Byramjee Jeejeebhoy Pvt. Ltd. v. Union of India

12] Since the adjudication in Nareshkumar-I forms the basis of the Petitioners challenge, it would be necessary to consider the adjudication therein. The facts of the case indicate that the suit premises belonged to a Trust which executed a lease deed on 11th March 1893 in favour of Hope Mills Limited for a period ninety nine years. The said lease was to expire on 21st October

1990. The original owners transferred the suit premises and ultimately a lease deed dated 25th October 1926 was executed in favour of Toyo Poddar Cotton Mills Limited. The Act of 1983 was enacted for taking over the management of various textile undertakings which included the Poddar Mills. After its lease expired on 25th October 1990, the Poddar Mills continued as a tenant holding over the suit premises. Initially, the Trust had filed suit for eviction under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. After repeal of that Act by the Maharashtra Rent Control Act, 1999, the Trust issued notice dated 26th September 2000 terminating the tenancy of the Mills. It thereafter filed suit for eviction alongwith a claim for mesne profits on 20th April 2001. The said suit was decreed on 5th August 2006. The appeal preferred by the NTC was dismissed on 14th August 2008. The NTC then preferred Civil Revision Application No.564 of 2008 and by the judgment dated 13th August 2009, the same was dismissed. This judgment was the subject matter of challenge before the Supreme Court at the behest of the NTC thus leading to Nareshkumar-I. One of the contentions urged on behalf of the NTC was that after termination of the tenancy, the Poddar Mills became the statutory tenant. In view of the provisions of the Act of 1995, the NTC stepped into the shoes of the Central Government as an agent while the Central Government remained the tenant. The tenancy of the Central Government was protected under Section 3(1)(a) of the Act of 1999. On behalf of the lessors it was pointed out that this defence was never taken either in the written statement filed by the NTC nor was the said issue raised before any of the Courts earlier. It was held in Nareshkumar-I that in absence of any such plea being taken in the written statement, it was not permissible to consider the same for the first time by the Supreme Court. It was further held that the NTC was neither the Government nor a department of the Government. It was merely a Government Company and it could not identify itself with the Central Government. The NTC was governed by the provisions of the Act of 1995 and not by the Central Government. It was held that the NTC was not entitled for any exemption under Section 3(1)(a) or Section 3(1)(b) of the Act of 1999 and it could not claim the status of an “agent” of the Central Government. The appeal preferred by the NTC was dismissed and it was given time to vacate the premises till 31st December 2013. It is thus clear that though the NTC sought to raise a plea that by virtue of the provisions of the Act of 1995, the tenancy stood vested in the Central Government, that plea was not entertained since there were no pleadings specifically taken in that regard. A finding was recorded that the NTC was merely a Government Company and it was not the Government or a Government department. Thus the decree for eviction passed against the NTC was upheld and the appeal preferred by it was dismissed.

13] The Act of 2014 came into effect from 24th October 2014. It sought to amend the Act of 1974 and the Act of 1995 so as to continue with the lease-hold rights vested in the NTC on completition of the lease-hold tenure. Under the Act of 2014, Section 3 of the Act of 1974 was amended and sub-sections (3) and (4) were inserted therein. The same read as under:- “3(3) Notwithstanding the transfer and vesting of any sick textile undertaking to the National Textile Corporation by virtue of sub-section (2), the lease-hold rights of the sick textile undertaking shall continue to remain vested in the Central Government on payment of lease-hold rents and shall be discharged, for and on behalf of that Government, by the National Textile Corporation as and when payment of such lease-hold rents or any amount becomes due and payable. (4) Subject to sub-section (3), no court shall have jurisdiction to order divestment from the National Textile Corporation of the property vested in it by the Central Government.” After Section 40 of the Act of 1974, Section 41 was inserted and the same reads as under:- “41. Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority,– (a) the provisions of this Act, as amended by the Textile Undertakings (Nationalisation) Laws (Amendment and Validiation) Act, 2014, shall have and shall be deemed always to have effect for all purposes as if the provisions of this Act, as amended by the said Act, had been in force at all material times; (b) any lease-hold property divested from the National Textile Corporation to any person under the provisions of this Act, as it stood immediately before the commencement of the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014, shall stand transferred to and vest or continue to vest, free from all encumbrances, in the National Textile Corporation in the same manner as it was vested in the National Textile Corporation before such divesting of that property under the provisions of this Act, as if the provisions of this Act as amended by the aforesaid Act, were in force at all material times;

(c) no suit or other proceedings shall, without prejudice to the generality of the foregoing provisions, be maintained or continued in any court or tribunal or authority for the enforcement of any decree or order or direction given by such court or tribunal or authority, notwithstanding any undertaking filed by the National Textile Corporation in any court or tribunal or authority, directing divestment of such lease-hold property from the National Textile Corporation vested in it under section 3 of this Act, as it stood before the commencement of the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014, and such lease-hold property shall continue to vest in the National Textile Corporation under section 3 of this Act, as amended by the aforesaid Act, as if the said section was in force at all material times;

(d) any transfer of any property, vested in the

National Textile Corporation, by virtue of any order of attachment, seizure or sale in execution of a decree of a civil court or orders of any tribunal or other authority in respect of lease-hold property vested in the National Textile Corporation which is contrary to the provisions of this Act, as amended by the Textile Undertakings 2014, shall be deemed to be null and void and notwithstanding such transfer, continue to vest in the National Textile Corporation under this Act.” The Act of 1995 was also amended by inserting subsections (3) and (4) in Section 3. The same read as under:- “3(3). Where any licence or other instrument in relation to a textile undertaking had been granted at any time before the appointed day to the owner by the Central Government or a State Government or any other authority, the National Textile Corporation shall, on and from such date, be deemed to be susbtituted in such licence or other instrument in place of the owner referred to therein as if such licence or such other instrument had been granted to it and shall hold such licence or the textile undertaking specified in such other instrument for the remainder of the period for which the owner would have held such licence or the textile undertaking under such other instrument. (4) Every mortgagee of any property which has vested under this act in the Central Government and every person holding any charge, lien or other interest in, or in relation to, any such property shall give, within such time and in such manner as may be prescribed an intimation to the Commissioner of such mortgage, charge, lien or other interest.” After Section 38 of the Act of 1995, Section 39 was inserted therein being the validation Section. The same reads a under:- "39. Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority,— (a) the provisions of this Act, as amended by the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014, shall have and shall be deemed always to have effect for all purposes as if the provisions of this Act, as amended by the said Act, had been in force at all material times; (b) any lease-hold property divested from the National Textile Corporation to any person under the provisions of this Act, as it stood immediately before the commencement of the Textile Undertakings 2014, shall stand transferred to and vest or continue to vest, free from all encumbrances, in the National Textile Corporation in the same manner as it was vested in the National Textile Corporation before such divesting of that property under the provisions of this Act as if the provisions of this Act, as amended by the aforesaid Act, were in force at all material times;

(c) no suit or other proceedings shall, without prejudice to the generality of the foregoing provisions, be maintained or continued in any court or tribunal or authority for the enforcement of any decree or order or direction given by such court or tribunal or authority, notwithstanding any undertaking filed by the National Textile Corporation in any court or tribunal or authority, directing divestment of such lease-hold property from the National Textile Corporation vested in it under section 3 of this Act, as it stood before the commencement of the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014, and such lease-hold property shall continue to vest in the National Textile Corporation under section 3 of this Act, as amended by the aforesaid Act, as if the said section was in force at all material times;

(d) any transfer of any property, vested in the

National Textile Corporation, by virtue of any order of attachment, seizure or sale in execution of a decree of a civil court or orders of any tribunal or other authority in respect of lease-hold property vested in the National Textile Corporation which is contrary to the provisions of this Act, as amended by the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014, shall be deemed to be null and void and notwithstanding such transfer, continue to vest in the National Textile Corporation under this Act."

