T!11 Sta11 of W1 v. THE SHOLAPUR SPINNING & WEAVING CO

The appeal concerns the validity of the same piece of legislation that was considered by this court in the case of Chiranjit Lal Chowdhuri ( 2 ). There, an ordinary the defendant company holding one shareholder of fully paid up share claimed relief under Art. 32 of the Constitution of India on the Sholapur Spinning & Weaving provisions of (Emergency Provisions) Act, XXVIII of Company the ground that (1) [1951] S. C. R 587. (2) [1950] S. C.R. 869. 1953 Dwarkada1 Sh:rinivas of Bo~ay v. The Sholapr'f Spinning and Wro;;ing Co. Ltd., and OlhtrJ. Mahajan]. 680 SUPREME COURT REPORTS [1954] fundamental it had not been proved 1950 abridged his rights conferred under Articles 14, 19 and 31 of the Constitution. This Court the petition holding by a majority of 3 to 2 dismissed to the constitutionality that the presumption in regard the Act had not been displaced by the petitioner impugned statute was a hostile or a discriminatory piece of legislation as against him, or that possession of his share. The minority held that the the peti impugned tioner's decision was delivered on 4th Constitution. This December, 1950. rights under Art. 14 of )fatute was void as the State had fundamental it abridged The suit out of which this appeal arises was decided by the High Court of Bombay during the pendency of Chiranjit Lal Chowdhuri's petition in this court. Most of the facts for the suit judgment of this court in have been detailed re-state that case, but them from a proper appreciation of the contentions have been raised in the appeal. the cause of action it seems necessary to briefly furnishing incorporated under The Sholapur Spinning and Weaving Company Ltd., Indian Companies Act with an authorized capital of Rs. 48 lakhs divided into 1,590 fully paid up ordinary shares of Rs. 1,000 each, 20 fully paid up ordinary shares of 500 each, and 32,000 partly paid up cumulative preference shares of the paid up capital of the company be Rs. 100 each, ing Rs. 32 lakhs comprised of Rs. 16 lakhs fully paid up ordinary shares and Rs. 16 lakhs partly paid up preference shares, Rs. 50 being unpaid on each of the 32,000 cumulative preference shares. The company did good business and declared high dividends for there was accumula some time ; but in the year 1949, tion of stocks and the directors decidecl to close overcome the Mills and on the 27th July, 1949, they gave notice .of the Mills were closed on the 27th August, 1949. notice it the This created a labour problem and the 5th October, 1949, appointed a Government on the workers. Pursuant financial difficulties. this situation this decision In order to solve 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and ~Veaving Co. Ltd., and Others. Mahqjan J, S.C.R. SUPREME COURT REPORTS 681 refused judgment the directors of the company the deadlock decided to call shares. The directors in their the affairs of the Mills under Controller to ,supervise the Essential Supplies Emergency Powers Act, 1946. the Controller in order to On the 9th November, 1949, resolve in more capital 'to make a and he asked call of Rs. 50 per share on the preference shareholders, the amount remaining unpaid on each of the prefer to comply with that was not in this requisition, as the interest of the company. Thereupon the Gover the 9th January, 1950, promulgated nor-General on the Mills could the impugned Ordinance, under which be managed and run by directors appointed by Central Government. On ·9th January, 1950, the Central Government acting under section 15 of the Government Ordinance delegated all its powers of Bombay. The Government of Bombay the assets appointed certain directors who took and management of the Mills. On the 7th February, 1950, they passed a resolution making a call of Rs. 50 on each of the preference shares payable at the time stated in resolution a notice was addressed on the 22nd February, 1950, in the suit, who held preference shares, to the plaintiff the amount of the said call on or to pay Rs. 1,62,000, instead of before the demand, filed the present suit on the 28th meeting in a representative capacity on behalf of March, 1950, himself and other preference shareholders against company and the directors appointed by the Govern ment of Bombay challenging the validity of the Ordin ance and questioning the right of the directors to make the call. On the 19th April, 1950, a notice was given the said suit the Union of India was added as defendant No. 9 therein. the 3rd April, 1950. The plaintiff the Attorney-General of resolution. Pursuant India of in the suit were illegal, ultra vires and The principal allegations the provisions of section 299 (2) of that the invalid as it Ordinance was contravened GOl·ernment of India Act, 1935, and all the provisions the Constitution, and contained in Part III of resolution of the directors dated 7th Febrnary, 7-93 $. C. Tndia/59. 682 SUPREME COURT REPORTS [1954] 1953 Dwcrkadas Shri,~ivaJ of BtJmbay v. The Sholapur Spir.ning and Weaving Co. Ltd., and Othm. Ma.11ajan J. they were appointed was relief 1950, making a call was illegal and ultra vires, as the itself in law under which the form of a valid. The plaintiff claimed the Ordinance declaration regarding the invalidity of and prayed the directors from giving effect resolution. The defendants denied the correctness of the contentions put forward by the plaintiff. for an injunction restraining Mr. Justice Bhagwati, who tried the sl!it, framed the following issues therein :- interest

#1. Whether by the Ordinance holders of prefernce shares have in the 1st defendant possession of or requisitioning or as alleged in para. 6 of the plaint ; 2. Whether s. 4 ( d) of the plaintiff and been deprived of company by taking the same acquiring the Ordinance illegal, ultra vires, and void in law as alleged ; and

#3. Whether resolution dated ruary, 1950, made by defendants 2 to 6 vires, void and mentioned in para. 6 of the plaint or any of them. the 7th Feb- is illegal, ultra reasons inoperative By his judgment dated the 28th suit, the State had neither acquired It was held that by June, 1950, issues learned Judges answered all this decision negative and dismissed was affirmed on appeal. the Ordinance property of the plaintiff, nor of the company, nor had it taken possession of it, but respective property and its possession were with the the affairs owners, and the State was only supervising through its nominated directors. It the company the Ordinance had not in anv was further held that rights of the plaintiff unde~ manner infringed Art. 14 of him no denial of equality before the law or equal pro tection of the Ordinance was based on a classification which rested upon a ground having a fair and substantial that it had a reasonable basis for that legislation and restrictions classification. the Constitution and It was also held there had been the object of laws, as relation .1953 Dwarkadas S/Jrinivas.of Bombay v. T 11' Sholap"' Spinning and Weaving Co. Lld., and Others. Mahaja•], S.C.R. SUPREME COURT REPORTS 683 • the right of the appellant and the com to hold his or its property were imposed on interests of the general public. imposed in The principal questions for consideration m appeal are :-

#1. Whether taking over the company, contravene . (2) of the Constitution ; and the prov1S1ons of the Ordinance for the management and administration of the provisions of article 31

#2. Whether its provisions stitution. the Ordinance as a whole or any of infringe articles 14 and 19 of the Con issues it strictness is necessary the substance of to decide the purpose of determining what it In order examine with legislation for that the legislature has really done; .such questions arise, mere appearance of legislation. constitutional prohibitions binding a dear that tions merely achieving exactly such cases forms and appearances to discover and nature of the legislation. the court, when the prohibi in all to look behind the names, the _true character is not overpersuaded by by employing the same legislature cannot disobey In legislature indirect method result. Therefore, relation the court has The preamble of the Ordinance states :- "On account of mismanagement and neglect a · situation has arisen the Sholapur Spinning & Weaving Company, Ltd., which has pre the production of an essential judicially commodity serious unemployment amongst a certain section of the community". the affairs of and has affected caused Section 3 is the most material section and is in these terms:- "The Central Government may at any time by notified order appoint as many persons as it thinks fit to be directors of the purpose of the company for taking over its management and administration and may appoint one of such the chair man." directors to be 1953 Dwarkadas Shrit!fras of Bombay v. The Sholapur Spinning and Weaving Co. Ltd., and Othtrs. ManajanJ. 684 SUPREME COURT REPORTS [1954} respect the issue of it shall not be The provisions of to such exceptions, the company or for to unless approved by to nominate or appoint any person that notwithstanding anything contained this section are supplemented by what is subsequently provided for in section 12 which provides tl1e memorandum or articles the Companies Act or in of association of the company, lawful the shareholders of the company or any other person to be a director of the company, that no resolution passed at any meeting of the shareholders of the company shall be given effect the Central that no proceeding for the winding Government, and the appointment of a up of receiver in in any thereof shall unless by or with the sanction of the Central Govern ment, and subject restrictions and limitations as the Central Government may by notified the Companies Act shall continue order specify, the company in the same manner as it applied thereto before the notified order under section 3. Section 4 states the effect of the order of the Central Government It directors. the company who that all the directors of provides were holding office issue of the notified order shall be deemed to have vacated the directors elected and shareholders stand automatically dismissed without more. Not only do the directors stand automatically dismissed by lative action, the managing agents also share fate and to an end. Section 4 directs their control all the property, into custody the company effects and actionable claims to exercise all is or appears company, whether powers of the Companies Act those powers the memorandum or articles of association or from or from any other source. By section 5 these nomi nated directors are given powers such manner and offer such security as they may deem fit. They are !fiven cancelling agreements the overriding power contrar~s and are derived from the persons appointed under section 3 In other words, their contracts come to he entitled and immediately before the directors of appointed by their offices. appointing and under to which varymg 1953 Dwarkadas Shrinfras of Bombay v. The Sholapur · Spinning and lVeauing Co. Ltd., and Others. Mahajan]. S.C.R. SUPREME COURT REPORTS 685 the premature Section 10 denies entered into between the company and any other person at any time if they are satisfied that the con to the interest< tract or the agreement is detrimental to the managing of the company. termination of agents compensation for the contract of management entered into by the com pany and it also says that no person shall be entitled in respect of a cancelled or varied ro compensation into with the contract under this Ordinance, entered company. The Ordinance powers on the directors of overriding all contracts and deprives persons who had entered into contracts with the com pany of their right under the ordinary law to recover compensation. Sections 6, 7 and 8 of the Ordinance lay down the existing directors were to give charge of the companv's affairs and properties Central Government under section 3 and any default in the matter of handing over charge is made punish able by imprisonment or other punitive action. the method and manner how the directors nominated by confers The result of these provisions the Central Government vested with is that all the pro perties and effects of the company pass into the hands of persons nominated by the Central Government who shareholders, are not members of the company or its or in any way connected with it, and who are merely the creatures of the provisions of dummies. The combined effect of the Central Government sections 3, 4 and 12 becomes possession, control and management of the property and effects of the com pany, and the normal function of the company under its articles and an end. The shareholders' most valuable the affairs of the com appoint directors to manage its property and effect pany and be in possession of lose all is taken away. Resolutions passed by vigour and become subject to the veto of the Central Government. Their power of voluntarily winding up the company formed by it up through court also becomes subject to the veto of Central Government. The Central Government by the Indian Companies Act comes them or of winding 1953 Dwr.rkada1 Shririivas of Bttmhay v. The Sholapur Spinning and Weaving Co. Ltd., and Olher1. Mahajan]. 686 SUPREME COURT REPORTS [1954] if it likes, all Indian Companies Act. its shareholders as well as executive action can override, the pro visions of In substance therefore by the provisions of this Ordinance the com pany and its directors and managing agents have been completely deprived of the com possession of pany, Central Government, i.e., by the Union of India. The undertaking purports taken over for a public purpose, namely, to keep up the production of an essential commodity, and to avoid serious unemploy ment amongst a certain section of the people. the property and effects of its possession has been to have been taken by The majority of the court ), was inclined effect of in Chiranjitlal Chowdhuri's case( 1 to take the view that that was the the Ordinance. the provisions of Mukherjea J., with whose views Kania C. J., concur to a certain extent Faz! Ali J. red, and to whose views subscribed on this part of the case said as follows :- imposed themselves and "Mr. Chari, on the other hand, has contended on the management is that after behalf of the petitioner it cannot be said taken over by the statutory directors, that the company still retains possession or control over its property and assets. Assuming that this State in the interests of the share management was holders the statutory directors are acting as the agents of the company, the possession is argued, be regarded in law as possession of the company so long as they are bound the dictates the Central Government and not of the company its a ff airs. Possession itself of an agent, it is said, cannot juridically be the posses if the agent is to act not according sion of the principal, the principal, but the commands or dictates of under the direction of an exterior authority. the statutory directors could not, it in the administration of to act in obedience to There can be no doubt that there is force contention." Mr. Justice Patanjali Sastri, as he the effect of the Act was that all and effects of the company passed then was held the properties into the absolute (1) (1950] S.C.R. 869. 