Holding

Indefinite requisition under the amended Act is a colourable acquisition and is invalid; requisition power is limited to a temporary duration.

Summary

The owner of a cashew factory leased it to the Kerala State Cashew Development Corporation, but after the lease expired the corporation continued to occupy the premises. The Kerala Cashew Factories (Requisitioning) Act, 1979 allowed the State to requisition such factories for up to five years; an amendment in 1985 removed this time limit, permitting indefinite extensions. The owner challenged the amendment, arguing that an indefinite requisition is in reality an acquisition and violates constitutional provisions. The Supreme Court held that requisition is a temporary measure and cannot be used to retain possession indefinitely; such an exercise amounts to a colourable acquisition and is unconstitutional. Consequently, the Court dismissed the appeals filed by the State and the corporation, leaving the lower court’s order in favour of the owner undisturbed.

Issues considered

Whether the 1985 amendment to the Kerala Cashew Factories (Requisitioning) Act, which removes the five‑year limit on requisition, amounts to a colourable exercise of power tantamount to acquisition.
Whether an indefinite requisition violates Articles 19(1)(g), 300A and other constitutional guarantees.

Subjects

requisitionacquisitionconstitutional lawproperty rightscolourable legislationtemporary vs permanentfundamental rightsKerala Cashew Actlease expirypublic purpose

Judgment

(2009) 4 S.C.R 419

KERALA STATE CASHEW DEVELOPMENT A
CORPORATION
V.
SHAHAL HASSAN MUSSALIAR & ANR.
Civil Appeal No. 8247 of 2001

MARCH 16, 2009 B

[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.]
Kera/a Cashew Factories (Requisitioning) Act, 1979, as
amended by Act No.26 of 1985 - s.3 - Requisition and
acquisition - Difference between - Discussed - s.3 of the Act C
empowered the State Goyernment to requisition cashew
factories leased to Kera/a State Cashew Development
Corporation for maximum period of five years - Amending
Act of 1985 purportedly removed the limitation of five years
\
and enabled the State Government to requisition such cashew D
factories for an indefinite period of time - Challenge to - Held:
The State cannot under the guise of requisition continue
dominion over someone's property for an indefinite period of
time, because that would be a fraud on the power conferred on
the government - If the Government wants to take over the E
property for an indefinite period of time, the Government must
acquire the property - The power of requisitioning would be
upheld, if it is to be exercised for a temporary duration, which
is limited either in terms of time or by reason of a contingency
- Constitutionalism - Colourable legislation. F
Section 3 of the Kerala Cashew Factories
(Requisitioning) Act, 1979 empowered the State
Government to requisition cashew factories leased to
, • .. Kerala State Cashew Development Corporation for a G
maximum period of five years.
The Amending Act of 1985 (Act No. 26 of 1985)
purportedly removed the limitation of five years an.d
419 H
420 SUPREME COURT REPORTS [2009] 4 S.C.R.

A enabled the State Government to requisition such cashew
factories for an indefinite period of time.
In the instant appeals, the question which arose for
consideration was: whether where any statute
empowered the State to continue to extend a requisition
8 order for an indefinite period, it is an order for acquisition
and, therefore, a colourable exercise of power which is
not available to the State under the Act.
Dismissing the appeals, the Court
C HELD:1. The two concepts, one of requisition and
the other of acquisition, are totally distinct and
independent. Acquisition means the acquiring of the
entire title of the expropriated owner, whatever the nature
and extent of that title may be. The entire bundle of rights
D which was vested in the original holder passes on
acquisition to the acquirer, leaving nothing to the former.
The concept of acquisition has an air of permanence and
finality in that there is transference of the title of the original
holder to the acquiring authority. In contradistinction, the
E concept of requisition involves merely taking of domain
or control over property without acquiring rights of
ownership and must by its very nature be of temporary
duration. The State cannot under the guise of requisition
continue dominion over some one's property for an
F indefinite period of time, because that would be a fraud
on the power conferred on the government. If the
Government wants to take over the property for an
indefinite period of time, the Government must acquire
the property, but it cannot use the power of requisition
G which is exercisable by the Government only for a public
purpose which is of a transitory character. If the public
purpose for which the premises are required is of a
perennial or permanent character from the very inception,
no order can be passed requisitioning the premises and,
H in such a case, the order of requisition, if passed, would
KERALA STATE CASHEW DEV. CORP. V. 421
SHAHAL HASSAN MUSSALIAR & ANR.

