Holding

The amendment to Section 47A of the Indian Stamp Act is constitutionally valid and does not violate Articles 14 or 19.

Summary

The appellant State challenged a High Court order that declared Section 47A of the Indian Stamp Act, as amended by Andhra Pradesh Act 8 of 1998, unconstitutional. The amendment requires a party to deposit 50% of the deficit stamp duty before a registering officer can refer the instrument to the Collector for valuation. The Supreme Court held that the amendment is a valid economic measure within the State's legislative competence and does not infringe Articles 14 or 19 of the Constitution. It emphasized that taxing statutes must be construed strictly, that hardship is irrelevant, and that a statute is presumed constitutional unless it is clearly violative. The Court also reiterated the doctrine of judicial restraint in reviewing economic legislation, while affirming the availability of a remedy against arbitrary orders under the statute. Consequently, the appeal was allowed and the High Court judgment set aside.

Issues considered

Whether the amendment to Section 47A of the Stamp Act, requiring a 50% deposit of deficit stamp duty as a condition precedent, violates Articles 14 and 19 of the Constitution.
Whether the provision constitutes an arbitrary or unreasonable restriction infringing the principle of equality before law.
Whether the State legislature had the competence to enact the amendment under List II Entry 63 and List III Entry 44 of the Seventh Schedule.
What is the scope of judicial review of statutes, particularly economic measures, and the presumption of constitutionality.
Whether the action of the registering officer under the proviso to Section 47A can be challenged as arbitrary without invalidating the statute.

Legislation cited

Constitution of Indias. 14, s. 19, s. 246(1)
Indian Stamp Act, 1899s. 33, s. 47A
Registration Act, 1908s. 33

Subjects

constitutional validitystamp dutySection 47Aeconomic legislationjudicial restrainttaxing statutesArticles 14 and 19statutory interpretationfundamental rightsjudicial review

Judgment

[2008] 3 S.C.R. 330

~r
A GOVERNMENT OF ANDHRA PRADESH & ORS.
v.
SMT. P. LAXMI DEVI
(Civil Appeal No. 8270 of 2001)

FEBRUARY 25, 2008
B
[H.K. SEMA AND MARKANDEY KAT JU, JJ.]
...
Stamp Act, 1899 - s. 47A (as amended by Andhra
Pradesh Act 8 of 1998) - State amendment imposing deposit
c of 50% of deficit stamp duty as a condition precedent for
making reference to Collector - Constitutional validity of -
Held.· The provision as amended is constitutional - It is not
violative of Articles 14, 19 or any provision of the constitution
- The amendment is an economic measure with aim for
plugging the loopholes for quick realization of duty- It is within
D
the power of State Legislature - Invalid order by an authority
-.y
under a statute does not make the statute itself unconstitutional
- A legal remedy is available against such invalid order -
Constitution of India, 1950 - Articles 14 and 19, Seventh
Schedule List II Entry 63 rlw List Ill Entry 44.
E
Judicial Review - Of statute - Scope of - Held:
Invalidation of statute, being a grave step has to be taken in
rare and exceptional circumstances - Statute can be declared
unconstitutional not because it is possible to hold so, but only
F when that is the only possible view not open to rational question
.._

- In case of possibility of two views, one for and the other
against the constitutional validity, the former will be preferred
- Court not to decide the wisdom of the legislature - There is
presumption in favour of Constitutionality of a statute and the
court should uphold it even by giving strained/narrower/wider
G
meaning to the provisions thereof - Courts should practice
great restraint while dealing with economic statutes, and should
be activist in defending the civil liberties and fundamental
rights of the citizens. ...

H 330
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 331
SMT. P. LAXMI DEVI

Interpretation of Statutes- Taxing statutes - Interpretation A
of- Held: Such statutes should be construed strictly- Hardship
is not a relevant factor for construing such statutes - If the
words used, are clear, one cannot try to find out the intention
and object of the statute.
Respondent filed a writ petition seeking declaration 8
thats. 47A of Stamp Act, 1899 as amended by Andhra
Pradesh Act 8 of 1998 which required a party to deposit
50% deficit stamp duty as a condition precedent for a
reference to the Collector under Section 47A, was
unconstitutional. High Court held it as unconstitutional. C
Hence the present appeal.
Allowing the appeal, the Court
HELD: 1.1 Section 47 A of the Stamp Act, 1899 as
amended by Andhra Pradesh Act 8 of 1998 is constitu- D
tionally valid and the judgment of the High Court declaring
it unconstitutional is not correct. The right to appeal which
is a statutory right can be conditional or qualified.
There is no violation of Articles 14, 19 or any other
provision of the Constitution by the enactment of Section E
47A as amended by the A.P Amendment Act 8 of 1998.
This amendment was only for plugging the loopholes
and for quick realization of the stamp duty. Hence it is
well within the power of the State legislature vide Entry
63 of List II read with Entry 44 of List Ill of the Seventh F
Schedule to the Constitution. [Paras 18, 24 & 27] [348-D;
349-8; 346-E-F]
Gujarat Agro Industries Co. Ltd. vs. Municipal
Corporation of the city of Ahmedabad and Ors. 1999(4) SCC G
468; Vijay Prakash D. Mehta vs. Collector of Customs
(Preventive) 1968(4) SCC 402; Anant Mills Ltd. vs. State of
Gujarat 1975(2) SCC 175 - relied on.
Mis. Elora Construction Company vs. The Municipal
Corporation of Gr. Bombay and Ors. AIR1980 Bombay 162; H
332 SUPREME COURT REPORTS [2008] 3 S.C.R.
\~

A Shyam Kishore and Ors. vs. Municipal Corporation of Delhi
and Anr. 1993(1) SCC 22 - referred to.
1.2 It cannot be said that the document can be
returned if the party does not want to get it stamped. A
perusal of s. 33 of Stamp Act shows that when a document
B is produced (or comes in the performance of his functions)
before a person who is authorized to receive evidence
and a person who is in charge of a public office (except a +
police officer) before whom any instrument chargeable
with duty is produced or comes in the performance of his
c functions, it is the duty of such person before whom the
said instrument is produced to impound the document if
it is not duly stamped. The use of the word 'shall' in Section
33(1) makes it mandatory to impound a document
produced before him or which comes before him in the
D performance of his functions. A registering officer under
the Registration Act is certainly a person who is in charge ~

of a public office. Section 33(3) applies only when there is
some doubt whether a person holds a public office or not.
There can be no doubt that a Sub-Registrar holds a
public office. Hence, he cannot return such a document
E to the party once he finds that it is not properly stamped,
and he must impound it. [Paras 16 and 17] [345-G;
346-A, B, C, D, E]
1.3 In case of a situation where the demand is
exhorbitant, it is always open to a party to file a writ petition
F "
challenging the exorbitant demand made by the
registering officer under the proviso to Section 47A
alleging that the determination made is arbitrary and/or
based on extraneous considerations, and in that case it
is always open to the High Court, if it is satisfied that the
G allegation is correct, to set aside such exorbitant demand
under the proviso to Section 47A of the Stamp Act by
declaring the demand arbitrary. It is well settled that
arbitrariness violates Article 14 of the Constitution. Hence, ...
the party is not remedy-less in this situation. [Para - 29]
H f349-E, F, G]
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 333
SMT. P. LAXMI DEVI
''/
Maneka Gandhi vs. Union of India AIR 1978 SC 597 - A
relied on.
1.4 There is always a difference between a statute
and the action taken under a statute. The statute may be
valid and constitutional, but the action taken under it may
not be valid. Hence, merely because it is possible that the B
order of the registering authority under the proviso to
f Section 47 A is arbitrary and illegal, that does not mean
that the proviso to Section 47 A is also unconstitutional.
This aspect must always by kept in mind while
adjudicating on the constitutionality of a statute. [Para 30] c
[349-G; 350-A, B]
1.5 It is well settled that stamp duty is a tax, and
hardship is not relevant in construing taxing statutes
which are to be construed strictly. There is no equity in a
tax. If the words used in a taxing statute are clear, one D
-t< cannot try to find out the intention and the object of the
statute. Hence the High Court fell in error in trying to go
by the supposed object and intendment of the Stamp Act,
and by seeking to find out the hardship which will be
·caused to a party by the impugned amendment of 1998. E
[Para 19) [346-G; 347-A]
Commissioner of Income Tax vs. Firm Muar AIR 1965
,'
SC 1216; Bengal Immunity Co. Ltd. vs. State of Bihar AIR
f )..
1955 SC 661 (685); Income Tax Officer vs. TS Devinatha
Nadar AIR 1968 SC 623 - relied on. F

Partington vs. Attorney-General 1969 LR 4 HL 100 -
referred to.
2.1 In view of the theory in jurisprudence of the
eminent jurist Kelsen (The Pure Theory of Law), the Courts G
have the power to declare an Act of the Legislature to be
invalid. In every country there is a Hierarchy of legal
~
~
norms, headed by as the 'Grundnorn' (The Basic Norm).
If a legal norm in a higher layer of this hiearachyconlictsl
clashes with a legal norm in a lower layer, the former will H
334 SUPREME COURT REPORTS [2008] 3 S.C.R.

