{"id":3713,"date":"1950-12-04T00:00:00","date_gmt":"1950-12-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/chiranjit-lal-chowdhuri-vs-the-union-of-india-and-others-on-4-december-1950"},"modified":"2018-09-22T15:49:29","modified_gmt":"2018-09-22T10:19:29","slug":"chiranjit-lal-chowdhuri-vs-the-union-of-india-and-others-on-4-december-1950","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/chiranjit-lal-chowdhuri-vs-the-union-of-india-and-others-on-4-december-1950","title":{"rendered":"Chiranjit Lal Chowdhuri vs The Union Of India And Others on 4 December, 1950"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Chiranjit Lal Chowdhuri vs The Union Of India And Others on 4 December, 1950<\/div>\n
Equivalent citations: 1951 AIR 41, \t\t 1950 SCR 869<\/div>\n
Author: H J Kania<\/div>\n
Bench: Kania, Hiralal J. (Cj), Fazal Ali, Saiyid, Sastri, M. Patanjali, Mukherjea, B.K., Das, Sudhi Ranjan<\/div>\n
           PETITIONER:\nCHIRANJIT LAL CHOWDHURI\n\n\tVs.\n\nRESPONDENT:\nTHE UNION OF INDIA AND OTHERS.\n\nDATE OF JUDGMENT:\n04\/12\/1950\n\nBENCH:\nKANIA, HIRALAL J. (CJ)\nBENCH:\nKANIA, HIRALAL J. (CJ)\nFAZAL ALI, SAIYID\nSASTRI, M. PATANJALI\nMUKHERJEA, B.K.\nDAS, SUDHI RANJAN\n\nCITATION:\n 1951 AIR   41\t\t  1950 SCR  869\n CITATOR INFO :\n F\t    1951 SC 318\t (19)\n RF\t    1952 SC  59\t (5)\n F\t    1952 SC  75\t (8,21,43,54,70)\n RF\t    1952 SC 123\t (45)\n RF\t    1952 SC 252\t (101,106)\n E\t    1953 SC 215\t (6)\n F\t    1953 SC 404\t (7)\n R\t    1954 SC  92\t (5)\n D\t    1954 SC 119\t (1)\n E\t    1954 SC 314\t (4)\n F\t    1955 SC  74\t (7)\n R\t    1955 SC 191\t (5)\n R\t    1956 SC  20\t (13)\n F\t    1956 SC 246\t (50,65)\n E\t    1956 SC 479\t (5)\n F\t    1957 SC 503\t (15,16)\n R\t    1957 SC 877\t (16)\n D\t    1957 SC 927\t (9)\n E\t    1958 SC 538\t (11,12,17)\n RF\t    1958 SC 578\t (211)\n R\t    1958 SC 731\t (15)\n RF\t    1958 SC 956\t (15)\n R\t    1959 SC 648\t (26)\n RF\t    1959 SC 725\t (11,12)\n F\t    1960 SC 356\t (8)\n R\t    1960 SC 457\t (9)\n R\t    1960 SC 554\t (9)\n D\t    1960 SC1080\t (28)\n R\t    1962 SC 458\t (21)\n F\t    1962 SC1044\t (5)\n R\t    1963 SC 222\t (22)\n R\t    1963 SC 864\t (27)\n F\t    1963 SC1241\t (84)\n HO\t    1963 SC1811\t (13,28,84,104,105,112)\n RF\t    1965 SC 190\t (4)\n F\t    1970 SC 564\t (16,54,78)\n E\t    1970 SC2182\t (7)\n F\t    1971 SC1594\t (7,8,9)\n R\t    1971 SC1737\t (45)\n RF\t    1973 SC 106\t (11)\n RF\t    1973 SC1461\t (227,265,2130)\n RF\t    1973 SC2720\t (9)\n R\t    1974 SC 849\t (10)\n RF\t    1974 SC1389\t (251)\n R\t    1975 SC 583\t (39)\n R\t    1978 SC 327\t (6)\n F\t    1978 SC 597\t (189)\n F\t    1978 SC 771\t (44)\n R\t    1980 SC 161\t (10)\n RF\t    1983 SC   1\t (168)\n F\t    1983 SC  75\t (5)\n F\t    1984 SC 866\t (4)\n R\t    1984 SC1707\t (17)\n RF\t    1986 SC1370\t (77,78)\n R\t    1988 SC1487\t (31)\n RF\t    1991 SC 672\t (33)\n RF\t    1992 SC   1\t (132,133)\n R\t    1992 SC1277\t (22,85,87,96)\n\n\nACT:\n    Sholapur Spinning and Weaving Company (Emergency  Provi-\nsions) Act (XXVIII of 1950)--Act dismissing managing  agents\nof  a company, removing its  directors, authorising  Govern-\nment   to  appoint new directors, and curtailing  rights  of\nshareholders in the matter of voting, etc.--Validity--Wheth-\ner infringes fundamental rights--Right not to be deprived of\nproperty  save by authority of law--Right to  acquire,\thold\nand  dispose  of  property--Right  to  equal  protection  of\nlaw--Constitution of India, Arts. 14, 19 (1) (f), 19(5),  1,\n32--\"  Deprivation  of property \", \"Property.,\t,,  acquisi-\ntion\",\t\"taking possession., \"equal protection\t\",  meanings\nof--Right  to  apply under Art. 32--Corporation's  right  to\napply--Shareholders' right.\n\n\n\nHEADNOTE:\nThe  Governor-General of India, finding that on\t account  of\nmismanagement  and  neglect a situation had  arisen  in\t the\naffairs\t of the Sholapur Spinning and Weaving  Company\tLtd.\nwhich had prejudicially affected the production of an essen-\ntial commodity and had caused serious unemployment amongst a\ncertain section of the community, and that an emergency\t had\nthereby\t arisen which rendered it necessary to make  special\nprovision  for the proper management and  administration  of\nthe said company, promulgated an Ordinance, which was subse-\nquently\t reenacted in the form of an Act of the\t Legislature\ncalled\tthe sholpur Spinning and Weaving Company  (Emergency\nProvisions)Act,\t 1950, the net result of which was that\t the\nManaging  Agents  of the said company  were  dismissed,\t the\ndirectors  holding office at the time automatically  vacated\ntheir  office, the Government was authorised to appoint\t new\ndirectors,  the\t rights of the shareholders of\tthe  company\nwere  curtailed\t in the matters of  voting,  appointment  of\ndirectors,  passing of resolutions and applying for  winding\nup,  and power was also given to the Government\t to  further\nmodify\tthe Indian Companies Act in its application  to\t the\ncompany; and in accordance with the provisions of the  Ordi-\nnance  new  directors were appointed by the  Government.   A\nshareholder of the company made an application under Art. 32\nof the Constitution for a declaration that the Act was\tvoid\nand  for enforcement of his fundamental rights by a writ  of\nmandamus  against the Central Government, the Government  of\nBombay\tand the directors, restraining them from  exercising\nany  powers  under  the Act and from  interfering  with\t the\nmanagement  of the company, on the ground that the  Act\t was\nnot within the Legislative competence\n870\nof  the\t Parliament  and infringed  his\t fundamental  rights\nguaranteed by Arts. 19 (1) (f), 31 and 14   of the Constitu-\ntion  and  was\tconsequently void under\t Art.  13.\t The\ncompany was made a respondent and opposed the petition.\n Held  per KANIA C.J., FAZL ALI, MUKHERJEA and\tDAS  JJ.-\n(i)  that the impugned Act did not infringe any\t fundamental\nright  of  the petitioner under Art. 31 (1), as if  did\t not\ndeprive\t the company or the petitioner of any property\tsave\nunder authority of law;\n  (ii) that the impugned Act did not infringe any  fundamen-\ntal right guaranteed by Art. 31 (2.) inasmuch as it did\t not\nauthorise  the \"acquisition\" of any property of the  company\nor  of\tthe shareholders or \"the taking possession\"  of\t the\nproperty of the petitioner, namely, the shares which he held\nin the company, though he was disabled from exercising\tsome\nof  the\t rights which an ordinary shareholder in  a  company\ncould  exercise in respect of his shares, such as the  right\nto vote, to appoint directors, and to apply for winding\t up;\nand,  if the Act had authorised the \"taking  possession\"  of\nthe property of the company, the petitioner was not entitled\nto any relief on that score under Art. 32;\n    (iii)  that, as the Act did not impose any\trestrictions\non the petitioner's right \"to acquire, hold and dispose\t of\"\nhis  shares, there was no infringement of Art. 19  (1)\t(f);\nand  assuming that the restrictions imposed on the right  of\nvoting etc. were restrictions on the right to acquire,\thold\nor dispose of property within Art. 19 (1) (f), such restric-\ntions were reasonable restrictions imposed in the  interests\nof  the public, namely, to secure the supply of a  commodity\nessential to the community and to prevent serious  unemploy-\nment  amongst  a section of the people, and  were  therefore\ncompletely protected by cl. (5) of Art. 19.\n    Held  also per KANIA C.J., FAZL ALI, and  MUKHERJEA\t JJ.\n(PATANJALI SASTRI AND DAS JJ. dissenting).--that though\t the\nLegislature  had proceeded against one company only and\t its\nshareholders, inasmuch as even one corporation or a group of\npersons can be taken to be class by itself for the  purposes\nof legislation, provided there is sufficient basis or reason\nfor  it and there is a strong presumption in favour  of\t the\nconstitutionality\/of  an  enactment, the burden was  on\t the\npetitioner  to\tprove that there were also  other  companies\nsimilarly situated and this company alone had been discrimi-\nnated against, and as he had failed to discharge this burden\nthe impugned Act cannot be held to have denied to the  peti-\ntioner the right to equal protection of the laws referred to\nin Art. He and the petitioner was not therefore entitled  to\nany relief under Art. 32.\n    Per\t PATANJALI  SASTRI J.--As the impugned\tAct  plainly\ndenied\tto the shareholders of this particular\tcompany\t the\nprotections of the law relating to incorporated Joint  Stock\nCompanies  as embodied in the Indian Companies Act.  it\t was\nPrima facie within\n     871\nthe  inhibition of Art. 14; and, even though when a  law  is\nmade  applicable  to a class of persons or  things  and\t the\nclassification\tis  based on differentia having\t a  rational\nrelation  to the object sought to be attained, it can be  no\nobjection  to its constitutional validity that its  applica-\ntion is found to affect only one person or thing. since\t the\nimpugned Act selected a particular company and imposed\tupon\nit  and\t its shareholders burdens and  disabilities  on\t the\nground\tof mismanagement and neglect of duty on the part  of\nthose  charged with the conduct of its undertaking no  ques-\ntion  of  reasonable classification arose and  the  Act\t was\nplainly discriminatory in character and within the constitu-\ntional\tinhibition of Art. 14.\tWhilst all  reasonable\tpre-\nsumptions must undoubtedly be made in favour of the  consti-\ntutional  validity of a law made  competent legislature,  no\nsuch presumption could be raised in this case as on the face\nof  it the Act was discriminatory and the  petitioner  could\nnot  be\t called\t upon to prove\tthat  similar  mismanagement\nexisted\t in other companies. The issue was not\twhether\t the\nimpugned  Act was ill-advised or not justified by the  facts\non  which it was based but whether it transgressed  the\t ex-\nplicit\tconstitutional\trestriction  on\t legislative   power\nimposed by Art. 14.\n    Per\t DAs J.--The impugned Act, ex facie, is nothing\t but\nan  arbitrary  selection  of a particular  company  and\t its\nshareholders for discriminating and hostile treatment,\tand,\nread  by itself, is palpably an infringement of Art.  14  of\nthe  Constitution.  Assuming that mismanagement and  neglect\nin  conducting\tthe affairs of a company can be a  basis  of\nclassification\tand that such a classification would bear  a\nreasonable relation to the conduct of all delinquent  compa-\nnies and shareholders and may therefore create no  inequali-\nty,  a\tdistinction cannot be made  between  the  delinquent\ncompanies inter se or between shareholders of equally delin-\nquent  companies,  and one set cannot he  punished  for\t its\ndelinquency while another set is permitted to. continue,  or\nbecome,\t in like manner, delinquent without  any  punishment\nunless\tthere  be some other apparent  difference  in  their\nrespective  obligations\t and  unless there  be\tsome  cogent\nreason why prevention of mismanagement is more imperative in\none  instance than in the other. The argument that the\tpre-\nsumption being in favour of the Legislature, the onus is  on\nthe  petitioner to show that there are other individuals  or\ncompanies  equally  guilty  of\tmismanagement  prejudicially\naffecting  the\tproduction  of an  essential  commodity\t and\ncausing serious unemployment amongst, certain section of the\ncommunity  does not, in such circumstances, arise,  for\t the\nsimple reason that here there has been no classification  at\nall  and,  in any case, the basis of classification  by\t its\nvery nature is much wider and cannot, in its application, be\nlimited only to this company and its shareholders; and\tthat\nbeing so, there is no reason to throw on the petitioner\t the\nalmost\timpossible  burden of proving that there  are  other\ncompanies which are in fact precisely and in all particulars\nsimilarly situated.  In any event the petitioner,\n872\nmay  well claim to have discharged the onus of showing\tthat\nthis company and its shareholders have been singled out\t for\ndiscriminating\ttreatment  by showing that the Act,  on\t the\nface of it, has adopted a basis of classification which,  by\nits  very nature, cannot be exclusively applicable  to\tthis\ncompany\t and its shareholders but which may be\tequally\t ap-\nplicable  to other companies and their shareholders and\t has\npenalised  this\t particular company  and  its  shareholders,\nleaving\t out other companies and their shareholders who\t may\nbe  equally guilty of the alleged vice of mismanagement\t and\nneglect\t of  the  type referred to in the  preamble  in\t the\nOrdinance.\n    Per\t PATANJALI  SASTRI, MUKHERJEA and  DAS\tJJ.  (KANIA,\nC.J,, dubitante).--In so far as the petitioner's rights as a\nshareholder  were  curtailed he was entitled  to  apply\t for\nrelief\tunder Art. 30, in his own right on the\tground\tthat\nthe  Act denied to him the equal protection of the laws\t and\ntherefore  contravened Art. 14 even though the other  share-\nholders did not join him in the application.\n    Per\t MUKHERJEA J.--The fundamental rights guaranteed  by\nthe  Constitution  are available not  merely  to  individual\ncitizens  but to corporate bodies as well except  where\t the\nlanguage  of the provision or the nature of the right,\tcom-\npels the inference that they are applicable only to  natural\npersons.  