• be a fraud upon the statute, for the Government would be A
requisitioning the premises, when really speaking they
want the premises for acquisition, the object of taking the
premises being not transitory but permanent in character.
Where the purpose for which the premises are required
is of such a character that from the very inception it can B
never be served by requisitioning the premises, but it can
be achieved only by acquiring the property, which would
~
be the case where the purpose is of a permanent
character or likely to subsist for an indefinite period of
time, the Government may acquire the premises, but it c
certainly cannot requisition the premises and continue
the requisitioning indefinitely. [Para 15)
1.2. The power of requisitioning would be upheld, if
it is to be exercised for a temporary duration, which is
\ limited either in terms of time or by reason of a D
contingency. If the possession of property by exercise of
dominion thereupon is continued indefinitely, it would
amount to colourable exercise of or fraud 0n the power
and nothing but a back door expropriation of property.
Though it is open to the State to impose reasonable E
restrictions upon fundamental rights guaranteed under
the Constitution, the nature of the restrictions should not
f be such that the right guaranteed becomes illusory. If that
happens then the restrictions should cease to be
reasonable. [Paras 17, 18) F
H.D. Vora v. State of Maharashtra AIR 1984 SC 866;
Grahak Sanstha Manch v. State of Maharashtra 1994 (4) SCC
192; Rajendra Kumar Gupta v. State of UP (1997 (4) SCC
511; Union of India v. E/phinstone Spinning and Weaving Co.
, + Ltd. AIR 2001 SC 724;Charanjit v. Union of India AIR 1951 G
SC 41; Raghubir Singh v. Court of Wards, Ajmer AIR 1953
SC 373 and Corporation of Calcutta v. Cal. Tramways Co. Ltd.
AIR 1964 SC 1279 - relied on.
Kesawananda Bharati v. State of Kera/a (1973) 4 SCC
H
422 SUPREME COURT REPORTS [2009] 4 S.C R.

A 225; Sonia Bhatia v State of UP AIR (1981) SC 1274; Minerva • .
Mills v Union of India AIR (1980) SC 1789 - referred to.
Case Law Reference
(1973) 4 sec 225 referred to Para 8
8 AIR (1981) SC 1274 referred to Para 8
AIR (1980) SC 1789 referred to Para 12
AIR 1984 SC 866 relied on Para 15
1994 (4) sec 192 relied on Para 16
c
(1997 (4) sec 511 relied on Para 16
AIR 2001 SC 724 relied on Para 17
AIR 1951 SC 41 relied on Para 18
D AIR 1953 SC 373 relied on
I
Para 18
AIR 1964 SC 1279 relied on Para 18
CIVILAP-PELLATE JURISDICTION: Civil Appeal No.8247
of 2001
E
From the Judgement and Order dated 27.09.2001 of the
High Court of Kera la in Writ Appeal No. 1797 of 1997.
WITH
Civil Appeal No.8249 of 2001
F
Civil Appeal No.8248 of 2001
Civil Appeal No.8250 of 2001
Civil Appeal No.8251 of 2001
G Civil Appeal No.8252 of 2001 ~ '

T.L.V. Iyer, Uday Kr. Lalit, M.K. Sreegesh, K.R. Sasiprabhu,
R. Sathish, M.K.S. Menon, Deepak Prakash, Naijal Kumar, Usha
Nandini, Biju P. Raman, for the Appellant.

H Yashobanto Das, P. Krishnamoorthy, C.S. Ranjan, P. Vinay
KERALA STATE CASHEW DEV. CORP. V. 423
SHAHAL HASSAN MUSSALIAR & ANR.

Kumar, R. Sathish, C.S. Rajani, M.T. George, A Raghunath, A
Ramesh Babu M.R. for the Respondent.

DR. ARIJIT PASAYAT, J.

1. In all these appeals challenge is to the judgment of a
Division Bench of the Kera la High Court in several writ appeals B
and original petitions.

• 2. The High Court referred to the factual position in Writ
Appeal No.1835/97 which was directed against the judgment
of learned Single Judge, dated 4th September, 1997 in O.P.
No.16424/94. The High Court noted that the factual basis in all
c
the cases is similar except the dates and the areas involved
and the location of the factories.