A prevail. Hence a constitutional provision will prevail over
all other laws, whether in a statute or in delegated
legislation or in an executive order. The Constitution is
the highest law of the land, and no law which is in conflict
with it can survive. Since the law made by the legislature
B is in the second layer of the hierarchy, obviously it will be
invalid if it is in conflict with a provision in the Constitution
(except the Directive Principles which, by Article 37,
have been expressly made non· enforceable). [Paras 31,
32 and 34] [350-D, E, F; 351-A, B, C]
C Marbury v. Madison 5 U.S. (1Crach) 137 (1803)-
referred to
'The General Theory of Law and State' by Kelson -
referred to
D 2.2 The Court must always remember that invalidating
a statute is a grave step, and must therefore be taken in
very rare and exceptional circumstances. While the Court
has power to declare a statute to be unconstitutional, it
should exercise great judicial restraint in this connection.
E [Paras 38 and 39] [352-B, CJ
Commonwealth ex. Rel O'Hara vs. Smith 4 Binn. 117 -
referred to.
'The Least Dangerous Branch' by A. Bickel - referred to.
F Article 'The Origin and Scope of the American Doctrine
of Constitutional Law' by James Bradley Thayer published
in the Harvard Law Review in 1893- referred to
2.3 Adjudication must be done within the system of
G historically validated restraints and conscious
minimization of the judges personal preferences. The
Court must not invalidate a statute lightly, for, invalidation
of a statute made by the legislature elected by the people
is a grave step. The Court should, therefore, ordinarily
H defer to the wisdom of the legislature unless it enacts a
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 335
SMT. P. LAXMI DEVI

law about which there can be no manner of doubt about A
its unconstitutionality. [Paras 54 and 55l [360-A, 8, C]
M.H. Quareshi vs. State of Bihar AIR 1958 SC 731 -
relied on.
2.4 A Court can declare a statute to be B
unconstitutional not merely because it is possible to hold
f
this view, but only when that is the only possible view not
open to rational question. In other words, the Court can
declare a statute to be unconstitutional only when there
can be no manner of doubt that it is flagrantly c
unconstitutional, and there is no way of avoiding such
decision. The philosophy behind this view is that there is
broad separation of powers under the Constitution, and
the three organs of the State -the legislature, the executive
and the judiciary, must respect each other and must not D
ordinarily encroach into each other's domain. Also the
judiciary must realize that the legislature is a
democratically elected body which expresses the will of
the people, and in a democracy this will is not to be lightly
frustrated or obstructed. [Para 41] [353-F, G, H; 354-A]
E
'Felix Frankfurter Reminisces' by H. Phillip 299-300, 1960
- referred to.
2.5 There is one and only one ground for declaring
' >- an Act of the legislature (or a provision in the Act) to be
invalid, and that is if it clearly violates some provision of F
the Constitution in so evident a manner as to leave no
manner of doubt. This violation can, of course, be in
different ways, e.g. if a State legislature makes a law which
only the Parliament can make under List 1 to the Seventh
Schedule, in which case it will violate Article 246 (1) of the G
Constitution, or the law violates some specific provision ·
. ,,
. of the Constitution (other than the directive principles) .
But before declaring the statute to be unconstitutional,
the Court must be absolutely sure that there can be no
manner of doubt that it violates a provision of the H
336 SUPREME COURT REPORTS [2008] 3 S.C.R.
....
A Constitution. If two views are possible, one making the
statute constitutional and the other making it
unconstitutional, the former view must always be
preferred. Also, the Court must make every effort to
uphold the constitutional validity of a statute, even if that
B requires giving a strained construction or narrowing
down its scope. Also, if it is necessary to uphold the
constitutionality of a statute to construe its general words
narrowly or widely, the Court should do so. [Paras 44
and 64] [354-E, F, G, H; 355-A; 365-D, E]
C Mark Netto vs. Government of Kera/a and Ors. AIR 1979
SC 83; Kedarnath vs. State of Bihar AIR 1962 SC 955; In re
Hindu Women's Right to Property Act AIR 1941 FC 72 -
relied on.
Bartels vs. Iowa 262 US 404 412(1923); West Virginia
0
vs. Barnette 319 U.S. 624 (1943) - referred to.
Principles of Statutory Interpretation, by GP. Singh 9th
Edition, 2004 page 497' - referred to.
The Influence of James B Thayer Upon the Work of
E Holmes, Brandeis and Frankfurter' by Wallace Mendelson
published in 31 Vanderbilt Law Review 71 (1978)- referred
to.
.
2.6 The legislature must be given freedom to do
F experimentations in exercising its powers, provided of
. course it does not clearly and flagrantly violate its
constitutional limits. [Para 49] [358-D]
Keshvananda Bharati vs. State of Kera/a AIR 1973 SC
1461 - followed.
G
New State Ice Co. vs. Liebmann 285 U.S. 262 (310-11)-
referred to.
Essay on Justice Holmes of the U.S. Supreme Court in
the dictionary of American Biography, by Justice Frankfurter;
H 'Thi~ Public and its Government' By J~stice Franl<furter -
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 337
'"-,; SMT. P. LAX.Ml DEVI

referred to. A
2.7 There is a presumption in favour of the
constitutionality of Statute, and the burden is always upon
the person who attacks it to show that there has been a
clear transgression of a constitutional provision. [Para 58]
[361-D] B
f
Charanjit Lal Chowdhury vs. Union of India and Ors. AIR
1951 SC 41 (para 1O); State of Bihar and Ors. vs. Bihar
Distillery Ltd. AIR 1997 SC 1511; Hamdard Dawakhana and
Anr. vs. Union of India AIR 1960 SC 554 - followed. c
Mis. B.R. Enterprises vs. State of U. P and Ors. AIR 1999
SC 1867; Union of India vs. Elphinstone Spinning and
Weaving Co. Ltd. and Ors. AIR 2001 SC 724- relied on.
Shell Company of Australia vs. Federal Commissioner
__,. of Taxation (1931) AC 275 (298) - referred to. D

2.8 The Court must make every effort to uphold the
constitutional validity of a Statute, even if that requires
giving the statutory provision a strained meaning, or
narrower or wider meaning, than what appears on the face E
of it. It is only when all efforts to do so fail should the
Court declare a statute to be unconstitutional. [Para 65]
[365-F, G]

>- 2.9 As regards fiscal or tax measures greater latitude
is given to such statutes than to other statutes. All F
decisions in the economic and social spheres are
essentially ad hoc and experimental. Since economic
matters are extremely complicated, this inevitably entails
special treatment for special situations. The State must
therefore be left with wide latitude in devising ways and G
means of fiscal or regulatory measures, and the Court
,,, should not, unless compelled by the statute or by the
~
Constitution, encroach into this field, or invalidate such
law. [Paras 68 and 69] [366-D, E; 368-E, F]
R.K. Garg vs. Union of India and Ors. 1981 (4) SCC 675 H
338 SUPREME COURT REPORTS [2008) 3 S.C.R.
,, .
A - followed.
American Federation of Labour vs. American Sash and
Door Co. 335 U.S. 538 (1949); New State Ice Co. vs. Liebmann
285 U.S. 262 (1932); Secretary of Agriculture vs. Central Reig
Refining Co. (1949) 338 U.S. 604 (617) - referred to.
B
Lochner vs. York, 198 U.S. 45(1903); Schenck vs. U.S.
249 U.S. 47 (1919); Abrams vs. U.S. 250 U.S. 616 624 (1919);
'Footnote Four' in United States vs. Carotene Products Co.
304 U.S. 144 - referred to.
c 2.10 While Judges should practice great restraint
while dealing with economic statutes, they should be
activist in defending the civil liberties and fundamental
rights of the citizens. The Courts are guardians of the
rights and liberties of the citizens, and they will be failing
D in their responsibility if they abdicate this solemn duty
;,.-
towards the citizens. When a law of the legislature
encroaches on the civil rights and civil liberties of the
people mentioned in Part Ill of the Constitution the Court
will not grant such latitude to the legislature as in the case
E of economic measures, but will carefully scrutinize
whether the legislation on these subjects is violative of
the rights and liberties of the citizens, and its approach
must be to uphold those rights and liberties, for which it
may sometimes even have to declare a statute to be
unconstitutional. This is necessary because though
F ordinarily the legislature represents the will of the people
.. ..
and works for their welfare, there can be exceptional
situations where the legislature, though elected by the
people may violate the civil liberties and rights of the
people. It was because of this foresight that the Founding
G Fathers of the Constitution in their wisdom provided
fundamental rights in Part Ill of the Constitution which
were modeled on the lines of the U.S. Bill of Rights of 1791 •
and the Declaration of the Rights of Man during the Great •
French Revolution of 1789. [Paras 73, 74, 83 and 86]
t-l [373-F, G; 374-A, E, F; 370-A, B, CJ
GOVERNMENT OF ANDHRA PRADESH & ORS. v. _339
SMT. P. LAXMI DEVI [MARKANDEY KAT JU, J.)
' i-
Maneka Gandhi vs. Union of India, AIR 1978 SC 597 - A
followed.
Terminiel/o vs. Chicago 337_ US 1 (1949); Bridges vs.
California 314 US 252 (1941); Wood vs. Georgia 370 U.S.
375(1962); Ghani vs. Jones (1970) 1 Q.B. 693 (709) - referred
to.
B

2.11 The Courts have taken an activist approach in
f
upholding the civil liberties and rights of the citizens,
because freedom and liberty is essential for progress,
both economic and social. Without freedom to speak, c
freedom to write, freedom to think, freedom to experiment,
freedom to criticize (including criticism of the Government)
and freedom to dissent there can be no progress. [Para 92]
[375-D, E]
Maneka Gandhi vs. Union of India, AIR 1978 SC 597; D
~ Joginder Kumar vs. State of UP, AIR 1994 SC 1349; 0. K.
Basu vs. State of West Bengal, AIR 1997 SC 610, etc -
followed.
2.12 In view of the fact that the impugned amendment
E
is an economic measure, whose aim is to plug the
loopholes and secure speedy realization of stamp duty,
the said amendment, being an economic measure, cannot
be said to be unconstitutional. [Para 94] [376-8]
' t ).._ CIVIL APPELLATE JURISDICTION: Civil Appeal No.8270 F
of 2001.
From the final Judgment and Order dated 8/5/2001 of the
High of Judicature, Andhra Pradesh at Hyderabad in W.P. No.
12649/2000.
G
Manoj Saxena, Rajneesh Kr. Singh, Rahul Shukla and T.V.
George for the Appellants.
. The Judgment of the Court was delivered by
MARKANDEY KAT JU, J. 1. This appeal by special leave H
340 SUPREME COURT REPORTS [2008] 3 S.C.R.

,, ,
A has been filed against the impugned judgment of the Andhra
Pradesh High Court dated 8.5.2001 in Writ Petition No.12649
of 2000.

2. Heard learned counsel for the parties and perused the
record.
B
3. The writ petition was filed in the High Court praying for a
declaration that Section 47 A of the Indian Stamp Act as
amended by A.P. Act 8of1998 which requires a party to deposit
50% deficit stamp duty as a condition precedent for a reference
c to the Collector under Section 4 7A is unconstitutional. By the
impugned judgment the High Court has declared it
unconstitutional. Hence, this appeal.

4. Under Section 3 of the Indian Stamp Act, 1899 certain
instruments are chargeable with the duty mentioned in the
D Schedule to the Act. Item 23 in the Schedule to the Act mentions
a 'conveyance' as one of the documents requiring payment of "-
stamp duty. A 'conveyance' is defined in Section 2(10) of the
Act and includes a sale deed. Since in the present case we are
concerned with payment of stamp duty on a sale deed, we have
E referred to the above provisions.

