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6. In the celebrated case of Kesavananda Bharti v. State of Kerala, AIR 1973 SC 1461, the Supreme Court by a majority of seven against six held that the constituent power conferred by Article 368 did not enable Parliament to alter the basic structure or framework of the Constitution. The ruling in Kesavadanda Bharti's case has to be understood and applied in the light of the recent decisions of the Supreme Court pronounced on 9th May, 1980 in Waman Rao v. Union of India, W. P. Nos. 656-660 of 1977: (reported in AIR 1981 SC 271) and Minerva Mills Ltd. v. Union of India, W. P. Nos. 356-361 of 1977: (reported in AIR 1980 SC 1789). The decision in Waman Rao's case upheld the validity of Article 31A introduced by the Constitution (1st Amendment) Act, 1951, and amended by the Constitution (Fourth Amendment) Act, 1950, with retrospective effect on the ground that it does not damage any of the basic or essential features of the Constitution or its basic structure. It was also held that Article 31B and all amendments to the Constitution which were made before 24th April, 1973 (the dale on which Kesavananda Bharti's case was decided) by which the Ninth Schedule to the Constitution was amended from time to time by the inclusion of various Acts and Regulations therein are valid and constitutional. It was further held that amendments to the Constitution made on or after 24th April, 1973 by which the Ninth Schedule to the Constitution was amended from time to time by the inclusion of the various Acts and Regulations therein are open to challenge on the ground that they or any one or more of them are beyond the constituent power of Parliament since they damage the basic or essential features of the Constitution or its basic structure. The Supreme Court also upheld the validity of Article 31C to the extent it was held to be valid in Kesavananda Bharti's case as it stood before the Constitution (42nd Amendment) Act, 1976, on the ground that it does not damage any of the basic or essential features of the Constitution. The Supreme Court did not pronounce upon the validity of subsequent constitutional amendments introducing further items in the Ninth Schedule, but the Court observed that if any Act or Regulation included in the Ninth Schedule by a constitutional amendment made after 24th April, 1973, is saved by Article 31C as it stood prior to its amendment by the Constitution (42nd Amendment) Act, the challenge to the validity of the relevant constitutional amendment by which that Act or Regulation is put in the Ninth Schedule on the ground that the amendment damages or destroys the basic or essential features of the constitution or its basic structure, as reflected in Article 14, 19 or 31 will become otiose. In Minerva Mills' case the Constitution (42nd Amendment) Act in so far as it amended Articles 31C and 368 was struck down on the ground that it damages the basic or essential features of the Constitution and destroys its basic structure. The majority judgment held that Articles 14, 19 and 21 of the Constitution and the limitations of the constituent power to amend the Constitution formed part of the basic or essential features or the basic structure of the Constitution.

7. Articles 19(1)(f) and 31 which deal with rights to property, were delated from Part III of the Constitution lay the Constitution (44th Amendment) Act, winch came into force on 20th June, 1979. The validity of the Constitution (44th Amendment) Act has not been challenged before us. The deletion of Articles 19(1)(f) and 31 from Part III, though prospective, is on the hypothesis that rights to property as guaranteed therein did not form part of the basic or essential features or the basic structure of the Constitution. Khanna, J., in Kesavananda Bharti's case had categorically held that rights to property did not form part of the basic structure of the Constitution. Although there is a strong extra judicial writing supporting a contrary view (see Several, Constitutional Law of India, Vol. III (second edition) p. 1729), there is no judicial authority which may have taken a view different from that taken by Khanna, J., Indeed in Golak Nath v. State of Punjab, AIR 1967 SC 1643 at p. 1710, Hidayatullah, J., as he then was, observed that it was an error to place the Rights to Property in the chapter of fundamental rights and that of all the fundamental rights, they were the weakest. We, therefore, hold that Articles 19(1)(1) and 31 dealing with rights to property did not pertain to the basic or essential features or the basic structure of the Constitution and that the exercise of the constituent power under Article 368 cannot be tested on the touch stone of these articles. It is true that at the time when the Constitution (39th Amendment) Act, 1975, was enacted, Articles 19 (1) (f) and 31 were in Part III of the Constitution and a law could be declared void if it violated these articles, but a Constitution Amendment Act passed in exercise of the constituent power is not a law under Article 13 and it can only he declared invalid if it damages the basic or essential features or the basic structures of the Constitution. As Articles 19(1)(f) and 31 even when they remained in Part III of the Constitution, did not pertain to the basic structure of the Constitution, the Constitution (39th Amendment) Act, 1975, cannot be assailed on the ground of infringing these articles.

8. We have already noticed that in Waman Rao's case, AIR 1981 SC 271 the Supreme Court observed that if any Act or Regulation included in the Ninth Schedule by a constitutional amendment made after 24th April, 1973 is saved by Article 31C as it stood prior to its amendment by the Constitution (42nd Amendment) Act, the challenge to the validity of the relevant constitutional amendment by which that Act or Regulation is put in the Ninth Schedule on the ground that the amendment damages or destroys the basic or essential features of the Constitution or its basic structure as reflected in Article 14, 19 or 31 will become otiose. On a parity of reasoning, if an Act or Regulation introduced in the Ninth Schedule is protected by Article 31A of the Constitution as amended by the Constitution (Fourth Amendment) Act, 1955, (upheld in Waman Rao's case) the validity of the constitution amendment by which such an Act is introduced in the Ninth Schedule would not be open to question on the ground that it damages or destroys the basic or essential features or the basic structure of the Constitution as reflected in Article 14, 19 or 13.

In re Special Courts Bill, 1978, AIR 1979 SC 478 at p. 509, the Supreme Court laid down that for a classification to be valid two conditions must be fulfilled, namely: (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others; and (2) that differentia must have a rational relation to the object sought to be achieved. It was further observed that "the differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them". (Ibid). Tested on these principles, the classification made by Section 29P cannot be sustained and the favoured treatment given to the debts incurred after the taking over of management has to be held to be violative of Article 14 of the Constitution. The Constitution (39th Amendment) Act in so far as it gives protection to Section 29D by inserting the Industries (Development and Regulation) Act at Item 88 in the Ninth Schedule offends Article 14 and thus damages one of the basic or essential features or the basic structure of the Constitution and is beyond the constituent power and invalid to that extent-Section 29D in our opinion, for this reason cannot claim the protection of Article 31B. It is also not protected by Article 31A(1)(b) and must be held to be invalid being violative of Article 14 of the Constitution. However, as earlier shown, Section 18FB is valid and constitutional being protected by Article 31A(1)(b) and the Constitution (39th Amendment) Act in so far as it has the effect of inserting this section in the Ninth Schedule cannot be held to be invalid.