3. Since the grounds of challenge raised by the appellant
\·
and the responses of the respondents are common, they are D
taken up together. The background facts are to be noted in brief:
4. The first respondent is the owner of a factory situated in
an extent of 2.29 acres of land in Kotttarakkara Taluk of Kollam
District. The factory comprises several buildings like godown,
E
office, shelling and peeling sheds, grading shed etc.•1ith
necessary machineries and equipments installed therein for
facilitating the work of the factory. This factory was being run by
the first respondent, up to the year 1969. Sometime in the year
1969, first respondent who was managing the factory himself,
F
desired to go abroad. So, he leased out his factory to the second
respondent-Kerala State Cashew Development Corporation
(hereinafter referred to as the 'Corporation'), a statutory
corporation set up in the State of Kerala, for development of the
cashew industry. Ext. P1 is the copy of the lease deed dated
~ ~-
1 G
l 17 h July, 1970 by which the cashew factory of the first
respondent was leased out to the second respondent on a
monthly lease rent of Rs.1,500/-. The lease was initially for a
period of three years and, on the expiry of the said terms, a
fresh lease deed was executed, which too expired on 16th July,
H
424 SUPREME COURT REPORTS [2009] 4 S.C.R.

A 1976. It is the case of the first respondent that, while he was
running the factory, he used to provide employment to the
workers for about 300 days in a year.
After the expiry of the lease deed on 16th July, 1976, the
first respondent, being unwilling to further lease out the factory,
8 called upon the second respondent Corporation to release and
hand over the factory and its assets to him. The Corporation,
however, did not release the factory and, in the meanwhile, the >
State of Kerala passed the Kerala Cashew Factories
(Requisitioning) Act, 1979 (hereinafter referred to as the 'Act').
C This act was passed for the following purpose, as indicted in
the preamble which reads as follows:
"Whereas certain cashew factories had been leased out
by the owners thereof to the Kerala State Cashew
Development Corporation Limited, which is a company
D
owned by the Government of Kerala;
And whereas such cashew factories were at the time of
the lease either closed down or run by persons other than
the owners thereof;
E And whereas the term of lease in respect of some of such
cashew factories has expired and the owners of some of
such factories are not willing to extend the terms of the
lease;

F And whereas suits have been filed in the courts by the
owners of some of such cashew factories for delivery of
possession thereof;
And whereas in the interests of the workers of the cashew

G
factories it is considered necessary to enable the said
Corporation to continue in possession and management
of such of those cashew factories which if given back to
. .-
the owners thereof could not be run properly and in
accordance with law and would either be sold or leased
out to private individuals."
H
KERALA STATE CASHEW DEV. CORP. V. 425
SHAHAL HASSAN MUSSALIAR &ANR. [DR. ARIJIT PASAYAT, J.]
.
' The object of the Act appears to be that, there were large A
number of such cashew factories which have been leased out
to the second respondent Corporation under leases which had
expired and it was intended to legalise the continuing
possession of the lessee Corporation. The preamble to the Act
suggests that the Act was intended to protect the interests of s
the workers, for which purpose it was necessary to enable the
second respondent Corporation to continue in possession and
management of those cashew factories and further that, if the
factories were given back to the owners they would not be run
properly and in accordance with law, and would either be sold c
or leased out to private individuals. Section 3 of the Act gives
power to the Government to requisition a cashew factory in the
possession of Corporation under a lease, even if the lease is
current or time expires. Section 3 of the Act, which is the focus
of attention, reads as under:
D
"3. Power to requisition cashew factories :
(1) When the Government IS satisfied that if the owner of
a cashew factory which is in the possession of the
Corporation under a lease, whether current or time-
expires, is put in possession thereof, such owner could E
not run that factory properly and in accordance with law
and would either sell it or lease it out to any private individual
and there would be large scale unemployment of the
workers of that factory or their conditions of service would
be adversely affected, the Government may, F
notwithstanding any judgment, decree or order of any court,
by order published in the Gazette, requisition that cashew
factory for such period not exceeding five years as may
be specified in the order and may make such further orders
as appear to them to be necessary or expedient in G
connection with the requisition;
Provided that before making an order under this sub-
section in respect of a cashew factory, the Government
shall give the owner of that factory and every person H
426 SUPREME COURT REPORTS [2009] 4 S.C.R.