5. Experience showed that there was large scale under
valuation of the real value of the property in the sale deeds so
as to defraud the Government's proper revenue. In the original
F Stamp Act there was no provision empowering the revenue "" '
authorities to make an enquiry about the value of the property
conveyed for determining the correct stamp duly. Hence
amendments were made to the Indian Stamp Act from time to
time in several States including amendments by the Andhra
G Pradesh Legislature e.g. by the Indian Stamps (A.P.
Amendment) Act 22 of 1971, Indian Stamps (A.P. Amendment)
Act 17 of 1986 and ultimately by the AP Act 8 of 1998 (with
effect from 1.5.1998). The scheme of Section 47A was to deal .•
with such cases where parties clandestinely undervalued the
property to evade payment of the correct stamp duty.
H
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 341
SMT. P. LAXMI DEVI [MARKANDEY KAT JU, J.]
~ ~

6.Afterthe 1998 amendment, Section 47A(1) of the Indian A
Stamp Act as applicable in the State of Andhra Pradesh reads
as under:
"47 A Instruments of conveyance, etc. how to be
dealt with - (1) Where the registering officer appointed
under the Registration Act, 1908, while registering any B
instrument of conveyance, exchange, gift, partition,
f settlement, release, agreement relating to construction,
development or sale of any immovable property or power
of attorney given for sale, development of immovable
property, has reasqn to believe that the market value of c
the property which is the subject matter of such instrument
has not been truly set forth in the instrument, or that the
value arrived at by him as per the guidelines prepared or
caused to be prepared by the Government from time to
fime has not been adopted by the parties, he may keep D
~ pending such instrument and refer the matter to the
Collector for determination of the market value of the
property and the proper duty payable thereon.
Provided that no reference shall be made by the
registering officer unless an amount equal to fifty per cent E
of the deficit duty arrived at by him is deposited by the
party concerned."
7. Under sub-clause (2) of Section 47A of the Stamp Act
~ ~ on receipt of a reference under sub-section(1 ), the Collector F
has to give opportunity of making a representation to the parties,
and after holding such enquiry as prescribed by the Rules, shall
determine the market value of the property which is the subject
matter of the instrument, and the duty thereon.
8. The respondent herein, had agreed to purchase land G
bearing S.No.594/B situated at village Kapra of Keesara
Mandal of Ranga Reddy District. The agreement of sale was
• ~

entered into on 25.1.1989 and as there was breach of
performance of the contract on the part of the prospective vendor,
a suit being O.S. No.1416 of 1997 was filed before the II H
342 SUPREME COURT REPORTS [2008) 3 S.C.R.
.i, •

A Additional Senior Civil Judge, Hyderabad and the same was
decreed. When the sale deed was not executed pursuant to the
decree, Execution Petition No.5 of 2000 was filed. An officer of
the Court was deputed to present the sale deed, which was
stamped according to the directions of the Senior Civil Judge.
8 9. The registering authority raised objection with regard to
the quantum of non-judicial stamp on which the sale deed was
engrossed. By letter no.288/2000 dated 19.2.2000, the
registering authority. the Sub-Registrar, Malkajigiri, Ranga
Reddy District, conveyed to the Second Senior Civil Judge, City
c Civil Court, Hyderabad that the document has to be referred
under Section 4 7A and as a condition precedent for such
reference, called upon the party i.e. the respondent herein, to
pay duty on 50% of the differential amount according to the
estimate made by him. Against this demand the respondent
D filed a writ petition in the High Court.
.,. _
10. In the writ petition filed by the respondent herein, it was
inter-alia, contended that the estimate made by the registering
authority was only provisional, and that will attain finality only
after the Collector on a reference under Section 47A adjudicates
E the same, and for the reference for such adjudication no
obligation can be imposed to deposit 50% of the deficit duty.
Hence the said provision contained in the proviso to Section
47A is arbitrary and unreasonable violating the Fundamental
Rights guaranteed in Articles 14 and 19(1)(g) of the Indian
F Constitution. ...
11 . A counter affidavit was filed by the State Government
in the writ petition. The relevant paragraphs in the counter
affidavit are quoted below :
G "In reply to the allegations made in the affidavit it is
stJbmitted that a sale deed was executed by II Senior Civil
Judge City Civil Court on 6.1.2000 and presented before
•
~

me on 7 1 2000 through one of the staff members. The
sale deed was admitted to registration and kept pending
H for want of clarification with regard to market value. The
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 343
SMT. P. LAXMI DEVI [MARKANDEY KAT JU, J.]
• J.
market value is arrived at Rs.6,17,80,500/- as per the A
market value guidelines for 33 acres 12 guntas whereas
the sale deed executed was for a consideration of
Rs.2,40,000/-. Thus there is huge loss to the Government
Exchequer to a tune of Rs.70,77,160/- in stamp duty.
Therefore, I sought clarification from the District Registrar, 8
R.R. District (2nd Respondent). The 2nd respondent in his
letter dated 473/G1/2003 dated 9.2.2000 ordered me to
-!" take action under Section 47A of Indian Stamp Act for
determination of market value. Hence the action taken by
the 3rd respondent i.e. Sub-Registrar, Malkajgiri is true c
and proper in the matter.
In reply to the allegations made paras 6 to 8 of the
petitioner's affidavit it is submitted that the petitioners are
liable to pay 50% of the deficit amount as per the Indian
Stamp (A.P. Amendment) Act, 1998. The appeal filed by D
the petitioner is without any merits and is liable to be
dismissed with a direction to the petitioner that 50% of the
deficit amount assessed by the Sub-Registrar concerned
and as per the directions of the Hon'ble Chief Judge, City
Civil Court, Hyderabad should be deposited before a E
reference could be made under Section 47A of the Indian
Stamp Act, as amended through Act No.8 of 1998. It is
submitted that the proviso under Section 47A(2) was
amended and the amendment has come into force with
t ;..
effect from 1.5.1998. Hence, it is necessary that the F
petitioner shall deposit the deficit duty as determined by
the registering officer".
12. By the impugned judgment the High Court has declared
Section 47A of the Indian Stamp Act as applicable to State
Government to be unconstitutional. G
13. In the impugned judgment the High Court has obseNed:
"The imposition of deposit of 50% of the differential
- ~

stamp duty for referring the document to the Collector runs
beyond the object and intendment of the above statutory H
344 SUPREME COURT REPORTS [2008] 3 S.C.R.

... '
A provision. The object and intendment of the Stamp Act is
to collect the proper stamp duty and such proper stamp
duty is dependent upon the determination of the market
value of the subject matter of the document and such
determination is only made by the Collector and until such
B determination is made by the Collector, the document which
is received for registration even after collection of whatever
stamp duty deposited and the registration fee is paid by
the party, is not released to the party, but is kept pending
registration and such document kept pending registration
c is not having any evidentiary value and is not entered into
the books of registration and no certified copy of the same
can be granted and no rights flow from such document, be
it sale, exchange, gift, mortgage, lease, etc. By keeping
the document pending registration, there is enough
safeguard for collecting the deficit stamp duty, as in the
D
event of the Collector accepting the valuation suggested
by the Registering Office and the party not paying the said
stamp duty, the document remains under pending
""'
registration and even may be returned to the party for
want of the payment of the differential stamp duty. This
E being the aim and intendment of the stamp duty protecting
the public exchequer, there is absolutely no nexus for calling
upon the party to deposit 50% of the differential stamp
duty as a condition for making reference. It is not that a
party seeks a reference on his own, but the Registering
F Officer is duty bound to refer the moment a party does not ..
_ accept the valuation suggested by him. The party
presenting a document is the master of his choice as to
whether he should deposit the deficit stamp after
determination of the Collector or not. If he feels that the
G market value determined by the Collector is exorbitant,
then he may resile from going ahead with the registration
of the document and may take return of the document. •
There is nothing to stop him from doing so. Stamp duty is •
not skin to a compulsory tax such as, property taxes levied
H upon the house properties, sales tax levied upon the turn-
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 345
SMT. P. LAXMI DEVI [MARKANDEY KAT JU, J.]
r f over, income-tax levied upon the income prescribed etc. A
If a party wants to have his document registered, he should
pay stamp duty and should he feel that it is exorbitant and
he cannot bear the same, he can resile from the same
even after presenting the document. The authority under
the Stamp Act cannot force upon the party to compulsorily B
pay the stamp duty. Such compulsion is imposed only
upon the party's insistence for registration of the document
and not otherwise. In such circumstances, the imposition
of deposit of 50% of the amount towards the differential
stamp duty as a condition for referring the matter to the c
Collector runs beyond the scope, intendment and object
of the act and, thus, offends equal protection of laws
guaranteed under Article 14 of Indian Constitution and
thus, is arbitrary and the said proviso to Section 47A of
Indian Stamp Act which reads :
D
"Provided that no reference shall be made by the
~~
registering officer unless an amount equal to fifty per cent
of the deficit duty arrived at by him is deposited by the
party concerned."
is unconstitutional and is accordingly struck down." E

14. We regret our inability to agree with the view taken by
the High Court that the amended Section 47A is unconstitutional.
15. Section 33(1) of the Stamp Act states :
r ~ F
"Every person having by law or consent of parties authority
to receive evidence, and every person in charge of a public
office, except an officer of police, before whom any
instrument, chargeable, in his opinion, with duty, is
produced or comes in the performance in his functions G
shall, if it appears to him that such instrument is not duly
stamped, impound the same".

,. .,._ 16. A perusal of the said provision shows that when a
document is produced (or comes in the performance of his
functions) before a person who is authorized to receive evidence H
346. SUPREME COURT REPORTS [2008] 3 S.C.R

"" 1
A and a person who is in charge of a public office (except a police
officer) before whom any instrument chargeable with duty is
produced or comes in the performance of his functions. it is the
duty of such person before whom the said instrument is
produced to impound the document if it is not duly stamped.
B The use of the word 'shall· in Section 33(1) shows that there is
no discretion in the authority mentioned in Section 33(1) to
impound a document or not to do so In our opinion, the word
'shall' in Section 33(1) does not mean ·may' but means 'shall'.
In other words. it is mandatory to impound a document produced
before him or which comes before him in the performance of
c his functions. Hence the view taken by the High Court that the
document can be returned if the party does not want to get it
stamped is not correct.