An incorporated company, therefore, can come up to\nthe Supreme Court for enforcement of its fundamental  rights\nand so may the individual shareholders to enforce their own;\nbut as the company and its shareholders are in law  separate\nentities, it would not be open to an individual\t shareholder\nto complain of a law which affects the fundamental right  of\nthe  company  except to the extent that\t it  constitutes  an\ninfraction of his own rights as well.  In order to redress a\nwrong  to  the\tcompany the action  should  prima  facie  be\nbrought by the company itself.\n    Article 32 of the Constitution is not directly concerned\nwith  the  determination of the constitutional\tvalidity  of\nparticular enactments, what it aims at is the enforcement of\nfundamental  rights  guaranteed by the Constitution  and  to\nmake  out  a case under the Article it is incumbent  on\t the\npetitioner  to establish not merely that the law  complained\nof  is beyond the competence of the Legislature but that  it\naffects or invades his fundamental rights guaranteed by\t the\nConstitution,  of  which  he could seek\t enforcement  by  an\nappropriate writ or order.\n    Under Art. 32 the Supreme Court has a very wide  discre-\ntion  in the matter of framing writs to suit the  exigencies\nof  particular\tcases and an application under\tthe  article\ncannot\tbe thrown out simply on the ground that\t the  proper\nwrit or direction has not been prayed for.\n    In\tthe context in which the word \"acquisition\" is\tused\nin  Art.  31 i2) it means and implies the acquiring  of\t the\nentire\ttitle of the expropriated owner whatever the  nature\nor extent of that right might be,\n     873\n    The guarantee against the denial of equal protection  of\nthe  laws does not mean that identically the same  rules  of\nlaw  should  be made applicable to all\tpersons\t within\t the\nterritory of India in spite of differences of  circumstances\nand  conditions.   It  means only that there  should  be  no\ndiscrimination between one person and another if as  regards\nthe subject-matter of the legislation their position is\t the\nsame.\n\tQuaere\t:  Whether the word \"property\"\tin  Art.  31\nmeans the totality of the rights which the ownership of\t the\nproperty connotes, and whether clause (1) of Art. 31 contem-\nplates\tonly  confiscation  or destruction  of\tproperty  in\nexercise of what are known as police powers in American\t law\nfor which no compensation is necessary.\n    DAS\t J.--The  question  whether an Act  has\t deprived  a\nperson of his \"property\" must depend on whether it has taken\naway  the  substantial bulk of the rights  constituting\t his\nproperty.  Where the most important rights possessed by\t the\nshareholders of a company are still preserved by an Act even\nthough certain privileges incidental to the ownership of the\nshares have been put in abeyance, the shareholders cannot be\nsaid to have been deprived of their \"property\" in the  sense\nin which that word is used in Art. 19(1) (f) and Art. 31.\n    If on the face of the law there is no classification  at\nall,  or at any rate none on the basis of any apparent\tdif-\nference\t specially peculiar to the individual or  class\t af-\nfected\tby the law, it is only an instance of  an  arbitrary\nselection  of an individual or class for discriminating\t and\nhostile\t legislation and, therefore, no presumption can,  in\nsuch  circumstances, arise at all-  Assuming, however,\tthat\neven  in such a case the onus is thrown on the\tcomplainant,\nthere can be nothing to prevent him from proving, if he can,\nfrom  the  text of the law itself, that it is  actually\t and\npalpably unreasonable and arbitrary and thereby\t discharging\nthe initial onus.\n    The\t right to vote, to elect directors, to pass  resolu-\ntions  and  to present an application for  winding  up,\t are\nprivileges incidental to the ownership of a share, but\tthey\nare  not  by  themselves apart from  the  share,  \"property\"\nwithin the meaning of Art. 19 (1) (f) and Art. 31; and\teven\nassuming that they are \"property\" such rights cannot be said\nto have been acquired or taken possession of by the  Govern-\nment  in  this\tcase within Art. 31 (2).   The\tlanguage  of\nclause (1) of Art. 31 is wider than that of clause (2),\t for\ndeprivation of property may well be brought about  otherwise\nthan  by acquiring or taking possession of it and in such  a\ncase no question payment of compensation arises.\n   FAZAL  ALI  MUKHERJEA and DAS JJ.--Except in\t the  matter\nwrits in the nature of habsas corpus no one but those  whose\nrights are directly affected by a law can raise the question\nof  the\t constitutionality of a law and claim  relief  under\nArt. 39.  A corporation being a different  entity  from\t the\nshareholders, a\n112\n874\nshare-holder  cannot complain on the ground that the  rights\nof the company under Arts. 19 (1) (f) or 31 are infringed.\n     FAZL  ALl J.--A classification which is  arbitrary\t and\nwhich  is made without any basis is no classification and  a\nproper classification must always rest upon some  difference\nand  must hear a reasonable and lust relation to the  things\nin respect of which it is proposed.  But the presumption  is\nalways\tin favour of the constitutionality of  an  enactment\nand the burden is upon him who attacks it to show that there\nhas been a clear transgression of constitutional principles.\nThough\tArt. 14 lays down an important\tfundamental  'right,\nwhich  should be closely and vigilantly guarded,  a  doctri-\nnaire approach which might choke all beneficial\t legislation\nshould not be adopted, in construing it. i\n     A.K. Gapalan v. The State ([1950] S.C.R. 87),  Minister\nof State for the Army v. Dalziel (68 C.L.R 261), Yick Wo  v.\nHopkins (118 U.S. 356), Southern Railway Co. v. Greene\t(216\nU.S. 400), Gulf C. & S.F. Co.  Ellis (165 U.S. 150), Middle-\nton v. Texas Power and Light & Co. (249 U.S. 152), Badice v.\nNew York (264 U.S. Pennsylvania Coal Co. v. Mahon (960\tU.S.\n3931, McCabe v. Archison (235 U.S. 151), Jeffrey Manufactur-\ning Co. v. Blang (935 U.S. 571), Newark Natural Gas and Fuel\nCo.  v.\t City of Nework U.S-403), Truax v. Raich  (939\tU.S.\n33), Buchanan v. W'arley (245 U.S. 60) Darnell v. The  State\nof  Indiana (226 U.S. 388), Lindely v. Natural Carbonic\t Gas\nCo.  (220 U.S. 618), and Barbier v. Connolly (113  U.S.\t 27)\nreferred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
ORIGINAL JURISDICTION: Petition No. 72 of 1950.
\nPetition under article 32 of the Constitution of India for a
\nwrit of mandamus.\n<\/p>\n
     V.K.T.  Chari, J.S. Dawdo, Alladi Kuppuswami, and\tC.R.
\nPattabhi Raman, for the petitioner.\n<\/p>\n
     M.C. Setalvad, Attorney-General for India (G. N.  Joshi
\nwith him) for opposite party Nos. 1 and 2.\n<\/p>\n
G.N. Joshi, for opposite party Nos. 3 to 5 and 7 to 10.\n<\/p>\n
     1950.  December  4.  The Court  delivered\tJudgment  as
\nfollows.\n<\/p>\n
   KANIA  C.J.–This is an application by the holder of\t one
\nordinary share of the Sholapur Spinning and Weaving  Company
\nLtd. for a writ of mandamus and certain other reliefs  under
\narticle\t 32  of the Constitution of India.   The  authorized
\ncapital\t of  the  company is Rs. 48 lakhs  and\tthe  paid-up
\ncapital\t is Rs. 32 lakhs, half of which is made up of  fully
\npaid ordinary shares of Rs. 1,000 each.\n<\/p>\n
875<\/span><\/p>\n
    I have read the judgment prepared by Mr. Justice Mukher-
\njea.  In respect of the arguments advanced to challenge\t the
\nvalidity of the impugned Act under articles 31 and 19 of the
\nConstitution  of India, I agree with his line  of  reasoning
\nand conclusion and have nothing more to add.
\n    On\tthe  question  whether the  impugned  Act  infringes
\narticle 14, two points have to be considered.  The first  is
\nwhether\t one individual shareholder can, under\tthe  circum-
\nstances\t of  the case and particularly when one of  the\t re-
\nspondents  is the company which opposes the petition,  chal-
\nlenge  the  validity of the Act on the ground that it  is  a
\npiece  of  discriminatory  legislation,\t creates  inequality
\nbefore\tthe law and violates the principle of equal  protec-
\ntion  of  the laws under article 14 of the  Constitution  of
\nIndia.\tThe  second is whether in fact\tthe  petitioner\t has
\nshown  that the Act runs contrary to article 14 of the\tCon-
\nstitution.   In this case having regard to my conclusion  on
\nthe  second  point, I do not think it is necessary  to\tpro-
\nnounce\ta definite opinion on the first point. I agree\twith
\nthe  line  of reasoning and the conclusion  of\tMr.  Justice
\nMukherjea as regards the second point relating to the  inva-
\nlidity of the Act on the ground that it infringes article 14
\nof the Constitution and have nothing more to add.
\n    In\tmy  opinion  therefore this petition  fails  and  is
\ndismissed with costs.\n<\/p>\n
FAZL-  ALI J.–I am strongly of the opinion that this  peti-
\ntion should be dismissed with costs.\n<\/p>\n
The  facts  urged in the petition and the points  raised  on
\nbehalf\tof the petitioner before us are fully set  forth  in
\nthe judgments of my brethren, Sastri, Mukherjea and Das JJ.,
\nand  I do not wish to repeat them here. It is sufficient  to
\nsay  that the main grounds on which the\t  Sholapur  Spinning
\nand  Weaving  Company (Emergency Provisions) Act, 1950\t(Act
\nNo.  XXVIII of 1950), which will hereinafter be referred  to
\nas “the Act”, has been assailed, is that it infringes  three
\nfundamental rights, these being:–\n<\/p>\n
876<\/span><\/p>\n
(1)  the  right\t to property secured by article\t 31  of\t the
\nConstitution;\n<\/p>\n
    (2) the right to acquire, hold and dispose of  property,
\nguaranteed to every citizen by article 19 (1) (f); and
\n    (3) the right to equal  protection of the laws,  guaran-
\nteed by article 14.\n<\/p>\n
    It\thas  been held in a number of cases  in\t the  United
\nStates of America that no one except those whose rights\t are
\ndirectly  affected  by a law can raise the question  of\t the
\nconstitutionality of that law.\tThis principle has been very
\nclearly\t stated by Hughes J. in McCabe v.  Atchison(1),\t  in
\nthese  words  :—“It is an elementary\tprinciple  that\t  in
\norder to justify the granting of this extraordinary  relief,
\nthe complainant’s need of it and the absence of an  adequate
\nremedy\tat law must clearly appear.  The complainant  cannot
\nsucceed because someone else may be hurt.  Nor does it\tmake
\nany  difference\t that other persons who may be\tinjured\t are
\npersons\t of  the same race or occupation. It  is  the  fact,
\nclearly established, of injury to the complainant — not  to
\nothers–which  justifies  judicial  interference.”  On\tthis
\nstatement of the law, with which I entirely agree, the scope
\nof the discussion on this petition is greatly restricted  at
\nleast  in  regard to the first two fundamental\trights.\t The
\ncompany\t and the shareholders are in law separate  entities,
\nand if the allegation is made that any property belonging to
\nthe  company has been taken possession of without  compensa-
\ntion  or the right enjoyed by the company under\t article  19
\n(1)  (f) has been infringed, it would be for the company  to
\ncome  forward to assert or vindicate its own rights and\t not
\nfor any individual shareholder to do so.  In this view,\t the
\nonly question which has to be answered is whether the  peti-
\ntioner\thas  succeeded\tin showing that there  has  been  an
\ninfringement  of his rights as a shareholder under  articles
\n31  and 19 (1) (f) of the Constitution.\t This  question\t has
\nbeen  so elaborately dealt with by Mukherjea J., that  I  do
\nnot  wish to add anything to what he has said in  his  judg-
\nment,  and  all that is necessary for me to say\t is  that  I
\nadopt his conclusions,
\n(1) 235 u.s. 151.\n<\/p>\n
     877<\/span><\/p>\n
without\t committing  myself  to the acceptance\tof  all\t his
\nreasonings.\n<\/p>\n
    The\t only serious point, which in my opinion, arises  in
\nthe case is whether article 14 of the Constitution is in any
\nway infringed by the impugned Act.  This article corresponds
\nto  the equal protection clause of the Fourteenth  Amendment
\nof  the Constitution of the United States of America,  which
\ndeclares that “no State shall deny to any person within\t its
\njurisdiction  the equal protection of the laws”.   Professor
\nWillis dealing with this clause sums up the law as  prevail-
\ning in the United States in regard to it in these words:–\n<\/p>\n
    “Meaning and effect of the guaranty–The guaranty of the
\nequal  protection of the laws means the protection of  equal
\nlaws.  It  forbids class legislation, but  does\t not  forbid
\nclassification\twhich  rests  upon  reasonable\tgrounds\t  of
\ndistinction.   It  does not prohibit legislation,  which  is
\nlimited either in the objects to which it is directed or  by
\nthe  territory\twithin which it is to operate.\t ‘It  merely
\nrequires  that\tall persons subjected  to  such\t legislation
\nshall  be treated alike under like circumstances and  condi-
\ntions  both in the privileges conferred and in the  liabili-
\nties  imposed.’ ‘The inhibition of the amendment  ….\t was
\ndesigned  to  prevent any person or class  of  persons\tfrom
\nbeing  singled out as a special subject\t for  discriminating
\nand  hostile legislation’. It does not take from the  states
\nthe power to classify either in the adoption of police laws,
\nor tax laws, or eminent domain laws, but permits to them the
\nexercise  of a wide scope of discretion, and nullifies\twhat
\nthey  do  only\twhen it is  without  any  reasonable  basis.
\nMathematical  nicety and  perfect equality are not required.
