K.T. Plantation Private Ltd. and Another v. State of Karnataka

Dr. Svetoslav Roerich and Devika Rani Roerich owned an estate near Bangalore, part of which was exempt from the land ceiling law because it was used to cultivate linaloe. A portion was sold to the appellant company in 1991. In 1994 the State withdrew the exemption under Section 110 of the Land Reforms Act, and in 1996 it enacted a law to acquire the estate, preserve it and the Roerichs' art collection, and set up an art gallery and museum. The Karnataka High Court upheld both, and the appeals were referred to a Constitution Bench.

Writing for the Constitution Bench, Radhakrishnan J. upheld Section 110: the legislative policy was discernible from the scheme of the Act, and the exemptions under Section 107 were expressly subject to withdrawal. The Acquisition Act was a measure of agrarian reform protected by Article 31A(1)(a), and its ancillary provisions for preserving the art collection did not take it outside that protection.

On Article 300A, the Court held that the right to property is now a constitutional, not a fundamental, right, and that a person may be deprived of property only by a law made by a competent legislature. The public purpose component of eminent domain remains a precondition for invoking Article 300A. The right to claim compensation, though not expressly stated, can be inferred from the Article; nil compensation or an illusory amount would have to be justified on judicial standards, and only for measures achieving greater social justice.

A law providing for deprivation of property must be just, fair and reasonable, as understood in terms of Articles 14, 19(1)(g), 26(b), 301 and other provisions of the Constitution. When a person is deprived of property, the State must justify both the public purpose and the compensation, having regard to the scheme and object of the statute, and a statute depriving a person of property is amenable to judicial review.