17. In our opinion. a registering officer under the
D Registration Act (in this case the Sub-Registrar) is certainly a
person who is in charge of a public office. Section 33(3) applies
only when there is some doubt whether a person holds a public
...
office or not. In our opinion, there can be no doubt that a Sub-
Registrar holds a public office. Hence, he cannot return such a
E document to the party once he finds that it is not properly
stamped, and he must impound it.

18. In our opinion, there is no violation of Articles 14, 19 or
any other provision of the Constitution by the enactment of
Section 47A as amended by the AP Amendment Act 8of1998.
F This amendment was only for plugging the loopholes and for ..
quick realization of the stamp duty. Hence it is well within the
power of the State legislature vide Entry 63 of List II read with
Entry 44 of List Ill of the Seventh Schedule to the Constitution.
19. It is well settled that stamp duty is a tax. and hardship
G
is not relevant in construing taxing statutes which are to be
construed strictly. As often said, there is no equity in a tax vide
Commissioner of Income Tax vs. Firm Muar AIR 1965 SC
1216. If the words used in a taxing statute are clear. one cannot '"' •
try to find out the intention and the object of the statute. Hence
H
.
..,.
GOVERNMENT OF ANDHRA PRADESH & ORS. v.
SMTP LAXMI DEVI [MARKANDEY KAT JU. J]
347

the High Court fell in error in trying to go by the supposed object A
and intendment of the Stamp Act, and by seeking to find out the
hardship which will be caused to a party by the impugned
amendment of 1998.

20. In Partington vs. Attorney-General (1969) LR 4 HL
B
100. Lord Cairns observed as under:
"If the person sought to be taxed comes within the letter of
the law he must be taxed, however great the hardship may
appear to the judicial mind. On the other hand if the court
seeking to recover the tax cannot bring the subject within c
the letter of the law, the subject is free, however apparently
within the spirit of the law the case might otherwise appear
to be."

The above observation has often been quoted with
approval by this Court, and we endorse it again. In Bengal D
•+ Immunity Co. Ltd. vs. State of Bihar AIR 1955 SC 661 (685)
this Court held that if there is hardship in a statute it is for the
legislature to amend the law, but the Court cannot be called upon
to discard the cardinal rule of interpretation for mitigating a
hardship. E
21. It has been held by a Constitution Bench of this Court
in Income Tax Officer vs T.S Devinatha Nadar AIR 1968 SC
623 (vide paragraph 23 to 28) that where the language of a

•• taxing provision is plain, the Court cannot concern itself with the
intention of the legislature. Hence, in our opinion the High Court F
erred in its approach of trying to find out the intention of the
legislature in enacting the impugned amendment to the Stamp
Act.
•
22. In this connection we may also mention that just as the
G
reference under Section 47 A has been made subject to deposit
of 50% of the deficit duty. similarly there are provisions in various
, .... statutes in which the right to appeal has been given subject to
some conditions. The constitutional validity of these provisions
has been upheld by this Court in various decisions which are
H
348 SUPREME COURT REPORTS [2008] 3 S. C.R.
~·
A noted below.
23. In Gujarat Agro Industries Co. Ltd. vs. Municipal
Corporation of the city of Ahmedabad and Ors. 1999(4)
SCC 468, this Court referred to its earlier decision in Vijay
Prakash D. Mehta vs. Collector of Customs (Preventive)
B 1968(4) SCC 402 wherein this Court observed :

"The right to appeal is neither an absolute right nor an
ingredient of natural justice the principles of which must
be followed in all judicial and quasi-judicial adjudications.
c The right to appeal is a statutory right and it can be
circumscribed by the conditions in the grant."
24. In Anant Mills Ltd. vs. State of Gujarat 1975(2) SCC
175 this Court held that the right of appeal is a creature of the
statute and it is for the Legislature to decide whether the right of
D appeal should be unconditionally given to an aggrieved party or
,, -
it should be conditionally given. The right to appeal which is a
statutory right can be conditional or qualified.
25. In M/s. Elora Construction Company vs. The
Municipal Corporation of Gr. Bombay and Ors. AIR1980
E Bombay 162, the question before the Bombay High Court was
as to the validity of Section 217 of the Bombay Municipal Act
which required pre-deposit of the disputed tax for the
entertainment of the appeal. The Bombay High Court upheld
the said provision and its judgment has been referred to with
F approval in the decision of this Court in Gujarat Agro
..
Industries Co. Ltd. vs. Municipal Corporation of the city of
Ahmedabad and Ors. (supra). This Court has also referred to
its decision in Shyam Kishore and Ors. vs. Municipal
Corporation of Delhi and Anr. 1993(1) SCC 22 in which a
G similar provision was upheld.
26. It may be noted that in Gujarat Agro Industries Co.
Ltd. vs. Municipal Corporation of t'tie city of Ahmedabad
.•
and Ors. (supra) the appellant had challenged the constitutional
validity of Section 406(e) of the Bombay Municipal Corporation
H
t,
.
.;-
GOVERNMENT OF ANDHRA PRADESH & ORS. v.
SMT. P. LAX.Ml DEVI [MARKANDEY KATJU, J.]
349

Act which required the deposit of the tax as a precondition for A
entertaining the appeal. The proviso to that provision permitted
waiver of only 25% of the tax. In other words a minimum of 75%
of the tax had to be deposited before the appeal could be
entertained. The Supreme Court held that the provision did not
violate Article 14 of the Constitution. · B
27. In view of the above, we are clearly of the opinion that
Section 47A of the Indian Stamp Act as amended by A.P. Act 8
of 1998 is constitutionally valid and the judgment of the High
Court declaring it unconstitutional is not correct.
c
28. We may, however, consider a hypothetical case.
Supposing the correct value of a property is Rs. 1O lacs and
that is the value stated in the sale deed, but the registering
officer erroneously determines it to be, say, Rs. 2 crores. In that

... case while making a reference to the Collector under Section
47A, the registering officer will demand duty on 50% of Rs.2
crores i.e. duty on Rs.1 crore instead of demanding duty on Rs.
D

10 lacs. A party may not be able to pay this exorbitant duty
demanded under the proviso to Section 47A by the registering
officer in such a case. What can be done in this situation?
E
29. In our opinion in this situation it is always open to_ a
party to file a writ petition challenging the exorbitant demand
made by the registering officer under the proviso to Section
47A alleging that the determination made is arbitrary and/or
based on extraneous considerations, and in that case it is F
""' always open to the High Court, if it is satisfied that the allegation
is correct, to set aside such exorbitant demand under the proviso
to Section 47A of the Indian Stamp Act by declaring the demand
~ arbitrary. It is well settled that arbitrariness violates Article 14 of
the Constitution vide Maneka Gandhi vs. Union of India AIR G
1978 SC 597. Hence, the party is not remedy-less in this
situation.
, ~

30. However, this would not mean that the proviso to
Section 47A becomes unconstitutional. There is always a
difference between a statute and the action taken under a statute. H
A
350 SUPREME COURT REPORTS (2008] 3 S.C.R.

The statute may be valid and constitutional, but the action taken
-;, .
t
under it may not be valid. Hence. merely because it is possible
that the order of the registering authority under the proviso to
Section 4 7A is arbitrary and illegal, that does not mean that the
proviso to Section 4 7A is also unconstitutional. We must always
B keep this in mind when adjudicating on the constitutionality of a
statute.

31. Since we have dealt with the question about
constitutionality of Section 47A of the Stamp Act, we think it
necessary to clarify the scope of judicial review of statutes, since
C Courts often are faced with a difficulty in determining whether a
statute is constitutionally valid or not. We are, therefore, going a
little deep into the theory of judicial review of statutes, as that
will give some guidance to the High Courts in future.

D
A Do Courts have the power to declare an Act of the
Legislature to be invalid? ...
The answer to the above question is : Yes. The theoretical
reasoning for this view can be derived from the theory in
jurisprudence of the eminent iurist Kelsen (The Pure Theory of
E Law)

32. According to Kelsen, in every country there is a
hierarchy of legal norms. headecj by what he calls as the
'Grund norm' (The Basic Norm). If a legal norm in a higher layer
of this hierarchy conflicts with a legal norm in a lower layer the
F former wili prevail (see Kelsen's 'The General Theory of Law
and State').
33. In India the Grund norm is the Indian Constitution, and
the hierarchy is as follows :
G (i) The Constitution of India;
(ii) Statutory law. which may be either law made by
Parliament or by the State Legislature.

(iii) Delegated legislation, which may be in the form of
H Rules made under the Statute. Regulations made
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 351
SMT. P. LAX.Ml DEVI [MARKANDEY KAT JU, J.]

under the Statute, etc.; A
(iv) Purely executive orders not made under any Statute.
34. If a law (norm) in a higher layer in the above hierarchy
clashes with a law in a lower layer, the former will prevail. Hence
a constitutional provision will prevail over all other laws, whether B
in a statute or in delegated legislation or in an executive order.
The Constitution is the highest law of the land, and no law which
is in conflict with it can survive. Since the law made by the
legislature is in the second layer of the hierarchy, obviously it
will be invalid if it is in conflict with a provision in the Constitution c
(except the Directive Principles which, by Article 37, have been
expressly made non enforceable).
35. The first decision laying down the principle that the
Court has power to declare a Statute unconstitutional was the
well-known decision of the US Supreme Court in Marbury vs. D
Madison 5 U.S. (1Cranch) 137 (1803). This principle has been
followed thereafter in most countries, including India.
B. How and when should the power of the Court to
declare the Statute unconstitutional be exercised?
E
Since, according to the above reasoning, the power in the
Courts to declare a Statute unconstitutional has tb be accepted,
the question which then arises is how and when should such
power be exercised.
36. This is a very important question because invalidating F
an Act of the Legislature is a grave step and should never be
lightly taken. As observed by the American Jurist Alexander
Bickel "judicial review is a counter majoritarian force in our
system, since when the Supreme Court declares unconstitutional
a legislative Act or the act of an elected executive, it thus thwarts G
the will of the representatives of the people; it exercises control,
not on behalf of the prevailing majority, but against it." (See A.
Bickel's 'The Least Dangerous Branch')
37. The Court is, therefore, faced with a grave problem. H
352 SUPREME COURT REPORTS (2008] 3 S.C.R.

