In Anurag Krishna Sinha v. State of Bihar & Anr. (Civil Appeal No. 13581 of 2025, decided on 10 March 2026), the Supreme Court of India delivered an important ruling on constitutional limits on legislative acquisition of property. The Court struck down the Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015, enacted by the Bihar Legislature to take over a historic library established through a private trust.
The Court held that the Act was manifestly arbitrary and violative of Article 14, and that its compensation provision allowing payment of a maximum of ₹1 rendered the acquisition confiscatory and unconstitutional. The decision reiterates that even though Article 300A permits deprivation of property by law, such law must be fair, reasonable, and non-arbitrary. A statute enabling the takeover of property without meaningful compensation or justification cannot withstand constitutional scrutiny.
Background of the Case
The dispute concerned the Smt. Radhika Sinha Institute and Sachchidanand Sinha Library, an institution established nearly a century ago in Patna. The library was founded in 1924 by Sachchidanand Sinha, a prominent public figure who briefly served as the first President of the Constituent Assembly. The institution was created in memory of his wife, Smt. Radhika Sinha.
Sinha donated funds obtained from ancestral property and contributed a large collection of books to establish the library. A trust structure was created to manage the institution, with trustees responsible for its administration and development. A formal trust deed was executed in 1926, outlining governance arrangements and succession to key positions. Notably, the deed provided that the eldest male member of the family would act as Honorary Secretary and Chief Executive Officer, and that if the trust failed, the property would revert to the settlor’s family.
In 1955, the Bihar government entered into an agreement with the trust recognising the library as a State Central Library, while allowing management to remain with the trustees. The government undertook to provide financial support for maintenance.
Decades later, the State attempted to take over the institution through an ordinance in 1983, but the ordinance lapsed, and the Supreme Court later held that actions taken under it were invalid.
More than thirty years later, the Bihar Legislature enacted the 2015 Act, which sought to acquire the institute and vest its control in the State government.
The appellant, Anurag Krishna Sinha, the great-grandson of the founder and serving trustee, challenged the Act before the Patna High Court. The High Court upheld the law, prompting the appeal before the Supreme Court.
Issues Before the Supreme Court
The Supreme Court identified two central constitutional issues:
- Whether the 2015 Act was manifestly arbitrary and violated Article 14 of the Constitution.
- Whether the Act resulted in confiscatory acquisition of property, violating Article 300A read with Article 14.
The case also raised ancillary questions relating to the nature of the trust and legislative competence.
Arguments of the Appellant
The appellant challenged the validity of the Act on several constitutional grounds.
1. Repugnancy with the Indian Trusts Act
The appellant argued that the law dealt with trusts and trustees, a subject covered by the Indian Trusts Act, 1882, which falls within the Concurrent List. Since the central legislation occupied the field, the State Act was repugnant under Article 254 of the Constitution.
2. Improper Characterisation of the Trust
Before the High Court, both parties had proceeded on the assumption that the trust was private. However, the High Court held that it was a public trust, relying on the public-oriented objectives of the library.
The appellant contended that the High Court erred by deciding the case on a ground neither pleaded nor argued, thereby denying the parties an opportunity to address the issue.
3. Confiscatory Acquisition
The appellant argued that Section 7 of the Act permitted the State to pay compensation up to ₹1, making the acquisition effectively confiscatory. Such a law, it was argued, violated Article 300A, which protects property from arbitrary deprivation.
4. Manifest Arbitrariness
The trustees had managed the institution for nearly a century without any allegation of mismanagement. The Act, therefore, represented an arbitrary and unjustified takeover of a functioning institution.
Arguments of the Respondent
The State defended the legislation on multiple grounds.
1. Public Character of the Trust
The State argued that the trust was public in nature, as the institution had been created to serve the general public of Patna.
2. Legislative Competence
According to the State, the law was not about regulating trusts but about the acquisition of property, a subject within the legislative competence of the State under Entry 42 of the Concurrent List.
3. Public Interest
The State maintained that the takeover was necessary due to the trust’s alleged failure to manage the institution effectively and to preserve the legacy of Sachchidanand Sinha.
4. Developmental Investment
The government highlighted its plans to renovate and modernise the library, including large financial allocations for infrastructure development.
Supreme Court’s Analysis
The Supreme Court undertook a detailed constitutional analysis focusing on Article 14 and the doctrine of arbitrariness.