\nSimilarity,  not identity of treatment, is enough.   If\t any
\nstate  of  facts can reasonably be conceived  to  sustain  a
\nclassification, the existence of that state of facts must be
\nassumed.  One  who assails a classification must  carry\t the
\nburden of showing that it does not rest upon any  reasonable
\nbasis.”(‘)
\n    Having  summed up the law in this way, the same  learned
\nauthor adds :–“Many different classifications
\n (1)  Constitutional  Law by Prof.  Willis,  (1st  Edition).
\np.579.\n<\/p>\n
878<\/span><\/p>\n
of persons have been upheld as constitutional. A law  apply-
\ning to one person  or one class of persons is constitutional
\nif there is  sufficient basis or reason for it.”  There\t can
\nbe   no\t doubt\t that article 14 provides one  of  the\tmost
\nvaluable and important guarantees in the Constitution  which
\nshould\tnot be allowed to be whittled down, and,  while\t ac-
\ncepting\t the  statement\t of Professor Willis  as  a  correct
\nexposition  of the principles underlying this  guarantee,  1
\nwish to lay particular emphasis on the principle  enunciated
\nby him that any classification which is arbitrary and  which
\nis made without any basis is no classification and a  proper
\nclassification\tmust  always rest upon some  difference\t and
\nmust  bear a reasonable and just relation to the  things  in
\nrespect of which it is proposed.\n<\/p>\n
    The\t petitioner’s case is that the shareholders  of\t the
\nSholapur company have been subjected to discrimination\tvisa
\nvis the shareholders of other companies, inasmuch as section
\n13  of the Act subjects them to the  following\tdisabilities
\nwhich  the shareholders of other companies governed  by\t the
\nIndian Companies Act are not subject to:-:\n<\/p>\n
    “(a) It shall not be lawful for the shareholders of\t the
\ncompany\t or  any  other person to nominate  or\tappoint\t any
\nperson to be a director of the company.\n<\/p>\n
    (b)\t No resolution passed at any meeting of\t the  share-
\nholders\t of  the  company shall be given  effect  to  unless
\napproved by the Central Government.\n<\/p>\n
    (c)\t No proceeding for the winding up of the company  or
\nfor  the appointment of a receiver in respect thereof  shall
\nlie  in\t any  court unless by or with the  sanction  of\t the
\nCentral Government.”\n<\/p>\n
    Primafacie, the argument appears to be a plausible\tone,
\nbut it requires a careful examination, and, while  examining
\nit,  two principles have to be borne in mind :–(1)  that  a
\nlaw may be constitutional even though it relates to a single
\nindividual, in those cases where on account of some  special
\ncircumstances or reasons applicable to him and not  applica-
\nble to others,
\n     879<\/span>
\nthat single individual may be treated as a class by himself;
\n(2) that it is the accepted doctrine of the American courts,
\nwhich  I consider to be well-founded on principle, that\t the
\npresumption is always in favour of the constitutionality  of
\nan  enactment, and the burden is upon him who attacks it  to
\nshow  that  there has been a clear  transgression   of\t the
\nconstitutional\tprinciples.   A clear  enunciation  of\tthis
\nlatter\tdoctrine is to be found in Middleton v. Texas  Power
\nand Light Company(1), in which the relevant passage runs  as
\nfollows :–\n<\/p>\n
    “It must be presumed that a legislature understands\t and
\ncorrectly  appreciates the need of its own people, that\t its
\nlaws  are directed to problems made manifest  by  experience
\nand  that  its\tdiscriminations\t are  based  upon   adequate
\ngrounds.”\n<\/p>\n
    The onus is therefore on the petitioner to show that the
\nlegislation which is impugned is arbitrary and\tunreasonable
\nand  there are other companies in the country  which  should
\nhave  been subjected to the same disabilities,\tbecause\t the
\nreasons\t which led the Legislature to impose  State  control
\nupon  the Sholapur company are equally applicable  to  them.
\nSo  far as article 14 is concerned, the case of\t the  share-
\nholders is dependent upon the case of the company and if  it
\ncould  be held that the company has been  legitimately\tsub-
\njected to such control as the Act provides without violation
\nof  the\t article,  that would be a complete  answer  to\t the
\npetitioner’s complaint.\n<\/p>\n
    Now, the petitioner has made no attempt to discharge the
\nburden of proof to which I have referred, and we are  merely
\nasked to presume that there must necessarily be other compa-
\nnies also which would be open to the charge of mismanagement
\nand negligence. The question cannot in my opinion be treated
\nso lightly. On the other hand, how important the doctrine of
\nburden of proof is and how much harm can be caused by ignor-
\ning  it or tinkering with it, will be fully illustrated,  by
\nreferring  to  the proceedings in the Parliament in  connec-
\ntion with the enactment of the
\n(1) 248 U.S.  1152,157.\n<\/p>\n
880<\/span><\/p>\n
Act,  where  the  circumstances which  necessitated  it\t are
\nclearly\t set out.  I am aware that  legislative\t proceedings
\ncannot\tbe referred to for the purpose of construing an\t Act
\nor  any\t of  its provisions, but I  believe  that  they\t are
\nrelevant  for the proper understanding of the  circumstances
\nunder which it was passed  and the reasons which necessitat-
\ned it.\n<\/p>\n
    A reference to the Parliamentary proceedings shows\tthat
\nsome  time  ago, a representation was made  on behalf  of  a
\nsection\t of the shareholders of the Sholapur company to\t the
\nRegistrar  of Joint Stock Companies in Bombay, against\t the
\nconduct of the managing agents, and the Government of Bombay
\nwas   moved to order a special inquiry into the\t affairs  of
\nthe  company.  For the purpose of this inquiry, two  special
\ninspectors were appointed by the Bombay Government and their
\nreport\trevealed “certain astounding facts” and showed\tthat
\nthe mill had been grossly mismanaged by the Board of  Direc-
\ntors  and  the managing agents. It also\t revealed  that\t the
\npersons\t who  were responsible for  the\t mismanagement\twere
\nguilty\tof  certain acts and omissions\twhich  brought\tthem
\nunder the purview of the law.  The Bombay Government accept-
\ned the report of the inspectors and instructed the  Advocate
\nGeneral of Bombay to take legal proceedings against  certain
\npersons\t connected  with  the  management  of  the  company.
\nThereafter,  the Government of India was approached  by\t the
\nProvincial Government and requiested to take special  action
\nin  order  to  secure the early opening of  the\t mill.\t The
\nGovernment  of\tIndia found that they had no power  to\ttake
\nover the management of a particular mill, unless its working
\ncould  be  ensured through the\texisting  management  acting
\nunder  the  direction of a Controller  appointed  under\t the
\nEssential Supplies Act, but they also found that a  peculiar
\nsituation  had\tbeen created in this case  by  the  managing
\nagents\tthemselves being unable or unwilling to conduct\t the
\naffairs\t of  the  company in a\tsatisfactory  and  efficient
\nmanner.\t The  Government of India, as a matter of precaution
\nand lest it should be said that they were going to interfere
\nunnecessarily in the affairs
\n     881<\/span>
\nof the company and were not allowing the existing provisions
\nof the law to take their own course, consulted other  inter-
\nests and placed the matter before the Standing Committee  of
\nthe  Industrial\t Advisory Council where a  large  number  of
\nleading\t industrialists\t of the\t country were  present,\t and
\nultimately  it was realized that this was a case  where\t the
\nGovernment  could rightly and properly intervene  and  there
\nwould  be  no  occasion for any criticism  coming  from\t any
\nquarter. It appears from the discussion on the floor of\t the
\nHouse  that the total number of weaving and  spinning  mills
\nwhich were closed down for one reason or other was about  35
\nin number.  Some of them are said to have closed for want of
\ncotton, some due to overstocks, some for want o[ capital and
\nsome  on account of mismanagement.  The Minister for  Indus-
\ntry,  who  sponsored the Bill, in  explaining  what  distin-
\nguished\t the case of the Sholapur mill from the other  mills
\nagainst\t whom there might be charges of mismanagement,\tmade
\nit  clear in the course of the debate that  “certain  condi-
\ntions  had  to be fulfilled before the\tGovernment  can\t and
\nshould\tintervene”, and he set out these conditions as\tfol-
\nlows :–\n<\/p>\n
    “(1) The undertaking must relate to an industry which is
\nof  national  importance.  Not each  and  every\t undertaking
\nwhich  may have to close down can be taken charge of  tempo-
\nrarily by Government.\n<\/p>\n
    (2)\t The  undertaking must be an economic unit.   If  it
\nappears\t that  it  is completely uneconomic  and  cannot  be
\nmanaged\t at  all,  there is no sense  in  Government  taking
\ncharge of it.  If anything, it will mean the Government will
\nhave  to  waste money which belongs to the  taxpayer  on  an
\nuneconomic unit.\n<\/p>\n
    (3)\t There\tmust be a technical report  as\tregards\t the
\ncondition  of  the plants, machinery, etc. which  either  as
\nthey  stand, or after necessary repairs\t and  reconditioning
\ncan be properly utilised.\n<\/p>\n
    (4)\t Lastly,–and  this is of  considerable\t importance-
\nthere  must be a proper enquiry held before Government\ttake
\nany action.  The enquiry should show that
\n113<\/span>
\n882<\/span>
\nmanaging  agents have so misbehaved that they are no  longer
\nfit and proper persons to remain in charge of such an impor-
\ntant undertaking.”(1)
\n    It appears from the\t same proceedings that the  Sholapur
\nmill is one of the largest mills in Asia and employs  13,000
\nworkers.   Per\tshift, it is capable of producing 25  to  30
\nthousand  pounds of yarn, and also one lakh yards of  cloth.
\nIt  was\t working two shifts when it was closed down  on\t the
\n29th  August, 1949. The closure of the mill meant a loss  of
\n25  lakhs yards of cloth and one and a half lakhs pounds  of
\nyarn  per month.  Prior to 1947, the  highest dividend\tpaid
\nby the company was Rs. 525 per share and the lowest Rs. 100,
\nand,  in  1948, when the management was taken  over  by\t the
\nmanaging  agents who have been removed by the impugned\tAct,
\nthe  accounts  showed a loss of Rs. 30\tlakhs,\twhile  other
\ntextile\t companies  had been able to show  very\t substantial
\nprofits during the same period.\n<\/p>\n
    Another fact which is brought out in the proceedings  is
\nthat  the.  managing agents had acquired  control  over\t the
\nmajority of the shares of the company and a large number  of
\nshareholders  who were dissatisfied with the management\t had
\nbeen rendered powerless and they could not make their  voice
\nheard.\t By reason of the preponderance of  their  strength,
\nthe  managing  agents made it impossible  for  a  controller
\nunder  the Essential Supplies Act to function and they\talso
\nmade it difficult for the company to run smoothly under\t the
\nnormal law.\n<\/p>\n
    It was against this background that the Act was  passed,
\nand  it is evident that the facts which were  placed  before
\nthe Legislature with regard to the Sholaput mill were of  an
\nextraordinary  character.  and fully justified\tthe  company
\nbeing  treated as a class by itself. There were\t undoubtedly
\nother mills which were open to the charge of  mismanagement,
\nbut  the  criteria adopted by the Government  which,  in  my
\nopinion, cannot be said to be arbitrary or unreasonable,  is
\nnot applicable
\n(1) parliamentary Debates,  Volume III, No. 14;\t 31st  March
\n1950, pp.2394 5
\n883<\/span>
\nto  any\t of them. As we have seen, one of the  criteria\t was
\nthat a mere allegation of mismanagement should not be enough
\nand  no drastic step such as is envisaged in the Act  should
\nbe  taken  without there being a complete enquiry.   In\t the
\ncase of the Sholapur mill, a complete enquiry had been\tmade
\nand  the  revelations which were made as a  result  of\tsuch
\nenquiry were startling.\n<\/p>\n
    We are familiar with the expression “police power” which
\nis in vogue in the United States of America. This expression
\nsimply\tdenotes that in special cases the State can step  in
\nwhere  its intervention seems necessary and  impose  special
\nburdens\t for  general  benefit.\t As one of  the\t judges\t has
\npointed\t out, “the regulations may press with more  or\tless
\nweight upon one than upon another, but they are designed not
\nto  impose unequal or unnecessary restrictions upon  anyone,
\nbut  to promote, with as little individual inconvenience  as
\npossible,  the general good.”(1)  It need not be  emphasized
\nthat the principles underlying what is known as police power
\nin  the\t United States of America are not peculiar  to\tthat
\ncountry, but are recognized in every modern civilized State.
\nProfessor Willis dealing with the question of classification
\nin  exercise  of police power makes the\t following  observa-
\ntions:\n<\/p>\n
    “There  is no rule for determining\twhen  classification
\nfor  the  police power is reasonable.  It is  a\t matter\t for
\njudicial  determination, but in determining the question  of
\nreasonableness the Courts must find some economic, political
\nor other social interest to be secured, and some relation of
\nthe classification to the objects sought to be accomplished.