A On the one hand, it is well settled since Marbury vs. Madison
(supra) that the Constitution is the fundamental law of the land
and must prevail over the ordinary statute in case of conflict, on
the other hand the Court must not seek an unnecessary
confrontation with the legislature, particularly since the legislature
B consists of representatives democratically elected by the
people.
38. The Court must always remember that invalidating a
statute is a grave step, and must therefore be taken in very rare
and exceptional circumstances.
c
39. We have observed above that while the Court has
power to declare a statute to be unconstitutional, it should
exercise great judicial restraint in this connection. This requires
clarification, since, sometimes Courts are perplexed as to
whether they should declare a statute to be constitutional or
0
unconstitutional.
40. The solution to this problem was provided in the classic
essay of Prof James Bradley Thayer, Professor of Law of
Harvard University entitled 'The Origin and Scope of the
E American Doctrine of Constitutional Law' which was
published in the Harvard Law Review in 1893. In this article,
Professor Thayer wrote that judicial review is strictly judicial and
thus quite different from the policy-making functions of the
executive and legislative branches. In performing their duties,
F he said, judges must take care not to intrude upon the domain
of the other branches of government. Full and free play must
be permitted to that wide margin of considerations which
address themselves only to the practical judgment of a
legislative body Thus, for Thayer, legislation could be held
G unconstitutional only when those who have the right to make
laws have not merely made a mistake (in the sense of
apparently breaching a constitutional provision) but have
made a ve'Y clear one, so clear that it is not open to rational
question. Above all, Thayer believed, the Constitution, as Chief -·
H Justice Marshall had observed, is not a tightly drawn legal
/

GOVERNMENT OF ANDHRA PRADESH & ORS. v. 353
I ;· SMT. P. LAXMI DEVI [MARKANDEY KATJU, J.]

document like a title deed to be technically construed; it is rather A
a matter of great outlines broadly drawn for an unknowable future.
Often reasonable men may differ about its meaning and
application. In short, a Constitution offers a wide range for
legislative discretion and choice. The judicial veto is to be
exercised only in cases that leave no room for reasonable B
doubt. This rule recognizes that, having regard to the great,
complex ever-unfolding exigencies of government, much which
will seem unconstitutional to one man, or body of men, may
reasonably not seem so to another; that the Constitution often
admits of different interpretations; that there is often a range of c
choice and judgment; that in such cases the Constitution does
not impose upon the legislature any one specific opinion, but
leaves open this range of choice;. and that whatever choice is
not clearly in violation of a constitutional provision is valid even
if the Court thinks it unwise or undesirable. Thayer traced these
D
t +· views far back in American history, finding, for example, that as
early as 1811 the Chief Justice of Pennsylvania had concluded:
"For weighty reasons, it has been assumed as a principle in
constitutional construction by the Supreme Court of the United
States, by this Court, and every other Court of reputation in the
United States, that an Act of the legislature is not to be declared E
void unless the violation of the Constitution is so manifest as to
leave no room for reasonable doubt" vide Commonwealth
ex. Rel. O'Hara vs. Smith 4 Binn. 117 (Pg.1811).
~.
41. Thus, according to Prof.Thayer, a Court can declare a F
statute to be unconstitutional not merely because it is possible
to hold this view, but only when that is the only possible view
not open to rational question. In other words, the Court can
declare a statute to be unconstitutional only when there can be
no manner or doubt that it is flagrantly unconstitutional, and
G
there is no way of avoiding such decision. The philosophy
behind this view is that there is broad separation of powers
.. under the Constitution, and the three organs of the State - the
legislature, the executive and the judiciary, must respect each
other and must not ordinarily encroach into each other's domain.
H
354 SUPREME COURT REPORTS [2008] 3 S.C.R.

A Also the judiciary must realize that the legislature is a
democratically elected body which expresses the will of the
people, and in a democracy this will is not to be lightly frustrated
or obstructed.
42. Apart from the above, Thayer also warned that exercise
8 of the power of judicial review "is always attended with a serious
evil", namely, that of depriving people of "the political experience
and the moral education and stim:.ilus that comes from fighting
the question out in the ordinary way, and correcting their own
errors" and with the tendency "to dwarf the political capacity of
C the people and to deaden its sense of moral responsibility".
43. Justices Holmes, Brandeis and Frankfurter of the
United States Supreme Court were the followers of Prof.
Thayer's philosophy stated above. Justice Frankfurter referred
to Prof Thayer as "the great master of constitutional law", and in
0
a lecture at the Harvard Law School observed "if I were to name 4 '

one piece of writing on American Constitutional Law, I would
pick Thayer's once famous essay because it is the great guide
for judges and therefore, the great guide for understanding by
non-judges of what the place of the judiciary is in relation to
E constitutional questions". (vide H. Phillip's 'Felix Frankfurter
Reminisces' 299-300, 1960).
44. In our opinion, there is one and only one ground for
declaring an Act of the legislature (or a provision in the Act) to
F be invalid, and that is if it clearly violates some provision of the
Constitution in so evident a manner as to leave no manner of
doubt. This violation can, of course, be in different ways, e.g. if
a State legislature makes a law which only the Parliament can
make under List I to the Seventh Schedule, in which case it will
G violate Article 246( 1) of the Constitution, or the law violates some
specific provision of the Constitution (other than the directive
principles). But before declaring the statute to be
unconstitutional, the Court must be absolutely sure that there
can be no manner of doubt that it violates a provision of the
Constitution. If two views are possible, one making the statute
H
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 355
SMT. P. LAX.Ml DEVI [MARKANDEY KAT JU, J.]
' ,,_.
constitutional and the other making it unconstitutional, the former A
view must always be preferred. Also, the Court must make every
effort to uphold the constitutional validity of a statute, even if that
" requires giving a strained construction or narrowing down its
scope vide Mark Netto vs. Government of Kera la and others
AIR 1979 SC 83 (para 6). Also, it is none of the concern of the B
Court whether the legislation in its opinion is wise or unwise.
45. In a dissenting judgment in Bartels vs. Iowa 262 US
404 412(1923), Justice Holmes while dealing with a state statute
requiring the use of English as the medium of instruction in the
public schools (which the majority of the Court held to invalid) c
observed "I think I appreciate the objection to the law but it
appears to me to present a question upon which men reasonably
might differ and therefore I am unable to say that the Constitution
of the United States prevents the experiment being tried".
D
46. The Court certainly has the power to decide about the
i •
constitutional validity of a statute. However, as observed by
Justice Frankfurter in West Virginia vs. Barnette 319 U.S. 624
(1943), since this power prevents the full play of the democratic
process it is vital that it should be exercised with rigorous self I
restraint. E

47. In this connection we may quote from the article titled
'The Influence of James B Thayer Upon the Work of
Holmes, Brandeis & Frankfurter' by Wallace Mendelson
,/ >- published in 31 Vanderbilt Law Review 71 (1978), which is as F
follows:
"If, then, the Thayer tradition of judicial modesty is outmoded
- if judicial aggression is to be the rule in policy matters,
as in the 1930's -some basic issues remain. First, how
legitimate is government by judges ? Is anything to be G
beyond the reach of their authority ? Will anything be left
for ultimate resolution by the democratic processes - for
• what Thayer called "that wide margin of considerations
which address themselves only to the practical judgment
of a legislative body" representing (as courts do not) a H
356 SUPREME COURT REPORTS (2008) 3 S.C.R.

A wide range of mundane needs and aspirations ? The
... .
legislative process, after all, is a major ingredient of
freedom under government.
Legislation is a process slow and cumbersome. It
turns out a product - laws - that rarely are liked by
B everybody, and frequently little liked by anybody. When
seen from the shining cliffs of perfection the legislative
process of compromise appears shoddy indeed. But when
seen from some concentration camp as the only alternative
way of life, the compromises of legislation appear but
c another name for what we call civilization and even revere
as Christian forbearance.
Let philosophy fret about ideal justice. Politics is our
substitute for civil war in a constant struggle between
different conceptions of good and bad. It is far too wise to
D
gamble for Utopia or nothing - to be fooled by its own
romantic verbiage. Above all, it knows that none of the ~·
numerous clashing social forces is apt to be completely
without both vice and virtue. By give and take, the
legislative process seeks not final truth, but an acceptable
E balance of community interests. In this view the harmonizing
and educational function of the process itself counts for
more than any of its legislative products. To intrude upon
its pragmatic adjustments by judicial fiat is to frustrate our
chief instrument of social peace and political stability.
F ~ \
Second, if the Supreme Court is to be the ultimate
policy-making body- without political accountability- how
is it to avoid the corrupting effects of raw power? Can the
Court avoid the self-inflicted wounds that have marked
other episodes of judicial imperialism? Can the Court
G
indeed satisfy the expectations it has already aroused?
A third cluster of questions involves the competence
of the Supreme Court as a legislative body. Can any nine ..
men master the complexities of every phase of American
H life which, as the post 1961 cases suggest, is now the
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 357
f .Joe
SMT. P. LAX.Ml DEVI [MARKANDEY KATJU, J.]
Court's province? Are any nine men wise enough and A
good enough to wield such power over the lives of millions?
Are courts institutionally equipped for such burdens? Unlike
legislatures, they are not representative bodies reflecting
a wide range of social interest. Lacking a professional
staff of trained investigators, they must rely for data almost 8
exclusively upon the partisan advocates who appear before
them. Inadequate or misleading information invites
unsound decisions. If courts are to rely upon social science
data as facts, they must recognize that such data are often
tentative at best, subject to varying interpretations, and c
questionable on methodological grounds. Moreover, since
social science findings and conclusions are likely to change
with continuing research, they may require a system of
ongoing policy reviews as new or better data become
available. Is the judiciary capable of performing this function
D
•> of supervision and adjustment traditionally provided by
the legislative and administrative processes?
Finally, what kind of citizens will such a system of judicial
activism produce-a system that trains us to look not to ourselves
for the solution of our problems, but to the most elite among E
elites: nine Judges governing our lives without political or judicial
accountability? Surely this is neither democracy nor the rule of
law. Such are the problems addressed by and - at least in the
,
minds of jurists like Holmes, Brandeis, and Frankfurter -
~
resolved by Thayer's doctrine of judicial restraint". F
We respectfully agree with the views expressed above,
and endorse Thayer's doctrine of self restraint.
48. In our opinion judges must maintain judicial self-restraint
while exercising the power of judicial review of legislation.
G
"In view of the complexities of modern society", wrote
;.
Justice Frankfurter, while Professor of Law at Harvard
University, "and the restricted scope of any man's
experience, tolerance and humility in passing judgment
on the worth of the experience and beliefs of others H
358 SUPREME COURT REPORTS [2008) 3 S.C.R.
... 1