A interested in that factory a notice of their intention to take
action under this sub-section and the grounds therefor
and consider the objection that may be preferred in
pursuance of such notice.

(2) Where a cashew factory is requisitioned under sub-
B section ( 1). such cashew factory together with all
machinery, other accessories and other movable
properties as were immediately before the date of
publication of order under sub-section (1) in the possession
of the corporation and all books of account, registers and
c other documents relating thereto shall vest in the
Government with effect from the said date.

(3) The Government may, by order in writing direct that a
cashew factory vested in them under sub-section (2) shall,
instead of continuing to vest in them, vest in the Corporation
D
with effect from such date, not being a date earlier than
the date of publication of the order under sub-section (1 ),
as may be specified in the order.
(4) Where an order vesting a cashew factory in the
E Corporation is made under sub-section (3), all rights,
liabilities and obligations of the Government in relation to
such factory shall, on and from the date of such vesting, be
deemed to have become the rights and liabilities and
obligations respectively of the Corporation.
F One salient factor of Section 3 which immediately strikes
the eye is that the power of the State Government to
requisition the factory was for such period "not exceeding
five years". In other words, there was a maximum period
of five years upto which the cashew factory could be
G requisitioned in pursuit of the objective with which the } ' .
legislation was enacted. Section 4 of the Act provides that
the Government may at any time release from requisition
any cashew factory requisitioned under Section 3 and
upon this hapiJening the Government shall restore the
H factory in as good a condition as it was when possession
KERALA STATE CASHEW DEV. CORP. V. 427
SHAHAL HASSAN MUSSALIAR & ANR. [DR. ARIJIT PASAYAT, J.]
...
• thereof was taken by virtue of the lease executed by it with A
the owner of the cashew factory, subject to the provisions
contained in such lease and to changes caused by
reasonable wear and tear and irresistible force. Section
4 also requires the Government to restore the cashew
factory and its assets on the factory being released from B
requisition. Section 5 empowers the Government to
determine the rent for requisitioning the factory, in
accordance with the principles laid down therein. Section
11 of the Act bars the jurisdiction of the Civil Court in
regard to any dispute in respect of any matter which the c
Government or the second respondent-Corporation is
empowered to determine under the Act and protects action
taken in good faith in pursuance of any power conferred
by or under the Act."

5. The Kerala Cashew Factories (Requisitioning) Act, D
•· 1979 was amended by Act 26 of 1985 (hereinafter referred to
as 'Amending Act'). Section 2 of Amending Act amends Section
3 of the Act, the effect of which is to remove the outer limit or five
years on requisition, imposed under Section 3 of Act. As a result
of amendment carried out by Amending Act, the Government E
may by order published in the Gazette:-

(a) requisition that cashew factory for such period not
exceeding five years as may be specified in the order;

(b) extend the period of requisition by five years at a time; F
(c) make such further orders as appear to them to be
necessary or expedient in connection with the requisition.
6. The objection of the factory owner apart from substantive
challenge to the power of requisition raised to the challenge
... , "'- G
stating that there was no material in existence which is
requisitioned for subjective satisfaction of the Government about
different factors as noted in each of the requisitioning orders.
""
~
To put differently, the substantive challenge was that the
Amending Act enables the State Governmentto requisition the
H
428 SUPREME COURT REPORTS [2009] 4 S.C.R.

