Anurag Krishna Sinha v. State of Bihar
Background
The Smt. Radhika Sinha Institute and Sachchidanand Sinha Library in Patna, a nearly century-old trust institution founded in 1924, was taken over in its entirety by the Bihar government through the Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015. The appellant, the settlor's great-grandson and the Trust's Honorary Secretary, challenged the Act in the Patna High Court, which upheld it, prompting this appeal to the Supreme Court. Notably, an earlier attempt by the State to take over the same institution via ordinances in 1983 had already been struck down by the Supreme Court in 1996.
Decision Breakdown
The Supreme Court allowed the appeal and struck down the 2015 Act as unconstitutional, holding it manifestly arbitrary and violative of Article 14. It found the State could have achieved its stated goal of "better management and development" through far less drastic means (grant-in-aid, conditional funding, statutory audit, supervisory oversight) rather than dissolving the Trust outright and extinguishing century-old rights. The Court was also troubled by the Act's compensation clause, which capped payouts at a token one rupee with no principled criteria, rendering it confiscatory and unfair under Article 300A. The fact that the State re-enacted, decades later, essentially the same measure that had already failed judicial scrutiny in 1983 (without any new justifying material) reinforced the finding of arbitrariness. The Trust was ordered restored to its pre-Act legal position.
Lesson Learnt
A law that deprives someone of property must be fair, reasonable and non-confiscatory, not just backed by "authority of law": a compensation scheme that hands unguided discretion to the government and reduces payment to a nominal token amount will not survive constitutional scrutiny, and courts will scrutinize whether less drastic alternatives to outright acquisition existed.