A become crucial faculties in the disposition of cases. The
successful exercise of such judicial power calls for rare
intellectual disinterestedness and penetration, lest
limitation in personal experience and imagination operate
as limitations of the Constitution. These insights Mr. Justice
B Holmes applied in hundreds of cases and expressed in
memorable language:
"It is a misfortune if a judge reads his conscious or
unconscious sympathy with one side or the other
prematurely into the law, and forgets that what seem to
c him to be first principles are believed by half his fellow
men to be wrong."
(See Frankfwter's 'Mr. Justice Holmes and the Supreme
Court')
D 49. In our opinion the legislature must be given freedom _,
to do experimentations in exercising its powers, provided of
course it does not clearly and flagrantly violate its constitutional
limits.
50. As observed by Mr. Justice Brandeis of the U.S.
E Supreme Court in his dissenting judgment in New State Ice
Co. vs. Liebmann 285 U.S. 262 (310-11):
"The discoveries in physical science, the triumphs in
invention, attest the value· of the process of trial and error.
F In large measure, these advances have been due to - '

experimentation.,.... There must be power in the States
and the Nation to re-mould, through experimentation, our
economic practices and in situations to meet changing
social and economic needs.
G To stay experimentation in things social and economic
is a grave responsibility. Denial of the right to experiment
may be fraught with serious consequences to the Nation." ..
51. In writing a biographical essay on the celebrated Justice
Holmes of the U.S. Supreme Court in the dictionary of American
H
. ~
GOVERNMENT OF ANDHRA PRADESH & ORS. v.
SMT. P. LAXMI DEVI [MARKANDEY KATJU, J.]
359

Biography, Justice Frankfurter wrote: A
"'It was not for him (Homes) to prescribe for society or to
deny it the right of experimentation within very wide limits.
That was to be left for contest by the political forces in the
state. The duty of the Court was to keep the ring free. He
reached the democratic result by the philosophic route of B
skepticism - by his disb~lief in ultimate answers to social
questions. Thereby he exhibited the judicial function atits
purest."
(see 'Essays on Legal History in Honour of Felix · c
Frankfurter' edited by Morris D. Forkosch)
52. In this connection Justice Frankfurter while Professor
of Law at Harvard University wrote in 'The Public and its

.;
Government' -
"With the great men of the Supreme Court constitutional
adjudication has always been statecraft. As a mere Judge,
D

Marshall had his superiors among his colleagues. His
supremacy lay in his recognition of the practical needs of
government. The· great judges are those to whom the
Constitution is not primarily a text for interpretation but the E
means of ordering the life of a progressive people."
In the same book Justice Frankfurter also wrote -
_. "In simple truth, the difficulties that government encounters
from law do not inhere in the Constitution. They are due to F
the judges who interpret. That document has ample
resources for imaginative statesmanship, if judges have
imagination for statesmanship."
53. In Keshvananda Bharati vs. State of Kerala AIR G
1973 SC 1461 (vide para 1547) Khanna J. observed:
"In exercising the power of judicial review, the Courts cannot
•
be oblivious of the practical needs of the government The
door has to be left open for trial and error."
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360 SUPREME COURT REPORTS [2008] 3 S.C.R.
' 1

A 54. In our opinion adjudication must be done within the
system of historically validated restraints and conscious
minimization of the judges personal preferences. The Court must
not invalidate a statute lightly, for, as observed above, invalidation
of a statute made by the legislature elected by the people is a
B grave step. As observed by this Court in State of Bihar vs.
Kameshwar Singh AIR 1952, SC 252(274): "The legislature
is the best judge of what is good for the community, by whose '·
suffrage it comes into existence".
55. In our opinion, the Court should, therefore, ordinarily
c defer to the wisdom of the legislature unless it enacts a law
about which there can be no manner of doubt about its
unconstitutionality.
56. As observed by the Constitution Bench decision of this
Court in M.H. Quareshi vs. State of Bihar AIR 1958 SC 731
D
(vide para 15) : ~ <

"The Court must presume that the legislature understands
and correctly appreciates the needs of its own people,
that its laws are directed to problems made manifest by
E experience and that its discriminations are based on
adequate grounds. It must be borne in mind that the
legislature is free to recognize degrees of harm and may
confine its restrictions to those cases where the need is
deemed to be the clearest, and finally that in order to
F sustain the presumption of constitutionality the Court may
take into consideration matters of common knowledge,
common report, the history of the times, and may assume
every state of facts which can be conceived existing at the
time of the legislation. (See also Moti Das vs. S.P. Sahi
AIR 1959 SC 942(947).
G
57. In the light of the above observations, the impugned
amendment is clearly constitutional. The amendment was
obviously made to plug a loophole in the Stamp Act so as to
prevent evasion of stamp duty, and for quick collection of the
H duty. There are other statutes e.g. the Income Tax Act in which
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 361
SMT. P. LAXMI DEVI [MARKANDEY KATJU, J.]
~ #-

there are provisions for deduction at source, advance tax, etc. A
which aim at quick collection of tax, and the constitutional validity
of these provisions have always been upheld.
C. Application of Thayer's Doctrine by the Courts :
In America, after the activist period of the US Supreme B
Court which was at one time declaring Act after Act of the U.S.
, Congress to be invalid on the ground that it violated the due
process clause in the U.S. Constitution or the right to liberty of
contract, there was a realization by the Judges of the U.S.
Supreme Court that they were following a confrontationist path c
vis-a-vis the U.S. Congress which was causing all kinds of major
problems. Hence in 1937 the U.S. Supreme Court accepted
Thayer's doctrine of judicial restraint, and the same was followed
thereafter (except for the period of the Warren Court).
58. The U.S. Supreme Court enunciated the principle that D
.... there is a presumption in favour of the constitutionality of Statute,
and the burden is always upon the pe:rson who attacks it to show
that there has been a clear transgression of a constitutional
provision. This view was adopted by the Constitution Bench of
this Court in Charanjit Lal Chowdhury vs. Union of India E
and others AIR 1951 SC 41 (para 10), which observed:
"Prima facie, the argument appears to be a plausible
one, but it requires a careful examination, and while
examining it, two principles have to be borne in mind :
t ,, (1) that a law may be constitutional even through it relates F
to a single individual, in those cases where on account
of some special circumstances or reasons applicable to
him and not applicable to others, that single individual
may be treated as a class by himself,· (2) that it is the
accepted doctrine of the American Courts, which I G
consider to be well-founded on principle, that the
presumption is always in favour of the constitutionality of
~ an enactment, and the burden is upon him who attacks
it to show that there has been a clear transgression of the
constitutional principles. A clear enunciation of this latter H
362 SUPREME COURT REPORTS [2008] 3 S.C.R.

A doctrine is to be found in Middleton vs. Texas Power
and L. Company, (248 U.S. 152 and 157), in which the
relevant passage runs as follows : ·
It must be presumed that a legislature understands
and correctly appreciates the need of its own people,
B that its laws are directed to problems made manifest
by expression and that its discriminations are
based upon adequate grounds."
(emphasis supplied)
c and this view has been consistently followed thereafter.
59. Thus in M/s. B.R. Enterprises vs. State of U.P. and
others AIR 1999 SC 1867 this Court observed:
"Another principle which has to be borne in mind in
D examining the constitutionality of a statute is that it must
be assumed that the legislature understands and ... ·
appreciates the need of the people and the laws it enacts
are directed to problems which are made manifest by
experience and that the elected representatives
E assembled in a legislature enact laws which they consider
to be reasonable for the purpose for which they are
enacted. Presumption is, therefore, in favour of the
constitutionality of an enactment, vide Charanjit Lal
Chowdhury vs. Union of India 1950 SCR 869: AIR 1951
F· SC 41); State of Bombay vs. F.N. Bulsara, 1951 SCR
682: (AIR 1951 SC 318), Mahant Moti Das vs. S.P. Sahi
(AIR 1959 SC 942)".
The following passage in Seervai, Constitutional Law of
India (3'd Edn.) page 119 found approval in Delhi
G Transport Corporation vs. D. TC. Mazdoor Congress,
1991 (Supp) 1 SCC 600: (AIR 1991 SC 101). The Court
held:
"Seervai in his book Constitutional Law of India (3rd
Edn) has stated at page 119 that:
H
. ~
GOVERNMENT OF ANDHRA PRADESH & ORS. v.
SMT. P. LAXMI DEVI [MARKANDEY KATJU, J.)
363

" ...... the courts are guided by the following rules in A
discharging their solemn duty to declare laws passed by
a leQislature unconstitutional:
1) There is a presumption in favour of constitutionality
and a law will not be declared unconstitutional unless
the case is so clear as to be free from doubt; 'to doubt the B
constitutionality of a law is to resolve it in favour of its
validity'.
****
2) A statute cannot be declared unconstitutional c
merely because in the opinion of the court it violates one
or more of the principles of liberty, of the spirit of the
Constitution, unless such principles and that spirit are
found in the terms of the Constitution"
D
, ,,, (emphasis supplied)
60. Similarly in Union of India vs. Elphinstone Spinning
and Weaving Co. Ltd. and others AIR 2001 SC 724 (vide
para 9) a Constitution Bench of this Court observed :
"There is always a presumption that the legislature does E
not exceed its jurisdiction and the burden of establishing
that the legislature has transgressed constitutional
mandates such as, those relating to fundamental rights
;.. is always on the person who challenges its vires. Unless
it becomes clear beyond reasonable doubt that the F
legislation in question transgresses the limits laid down
by the organic law of the Constitution it must be allowed
to stand as the true expression of the national will - Shell
Company of Australia vs. Federal Commissioner of
Taxation, 1931 AC 275(Privy Council). The aforesaid G
principle, however, is subject to one exception that if a
citizen is able to establish that the legislation has invaded
' his fundamental rights then the State must justify that
the law is saved. It is also a cardinal rule of construction
that if one construction being given the statute will become H
364 SUPREME COURT REPORTS (2008] 3 S.C.R.