\nIn  doing  this the Courts may consider\t matters  of  common
\nknowledge,  matters  o[ common report, tile history  of\t the
\ntimes,\tand  to sustain it they will assume every  state  of
\nfacts  which can be conceived of as existing at the time  Of
\nlegislation. The fact that only one person or one object  or
\none  business  or one locality is affected is not  proof  of
\ndenial of the equal protection of the laws.  For such
\n(1) Per Field J. in Barbier v. Connally. 113 U S. 27.\n<\/p>\n
884<\/span><\/p>\n
proof it must be shown that there is no reasonable basis for
\nthe classification.”\n<\/p>\n
    In\tthis particular case, the Government initially\ttook
\ncontrol\t of  the Sholapur Company by means of  an  Ordinance
\n(Ordinance  No. II of 1950), of which the preamble  runs  as
\nfollows :-\n<\/p>\n
    “Whereas  on  account  of mismanagement  and  neglect  a
\nsituation has arisen in the affairs of the Sholapur Spinning
\nand  Weaving Company, Limited, which has  prejudicially\t af-
\nfected\tthe  production of an essential\t commodity  and\t has
\ncaused serious unemployment amongst a certain section of the
\ncommunity;\n<\/p>\n
    And\t whereas  an emergency has arisen which\t renders  it
\nnecessary  to make special provision for the proper  manage-
\nment and administration of the aforesaid Company;\n<\/p>\n
    Now, therefore,……………………  ”
\n In  the course of the Parliamentary debate,  reference\t was
\nmade to the fact that the country was facing an acute  cloth
\nshortage, and one of the reasons which apparently influenced
\nthe promulgation of the Ordinance and  the  passing  of\t the
\nAct  was that the mismanagement of the company\thad  gravely
\naffected  the  production of an\t essential  commodity.\t The
\nfacts relating to the mismanagement of this mill were  care-
\nfully collected and the mischief caused by the sudden  clos-
\ning of the mill to the shareholders as well as to the gener-
\nal public were fully taken into consideration. Therefore, it
\nseems  to me that to say that one particular mill  has\tbeen
\narbitrarily   and   unreasonably selected and  subjected  to
\ndiscriminatory treatment, would be an entirely wrong  propo-
\nsition.\n<\/p>\n
    Article 14 of the Constitution, as already stated,\tlays
\ndown an important fundamental right, which should be closely
\nand vigilantly guarded, but, in construing it, we should not
\nadopt  a doctrinaire approach which might choke all  benefi-
\ncial legislation.\n<\/p>\n
    The facts to which I have referred are to be found in  a
\npublic document, and, though some of them may
\n(1) Constitutional Law by Prof. Willis (1st Edition) p. 580.\n<\/p>\n
885<\/span><\/p>\n
require\t further investigation forming as they do part of  a
\none-sided  version,  yet  they\tfurnish\t good  prima,  facie
\ngrounds\t for the exercise of the utmost caution in  deciding
\nthis case and for not departing from the ordinary rule as to
\nthe burden of proof.  In the last resort, this petition\t can
\nbe disposed of on the simple ground that the petitioner\t has
\nnot discharged the onus which lies upon him, and I am  quite
\nprepared to rest my judgment on this ground alone.
\n    I  think that the petitioner has failed to make out\t any
\ncase for granting the writs or directions asked for, and the
\npetition should therefore be dismissed with costs.
\nPATANJALI SASTRI J.–This is an application under article 32
\nof the Constitution seeking relief against alleged infringe-
\nment of certain fundamental rights of the petitioner.
\n    The petitioner is a shareholder of the Sholapur Spinning
\nand  Weaving  Company, Limited, Sholapur, in  tim  State  of
\nBombay,\t (hereinafter referred to as “the Company  “).\t The
\nauthorised  share capital of the Company consisted  of\t1590
\nfully  paid up ordinary shares of Rs. 1,000 each,  20  fully
\npaid  up ordinary shares of Rs. 500 each and :32,000  partly
\npaid  up redeemable cumulative preference shares of Rs.\t 100
\neach,  of  which  Rs. 50 only was paid up.   Of\t these,\t the
\npetitioner  held one ordinary share in his own name  and  80
\npreference  shares which, however, having been pledged\twith
\nthe Bank of Baroda Ltd., now stand registered in the  Bank’s
\nname.\n<\/p>\n
    The company was doing flourishing business till disputes
\narose recently between the management and the employees, and
\nin or about August, 1949, the mills were temporarily  closed
\nand  the company, which was one of the largest producers  of
\ncotton\ttextiles, ceased production.  Thereupon, the  Gover-
\nnor-General  intervened by promulgating on the 9th  January,
\n1950, an Ordinance called the Sholapur Spinning and  Weaving
\nCompany (Emergency Provisions) Ordinance (No. II’ of  1950),
\nwhich empowered tim Government of India to
\n886<\/span>
\ntake over the control and management of the company and\t its
\nproperties and effects by appointing their own Directors and
\nto  delegate  all or any of their powers to  the  Provincial
\nGovernment.   In exercise of the powers thus delegated,\t the
\nGovernment of Bombay appointed respondents 3 to 9 as  Direc-
\ntors to take charge of the management and administration  of
\nthe properties and affairs of the company.  Subsequently, on
\n10th  April, ‘1950, the Ordinance was repealed and  was\t re-
\nplaced by an Act of Parliament containing similar provisons,
\nnamely the Sholapur Spinning and Weaving Company  (Emergency
\nProvisions)  Act (No. XXVIII of 1950) (hereinafter  referred
\nto as the “impugned Act”).\n<\/p>\n
    The\t petitioner complains that the impugned Act and\t the
\naction\tof  the Government of Bombay pursuant  thereto\thave
\ninfringed  the fundamental rights conferred on him by  arti-
\ncles 11, 19 and 31 of the Constitution with the result\tthat
\nthe  enactment is unconstitutional and void, and the  inter-
\nference\t by the Government in the affairs of the company  is
\nunauthorised and illegal. He accordingly seeks relief by way
\nof  injunction and mandamus against the Union of  India\t and
\nthe State of Bombay impfended as respondents 1 and 2 respec-
\ntively\tin these proceedings and against respondents a to  9
\nwho are now in management as already stated. The company  is
\nirapleaded proforma as the 10th respondent.
\n    Before  discussing the issues involved, it is  necessary
\nto  examine the relevant provisions of the impugned  Act  in
\norder to see in what manner and to what extent the petition-
\ner’s  rights have  been\t affected thereby.   The preamble to
\nthe  repealed Ordinance stated\tthat  “on account  of\tmis-
\nmanagement and neglect a situation has arisen in the affairs
\nof  the\t Sholapur Spinning and\t Weaving  Company,  Limited,
\nwhich has prejudicially affected the production of an essen-
\ntial  commodity and has caused serious unemployment  amongst
\na   certain  section of the community and that an  emergency
\nhas arisen which renders it necessary to make special provi-
\nsion  for  the proper management and administration  of\t the
\naforesaid
\n   887<\/span>
\nCompany.”  This preamble was not reproduced in the  impugned
\nAct.  Section a empowers  the  Central Government to appoint
\nas  many  persons as it thinks fit to be  directors  of\t the
\ncompany\t “for the purpose of taking over its management\t and
\nadministration.”  Section 4 states the effect of  the  order
\nappointing directors to be that (1) the old directors  shall
\nbe  deemed  to have vacated their office, (2)  the  contract
\nwith the managing agents shall be deemed to have been termi-
\nnated,\t(3) that the properties\t and effects of the  company
\nshall  be deemed to be in the custody of the  new  directors
\nwho are to be “for all purposes” the directors of the compa-
\nny  and “shall alone be entitled to exercise all the  powers
\nof  the\t directors of the company whether  such\t powers\t are
\nderived\t  from\tthe Companies Act or from the memorandum  or
\narticles of association or otherwise.” Section 5 defines the
\npowers\tof the new directors.  They are to manage the  busi-
\nness  of the company “subject to the control of the  Central
\nGovernment” and shall have the power to raise funds offering
\nsuch  security\tas they think fit, to  carry  out  necessary
\nrepairs to the machinery or other property in their  custody
\nand to employ the necessary persons and define the necessary
\nconditions  of\ttheir service. Section 12 provides  for\t the
\nrestoration of the management to directors nominated by\t the
\nshareholders when the purpose of the Government’s  interven-
\ntion has been fulfilled.  Section 13 is important and  reads
\nthus:  “13. Application of the Companies Act.–(1)  Notwith-
\nstanding  anything contained in the Companies Act or in\t the
\nmemorandum or articles of association of the company (a)  it
\nshall  not be lawful for the shareholders of the company  or
\nany  other person to nominate or appoint any person to be  a
\ndirector  of  the company; (b) no resolution passed  at\t any
\nmeeting\t of the shareholders of the company shall ‘be  given
\neffect to unless approved by the Central Government; (c)  no
\nproceeding  for\t the winding up of the company\tor  for\t the
\nappointment  of a receiver in respect, thereof shall lie  in
\nany  Court  unless by or with the sanction  of\tthe  Central
\nGovernment.  (2) Subject.\n<\/p>\n
888<\/span><\/p>\n
to  the provisions contained in sub-section (1) and  to\t the
\nother  provisions  of this Act. and subject to\tsuch  excep-
\ntions,\trestrictions and limitations as the Central  Govern-
\nment  may,  by notified order, specify,\t the  Companies\t Act
\nshall continue to apply to the company in the same manner as
\nit  applied thereto before the issue of the  notified  order
\nunder  section 3.” By section 14 the provisions of  the\t Act
\nare  to have effect “notwithstanding  anything\tinconsistent
\ntherewith  contained in any other law or in  any  instrument
\nhaving\teffect\tby virtue of any law other than\t this  Act.”
\nSection 16 provides for delegation of powers to the  Govern-
\nment of Bombay to be exercised subject to the directions  of
\nthe  Central Government, and section 17 bars suits or  other
\nproceedings against the Central Government or the Government
\nof  Bombay or any director “for any damage caused or  likely
\nto  be\tcaused by anything which is in good  faith  done  or
\nintended to be done in pursuance of this Act.”\n<\/p>\n
    As\ta result of these provisions all the properties\t and
\neffects\t of the company passed into the absolute  power\t and
\ncontrol\t of the Central Government or its delegate the\tGov-
\nernment of Bombay, and the normal functioning of the company
\nas  a corporate body came to an end.  The shareholders\thave
\nbeen   reduced to the position of interested,  if  helpless,
\nonlookers  while  the business is carried on  against  their
\nwill and, may be, to their disadvantage by the\tGovernment’s
\nnominees.  The\tdeclared purpose of  this  arrangement\twas,
\naccording to the Preamble of the repeated Ordinance to\tkeep
\nup  the\t production of an essential commodity and  to  avert
\nserious unemployment amongst a certain section of the commu-
\nnity.\n<\/p>\n
    The\t question  accordingly arises whether  the  impugned
\nAct. which thus affects the petitioner and his co-sharehold-
\ners,  while leaving untouched the shareholders of all  other
\ncompanies,  including  those engaged in\t the  production  of
\nessential  commodities, denies to the petitioner  the  equal
\nprotection of the laws under article 14 of the Constitution.
\nThe correct approach to
\n889<\/span>
\nthis  question\tis first to see what rights have  been\tcon-
\nferred or protection extended to persons similarly situated.
\nThe relevant protection is to be found in the provisions  of
\nthe  Indian  Companies Act which regulates  the\t rights\t and
\nobligations of the shareholders of incorporated companies in
\nIndia.\t Section 21 of the Act assures to  the\tshareholders
\nthe protection of the stipulations contained in the memoran-
\ndum  and  articles of association by  constituting.  them  a
\nbinding contract, so that neither the company nor the share-
\nholders have the power of doing anything inconsistent there-
\nwith.\tThe  basic right of the shareholders to\t have  their
\nundertaking managed and conducted by the directors of  their
\nown  choice is ensured by section 83B. Their right to  exer-
\ncise  control  and supervision over the\t management  by\t the
\ndirectors by passing resolutions at their general meeting is
\nregulated  by various provisions of the Act.  The  important
\nsafeguard of winding up the company in certain\tunfavourable
\ncircumstances  either through court or by  the\tshareholders
\nthems elves voluntarily is provided for in sections 162\t and\n<\/p>\n
203. All these rights and safeguards, on the faith of  which
\nthe  shareholders embark their money in\t their\tundertaking,
\nare abrogated by the impugned Act in the case of the  share-
\nholders of this company alone.\tIn fact, the Central Govern-
\nment  is empowered to exclude, restrict or limit the  opera-
\ntion of any of the provisions of the Companies Act in  rela-
\ntion to this company. It is thus plain that the impugned Act
\ndenies\tto the shareholders of this particular\tcompany\t the
\nprotection  of the law relating to incorporated joint  stock
\ncompanies  in this country is embodied in the Companies\t Act
\nand is primafacie within the inhibition of article 14.
\n    It is argued, however, that article 14 does not make  it
\nincumbent on the Legislature always to make laws  applicable
\nto all persons generally, and that it is open to the  Legis-
\nlature\t‘to classify persons and things and subject them  to
\nthe operation of a particular law according to the aims\t and
\nobjects\t which\tthat  law is designed  to  secure.   In\t the
\npresent case, Parliament,
\n114<\/span>
\n890<\/span>
\nit was said, came to the conclusion, on the materials placed
\nbefore\tthem,  that the affairs of the\tcompany\t were  being
\ngrossly\t mismanaged  so\t as to result in  the  cessation  of
\nproduction  of an essential commodity and serious  unemploy-
\nment  amongst  a section of the community.  In view  if\t the
\ndetriment  thus caused to public economy, it  was  competent
\nfor Parliament to enact a measure applicable to this company
\nand its shareholders alone, and Parliament must be the judge
\nas  to whether the evil which the impugned Act was  designed
\nto remedy prevailed to such an extent in this company as  to
\ncall for special legislation. Reliance was placed in support
\nof this argument on certain American decisions dealing\twith
\nthe  equal protection clause of the Fourteenth Amendment  of
\nthe  Federal Constitution.  It is, however,  unnecessary  to
\ndiscuss\t those\tdecisions here, for it\tis  undeniable\tthat
\nequal protection of the laws cannot mean that all laws\tmust
\nbe  quite  general in their character  and  application.’  A
\nlegislature  empowered to make laws on a wide range of\tsub-
\njects  must  of necessity have the power of  making  special
\nlaws  to attain particular objects and must, for  that\tpur-
\npose, possess large powers of distinguishing and classifying
\nthe  persons or things to be brought under the operation  of
\nsuch  laws, provided the basis of such classification has  a
\njust and reasonable relation to the object which the  legis-
\nlature has in view. While, for instance, a classification in
\na  law regulating labour in mines or factories may be  based
\non  age or sex, it may not b`e based on the colour of  one’s
\nskin.\tIt is also true that the class of persons to whom  a
\nlaw is made applicable may be large or small, and the degree
\nof harm which has prompted the enactment of a particular law
\nis a matter within the discretion of the law-makers.  It  is
\nnot  the  province of the court to canvass  the\t legislative
\njudgment in such matters. But the issue here is not  whether
\nthe  impugned  Act was ill-advised or not justified  by\t the
\nfacts on which it was based, but whether it transgresses the
\nexplicit  constitutional  restriction on  legislative  power
\nimposed by article 14.\n<\/p>\n
   891<\/span><\/p>\n
    It\tis obvious that the legislation is  directed  solely
\nagainst\t a  particular\tcompany\t and  shareholders  and\t not
\nagainst any class or category of companies and no  question,
\ntherefore, of reasonable legislative classification  arises.