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Weariing Co. Ltcf., and Others. Mahajan]. S.C.R. SUPREME COURT REPORTS 687 power and control of the Central Government and the normal function of the company as a corporate body to an end. Mr. Justice Das on this part of' the case said as follows :- to, and amenable "It is, however, urged by the in the possession and custody of learned Attorney Gcneral that the mills and all other assets now in the possession and custody of the new directors who are only servants or agents of the said company are, in the eye of the law, company and have not really been taken possession of by the State. This argument, however, overlooks fact that in order that the possession of the servant or juridically regarded as the possession of agent may be the servant or agent must k the master or principal, obedient the directions of, master or principal. If the master or principal has no the appointment of the servant or agent or has no control over him or has no power to dismiss or <lischarge him, as in this case, the possession of such in law, be regarded as the servant or agent can hardly, ·In this view of the matter possession of the company. there is great force that the property taken possession of by the of the company has been l?een appointed by State the State in exercise of the powers conferred by Ordinance and the Act and who are under the direction and control of the State and this has been done with- out payment of any compensation, , , .................. . the pro Here, perty of the company having been taken possession of in exercise of powers conferred by a' law which does not provide for payment of any compensa tion, the fundamental right of the company has, in the eye of the law, been infringed." through directors who have ,may well be argued in Li1e argument the State therefore, The learned Attorney-General combated this view arnl strenuously argued that the Ordinance could not be construed in the manner suggested above and on the Government true construction its effect was the affairs of the com took under its superintendence pany without in any way disturbing its in the pro perty and that the shareholders have still to a certain Illustratively extent an effective voice its affairs. 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spi1111ing and Weaving Co, Ltd. 1 and Others. Mahajan]. 688 SUPREME COURT REPORTS [1954] the company was construed m the same point of view the same state he said is under the provisions of the as a Jisqualified owner the provisions of Court of Wards Act and light. To Ordinance should reference was also emphasize the provi made to the provisions of the Lunacy Act, introduced sions of sections 52-A 52-B the provisions of the Insurance Act by Act 47 of 1950, Railway Companies Emergency Powers Act (51 of 1951 ), and also to the provisions of Act 65 of 1951 (Development of Industries Act), and it was contended that the impugned Ordinance was a piece of social control the provisions contained in the statutes legislation as were referred to above. it is apt In my opm10n, illustrative pieces of these contentions are not well legislation founded. Reference is neither very happy designed on the same pattern nor apposite ; on the other hand, to mislead because except in the case of the Court of Wards Act, to which reference was made were enacted all the laws after the enactment of the Ordinance in question. The different Court of Wards Acts being existing laws have been excepted from the fundamental right guaranteed by article 31 (2). That being so, they can afford little the validity of the impugned law. assistance in judging In dealing with constitutional matters of this kind in mind what Bradley, J., is always well in Boyd v. United States( 1 speaking for at page 635 :- to bear the court said ) , footing "Illegitimate unconstitutional that way, namely, by practices get silent legal modes of approaches and slight deviations from procedure. This can only be obviated by adhering to the rule that constitutional provisions for the security liberally construed. of person arnl property them of half A close and literal construction deprives their efficacy and leads in substance. right, as· if it consisted more in sound than It the consti the dutv of conrts to he watchful for tutional right~ of the citizen and against any stealthy encroachments thereon." (1) 1 •6 U.S. 616. to gradual depreciation of should be 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co. Ltd., and Others. Mahajan]. S.C.R. SUPREME COURT REPORTS 689 to be These observations legislation to which the illustrative pieces of reference may well learned Attorney-General made the light of these observatiom judged when occasion arises. Reference may also be made to of Holmes C. J. in Pennsylvania Coal Co. v. Mahon( 1), wherein that learned Judge said · as follows :- "As long recognized, some values were enjoyed to police under an implied limitation must have power but obviously limits or the contract and due process clauses are _gone. One fact for consideration in determining such limits reaches a certain magnitude, in most, if. not in all <eases, there must be an exercise of eminent domain and compensation to sustain the act." limitation and must yield the diminution. When the extent of the implied the question its determination depends on the these circumstances, what In In my judgment, in the determination of all such <eases no abstract standard or general rule can be laid is really one of degree and down and facts of each to be deter case. the provisions of the Ordinance mined here is whether legislation have not overstepped the limits of the ambit of and whether article 31 (2). they do not come within socia.1 to all companies is a vice peculiar in a particular category or class. The Ordinance in question is not a law of a general that may <=haracter and applicable It deals only is difficult to say that with a single companv and mismanagement this company is a virtue possessed by alone and good management incorporated companies. That being so, can all other it be reasonably held taken over the Ordinance the company ? Or, · superintendence of the affairs of the under taking itself ? Obviously, the field of superintendence has to be demarcated from the field of eminent domain. the affairs of a concern It is one thing to superintend its affairs and it is quite another thing to take over the Government has merely in effect and substance promulgating taken over that by (1) 260 U.S. 322 1953 DuiarkaOas Shrinivas of Bombay v. Thi Sholapur Spi11ning and Wtav:ing Co. Ltd .. and Others. Mahajan]. 690 SUPREME COURT REPORTS [1954] charter. Its old It seems the State to maintain the capital of being any vacancy the directors, deprives the guise of superintendence to carry on its trade itself. its business in the manner and according complexion through agents and then proceed appointed by to me that the State is carry the company ing on the business or trade for which was incorporated with the company but through its own agents who take orders from it and are appointed by it and in the appointment and dismissal of whom the shareho)ders have absolutely no voice. The purpose of taking over the company's undertaking is a to keep the labour going and public purpose, namely, the supply of essential contended and commodity. The company is debarred from carrying terms of stands changed by the terms of the Ordinance. The Ordinance the shareholders of overrides rights and privileges and completely puts an end to the contract of the managing agents. With the number of in and old directors and directors new directors step managing agents Exercise of any stand dismissed. power by them under the articles is subject to heavy penalties. to subs the learned Attorney General that the the superintend Central Government has ence of impugned in character. the present case, practically all incidents of owner In ship have been taken over by the State and all has been left with the company is mere paper owner judgment, is an apposite ship. This Ordinance, in my illustration of what Holmes C. J. had in mind when he made in the case already referred to :- "Where the affairs of the company and legislation protection m respect of private property given by the Constitution natural to extend the qualification more and more until at last private property disappears. We are in danger of forgetting the public that a strong public desire to be qualified by the police power, the effect of the Ordinance tendency of human nature situation it is not possible the following observations is merely regulative In this taken over contention seemingly improve absolute 1953 Dwarkadas Shrinivas of Bombay ... The Shoiapur Spinning and Weaving Co. ltd., and Others. Mahajan J. S.C.R. SUPREME COURT REPORTS 691 to warrant condition is not enough achieving the desire by a shorter cut than the constitutional way of paying for the change and that the general rule is that while property may be regulated to a certain extent but if the regulation goes too far it will be recognized as a taking." For the reasons given above I am of the opinion limits that the impugned statute has overstepped of legitimate social control legislation and has infring ed the fundamental right of the company guaranteed the Constitution and is therefore unconstitutional. it. under article 31 (2) of • -contended the Ordinance commandeered by it was Next in any event could not fall within the mis question the State had not chief of article 31 (2) because acquired in the property of the company under its . provisions and that whatever possession had been taken had. been taken for the purpose of managing the company's property on the company's behalf and requisitioned for any State purpose. It it had not been that unless the property of the company by - was said the provisions of in the the Ordinance was vested the State for State State or was invoked to judge purposes, article 31 (2) could not be that article 31 the constitutionality of the Ordinance, two forms of taking (2) covered within its ambit only of property by the State the State acquired title temporarily commandeered it, and that all other forms of taking the property were outside fundamental right guaranteed by article 31 (2). It was suggested to private the protection given property by our Constitution was not as large as it was contained in the Fifth Amendment of the Consti tution of the United States of America. According to true content of the the learned Attorney-General, fundamental right guaranteed by article 31 (1) was that a person could not be ·deprived of his property except by statutory authority, but once a law was made depriving a person of his property article afforded no further protection. Support for this the State, namely, where property or where the scope of 1953 Dwarkadas S!.rinfras of Bombay v. Tilt Sholapur Spinning and Wea~'ing Co. Ltd., aad Others. Mahajan]. • 692 SUPREME COURT REPORTS [1954] relating property soon as liberty by guaranteed to be derived legislature. The In relating contention was sought from the reason in Gopalan's case (1). There it was held ing employed that the freedoms the person of a citizen guaranteed by article 19 assume the existence of a free citizen and can no longer be enjoyed if a citizen is deprived of his law of preventive or like manner it was argned that punitive detention. freedom article 19 also vanished a person was deprived of his property under a law enacted by an learned Attorney-General appropriate suggested that the two clauses of article 31 were in the to the provisions of article 19 nature of two exceptions (1) (f). The first exception was the guarantee of freedom given by article 19 (1). (f) could be defeated simply by enacting a statute and the second exception was that it could also be defeated by the State acquir in exercise of its power of ing title the limited eminent domain within fiel<l prescribed by if a certain deprivation of article 31 (2) hut the prescribed field of property did not fall within . article 31 (2) and fell within article 31 (1), such deprivation no compensation was payable. As laws from regards clause the ambit of article 31 (2), the article by way of clause had been abundant caution. (5) which excepted certain it was argued that the property inserted In my It seems to certain judgment, none of these contentions have any validity. The construction sought to be placed by learned Attorney-General on the language of article 31 is neither borne out by the phraseology employed in the scheme of Part III of the that article nor by to me that our Constitution Constitution, gnaranteed subject fullest protection to pnvate property. It has not only provided that no person can be deprived of property legislative sanction but that even the legislature cannot is a deprive a person of his property unless public purpose and then only on payment of compen sation. This article provides as follows :- (!) ['9:,o] S.C.R. 88. the executive without further provided exceptions S.C.R. SUPREME COURT REPORTS 693 "31. (1) No person shall be deprived of his 1953 Dwarkar!aJ Shrinfoas of Bombay v. The Sholapur Spinr1ing and Weacing Co. Ltd.-, and Others. Mahajan]. property save by authority of law. industrial undertaking, includ shall be taken for public purposes under taking of such possession or law provides for compen taken possession of or acquired the amount of the compensation, or (2) No property, movable or immovable, ing any interest, in, or in any company owning, commercial or possession of or acquired law authorising such acquisition, unless sation for the property and either specifies which, given. the principles on which, and the manner in · to be determined and the compensation 1s law as 1s (3) No such in clause (2) made by the Legislature of a State shall have effect unless such law, having been reserved for the consider ation of the President, has received his assent. referred ( 4) It any Bill pending at the commencement of legislature of a State has, it has been passed by such Legislature, been the President and then, notwithstanding any the law so assented to shall in any court on the ground received his assent, in this Constitution, this Constitution reserved not be called that it contravenes the provisions of clause (2). the consideration of in question (5) Nothing in clause (2) shall affect- (.a) the provisions of any existing law other a law to which the provisions of clause (6) apply, or (b) the provisions of any law which the State may hereafter make- the purpose of imposing or levying any tax ( i) for or penalty, or (ii) for the promotion of public health or prevention of danger to life or property, or (iii) in pursuance of any agreement entered between the Government of the Dominion of India or the Government of India and the. Government of any other country, or otherwise, with respect to property declared by law to be evacuee property. 1953 Dwarkadas S4rinivaJ of Bombay .,, IThe Sholapw Spinning and Weauing Co. Ltd., and Others. Mahajan]. 