B. Malik, C.J:— I agree that if Rehabilitation Grant can be treated as a part of compensation then the question of its validity on the ground that it is discriminatory cannot be raised in a court of law by reason of clause (4) of Article 31. On the question of fact, however, whether Rehabilitation Grant is a part of compensation, I am not prepared to hold that it is. The Legislature treated the two differently and gave eight times the net assets as compensation and directed payment of Rehabilitation Grant to some of the Intermediaries. It must be presumed that the Legislature intended to differentiate between the two when it deliberately divided the two payments and gave them different names. No case has been cited to us in which a Legislature, which is the representative of the people, was ever held to be guilty of fraud. In Abitibi Pdwer and Paper Co. Ltd. v. Montreal Trust Company their Lordships of the Judicial Committee observed:
“This Board must have cogent ground before it arising from the nature of the impugned legislation before it can impute to a provincial legislature some object other than what is to be seen on the fact of the enactment itself.”
In State of Arizona v. State of California et al. Mr. Justice Brandeis delivering the opinion of the Court, said:
“Into the motives which induced members of Congress to enact the Boulder Canyon Project Act, this Court may not enquire.”
Unless, therefore, there were some conclusive evidence on which it could be held that Rehabilitation Grant is a part of compensation I would be most reluctant to hold that it is. It is admitted that there is no direct evidence but it is urged that there are grounds for holding that Rehabilitation Grant is a part of compensation.
The reasons given by learned, counsel for the applicants are that both in the case of compensation as well as Rehabilitation Grant the reason for the payment is the acquisition of the property. It is true that the occasion for the two payments is the same, that is the loss of property to the owner thereof. The acquisition of the property, however, may result not only in depriving the owner of the property, but it may also result in the loss of the means of subsistence or livelihood and those, who have limited means, may find it more difficult to bear the loss than others who besides zamindari may have other property or business to fall back upon. The Legislature may well consider where it is paying inadequate compensation that it should try to reduce the suffering by giving some extra help to those who are in real need of it. Though the words have not been defined in the Act, nor any reason given why Rehabilitation Grant was being paid, the name itself signifies that the idea was to help those petty zamindars of small means who have been deprived of their livelihood by the loss of the property. Viewed in this light, though the occasion for payment of compensation as well as Rehabilitation Grant may be the acquisition of the property the reason for the payment of one is entirely different from the reason for the payment of the other.
The next objection, that no enquiry is made into the means of the persons to whom Rehabilitation Grant is payable, and a person paying a small revenue may be a chip industrialist while a person paying a large amount as revenue may, by reason of his indebtedness be in real need, is also, to why find, not conclusive if we be in mind that Intermediaries, to whom Rehabilitation Grant is to be paid, exceed nineteen lakhs. It would have entailed enormous cost and would have caused so much delay in payment of Rehabilitation Grant that the Legislature might well have decided not to take into account exceptional cases and to go on the basis of payment of land revenue which for the vast majority of the people was the correct criterion to judge of their means.
It was further urged that in the lower grades the amount of Rehabilitation Grant is much larger than the amount of compensation. One of the directive principles of State policy being, however, that citizens should have adequate means of livelihood and every one should be ensured a decent standard of life, if the legislature decided to be generous to the lowest class, it does not necessarily follow that what was being paid to them was compensation and not Rehabilitation Grant.
Reliance is also placed on the fact that both Rehabilitation Grant as well as compensation are multiples of the net assets of the Intermediaries and the amount thereof is payable in cash or in bonds or partly in cash or partly in bonds. The suggestion is that Rehabilitation Grant to be of any use must be paid in cash and there is no point in giving Rehabilitation Grant in bonds. Further that there was no reason why Rehabilitation Grant should be a multiple of the net assets and not fixed amount. The Legislature had to fine an equitable basis for determining the amount payable to the poor class of intermediaries and if it thought that their means were, for a large majority at any rate, correctly reflected in the net assets of the property that was being acquired there was no reason why Rehabilitation Grant should not be made a multiple there of. As regards payment by bonds, this only gives the State an option and though receipt, of bonds may not be as convenient to the Intermediaries as the receipt in cash, in case of necessity there is no reason why the State should not be given the right to pay the amount in bonds rather than in cash.
The last point urged is that there could be no question of Rehabilitating trust, religious, chasitable or otherwise. Rehabilitation Grant was merely to set up those whose property was being acquired and there was no reason why the trusts should have been deprived of the grant when it was being paid to private individuals, though in case, of trusts the words “Rehabilitation Grant” may, to some extent, be a misnomer.
None of the points urged, therefore, is to my mind so conclusive as would entile us to hold that Rehabilitation Grant must be deemed to be a part of compensation when the legislature has ruled to the contrary.
The next point for consideration is whether Rehabilitation Grant can be paid on a sliding scale or whether that would contravene the provisions of Article 14 of the Constitution. Sri Beg, on behalf of the State, has urged that for an ex gratia payment to which a person “may have no right the provisions of Article 14 are not applicable. He has relied on a passage in the judgment, of the Supreme Court in Joslin Manufacturing Company v. City of Providence which is as follows:—
“This statute therefore does not deny a right, it grants one and limits it to a business already established. One cannot say that such a classification is unreasonable or arbitrary and certainly it is not clearly so.”
