VEERNATH Vs. STATE OF HYDERABAD

JUDGEMENT

(1.) These five Writ Petitions challenge the constitutionality of the Hyderabad (Abolition of Cash Grants) Act on the ground of its provisions being discriminatory and confiscatory.

(2.) The Act came into force from July 30, 1952, and has since been amended twice. It consists of five sections. Act No. 23 of 1954. has amended sections 2 and 3 of the impugned Act as well as its Schedule which the amending Act has expanded and divided into parts A, B and C. By the other amending Act No. 14 of 1956, provisos have been added to section 3 exempting minors, widows and grantees incapable of earning from the operation of section 3(2). Along with these amendments the important provisions of the impugned Act are section 3 and the Schedule ; but before giving their details we would mention the substance of what other sections enact. Section 2 provides that the Act shall apply to all cash grants specified in the Schedule except those that are subject to rendering of service to religious or charitable institutions. Section 4 confers power to make rules and section 5 enables tht Government to remove difficulties, should they arise. Section 3 (1) provides that all cash grants specified in Part A of the Schedule and which are payable or enforceable during the year commencing on April 1, 1952, and in any subsequent financial year, shall be discontinued and cease to have effect immediately on the commencement of the Act. The aforesaid part comprises 5 classes of Rusums enjoyed by Sardeshmukhs, Sardeshpandyas, Desmukhs, Despandyas and Dastbandars; but we are not concerned with these in the present writ petitions. For, by the decisions of a Division Bench of the Hyderabad High Court in Mungabai v. Hyderabad State, A.I.R. 1955 Hyd. 44. of which one of us was a party, abolishing without compensation four out of five such grants has been held to be contrary to Article 31 of the Constitution, and, therefore, void. An appeal against the decision is now pending before the Supreme Court.

(3.) In these writ petitions we are concerned with section 3(2) that provides for all cash grants specified in Parts B and C of the Schedule, and which are payable or enforceable during the year commencing on the first day of April, 1954, and in any subsequent financial year, shall be discontinued and cease to have effect on the 1st day of July, 1954. Provisions for compensation to holders of cash grants mentioned in Part B have been made by section 3(2) (a), which says that compensation amounting to a sum equal to six times the annual amount payable to each of the aforesaid grantees shall be paid in cash either in full or in annual instalments not exceeding twelve. Two out of the five petitioners before us, Mirza Mohd. Ali Baig and Ishwarlal in Writ Petitions Nos. 58/5, and 59/5 of 1954, were holders of cash grants enumerated in Part B of the Schedule. They challenge the constitutionality of section 3 (2) () on the ground of the compensation provided for being illusory, and therefore, contrary to Article 31 as it stood before the Constitution (Fourth Amendment) Act, 1955. The remaining three petitioners belong to the classes of cash grantees who are grouped in Part C of the Schedule and section 3 (2) (b) directs their grants to be discontinued and cease to have effect. As these holders have not been given any compensation, exceptions against discontinuance have been made in favour of old persons, widows, minors or those incapable of earning livelihood. The proviso to section 3 (2) (b) says that in respect of each of the cases specified in Column i to it, the grant shall be continued subject to the conditions specified against such case, during the period mentioned in column 2. The first column comprises 3 classes. Firstly are those who were not less than sixty on April 1, 1954, and their grants are to continue till their deaths. The next group consists of those who were less than sixty years on April 1, 1954. In such cases if the grantee be a widow, the grant is to continue till her death or during the continuance of widowhood ; and if male, he will enjoy the benefit if he be incapable of earning livelihood on account of being blind, deaf, dumb, mute, mentally deranged, cripple or paralytic. The last group of grantees exempted from the operation of section 3(2) (b) are minors.