694 SUPREME COURT REPORTS [1954] indicate provisions sub-section fundamental in any court on the heading "Right the different articles ( 6) Any law of the State enacted not more the commencement of eighteen months before Constitution may within commencement be submitted certification ; thereupon, public notification so certifies, question contravened section 299 of It bears three months from such to the President for his the President by it shall not be called in the ground that it contra the provisions of clause (2) of this article or has (2) of the Government of India Act, 1935." to Property". It is in Part III . have significant in several groups, each bearing a heading of been put its own. These headings briefly the nature and character of the fundamental rights thus grouped. The first group of articles 14 to 18, bears. the heading right of "Right The to Equality". law, religion, social status equality in matters of etc. is mentioned the different articles grouped under to 22 have been grouped this heading. Articles 19 under the heading "Right to Freedom". Not only are the protections given against deprication of personal in this group but it also mentions freedom mentioned freedom can be deprived by cer cases where personal in this part have the headings "Right against "Constitu rights" exploitation", the fundamental tional remedies". Under this scheme from personal and in this part property separately as a self-contained provision and as a dis the various freedoms declared by tinct subject from article 19. is significant to note that it deals with private property of persons residing in the Union of India, while article 19 only deals with citizens defined in article 5 of the Constitu the scope of these two tion. It they cover different articles cannot be the same as that so far as fields. citizens are concerned, freedoms regarding enjoyment of property have been granted in two articles of the qua all Constitution, while the protection to property freedoms has been dealt with It cannot be seriously argued laws. Similarly, other articles regarding property apart In considering article 31 grouped under thus obvious "Educational 1953 Dwar/r,arlas Shrinicias of Bombay v. TJ,, Sholapur Spinning and Weaving Co. I.Jd., and Others. Mahajan]. S.C.R. SUPREME COURT REPORTS 695 that field the amendment of is demarcated by the State's power to take other persons has been dealt with in article 31 alone. If both articles covered the same ground, it was unne cessary to have two articles o.n the same subject. The true approach to this question is that these two articles really deal with two different subjects and one has no direct relation with the other, namely, article 31 deals with the field of eminent domain and the whole boun this article. In dary of other words, the property of a person is comprehensively delimited by this article. The article• has been split up in six clauses. Moreover, the Constitution certain kinds of laws have been exempted from the operation of the article or the whole of Part. III of the Constitu tion by the addition of articles 31A and 31B. Article the exercise of 31(1) declares the power of eminent domain. that a ·person cannot be deprived of property by an executive fiat and that it is only by the exercise of its legislative the State can deprive a person of his powers that article 31(1) says is property. that private property can only be taken pursuant law and not otherwise. · A reference to Cooley's Con stitutional Limitations fully bears out what is what he has said at content of article 31(1) page 1119 (8th edn.) :- In other words, all It guarantees requisite for the first is. This authority "Legislative requisite : The lies dor to public uses legislative action is had, the modes, conditions and its appropriations. Private property can appropriate private property the State, until pointing out the occasions, agencies only be taken pursuant to law." Article 31 (2) defines the powers of the legislature in It declares that private the field of eminent domain. property shall not be taken by the State under a law the law provides for compensation for the pro unless perty taken. It implicit in the language of the article that such taking can only be for public purposes. Clause (3) of the article places an additional limitation on State laws enacted on this subject while clause ( 4) limits the justiciability of the quantum of compensation in certain cases. Clause (5) is the saving clause . It saves is also 1953 DwarkaJas Shrinfras oj Bomf.iay v. Ti1e Sholapur Sp£m1ing and Weaving Co. Ltd., and Others. Mahajan]. 696 SUPREME COURT REPORTS [1954} resemble the saving clause therefore concerns the police power of from the operation of clause (2) laws made on certain subjects. The scope of the first clause being merely to from being taken purely by save private property limits the only clause which executive action and in the field of eminent domain being legislative action clause (2), itself with clause (2) only. As pointed out in exercise of relating to tax. in Willis on Constitutional Law, at page 716, police power, power of taxation and eminent domain arc all forms of social control and probably include all the forms of social control knowu to the law: but each differs from the others; though is possible the others, yet each has to distinguish each from characteristics which the characteristics of times when it is very difficult to others and there are draw a line between the one and the others. The in article 31 has been designed with saving clause (5) the express purpose of saving to a certain extent the State to deprivation property. It has also which may thus delimited from the field of eminent domain the field of exercise of police power and the exercise of the power of taxation. the mischief of clause (2) Not only has it saved of article 31 provisions of laws made for the purpose tax or penalty and the laws made for promotion of public health or life· or property, but it has prevention of danger also saved from the provi sions of all existing laws which may be construed as to deprivation of property of a person as amounting the State laws under which well as evacuee property takes possession of properties of persons who have left India the saving clause comprehensively powers of the State in exercise of which it could deprive a person of property without payment of compensa tion. forms of deprivation of property by the State without payment of compen sation have been exception clause, while other forms of deprivation of property which are outside the ambit of the exception In other words, all included within the mischief of includes within the ambit all the ambit of for Pakistan. imposing or levying any the clause It has result In 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning· and Weai•ing Co. Ltd., and Others. ~ohajan J. S.C.R. SUPREME COURT REPORTS 697 the words the State"s power of the word "deprivation" in construing article 31 [ am unable to accede to me that clause are inevitably within the mischief of clause (2) of the language employed in the differ the article. From ent sub-clauses of article 31 is difficult to escape the conclusion "acquisition" and "taking possession" used in article 31 (2) Juve the same mean in article 31(1). The ing as that much weight learned Attorney-General suggested could not be attached inasmuch as the saving clause provrnons of. clause (5) introduced by the article merely by way of had been abundant caution. to this con the Constitution while tention as it seems defining and delimiting fundamental rights would not introduce in the :irt1cles de:iling with those rights some matter merely by way of abundant caution. To my it was essential while delimiting and defining mind, to fully define the field of the right fundamental rights and to say what was not right. included within that the article read as a whole comprehen As already said, eminent domain sively defines the exercise as distinguished from all of which may amount to the taking of private pro perty. The argument that these exceptions were porated in article by way of abundant caution 31 further stands negatived by the contents of sub-clause (5) (b) (ii) of the article. Only laws made for the promo tion of public health or for prevention of danger the mischief life or property have been excluded from laws made in of clause (2) of the article, while other exercise of power of social control which deprive a frorl} the ope person of property have not been saved ration of clause (2). Illustratively, State dealing with morality and which may lead to deprivation of property are outside the ambit of the exception clause. A fortiori, any deprivation of pro law made for promotion of morality perty under a (2) of article would fall within 31. that form of legislation which promotes public health or prevention of danger the provisions of article 31 (2), while other laws made in exercise of the they deprive a person of power of social control, 8-95 S.G.J./59 the mischief of clause thus clear that only life or property its other powers laws made by is saved It 1953 Dwarkadas Shrinivas of Bombay v. Tk Sholapur Spinning and Weaving Co. Ltd., and Others. _,.. J,faftajan J. 698 SUPREME COURT REPORTS [1954] property, are not saved from (2) of article 31. the operation of clause In support of his contention that the content of that of article 31(2) and in cases where the form of taking private title or shape of acquisition of the State simply learned Attorney-General placed the following observations of my brother article 31(1) was larger that except property requisition for State uses, could deprive a person of his property by m:· :cing a reliance on Das in Chiranjit Lal Chowdhuri's case(') :- in all other cases law, to me acqu1S1t1on It implies two objections "Article 31 (1) law, unless such or taking possession the fundamental formulates the deprivation of pro in a negative form prohibiting perty except by authority of law. that a person may be deprived of his property by authority of law. Article 31(2) prohibits the acquisition or tak ing possession of property for a public purpose under law provides for payment of compensation. It is suggested that clauses (1) and (2) topic, namely, of article 31 deal with compulsory perty, clause (2) being only an elaboration of clause ( 1 ) to be There appear If that were the correct view, then clause suggestion. (1) must be held to be wholly redundant and clause (2), the next such a view would exclude deprivation of place, property otherwise than by acquisition or t;iking of possession. One can conceive of circumstances where to deprive a person of his pro the State may have perty without acquiring or same. For example, in order prevent a fire spreading, the authorities may have demolish an intervening building. This deprivation of taking of property the name of possession of property which goes by 'eminent domain' law. The construc tion suggested implies that our Constitution has dealt the. law of 'eminent domain', but has not with only in exercise of provided for deprivation of property itself, would have been from acquisition or taking possession of in any emergency, in the American is different sufficient. In (l) [!950] S.C.R. 869. 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and W eoving Co. LlJ., and Others. Mahqjan J. S.C.R. SUPREME COURT REPORTS 699 think clause (1) enunciates the contrary, is wider than 'police power'. I am not prepared I do not feel pressed to do so by the construction, for language used in article 31. On language of clause (1) of article 31 of clause (2), for deprivation of property may well be than by acquiring or taking brought about otherwise I possession of it. that no person shall be deprived of general principle his property except by authority of law, which, put implies that a person may be deprived a positive form, of his property, provided he is so deprived by autho law. No question of _compensation arises rity of (2) is that only under clause (1). The effect of clause certain kinds of deprivation of property, namely, those taking possession of brought about by acquisition or law, unless such it, will not be permissible under any If the law provides is brought about by means deprivation of property it, no compensation is required, provided that such depriva tion is by authority of law." for payment of compensation. taking possession of than acquisition or I not restricted, that his approach I would have hesitated learned brother and had Similar observations were made by my brother in the Bihar Zamindari case('). Undoubtedly great weight must be given to the opinion expressed on this ques tion by my this question was convinced illiberal and differ from his views. After a full consideration of the to the reasoning problem and after giving due weight learned of my brother, I am unable, for reasons above to agree with him. The objections envisaged stated, by my brother in Chiranjit Lal Chowdhuri's case ( 2 } (2) of against article 31 deal with topic of compulsory the same acquisition or taking of property do not at all oppress insurmountable or me and do not seem to me cogent. On (1) and (2) of artide 31 deal with it is not clear to the same topic, me why in that context article 31(1) somehow becomes the assumption the suggestion that clauses that clauses (1) and to be (') ['952]S.CR·889. (2) [1950] S.C.R. 869. 1953 Dwarkadas Shrinivas of Bombay v. Th~ Sholapur Spinning a11d Weaving Co. Ltd., anti Others. Afahajan J. 700 SUPREME COURT REPORTS [1954} law. requisite from being legislative to priYate property the only clause in the article which mlu1Hlant. This giYes protection sanction under executive orders without the exercise of them. The first behind is that it can only be the power of eminent domain lt was necessary while exercised pursuant delimiting the field of eminent domain to state that iD If the State had been entitled by clause the article. (1) to take away private property merely by making a law, then no question of paying compensation would arise, whether the taking 'assumed one form or another. Acquisition of property or construction of the article, are merely two modes of depriving a person of property and must be held to be included within the ambit of clause (1) of article 31, and clause (2) has not been drafted in the nature of an to the provisions of clause (1) of article 31. exception ( 1) of article 31 t,he On logical conclusion clause it has declared a fundamental right in the State as against an individual. Such a construc tion of the article in Part III, be avoided, as declace the Union, citizens or other persons the State as rather against them. in my opinion, has those articles possessed by is that what has been ·done by residing within rights of this construction of clause the purpose of requisition, on fundamental to declare rights the State Secondly, my in cases of emergency, in order • to prevent a fire learned brother was oppressed with that if a wide construction was not placed on the idea in clause (1), deprivation of the phraseology employed property by from spreading, instance, would also have to be paid case pointed attention was not drawn during argu the saving clause of the article which seems fully to cover cases of that kind. The Constitution makers were fully alive to cases of that character and considering th;t all such cases, unless excepted, would fall within the mis chief of clause (2), them from the ambit of the clause. to the comprehensive provisions of they purposely excepted It seems that in for. • S.C.R. SUPREME COURT REPORTS 701 refrained in Chiranjit Lal The maionty Chowdhuri's case(') from expressing any the scope of article 31 (1). My brother opinion on this question but reference Mukherjea made a declined to express any opinion on it. There no concensus of opinion on the ssope of the provisions of clause (1) of article 31 in this court and no final opinion has been pronounced upon it so far. 1953 Dwarkadas Shriniz'as of Bombay v. Tile Sholopur Spinning and Weaving Co. Ltd., and Others. Mahajan J. article 31 The result of the above discussion is that, in my opinion, provlS!on a delimiting the field of eminent domain and article 31 topic of (1) and (2) deal with clauses compulsory acquisition of property. self-contained learned Attorney-General The contention of the decision of this court in that on the analogy of Gopalrm's case(') it should be held that when a person is deprived of private property by authority of that deprivation puts an end freedoms regarding property guaranteed under article 19, does the lighr of not require any detailed examination the comtruction placed by me on language of article 31(1). It-was conceded by the learnecl counsel that decis1011 would have had no application once it was held that clauses (1) and (2) of article -31 dealt with the same topic of compulsory acquisition of property. to all the (2) means that unless article 31 the State and "acquisition" m title by The next contention of the learned counsel that the acquisition of State becomes vested with the property there can be the meaning of the clause and no acquisition within expression connoted possession" "taking idea of requisition cannot be sustained and does not, the decision of the case. As to my mind, affect above pointed, both these expressions used in clause (2) the same meaning that is conveyed in clause ( 1) convey I read article 31, by the expression "deprivation". As it gives complete protection to private property as against executive action, no matter by what process a ·(1) [1950] s.c.R. 869. (2i [1950] S.C.R 88. I 1953 Dwarkadas Shrinivas of Bombay T. Thi Slwlapur ~)inning and W~aving Co. Ltd., and Others. Mahojan J. 702 SUPREME COURT REPORTS [19541 is against immaterial too under that no person is no protection given is deprived of possession of it. loss of property In other words, person the Constitution declares shall be deprived of possession of private property without payment of compensation and authority of law, provided there was a public purpose behind that law. It the person who is deprived of property as to what use the State makes of his property or what it acquires in it. The to the owner and protection article. individual citizen. Article 31 states limitations on in the field of taking property the power of the State and those in the interests of the person to be deprived of his property. The question sought whether conveyed really of academic in view of the comprehen sive phraseology employed by clause (2) of article 31. the matter was argued at some length, I propose As to briellv indicate my opinion on that point. expression "taking possession" acquisition has a the State by right as against It has no fundamental larger concept limitations are interest the Commonwealth Parliament For the proposition that the expression "acquisition" in the State reliance has the concept of vesting of title was placed on the opinion of Latham C. J. in Minister of State for the Army v. Dalzi ,I ( 1 ) • By virtue of the provi sions of section SI, placitum (xxxi) of the Constitution of Australia, is em powered to make laws with respect to "the acquisition of property on just terms from any state or person for any purpose in respect of which the Parliament has power to make laws." General regulations styled as the National Security Regulations were made under the national Security Act, 1939-1943, S. Regulation 54 relates taking of possession of land by the Commonwealth and other regulations provide for the ascertainment and payment of compensation for or damage suffered by reason of things done in pursu ance of the regulation. The Supreme Court of New South Wales held in pursuance of Reg. 54 amounted acquisition taking possession of section r1J 68 c.w.L.R. 261. 