Character of the Trust
The Court first addressed the High Court’s finding that the trust was public in nature.
It held that public use alone does not determine the legal character of a trust. The structure of management, control mechanisms, and provisions of the trust deed must also be considered.
The Court emphasised that:
- The trust deed created specific trusteeship arrangements.
- Succession to management roles was defined.
- The property was to revert to the settlor’s family if the trust failed.
These factors suggested that the trust retained private characteristics, notwithstanding its public-facing purpose.
The Court also noted that the High Court should not have introduced a new theory—public trust—when neither party had argued it.
Doctrine of Manifest Arbitrariness
The Court reiterated that Article 14 prohibits arbitrary legislation, drawing upon several landmark judgments including:
- E.P. Royappa v. State of Tamil Nadu
- Maneka Gandhi v. Union of India
- Ajay Hasia v. Khalid Mujib
- Shayara Bano v. Union of India
The Court observed that legislation may be struck down if it is capricious, irrational, or disproportionate. Applying these principles, the Court found several indicators of arbitrariness.
Absence of Mismanagement
The Court examined the government records and found no evidence of mismanagement or misconduct by the trustees. There was no communication from the State government to the trust raising concerns, nor any inquiry or notice prior to the takeover.
The absence of such material weakened the State’s claim that intervention was necessary.
Role of the State Librarian
Another factor noted by the Court was that the State Librarian served as the ex-officio Chief Librarian, responsible for supervising the institution’s functioning.
If mismanagement had existed, the Court observed, it would have fallen within the supervisory responsibilities of this government official.
Yet no action had ever been taken against the official, casting doubt on the State’s justification for the takeover.
Disproportionate State Action
The Court emphasised that complete acquisition and dissolution of the trust structure was an extreme measure. Even if the State wanted to improve the institution, it could have adopted less intrusive alternatives, such as:
- Financial assistance
- Conditional grants
- Regulatory oversight
- Statutory audits
Instead, the legislature chose total displacement of the trust, which the Court considered disproportionate.
Token Compensation and Article 300A
One of the most decisive factors was Section 7 of the Act, which allowed the government to pay compensation up to ₹1.
The Court held that such a provision:
- Lacked objective criteria
- Granted unguided discretion
- Reduced compensation to a nominal figure
Although Article 300A does not guarantee compensation equivalent to market value, the Court clarified that a law enabling acquisition with token compensation may become confiscatory and unconstitutional.
Therefore, the provision reinforced the conclusion that the legislation was arbitrary.
Legislative History
The Court also examined the earlier 1983 ordinance through which the State had attempted to take over the institution. That ordinance had failed and its consequences had been nullified by the Supreme Court.
The Court noted that the 2015 Act essentially attempted to achieve the same outcome, without any fresh justification or change in circumstances. This legislative history further supported the finding of arbitrariness.
Selective Targeting of a Single Institution
Another constitutional concern was that the Act targeted only one institution, even though many public libraries in Bihar were reportedly in poor condition.
The selective application of an extreme measure to a functioning institution lacked rational justification.
Judgment of the Supreme Court
The Supreme Court ultimately held that:
- The 2015 Act was manifestly arbitrary.
- The compensation provision rendered the acquisition confiscatory.
- The law violated Article 14 and failed to meet the fairness requirements of Article 300A.
Accordingly, the Court:
- Set aside the Patna High Court judgment.
- Declared the 2015 Act unconstitutional.
- Restored the trust to its original legal position prior to the Act.
However, the Court clarified that the State could still provide financial assistance or regulatory oversight in accordance with the law.
Conclusion
The Supreme Court’s ruling in Anurag Krishna Sinha v. State of Bihar is a significant reaffirmation of constitutional protections against arbitrary legislation. By striking down a law that permitted the acquisition of a historic institution with nominal compensation, the Court reinforced the principle that state power must operate within the bounds of fairness, proportionality, and constitutional reasonableness.
The judgment clarifies that legislative acquisition cannot be justified merely by invoking public interest, especially when no evidence of mismanagement exists, and less intrusive measures are available. Ultimately, the Court restored the autonomy of the trust while recognising that the State may still support the institution through lawful means.
The decision thus strengthens the constitutional balance between public interest and individual property rights, ensuring that legislative power remains subject to the discipline of the rule of law.
Important Link
Law Library: Notes and Study Material for LLB, LLM, Judiciary, and Entrance Exams