\nIf a law is made applicable to a class of persons or  things
\nand  the classification is based upon differentia  having  a
\nrational  relation to the object sought to be  attained,  it
\ncan be no objection to its constitutional validity that\t its
\napplication  is\t found to affect only one person  or  thing.
\nFor instance, a law may be passed imposing  certain restric-
\ntions  and  burdens on joint stock companies  with  a  share
\ncapital\t of, say, Rs. 10 crores and upwards, and it  may  be
\nfound that there is only one such company for the time being
\nto  which the law could be applied. If other such  companies
\nare brought into existence in future the law would apply  to
\nthem  also,  and no discrimination would thus  be  involved.
\nBut the impugned Act, which selects this particular  company
\nand  imposes upon it and its shareholders burdens and  disa-
\nbilities on the ground of mismanagement and neglect of\tduty
\non the part of those charged with the conduct of its  under-
\ntaking, is plainly discriminatory in character and is, in my
\njudgment,  within the constitutional inhibition\t of  article\n<\/p>\n
14.   Legislation based upon mismanagement or other  miscon-
\nduct  as the differentia and made applicable to a  specified
\nindividual  or\tcorporate body is not far removed  from\t the
\nnotorious  parliamentary  procedure  formerly  employed\t  in
\nBritain\t  of   punishing individual delinquents\t by  passing
\nbills  of attainder, and should not, I think, receive  judi-
\ncial encouragement.\n<\/p>\n
    It\twas next urged that the burden of proving  that\t the
\nimpugned Act is unconstitutional lay on the petitioner,\t and
\nthat,  inasmuch as he has failed to adduce any\tevidence  to
\nshow that the selection of this company and its shareholders
\nfor special treatment under the impugned Act was  arbitrary,
\nthe  application must fail.  Whilst  all  reasonable\tpre-
\nsumption  must undoubtedly be made in support of the consti-
\ntutional validity of a law made by a competent\tlegislature,
\nthe circumstances of the present case would seem, to my
\n892<\/span>
\nmind to exclude such presumption. Hostile discrimination  is
\nwrit  large  over the face of the impugned Act and  it\tdis-
\ncloses no grounds for such legislative intcrvcntion. For all
\nthat  appears no compelling public intercsts were  involved.
\nEven  the  preamble to the original Ordinance  was  omitted.
\nNor  did respondents 1 and 2 file any  counter-statement  in
\nthis  proceeding explaining the circumstances which  led  to
\nthe  enactment of such an extraordinary measure.   There  is
\nthus  nothing in the record even by way of allegation  which
\nthe petitioner need take steps to rebut.  Supposing,  howev-
\ner, that the impugned Act was passed on the same grounds  as
\nwere  mentioned in the preamble to the\trepealed  Ordinance,
\nnamely, mismanagement  and  neglect prejudicially  affecting
\nthe production of an essential commodity and -causing  seri-
\nous  unemployment  amongst a section of the  community,\t the
\npetitioner could hardly be expected to assume the burden  of
\nshowing,  not that the company’s affairs were properly\tman-
\naged,  for  that is not his case, but that there  were\talso
\nother  companies  similarly mismanaged, for  that  is  what,
\naccording  to the respondents, he should prove in  order  to
\nrebut the presumption of constitutionality.  In other words,
\nhe should be called upon to establish that this company\t and
\nits shareholders were arbitrarily singled out for the  impo-
\nsition\tof the statutory disabilities.\tHow could the  peti-
\ntioner discharge such a burden ? Was he to ask for an inves-
\ntigation  by  the Court of the affairs of  other  industrial
\nconcerns  in  India where also there were strikes  and\tlock
\nouts  resulting in unemployment and cessation of  production
\nof essential  commodities? Would these companies be  willing
\nto submit to such an investigation ?  And even so, how is it
\npossible  to prove that the mismanagement and neglect  which
\nis  said to have prompted the legislation in regard to\tthis
\ncompany was prevalent in the same degree in other  companies
\n?  In  such  circumstances, to cast upon  the  petitioner  a
\nburden of proof which it is as needless for him to assume as
\nit  is\timpracticable to discharge is to lose sight  of\t the
\nrealities of the case.\n<\/p>\n
     893<\/span><\/p>\n
    Lastly,  it was argued that the constitutionality  of  a
\nstatute\t could not be impugned under article 32 except by  a
\nperson\twhose  rights were infringed by the  enactment.\t and
\nthat, inasmuch as there was no infringement  of the individ-
\nual right of a shareholder, even assuming that there was  an
\ninjury\tto the company as a corporate body,  the  petitioner
\nwas  not  entitled to apply for relief under  that  article.
\nWhatever  validity the argument may have in relation to\t the
\npetitioner’s  claim  based on the alleged  invasion  of\t his
\nright  of  property under article 31, there  can  be  little
\ndoubt  that, so far as his claim based on the  contravention
\nof  article 14 is concerned, the petitioner is\tentitled  to
\nrelief\tin his own right  As has been pointed  out  already,
\nthe impugned Act deprives the shareholders of the company of
\nimportant  rights  and safeguards which are enjoyed  by\t the
\nshareholders of other joint stock companies in Indian  under
\nthe Indian Companies Act.  The petitioner is thus denied the
\nequal protection of the laws in his capacity as a sharehold-
\ner,  and none the less so because the other shareholders  of
\nthe company are also similarly affected.  The petitioner  is
\nthereled  to seek relief under article 32 of  the  Constitu-
\ntion.\n<\/p>\n
    In\tthis  view it becomes unnecessary  to  consider\t the
\nquestions  raised under articles 19 and 31 of the  Constitu-
\ntion.\n<\/p>\n
In the result]t, I would allow the application.
\n    MUKHERJEA  J.–This is an application presented  by\t one
\nChiranjitlal  Chowdhuri,  a   shareholder  of  the  Sholapur
\nSpinning  and Weaving Company Limited (hereinafter  referred
\nto  as\tthe  company), praying for a writ  of  mandamus\t and
\ncertain other reliefs under article 32 of the  Constitution.
\nThe  company,  which has its registered\t office\t within\t the
\nState  of  Bombay and is governed by the provisions  of\t the
\nIndian\tCompanies Act, was incorporated with  an  authorised
\ncapital\t of  Rs. 48 lakhs divided into 1590, fully  paid  up
\nordinary  shares of Rs. 100 each, 20 fully paid up  ordinary
\nshares of Rs. 500 each and 32,000 partly paid up  cumulative
\npreference shares of Rs. 100 each.  The
\n894<\/span>
\npresent paid up capital of the company is Rs. 32 lakhs\thalf
\nof which is represented by the fully paid up ordinary shares
\nand the other half by the partly paid up cumulative  prefer-
\nence  shares. The petitioner states in his petition that  he
\nholds  in  his own right three ordinary\t shares\t and  eighty
\nprefercnce  shares in the company, though according  to\t his
\nown  admission\tthe ,preference shares do not stand  in\t his
\nname but have been registered in the name of the Baroda Bank
\nLimited with which the shares are pledged. According to\t the
\nrespondents, the petitioner is the registered holder of
\none single ordinary share in the company.\n<\/p>\n
It  appears  that  on July 27, 1949, the  directors  of\t the
\ncompany gave a notice to the workers that the mills would be
\nclosed, and pursuant to that notice, the mills were in\tfact
\nclosed on the 27th of August following. On January 9,  1950,
\nthe Governor-General of India promulgated an Ordinance which
\npurported  to make special  provisions for  the proper\tman-
\nagement and administration of the company. It was stated  in
\nthe   preamble\tto the Ordinance that “on  account  of\tmis-
\nmanagement  and neglect, a situation has arisen in  the\t af-
\nfairs  of the Sholapur Spinning and Weaving Company  Limited
\nwhich has prejudicially affected the production of an essen-
\ntial commodity and has caused serious unemployment amongst a
\ncertain section of the community “, and it was on account of
\nthe emergency arising from this situation that the promulga-
\ntion  of the Ordinance\twas  necessary.\t The  provisions  of
\nthe  Ordinance, so far as they are material for our  present
\npurpose, may be summarised as follows:\n<\/p>\n
   Under section 3 of the Ordinance, the Central  Government
\nmay, at any time, by notified order, appoint as many persons
\nas  it\tthinks fit, to be directors of the company  for\t the
\npurpose of taking over its management and administration and
\nmay  appoint  one  of such directors  to  be  the  Chairman.
\nSection\t 4  provides that on the issue of a  notified  order
\nunder  section\t3 all the directors of the  company  holding
\noffice\tas  such immediately before the issue of  the  order
\nshall  be deemed to  have vacated  their  offices.  and\t any
\nexisting
\n895<\/span>
\ncontract of management between the company and any  managing
\nagent  thereof\tshall be deemed\t to  have  terminated.\t The
\ndirectors  thus\t appointed  shall be for  all  purposes\t the
\ndirectors  of the company duly constituted under the  Compa-
\nnies  Act  and shall alone be entitled to exercise  all\t the
\npowers of the directors of the company.\t The powers and\t the
\nduties of the directors are specified in section 5 and\tthis
\nsection inter alia empowers the directors to vary or cancel,
\nwith  the previous sanction of the Central  Government,\t any
\ncontract  or agreement entered into between the company\t and
\nany other person if they are satisfied that such contract or
\nagreement  is detrimental to the interests of  the  company.
\nSection\t 10  lays down that no\tcompensation  for  premature
\ntermination of any contract could be claimed by the managing
\nagent  or  any other contracting party. It  is\tprovided  by
\nsection\t 12 that so long as the management by the  statutory
\ndirectors  continues,  the shareholders would  be  precluded
\nfrom nominating or appointing any person to be a director of
\nthe  company and any resolution passed by them will  not  be
\neffective unless it is approved\t by the Central\t Government.
\nThis  section lays down further that during this  period  no
\nproceeding for winding up of the company, or for appointment
\nof a receiver in respect thereof could be instituted in\t any
\ncourt,\tunless it is sanctioned by the\tCentral\t Government,
\nand the Central Government would be competent to impose\t any
\nrestrictions  or limitations as regards application  of\t the
\nprovisions  of the Indian Companies Act to,  be\t affairs  of
\nthe  company.\tThe only other material\t provision  is\tthat
\ncontained in section 15, under which the Central  Government
\nmay, by notified order, direct that all or any of the powers
\nexercisable  by it under this Ordinance\t may   be  exercised
\nby  the\t Government of Bombay.\n<\/p>\n
    In\taccordance with the provisions of  section  15\tmen-
\ntioned above, the Central Government, by notification issued
\non the same day that the Ordinance was promulgated, delegat-
\ned  all\t its powers exercisable under the Ordinance  to\t the
\nGovernment of Bombay,
\n896<\/span>
\nOn the next day, the Government of Bombay appointed respond-
\nents 3 to 7 as directors of the company in terms of  section
\n3  of the Ordinance.  On the 2nd of March, 1950,    the\t re-
\nspondent No. 9 was appointed a director and   respondent No.
\n5  having  resigned  his office in the\tmeantime,   the\t re-
\nspondent  No.  8 was appointed in his place. On the  7th  of
\nApril,\t1950,  the  Ordinance was repealed and\tan  Act\t was
\npassed\tby  the Parliament of India, known as  the  Sholapur
\nSpinning and Weaving Company (Emergency Provisions)Act which
\nre-enacted  almost in identical terms all the provisions  of
\nthe  Ordinance and provided further that all  actions  taken
\nand orders made under the Ordinance shall be deemed to\thave
\nbeen taken or made under the corresponding provisions of the
\nAct.   The preamble to the Ordinance was not however  repro-
\nduced in the Act.\n<\/p>\n
    The\t petitioner in his petition has challenged the\tcon-
\nstitutional validity of both the Ordinance and the Act.\t  As
\nthe  Ordinance is no longer in force and all its  provisions
\nhave been incorporated in the Act, it will not be  necessary
\nto  deal with or refer to the enactments  separately.\tBoth
\nthe  Ordinance and the Act have been attacked  on  identical
\ngrounds\t and it is only\t necessary  to\t enumerate   briefly
\nwhat these grounds are.\n<\/p>\n
    The\t main ground put forward by the petitioner  is\tthat
\nthe pith and substance of the enactments is to take  posses-
\nsion of and control over the mills of the company which\t are
\nits valuable assets and such taking of possession of proper-
\nty  is entirely beyond the powers of the Legislature.\t‘The
\nprovisions of the Act, it is said, amount to deprivation  of
\nproperty  of  the  shareholders as well as  of\tthe  company
\nwithin the meaning of article 31 of the Constitution and the
\nrestrictions  imposed on the rights of the  shareholders  in
\nrespect to the shares held by them constitute an unjustifia-
\nble  interference with their rights to hold property and  as
\nsuch  are  void under article 19 (1) (f). It is\t urged\tthat
\nthere was no public purpose for which the Legislature  could
\nauthorise the taking possession or acquisition of
\n     897<\/span>
\nproperty and such acquisition or taking of possession  with-
\nout payment of compensation  is\t in violation of the  funda-
\nmental rights guaranteed by article 31 (2) of the  Constitu-
\ntion.\tIt is said further that the enactment denies to\t the
\ncompany\t and its  shareholders equality before the law.\t and
\nequal protection of laws and thus offends against the provi-
\nsions  of  article 14 of the Constitution.  The\t only  other
\nmaterial point raised is that the legislation is beyond\t the
\nlegislative competency of the Parliament and is not  covered
\nby any of the items in the legislative lists.
\n    On these allegations, the petitioner prays, in the first
\ninstance. that it may be declared that both the Act and\t the
\nOrdinance are ultra vires and void and an injunction may  be
\nissued\trestraining the respondents from exercising  any  of
\nthe powers conferred upon them by the enactments.  The third
\nand  the material prayer is for issuing a writ of  mandamus,
\n“restraining  the  respondents\t1 to 9\tfrom  exercising  or
\npurporting  to exercise any powers under the said  Ordinance
\nor Act and from in any manner interfering with\tthe  manage-
\nment  or affairs of the company under colour of or any\tpur-
\nported\texercise  of any powers under the Ordinance  or\t the
\nAct,”  The other prayers are not material for our purpose.