1953 Dwarkadas Shrinivas of Bombay v. Th~ Sholapur Spinning and fV1aving Co. Lid., and Others. Mahajan]. , I S.C.R. SUPREME COURT REPORTS 703 of property within the meaning of section 51 (xxxi) of the Constitution, On appeal Latham C. ). made following observations :- cannot it has become "The Commonwealth land unless to have be held the owner of land acquired the Commonwealth or of some interest land. becomes only a possessor but does not become an the Commonwealth may owner of land, land may be have rights called prf perty, in such a case acquired property ....... . the Commonwealth has not then, in respect though land, which If Accordingly, to possession in my opinion, that possession may develop the facts the most valuable attribute of facie evidence of ownership, that possession is prima ownership, identification of posses ownership, do not justify any sion with ownership, hut, on the contrary, emphasize the distinction between is in possession of land as a result the Commonwealth of action under the Regulations does not show that the Commonwealth has become the owner of the land or of any estate in the land". ideas. The fact the two the opinion the Constitution. This for an indefinite period of The majority of the court held otherwise and ex taking under Regula pressed tion 54 of the National Security (General) Regulations by the Commonwealth exclusive possession of property constituted an acqui the meaning of section 51 sition of property within is what Rich J. (xxxi) of said, representing "It would, the majority opinion :- in my opinion, be wholly with the language of the placitum to hold preventing the legislature from authorizing sition of a citizen's ' full title except upon leaves and enjoy any terms it chooses, or upon no terms at all. case now before us, away from Dalziel everything tenancy worth having, and has empty husk of tenancy. may well say :- inconsistent that, whilst the acqui just terms, to seize possession indefinitely, on that made his weekly left him with 'the In such circumstances, he legislature fruits of possession, it open to the the full the Minister has seized and In • Ul53 Dwarkada.t Shrini1;as of Bombay v. The Sholapur Spinning and Wea11ing Co. Ltd., a11d Others. Mahajan J. 704 SUPREME COURT REPORTS [1954] 'You take my house, when you do take That doth sustain my house ; you take mv life. \Vhen you do take the means whereby I live.'" In the present case nothing has been left with the the prop company but the mere husk of title. respect In my necessarily judgment, and literal ''acquisition" has quite in our Constitution as well as in India Act is the majority of the procuring -af property or the taking of that a close constitutional provisions made true concept of the expression "acquisition" the one enunciated bv Government of Rich J. and the court in Dal.zic's I am nnahk to accept the case('). Vv'ith great ''acquisition" narrow tneans in whole or part of the propertv. acqms1t10n of It has been rightlv said co11- strnctio11 of them of half security of person and property deprives their efficacy and ends in a gradual depreciation of the right as if the right consisted more in sound than such provisions cannot In other words, in .sub.stance. be construed merely by taking a dictionary in hand. concept. Tl1e \Vord a wide: meaning It does not necessarily permanently or temporarily. learned Attornev property General combated that such a wide concept of the meaning of the word "acquisi India tion)) which practice was in accord with the view enunciated the case above cited. It was said by Latham C.J. in supported that con to a struction of decision of Bhagwati J. in Tan Bug Taim v. Collector of Bombay ( 2 the requisition by the State of the premises of a leading Bombay Chinese court und·:r restaurant. On a petition presented section 45 of the Specific Relief Act, Bhagwati J. hdd that having Britjsh jurisprudence which had been enacted in sec India Ac:, tion 299 ( 1) and (2) of the Government of the acquisition of legal title by the State in the word. Reference was made taken possession of. The the principles applicable this view and contended ). That case concerned the decided cases \Vas contrary legislative in India practice regard (1) 68 C.W.L.R. ,61. (2) l.L.R. 1946 Born. 51-. • ! 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Wea11ing Co. Ltd., and Others. Mahajan J. S.C.R. SUPREME COURT REPORTS 705 follow refused "requisition" to the learned that it is more in construing follow in the property or rights the view of to me legislative practice in Dalziel's case('). Having considered learned Judge preferred requmt1on of land could not be considered as being included either in item 9 or item 21 of List II of the the word "acquisition" 7th Schedule of the Act, in or over implied ownership implied depriva such property, while tion of the owner of the property for time heing thereof and meant control of the use and possession there was no warrant for of the property, and holding that so far as in India was concerned, "requisition" was included in "acquisition". the view of The Latl1am C.J. and the maionty judgment matter in full, and with respect Judge, I prefer follow .the majority of the in con court, because that possession after 'onance with all is nine-tenths of ownership, and once possession taken away, practically everything is taken away, and the sub stance and the practical result of the act of the State that should be considered rather than its purely legal in such aspect. As already said, cases should be this : what in substance to the owner and not what manner or injury caused and method has been adopted by the State in taking the property. That it seems juridical principle the view expressed by Bhagwati J. did not in drafting intent of Parliament represent II of the 7th SchecJ.ule becomes clear entry 9 of List this pronounce from what happened judgment was deliverec1, an Act ment. After the Government was passed by Parliament amending the effect of the juc1gment as of India Act nullifying Indian (Pro regards requisition of property. The (9 & 10 Geo. clamation of Emergency) Act, 1945, 6 Ch. 23) was promulgated on February 14, 1946, J. having been delivered the judgment of Bhagwati on August 9, 1945, section 102 of the Government of the Central Legisla Inc1ia Act was amended and by it in force, ture, when a proclamation of emergency was the correct approach the Constitution subsequent (I) 68 C.W.L.R. 261.' l 706 SUPREME COURT REPORTS (1954} 1953 Dwarkadas ~Miniva.s of Bombay v. The Sholapur Spinning and Weaving Co. Ltd., .,ntf Othlrs. .. ~ahajan J. to make in respect of any matters not enumerated was empowered thereof, any of also made in Chiranjit Lal Chowdhuri' s case(') opinion was expressed had implicit the State. For respect, I am unable to subscribe to that view. laws for a province or a part lists of the 7th Schedule. Reference was to certain observations of my brother Das the word "acquisition" the reasons already given, with great in it the idea of vesting of property in which impugned fundamental to a decision of to appropriation of Reference was also made It was further held that the in the narrower sense and held remained Punjab High Court in Jupiter General Insurance, Co. v. Rajagopalan('). This case concerned the provisions of sections 52 and 52(a) of the Insurance Amendment Act, 1950. It was contended those pro visions abridged rights guaranteed by article 31 (2) of the Constitution. In view of decision of this Court in Chiranjit Lal Chowdhuri's the word case('), the Punjab High Court construed that as "acquisition" in the the beneficial interest in the property section did insurer the provisions of insurer's pro not amount perty and mere! y amounted to exerdse of police power. stance of the impugned the regulation of insurance companies and winding up such corpo rations, to the general interest of policy holders. purpose of this case to say anything about the correct ness of that decision. In the light of the Con these different decisions employed more comprehensive phraseology in the entries the Government the subject decided by the 7th Schedule the same phraseology has not been in all stitution in article 31 of India Act, 1935, and which became matter of Bhagwati appended "requisition" but employed purposely (l\ [1950] S.C.R. 869. 12\ A.l.R. 1952 Punjab 9. In the Constitution the entries of if that was most advantageous the 7th Schedule appended than had been employed It is unnecessary for (2) of article 31, legislation was construction the word in clause J. and sub- . 1953 Dwarkat/as Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co. Lrd.J and Others. Mahajan]. • S.C.R. SUPREME COURT REPORTS 707 to avoid any controversy on . the scope of probability the article by gmng a limited meaning to these two words. taken possession of under On the finding that the company's property was in effect the provisions of the Ordinance by the company was deprived of it, is no escape from the conclusion that the impugned Ordinance and the statute · follow ing it are void as both of them encroach on the funda mental right of the company under article 31 (2) of the Constitution. the State and that ' It was then argued these questions the State. Finally that even so the plaintiff in the to the relief claimed by hiQl as it suit was not entitled was the company alone that could complain about abridgement of its fundamental rights by the Ordinance in question. It was also contended that the plaintiff's fundamental right to property had not been infringed the share had not in any manner as his property been taken possession of by it was said that on both the majority decision of this court in Cliiranjit Lal Chowdhuri's case(') was to sustain any one of these conclusive. I am unable contentions. Undoubtedly the majority decision Chiranjit Lal C howdhuri's case ( 1 ) has binding force till it is reconsidered or overruled by decision, in my opinion, has no apposite application this case and and circumstances of is clearly distinguishable. My for saying so reasons are these:- 1. The in Chiranjit Lal Chowdhuri's to this court case(1) was given on a petition presented jurisdiction under article 32 of the in exercise of Inter alia, Chowdhuri's grievance was Constitution. that his fundamental right under article 31 (2) of the Constitution had been infringed by the impugned law, taken possession of the inasmuch as rights and company's privileges annexed lost. The majority of the court took the view that the peti-. in possession of his share and that he tioner was still had power that he could to his share had thereby been this court. But the State had property and to dispose of that . share, that all decision (1) [1950] S.C.R. 869. 9• 1953 Dwarkadas Shrinivas of Bombay~ v. The S!wlap'lr Spftming arid Wtoiing Co. f)d .• and Other:r. Mahajan]. 708 SUPREME COURT REPORTS [1954] a liability alo;,.e In case that share, and to be enforced, receive a dividend on that though he ha,\ lost some of the privileges annexed to his share, it the State had taken possession could not be said the privileges which he of his share or was exercising shareholder. The situation however of enjoyec\ as a the preference share the present plaintiff and of all holders whom he represents is quite different. Chiran jit Lal was an ordinary shareholder of a fully paid up share. The plaintiff and the other preference share holders arc in a different situation from Chiranjit Lal. All of them hold partly paid up preference shares on which their liabilitv amounts to a sum of Rs. 16 bkhs, the pTaintiff Rs. 1,62,000. is sought to for feiture. The plaintiff and the other preference share therefore arc in imminent danger of losing the holders shares themselves or losing valuable property nature of money which they will have to pay out in order to meet the call. For all practical purposes is in danger of losing valuable prope\tV which plaintiff take possession of. Not the State only will their shares and be forced to pay deprived of them but they will also be large sums of money and all this will be in exercise of the powers conferred on the directors appointed by in question. There can the State by the Ordinance the rights and liabili thus be no comparison between ties of Chiranjit Lal with liabili ties of the present plaintiff and the other preference shareholders. threatening to these shareholders liability the shares are is not met when rights and liable in winding up and rights and privileges of preference sharc 2. The in earning dividends hol, lers even are somewhat different from the rights and privileges of the ordinary fully paid up shareholders. The court in Chiranjit Lal Chowd!rnri's case(') did not at all advert to the case of preference shareholders and It is eviclent effect to obey the refusal of the directors the Centnl mandate of the Controller appointed by preference Government the Ordinance hacl on their rights. to make it was a (l) [t_150) S.C.R,869. ' • 1953 Dwarkadas Shrinivas of Bomb0;.v y, The Sholapur Spinning and Ji'eaving Co. Ltd., . arid Other's . Mahajan J. , S.C.R. SUPREME COURT REPORTS 709 a resulted supervise the commarnl. On the directors passed that to a certain extent resolution refusing the 9th shareholders making of the Ordinance. On the 5th October, 1949, the Government appointed a Controller to affairs of this company. On the 9th November, 1949, the directors of the company to the Controller asked the preference shareholders. Soon make a call on compl:1 with January, the Ordinance was promulgated, i.e., soon after 1950, the refusal, and on the same day powers were delegat ed by the Central Government to the Bombay Govern ment under the Ordinance. Next c1ay, on the 10th appointed January, 1950, its nominees as directors of the company. On the 7th February, 1950,, these directors passed a resolution call up 1he uncalled capital and actually on the 22nd February, 1950, call was made and the plaintiff was call ed upon to pay a sum of Rs. 1,62,000. In these circum stances, it cannot be held to be an unreasonable infer the purposes of the Ordinance was ence