14] The Statement of Objects and Reasons of the Act of 2014 throws light on the requirement behind enacting the legislation. It states that under the Acts of 1974 and 1995 various textile undertakings had been nationalised from time to time and their assets vested absolutely in the Central Government. The assets were then transferred to the NTC. Steps were taken to revive sick undertakings and huge investments were made. It was found necessary for proper and effective implementation of the revival scheme, to protect public investment in the acquired textile undertakings and to explicitly clarify the status of such vesting of lease-hold rights in the Central Government. Hence the enactment. The aforesaid would indicate that with a view towards proper and effective implementation of the revival scheme of textile undertakings, to protect public investment in the acquired textile undertakings, to continue with the lease-hold rights vested in the NTC on completion of lease-hold tenure and clarify the status of vesting of such lease-hold rights in the Central Government, the Act of 2014 was enacted. The Act of 2014 has been stated to be an Amendment and Validation Act. Section 3(3) sought to be inserted in the Act of 1974 relates to transfer and vesting of any sick textile undertakings and in the Act of 1995 as regards transfer and vesting of any textile undertaking seek to emphasise the continued vesting of the lease-hold rights of such textile undertakings in the Central Government. The Validation Sections, namely Section 41 in the Act of 1974 and Section 39 in the Act of 1995 indicate that the provisions of the Act of 2014 are deemed to have effect from the date the respective Acts came into force. Though the Statement of Objects and Reasons by itself may not be a decisive factor as a tool for interpretation of a statute, it is definitely an indicator that throws light on the mind of the legislation makers and points out the necessity for bringing such legislation. 15] The Act of 2014 is stated to be clarificatory in nature. In the Statement of Objects and Reasons of the Act of 2014 it has been stated that the status of vesting of lease holders rights in the Central Government was required to be explicitly clarified. The Act of 2014 would have to be viewed from that context. With regard to an amendment being clarificatory in nature, useful reference can be made to the decision in Zile Singh vs State of Haryana & Ors, 2004 INSC 585. While holding a clarificatory amendment to have the retrospective effect, it was held as under:- “It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is deemed to be prospective only 'nova constitutio futuris formam imponere debet non praeteritis __ a new law ought to regulate what is to follow, not the past. (See: Principles of Statutory Interpretation by Justice G.P. Singh, Ninth Edition, 2004 at p.438). It is not necessary that an express provision be made to make a statute retrospective and the presumption against retrospectivity may be rebutted by necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole. (ibid, p.440) The presumption against retrospective operation is not applicable to declaratory statutes. In determining. therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended An amending Act may be purely declaratory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect. (ibid, pp.468-469).”

I. Decision in Nareshkumar-II:

16] Coming to the decision in Nareshkumar-II, it is to be noted that review of the decision in Nareshkumar-I was sought by the Union of India as well as by the NTC. On behalf of the Union of India it was contended that by virtue of Section 3(1) of the Act of 1995 the right, title and interest in the suit property which was the textile undertaking vested absolutely in the Central Government. However, the Union of India had not been impleaded as a defendant in the suit for eviction. During pendency of the said proceedings on 18th December 2014, the Act of 2014 was published in the Gazette of India. It was deemed to have come into force from 24th October 2014. Considering the scope for entertaining the prayer for review at the behest of a third party to the proceedings, the Supreme Court in Nareshkumar-II held that even a third party to the proceedings, if he considers himself an aggrieved person could take recourse to the remedy of a review petition. It was noted that the provisions of Section 3 of the Act of 1995 were amended by the Act of 2014 and by legal fiction the amendment was deemed to have been inserted in the Act of 1995 from 1st January 1994. It was thus held that the Union of India could be said to be a person aggrieved and it had locus to point out that the decree for possession of the suit premises could not have been passed against the NTC and the same was not enforceable. 17] The Supreme Court then found that the legal situation had undergone a sea change retrospectively after the Act of 2014 came into force. It noted that the validity of the provisions of the Act of 2014 were not under challenge before it. It was held that the right enjoyed by the tenant – Poddar Mills stood transferred to and vested in the Central Government from 1st April 1994. From that date, the Central Government continued to remain as a protected or statutory tenant in respect of the suit property. The Trust was therefore required to initiate eviction proceedings against the real tenant which was the Central Government or the Union of India. Since the suit for eviction had been filed only against the NTC which culminated into a decree of eviction, the same was rendered without jurisdiction by operation of law. With the coming into force of the Act of 2014 and especially Section 39 thereof, the decree as passed in favour of the NTC could not be continued or enforced. It was held that the expression “lease-hold rights” in the Act of 1995 ought to include “tenancy rights” flowing from the provisions of the applicable rent legislation. As long as the amended provisions of the Act of 1995 or of the Act of 2014 were enforceable by operation of law, the interest of Poddar Mills as a statutory tenant stood transferred to and vested absolutely in the Central Government. Hence, the Trust was required to seek eviction of the Central Government or the Union of India from the suit premises if it was entitled to do so on grounds permissible and in the manner prescribed by law. It was thus held that since the suit for eviction was not filed against the Union of India which was the statutory tenant on the date of filing of the suit, the decree passed by the Small Causes Court was rendered unenforceable against the Union of India and was not executable due to legal fiction. The Supreme Court noted that the validity of Act of 2014 was pending consideration in the present writ petition and hence observed that if that challenge succeeded, then the judgment of the Supreme Court in Nareshkumar-I could be taken to its logical end against the NTC. J. Grounds available for challenging plenary legislation: 18] As per earlier precedents, challenge to legislation was held to be permissible only on the grounds of lack of legislative competence and the legislation resulting in breach of the provisions of the Constitution of India. An additional ground of challenge based on manifest arbitrariness has been recently recognised as a basis for assailing a legislation. Reference in this regard can be made to the decision in Dr. Jaya Thakur (supra) wherein the ground of manifest arbitrariness has been considered as another ground of challenge available while assailing a legislation. Recently, the Constitution Bench in Association for Democratic Reforms and another (supra) referred to various earlier decisions on this aspect while considering the question as to whether a legislative enactment could be challenged on the sole ground of manifest arbitrariness in the context of Article 14 of the Constitution of India. It was held as under:- “194. It is now a settled position of law that a statute can be challenged on the ground it is manifestly arbitrary. The standard laid down by Justice Nariman in Shayara Bano (supra), has been cited with approval by the Constitution Benches in Navtej Singh Johar (supra) and Joseph Shine (supra). Courts while testing the validity of a law on the ground of manifest arbitrariness have to determine if the statute is capricious, irrational and without adequate determining principle, or something which is excessive and disproportionate. This Court has applied the standard of "manifest arbitrariness" in the following manner: a. A provision lacks an "adequate determining principle" if the purpose is not in consonance with constitutional values. In applying this standard, Courts must make a distinction between the "ostensible purpose", that is, the purpose which is claimed by the State and the "real purpose", the purpose identified by Courts based on the available material such as a reading of the provision; and b. A provision is manifestly arbitrary even if the provision does not make a classification.” It is thus clear that a plenary legislation can be challenged on the ground/s of lack of legislative competence, the legislation resulting in breach of provisions of Part-III of the Constitution and that the legislation is manifestly arbitrary. In the present case, the Act of 2014 is assailed on the latter two grounds mentioned hereinabove.

