Facts: The case revolves around the Srimati Radhika Sinha Institute and Sachchidanand Sinha Library, established in 1924 via a private trust deed by Dr. Sachchidanand Sinha. In 1955, the Trust agreed to let the institution serve as a State Central Library while retaining private management. Following a failed attempt to acquire the institution through ordinances in 1983, the Bihar State Legislature enacted the Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015. This Act provided for the total takeover of the institution, dissolution of the Trust, and transfer of all assets to the State, while providing a maximum compensation of only one rupee.
Procedural Posture: The appellant, a descendant of the settlor and a trustee, challenged the 2015 Act before the Patna High Court. The High Court dismissed the writ petition, characterizing the trust as a "Public Trust" and upholding the Act as a valid exercise of legislative power for better management. The appellant subsequently moved the Supreme Court of India via civil appeal.
Issue: Whether the 2015 Act is manifestly arbitrary and violative of Article 14 of the Constitution of India, and whether it effects a confiscatory acquisition of property offending Article 300A.
Holding: Yes, the Act is unconstitutional. The Supreme Court struck down the Act as being manifestly arbitrary and violative of Articles 14 and 300A of the Constitution.
Reasoning: The Court reasoned that the High Court erred in unilaterally re-characterizing the private trust as a public trust without evidence or pleadings. On the merits, the Court found the Act "manifestly arbitrary" because it adopted the most "intrusive form of State intervention" without any prior inquiry, notice, or evidence of mismanagement. The Court noted that the State Librarian was already the ex-officio supervisor, yet no action was taken against him for any alleged failures. Furthermore, the provision for illusory compensation of one rupee without any prescribed principles was found to be confiscatory. The Court emphasized that while the State can provide financial aid, a complete legislative takeover without demonstrated necessity fails the tests of reasonableness and proportionality required under Article 14.