that one of for the business of the company to raise further finance that was In any case, the effect of the Or<linance on the property of clearly the preference circumstances, In rule of stare decisis the it cannot be said plaintiff is out of court in view of that decision. the Bombay Government it may start working. shareholders. that on the the · fact It was said that the case of Chiranjit Lal Chowdhuri(') the 3. In influenced considerably by court was shareholder was trying to enforce the com a solitarv pany's jurisdic fundamental. right in the exercise of its tion under article 32 and that he could not do so unless his own fundamental right under article 31 (2) had been the complainant could not infringed. succeed because somebody else was hurt and that it in order to was an elementary principle of law the com the grant of extraordinary 1 justify it and the absence of an adequate plainant's need of remedy pointed out that article 32 can only be invoked for the right and purpose of enforcement of the fundamental that article c1oes not permit an application merely law must clearly appear. Das relief J. (I) [1950] S.C.R. 869, 1953 Dwarkadas Shrinivas of B01.1bay v. The Sholapur Spinning and Weaving Co. Ltd., and Others. Mahajan J. 710 SUPREME COURT REPORTS [1954] the purpose of agitating legislature passing the enactment also appropriate enactment unless by saying- fundamental rights. The the competence of particular infringes any of learned Judge concluded That ) from the present. "In exceptional cases where the company's pre> perty is injured by outsiders, a shareholder may, under the English law, after making all endeavours to induce the persons in charge of the affairs of the com file a suit on behalf of himself and pany to take steps, other shareholders for redressing the wrong done ,to the that principle does not apply here for company, but it been shown that any is not a suit, nor has attempt was made by the petitioner the old induce take steps nor do these proceedings pur directors port to have been taken by the petitioner on behalf of the other shareholders of the company." himself and is quite clear that the present contention Here has been raised in a suit and not in an application for itself distinguishes a writ under article 32. It Chiranjit Lal Chowdhuri's case( 1 that all the necessary steps visualised is further clear by my learned brother have been taken by the prefer for calling a meet ence shareholders. A requisition ing of the shareholders of the company was made on 3rd August, 1950, a meeting was actually held on 23th September, 1950, and on subsequent days and on 5th November, 1950, resolutions were passed that the call should not be made. The resolutions were, . however, vetoed by the Government. All the preference share in this suit including some of holders are the company has been impleaded as a the directors, defendant and the company have the old directors of made an application that they should be allowed to sup port the appeal. On these facts the present case is clearly distinguishable from that of ChiranFt Lal Chowdhuri( 2 ), 4. In any case, even if it is held that in view of the in Chiranjit the shareholders the plaintiff binding character of this court's decision Lal Chowdhuri's case(') the point is concluded, State has hot property, taken possession of the opinion represented I am of (I) [19.10] S.C.R. 869. ' • 1953 Dwarkadas Shrinivas of BEm~ay v. The Sholapur Spinning and Weaving Co. Ltd., and Others. Mahajan]. S.C.R. SUPREME COURT REPORTS . 711 shareholders entitled and the other preference in this suit to attack the validity of the Ordinance on the basis of the infringement of the fundamental right of the company. The plaintiff. has every right to chal lenge the authority of the directors to make the call and to question their locus standi before they call fix a liability on him. The directors seek to derive autho rity from If, however, the Ordinance the Ordinance. is void as against the company obviously they are not to be regarded as the directors of the company and would thus have no authority to make the call. It would indeed be a strange thing to hold that the plaintiff in a suit cannot question the authority and the credentials of the person who is seeking to enforce a demand against him. Unless the person making the demand makes out his authoritv or his credentials to do so, he is not entitled In all cases where a pecuniary to enfo; ce the demand. or other similar liability is sought to be enforced by a person, it is always open to the person challenging the liability to raise the question of the locus standi and If that authority of the person making the demand. person claims in the status of an agent of some other appointment is validly made, he person, unless his would have no authority. In this case the shareholders the articles of association were under a con unr\er tractual the directors them. They never to meet a call made by persons appointed by agreed these circumstances they an external authority and in are entitled to question the authority of the person making the call. The directors Government can only invoke in aid the authority given to them by the Ordinance and if the Ordinance is void as against the company, to be directors of the company and would therefore have no authority to make the call. In my judgment, therefore, it is plain that the plaintiff is entitled to succeed on the basis of the infringement of the company's funda mental right under article 31 (2), because that is the the directors have been only authority under which into existence and are exercising powers by brought If they are virtue of the provisions of the Ordinance. liability the company to meet calls made by they cannot be held appointed by appointed , 1953 Dwarkadas Shrinivas of Bombay v. Th• Sholapur Spinning and it'eaving Co. Ltd., and Others. Mahqjan J. 712 SUPREME COURT REPORTS Ll954 J not the validly appointed agents of the company qua the company, they cannot function as directors qua the shareholders. infringement of the

#5. The learned Attorney-General drew our attention the proposition that unless to a number of cases for there was a direct fundamental right of the shareholders it was not open to them to take ad vantage of the breach of a fundamental right In these wide terms I am unable to of the company. accede to this proposition. In my opinion, the correct rule on this point has been stated in Willoughby, at page 20, on the authority of the decision in Massa chusetts v. Mellon( 1 ), and is in these terms:- · the controversv. poV,:er justification for some direct injury It amounts to little more to disregard an "We have no power per se to review and annul acts of Congress on the ground that they are unconsti tutional. That question may be considered only when suffered or justiciable issue, is made to threatened, presenting a the power exercised is rest upon such an act. Then law applicable that of ascertaining and declaring to the unconstitutional the negative enactment, which otherwise, would stand in the way of the enforcement of a legal right. The party who invokes the power must be able to show, not only that the invalid, but that he has sustained statute immediately in danger of sustaining some direct injury as the result of its enforcement, and not merely common with he suffers in some indefinite way in If a case for preventive relief be people generally. the execu prevented, the court enjoins, in effect, not the official, the tion of statute notwithstanding". the statute, hut the acts of in imminent danger of The rule stated above has apposite application LO this case. The plaintiff and the other preference share susta111111g direct holders are injury as a result of the enforcement of this Ordinance, the amount of the call that the clireet injury being they are called upon consequent forfeiture of their shares. Not only would they to pay and (1:1 262 U.S. 447. 1953 Dwarkadas Shrinivas of Bombll)I v. The Sholapur Spinning and WeavingCo. lJd., and Others. Mahajan J . S.C.R. SUPREME COURT REPORTS 713 ) ), and made reference their shares, if they do not meet the demand, but they would also have to pay the amoum of the call. My brother Das elaborately dealt with this question Chiranjit Lat's case(1 to all cases that were cited by the Attorney-General on this subject, viz., McCabe v. Atchison ( '); /effrey Manu facturing Co. v. Blagg( 3 ; Hendrick v. Maryland( •) ; .Newark Natural Gas & Fuel Co. v. The City of . Newark(') ; and in which the rule laid .down was that in order to justify the granting of extraordinary relief the complainant's need of it and the absence of an adequate remedy at law mpst clearly appear and that the complainant cannot succeed because some one else was hurt. He also made reference to the cases of Truax v. Raich (' ), and Buchanan v. Warley ( '). There the court allowed the plea to be raised because in both these cases the person . raising it was directly affected. In the first of the two last mentioned cases an Arizona Act of 1914 requiring employers employing more than five workqs to employ not less than eighty per cent. native born citizens was challenged by an alien who had been employed as a cook in a restaurant. That . statute made a violation of the Act by an employer punishable. The fact that the employment was at will or that the employer and not the employee was subject to prosecution did not prevent the employee raising the question of constitutionality because statute, the employee and, discharge the employee was directly affected by the second case a city Ordinance prevented the occupation of a plot by a coloured person in a block where a majority the residences were occupied by white persorn. A white 111an sold his property in such a block to a Negro under a contract which provided that the pur chaser should not be required to accept a deed unless he would have a right, under the laws of the city, to occupy the same as a residence. The vendor sued for therefore, statute. In the if enforced, would compel the employer (1) (1950] S.C.R. 869. (2) 235 u. s. 151, (3) 235 u. s. 571, (4) 235 u. s. 610. !r-95 S.C.l./59 (5) 242 U.S. 403. (6) 239 U.S. 33. (7) 245 U.S. 60. 1953 &- Dwarkadas S hrinivas of Bombay v. T Ml/ilwlapur JSpi, nning and '1-Veaving Co. Ltd., and Others. Mahajan J. 714 SUPREME COURT REPORTS [1954 \ rights to tlle involved only ). That is tlle only case the Ordinance infri>l.gcd specific performance and contended that the Ordinance was unconstitutional. Although the alleged denial of constitutional rights of coloured persons and the vendor was a white person, yet it was held that the vendor was directly affected, because the courts below, in view of the Ordinance, declined to enforce his contract and thereby directly affected his right to sell his property. Reference was also made case of Darnell v. The State of Indiana ( 1 in which a share holder was not heard to complain in his own name the fundamental right of the company, his own rights had not been infringed. In view of this decision my brother Das took the view that Chiranjit Lal who was merely a shareholder and did not suffer any direct injury by the result of the law was not entitled to complain. That may very well have been the correct view in the case of a fully paid up shareholder who had no further liability or who was not likely to suffer in any manner by the enforce ment of the Ordinance but the situation of a partly paid up preference shareholder as in this case is quite different and distinguishable and in my judgment the apposite rule to apply to tlle present case is the one laid down in the ) and Buchanan v. Warley(' ). The result is that the plaintiff is entitled Ordinance on the basis that it abridges the company's fundamental right under article 31 (2). The plaintiff is thus entitled to succeed in this suit which should have been decreed in the terms in which it was laid. the constitutionality of of Truax v. Raich ( 2 to challenge I am further of the opinion that the question of the locus standi of the plaintiff to raise the plea that the Ordinance being void against the company the direc tors had no authority to make the call, is really of academic interest in this case because here the company has been impleaded as a defendant. Its old directors have made an application to this court supporting the case of the plaintiff on the ground that the Ordinance (!) 226 U.S. 388. (2) 23g U.S. 33. (3) 245 U.S. 60. 1953 DwarkadaJ Shrinit:as of 'Bombay v. The SholopUT Spinning and Weaving Co. Ltd., and Olhen. Mahajan J. .:S.C.R. SUPREME COURT REPORTS 715 (Z). The is void as it infringes the company's fundamental right learned Attorney-General under article 31 when asked about this application it not in the High Court and having only having been made 'been made at the last stage of the case should not be entertained. In my view, when the question in issue is one .concerning constitutional rights, the matter can not be viewed purely from a technical angle and if in interests of doing substantial justice it is necessary to grant permission to the old directors say, way of doing so. If the Ordinance qua the company is void, I do not see why the old directors should be debarred from saying so and is void qua the it can certainly not be · sustained qua the .company, shareholders. Some of the directors who are preference .shareholders are also represented in the suit as well. In Chiraniit Lal's case(') the question of his locus standi the Chief Justice. This is what the left open by learned Chief Justice said :- technical considerations should not stand to have "The is whether one first question :Shareholder can, under and particularly when one of the respondents -company which opposes validity of the Act on . the ground that ·Of :first point." individual the circumstances of the case is a piece to pronounce a definite opinion on the the petition, challenge legislation .......... I do not discriminatory is necessary In that case Patanjali Sastri J., as he then was, also did not pronounce any definite opinion on question so far as the shareholder's right to question the company to property of the invasion of the right under article 31 was concerned. This is what learned Judge said :- "Whatever validity the argument may have relation to the petitioner's claim based on the alleged invasion of his right of property under article 31, there <an be little doubt that, so far as his claim based on the contravention of article 14 is concerned, the peti tioner is entitled to relief in his own right." (1) [1950] S.C.R. 869. 1953 Dwarkadas Shrinh'aS of Bombay v. The Sholapur Spi,11ning and J.Veaving Co. lid., and Others. Mahajan J. 716 SUPREME COURT REPORTS [1954} The learned Judge did not offer any opinion on the the question taken by other questions. Mukherjea on grounds somewhat different from Faz! Ali J. This what the learned Judge said :- J. decided the company the company, "A discussion of itself. the present case. As to be unconstitutional, the fundamental rights of is settled law that in order the purview of to redress the action should It is open to the old the company who have been ousted from to maintain the eye of law, and on shareholders can also the company as such. None of institute any the present application the company itself. the respondents, and company as such would be outside our enquiry. It a wrong done prima facie be brought by cannot be said that this .course is not possible circumstances of alleged directors of their position by reason of the enactment that they are directors still assert them, however, have come proceeding on behalf of the company. Neither form nor purport Indeed, the company opposes the petition." in substance does to be one made by is one of the majority of footing rights of forward Even on the basis of this reasoning the situation of the present plaintiff, as is quite different and so circumstances the decision given in Chiranjit Lat's case(') is binding on this point, as even the judgments of Judges majority did not speak with the same voice. already explained, the company. is . that of it cannot be forming In For I would allow the reasons given above appeal, set aside decree the plaintiff's suit with costs. to give any decision on decision reached above, viz., whether the fundamental because articles 14 and 19. judgment of the High Court and is not neces It issue 2 in view of the is void rights under infringes DAs J.