Anurag Krishna Sinha vs State of Bihar & Anr.

Held: The impugned Act authorises the State to take over the Institute & Library in its entirety, dissolving existing legal arrangements and divesting long-standing rights, without any demonstrated necessity, objective criteria, or prior inquiry – The manner in which this power is exercised is excessive, unreasoned and disproportionate to the stated object of “better management and development” – This Court is of the view that Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015 is manifestly arbitrary and violative of Art.14 of the Constitution of India – Further, the scheme of the Act permits deprivation of property without adherence to basic requirements of fairness and due process – The absence of any principled or meaningful framework for compensation underscores the arbitrary character of the legislative measure – While Art.300A permits deprivation of property by authority of law, such law must be fair, reasonable and non-confiscatory – The impugned Act fails to meet this standard – The Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015 is unconstitutional and is accordingly struck down – Accordingly, the Trust governing the Institute & Library, together with its rights of management and administration, shall stand restored to its pre-existing legal position prior to the enactment of the impugned Act – This shall not preclude the State Government from providing financial assistance, administrative support or regulatory oversight in accordance with law. [Paras 50-53] Trust – Public Trust – Determination of legal character: Held: The fact that an institution is intended to serve a public purpose or is open to public use does not, by itself, conclusively determine that the trust is a public trust in law – The legal character of a trust depends on several factors, including the manner in which the dedication is made, the structure of the trust, the nature of control and management, and the rights reserved by the Settlor and his successors under the trust deed – A public-facing object, standing alone, is not determinative. [Para 19] Constitution of India – Art.14 – Principle of equality – Evolution of – Discussed. [Paras 23-34]

Constitution of India – Art.14 – Equality before the law is not a mere formal concept:

Held: The guarantee by Art.14 strikes at arbitrariness in State action and ensures that the exercise of legislative power is informed by reason, fairness and non-discrimination – Equality before the law is not a mere formal concept; it embodies the principle that State action, whether legislative or executive, must be based on rational criteria and must not operate in an arbitrary or capricious manner – From an early stage, this Court has interpreted this guarantee not merely as a prohibition against formal discrimination, but as a constitutional injunction against arbitrariness in State action – The evolution of this principle is traceable through a consistent line of authorities. [Para 23]

Constitution of India – Art.14 – Arbitrariness – A ground to strike down legislation:

Held: The principle that arbitrariness is antithetical to equality now operates as a firm substantive constitutional limitation on legislative power – Manifest arbitrariness is a ground available to this Court to strike down legislation under the judicial review of Art.14 – It is acknowledged that this power must be exercised with care and restraint, so as to maintain the constitutional balance between the legislature and the judiciary – However, where clear and substantive unreasonableness is embedded in a legislative enactment, the Court is not only empowered but obliged to intervene. [Para 32] Constitution of India – Art.14 – Arbitrariness is not confined to discriminatory classification:

Held: As the jurisprudence u/Art.14 makes clear, arbitrariness is not confined to discriminatory classification – A law which proceeds on unreasoned assumptions, adopts excessive means, or operates without adequate determining principles equally attracts constitutional censure – The impugned Act, by extinguishing longstanding rights and arrangements without cogent justification, departs from the discipline of reason that Art.14 mandates. [Para 43] Constitution of India – Art.300A – Deprivation of property by authority of law cannot be arbitrary:

Held: While Art.300A of the Constitution permits deprivation of property by authority of law, such law must nevertheless be just, fair and reasonable, and not arbitrary or confiscatory in effect – A statutory provision that enables acquisition of property while reducing compensation to a token amount lacks the basic attributes of fairness – The confiscatory nature of the vesting contemplated under the impugned Act therefore reinforces the conclusion that the enactment is manifestly arbitrary and fails constitutional scrutiny. [Para 45]