19] There is a strong presumption attached to the constitutionality of a plenary legislation. While considering challenge to the vires of a plenary legislation, the Court would be required to be conscious of the presumption of constitutionality attached to such legislation. This presumption proceeds on the basis that legislature is best suited to understand and address societal needs. While acting within its defined sphere under the Seventh Schedule to the Constitution of India, it is entitled to some play in the joints since it has to deal with various complex issues. In R. K. Garg (supra) the Constitution Bench held that the presumption of constitutionality is indeed so strong that in order to sustain it, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. When the competence of the legislature to enact a legislation is accepted, the presumption of constitutionality would no doubt be stronger subject to overcoming the other challenges as raised. In this backdrop, the challenge to the constitutionality of the Act of 2014 can be considered. Hon’ble B. R. Gavai J in Dr. Jaya Thakur (supra) has observed that a statute enacted by the Parliament or a State Legislature cannot be declared unconstitutional lightly. To do so, the Court must be able to hold beyond any iota of doubt that the violation of the constitutional provisions was so glaring that the legislative provision under challenge cannot stand. There has to be a flagrant violation of the constitutional provisions for such law to be declared bad. Recently, the Constitution Bench in Association for Democratic Reforms and another (supra) while considering challenge to the constitutional validity of the Electoral Bond Scheme referred to the scope of judicial review in such matters. It was held that the Courts while adjudicating challenges to legislation and executive action relating to economic policy as compared to laws relating to civil rights such as freedom of speech or freedom of religion must adopt a less stringent form of judicial review. It was further observed the presumption of constitutionality is based on two premises. Firstly, it is based on democratic accountability that is, the elected representatives are aware of the needs of the citizens and are best placed to frame policies to resolve them. Secondly, they are privy to information necessary for policy making which the Courts as an adjudicating authority are not. The policy underlying the legislation must not violate the freedoms and rights which are entrenched in Part III of the Constitution and other constitutional provisions. The presumption of constitutionality is rebutted when a prima facie violation of a fundamental right is established. The onus would then shift on the State to prove that the violation of the fundamental right is justified. A note of caution was also sounded by observing that it was not the constitutional role of the Supreme Court to second guess the intention of the legislature in enacting a particular statute. The Courts would always presume that the legislature is supposed to know and will be aware of the needs of the people.

20] It is well settled that while considering a challenge raised to the constitutionality or vires of an enactment, the foremost aspect to be considered would be that of legislative competence. Whether the legislature was in fact competent to legislate on the subject under challenge is required to be examined so as to cross the first hurdle. The Constitution Bench in Shri Prithvi Cotton Mills Ltd. & Anr. Vs Broach Borough Municipality & Ors., 1969 INSC 122 has held that if the legislature has power over the subject matter and competence to make a valid law, it can at any time make such a valid law retrospectively so as to bind even past transactions. In the present challenge however, the Petitioners do not seek to question the competence of the legislature in enacting the Act of 2014. The challenge proceeds on the basis that though the legislature was indeed competent to pass the legislation under challenge, the impugned legislation suffers from the vice of offending the demarcation of separation of powers between the legislature and judiciary, that it suffers from manifest arbitrariness and that it seeks to nullify the decision of the Supreme Court in Nareshkumar-I. The challenge as mounted to the Act of 2014 would thus have to be considered keeping in mind the fact that the said legislation does not suffer from the vice of lack of legislative competence. This would include the competence to legislate prospectively as well as retrospectively in a given situation.

21] According to the petitioners, the Act of 2014 results in the legislature transgressing the dividing line that separates the recognised areas of jurisdiction between the judiciary and legislature. Since none of the provisions of the Act of 1974 and the Act of 1995 were found to be offending or invalid by the Supreme Court in Nareshkumar-I, it was evident that a position directly contrary to what was held was sought to be legislatively brought into force. The doctrine of separation of powers between the three organs namely, the legislature, executive and judiciary has long been recognised as a basic feature of the Constitution of India though not expressly indicated therein. Reference in this regard can be made to the decision in Kesavananda Bharati vs. State of Kerala 1973 INSC 91. The Constitution Bench in State of Tamil Nadu (supra), which decision is the sheet anchor of the petitioner’s contention in this regard, has summarised the principles relating to the doctrine of separation of powers under the Constitution of India as under:- “126. On a deep reflection of the above discussion, in our opinion, the constitutional principles in the context of Indian Constitution relating to separation of powers between the legislature, executive and judiciary may, in brief, be summarised thus:

126.1. Even without express provision of the separation of powers, the doctrine of separation of powers is an entrenched principle in the Constitution of India. The doctrine of separation of powers informs the Indian constitutional structure and it is an essential constituent of rule of law. In other words, the doctrine of separation of power though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of Indian Constitution. Constitution has made demarcation, without drawing formal lines between the three organs-legislature, executive and judiciary. In that sense, even in the absence of express provision for separation of powers, the separation of powers between the legislature, executive and judiciary is not different from the Constitutions of the countries which contain express provision for separation of powers.

126.2. Independence of courts from the executive and legislature is fundamental to the rule of law and one of the basic tenets of Indian Constitution. Separation of judicial power is a significant constitutional principle under the Constitution of India.

126.3. Separation of powers between three organs the legislature, executive and judiciary is also nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution of India. Accordingly, breach of separation of judicial power may amount to negation of equality under Article 14. Stated thus, a legislation can be invalidated on the basis of breach of the separation of powers since such breach is negation of equality under Article 14 of the Constitution.