-I agree that this apeal should be allowed but I prefer to rest my decision on the grounds and in detail reasonings judgment in my (t) [1950] S.C.R. 86:,. , 1953 Dwarkadas ShrinivoJ of Bombay v. Thi Sholapur Spinning, and Weaving Co- Ltd., and Others. Das]. S.C.R. SUPREME COURT REPORTS 717 Appeal No. 107 of 1952 [The State of West Bengal v. Subodh Gopal Bose(')]. resists the defendants to make a call and the resolution passed by This is an appeal by the plaintiff in a suit filed in the Bombay High Court on behalf of himself and other preference shareholders of the respondent com pany praying for a declaration the power given respondents 2 to 8 who had been appointed directors under the Sholapur Spinning and (Emergency Provisions) Ordinance Weaving Company II of 1950 (hereinafter referred to as said Ordin ance) respondents 2 to 6 on the 7th February, defendants for making a call of Rs. 50 per each preference 1950, illegal, ultra vires, void and inoperative share are law. The plaintiff-appellant registered holder -of 3,244 preference shares of the respondent company of the face· value of Rs. 100 per share out of which -only Rs. 50 had been paid up and consequently call has been duly made, he will have to pay in respect of his holding. The plaintiff Rs. 1,62,200 the call on ·appellant ground, inter alia, said Ordinance is illegal, ultra vires and invalid under Government of India Act, 1935, and/or the Constitu India. No oral evidence was adduced on tion of issue were argued as ·either side. The matters the Constitution. The ·questions of law governed by inconsistent contention was with or the Constitution. The suit was dis guaranteed by that dismissal was trial court and missed by the appeal court. The plaintiff has now affirmed by come up on appeal before us after having obtained a certificate under article 132 ( 1) of the Constitution from the High Court. The material facts the Ordinance was in derogation of the payment of institution of the suit and the terms of the impugned Ordinance have been set out in detail in the judgments delivered by the case of Chiranjitlal Chowdhuri v. this court The Union. of India(') where this very Ordinance it were and · the Act which challenged replaced (2! [1950) S.C.R. 86J. (T) [1954] S.C.R. 51l7. the provisions of leading up to the fundamental rights • 1953 DwarkaJas Shriniias ef Bombay v, The Sholapur Spinning and Weaving Co· Ltd., tind Others. Das]. 718 SUPREME COURT REPORTS [1954J as unconstitutional and also is not necessary for me to recapitulate delivered and it the same. The determination of the matters depends on interpretation of article 19 (1) (f) read with article 19 (5), article 31 and article 14 of the Constitution. the correct judgment in my judgment My view about the correlation between article 19 (1) (f) read with article 19 (5) and article 31 and true meaning and respective scope and effect of clauses (1) and (2) of article 31 have been set forth in Chiranjitlal' s case ( 1 } in detail fully explained in my judgment and have been more f The State of West Bengal in Appeal No. 107 of 1952 v. Subodh Gopal Bose and others(')] and no reiteration light of the conclusions of them is called for. In thereof given by reached and me in those I proceed to examine the con tentions advanced by the appellant. judgments in support reasons the validity of The appellant seeks to question the grouncl that it infringes Ordinance on mental rights of (a) the company, ( c) the managing agents, whether he can mental rights of anybody other than himself. the funda (b) the shareholders, ( d) the directors elected by ( e) persons having contracts the question of constitutionality the breach of the funda the Ordinance founded on the company. The first shareholders and to consider The above matter was agitated in Chiranjitlal's case (1 ) . There Chiranjitbl Chowdhuri, who was the holder of one fully paid up ordinary share, applied to the validity this court under article 32 challenging of this very Ordinance which is now questioned before us and the Act which eventually replaced it. One of the Ordinance had' the grounds of attack was the company infringed rights of under article 19 (1) (f) and article 31 that it dis the directors and missed authorised :md authorised the directors so appointed under the Ordi the company's assets take possession of the point without payment of any compensation. On (2) [1954] S.C.R. 587. the managing agents and to appoint new directors (•) [1950] S.C.R. B6J. fundamental the State S.C.R. SUPREME COURT REPORTS 719 himself thus, at page 898 : consideration Mukhcrjea J. expressed 1953 Dwarkadas Shrinivas of BombllJ •• The Sholapur Spinning and Weaving Co· Ltd,, and Othlr:. Das]. company, shareholders so may be therefore, can their own ; but the fundamental "An rights and enforce individual shareholder affects to the extent own rights · as well. This follows rule of personality of duties and obligations individual members. As inhere indifferent to one person to seek to enforce the rights except where the law permits him the procedure a writ of habeas corpus." incorporated this court for enforcement of its fundamental individual it would not be open to an to complain of an Act which rights of the company except that it constitutes an infraction of his rights and capacities, separate the rights are different and is not competent of another to do so. A well is furnished by is sanctioned in aa application for that a corporation has a distinct illustration of such exception its own with logically from legal entities, those of And again at page 899 :- "The . could be enforced under rights article 32 must ordinarily be rights of the peti infraction of such tioner himself who complains of rights and approaches the court for relief. This being the position, proper subject of our investigation would the petitioner as a share be what rights, holder of impugned legislation. A discussion of the fundamental rights of the company as such would be outside purv.iew of our enquiry." the company have been violated by if any, of At pages 904-909 learned Judge discussed the law had infringed any question whether the impugned funclamental right of the shareholders under article 31 (2) or article 19(1) (f) and answered it in the negative. Kania C. J. agreed with the line of reasoning and conclusion this point. Faz\ Ali J. at page 876 referred to a passage in the in McCabe v. Atchison( 1) and judgment of Hughes J. expressly held that no one except those whose rights reached by Mukherjea J. on 1953 Dwarkot!'" Shrinivas of Bombay v. Tht Sholapur Spinning and Weaving Co· IJd·, and Olhtrs. Dos]. 720 SUPREME COURT REPORTS [1954) were <lirectly affected by a question of Lordship said : the constitutionality of law could law. His "The company and the shareholders are in law separate entities, and if the allegation any property belonging the company has been taken possession of without compensation or the right enjoyed by the company under article 19 (1) (f) has it would be for the company to come forward to assert or vindicate its own rights and not for any individual shareholder to do so." infringed, is made the conclusion the question whether the petitioner had As to in showing that there had been an infringe succeeded ment of his own rights as a shareholder under articles 31 and 19 (1) (f) his Lordship agreed with and adopted the conclusions arrived at by Mukherjea J. to the acceptance of all without committing himself the reasonings of Mukherjea J. My Lord the present rested his decision on article 14 and Chief Justice that the petitioner as a share holder had been discriminated against. Having the question arising under article 14, he did decided to express any opinion on the raised under articles 19 and 31. At pages questions 927-930 I dealt with the question whether the share the law holder could impugn the ground company had been infringed. After referring to several decisions of the Supreme Court of America I came to the following conclusion at page 930 : the constitutionality of the fundamental it necessary right of to see interested is a shareholder "In my opinion, although a shareholder may, m a sense, be the company of which he property he cannot, as held in Darnell v. Indiana(') be heard to complain in his own name and on his own behalf, of the fundamental right to property of the company, for, in law, his own right is not the owner of the company's properties." has not been infringed as he is not deprived of the infringement of property .. In the premises, I think it is quite clear that the Bench which heard majority of the members of (1) 226 U.S. 388.' 1953 i>wDkildas Shrinivas of Bombay v. Th4 S/wlapur Spinning and J1le.:uring Co. Ltd. and Others. ) Das]. S.C.R. SUPREME COURT REPORTS 721 law is, question therefore, the view the Bench the validity of the infringement of his the constitutionality of Chiranjitlal's case(') the petitioner was not entitled Ordinance and the Act on the ground that the funda mental rights of the company under articles 19 (1) (f) and 31 had been infringed. He had, to rely on the plea of infringement of his own fundamental rights. The majority of the court held that there had been no rights as a shareholder the peti under article 19(l)(f) or article 31 and that tioner consequently had to fall back on article 14 ·Order to suppori;. his plea of the unconstitutionality of the Ordinance and the Act. Even here the majority the petitioner had not discharged the onus that was .on him of showing that in fact there had been any discrimination against him and other shareholders of the company. Learned Attorney-General submits founded on the rights, the said Ordinance on the fundamental rights of in so far as . the challenge present case, infringement of company's fundamental concluded by the decision in Chiranjitlal's case(1) the reasons adopted by the maionty that case apply equally the case now before us and the same conclusion the present appellant, must be drawn, namely, is also a shareholder, cannot be permitted impugn the ground that infringes the company, or the managing agents or the directors or other persons It is, on the other having contracts with the company. hand, contended on behalf of that the from Chiranjitlal's present .ca~e( 1 the question here arises in a regular suit and not on an application under article 32 for the .enforcement of fundamental is a substantial ground of distinc that this, by itself, tion at all. the mere form of the proceeding can affect true principle being that only a person who is directly affected by a the validity of that law and that a law can challenge interest has not been person whose own Yiolated or threatened cannot ground that wmebody else's right bas been infringed, the question. The I cannot see bow ) in that distinguishable the appellant the law on I do not right or impugn rights. (I) [1950] S.C.R. 869. 1953 Dwarkad-.s Shriniva1 of BOmb'IJ v. The S!wlapur Spinning and We.,ving Co· Ltd., and Others Dos]. 722 SUPREME COURT REPORTS [1954] ) law, in which the impugned the petitioner irrespective of in Chiranjitlal's case( 1 the question of the plaintiff appellant alone will have the same principle must prevail the proceeding form of constitutionality is raised. the appellant, however, urges Learned counsel for that although on a parity of reasoning there has been no infringement of the fundamental right of the pre ference shareholders under article 19(1) (f) or article 31 if it stands, certainly subjects (2), to the risk of being called the preference shareholders remaining unpaid upon to pay the amount of capital on their respective shareholding. the directors Indeed, the said Ordinance ~ave made a call appointed under for the payment of Rs. 50 on each preference to pay Rs. 1,62,200 on rus· shares. There was no such liability the holder of only one fully paid up ordinary therefore, directly impugned Ordinance, share. The imposing on affects the preference shareholders by them this liability, or the risk of it, and gives them a interest sufficient Ordinance. It is quite the pro learned Attorney-General, perty of the company or the managing agents, or the other persons having contracts with directors or taken possession of by the the company having been State through the State the Ordinance has no relation to or bearing on the imposition on the preference shareholders of liability the directors were not obliged they had the company or the possession of imposition of liability or other persons and that this therefore, be said to be the direct or even risk cannot, result of the State having through the direc indirect taken possession tors appointed under the other persons. of the property of the company or It is then urged by him that, the pre ference shareholders cannot be allowed to complain of the infringment of the rights of the company or of the other persons which does not concern or affect them. This argument, however, overlooks the purpose (>) [1950] S.C.R. 869. the call because the validity of submitted by the directors appointed by to pay to make true, as the property of the Ordinance that being so, to challenge the fact of the caJI, 1953 Dwarkadas Shrinivas of Bombay . v. The Sholapur Spinning and Weaving Co. Ltd-~ and Others. Das]. S.C.R. SUPREME COURT REPORTS 723 liability to do so. to make is entitled if he can, ,competent the Ordinance. He is, if he can, to make they are not to resist the call are not and scope of the suit filed by the appellant for himself and all other preference shareholders. The appellant is the call made by the disputing his to pay directors appointed under the directors who have to show fore, entitled made the call are not It is open to him to allege and prove, that the gentle men who have purported the call are not competent the directors to do so because the case of a company which of the company. Take If a call is made is not governed by this Ordinance. on the shareholders of such a company, it is certainly open to a shareholder tl1e payment of the call the persons who have by proving, purported the dire, ctors of the company. This he may do by showing persons have not the requisite qualifications or have not been duly elected. Likewise, on a parity of reason ing, the appellant as a preference shareholder respondent company if he can, the call are really the persons who have made the directors of the company. Certainly he can these persons have been appointed wa·s legislative competency of the authority which made If the Ordinonce had not been duly promulgated. he can, with a view locus standi of the persons who have made the call, raise the question the grounds invalidity of the Ordinance on I have just mentioned, I can see no valid reason why, for the self same purpose, he should not be permitted to challenge ground of the breach of the fundamental rights of the company or of other persons. He may not be interested in or concerned with the facts which constitute the unconstitutionality, e.g., the taking of possession of tlie property of the company or of the other persons but he is certainly getting out of the law so as to destroy the very founda tion of the status of the persons who have made call and thereby repel the attack on him and avoid the Ordinance under which its unconstitutionality for the Ordinance on In C!iiranjitlal's the validity of to destroy to show, interested case(1) beyond it or liability. (I) [rJ50] S.C.R. 869. 1953 DwarlcadM Shrini~as of Bombay v. The ShoZ.pur Spinning llJ1d iW taving Co· Ltd·, and Others. Das]. 