Court caseAIR 1963 SC 1241

Parliament enacted the Coal Bearing Areas (Acquisition and Development) Act 1957 to acquire coal-bearing lands for the Union. The State of West Bengal owned coal-bearing land in the Raniganj area and filed a suit against the Union under Article 131, contending that the Act could not apply to land belonging to a State: under a federal constitution the States are sovereign within their sphere, and Parliament has no power to acquire a State's property without its consent.

The majority, through Sinha CJ, dismissed the suit. Parliament's power under Entry 42 of List III extends to the acquisition of property belonging to a State; nothing in the Constitution exempts State property. Examining the structure of the Constitution, the Court held that it is not truly federal: the Union was not formed by agreement among the States; Parliament can alter State boundaries under Article 3; the residuary power is the Union's; Parliament may legislate on State subjects under Articles 249-253; the emergency provisions make the system unitary; and there is a single judiciary. The States therefore possess no sovereignty of the kind claimed, and the Union's legislative power reaches their property. Subba Rao J dissented, holding the Constitution federal in essence, the States sovereign within their allotted field, and State property immune from acquisition without consent.