A cashew factory for an indefinite period of time; virtually thereby A

enabling the State Government to acquire the factory without
following the provisions of any law and therefore, was contrary
to Articles 145, 19(1 )(g) and 300A of the Constitution of India,
1950 (in short the 'Constitution'). Coming to the factual aspect
B as noted that while private cashew factories was giving 250
days of work in year, the Corporation on account of financial
situation was unable to give, on an average, more than 60 days
of work in a year for the earlier ten years. With reference to the
factual scenario of 1993 it was pointed out that while the factory
c was run by the Corporation and it gave work to the workers for
12 days and during the subsequent year 1994 only for 13 days.
It was pointed out that the factory was returned, there was scope
for greater number of days work for the workers. The objections
were rejected and subsequent requisitioning orders were
passed by merely reproducing the conditions precedent in the
D
Amending Act. It was, therefore, submitted that the action of the
Corporation and the State Government is illegal and
unconstitutional.
7. Before learned Single Judge stand was that where any
E statute empowers the State to continue to extend a requisition
order for an indefinite period, it is nothing but an order for
acquisition and, therefore, it is a colourable exercise of power
which is not available to the State under the Act. The conceptual
difference between the requisition and acquisition of property
F was highlighted. The stand was opposed by the State and the
Corporation. The High Court after noticing the factual scenario
came to hold that power of requisition granted to the Government
under Section 3 of the Parent Act was limited to a maximum
period of five years. By the Amending Act, 1985 this limitation
was removed and the Government was empowered to extend
G ~ < ..
the lease indefinitely by instalments of five years at a time. The
learned Single JudgP held that his power is bad for reasons
enunciated in H.D. Vora's case. By this case, it virtually amount
to a power of acquisition.
H 8. The stand of the State and the Corporation was that in
KERALA STATE CASHEW DEV. CORP. V. 429
SHAHAL HASSAN MUSSALIAR & ANR. [DR. ARIJIT PASAYAT, J.]

~ view of what has been stated by this Court in Kesavananda A
Bharati v. State of Kera/a (1973 (4) SCC 225) and Sonia Bhatia
v. State of UP (AIR 1981 SC 1274) when a law was enacted to
further the directive principles of State policy enumerated in Part
IV of the Constitution then, irrespective of other considerations,
it must be upheld. The High Court did not accept the stand. It B
was noted that the principle of law highlighted in the decisions
in Keshvananda Bharati's and Sonia Bhatia's cases (sµpra)
were not applicable to the facts of the present case.

9. The High Court referred to salient features of Section 3
which relates to the power of the State Government to requisition c
the factory for such period "not exceeding five years". In other
words, there was a maximum period of five years up to which
the cashew factory in question could be requisitioned in line
with the objective with which the legislation was enacted. Section
I(
4 of the Act provides that the Government may at any time D
release from requisition any cashew factory requisitioned under
Section 3 and upon this happening the Government shall restore
the factory in as good a condition as it was when the possession
thereof was taken by virtue of the lease executed by it with the
owner of the cashew factory, subject to the provisions contained E
in such lease and to changes caused by reasonable wear and
tear and irrespective force. Under the said provision the
Government is required to restore the cashew factory and its
assets on the factory being released from requisition. Section
4 empowers the Government to determine the rent for F
requisitioning the factory. While doing so, the principles laid down
therein have to be kept in view. Section 11 of the Act bars the
jurisdiction of the Civil Court in regard to any dispute in respect
of any matter which the Government or the Corporation is
empowered to determine under the Act and protects action
_.. ,... "'-· G
taken in good faith in pursuance of any power conferred by or
·under the Act.

10. The grievance of the factory owner was that the
authority declined to extend the lease and refused to renew the
lease in favour of the Corporation. A request was made to return H
430 SUPREME COURT REPORTS [2009] 4 S.C.R

A the concerned cashew factory with all its assets. That prayer
was also not complied with. There were pleas of set up of certain
amounts/dues. Having failed in his attempt to persuade the
authorities to return its factory and its assets, the Original Petition
No.16424/1994 was filed for a direction to the authorities to
B hand back the possession of the concerned cashew factory with
all its assets. During the pendency of the original petition, notice
was served under Section 3(1) of the Act, notifying the intention
to requisition the concerned cashew factory under the Act for a
further period of five years on the ground that if the owner is put
c in possession of the cashew factory, he may not run the factory
properly, in accordance with law and may either sell it or lease it
out to private individuals resulting larger scale unemployment
of workers and adversely affecting their part of service. A
statement of objection was filed, inter alia, taking the stand that
the Government has no right to extend the lease for an indefinite
0
period. It was stated that no such fact existed which could have
enabled the State Government to arrive at a decision that upon
return of the factory, they would not run it or close it down or
lease it out to the private individuals resulting in large scale
unemployment of workers or thereby adversely affecting the
E conditions of workers. By another notice, the Government
extended the period of requisition for a period of five years.
Objection was also filed.

