Minerva Mills Vs. Union of India – Case Summary

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11593
Equivalent Citation – AIR 1980 SC 1789, 1981 SCR (1) 206
Petitioner: Minerva Mills Ltd. & Ors.
Respondent: Union of India & Ors.
 Date of Judgement: 31/07/1980
Bench: 
Y.V. Chandrachud (then CJI), A.C. Gupta, N.L. Untwalia, 
P.S. Kailsam & P.N. Bhagwati JJ.
Referred Cases: 
1. Indira Gandhi Nehru v. Raj Narain
2. Kesavananda Bharati Vs. State of Kerala

Background

The Parliament in order to serve general public interest came up with a noble solution by reconstructing bad assets of companies having importance to the general public. Therefore, in accordance with the achievement of the said solution the Parliament enacted The sick textile undertakings (taking over of management) Act, 1974 [Act no. 57 of 1974] on December 24, 1974.

The preamble to the act contained the following words……. “An Act to provide for the acquisition and transfer of the sick textile undertakings, and the right, title and interest of the owners in respect of the sick textile undertakings, specified in the First Schedule with a view to re-organizing and rehabilitating such sick textile undertakings so as to subserve the interests of the general public by the augmentation of the production and distribution, at fair prices, of different varieties of cloth and yarn, and for matters connected therewith or incidental thereto”. Therefore, the said act aimed at providing general public commodities at fair prices and to recover sick textile undertaking so that general masses won’t suffer.

Minerva Mills was a textile industry in the State of Karnataka engaged in the mass production of silk clothes and provided market to the general public. The Central Govt. was suspicious that company fulfilled the criteria to be classified as a sick industry. Therefore, the Central Govt. in 1970 appointed a committee u/s 15 of the Industries (Development and Regulation) Act, 1951 for making a full detailed report analyzing the affairs of Minerva Mills. Relying on the Committee’s report, on October 19, 1971 the Central govt. empowered National Textile Corporation Limited (a body under the 1951 act) to take over the management of Minerva Mills u/s 18A of the 1951 act.

Earlier through 39th Constitutional (Amendment) Act, 1975 the Parliament inserted Nationalization Act, 1974 into Ninth Schedule which means that any challenge on the said act was outside the purview of judicial review. Now, the petitioner was not able to challenge this aspect of 39th amendment since this remedy was barred by 42nd Amendment. The Parliament after suffering massive defeat in Indira Nehru Gandhi v. Shri Raj Narain[1]in order to make its power and authority supreme passed 42nd amendment (as discussed earlier in Indira Nehru Gandhi summary) to bar any challenge on constitutional amendments in courts of law.[2]

Therefore, the main issue before the court was to check the constitutionality of 42nd Constitutional (Amendment) Act, 1976.

Issue

Constitutional Validity of 42nd Constitutional (Amendment) Act, 1976

Petitioner’s Arguments

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. There need not necessarily be violation of Part III for fulfillment of provisions of Part IV.

 Respondent’s Arguments

  1. 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.
  2. 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,
  3. Further, if any harm is caused to the Part III provisions then it cannot be termed as violation of Basic structure.
  4. 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.
  5. This conflict between the hierarchy of provisions is an issue of academic interest therefore, the courts should remain aloof of such issues.

Judgment

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.[4] 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.

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.