724 SUPREME COURT REPORTS [1954] the> interest seeking the call fighting question fundamental is different. Here of unconstitutionality of petitioner was held to have suffered no loss of his own fundamental right as a shareholder and, therefore, by raising the ground of the breach of the funda Ordinance on mental rights of the company, or of the other persons the battle of the company and he was really the posi the other persons and not of his own. Here law has made liability on him and other preference position of a shareholders possible and he is to resist that liability and as in the premises he is directly affected to challenge by the statute he has sufficient its validity. If as between the company or the other these persons who, purporting to act as persons and the law is unconstitu directors, have made rights tional for breach of the fonner's in the eye then it follows directors company at directors surely arrogate to themselves powers of the directors of the company and to make If the said Ordinance stands, any cail. the directors appointed thereunder will have authority to make they have done and the appellant's liabilitv call which the appellant as to pay it will stand good. Therefore, a preference shareholder in my opinion, distin statute and guishes this case from Chiranjitlal' s case(1 ) and it must he held that, in the circumstances of this case, the appel lant, who is a preference shareholder and as such liable to pay the call, is entitled to challenge the Ordinance the directors elected by the sharehold which dismissed ers, authorised the appointment of directors by State and made it possible for the directors so appoint ed to make the call and thereby impose a liability on all preference shareholders including the appellant. these persons are not, company, they cannot exercise is directly affected by this circumstance, law the law, On the hypothesis that, with a view to resist his own the call, it is open to the appellant to the Ordinance and the Act which has replaced the infringement of liability to pay impugn it and for that purpose the fundamental right under article 31 (2) of to call in aid l•) [r950) S.C.R. 869. 1953 Dwarktldas Shrinivas of BrJm6oy •• Tile S!wlapur Spinning and J-VeavingCo. Ltd.,, and OthtrJ. Das]. S.C.R. SUPREME COURT REPORTS 725 there has by the directors to be shown that "property" within is "property" within there cannot be any doubt stocks etc., of company or of the other persons mentioned above, it has yet in fact been such infringement. Two questions will have to ·be consider ed and decided, namely, (1) whether the impugned law has authorised the taking of possession or acquisition of any property and (2) whether what has been possession of or acquired the second question meaning of article 31(2). Taking first, the mills, respondent company machineries, the meaning of articles 19 and 31. A contract or agreement which a person the company and which may be may have with cancelled powers in exercise of the Ordinance will undoubtedly be "property" the meaning of the two articles. There may within be some argument as to whether the office of manag ing agents or of though each of such the directors, offices carries substantial remuneration, can be said to itself, can be acquired or be "property" which, by taken possession of or disposed of. I need not dilate on this further, for the machinery etc., of the company and the benefits of agreements of persons having con tracts with "property" those have been taken within possession of or acquired that will be quite sufficient the plaintiff appellant to sustain his challenge to the constitutionality of the law, whether or impugned no the office of the managing agents or of the direc tors is "property" or has been taken possession of or acquired. the company are certainly those articles and if The next question is whether the impugned law has authorised the taking of possession or acquisition of the property of the shareholders, or of the company. It may be mentioned at the outset that the impugned law has not authorised any acquisition of any property in the sense of divesting the shareholders or the com that property in the pany of any property and vesting State or its nominee. there has been no transfer of title, voluntarily or by operation of law. It . is, to enquire and as.certain the Ordinance or the Act which replaced it whether therefore, necessary In other words, 1953 Dwarkadas Shrinivas of Bombay v. The Sholapw Spinning and Weaving Co· Ltd·, and Other~. Das]. 726 SUPREME COURT REPORTS [19541 has authorised of the shareholders or of the company. the taking of possession of any properly It shares of the in the valuable the same as in that surplus. there remains any surplus As regards the property of the shareholders rights the right to elect directors and the posi in Chiranj; tlal's case('). The shares still belong to them. They can hold them or dispose of them. If any dividend is declared they will If there is any winding up and if after pay get them. ment of all liabilities they will participate true· that from a practical point of view it may be difficult for to sell the shares, if they desire the shareholders, find a purchaser who will be willing to buy shares in a company which is governed by an Ordinance of this kind but, nevertheless, it cannot be said that the State sense in has taken possession of the which that expression used in article 31(2) has been explained by me in Subodh Go pal Bose's case('). It is said, as was done in Chiranjitlal's case(' ), shareholders, e.g., certain the right of voting, right to apply for the winding up of the company have been taken away. In the first place, it is donbtful if any of these right can be called "property" within the meaning of article 31 (2) for, by itself and apart from the shares, none of them can be acquired or dispmed In the next place, the State has not taken posses of. rights as explained by Mukherjea J. in sion of these Chiranjitlal's case ( 1 ) at pages 904-906 and by me at pages 923-924. Therefore, there has been no infringe to property under ment of article 31 (2). What has happened is that these rights incidents of the ownership of the shares which are only have been suspended or kept in abeyance and may be regarded as amounting to imposing restnctmn< on the exercise of the rights of ownership of the shares it may possibly be in any emergency of the State's police power under clause (5) of article 19 by restric imposing by law in the interests of the general public so as co secure the supply of an essential commodity and prevent unempolyment. justified as an exercise the shareholders reasonable (1) [1950] S.C.R. 869. (2) [1954] S.C.R. 587. S.C.R. SUPREME COURT REPORTS 727 As regards the property of the company also there has been no transfer of title to any such property, volun to the State or its tary or involuntary, from the company therefore, no question arises of any pro nominee and, perty of the company having been "acquired''. The question remains whether any property of the company has been "taken possession of" by the State within meaning of article 31 (2) as explained by me in Subodh Gopal Bose's case(1). ) Mukher jea J. at pages 903-904 said : In Chiranjitla/'s case( 2 the · i953 DwaT!cadas Shrinivas ef Bombay v. The Slwlapur Spinning and JVeaving Co· Ltd., and OtherJ. Das]. "Assuming is argued, be ed in the interests of tl1at the statutory directors are acting as of the company, tors could not, possession of the company so long as to act ernment ·and not of the company itself tration of its affairs. Possession of an agent, cannot the agent is to act not according dictates of the principal, but under exterior authority. that this State management was impos tl1e shareholders tl1emselves and the agents the possession of the statutory direc in law as tliey are bound to the dictates of the Central Gov in the adminis it is said, to the commands or the direction of an the possession of tlie principal, judicially be in obedience regarded There can be no doubt that tl1ere is force in this the outset, we the larger question this statutory taking contention, but as I have indicated at are not concerned in this case with to how control management possession of the property and assets belonging to company. inter-position of amounts It is fairly clear that his Lordship was inclined to the the company's properties had. been taken possession of although he <lid not categorically an ex I dealt with the matter at pages 926-927. plicitly say so. the possession of directors who After pointing out that to or amenable to the company or its were not obedient to be dismissed or shareholders and are not discharged by in the eye of law, be the possession of tlie company I said : the company cannot, regarded as liable 1953 Dwarkada.s Shrinivas of Bombay v, Tm ShDlal'M Spinning and Weaving Co. IJd., and Othtrs. Das]. 728 SUPREME COURT REPORTS [1954] "In this view of the matter there is great force that the property of the company has the argument been taken possession of by the State through direc tors who have been appointed by the State in exercise the Act of the powers conferred by the Ordinance and and who are under the direction and control of State and this has been done without payment of any compensation." therefore, Then after quoting a passage from the judgment of Holmes J. in Pennsylvania Coal Company v. Mahon(') I concluded : "Here, property of the company having been taken possession of by the State in exercise of powers conferred by a law which does not provide for payment of any compen right of the company, has, in sation, the eye of the law, been infringed." it may well be argued the fundamental that although I used It is quite clear the words the argument" and "it may "there is great force in inclination of my mind was well be argued", definitely that the property of the company had been taken possession of as contemplated by article 31 (2). My observations were much more definite than ·those of Mukherjea J. the then Learned Attorney-General contends that the taking of possession of the property of the company that has in this case is clearly not an exercise of taken place the power of eminent domain within article 31 (2) but constitutes an exercise of police power under to him, the State has article 31 ( 1 ). Here, according not taken possession of the company's property on to implement a public purpose such as is own account contemplated by article 31 (2) but the State has possession of the company's property company from using its own property to the detriment of the interests of the public and to do for the company In order what the company should itself have done. taking of posses to which category to determine sion falls, to keep in mind the circum is necessary stances in which the Ordinance and the Act were passed and to ascertain immediate from their language (1) 260 U.S. 399· to prevent S.C.R. SUPREME COURT REPORTS 729 the rights of purpose and ultimate aim and to consider their effect the company. It should be remem bered that the Ordinance of 1950 was promulgated on the 9th January, 1950. The preamble to the Ordinance · recited as follows : "Whereas on account of mismanagement neglect a situation has arisen the affairs of· the Sholapur Spinning and Weaving Company, Limited, the production of an essential commodity and has caused serious unemployment amongst a community." prejudicialiy section of affected ·certain 1953 Dwarkadas Shn'nivas of Bombay VJ The Sholapur' Spinning and . Weaving Ca. Lt<h, avd Others. i - DasJ. Then came the Act on the 10th April, 1950. There is no preamble to the Act. Although the short title of the Act contains a reference to emergency provi the full title of the Act is as follows : 1 An Act management Spinning and Weaving Company Limited. to make special provision for the proper the Shola pur administration of to a is no doubt its affairs would be restored large number of workmen and There is . no suggestion either in this long title or in the body of the Act except in section 12 the Act is intended only to be a temporary emergency measure. to be to provide The object of the Ordinance was stated employment the production of an essential commodity. keep up that section 12 of the Act provide, There that the property of the company and the management and administration of the company or the share the unfettered holders but discretion of the Government. The prvisions of Ordinance and the Act are drastic in the extreme. The managing agents and the elected directors have been dismissed and new directors have been appointed by is concerned it has the State. So far as the company been completely denuded of property. All is its bare title. The carrying on of a business demands business many personal qualities acumen and is much more complicated than collecting its directors elected by left entirely . to the possession of and considerable to the company ,, ta-~J 5. G. Indiaf39 • 1953 DwarJ:adas Shrinivas of Bombay v. T ha Sholapur Spinning and Weaving Co. LJ4., and Others. Da.s:J 730 SUPREME COURT REPORTS [1954] is the State that has through inconsistent with in effect and in substance, the rents of the estate of a disqualified proprietor. The impugned law has thrust upon the company a board of directors in whose business capacity the company and shareholders may have no confidence and over the company has certainly no vestige of control to them at O" authority and who are not answerable all. Although in outward form the directors are the company and are bound to act under officers of the articles of association in so far as they are not the Ordinance and contrary to or the Act, nevertheless, the creatures of the State and are answerable to the State and directors of its choice taken possession of the under the company and has been carrying on taking of an experiment in State management of business at risk and expense of the company and the shareholders. Indeed we are told that under such State management which is going on for pretty nearly business has been running at a loss. At any rate no profit has been made or distributed as and by way of dividend during this long period-a sad commentary efficacy of State management. And nobody knows how long this state of affairs will continue, for the Act does not prescribe any definite time limit this hazardous experiment. It the premises, to uphold this law as an instance of impossible the State's police power as an emergency exercise of limits of police measure. power and is, in substance, nothing short of expropria tion by way of the exercise of the power of eminent domain and as for any law has not provided it must be held to offend the provisions compensation of article 31 (2). far overstepped the four years It has is, fundamental The last contention of the appell&nt that the Ordinance is unconstitutional and void infringes In Chiranjitlal's case(') my holders under article 14. Lord opinion that the Ordinance and the Act did not proceed on any rational basis of classification and shareholders had been arbitrarily company and the present Chief Justice and I were of rights (1) [1950] S.C.R. 869. 1953 DwarWas SkrinivtU of Bombqy v. Th< Sho/ajJU1 Spinning and Weaving Co. Ltd., and Others. DasJ. :S~C.R . SUPREME COURT REPORTS 731 that, Indeed, shareholders the present case there was before the Ordinance and In than what in that case had not discharged .singled out for di&criminatory treatment and · that as law was denied to this company equality before and 1ts the Act -offended the equal protection clause of our C.onstitution. the view The majority of the Bench, however, that, there being a presumption in favour of the consti tutionality of the law and that the onus of displacing the law, that presumption being on him who impugns the petitioner therefore, he could not complain of -0nus and discrimination. there is nothing the court (;hiranjitlal' s case( 1 ) • the question of dis crimination does not appear , to have been argued before the appeal court has rejected it by saying that the plaintiff had not shown there were other companies which were guilty of the same conduct but had not been similarly dealt with. Learned Attorney-General has this court is not bound by its previous decision and has pressed us to go behind the majority decision. Accepting is not bound by its own decisions and may reverse a previous decision especially the court will surely be on constitutional questions be obvious! y erroneous. But in view of the conclusion I have already arrived at on the other point I do not this point of discrimination feel called upon to pursue this appeal any further. should be allowed and the plaintiff's suit should be decreed. The Union of India must pay the plaintiff his costs throughout. to do so unless such previous decision appears In my judgment, this court court and submitted therefore, BosE J.