126.4. The superior judiciary (High Courts and Supreme Court) is empowered by the Constitution to declare a law made by the legislature (Parliament and State Legislatures) void if it is found to have transgressed the constitutional limitations or if it infringed the rights enshrined in Part III of the Constitution.

126.5. The doctrine of separation of powers applies to the final judgments of the courts. The legislature cannot declare any decision of a court of law to be void or of no effect. It can, however, pass an amending Act to remedy the defects pointed out by a court of law or on coming to know of it aliunde. In other words, a court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.

126.6. If the legislature has the power over the subject-matter and Competence to make a validating law, it can at any time make such a validating law and make it retrospective. The validity of a validating law, therefore, depends upon whether the legislature possesses the competence which it claims over the subject-matter and whether in making the validation law it removes the defect which the courts had found in the existing law.

126.7. The law enacted by the legislature may apparently seem to be within its competence but yet in substance if it is shown as an attempt to interfere with the judicial process, such law may be invalidated being in breach of doctrine of separation of powers. In such situation, the legal effect of the law on a judgment or a judicial proceeding must be examined closely, having regard to legislative prescription or direction. The questions to be asked are:

(i) Does the legislative prescription or legislative direction interfere with the judicial functions?

(ii) Is the legislation targeted at the decided case or whether impugned law requires its application to a case already finally decided?

(iii) What are the terms of law; the issues with which it deals and the nature of the judgment that has attained finality? If the answer to Questions (i) and (ii) is in the affirmative and the consideration of aspects noted in Question (iii) sufficiently establishes that the impugned law interferes with the judicial functions, the Court may declare the law unconstitutional.” 22] Reference can also be made to two recent decisions. In Kalpana Mehta & Ors. vs. Union of India & Ors. 2018 INSC 470, Hon’ble Dr. D. Y. Chandrachud J (as the learned Chief Justice then was) in his concurring opinion observed in paragraphs 52 and 58 as under:- “52. The doctrine of separation restrains the legislature from declaring a judgment of a court to be void and of no effect. However, in the exercise of its law making authority, a legislature possessed of legislative competence can enact validating law which remedies a defect pointed out in a judgment of a court. While the legislature cannot ordain that a decision rendered by the court is invalid, it may be enacting a law, take away the basis of the judgment such that the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.

58. …… Parliament and the State Legislatures legislate. The executive frames policies and administers the law. The judiciary decides and adjudicates upon disputes in the course of which facts are proved and the law is applied. The distinction between the legislative function and judicial functions is enhanced by the basic structure doctrine. The legislature is constitutionally entrusted with the power to legislate. Courts are not entrusted with the power to enact law. Yet, in a constitutional democracy which is founded on the supremacy of the Constitution, it is an accepted principle of jurisprudence that the judiciary has the authority to test the validity of legislation. Legislation can be invalidated where the enacting legislature lacks legislative competence or where there is a violation of fundamental rights. A law which is constitutionally ultra vires can be declared to be so in the exercise of the power of judicial review. Judicial review is indeed also a part of the basic features of the Constitution. Entrustment to the judiciary of the power to test the validity of law is an established constitutional principle which co-exists with the separation of powers. Where a law is held to be ultra vires there is no breach of parliamentary privileges for the simple reason that all institutions created by the Constitution are subject to constitutional limitations. The legislature, it is well settled, cannot simply declare that the judgment of a court is invalid or that it stands nullified. If the legislature were permitted to do so, it would travel beyond the boundaries of constitutional entrustment. While the separation of powers prevents the legislature from issuing a mere declaration that a judgment is erroneous or invalid, the law-making body is entitled to enact a law which remedies the defects which have been pointed out by the court. Enactment of a law which takes away the basis of the judgment (as opposed to merely invalidating it) is permissible and does not constitute a violation of the separation doctrine. That indeed is the basis on which validating legislation is permitted.” In Madras Bar Association vs. Union of India 2021 INSC 332 the permissibility of legislative override has been highlighted. In paragraph 44 it has been observed as under:- “44. The permissibility of legislative override in this country should be in accordance with the principles laid down by this Court in the aforementioned as well as other judgments, which have been culled out as under: a) The effect of the judgments of the Court can be nullified by a legislative act removing the basis of the judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution. b) The test for determining the validity of a validating legislation is that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment. In other words, the defect pointed out should have been cured such that the basis of the judgement pointing out the defect is removed. c) Nullification of mandamus by an enactment would be impermissible legislative exercise [See: S.R. Bhagwat (supra)]. Even interim directions cannot be reversed by a legislative veto [See: Cauvery Water Disputes Tribunal (supra) and Medical Council of India v. State of Kerala & Ors.]. d) Transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the rule of law and of Article 14 of the Constitution of India.” 23] It is also necessary to bear in mind what has been held by the Supreme Court to be impermissible for the legislature to do while undertaking the exercise of validation. These are (a) Simply setting at naught a decision of a Court without removing the defects pointed out in the said decision – NHPC Ltd. (supra) (b) Nullification of mandamus by an enactment would be an impermissible legislative exercise – Dr. Jaya Thakur (supra) (c) Where the legislature merely seeks to validate the acts carried out under a previous legislation which has been rendered inoperative by a Court by a subsequent legislation without curing the defects in such legislation, the subsequent legislation would also be ultra-vires. An attempt to ‘legislatively overrule’ a Court’s judgment by a legislative fiat would be illegal and a colourable legislation – NHPC Ltd. (supra) (d) While the legislature can change the basis on which a decision is given by the Court and thus change the law in general which affects a class of persons and events at large, it cannot set aside an individual decision inter parties and affect their rights and liabilities alone – In re: Cauvery Water Disputes Tribunal 1991 INSC 24] Applying the aforesaid legal principles to the case in hand, we do not find that the exercise of enacting the Act of 2014 in any manner results in the legislature providing for exactly the opposite of what was held in Nareshkumar-I. What has been done by the Act of 2014 is the removal of the basis of the decision in Nareshkumar-I by providing that notwithstanding the transfer and vesting of any sick textile undertaking or textile undertaking with the NTC under Section 3(2) of the Act of 1995, the lease-hold rights continued to vest in the Central Government. The competence of the legislature to enact the Act of 2014 having not been questioned, it is clear that it is only the basis of the decision in Nareshkumar-I that has been removed with retrospective effect. Though the Supreme Court in Nareshkumar-I did not point out any defect in the earlier legislation, this requirement is not a sine qua non for enacting an amending and validating statute as would be pointed out hereinafter. The enforcement of the Act of 2014 results in rendering the decision in Nareshkumar-I to be ineffective by removing the basis on which it was held that the NTC was merely a Government Company and that it could not be considered to be the Central Government. As held in Shri Prithvi Cotton Mills Ltd. & Anr. (supra) it is open for the legislature to give its own meaning and interpretation to its legislation and by legislative fiat make such meaning binding upon Courts. Given legislative competence, this is a permissible exercise and its effect cannot be said to be an attempt to overrule a decision rendered earlier. The premise on which the decision in Nareshkumar-I had been rendered stands fundamentally altered by the Act of 2014 that such decision may not be given in the altered circumstances. There is no bare declaration, without anything more in the Act of 2014 so as to overrule, reverse or override the decision in Nareshkumar-I, as per the test laid down in Virendra Singh Hooda (2) vs. State of Haryana 2004 INSC 625. It is thus held that the Act of 2014 as a validating legislation removes the basis of the decision in Nareshkumar-I and it does not amount to an encroachment on judicial power so as to hold that the Act of 2014 offends the dividing line of separation of powers between the legislature and judiciary. 25] According to the petitioners, by enacting the Act of 2014 the legislature has sought to provide for exactly the opposite of what was held in Nareshkumar-I which would thus amount to an encroachment on the judicial powers of Courts. The distinction between encroachment on judicial powers and nullifying the effect of a judicial decision by changing the law retrospectively has been explained by the Supreme Court in M/s. Tirath Ram Rajindra Nath vs. State of UP and another, AIR 1973 SC 405 by observing that the former was outside the competence of the legislature while the latter was within its permissible limits. Amending the law retrospectively thereby removing the basis of an earlier decision cannot be considered as an encroachment on judicial powers of Courts. Yet again in I.N. Saksena vs. The State of Madhya Pradesh. 1976 INSC 10 it has been held as under. “The distinction between a “legislative” act and a “judicial” act is well known, though in some specific instances the line which separates one category from the other may not be easily discernible. Adjudication of the rights of the parties according to law enacted by the legislature is a judicial function. In the performance of this function, the court interprets and gives effect to the intent and mandate of the legislature as embodied in the statute. On the other hand, it is for the legislature to lay down the law, prescribing norms of conduct which will govern parties and transactions and to require the court to give effect to that law. While, in view of this distinction between legislative and judicial functions, the legislature cannot by a bare declaration, without more, directly over-rule, reverse or over-ride a judicial decision, it may, at any time in exercise of the plenary powers conferred on it by Article 245 and 246 of the Constitution render a judicial decision ineffective by enacting a valid law on a topic within its legislative field fundamentally altering or changing with retrospective, curative or neutralising effect the conditions on which such decision is based. As pointed out by Ray C. J. in Indira Nehru Gandhi vs. Raj Narain, 1975 INSC 272, the rendering ineffective of judgments or orders of competent courts and tribunals by changing their basis by legislative enactment is a well-known pattern of all validating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidity of actions or proceedings is not an encroachment on judicial power. In Hari Singh vs. Military Estate Officer, 1972 INSC 135 a Bench of seven learned Judges of this Court laid down that the validity of a validating law is to be judged by two tests. Firstly, whether the legislature possesses competence over the subject matter, and, secondly, whether by validation the legislature has removed the defect which the courts had found in the previous law. To these we may add a third. Whether it is consistent with the provisions of Part III of the Constitution.”