A ultra vires the powers of the legislature whereas on
another construction which may be open, the statute
remains effective and operative, then the Court will prefer
the latter, on the ground that the legislature is presumed
not to have intended an excess of jurisdiction".
B (emphasis supplied)
61. In State of Bihar and others vs. Bihar Distillery Ltd. ~.
AIR 1997 SC 1511 (vide para 18) a Constitution Bench of this
Court observed :
c "The approach of the Court, while examining the challenge
to the constitutionality of an enactment, is to start with the
presumption of constitutionality. The Court should try to
sustain its validity to the extent possible. It should strike
down the enactment only when it is not possible to sustain
D it. The Court should not approach the enactment with a
.... '
view to pick holes or to search for defects of drafting,
much less inexactitude of language employed. Indeed,
any such defects of drafting should be ironed out as part
of the attempt to sustain the validity/constitutionality of the
E enactment. After all, an Act made by the Legislature
represents the will of the people and that cannot be lightly
interfered with. The unconstitutionality must be plainly and
clearly established before an enactment is declared as
void."
F 62. The same view has been taken by the Constitution
Bench of this Court in Hamdard Dawakhana and another
vs. Union of India AIR 1960 SC 554 (vide para 9) which
observed:
"Another principle which has to be borne in mind in
G
examining the constitutionality of a statute is that it must
be assumed that the legislature understands and
appreciates the need of the people, that the laws it enacts
are directed to problems which are made manifest by
experience, and that the elected representatives
H
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 365
SMT. P. LAXMI DEVI [MARKANDEY KAT JU, J.]

assembled in a legislature enact laws which they consider A
to be reasonable for the purpose for which they are
enacted. Presumption is, therefore, in favour of the
constitutionality of an enactment. Charanjit Lal vs. Union
of India, 1950 SCR 869: (AIR 1951 SC 41 ); State of
Bombay vs. F.N. Baulsara, 1951 SCR 682 at p.708; (AIR B
1951 SC 318 at p. 326); AIR 1959 SC 942."
63. As observed by the Privy Council in Shell Company
of Australia vs. Federal Commissioner of Taxation (1931)
AC 275 (298) :
c
"Unless it becomes clear beyond reasonable doubt that
the legislation in question transgresses the limits laid down
by the organic law of the Constitution it must be allowed
to stand as the true expression of the national will."
64. Hence if two views are possible, one making the D
provision in the statute constitutional, and the other making it
unconstitutional, the former should be preferred vide Kedarnath
vs. State of Bihar AIR 1962 SC 955. Also, if it is necessary to
uphold the constitutionality of a statute to construe its general
words narrowly or widely, the Court should do so vide G.P. E
Singh's 'Principles of Statutory Interpretation, 9th Edition, 2004
page 497'. Thus the word 'Property' in the Hindu Women's Right
to Property Act, 1937 was construed by the Federal Court in In
re Hindu Women's Right to Property Act AIR 1941 FC 72 to
mean 'property other than agricultural land', otherwise the Act F
would have become unconstitutional.
65. The Court must, therefore, make every effort to uphold
the constitutional validity of a Statute, even ifthat requires giving
the statutory provision a strained meaning, or narrower or wider
meaning, than what appears on the face of it. It is only when all G
•
efforts to do so fail should the Court declare a statute to be
unconstitutional.
D. Some difficulties in the practical application of
Thayer's Doctrine:
H
366 SUPREME COURT REPORTS [2008] 3 S.C.R.

A After laying down the above broad principles in relation to
...
the Thayer doctrine of Judicial Review of Statutes (which we
respectfully agree with) we may now consider some practical
difficulties which arise in this connection.
66. As stated above, it is only when there is no manner of
8 doubt that the Statute is unconstitutional that it should be
declared to be so. However, even reasonable men can
sometimes differ as to whether there is a doubt or not about the '
constitutional validity. In other words, sometimes there can be a
doubt whether there is a doubt at all. About some statutes there
c can be no doubt that they are unconstitutional e.g. if
discriminatory treatment is given to redheads, or if a statute
excluded owners of a certain make of motor vehicle from voting
in a general election. However, there are other statutes about
which one cannot be absolutely sure about their constitutional
D validity, and difficulties would then arise in this connection.
67. Some broad principles to resolve these difficulties are ~ .
given below.
68. As regards fiscal or tax measures greater latitude is
E given to such statutes than to other statutes. Thus in the
Constitution Bench decision of this Court in R. K. Garg vs.
Union of India and others 1981 (4) SCC 675 (vide para 8)
this Court observed:
"Another rule of equal importance is that laws relating to
F economic activities should be viewed with greater latitude '"'
than laws touching civil rights such as freedom of speech,
religion etc. It has been said by no less a person than
Holmes, J. that the legislature should be allowed some
play in the joints, because it has to deal with complex
G problems which do not admit of solution through any
doctrinaire or strait-jacket formula and this is particularly
true in case of legislation dealing with economic matters,
where, having regard to the nature of the problems •
required to be dealt with, greater play in the joints has to
H be allowed to the legislature. The court should feel more
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 367
SMT. P. LAX.Ml DEVI [MARKANDEY KAT JU, J.]
• >

inclined to give judicial deference to legislative judgment A
in the field of economic regulation than in other areas
where fundamental human rights are involved. Nowhere
has this admonition been more felicitously expressed
than in Morey v. Doud where Frankfurter, J. said in his
~ inimitable style: B
In the utilities, tax and economic regulation cases, there
are good reasons for judicial self-restraint if not judicial
deference to legislative judgment. The legislature after
I all has the affirmative responsibility. The courts have
c
~

only the power to destroy, not to reconstruct. When these
are added to the complexity of economic regulation, the
uncertainty, the liability to error, the bewildering conflict
of the experts, and the number of times the judges have
been overruled by events ·_ self- limitation can be seen
to be the path to judicial wisdom and institutional prestige D
. ~ and stability.
The court must always remember that "legislation is
directed to practical problems, that the economic
mechanism is highly sensitive and complex, that many
problems are singular and contingent, that laws are not E
abstract propositions and do not relate to abstract units
and are not to be measured by abstract symmetry';· "that
exact wisdom and nice adaptation of remedy are not
.~
always possible" and that ''iudgment is largely a prophecy
).
based on meagre and uninterrupted experience". Every F
legislation particularly in economic matters is essentially
empiric and it is based on experimentation or what may
_, one call trial and error method and therefore it cannot
provide for all possible situations or anticipate all possible
abuses. There may be crudities and inequities in G
complicated experimental economic legislation but on
that account alone it cannot be struck down as invalid.
> The courts cannot, as pointed out by the United States
Supreme Court in Secretary of Agriculture v. Central
Reig Refining Company, be converted into tribunals for H
•
368 SUPREME COURT REPORTS [2008] 3 S.C.R.

A relief from such crudities and inequities. There may even
be possibilities of abuse, but that too cannot of itself be
a ground for invalidating the legislation, because it is not
possible for any legislature to anticipate as if by some
divine prescience, distortions and abuses of its legislation
B which may be made by those subject to its provisions
and to provide against such distortions and abuses.
Indeed, howsoever great may be the care bestowed on
its framing, it is difficult to conceive of a legislation which
is not capable of being abused by perverted human
c ingenuity. The court must therefore adjudge the
constitutionality of such legislation by the generality of
its provisions and not by its crudities or inequities or by
the possibilities of abuse of any of its provisions. If any
crudities, inequities or possibilities of abuse come to
light, the legislature can always step in and enact suitable
D
amendatory legislation. That is the essence of pragmatic .
approach which must guide and inspire the legislature
in dealing with complex economic issues".
(emphasis supplied)
E 69. All decisions in the economic and social spheres are
essentially ad hoc and experimental. Since economic matters
are extremely complicated, this inevitably entails special
treatment for special situations. The State must therefore be
left with wide latitude in devising ways and means of fiscal or
F regulatory measures, and the Court should not, unless compelled
by the statute or by the Constitution, encroach into this field, or
invalidate such law.
70. As Justice Frankfurter of the U.S. Supreme Court
G observed in American Federation of Labour vs. American
Sash and Door Co. 335 U.S. 538 (1949):
"Even where the social undesirability of a law may be
convincingly urged, invalidation of the law by a Court
debilitates popular democratic government. Most laws
H dealing with social and economic problems are matters
GOVERNMENT OF A~DHRA PRADESH &-ORS. v. 369
. I'
SMT. P. LAX.Ml DEVI [MARKANDEY KAT JU, J.]

of trial and error. That which before trial appears to be A
demonstrably bad may belie prophecy in actual operation.
But even if a law is found wanting on trial, it is better that
its defects should be demonstrated and removed by the
legislature than that the law should be aborted by judicial
fiat. Such an assertion of judicial power defeats B
responsibility from those on whom in a democratic society
it ultimately rests. Hence rather than exercise judicial review
Courts should ordinarily allow legislatures to correct their
own mistakes wherever possible".

71. Similarly, in his dissenting judgment in New State Ice c
Co. vs. Liebmann 285 U.S. 262 (1932) Mr. Justice Brandeis,
the renowned Judge of the U.S. Supreme Court observed that
the government must be left free to engage in social

. ~
experiments. Progress in the social sciences, even as in the
physical sciences, depends on a "process of trial and error"
and Courts must not interfere with necessary experiments.
D

72. In Secretary of Agriculture vs. Central Reig
Refining Co. (1949) 338 U.S. 604 (617): 94 Law Ed. 381 ~292,
Mr. Justice Frankfurter of the U.S. Supreme Court observed:
E
"Congress was ...... confronted with the formulation of
policy peculiarly within its_ wide swath of discretion. It would
be a singular intrusion of the judiciary into the legislative
..• .... process to extrapolate restrictions upon the formulation of
such an economic policy from those deeply rooted notions F
of justice which the Due Process Clause expresses .... "
73. However, though while considering economic .or most
other legislation the Court gives great latitude to the legislature
when adjudging its constitutionality, a very different approach
has to be adopted by the Court when the question of civil G
liberties and the fundamental rights under Part Ill of the ·
;. Constitution arise.
74. In paragraph 8 of the Constitution Bench decision in
R.K. Garg's case (supra) it was observed (as quoted above)
H
370 SUPREME COURT REPORTS [2008] 3 S.C.R.
1 •
A that laws relating to economic activities should be viewed with
greater latitude than laws touching civil rights such as freedom
of speech, freedom of religion etc. Thus, the Constitution Bench
decision in R.K Garg's case (supra) is an authority for the
proposition which has been stated herein, namely, when a law
8 of the legislature encroaches on the civil rights and civil liberties
of the people mentioned in Part Ill of the Constitution (the
fundamental rights), such as freedom of speech, freedom of
movement, equality before law, liberty, freedom of religion etc,
the Court will not grant such latitude to the legislature as in the
c case of economic measures, but will carefully scrutinize whether
the legislation on these subjects is violative of the rights and
liberties of the citizens, and its approach must be to uphold those
rights and liberties, for which it may sometimes even have to
declare a statute to be unconstitutional.
D 75. Some scholars regarded it a paradox in the judgments . ' ,

of Justice Holmes (who, as we have already stated above, was
a disciple of Thayer) that while he urged tolerance and deference
to legislative judgment in broad areas of lawmaking challenged
as unconstitutional, he seemed willing to reverse the presumption
E of constitutionality when laws inhibiting civil liberties were before
the Court.
76. However, we find no paradox at all. As regards
economic and other regulatory legislation judicial restraint must
...
be observed by the Court and greater latitude must be given to ~,