-I agree with my brother Mahajan that the impugned Ordinance and Act offend article 31 (2) of the Constitution and so are void. But I prefer to rest foundations. With the utmost my decision on simpler respect as I have done in previous case5, like "police power," the use "social like. I say doubtful, not because they .are devoid of meaning but because they have different shades of meaning they represent powers different countries and because control", "eminent domain" of doubtful words I deprecate, (t) [1950] S.C.R. 869. 1953 Dwarkadas · Shrinivas of Bombay v. The Sholapur Spirmin$ and Weaving Co. Ltd., and Others. Bose J, 732 SUPREME COURT REPORTS [1954J inherent is wrong in the State regulates and fits to assume India and In my which spring from widely differing sources. these powers opinion, then to see in with how far the Constitution the plain provisions of them. We have to interpret jurists and students of the Constitution and it is for to see whether our Constitution law, not for Judges, also provides determine whether in India resemble any of the varying forms which they . assume in other countries. the shape which they take for these powers and it for them that after Article 19 ( 1) ( £) confers a certain fundamental freedom on all citizens of India, namely, the freedom to acquire, hold and dispose of property. Article -31(1) is a sort of corollary, namely the property it cannot be taken away save by has been acquired authority of law. Article 31 than article 19 to everyone and is not restricted to because it applies citizens. But what article 19 (1) (f) means is whereas a law can be passed to prevent persons who India from acquiring and holding are not citizens of property restrictions· can be in the absence of such a law placed on citizens. But non-citizens can also acquire property they do then they cannot be deprived of it any more than citizens, save by authority of law. in this country no such in India and is wider impose restrictions I have put the matter broadly and ignored for the imposed by article 19 (5). moment The rights conferred by article 19 ( 1) ( f) are not the State can restrictions unfettered provided they are (1) reasonable and (2) are in the interests of either the general public or for the protec tion of the interests of any Scheduled Tribe. But we are not concerned with article 19 in this case because no one has prevented either from acquiring and holding property. They plaintiff actually did acquire property and they held it and them. The complaint is that they are nobody stopped in a manner not allowed by the now being deprived, Constitution, of the property which and hold. That concerns fully permitted to acquire article 31. the company or they were S.C.R. SUPREME COURT REPORTS 733 Now article 31(1) says that no one shall be deprived law. That to my It means that no taken away arbitrarily or by legal sanction for of property save by authority of mind is straightforward and simple. one's property can be executive action. There must be every act of deprivation. Now an Act of legal sanction, legislature if the rest of the article was not there a man therefore could be deprived of his property by legislative enact ment though not by executive action. But that brings in article 31 (2). Restrictions are there placed even on legislature. Unless the Act provides for compen sation and either fixes principles on which, and the manner. in which, it is to it cannot be validly enacted. The only be determined in clause (5). Therefore, those set out exceptions are the simple question in this case is, do the to my mind, impugned Ordinance and Act fall foul of article 31 (2) read with clause (5) ? All we have to do is to examine these provisions. the amount or specifies 1953 Dwarkadas Shrinivas of · Bombay. v. Th• Siwlapur Spinning and Weaving Co. Ltd., and Others. Bose]. ) interest It also in "any interest" the word commercial includes any this company interest "property". Are We start with plaintiff's "interests" "property" within the meaning of this clause ? Property includes industrial "any undertaking." in "any company owning" any interest in any commercial or industrial undertaking. That is how I read this clum ~ily drafted clause. The company here certainly has industrial under in a commercial and taking and the plaintiff has an undoubted interest the company. He also has a direct interest in runs because, as a· undertaking preference shareholder, he is a member of the company and would, on liquidation, be entitled distribution of its assets. Next, have interests been "taken possession of" or "acquired" ? Here again I have no doubt. In the Constitution provisions touching fundamental rights must be construed broad in favour of those on whom the rights ly and liberally have been conferred. But in this instance, the company in any case, judgment, to share 1953 Dwarkadas Shrinivas of BombaJ v. The Slwlap"' Spinning and Weaving Co. Ud., and Others. Bose]. 734 SUPREME COURT REPORTS [1954} in clause (1). In my opinion, to be read along with the word these words have the posses "deprived" to in clause (2) mean the sion and acquisition referred that amounts sort of "possession" and "acquisition" the meaning of clause (1) •. to "deprivation" within laid down. Each case No hard and fast rule can be if there is substan must depend on its own facts. But in my judgment, tial deprivation, is, the sort I mean attracted. By substantial deprivation robs a man of those of deprivation attributes of enjoyment which normally accompany to, or an interest in, property. The form is un rights essential. It is the substance that we must seek. that substancially then clause (2) insult the best left with Has that happened here ? Of course, it has. The the company have been plaintiff and mere husk of title and not only has every form of enjoyment which normally accompanies an interst in this kind of property been taken away from them but the plaintiff has also been injury to add to pay substantial sums of money ; and for called upon what ?-not in compliance with any engagement in fulfilment of any duty which he has entered, not or obligation which he has incurred, not in furtherance of his judge, but interests of which he blankly and unashamedly because the furtherance of interests affects "the production of an essential commodity" and has caused "serious unemployment amongst a certain section of the community." If that is not "deprivation" is. One of the privileges of a democracy of free men is the to mismanage one's own affairs within if A can mismanage his confines of in a particular way, so can B, C and D. The concerns production of essential commodities and the employ ment of labour are matters for the State and statutory to handle. They have the right, when the law bodies to take over this responsibility when the so permits interests so demand but if by doing so they public deprive private individuals and bodies in the sense explained compensation. They cannot their obligations they must pay their own duties by fathering to know what their interests non-statutory in property is difficult law ; and it, S.C.R. SUPREME COURT REPORTS 735 on others who are not responsible for carrying on the the State. My brother Mahajan has dealt affairs of with this at length and there is no need for me to add to what he has said. The only other point I need consider is the appli- . cability of clause (5) of article 31. The exceptions clauses (1) and (2) lie there. I am clear that none of impugned the exceptions set out Ordinapce and Act have not been made for the pro motion of. public health nor to prevent danger to life and property. there apply. The 1953 Dwarkadar Shrinivas of Bombay v. - The Slwlapu-r Spinning and Weavin~ Co. Ut!., and Others. Bose J• I do not In my opinion, Chiraniit Lal's case(') is distinguish is a bar here. My brother I agree this at length and as therefore learned brother, allow the plaintiff's claim with able. Mahajan has explained with him I need also, costs. in agreement with my appeal and decree say no more. I would GHuLAM HASAN J.-I have had the advantage of judgment of my learned brother Mr. perusing Justice Mahajan and I agree with his conclusion that the appeal should be allowed and the plaintiff's suit decreed with costs. like to add a few words. I would This appeal raises reproduced substantially (Emergency Provisions) Ordinance the . question of the constitutional the Sholapur Spinning and Weaving validity Company II of 1950, subsequently replaced by Act XXVIII of 1950, same provisions. This question arose originally upon a petition under article 32 of the Constitution filed by one Chiranjit the com Lal Chowdhuri an ordinary shareholder of the Act as being in violation of his pany, challenging fundamental rights under articles 14, 19 and 31 of the Constitution. By a majority of 3 : 2 it was held the presumption the petitioner had failed there had been any abridgement of his fundamental rights. The minority declared the the petitioner violated under article 14 of the Constitution. impugned Act as void rights of the constitutionality of the Act or that fundamental to displace as· (') [1s50] S. C.R. 863. 1953 Dwarkadas Shrinfras of Bombay •• The Sholapur Spinning and , Weaving Co. Ltd., and OtherJ. Ghul•m Hasan J. 736 SUPREME COURT REPORTS [1954] respect successfully, My learned brother has distinguished, so with and if I may Chiranjit Lal's case(') and has explained the majority view in that case and I decidendi of entirely agree with him. That decision does not, in my the present opinion, conclude principle of stare decisis arises. is concerned and no question of the matter so the decision invoking far as The question which we are now invited to consider raised by the appellant, a preference sbareho Ider holding 3,244 preference shares of the face value of Rs. 100 out of which he had paid up Rs. 50 per share. He was called upon by the statutory directors nomi the Government under the impugned Act to nated by pay Rs. 1,62,000 as the balance of the amount of representative call. Thereupon he capacity on behalf of himself and other preference shareholders challenging the validity of the Act. The suit was dismissed by trial Judge whose decision was affirmed on appeal by the Division Bench of Bombay High Court. the suit in a in detail in agreeing with him My learned brother has analysed the company of every vestige of ant provisions of tbe hesitation stance robs except what has been title. upon the State and offends against article 31 and must, the relev in1puzncJ P ... ct a:vl I have no that the Act in sub the husk of that tbe impugned Act over limits of the power conferred the provisions of I agree, therefore, the constitutional therefore, be held void. laconically called It •ights. in which fundamrntal language and it stands and unhampered by Article 31 finds ~ place in Part !II Gf the Comt::,,_ " tion which deals with to Property". Upon a simple and headed "Right straightforward construction of context the article provisions of confers upon every person, whether a citizen or not, right of protection of property against a fundamental the authority encroachment by the executive without two essential conditions passed by the American Constitution law and against legislature unless it satisfies (I) [I950] s.c.R. 869. !953 Dwarkadas Shrinivas of Bombay v. The _Sholapur Spinning and Weaving Co. Ltd., and Others. Ghulam Hasan J. • S.C.R. SUPREME COURT REPORTS 737 in which law. The the manner in my opinion, laid down in (2) that there must be public purpose for law must taking away private . property and that provide for compensation and either fix the amount of such compensation or specify the principles on the compensation which and shall be determined and given. Article 31 (1) em bodies a categorical declaration proclaiming the of property and equally categorically prohibits the owner of that property by State from depriving an executive act or without being backed by intention underlying authority article -being the protection of property against sion by the State, both parts (1) and (2) of article 31 should be read together so as to harmonize with intention. Article 31, is wider article 19(1) (f) whLch confers upon a citizen only the to acquire, hold and aispose of property and is different is self in scope and content. Article 31 contained and ( 1) refers to deprivation of property in general. Acquisition or taking possession in (2) are different modes of deprivation and are comprehensive enough to include all forms of taking away rights of the setting in which property: Having article 31 'property' used in the the word article must be construed in the widest sense as con the owner noting a bundle of rights exercisable by in respect thereof and embracing within its purview both corporeal rights. The word in the Constitution and there 'property' is no good reason its meaning. Whether in a given case amount to deprivation of the meaning of article 31 will depend property within upon the circumstances of each case and it is not possible, the nature of things, lay down any test which may be universally applicable. inflexible When it can be shown the statute substantially right of enjoyment of property, interfores with it wrn, in my opinion, be hit by article 31 (2) and declared void, unless compensation is provided. is not defined incorporeal is placed, restrict regard I am not prepared to subscribe the proposition that article 31 (1) stands by itself and should be read separately from (2) and I cannot attribute an intention 1953 Dwarkadas Shrinivas of Bombay v. The Sholapur spinning and Weaziing Co. Ltd., and Others. 738 SUPREME COURT REPORTS [1954)' to our Parliament merely by passing an Act. The article form an associated from each other. to deprive a person of his property integral whole and cannot be dis two parts of The result is that I agree with the order proposed by my learned brother. Appeal allowed. Agent for the appellant : /. N. Shroff. Agent for respondents Nos. 1 to 4 and 6 to 8 ~ Rajinder Narain. Agent for respondent No. 9 : G. H. Rajadhyaksha. 1954 Jan. 22. K. S. RASHID AND SON ti. THE INCOME-TAX INVESTIGATION COMMISSION, ETC. (With connected appeals) [MEHR CHAND MAHAJAN C. J., MuKHERJEA, S. R. DAs, VIVIAN BosE and GHULAM HASAN JJ.] Constitution of India, art. 226-/urisdiction of Punjab High Court to issue writs to Income-tax Investigation Commission located in Delhi-Remedy under art. 226-Discretionary-Taxation on (Act XXX of 1947), ss. 5 and Income (Investigation Commission) 8(5). the Constitution to located in Delhi and The Punjab High Court has jurisdiction to issue a writ under art. 226 of Investigation the case of the Commission petitioner under 5 of the Taxation on Income (Investigation Com mission) Act, ·1947, although the petitioners were assessees within the U. P. State an<l their original assessments were made by Income-tax authorities of that State. investigating Income-tax Article 226 of the Constitution confers on all the High Courts in the matter of issuing writs which new and very wide powers they never possessed before. There are only two limitations placed upon the exercise of such powers by a High Court ; one is that the in relation to which it exercises jurisdiction", that is to say, the writs issued territories subject to whom jurisdiction. The other is that the court cannot run beyond to be exercised "throughout the person or authority territories