26. The learned Senior Advocate for the petitioners heavily relied upon the decision in State of Tamil Nadu (supra) to urge that the Act of 2014 seeks to provide for exactly the opposite of what was held in Nareshkumar-I. To appreciate this contention, it would be necessary to consider the issue that arose before the Constitution Bench therein. By its judgment dated 27th February 2006, the Supreme Court in Mullaperiyar Environmental Protection Forum Vs. Union of India, 2006 INSC 127 permitted the water level in the Mullaperiyar Dam to be raised to 142 feet. Shortly after the said decision, the Kerala State Legislature amended the Kerala Irrigation and Water Conservation Act, 2003 on 18th March 2006 and fixed the height of the Mullaperiyar Dam at 136 feet. The State of Tamil Nadu filed Original Suit No.3 of 2006 before the Supreme Court under Article 131 of the Constitution of India. One of the challenges raised was that the Amendment Act was not a validation Act but a mere device to defy, obstruct and nullify the earlier decision of the Supreme Court. By a mere declaration and enactment, the legislature could not overrule and nullify a judicial decision. The Constitution Bench answered the issues as framed and held that: (a) The judgment dated 27th February 2006 was the result of judicial investigation founded upon facts ascertained during the course of hearing. The stand of the State of Kerala that the raising of water level to 142 feet was unsafe was specifically turned down. (b) Under the pretence of power, the legislature cannot neutralise the effect of a judgment given after ascertainment of fact by means of evidence / materials placed by the parties to the dispute. A decision which disposes of the matter by giving findings upon facts is not open to change by the legislature.

(c) The Amendment Act of 2006 was not a validation enactment and hence there was no question of the legislature removing any defect. It was aimed only at nullifying the prior and authoritative decision of the Supreme Court.

(d) The legislature (Parliament or State Legislatures) cannot be judge in their own cause in case of any dispute with another State. (e) The judgment dated 27th February 2006 had become final and binding. The issues decided therein would operate as res judicata in the subsequent proceedings filed under Article 131 of the Constitution of India. On the aforesaid basis, it was held that the Amendment Act of 2006 was unconstitutional. 27] In our considered opinion, the ratio of the aforesaid decision does not support the case of the petitioners. In Nareshkumar-I, the provisions of Section 3(1) and (2) of the Act of 1995 were considered and it was held that notwithstanding the vesting of the textile undertaking in the Central Government and the subsequent transfer and vesting in the NTC, the NTC could not urge that it stepped into the shoes of the Central Government. According to the legislature, it was always intended that the tenancy rights of the lessee stood transfered and vested absolutely in the Central Government. This was with the view to protect public investment in the acquired textile undertakings especially since the parent enactments sought to revive sick textile undertakings by making investments therein and also undertake their nationalisation. The legislative exercise of amendment and validation is a permissible method of clarifying legislative intention by removing the basis of an earlier adjudication. The Act of 2014 does not simplicitor set at naught the decision in Nareshkumar-I. It also does not result in nullyfying any mandamus issued by the Court. By clarifying the effect of vesting in the Central Government, the Act of 2014 seeks to achieve the object behind enacting the Acts of 1974 and 1995. Thus, considering the law laid down in M/s. Tirath Ram Rajindra Nath, I.N. Saksena, Kalpana Mehta and Madras Bar Association (supra) it cannot be said that by enacting the Act of 2014, the legislature has breached the doctrine of separation of powers. The petitioners’ challenge on that basis cannot succeed.