F the legislature while adjudging the constitutionality of the statute
because the Court does not consist of economic or
administrative experts. It has no expertise in these matters, and
in this age of specialization when policies have to be laid down
with great care after consulting the specialists in the field, it will
G be wholly unwise for the Court to encroach into the domain of
the executive or legislative and try to enforce its own views and
perceptions. ' ~

77. In this connection we may refer to the famous dissenting
judgment of Mr. Justice Holmes in Lochner vs. York, 198 U.S.
H
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 371
SMT. P. LAXMI DEVI [MARKANDEY KAT JU, J.]
.. ,
45(1903). In that case, the validity of a law made by the New A
York Legislature providing for a maximum of 10 hour a day and
60 hour a week work in the bakery industry was challenged.
While the majority, who believed in the laissez faire theory of
economics, held that the law violated the liberty of contract, which
. they perceived as part of the Bill of Rights to the U.S. B
Constitution, Mr. Justice Holmes pointed out that the Constitution
was not intended to embody any particular economic theory,
r whether of paternalism or of laissez faire. He further observed
that reasonable men might think the impugned statute is a
proper measure to ensure the health of the workers, and hence c
it was well within the power of the legislature to enact it. To use
his own words in the judgment, "The Fourteenth Amendment (to
the U.S. Constitution) does not enact Mr. Herbert Spencer's
Social Statics".
78. However, when it came to civil liberties, Mr. Justice D
~ .,.,._ Holmes was an activist Judge. Thus, in Schenck vs. U.S. 249
U.S. 47 (1919) he laid down his famous "clear and present
danger" test for deciding whether restriction on free speech was
constitutionally valid. As Mr. Justice Holmes observed, the
question in every case is "whether the words used are used in E
such circumstances and are of such a nature as to create a
clear and present danger that they will bring about substantive
evils that Congress has a right to prevent".
79. We respectfully endorse the view of Mr. Justice Holmes,
,.. as stated above. F

80. In Abrams vs. U.S. 250 U.S. 616 624 (1919), Mr.
Justice Holmes observed :
"Persecution for the expression of opinions seems to
me perfectly logical. If you have no doubt of your G
premises or your power and want a certain result with all
your heart you naturally express your wishes in law and
.. sweep away all opposition. To allow opposition by speech
seems to indicate that you think the speech impotent, as
when a man says that he has squared the circle, or that H
372 SUPREME COURT REPORTS [2008] 3 S.C.R.

A you do not care wholeheartedly for the result, or that you ' .
doubt either your power or your premises. But when men
have realized that time has upset many fighting faiths,
they may come to believe even more than they believe
the very foundations of their own conduct that the ultimate
B good desired is better reached by free trade in ideas -
that the best test of truth is the power of the thought to get
itself accepted in the competition of the market, and that
truth is the only ground upon which their wishes safely
can be carried out. That, at any rate, is the theory of our
c Constitution. It is an experiment as all life is an
experiment."
(emphasis supplied)
81. In his famous 'Footnote Four' in United States vs.
D Carolene Products Co. 304 U.S. 144, Mr. Justice Stone of
the United States Supreme Court observed :
"There may be narrower scope for operation of the
presumption of constitutionality when legislation appears
on its face to be within a specific prohibition of the
E Constitution, such as those of the first ten amendments,
which are deemed equally specific when held to be
embraced within the Fourteenth".
In a letter to Stone in the first Flag Salute case, in which
Stone was the lone dissenter, Justice Frankfurter said:
F
"I am aware of the important distinction which you so skillfully
adumbrated in your footnote 4 .... In the Carolene Products
Co. case. I agree with that distinction; I regard it as basic.
I have taken over that distinction in its central aspect ....
in the present opinion by insisting on the importance of
G
keeping open all those channels of free expression by
which undesirable legislation may be removed, and
keeping unobstructed all forms of protests against what
are deemed invasions of conscience".

H We respectfully agree with the above views.
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 373
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82. For Justice Holmes, democracy was not hurt but A
strengthened whenever courts protected the individual freedoms
which alone make the democratic process meaningful and valid.
For the substance of decisions to be truly democratic, the
process by which they are reached must give as much free play
as possible for the transmutation of present minorities into future s
majorities by the unencumbered operation of freedom of thought,
communication, and discussion. From this point of view,
reasonably equal access to the political processes and
reasonably uninhibited freedom to argue and discuss (limited
only by imminently impending danger to the state itself) is in c
fact an integral part of, although antecedent to, the formal
legislative processes of democracy. Hence to uphold the
restrictions on freedom of thought and communication and
access to the political processes which may be placed in effect
by a temporary majority would be actually to reduce the integrity D
of the processes of transforming that transient majority into a
> I minority - a processes essential to the very concept of
democracy. Professor Chafee years ago remarked the fact that
the Justices, including Holmes, who tended to uphold wide
legislative control over business were often the very same men
who tended to invalidate wide legislative control over discussion. E
"These Justices", said Chafee, "know that statutes, to be sound
and effective, must be preceded by abundant printed and oral
controversy. Discussion is really legislation in the soft. Drastic
restrictions on free discussion are similar to rigid constitutional
limits on lawmaking". F

83. In our opinion, therefore, while Judges should practice
great restraint while dealing with economic statutes, they should
be activist in defendrrrg,Jhe civil liberties and fundamental rights
of the citizens. This is necessary because though ordinarily the G
legislature represents the will of the people and works for their
welfare, there can be exceptional situations where the legislature,
though elected by the people may violate the civil liberties and
rights of the people. It was because of this foresight that the
Founding Fathers of the Constitution in their wisdom provided
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374 SUPREME COURT REPORTS (2008] 3 S.C.R.

A fundamental rights in Part Ill of the Constitution which were
modeled on the lines of the U.S. Bill of Rights of 1791 and the
Declaration of the Rights of Man during the Great French
Revolution of 1789.
84. It may be mentioned that during feudal times citizens
8 had no civil rights. There was no freedom of speech, no equality,
no freedom to practice one's own religion, no liberty etc. The
Great English Revolution of 1688 emphasized the importance
of liberty and the Great French Revolution of 1789 underscored
equality and freedom of religion. The Great American Revolution
C championed all these rights. Our founding fathers borrowed
these lessons from history and provided for the fundamental
rights in our Constitution to protect the citizens' liberties not only
against the executive but even against the legislature, if need
be.
D
85. It may be noted that there were no fundamental rights
in the Government of India Act, 1935. The Founding Fathers of
our Constitution, who were also freedom fighters for India's
Independence, knew the value of these rights, and that is why
they incorporated them in the Constitution.
E
86. It must be understood that while a statute is made by
the peoples' elected representatives, the Constitution too is a
document which has been created by the people (as is evident
from the Preamble). The Courts are guardians of the rights and
F liberties of the citizens, and they will be failing in their
responsibility if they abdicate this solemn duty towards the
citizens. For this, they may sometimes have to declare the act
of the executive or legislature as unconstitutional.
87. In Terminiello vs. Chicago 337US1 (1949), the U.S.
G Supreme Court observed that free speech may best serve its
high purpose when it induces a condition of unrest, creates
dissatisfaction with conditions as they are, even stirs people to
anger.
88. In Bridges vs. California 314 US 252 (1941) the U.S.
H
GOVERNMENT OF ANDHRA PRADESH & ORS. v. 375
SMT. P. LAXMI DEVI [MARKANDEY KATJU, J.]
' I'

Supreme Court observed that freedom of the press must be A
allowed the broadest scope compatible with the supremacy of
order.
89. In Wood vs. Georgia 370 U.S. 375(1962), the U.S.
Supreme Court observed that Judges may use their contempt
power to punish disorder in the courtroom, but not to penalize B
any editor who assails the performance of the Court in print.

90. In Ghani vs. Jones (1970) 1 Q.B. 693 (709) Lord
Denning observed:

"A man's liberty of movement is regarded so highly by the c
law of England that it is not to be hindered or prevented
except on the surest ground."

91. The above observation has been quoted with approval
by a Constitution Bench decision of this Court in Maneka
D

." Gandhi vs. Union of India, AIR 1978 SC 597 (vide para 99).
92. Why is it that the Courts both in India and in America
have taken an activist approach in upholding the civil liberties
and rights of the citizens? In our opinion, this is because freedom
and liberty is essential for progress, both economic and social. E
Without freedom to speak, freedom to write, freedom to think,
freedom to experiment, freedom to criticize (including criticism
of the Government) and freedom to dissent there can be no
progress.

93. Scientific ideas initially were often condemned F
because they were regarded as opposed to religious dogma.
For instance, Charles Darwin's theory or Copernicus' theory at
one time were condemned because they were regarded as
opposed to the Bible. It was only by freedom of speech, freedom
to think and freedom to dissent that human progress was G
possible. And it is for this reason that our founding fathers in
their wisdom provided for the fundamental rights in Part Ill of the
Constitution. It is the solemn duty of the Courts to uphold the
civil rights and liberties of the citizens against executive or
legislative invasion, and the Court cannot sit quiet in this H
376 SUPREME COURT REPORTS [2008] 3 S.C.R.

A situation, but must play an activist role in upholding civil liberties
' .
and the fundamental rights in Part Ill, vide Maneka Gandhi vs.
Union of India, AIR 1978 SC 597, Joginder Kumar-vs. State
of U.P., AlR 1994 SC 1349, D. K. Basu vs. State of West
Bengal, AIR 1997 SC 610, etc.
B 94. In view of the fact that the impugned amendment is an
economic measure, whose aim is to plug the loopholes and
secure speedy realization of stamp duty, we are of the opinion
that the said amendment, being an economic measure, cannot
"'
be said to be unconstitutional.
c
95. In view of the above observation, this appeal is allowed
and the impugned judgment is set aside and the constitutional
validity of the amended Section 47A of the Stamp Act is upheld.
In the facts and circumstances of the case, there shall be no
order as to costs.
0
K.K.T. Appeal allowed. . .