11. Section 3 of the Amending Act validated the continued
F possession of the cashew factories requisitioned under Section
3(1) of the Act which had vested in the second respondent
Corporation under sub-section (3) of that Section
notwithstanding the expiry of the lease period and
notwithstanding anything contained in any law, or any decree or
G order of any court, and notwithstanding anything to the contrary
in the terms of the contract or agreement. The result of Amending
Act was that it validated the action of the appellant and the
second respondent even if contrary to the terms of the lease,
even if time had expired, and even if there was a decree for
eviction made by a competent court of law.
H
.
KERALA STATE CASHEW DEV. CORP. V. 431
SHAHAL HASSAN MUSSALIAR &ANR. [DR. ARIJIT PASAYAT, J.]
• 12. The High Court referred to a decision of this Court in A
Minerva Mills v. Union of India (AIR 1980 SC 1789) to hold
that a fundamental distinction was drawn by this Court between
the constitutional law and ordinary law as in the criterion of
validity. Learned Single Judge accepted the challenges in the
writ petitions. The writ appeals were also dismissed. The B
Division Bench also took note of the observation of learned
~
Single Judge about the period of employment offered by the
factory under requisition. It also noted that the financial condition
of the Corporation was far from satisfactory and, therefore, there
was no material to show that it was in a better position to manage
and run the factory than the owner himself. Appellants and
c
respondent-writ petitioner reiterated the stands before the High
Court.

13. While in the case of Constitutional law its validity is
y
inherent, in the case of ordinary law its validity is to be tested on D
the touchstone of the Constitution.
14. It was noted that in Sonia Bhatia's case (supra) this
Court upheld the validity of the U .P. Imposition of Ceiling on Land
Holdings Act, 1961 on the ground that it was a valuable piece of
social legislation with the object of ensuring equitable distribution E
of land by taking away land from large tenure holders and
~ distributing the amount among the landless tenants or using the
same for public utility schemes which was in the larger interest
of the community. The High Court noted that the question to be
answered was, however, justifying the initial requisitioning of F
the cashew factory was, since requisition by definition must be
of temporary character and it cannot be tuned into a permanent
deprivation of proprietary rights so as to amount to acquisition
at back door. This is precisely what this Court has described as
:... ~ """ a fraud on the power in H. D. Vohra's case. It was submitted that G
the High Court should not have treated an action of the State
Government and of the Corporation to be actually an opinion or
acquisition under the colour of requisition. Learned counsel for
the respondent on the other hand submitted that both the learned
Single Judge and the Division Bench have analysed factual H
432 SUPREME COURT REPORTS [2009] 4 S.C.R.

A scenario in great detail keeping in view the statutory provisions.
The conclusion as submitted would not warrant any interference.

15. The first contention which weighed with the learned
Sing le Judge was that any statute which empowers the State to
continue to extend a requisition order for an indefinite period
B was nothing but an order for acquisition, it was a colourable
exercise of power, which the State did not possess under the
· Act. The distinction between requisition and acquisition of
>
property has been the subject matter of several decisions of
the Supreme Court and the line of demarcation between the
C two is well defined in the celebrated judgment in H.D. Vora v
State of Maharashtra (Al R 1984 SC 866). In this case this Court
had occasion to consider the validity of repeated continued
requisitions of private premises initially acquired under the
emergency powers during war years. This Court pointed out
D that the two concepts, one of requisition and the other of
acquisition, are totally distinct and independent. Acquisition
means the acquiring of the entire title of the expropriated owner,
whatever the nature and extent of that title may be. The entire
bundle of rights which was vested in the original holder passes
E on acquisition to the acquirer, leaving nothing to the former. The
concept of acquisition has an air of permanence and finality in
that there is transference of the title of the original holder to the
acquiring authority. In contradistinction, the concept of requisition
involves merely taking of domain or control over property without
F acquiring rights of ownership and must by its very nature be of
temporary duration. This Court summed up by pointing out that,
the State cannot under the guise of requisition continue dominion
over some one's property for an indefinite period of time,
because that would be a fraud on the power conferred on the
G government. If the Government wants to take over the property
for an indefinite period of time, the Government must acquire
the property, but it cannot use the power of requisition which is
exercisable by the Government only for a public purpose which
is of a transitory character. If the public purpose for which the
premises are required is of a perennial or permanent character
H
KERALA STATE CASHEW DEV. CORP. V. 433
SHAHAL HASSAN MUSSALIAR & ANR. [DR. ARIJIT PASAYAT, J.]

from the very inception, no order can be passed requisitioning A
the premises and, in such a case, the order of requisition, if
passed, would be a fraud upon the statute, for the Government
would be requisitioning the premises, when really speaking they
want the premises for acquisition, the object of taking the
premises being not transitory but permanent in character. Where B
the purpose for which the premises are required is of such a
~ character that from the very inception it can never be served by
requisitioning the premises, but it can be achieved only by
acquiring the property, which would the case where the purpose
is of a permanent character or likely to subsist for an indefinite c
period of time, the Government may acquire the premises, but
it certainly cannot requisition the premises and continue the
requisitioning indefinitely.