Reliance is, on the other hand, placed on the case of John Hayes v. State of Missouri where it was held that—
“The Fourteenth Amendment does not prohibit legislation which is limited in the objects to which it is directed, or by the territory within which it is to operate. It merely requires that all persons subjected to such legislation shall be treated alike under like circumstances and conditions both in the privileges conferred and in the liabilities imposed.”
The words “privileges conferred” are important and they show that the Legislature cannot discriminate and give special privileges to a person or to a class of persons. There is nothing in Article 14- which would support the contention of learned counsel for the State that when a right is created by law the State is entitled to discriminate. There is, therefore, no valid reason why Article 14, which provides that “The State shall not deny to any reason equality before the law”, should not apply to the Chapter relating to Rehabilitation Grant. Classification on a reasonable basis is, however, permissible for Rehabilitation Grant if it is payable according to the needs of the people rehabilitated. Sri Beg, on behalf of the State, has taken us through various Acts to show that smaller landlords have always been shown special consideration by the Legislature and they have always been more generously treated than the bigger ones. He has referred us to the provisions of the Land Revenue Act, the U.P Agriculturists Relief Act, the Debt Redemption Act, and similar other Acts, and has urged that it is a well-known basis that a man who is less able to bear the loss should be more generously treated than a person who may well be able to bear the same. (See Carles U. Cotting and Francis Lee Higginson v. A.A Godard . There is no difficulty in accepting this argument if Rehabilitation Grant is acceptable to be a payment to the individual according to his circumstances, to set him up in life. The classification in that case would be deemed to be possible.
Sri Dar has, however, urged that there is no reason why the landlords should be grouped for the purposes of Rehabilitation Grant into nine classes—those paying land revenue up to Rs. 25 getting Rehabilitation Grant at twenty times, and those paying land revenue exceeding Rs. 25 but not Rs. 50 only seventeen times, and so on, on a sliding scale. He has urged that this is really being done to give the largest amount of benefit to the largest number.
The largest amount of benefit to the largest number itself will not necessarily be unreasonable, but why for purposes of Rehabilitation Grant the Intermediaries have been divided into nine classes was a matter for the Legislature. Classification on a reasonable basis is not bad because it is not done with mathematical accuracy—(see Stuart Lindsley v. Natural Carbonic Gas Company and further there is a presumption that the Legislature knows correctly about the needs of the people and the discrimination by it must be deemed to be on adequate grounds (see Charlie Middleton v. Texas Power and Light Company . It is further pointed out in Jessie Norton Torrence Magoun v. Ilincis Trust and Savings Bank that there is no precise application of the rule of reasonableness. It has, therefore, to a large extent to be left to the Legislature. For the purposes of making payment to rehabilitate a person the needs of the person to be rehabilitated can be taken into consideration and it cannot, be said that the same amount of Rehabilitation Grant must be paid to everybody without taking into consideration his circumstances in life. Payment can, therefore, be made on a sliding scale according to the means of the person. We have already held that the amount of land revenue paid is, in a vast majority of cages, a good test of a man's means, Rehabilitation Grant could, therefore, be paid on a sliding scale and for marginal cases marginal adjustments have been provided for in the Act itself. The validity of the Act, therefore, cannot be challenged on the ground that Rehabilitation Grant has not been paid on a uniform basis and is, therefore, discriminatory.
One point that has, however, troubled me to some extent is whether differentiation between religious and charitable trusts paying land revenue above Rs. 10,000 and those paying land revenue Rs. 10,000 or less can be made on any reasonable basis. No Rehabilitation Grant is payable to religious or charitable trust paying land revenue of above Rs. 10,000; they are entitled to get only eight times the net income, while trusts paying land revenue of Rs. 10,000 or less are entitled to get by way of Rehabilitation Grant an annuity worked out on principles laid down in section 99 of the Act. The Poirot was not brought out in arguments by learned counsel and if the decision of this question had been necessary I would have liked to hear further arguments. I am, however, clearly of the opinion that even if this be discriminatory treatment between smaller religious or charitable trusts and larger ones it does not really affect the other Intermediaries. Religious and char table trusts can easily be separately classified from the other Intermediaries and even if the Legislature had not acquired the interests of religious and charitable trusts, other intermediaries could not have objected on the ground that they should be put on the same basis as religious or charitable trusts. To make my point more clear, the Legislature may well have added religious and charitable trust, in section 2(1)(b) of the Act or it may have had a separate clause for the same. Some of the applications are on behalf of religious and charitable trusts. In case we were holding that the Act is invalid. I would have liked to hear further arguments on the point whether classification between larger religious and charitable trusts and smaller religious and charitable trusts was possible, and in case such a classification was not possible how that matter would affect the rest of the Act.
Applications dismissed.