Critical Analysis

Indira Gandhi government after feeling aggrieved by the decision of the apex court in Indira Gandhi Nehru v. Raj Narain passed the 42nd Amendment Act in the year 1976. This amendment was a black stain on the noble provision of article 368 i.e. Constitutional Amendment. This amendment made explicit something which no one can imagine from a democratically elected government. This amendment made the challenge of Constitutional Amendments in the courts of law unjustifiable, further it clearly laid down that there is no sort of limitation on the Parliament’s competency when it comes to Constitutional Amendments. This amendment was made so that Parliament can without fear of any institution do whatever necessary to satisfy their political greed. This amendment even gave the power to parliament to rewrite entire Constitution and turn this Democratic nation into a Totalitarian regime. Earlier the courts had the power to shed water on malicious acts of legislature however after enactment of the 1976 amendment act the courts were stripped off this power. The arguments that the government advanced in defense of such a horrific law was that to achieve the goals enunciated in Part IV it is necessary to make Parliament Supreme when in reality the Parliament was making it escape from the clutches of Judiciary. The Parliament was contending that since Part IV provisions are also basic structure therefore, the achievement of such provisions cannot be termed as violation of basic structure. The legislature also said that if an unintentional injury is caused to Part III provisions in the process of fulfillment of Part IV provisions it would not be a violation of basic features of the Constitution.

The apex court in the said judgment rejected all the contention raised by the legislature. It held that Section 55 of the amendment act 1976(through which courts were stripped off their power to entertain challenge) is unconstitutional since it violates the basic structure. Therefore, the court struck down the said sections. The court opined that snatching from the citizens their power to seek constitutional remedies which were termed as Heart & Soul of the Constitution[5]is an unpardonable wrong to the Constitution. This would cause an irreversible damage to the sanctity of the Constitution & hurt its spirit. The court very well pointed out in the decision that it is not the function of the judges to question the validity of laws rather it is their duty. The parliament cannot even by an unanimous vote in both houses strip this right because Judicial Review is basic structure of the Constitution. Relying on the analogy of Justice Hegde &Mukkerjea the court said that some features are basic while other are circumstantial and where the latter may be changed the former can never be changed because it will change the whole spirit of those features.

The court also explained the relationship between the provisions of Part III & Part IV where it held that the entire Indian constitution is based upon the foundation of these provisions. Over emphasis on one part will be injustice to another part. There can be achievement of Part IV provisions without the abrogation of Part III provisions. The court also laid down that this harmonious relation between Part III & Part IV is basic feature of Constitution.

Bhagwati J. wrote the minority opinion in which he dissented with the majority and held that the courts have to look into the substance of law, if it is actually for fulfillment for Part IV provisions only then it will be constitutional.           

Conclusion

This judgment was another decision where the apex court applied the doctrine of Basic Structure laid down in Kesavananda Bharti. The judgment unanimously struck down 42nd Amendment to the extent of striking down Section 55 of the Amendment act 1976. The importance of the judgment lies in the way it grants finality to the debate that was going on since 1951. The judgment finally rests the debate on the point of limitation on parliament’s power in amending the constitution when it held that the parliament cannot amend basic structure of the constitution. Parliament since the Golaknath[6] decision is indulging in proving its supremacy over other institutions as well as over democracy itself in one way or another; direct or indirect. After 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. 

Edited by Chiranjeeb Prateek Mohanty

[References]

[1]Indira Nehru Gandhi v. Shri Raj NarainA.I.R. 1975 S.C. 2299.

[2]INDIA CONST. art. 368(4).

[3]INDIA CONST.art. 37.

[4]Kesavananda Bharti v. State of Kerala, (1973) 4 S.C.C. 225.

[5] Art. 32 & 226

[6]Golaknath v. State of Punjab, 1967 A.I.R. 1643, 1967 S.C.R. (2) 762.

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Hemant Varshney
Hello Readers, I am Hemant Varshney student of B.A.LLB.(Hons.) at Dr. Ram Manohar Lohia National Law University, Lucknow (Uttar Pradesh). Since the beginning of my life as a law student I had a great liking in the Constitutional Laws of various nations. However, apart from Constitutional Law I am also interested in Criminal laws, Human Rights Law and Arbitration laws. I also have great liking in novels both fiction (especially philosophical) and non-fiction. In my free time I often watch Netflix series, Hollywood movies, Web series etc. I love to listen songs almost all the time of the day. I am also a fitness enthusiast and try to keep myself fit. The motto of my life is “Hard work is the key to success” therefore, I try to not to give up in any circumstance and fulfill my obligations no matter how worse the situation is.