16. In Grahak Sanstha Manch v. State of Maharashtra
(1994 (4) SCC 192), a Constitution Bench of this Court approved D
of the decision in H.D. Vora's case (supra) and held that the
said decision did not require reconsideration. However, the
Constitution Bench did not approve the reasoning in H.D. Vora's
case (supra) that the requisition order cannot be made for a
permanent purpose leaving the question open and holding that E
the order of requisition can continue for a reasonable period of
time though in H.D. Vora's case (supra) it was considered to be
unreasonable in the facts of the case. In Rajendra Kumar Gupta
v. State of UP (1997 (4) SCC 511), the same principle has
been reiterated by this Court. F
17. In Union of India v. E/phinstone Spinning and
Weaving Co. Ltd. (AIR 2001 SC 724), this Court was concerned
with a challenge to the Textile Undertakings Act, under which
. ' " the Government was empowered to take over the management G
of certain textile mills whose financial condition had deteriorated
"pending natioalisation". The question was whether this power
was liable to be challenged on the ground that it amounted to
acquisition in reality. Repelling the challenge, it was held by this
Court that power was not even liable to challenge as abridging H
434 SUPREME COURT REPORTS [2009] 4 S.C.R.

A Article 31-A (1) of the Constitution introduced by the Constitution
First Amendment Act of 1951, clause (1)(b) of which provides
that, notwithstanding anything contained in Article 13, no law
providing for the taking over of the management of any property
by the State for a limited period either in the public interest or in
B order to secure the proper management of the property shall
be deemed to be void on the ground that it is inconsistent with,
or takes away or abridges any of the rights conferred by Article
14 and Article 19. This Court was of the-view that parliament
had in enacting the Textile Industries Act, 1983 clearly indicated
C that the taking over was for a temporary period "pending
nationalization of Textile Mills". Merely because nationalization
would take long time, it cannot be urged that the power was to
be exercised for indefinitely long time since the exercise of the
power was delimited by the happening of a contingency. Thus,
D the power of requisitioning is liable to be upheld, if it is to be
exercised for a temporary duration, which is limited either in
terms of time or by reason of a contingency.
18. In Charanjit v. Union of India (AIR 1951 SC 41) the
difference between the temporary and transitory nature of
E requisition and permanent nature of acquisition was highlighted
by this Court. It was inter alia held that upon acquisition the entire
bundle of rights which were vested in the former original holder.
would pass on to the acquirer leaving nothing in the former, while
requisition would keep merely possession in the person
F requisitioning while leaving the title of the owner in tact. In other
words, if the possession of property by exercise of dominion
thereupon is continued indefinitely, it would amount to colourable
exercise of or fraud on the power and nothing but a back door
expropriation of property. As was observed in Raghubir Singh
G v. Court of Wards, Ajmer (AIR 1953 SC 373) and Corporation
~ ..
of Calcutta v. Cal. Tramways Co. Ltd. (AIR 1964 SC 1279) that
though it is open to the State to impose reasonable restrictions
upon fundamental rights guaranteed under the Constitution, the
nature of the restrictions should not be such that right guaranteed
H
KERALA STATE CASHEW DEV. CORP. V. 435
SHAHAL HASSAN MUSSALIAR & ANR. [DR. ARIJIT PASAYAT, J.]

becomes illusory. If that happens then the restrictions should A
cease to be reasonable. We find there is no merit in all these
appeals which are to be dismissed. We direct accordingly. It is,
however, brought to our notice by learned counsel for the
appellant that the State Government intends to limit the period
by another ten years. This is a matter about which we express B
no opinion. The appeals fail and are dismissed with no orders
as to costs.

B.B.B. Appeals dismissed.