Anurag Krishna Sinha v. State of Bihar [Neutral Citation: 2026 INSC 219]: The SC Struck Down Legislation Relating to a Trust as Violative of Article 14 and 300A

Saji Koduvath, Advocate, Kottayam.

Abstract

The State of Bihar passed an enactment to take over the Trust – Srimati Radhika Sinha Institute and Sachchidanand Sinha Library. The Act was named: ‘Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015‘. The professed object of the legislation is: “better management and development” of the Trust. The Act was struck down by the Supreme Court of India.

The Supreme Court found:

  • The Act is manifestly arbitrary. It is violative of Article 14 of the Constitution of India.
  • It deprives property without adherence to fairness and due process. Because Article 300A of the Constitution permits deprivation of property only under the methods permitted by law. Here, no compensation is paid.  It underscores the arbitrary character.
  • The law must be fair, reasonable and non-confiscatory. The impugned Act transgress these constitutional requirements.
  • There was an observation that the trust was a private trust. But that was not determinative as the judgment proceeded ‘assuming arguendo’ (meaning: “assuming for the sake of argument”) that it was a ‘public trust’.

Facts in Brief

The Trust was settled under a trust deed. It was founded according to the wish of Smt. Radhika Sinha to establish an institution for “providing the public of Patna and its neighbourhood with a place for intellectual and social intercourse.” The High Court concluded that the dedication was in favour of the general public. Therefore, the Trust must be treated as a public trust.

Finding of the Supreme Court as regards Public Trust

The Apex Court held – “A public-facing object, standing alone, is not determinative.” The reasons pointed out are the following:

  • 1. “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”.
  • 2. The legal character of a trust depends on several factors, including
    • i)   the manner in which the dedication is made,
    • ii)  the structure of the trust,
    • iii) the nature of control and management, and
    • iv) the rights reserved by the Settlor and his successors under the trust deed.
  • 3. “It is also significant that neither party before the High Court pleaded or argued that the Trust was a public trust.”
  • 4. “The case was argued on the common assumption that the Trust was a private trust governed by the Indian Trusts Act. In such circumstances, the High Court could not have proceeded to decide the case on an entirely different basis without affording an opportunity to address that issue.”

The above finding is not decisive: The Supreme Court proceeded “Assuming Arguendo”. It held – even assuming it to be a public trust, state action was unconstitutional. The Court observed as under:

  • “22. In any event, even if it were assumed that the Trust has a public character, that fact alone does not legitimise the State’s action in acquiring the Institute & Library or dissolving the existing trust arrangements. Whether the Trust is public or private, any legislative measure resulting in compulsory acquisition and vesting must satisfy constitutional requirements, particularly those flowing from Article 14. The question of public or  private character, therefore, is not determinative of the validity of the impugned Act.”

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The Legislation is Unconstitutional

The Apex Court tested the validity of the enactment on two principal touchstones –

  • (i) Whether the Act is manifestly arbitrary and violates Article 14 and
  • (ii) whether it offends Article 300A, which declares the ‘constitutional right to property’.

Article 14 of the Constitution: This Article mandates – “the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.”

The Apex Court found – though mismanagement was the basis for the acquisition, the record did not disclose that any notice was ever issued to the Librarian. He was the appointee of the State, who was charged with the general administration.  No inquiry was ever initiated against him. The State failed to act against its own appointee’s management. Therefore, the State is not in a position to support the action it now seeks to impugn.

It is held further as under:

  • “This guarantee 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.”

The Supreme Court pointed out as under –

  • “38. Section 3 of the impugned Act effects a complete vesting of the Institute & Library, together with all rights, title and interest therein, in the State Government. Section 4(2) simultaneously dissolves the Deed of Trust, the Agreement, the Lease of land, and all committees and sub-committees constituted thereunder. The cumulative effect of these provisions is not regulatory supervision, but total displacement of a legal and institutional framework that has governed the Institute & Library for nearly a century.”
  • 39. Such a drastic assumption of control represents the most intrusive form of State intervention. Yet, the record before this Court discloses no finding of abandonment, failure of purpose, or established mismanagement of the Institute & Library. No inquiry appears to have preceded the enactment. No contemporaneous material has been placed to demonstrate that the objectives of the Trust were being  defeated or that lesser measures were inadequate. In the absence of demonstrated necessity, compulsory acquisition coupled with dissolution of trust arrangements is plainly disproportionate.”

The following decisions were relied on-

  • S.G. Jaisinghani v. Union of India, AIR 1967 SC 1427, 
  •  State of Mysore v. S.R. Jayaram, 12 (1968) 1 SCR 349,
  • E.P. Royappa v. State of Tamil Nadu,  (1974) 4 SCC 3,
  • Maneka Gandhi v. Union of India, (1978) 1 SCC 248, 
  • Ajay Hasia v. Khalid Mujib Sehravardi, (1981)1 SCC 722 ,
  • Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India,  (1985) 1 SCC 641,
  • K.R. Lakshmanan v. State of Tamil Nadu,  (1996) 2 SCC 226,
  • A.P. Dairy Development Corpn. Federation v. B. Narasimha Reddy. (2011)9 SCC 286,
  • Shayara Bano v. Union of India. (2017)9 SCC 1 (wherein considered – Mithu v. State of Punjab(1983) 2 SCC 277,   Sunil Batra v. Delhi Administration (1978) 4 SCC 494 and State of Andhra Pradesh v. McDowell & Co. (1996) 3 SCC 709), 
  • Joseph Shine v. Union of India, AIR 2018 SC 4898,    
  • Democratic Reforms v. Union of India, 2024 INSC 11324. 

Article 300A of the Constitution: Our Apex Court pointed out – while this Article permits deprivation of property by authority of law, such law must nevertheless be just, fair and reasonable, and not arbitrary or confiscatory in effect.

The Court then held as under:

  • “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.”

The Court had gone deep into the legislative history preceding the impugned enactment and found as under:

  • “An earlier attempt by the State to take over the Institute & Library through ordinances in 1983 did not pass muster of judicial scrutiny, and the consequences of those ordinances were set aside by this Court in 1996 upon their lapse, restoring the Trust to its prior legal position. The legislature is, of course, competent to enact a fresh law. However, the impugned Act, enacted more than three decades later, seeks to achieve substantially the same outcome as the failed ordinance of 1983, without any intervening change in circumstances and without any fresh material justifying acquisition being placed on record. The mere passage of time does not supply any justification. When a legislature re-enacts substantially the same measure that has previously failed, without  placing any new or cogent material before the Court to justify the same, the legislative history becomes a relevant consideration. Viewed in light of this, the history of this enactment reinforces the findings of manifest arbitrariness in the impugned Act.”

The Court summed up as under:

  • “Viewed cumulatively, the scheme of the impugned Act reveals a pattern of arbitrariness: complete vesting of property in the State, dissolution of long-standing trust arrangements, absence of any finding of necessity or mismanagement, provision for illusory compensation, and lack of guiding principles or safeguards. Each of these features, taken individually, raise serious constitutional concern; taken together, they render the enactment manifestly arbitrary in its conception and operation.”

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