28] Since the Act of 2014 has been described as an Amendment and Validation Act, it would be necessary to refer to the law in that regard as laid down by the Supreme Court. In the leading decision of the Constitution Bench in Shri Prithvi Cotton Mills Ltd. & Anr. (supra) while setting down the purpose of a Validating Act, it was held as under:- “When a legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the legislature does not possess or exercise. A court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a court holds a tax to be invalidly imposed because the power to' tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the reenacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat, makes the new meaning binding upon courts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the court which becomes ineffective after the change of the law. Whichever method is adopted it must be within the competence of the legislature and legal and adequate to attain the object of validation. If the legislature has the power over the subject-matter and competence to make a valid law, it can at any time make such a valid law and make it retrospectively so as to bind even past transactions. The validity of a Validating law, therefore, depends upon whether the legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the courts had found in the existing law and makes adequate provisions in the Validating law for a valid imposition of the tax.” In Amarendra Kumar Mohapatra & Ors. vs State of Orissa & Ors., 2014 INSC 1716 the Supreme Court considered the dictionary meaning of the term “Validation Act”. In that context it was observed as under:- “22. Black's Law Dictionary (9th Edition, Page No.1545) defines a Validation Act as "a law that is amended either to remove errors or to add provisions to conform to constitutional requirements". To the same effect is the view expressed by this Court in Hari Singh & Others v. The Military Estate Officer and Anr. (1972) 2 SCC 239, where this Court said "The meaning of a Validating Act is to remove the causes for ineffectiveness or invalidating of actions or proceedings, which are validated by a legislative measure". In ITW Signode India Ltd. v. Collector of Central Excise (2004) 3 SCC 48, this Court described Validation Act to be an Act that "removes actual or possible voidness, disability or other defect by confirming the validity of anything which is or may be invalid.” From the aforesaid it is clear that the mode of validation can be resorted to when the legislature seeks to give its own meaning and interpretation to a law previously enacted. Retrospective effect can be given to a validating law so as to bind even past transactions. 29] It was vehemently contended by the learned Senior Advocate for the petitioners that in Nareshkumar-I, the Supreme Court did not declare any of the provisions of the Act of 1995 to be invalid. No defect whatsoever in that legislation was pointed out so as to warrant enactment of the Validation Act. Reliance was placed on the observations made in this regard in State of Tamil Nadu and NHPC (supra). On this basis it was urged that the only object behind enacting the Act of 2014 was to defeat the legal rights that had accrued in favour of the decree holders in Nareshkumar-I as well as the Petitioners. 30] This contention carries weight and merits consideration. It is true that in Nareshkumar-I, none of the provisions of the Act of 1995 were found to be invalid or commented upon adversely. Infact the contention based on the NTC’s interpretation of Section 3(1) of the Act of 1995 was not permitted to be urged for want of necessary pleadings in the written statement and also for want of the same being raised earlier. It is however seen from legal precedents that a prior judicial pronouncement of a statutory provision being invalid is not a sine qua non for the enactment of a Validation Act. In this context it would be apposite to refer to the decision in Amarendra Kumar Mohapatra (supra). Therein, the constitutional validity of the Orissa Service of Engineers (Validation of Appointment) Act, 2002 seeking to validate the ad-hoc appointment of about 881 Assistant Engineers that were made in breach of the Orissa Service of Engineers’ Rules, 1941 was under challenge. It was urged that the State of Orissa having not suffered any adverse judicial pronouncement to necessitate a Validation Act, the same was invalid. Considering various decisions on the subject of validation, it was held in clear terms that a prior judicial pronouncement declaring an act, proceeding or rule to be invalid is not a condition precedent for the enactment of a Validation Act. It was permissible to enact such legislation for removing some perceived invalidity which the Court had not yet adjudged. It has been stated therein as under:- “30. The matter can be viewed from yet another angle. The enactment came de hors any compulsion arising from a judicial pronouncement regarding the invalidity attached to the appointment of Assistant Engineers on ad hoc basis and only because of the State's anxiety to appoint/absorb the Stipendiary Engineers, subsequently appointed as ad hoc Assistant Engineers on a substantive/regular basis without following the route mandated by the Service Rules of 1941 applicable for making any such appointments. Having said that, we must hasten to add that a prior judicial pronouncement declaring an act, proceedings or rule to be invalid is not a condition precedent for the enactment of a Validation Act. Such a piece of legislation may be enacted to remove even a perceived invalidity, which the Court has had no opportunity to adjudge. Absence of a judicial pronouncement is not, therefore, of much significance for determining whether or not the legislation is a validating law.” (Empasis supplied) It was then held that the legislation under challenge was not a Validation Act as it purported to be but was an enactment that regularised the appointment of ad-hoc engineers. The exercise of regularisation could have been undertaken even in exercise of the State’s executive power. However, the same was done in exercise of its legislative power which was also permissible. It was held in clear terms that the essence of a validating enactment is a pre-existing act, proceeding or rule that is found to be void or illegal with or without a judicial pronouncement of the Court. The aforesaid decision lays down in clear terms that even in the absence of an adverse judicial pronouncement, a validating law can be enacted. Such legislation can seek to remove even a perceived invalidity which the Court had no opportunity to adjudge. Thus, in view of the decision in Amarendra Kumar Mohapatra (supra) it is held that notwithstanding absence of any adjudication by the Supreme Court in Nareshkumar-I declaring any provisions of the Act of 1995 to be invalid, it was permissible to undertake the exercise of enacting a validating law. Hence, on the premise that no defect in the Act of 1974 or the Act of 1995 was pointed out by the Supreme Court, enactment of the Act of 2014 cannot be questioned on that count. 31] It may be noted that in Nareshkumar-I, a contention was raised on behalf of the NTC that in view of the provisions of the Act of 1995, the NTC had stepped into the shoes of the Central Government as its agent while the Central Government remained the tenant. It was urged that as the Central Government continued to be the tenant, its tenancy was protected under Section 3(1)(a) of the Act of 1999. This stand of the NTC was not permitted to be raised since the same was not raised by it in its written statement nor was such issue raised before any of the Courts earlier. This would however indicate that the provisions of Section 3(1) and (2) of the Act of 1995 were sought to be interpreted as conferring tenancy rights in favour of the Central Government and that the statutory vesting in favour of the NTC would not have the effect of divesting the Central Government of such rights. Reference is being made to this aspect as the impugned legislation is sought to be defended as being clarificatory in nature and that Section 3(1) and (2) ought to be read and understood as such since the time the parent Act came into force. This very position was sought to be reiterated by the Union of India in Nareshkumar-II. However, by the time the review application was decided, the Act of 2014 had come into force. In the absence of any challenge to the validity of that Act, full effect was given to the provisions of Section 3 as amended alongwith the validating Section. Thus, even prior to the enforcement of the Act of 2014, the NTC had sought to interpret Sections 3(1) and 3(2) of the Act of 1995 as vesting lease-hold rights in the Central Government with the NTC acting as its agent. No doubt, this contention did not find favour in Nareshkumar-I resulting in the decree for eviction against the NTC being confirmed.