\n    Before I address myself to the  merits of  this applica-
\ntion  it  will be necessary to\tclear  up   two\t preliminary
\nmatters in respect to which arguments were advanced at\tsome
\nlength\tfrom the Bar.  The first point relates to the  scope
\nof  our enquiry in the present case and raises the  question
\nas to what precisely are the matters that have to be  inves-
\ntigated and determined on this application of the  petition-
\ner.  The second point relates to the form of relief that can
\nbe prayed for and granted in a case of this description.
\n    Article 32 (1) of the Constitution guarantees to  every-
\nbody  the right to move this court, by appropriate  proceed-
\ning,  for  enforcement of the fundamental rights  which\t are
\nenumerated  in Part 1II of the Constitution.  Clause (2)  of
\nthe article lays down that the
\n115<\/span>
\n898<\/span>
\nSupreme\t Court shall have the power to issue  directions  or
\norders\tor  writs including writs in the  nature  of  habeas
\ncorpus,\t mandamus, prohibition, quo warranto and  certiorari
\nwhichever  may be appropriate for the enforcement of any  of
\nthe rights conferred by this part.\n<\/p>\n
    Thus  anybody who complains of infraction of any of\t the
\nfundamental  rights  guaranteed by the\tConstitution  is  at
\nliberty\t to move the Supreme Court for\tthe  enforcement  of
\nsuch rights and this court has been given the power to\tmake
\norders\tand issuue directions or writs similar in nature  to
\nthe prerogative writs of English law as might be  considered
\nappropriate  in\t particular cases.  The\t fundamental  rights
\nguaranteed  by the Constitution are  available\t not  merely
\nto  individual\tcitizens  but to corporate  bodies  as\twell
\nexcept where the language of the provision or the nature  of
\nthe  right  compels the inference that they  are  applicable
\nonly  to natural persons.  An incorporated  company,  there-
\nfore,  can  come  up to this court for\tenforcement  of\t its
\nfundamental rights and so may the individual shareholders to
\nenforce their own; but it would not be open to an individual
\nshareholder  to complain of an Act which affects the  funda-
\nmental\trights of the company except to the extent  that  it
\nconstitutes  an infraction of his own rights as\t well.\tThis
\nfollows\t logically from the rule of law that  a\t corporation
\nhas a distinct legal personality of its own with rights\t and
\ncapacities,  duties and\t obligations separate from those  of
\nits  individual\t members.  As the rights are  different\t and
\ninhere\tin different legal entities, it is not competent  to
\none  person to seek to enforce the rights of another  except
\nwhere the law permits him to do so.  A well known  illustra-
\ntion of such exception is furnished by the procedure that is
\nsanctioned  in an application for a writ of  habeas  corpus.
\nNot  only the man who is imprisoned or detained in  confine-
\nment  but  any\tperson, provided he is\t not   an   absolute
\nstranger,  can\tinstitute proceedings to obtain\t a  writ  of
\nhabeas corpus for the purpose of liberating another from  an
\nillegal imprisonment.\n<\/p>\n
899<\/span><\/p>\n
    The\t application before us under article 32 of the\tCon-
\nstitution  is on behalf of an individual shareholder of\t the
\ncompany.   Article 32, as its provisions show,. is  not\t di-
\nrectly\tconcerned with the determination  of  constitutional
\nvalidity of particular legislative enactments.\tWhat it aims
\nat is the enforcing of fundamental rights  guaranteed by the
\nConstitution,  no  matter  whether the\tnecessity  for\tsuch
\nenforcement  arises out of an action of the executive or  of
\nthe legislature.  To make out a case under this article,  it
\nis  incumbent  upon the petitioner to establish\t not  merely
\nthat  the law complained of is beyond the competence of\t the
\nparticular  legislature as not being covered by any  of\t the
\nitems  in  the\tlegislative lists, but that  it\t affects  or
\ninvades\t his fundamental rights guaranteed by the  Constitu-
\ntion,  of which he could seek enforcement by an\t appropriate
\nwrit  or  order.  The rights that could\t be  enforced  under
\narticle 32 must ordinarily  be the rights of the  petitioner
\nhimself\t who  complains I of infraction of such\t rights\t and
\napproaches  the court for relief.  This being the  position,
\nthe  proper  subject  of our  investigation  would  be\twhat
\nrights,\t if any, of the petitioner as a shareholder  of\t the
\ncompany\t have been violated by the impugned legislation.   A
\ndiscussion of the fundamental rights of the company as\tsuch
\nwould be outside the purview of our enquiry.  It is  settled
\nlaw  that in order to redress a wrong done to  the  company,
\nthe  action  should prima facie be brought  by\tthe  company
\nitself.\t It cannot be said that this course is not  possible
\nin  the\t circumstances of the present case.  As the  law  is
\nalleged\t to  be\t  unconstitutional, it is open\tto  the\t old
\ndirectors  of  the company who have been ousted\t from  their
\nposition  by reason of the enactment to maintain  that\tthey
\nare  directors still in the eye of law, and on that  footing
\nthe majority of shareholders can also assert ‘the rights  of
\nthe  company  as  such.\t None of them,\thowever,  have\tcome
\nforward to institute any proceeding on behalf of the  compa-
\nny.   Neither  in form nor in substance does   the   present
\napplication   purport to be one made by the company  itself.
\nIndeed, the company
\n900<\/span>
\nis one of the respondents,  and opposes the petition.
\n    As\tregards\t the other point, it would appear  from\t the
\nlanguage  of article 32 of the Constitution that.  the\tsole
\nobject\tof  the article is the\tenforcement  of\t fundamental
\nrights\tguaranteed  by\t the   Constitution.   A  proceeding
\nunder\tthis   article\tcannot really have any\taffinity  to
\nwhat  is  known\t as  a\tdeclaratory suit.  The first  prayer
\nmade  in  the petition, n  seeks relief in the\tshape  of  a
\ndeclaration  that  the\t Act is invalid\t and  is  apparently
\ninappropriate to an application under article 32; while\t the
\nsecond purports to be framed for a relief by way of  injunc-
\ntion consequent upon the first.\t As regards the third  pray-
\ner, it has been contended by Mr. Joshi, who appears for\t one
\nof the respondents, that having regard to the nature of\t the
\ncase and the allegations made by the petitioner himself, the
\nprayer\tfor a writ of mandamus, in the form in which it\t has
\nbeen made, is not tenable. What is argued is that a writ  of
\nmandamus  can  be prayed for, for enforcement  of  statutory
\nduties\tor to compel a person holding a public office to  do
\nor forbear from doing something which is incumbent upon\t him
\nto do or forbear from doing under the provisions of any law.
\nAssuming that the respondents in the present case are public
\nservants,  it is said that the statutory duties which it  is
\nincumbent  upon them to discharge are precisely\t the  duties
\nwhich are laid down in the impugned Act itself.\t  There\t  is
\nno legal obligation on their part to abstain from exercising
\nthe powers conferred upon  them\t by  the  impeached   enact-
\nment which the court can be called  upon to enforce.   These
\nis really not much substance in this argument, for according
\nto  the petitioner the impugned Act is not valid at all\t and
\nconsequently the respondents cannot take their stand on this
\nvery Act to defeat the application for a writ in the  nature
\nof  a  mandamus.  Any way, article 32  of  the\tConstitution
\ngives  us very wide discretion in the matter of framing\t our
\nwrits  to suit the exigencies of particular cases,  and\t the
\napplication of the petitioner cannot be thrown out simply on
\nthe
\n901<\/span>
\nground\tthat  ‘the  proper writ or direction  has  not\tbeen
\nprayed for.\n<\/p>\n
    Proceeding\tnow  to the merits of the  case,  the  first
\ncontention  that has been pressed before us by\tthe  learned
\nCounsel for the petitioner is that the effect of the  Shola-
\npur  Spinning and Weaving Company Limited (Emergency  Provi-
\nsions)\tAct, has been to take away from the company and\t its
\nshareholders, possession of -property and other interests in
\ncommercial undertaking and vest the same in certain  persons
\nwho  are appointed by the State, and the exercise  of  whose
\npowers\tcannot be directed or controlled in any way  by\t the
\nshareholders.  As  the taking of possession is not  for\t any
\npublic\tpurpose and no provision for compensation  has\tbeen
\nmade  by the law which authorises it, such law, it is  said,
\nviolates  the fundamental  rights guaranteed  under  article
\n31 of the Constitution.\n<\/p>\n
    To\tappreciate  the contention, it would  be  convenient
\nfirst  of all to advert to the provisions of the  first\t two
\nclauses of article 31 of the Constitution.  The first clause
\nof article 31 lays down that “no person shall be deprived of
\nhis   property save by authority of law” The  second  clause
\nprovides:  “No property, movable or immovable, including any
\ninterest  in,  or in any company owning, any  commercial  or
\nindustrial  undertaking,  shall be taken  possession  of  or
\nacquired  for public purposes under any law authorising\t the
\ntaking\tof such possession or such acquisition,\t unless\t the
\nlaw provides for compensation for the property taken  posse-
\nsion  of  or  acquired and either fixes the  amount  of\t the
\ncompensation, or specifies the principles on which, and\t the
\nmanner\tin which, the compensation is to be  determined\t and
\ngiven.”\n<\/p>\n
    It\tis a right inherent in every sovereign to  take\t and
\nappropriate  private property belonging to individual  citi-
\nzens  for-public  use.\t‘this right, which is  described  as
\neminent\t domain\t in American law, is like  the\tpower\t  of
\ntaxation,  an  offspring of political necessity, and  it  is
\nsupposed to be based upon an implied reservation by  Govern-
\nment that private property acquired by its
\n902<\/span>
\ncitizens  under its protection may be taken or its use\tcon-
\ntrolled for public benefit irrespective of the wishes of the
\nowner. Article 31 (2) of the Constitution prescribes a\ttwo-
\nfold  limit  within which such superior right of  the  State
\nshould be exercised. One limitation imposed upon acquisition
\nor taking possession of private property which is implied in
\nthe  clause is that such taking must be for public  purpose.
\nThe other condition is that no property can be taken, unless
\nthe  law  which\t authorises such  appropriation\t contains  a
\nprovision  for\tpayment of compensation in the\tmanner\tlaid
\ndown in the clause.  So far as article S1 (2) is  concerned,
\nthe  substantial question for our consideration is   whether
\nthe  impugned  legislation  authorises any act amounting  to
\nacquisition or taking possession of private property  within
\nthe meaning of the clause.\n<\/p>\n
    It cannot be disputed that acquisition means and implies
\nthe acquiring of the entire title of the expropriated owner,
\nwhatever  the nature or extent of that title might be.\t The
\nentire\tbundle of rights which were vested in  the  original
\nholder\twould  pass on acquisition to the  acquirer  leaving
\nnothing\t in  the former. In taking possession on  the  other
\nhand,  the title to the property admittedly remains  in\t the
\noriginal  holder, though he is excluded from  possession  or
\nenjoyment of the property.  Article 31 (,?) of the Constitu-
\ntion itself makes a clear distinction between acquisition of
\nproperty  and taking possession of it for a public  purpose,
\nthough\tit  places both of them on the same footing  in\t the
\nsense  that a legislation authorising either of\t these\tacts
\nmust  make  provision  for payment of  compensation  to\t the
\ndisplaced  or expropriated holder of the property.   In\t the
\ncontext\t in which the word “acquisition” appears in  article
\n31  (2),  it can only mean and refer to acquisition  of\t the
\nentire interest of the previous holder by transfer of  title
\nand  I have no hesitation in holding that there is  no\tsuch
\nacquisition either as regards the property of the company or
\nof  the\t shareholders in the present  case.   The  question,
\ntherefore,  narrows down to this as to whether the  legisla-
\ntion in
\n903<\/span>
\nquestion  has  authorised the taking of\t possession  of\t any
\nproperty or interest belonging to the petitioner.