32] As can be seen from the foregoing discussion, manifest arbitrariness has been recognised as a ground available for challenging plenary legislation. In Shayara Bano Vs. Union of India 2017 INSC 785 the Constitution Bench while setting aside the practice of Talaq-e-Bidaat (Triple Talaq) held that manifest arbitrariness must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. A legislation that is excessive and disproportionate would also be manifestly arbitrary. Subsequent decisions of the Constitution Benches in Navtej Singh Johar Vs. Union of India 2018 INSC 790 and Joseph Shine Vs. Union of India 2018 INSC 898 have reiterated the said principle laid down in Shayara Bano (supra). Reference in this regard can be made to the following observations in Association for Democratic Reforms and another (supra):-

181. At the outset, the relevant question that this Court has to answer is whether a legislative enactment can be challenged on the sole ground of manifest arbitrariness. Article 14 of the Constitution provides that the State shall not deny to any person equality before the law or the equal protection of laws within the territory of India. Article 14 is an injunction to both the legislative as well the executive organs of the State to secure to all persons within the territory of India equality before law and equal protection of the laws (Basheshar Nath v. CIT, (1959) Supp 1 SCR 528). Traditionally, Article 14 was understood to only guarantee non-discrimination. In this context, Courts held that Article 14 does not forbid all classifications but only that which is discriminatory. In State of West Bengal v. Anwar Ali Sarkar, (1951) 1 SCC 1, Justice S R Das (as the learned Chief Justice then was) laid down the following two conditions which a legislation must satisfy to get over the inhibition of Article 14: first, the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others; and second, the differentia must have a rational relation to the object sought to be achieved by the legislation. In the ensuing years, this Court followed this "traditional approach" to test the constitutionality of a legislation on the touchstone of Article 14 (Kathi Raning Rawat v. State of Saurashtra, (1952) 1 SCC 215; Budhan Chowdhury v. State of Bihar, (1955) 1 SCR 1045; Ram Krishna Dalmia v. S R Tendolkar, 1959 SCR 279.)

187. In Shayara Bano v. Union of India, (2017) 9 SCC 1, a Constitution Bench of this Court set aside the practice of Talaq-e-Bidaat (Triple Talaq). Section 2 of the Muslim Personal Law (Shariat) Act 1937 was also impugned before this Court. The provision provides that the personal law of the Muslims, that is Shariat, will be applicable in matters relating to marriage, dissolution of marriage and talaq. Justice R F Nariman, speaking for the majority, held that Triple Talaq is manifestly arbitrary because it allows a Muslim man to capriciously and whimsically break a marital tie without any attempt at reconciliation to save it. Thus, Justice Nariman applied the principle of manifest arbitrariness for the purpose of testing the constitutional validity of the legislation on the touchstone of Article 14.

189. Shayara Bano (supra) clarified In Re Special Reference No. 1 of 2012 (supra) by holding that a finding of manifest arbitrariness is in itself a constitutional infirmity and, therefore, a ground for invalidating legislation for the violation of Article 14. Moreover, it was held that there is no rational distinction between subordinate legislation and plenary legislation for the purposes of Article 14. Accordingly, the test of manifest arbitrariness laid down by this Court in Indian Express Newspapers (supra) in the context of subordinate legislation was also held to be applicable to plenary legislation. In conclusion, this Court held that manifest arbitrariness "must be something done by the legislature capriciously, irrationally and/or without adequate determining principle." It was further held that a legislation which is excessive and disproportionate would also be manifestly arbitrary. The doctrine of manifest arbitrariness has been subsequently reiterated by this Court in numerous other judgments.

191. In Joseph Shine v. Union of India, (2019) 3 SCC 39, a Constitution Bench of this Court expressly concurred with the doctrine of manifest arbitrariness as evolved in Shayara Bano (supra). In Joseph Shine (supra), one of us (Justice D Y Chandrachud) observed that the doctrine of manifest arbitrariness serves as a check against state action or legislation "which has elements of caprice, irrationality or lacks an'adequate determining principle." ……...” 33] The petitioners challenge based on manifest arbitrariness proceeds on the premise that the Act of 2014 lacks an “adequate determining principle” and that its purpose “is not in consonance with constitutional values”. The object behind the enactment is to nullify decrees for eviction passed against the NTC from leasehold premises of textile undertakings inasmuch as Section 2 of the Act of 2014 is ex-facie and directly contrary to Section 3(1) and 3(2) of the Act of 1995 as interpreted in Nareshkumar-I. It would thus be necessary to consider whether the provisions of the Act of 2014 lack an “adequate determining principle”. The provisions of Section 2 of the Act of 2014 seek to insert sub-sections (3) and (4) in Section 3 of the Act of

1974. Section 3(3) seeks to clarify the effect of the transfer and vesting of any sick textile undertaking to the NTC under Section 3(2) and states that notwithstanding such transfer and vesting of such sick textile undertaking, the lease-hold rights would continue to remain vested in the Central Government on payment of lease-hold rents. In Nareshkumar-I, the contention raised on behalf of the NTC that it was merely an agent of the Central Government was turned down after considering the expression “vesting” in the context of Sections 3(1) and 3(2) of the Act of 1995. Further, the necessary pleadings in that regard had not been raised by the NTC in its written statement. Hence it was held that the NTC was not entitled for exemption under Section 3(1)(a) and 3(1)(b) of the Act of 1999. It is also true that none of the provisions of the Act of 1995 were held to be invalid or suffering from any legal infirmity. 34] Notwithstanding the aforesaid position, in our view it was permissible for the legislature to come up with the Act of 2014 so as to clarify the effect of “vesting” under Section 3(1) and 3(2) of the Act of 1995. Given legislative competence, it has been held by the Constitution Bench in Shri Prithvi Cotton Mills Ltd. (supra) that a Court’s decision would always be binding unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. The following observations explicitly explain the issue: “Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidty are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat, makes the new meaning binding upon courts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the court which becomes ineffective after the change of the law. Whichever method is adopted it must be within the competence of the legislature and legal and adequate to attain the object of validation. If the legislature has the power over the subject-matter and competence to make a valid law, it can at any time make such a valid law and make it retrospectively so as to bind even past transactions.” (Emphasis supplied) We have already noted that the Supreme Court in Amarendra Kumar Mohapatra (supra) has held that even in the absence of a judicial pronouncement declaring an Act or provision to be invalid, validation legislation can seek to remove even a perceived invalidity. Thus, notwithstanding the decision of the Supreme Court in Nareshkumar-I in which the provisions of Section 3(1) and 3(2) of the Act of 1995 were considered as not conferring any right in favour of the Central Government, it was permissible for the legislature to clarify the effect of such vesting through the Act of 2014. As a result of the Act of 2014, the basis of the decision in Nareshkumar-I stands removed. In view of the amended provisions of the Acts of 1974 and 1995, such decision may not be possible in the altered circumstances. It cannot be said that such legislation is arbitrary or capricious enacted only with the intent of nullifying decrees passed by Courts. Such decrees now stand legally unenforceable by a legal fiction as observed in Nareshkumar-II. 35] It is to be noted that in Minerva Mills Ltd. and Ors. (supra), the constitutionality of the Act of 1974 has been upheld. It was found that the Act of 1974 seeks to give effect to the policy of the State towards securing the ownership and control of the material resources of the community, which are so distributed as best to subserve the common good as specified in Article 39(b) of the Constitution of India. The Statement of Objects and Reasons of the Act of 1995 indicates that it was found necessary to ensure continued production and distribution of different varieties of cloth and yarn to the public at fair prices. The interests of workmen was also sought to be protected. The Act of 2014 seeks to provide for proper and effective implementation of the revival scheme as well as to protect the public investment in the acquired textile undertakings. The status of vesting of lease-hold rights in the Central Government was sought to be explicitly clarified. When the provisions of the Act of 2014 are examined in the aforesaid backdrop, it becomes obvious that the enactment seeks to achieve the purpose that is in consonance with constitutional values. The “real purpose” behind enacting the Act of 2014 is to achieve the objects sought to be arrived at by the Acts of 1974 and 1995. Thus, applying the test of manifest arbitrariness as laid down in Association for Democratic Reforms (supra), it cannot be said that the Act of 2014 suffers from such vice. Failure on the part of the NTC in not raising a plea of non-joinder of the Central Government in the proceedings for eviction for a period of almost twenty years would not be a very relevant aspect in deciding the present challenge. The Act of 2014 results in decrees passed in absence of the Central Government being impleaded becoming unenforceable. That however is the effect of the validating Act which the legislature was competent to pass. As observed in R.S. Joshi and Ors. Vs. Ajit Mills Ltd. and Anr., 1977 INSC 171, a law has to be adjudged for its constitutionality by the generality of cases it covers, not by the freaks and exceptions it martyrs. 36] According to the petitioners, Section 4(9) as amended in the Acts of 1974 and 1995 enables the NTC to prosecute or defend any proceedings as a subsequent vestee in respect of the lease-hold rights and non-impleadment of the Central Government in such proceedings would not be fatal. Said provision is thus inconsistent with Section 3(3) read with Section 39 of the Act of 1995. In our view, the provisions of Section 4(9) as amended merely seek to remove doubts flowing from the effect of Section 3(3) of the Act of 1995. Once the nature of vesting in the Central Government is clarified by Section 3(3), it follows that the lease-hold rights of the Central Government cannot be prejudiced by not impleading it in any proceedings initiated by the lease holder. Similarly, the right of the NTC to prosecute or defend such proceedings has been preseved and that failure to implead the Central Government in such proceedings would not be fatal. The NTC has been stated to be the subsequent vestee and hence competent to prosecute or defend such proceedings even in the absence of the Central Government. It is obvious that the converse cannot apply as the rights of the Central Government as lessee cannot be determined in its absence in proceedings initiated by the lease holder. It therefore cannot be said that the provisions of Section 4(9) of the amended Act indicates the artificial and arbitrary nature of the Act of 2014. It is not violative of Article 14 of the Constitution of India. This contention of the petitioners cannot be accepted.

37] The last contention that remains to be dealt with is that the Act of 2014 was enacted only to nullify eviction decrees made against the NTC in suits filed by lessors. This constituted class legislation without any determining principle. The petitioners seek to attack the validity of the Act of 2014 on the premise that, in a sense, it is “a colourable piece of legislation” enacted only to save the NTC from being evicted. In our view, this contention too does not warrant acceptance. Whether the intention or the motive behind enacting the Act of 2014 was only to save the NTC from eviction decrees would not be a decisive factor. What would be material is the aspect of legislative competence. In this regard, useful reference can be made to the decision in K.C. Gajapati vs. State of Orissa, 1953 INSC 52. The Constitution Bench therein considered the doctrine of colourable legislation and held that the same does not involve any question of bonafides or malafides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are irrelevant. On the other hand, if the legislature lacked competency, the question of motive would not arise at all. In the present case, legislative competence of the legislature has not been challenged. Once the same is accepted, the relevance of any motive becomes insignificant. Rather, it cannot be inquired into as held in Welfare Association ARP, Maharashtra vs. Ranjit P. Gohil, 2003 INSC 103. In view of this position, it cannot be said that the Act of 2014 came to be enacted only with a view to nullify eviction decrees made against the NTC. 38] It could be said that in view of the Act of 2014, the eviction decrees made against the NTC have become unexecutable. But that is the consequence of a Validating Act. Since the Act of 2014 fundamentally alters the nature of vesting by clarifying that lease-hold rights would continue to vest in the Central Government, the NTC cannot be evicted pursuant to the decrees passed in which the Central Government had not been impleaded as a lessee. In other words, if the position as introduced/inserted in the statute by the Act of 2014 would have been available when the decision in Nareshkumar-I was rendered, it is likely that the eviction of the NTC may not have occasioned. It therefore cannot be said that the Act of 2014 was enacted with the sole purpose of nullifying eviction decrees made against the NTC in suits filed by the lessors. It is also to be noted that under the Act of 1974, the rights of owners of sick textile undertakings were to stand transferred so as to vest in the Central Government and thereafter the NTC. Similarly, under the Act of 1995, the rights of owners of textile undertakings were to stand transferred so as to vest in the Central Government and thereafter the NTC. These legislations pertain only to sick textile undertakings as defined by Section 2(1)(j) of the Act of 1974, textile undertakings as defined by Section 2(1)(m) of the Act of 1995 and the NTC as formed and registered under the Companies Act, 1956. There being no other entities involved, it cannot be said that the Act of 2014 amounts to class legislation. We therefore do not find any basis to hold that the Act of 2014 was enacted only to nullify decrees of eviction passed against the NTC. Q. Conclusion: 39] We thus find that the challenge as raised to the Act of 2014 as being manifestly arbitrary, transgressing the dividing line of separation of powers and seeking to nullify the decision of the Supreme Court in Nareshkumar-I cannot succeed. Having appreciated the rival contentions as urged, we do not find that there is any flagrant violation of Part-III of the Constitution of India for declaring the Act of 2014 to be bad. Judicial deference to legislative judgment has to be conceded as observed in R.K. Garg (supra) especially when the aspects of fundamental human rights are not involved herein. In the light of the discussion made hereinabove, we conclude as under: (a) The Act of 2014 is intra vires. It does not suffer from the vice of offending the doctrine of separation of powers. It is an amending and validating Act that does not simplicitor seek to provide for exactly contrary to what has been held by the Supreme Court in Nareshkumar-I. (b) The Act of 2014 does not suffer from manifest arbitrariness nor is it violative of the provisions of Article 14 of the Constitution of India.

(c) The challenge to the constitutionality of the Act of 2014 thus fails. Rule stands discharged with no order as to costs. 40] We place on record our sincere appreciation for the efforts put in by learned Senior Advocates for the petitioners and the respondents. They put forth their submissions with great clarity and erudition. They were ably assisted by their instructing counsel. The systematic and precise presentation of submissions in support of the challenge and in its defence aided us immensely in deciding the issues as raised. [ JITENDRA JAIN, J. ] [ A.S. CHANDURKAR, J.]