\n    It\tis argued by the learned Attorney-General  that\t the
\ntaking of possession as contemplated by article 31 (2) means
\nthe  taking  of possession of the entire  bundle  of  rights
\nwhich  the previous holder had, by excluding him from  every
\npart or item thereof.  If the original holder is still\tleft
\nto exercise his possession with regard to some of the rights
\nwhich  were  within  the folds of his title,  it  would\t not
\namount to taking possession of the property for purposes  of
\narticle\t 31 (2) of the Constitution.  Having laid down\tthis
\nproposition  of law, the learned Attorney-General has  taken
\nus  through the various provisions of the impugned  Act\t and
\nthe  contention advanced by him substantially is  that\tnei-
\nther the company nor the shareholders have been dispossessed
\nfrom their property by\treason of the enactment.  As regards
\nthe properties of the company, the directors, who have\tbeen
\ngiven  the custody of the property, effects  and  actionable
\nclaims\tof the company, are, it is said, to  exercise  their
\npowers not in their own right but as agents of the  company,
\nwhose  beneficial  interest in all its assets has  not\tbeen
\ntouched\t or taken away at all.\tNo doubt the affairs of\t the
\ncompany\t are to be managed by a body of directors  appointed
\nby the State and not by the company, but this, it is argued,
\nwould  not  amount to taking possession of any\tproperty  or
\ninterest within the meaning of article 31 (2).\tMr. Chari on
\nthe  other hand, has contended on behalf of  the  petitioner
\nthat  after  the management is taken over by  the  statutory
\ndirectors, it cannot be said that the company still  retains
\npossession or control over its property and assets. Assuming
\nthat  this State management was imposed in the interests  of
\nthe shareholders themselves and that the statutory directors
\nare  acting as the agents of the company, the possession  of
\nthe statutory directors could not, it is argued, be regarded
\nin  law\t as possession of the company so long  as  they\t are
\nbound  to  act in obedience to the dictates of\tthe  Central
\nGovernment and not of the company itself in the\t administra-
\ntion of its affairs.  Possession of an
\n904<\/span>
\nagent,\tit is said, cannot juridically be the possession  of
\nthe  principal, if the agent is to act not according to\t the
\ncommands or dictates of the principal, but under the  direc-
\ntion of an exterior authority.\n<\/p>\n
    There  can be no doubt that there is force in this\tcon-
\ntention,  but as I have indicated at the outset, we are\t not
\nconcerned  in this case with the larger question as  to\t how
\nfar  the  inter-position  of this statutory  management\t and
\ncontrol\t amounts  to taking possession of the  property\t and
\nassets belonging to the company. The point for our consider-
\nation  is a short one and that is whether by virtue  of\t the
\nimpugned  legislation any property or interest of the  peti-
\ntioner\thimself, as a shareholder of the company,  has\tbeen
\ntaken  possession of by the State or an authority  appointed
\nunder it, as contemplated by article 31 (2) of the Constitu-
\ntion.\n<\/p>\n
    The\t petitioner  as\t a shareholder\thas  undoubtedly  an
\ninterest in the company. His interest is represented by\t the
\nshare he holds and  the\t share is movable property according
\nto  the Indian Companies Act with all the incidence of\tsuch
\nproperty attached to it. Ordinarily, he is entitled to enjoy
\nthe  income  arising from the shares in the shape  of  divi-
\ndends; the share like any ‘other marketable commodity can be
\nsold or transferred by way of mortgage or pledge. The  hold-
\ning of the share in his name gives him the right to vote  at
\nthe  election of directors and thereby take a  part,  though
\nindirectly, in the management of the company’s affairs.\t  If
\nthe  majority of shareholders sides with him, he can have  a
\nresolution passed which would be binding on the company, and
\nlastly,\t he can institute proceedings for winding up of\t the
\ncompany which may result in a distribution of the net assets
\namong the shareholders.\n<\/p>\n
    It\tcannot be disputed that the petitioner has not\tbeen
\ndispossessed  in  any  sense of the term of  the  shares  he
\nholds.\t Nobody\t has taken the shares away  from  him.\t His
\nlegal  and beneficial interest in respect to the  shares  he
\nholds is left intact.  If the company declares dividend,  he
\nwould  be  entitled to the same. He can\t sell  or  otherwise
\ndispose of the shares at any
\n      905<\/span>
\ntime  at his option.  The impugned Act has affected  him  in
\nthis way that his right of voting at the election of  direc-
\ntors has been kept in abeyance so long as  the management by
\nthe  statutory\tdirector continues;    and as  a  result  of
\nthat,  his right to participate in   the management  of\t the
\ncompany\t has  been abridged to that extent.  His  rights  to
\npass resolutions or to institute winding up proceedings have
\nalso been restricted though they are not wholly gone;  these
\nrights can be exercised only with the consent or sanction of
\nthe  Central  Government.   In my opinion,  from  the  facts
\nstated above, it cannot be held that the petitioner has been
\ndispossessed from the property owned by him. I may apply the
\ntest  which Mr. Chari himself formulated.  If  somebody\t had
\ntaken possession of the petitioner’s shares and was  clothed
\nwith the authority to exercise all the powers which could be
\nexercised  by the holder of the shares under law, then\teven
\nif  he purported to act as the petitioner’s agent and  exer-
\ncise  these powers for his benefit, the possession  of\tsuch
\nperson would not have been the petitioner’s possession if he
\nwas bound to act not under the directions of the  petitioner
\nor in obedience to his commands but under the directions  of
\nsome other person or authority. There is no doubt whatsoever
\nthat\tis not the position in the present case.   The\tState
\nhas not usurped the shareholders’ right to vote or vested it
\nin any other authority.\t The State appoints directors of its
\nown  choice but that it does, not in exercise of the  share-
\nholders’ right to vote but in exercise of the powers  vested
\nin  it by the impugned Act.  Thus there has been no  dispos-
\nsession\t of the shareholders from their right of  voting  at
\nall.  The same reasoning applies to the other rights of\t the
\nshareholders spoken of above, namely, their right of passing
\nresolutions   and of presenting winding up petition.   These
\nrights\thave  been  restricted undoubtedly and\tmay  not  be
\ncapable of being exercised to the fullest extent as long  as
\nthe management by the State continues. Whether the  restric-
\ntions are such as would bring the case within
\n116<\/span>
\n906<\/span>
\nthe  mischief of article 19 (1) (f) of the  Constitution,  1
\nwill examine presently; but 1 have no hesitation in  holding
\nthat they do not amount to dispossession of the shareholders
\nfrom  these  rights in the sense that the rights  have\tbeen
\nusurped by other people who are exercising them in place  of
\nthe displaced shareholders.\n<\/p>\n
    In\tthe  view that I have taken it is not  necessary  to
\ndiscuss\t whether we can accept as sound the  contention\t put
\nforward\t by  the  learned  Attorney-General  that  the\tword
\n“property”  as used in article 31 of the  Constitution\tcon-
\nnotes  the entire property, that is to say the\ttotality  of
\nthe  rights  which  the ownership of  the  object  connotes.
\nAccording to  Mr. Setalvad, if a shareholder is not deprived
\nof the entirety of his rights which he is entitled to  exer-
\ncise by reason of his being the owner or holder of the share
\nand some rights, however insignificant they might be,  still
\nremain in him, there cannot be any dispossession as  contem-
\nplated by article 31(2).  It is difficult, in my opinion, to
\naccept\tthe contention formulated in such broad terms.\t The
\ntest  would  certainly be as to whether the owner  has\tbeen
\ndispossessed  substantially from the rights held by  him  or
\nthe  loss is only with regard to some minor  ingredients  of
\nthe  proprietory  right.  It is relevant to  refer  in\tthis
\nconnection to an observation made by Rich J. in a Full Bench
\ndecision of the High Court of Australia,(1) where the  ques-
\ntion arose as to whether the taking of exclusive  possession
\nof  a property for an indefinite period of time by the\tCom-
\nmonwealth of Australia under Reg. 54 of the National Securi-
\nty Regulation amounted to acquisition of property within the
\nmeaning\t of  placitum 31, section 51,  of  the\tCommonwealth
\nConstitution.\tThe majority of the Full Bench answered\t the
\nquestion  in the affirmative and the main reason upon  which
\nthe  majority  decision was based is thus expressed  in\t the
\nlanguage of Rich J.–\n<\/p>\n
    “Property,\tin relation to land, is a bundle  of  rights
\nexercisable  with  respect to the land.\t The  tenant  of  an
\nunencumbered  estate  in fee simple in\tpossession  has\t the
\nlargest possible bundle.  But there is nothing in
\n(1) See Minister of Stain for the Army v. Dalziel, 68 C L.R.
\np. 261,
\n      907<\/span>
\nthe placitum to suggest that the legislature was intended to
\nbe at liberty to free itself from the restrictive provisions
\nof  the placitum by taking care to seize something short  of
\nthe whole bundle owned by the person whom it was expropriat-
\ning.”\n<\/p>\n
    It\tis not, however, necessary for my purpose to  pursue
\nthe  matter any further, as in my opinion there has been  no
\ndispossession of the rights of a shareholder in the  present
\ncase.\n<\/p>\n
    Mr. Chari in course of his opening relied exclusively on
\nclause\t(2) of article 31 of the Constitution.\t During\t his
\nreply,\thowever,  he laid some stress on clause (1)  of\t the
\narticle\t as well, and his contention seems to be that  there
\nwas  deprivation of property in the present case in  contra-
\nvention of the terms of this clause.  It is difficult to see
\nwhat exactly is the contention of the learned Counsel and in
\nwhich  way it assists him for purposes of the present  case.
\nIt  has\t been argued by the  learned  Attorney-General\tthat
\nclause\t(1) of article 31 relates to a power different\tfrom
\nthat  dealt with under clause (2).  According to  him,\twhat
\nclause\t(1) contemplates is confiscation or  destruction  of
\nproperty in exercise of what are known as ‘police powers’ in
\nAmerican law, for which no payment of compensation is neces-
\nsary.  I do not think it proper for purposes of the  present
\ncase  to enter into a discussion on this somewhat  debatable
\npoint which has been raised by the learned Attorney-General.
\nIn  interpreting  the  provisions of  our  Constitution,  we
\nshould go by the plain words used by the Constitution-makers
\nand the importing of expressions like ‘police power ;  which
\nis a term of variable and indefinite connotation in American
\nlaw can only make the task of interpretation more difficult.
\nIt is also not necessary to express any opinion as to wheth-
\ner  clauses (1) and (2) of article 31 relate to exercise  of
\ndifferent kinds of powers or they are to be taken as cumula-
\ntive  provisions  in  relation to  the\tsame  subjectmatter,
\nnamely,\t compulsory  acquisition of property.  If  the\tword
\n“deprived”  as used in clause (1) connotes the idea  of\t de-
\nstruction  or  confiscation of property, obviously  no\tsuch
\nthing has happened in the present
\n908<\/span>
\ncase.  Again if clauses (1) and (2) of article 31 have to be
\nread  together and “deprivation” in clause (1) is given\t the
\nsame meaning as compulsory acquisition in clause (2), clause
\n(1),  which  speaks neither of compensation  nor  of  public
\npurpose,  would\t not by itself, and apart from\tclause\t(2),
\nassist\tthe  petitioner in any way. If the two\tclauses\t are
\nread  disjunctively,  the only question that  may  arise  in
\nconnection  with clause (1) is whether or not the   depriva-
\ntion of property is authorised by law.\tMr. Chari has raised
\na  question relating to the validity of the  legislation  on
\nthe  ground of its not being covered by any of the items  in
\nthe  legislative  list and to this question I  would  advert
\nlater  on; but apart from this, clause (1) of article 31  of
\nthe  Constitution seems to me to be   altogether  irrelevant
\nfor purposes of the petitioner’s case.\n<\/p>\n
    This  leads\t me to the consideration of the\t next  point
\nraised\tby  Mr. Chari, namely,\twhether\t these\trestrictions
\noffend\tagainst\t the provision of article  19(1)(f)  of\t the
\nConstitution.\n<\/p>\n
    Article  19(1)  of the Constitution enumerates the\tdif-
\nferent forms of individual liberty, the protection of  which
\nis guaranteed by the Constitution. The remaining clauses  of
\nthe  article  prescribe the limits that may be\tplaced\tupon
\nthese  liberties by law, so that they may not conflict\twith
\npublic\t welfare  or   general\tmorality.  Article  19(1)(f)
\nguarantees  to all citizens ‘ the right to acquire, hold  or
\ndispose\t of  property.’ Any infringement of  this  provision
\nwould  amount  to  a violation of  the\tfundamental  rights,
\nunless it comes within the exceptions provided for in clause
\n(5)  of the article. That clause permits the  imposition  of
\nreasonable  restrictions  upon\tthe exercise  of  such\trigh
\nteither\t in the interests of the general public or  for\t the
\nprotection  of\tthe interests of any Scheduled\tTribe.\t Two
\nquestions,  therefore,\tarise in  this\tconnection:   first,
\nwhether\t the  restrictions that have been imposed  upon\t the
\nrights\tof  the petitioner as a shareholder in\tthe  company
\nunder  the Sholapur Act amount to infringement of  his.right
\nto  acquire, hold or dispose of property within the  meaning
\nof article 19(1)(f) of the Constitution and
\n     909<\/span>
\nsecondly,  if they do interefere  with such rights,  whether
\nthey  are covered by the exceptions 1aid down in clause\t (5)
\nof the article.\n<\/p>\n
    So\tfar  as the first point is concerned,  it  is  quite
\nclear  that  there  is no restriction  whatsoever  upon\t the
\npetitioner’s  right to acquire and dispose of any  property.
\nThe  shares  which he holds do remain his property  and\t his
\nright  to dispose of them is not lettered in any way. If  to
\n‘hold’ a property means to possess it, there is no infringe-
\nment  of this right either, for, as I have  stated  already,
\nthe  acts complained of by the petitioner do not  amount  to
\ndispossession of him from any property in the eye of law. It
\nis argued that ‘holding’ includes enjoyment of all  benefits
\nthat are ordinarily attached to the ownership of a property.
\nThe enjoyment of the fruits of a property is undoubtedly  an
\nincident  of  ownership.   The pecuniary  benefit,  which  a
\nshare.\tholder\tderives\t from the shares he  holds,  is\t the
\ndividend  and  there is no limitation  on  the\tpetitioner’s
\nright in this respect.\tThe petitioner undoubtedly has\tbeen
\nprecluded  from exercising his right of voting at the  elec-
\ntion of directors so long as the statutory directors contin-
\nue  to manage the affairs of the company. He cannot pass  an
\neffective  resolution  in concurrence with the\tmajority  of
\nshareholders without the consent or sanction of the  Central
\nGovernment and without such sanction, there is also a  disa-
\nbility\ton him to institute any winding up proceedings in  a
\ncourt of law.\n<\/p>\n
    In my opinion, these are rights or privileges which\t are
\nappurtenant  to or flow from the ownership of property,\t but
\nby themselves and taken independently, they cannot be  reck-
\noned as property capable of being acquired, held or disposed
\nof as is contemplated by article 19 (1) (f) of the Constitu-
\ntion.  I do not think that there has been any restriction on
\nthe  rights of a shareholder to hold, acquire or dispose  of
\nhis  share  by reason of the impugned enactment\t and  conse-
\nquently\t article  19 (1) (f) of the Constitution  is  of  no
\nassistance to the petitioner.  In this view, the other point
\ndoes not arise for consideration, but I may state here\tthat
\neven if it is conceded for argument’s sake that the
\n910<\/span>
\ndisabilities   imposed\tby  the impugned legislation  amount
\nto restrictions on proprietory right, they may very well  be
\nsupported as reasonable restraints imposed in the  interests
\nof  the\t general  public, viz., to secure the  supply  of  a
\ncommodity essential to the community and to prevent a  seri-
\nous unemployment amongst a section of the people.  They are,
\ntherefore, protected completely by clause (5)of article\t 19.
\nThis disposes of the second point raised by Mr. Chari.
\n    The next point urged on behalf of the petitioner  raises
\nan important question of constitutional law which turns upon
\nthe  construction of article 14 of the Constitution.  It  is
\nurged  by  the learned Counsel for the petitioner  that\t the
\nSholapur Act is a piece of discriminatory legislation  which
\noffends against the provision of article 14 of the Constitu-
\ntion.\tArticle 14 guarantees to all persons in the territo-
\nry of India equality before the law and equal protection  of
\nthe  laws and its entire object, it is said, is\t to  prevent
\nany  person or class of persons from being singled out as  a
\nspecial\t subject  of  discriminatory  legislation.    It  is
\npointed\t out  that  the law in this case  has  selected\t one
\nparticular company and its shareholders and  has taken\taway
\nfrom  them  the right to manage their own affairs,  but\t the
\nsame treatment has not been meted out to all other companies
\nor shareholders situated in an identical manner.\n<\/p>\n
     Article 14 of the Constitution, it may be\tnoted, corre-
\nsponds\tto  the equal protection clause\t in  the  Fourteenth
\nAmendment  of the American Constitution which declares\tthat
\n“no  State shall deny to any person within its\tjurisdiction
\nthe equal protection of the laws.” We have been referred  in
\ncourse of the arguments on this point by the learned Counsel
\non  both  sides to quite a number of cases  decided  by\t the
\nAmerican  Supreme  Court, where questions turning  upon\t the
\nconstruction of the ‘equal protection’ clause in the  Ameri-
\ncan  Constitution  came\t up for\t consideration.\t A  detailed
\nexamination of these reports is neither necessary nor  prof-
\nitable\tfor our present purpose but we think we can  cull  a
\nfew general principles from some of the pronouncements of
\n911<\/span>
\nthe American Judges which might appear to us to be consonant
\nwith reason and help us in determining the true meaning\t and
\nscope of article 14 of our Constitution.\n<\/p>\n
    I  may  state here that so far as the violation  of\t the
\nequality clause in the Constitution is concerned, the  peti-
\ntioner,\t as a shareholder of the company, has as much  right
\nto  complain  as the company itself, for his  complaint\t  is
\nthat   apart   from   the discrimination  made\tagainst\t the
\ncompany,   the\t impugned   legislation\t has   discriminated
\nagainst\t him  and  the other shareholders  of  the   company
\nas   a\t group\tvis-a-vis  the\tshareholders  of  all  other
\ncompanies governed by the Indian Companies Act who  have not
\nbeen treated in a similar way.\tAs the discriminatory treat-
\nment has been in respect to the shareholders of this company
\nalone, any one of the shareholders, whose interests are thus
\nvitally affected, has a right to complain and it is  immate-
\nrial  that there has been nodiscrimination inter se  amongst
\nthe shareholders themselves.\n<\/p>\n
    It\tmust  be  admitted that the  guarantee\tagainst\t the
\ndenial\tof equal protection of the laws does not  mean\tthat
\nidentically the same rules of law should be made  applicable
\nto  all\t persons within the territory of India in  spite  of
\ndifferences  of\t circumstances and conditions. As  has\tbeen
\nsaid  by the Supreme Court of America, “equal protection  of
\nlaws  is a pledge of the protection of equal  laws(‘),”\t and
\nthis  means “subjection to equal laws applying alike to\t all
\nin  the same situation(“).” In other words, there should  be
\nno  discrimination  between  one person and  another  if  as
\nregards the subject-matter of the legislation their position
\nis the same. I am unable to accept the argument of Mr. Chari
\nthat a legislation relating to one individual or one  family
\nor one body corporate would per se violate the guarantee  of
\nthe  equal protection rule.  There can certainly  be  a\t law
\napplying  to  one person or to one group of persons  and  it
\ncannot be held to be
\n(1) Yick Wo v. Hopkins, 118 U.S. at 369
\n(2) Southern Raliway Company v. Greene, 216 U.S 400,412.\n<\/p>\n
912<\/span><\/p>\n
unconstitutional if it is not  discriminatory in its charac-
\nter (1).  It would be bad law “if it arbitrarily selects one
\nindividual or a class of individuals, one corporation or   a
\nclass  of  corporations\t and  visits a\tpenalty\t upon  them,
\nwhich\tis   not  imposed  upon\t others\t  guilty   of\tlike
\ndelinquency(2).”   The\tlegislature undoubtedly has  a\twide
\nfield  of choice in determining and classifying the  subject
\nof  its laws, and if the law deals alike with all of a\tcer-
\ntain  class, it is normally not obnoxious to the  charge  of
\ndenial\tof equal protection; but the  classification  should
\nnever be arbitrary.  It must always rest upon some real\t and
\nsubstantial distinction bearing a reasonable and just  rela-
\ntion to the things in respect to which the classification is
\nmade; and classification made without any’ substantial basis
\nshould be regarded as invalid(3).\n<\/p>\n
    The\t question  is whether judged by this test  the\t im-
\npugned\tAct  can be said to have contravened  the  provision
\nembodiedin  article 14 of the Constitution.   Obviously\t the
\nAct  purports  to  make provisions which are  of  a  drastic
\ncharacter  and against the general law of the land  as\tlaid
\ndown in the Indian Companies Act, in regard to\tthe   admin-
\nistration  and management of the affairs of one\t company  in
\nindian\tterritory.  The Act itself gives no reason  for\t the
\nlegislation but the Ordinance, which was a precursor of\t the
\nAct expressly stated why the legislation was necessary.\t  It
\nsaid  that owing to  mismanagement and neglect, a  situation
\nhad arisen in the affairs of the company which prejudicially
\naffected  the  production  of an  essential  commodity\t and
\ncaused serious unemployment amongst a certain section of the
\ncommunity. Mr. Chari’s contention in substance is that there
\nare various textile companies in  India situated in a  simi-
\nlar  manner as the Sholapur company, against which the\tsame
\ncharges could be brought and for the control and  regulation
\nof which all the reasons that are mentioned in the  preamble
\nto the Ordinance
\n(1) Willis Constitutional Law, p. 580.\n<\/p>\n
(2) Gulf C. &  S. F.R. Co. v. Ellis. 163 U.S, 150, at 159.
\n(3) Southern Railway Co. v. Greene, 216 US. 400, at 412
\n913<\/span>
\ncould be applied.  Yet, it is said, the legislation has been
\npassed\twith regard to this one company alone. The  argument
\nseems plausible at first sight, but on a closer\t examination
\nI  do not think that I can accept it as sound.\tIt  must  be
\nconceded  that\tthe  Legislature has a\twide  discretion  in
\ndetermining  the   subject  matter of its laws.\t  It  is  an
\naccepted doctrine of the American Courts and which seems  to
\nme  to be well founded\ton  principle, that the\t presumption
\nis  favour of the constitutionality of an enactment and\t the
\nburden\tis  upon him who attacks it to show that  there\t has
\nbeen  a transgression of constitutional principles.  As\t was
\nsaid  by the Supreme Court of America in Middleton v.  Texas
\nPower  and  Light Company(1), ‘It must be  presumed  that  a
\nLegislature  understands  and  correctly  appreciates\t the
\nneeds\tof  its own people, that  its laws are\tdirected  to
\nproblems  made\tmanifest by experience\tand  that\t its
\ndiscriminations\t  are  based  upon  adequate\t   grounds.”
\nThis  being  the position,  it is for  the    petitioner  to
\nestablish   facts  which  would\t prove\tthat  the  selection
\nof this particular subject by the Legislature is  unreasona-
\nble  and based upon arbitrary grounds. No  allegations\twere
\nmade in the petition and no materials were placed before  us
\nto  show  as to whether there are other companies  in  India
\nwhich come precisely under the same category as the Sholapur
\nSpinning  and Weaving Company and the reasons  for  imposing
\ncontrol upon the latter as mentioned in the preamble to\t the
\nOrdinance  are applicable to them as well. Mr. Chari  argues
\nthat  these  are  matters of common knowledge  of  which  we
\nshould\ttake judicial notice.  I do not think that  this  is
\nthe  correct  line of approach.\t It is quite true  that\t the
\nLegislature  has,  in this instance, proceeded\tagainst\t one
\ncompany only and its shareholders; but even one\t corporation
\nor a group of persons can be taken as a class by itself\t for
\nthe purpose of legislation, provided it exhibits some excep-
\ntional\tfeatures  which\t are not possessed  by\tothers.\t The
\ncourts should prima facie
\n(1) 219 u.s. 152 at p. 157.\n<\/p>\n
117<\/span>
\n914<\/span><\/p>\n
lean  in favour of constitutionality and should support\t the
\nlegislation  if\t it is possible to do so on  any  reasonable
\nground, and it is for the party who attacks the validity  of
\nthe  legislation  to place all materials  before  the  court
\nwhich  would go to show that the selection is arbitrary\t and
\nunsupportable.\t Throwing out of vague hints that there\t may
\nbe other instances of similar nature is not enough for\tthis
\npurpose.   We have not even before us any statement on\toath
\nby  the petitioner that what has been alleged  against\tthis
\nparticular  company may be said against other  companies  as
\nwell. If there was any such statement, the respondents could
\nhave placed before us the whole string of events that led up
\nto the passing of this legislation. If we are to take  judi-
\ncial notice of the existence of similar other badly  managed
\ncompanies,  we\tmust  take notice also of  the\tfacts  which
\nappear\tin the parliamentary proceedings in connection\twith
\nthis legislation which leave been referred to by my  learned
\nbrother,  Fazl Ali J. in his judgment and which would go  to
\nestablish that the facts connected with this corporation are
\nindeed exceptional and the discrimination that has been made
\ncan be supported on just and reasonable grounds.  I purpose-
\nly  refrain from alluding to these facts or basing my  deci-
\nsion thereon as we had no opportunity of investigating\tthem
\nproperly  during  the  course of the  hearing.\t As  matters
\nstand,\tno  proper materials have been placed before  us  by
\neither\tside and as I am unable to say that the\t legislature
\ncannot be supported on any reasonable ground, I think it  to
\nbe  extremely  risky to overthrow it on\t mere  suspicion  or
\nvague conjectures. If it is possible to imagine or think  of
\ncases  of other companies where similar or identical  condi-
\ntions  might prevail, it is also not impossible to  conceive
\nof  something”\tpeculiar” or “unusual” to  this\t corporation
\nwhich  led the legislature to intervene in its\taffairs.  As
\nhas  been  laid down by the Supreme Court of  America,\t“The
\nLegislature is free to recognise degrees of harm and it\t may
\nconfine\t its restrictions to those cases where the  need  is
\ndeemed to be the clearest”(1). We should
\n(1) Radics, v. New York, 264 U.S.\n<\/p>\n
915<\/span><\/p>\n
bear in mind that a corporation, which is engaged in produc-
\ntion of a commodity  vitally essential to the community, has
\na  social character of its own, and it must not be  regarded
\nas  the concern primarily or only of those who invest  their
\nmoney  in it. If its possibilities  are large and it  had  a
\nprosperous  and useful career for a long period of time\t and
\nis about to collapse not for any economic reason but through
\nsheer  perversity of the controlling authority,\t one  cannot
\nsay  that the legislature has no authority to treat it as  a
\nclass  by itself and make special legislation applicable  to
\nit  alone  in the interests of the community at\t large.\t The
\ncombination  of circumstances which are present here may  be
\nof  such  unique character as could not be existing  in\t any
\nother  institution.  But all these, I must say, are  matters
\nwhich  require\tinvestigation on proper materials  which  we
\nhave not got before us in the present case. In these circum-
\nstances\t I am constrained to hold that the present  applica-
\ntion must fail on the simple ground that the petitioner made
\nno attempt to discharge the primafacie burden that lay\tupon
\nhim  and did not place before us the materials upon which  a
\nproper\tdecision  on the point could be arrived at.   In  my
\nopinion\t , therefore, the attack on the legislation  on\t the
\nground\tof  the\t denial of equal protection  of\t law  cannot
\nsucceed.\n<\/p>\n
    The\t only other thing that requires to be considered  is
\nthe  argument of Mr. Chari that the law in question  is\t in-
\nvalid as it is not covered by any of the items in the legis-
\nlative list.  In my opinion, this argument has no substance.
\nWhat the law has attempted to do is to regulate the  affairs
\nof this company by laying down certain special rules for its
\nmanagement and administration.\tIt is fully covered by\titem
\nNo. 43 of the Union List which speaks inter alia of  “incor-
\nporation,    regulation\t  and\twinding\t  up   of    trading
\ncorporations.”\n<\/p>\n
    The\t result\t is that the application fails and  is\tdis-
\nmissed with costs.\n<\/p>\n
    DAS J.–As I have arrived at a conclusion different from
\nthat reached by the majority of this Court, I
\n916<\/span>
\nconsider it proper, out of my respect for the opinion of  my
\nlearned colleagues, to state the reasons for my\t conclusions
\nin some detail.\n<\/p>\n
    On\tJanuary\t 9,  1950, the\tGovernor-General  of  India,
\nacting\tunder  section 42 of the Government  of\t India\tAct,
\n1935,  promulgated an Ordinance, being Ordinance No.  II  of
\n1950, concenrning the Sholapur Spinning and Weaving Company,
\nLimited,  (hereafter referred to as the said  company).\t The
\npreambles  and\tthe provisions of the  Ordinance  have\tbeen
\nreferred  to in the judgment just delivered by Mukherjea  J.
\nand need  not  be recapitulated by me in detail.  Suffice it
\nto  say\t that the net result of the Ordinance was  that\t the
\nmanaging  agents  of the said company  were  dismissed,\t the
\ndirectors holding office at the\t time  automatically vacated
\ntheir  office,\tthe Government was  authorised\tto  nominate
\ndirectors,  the rights of the shareholders of  this  company
\nwere  curtailed\t in that it was made unlawful for  them\t  to
\nnominate  or  appoint any director, no resolution passed  by
\nthem  could be given effect to without the sanction  of\t the
\nGovernment  and no proceeding for winding up could be  taken
\nby  them without such sanction, and power was given  to\t the
\nGovernment  to further modify the provisions of\t the  Indian
\nCompanies Act in its application to the said company.
\n    On\tthe very day that the Ordinance was promulgated\t the
\nCentral\t Government  acting under section 15  delegated\t all
\nits  powers  to the Government\tof Bombay.   On January\t 10,
\n1950, the Government of Bombay appointed Respondents Nos.  3
\nto 7 as the new directors.  On March 2, 1950, Respondent No.
\n5 having resigned, Respondent No. 8 was appointed a director
\nin  his place and on the same day Respondent No. 9 was\talso
\nappointed as a director.  In the meantime the new  Constitu-
\ntion  had come into force on January 26, 1950.\tOn  February
\n7, 1950, the new directors passed a resolution sanctioning a
\ncall  for Rs. 50 on the preference shares. Thereupon a\tsuit
\nbeing Suit No. 438 of 1950 was filed in the High Court of
\n917<\/span>
\nBombay by one Dwarkadas Shrinivas against the new  directors
\nchallenging  the validity of the Ordinance and the right  of
\nthe  new directors to make the call. Bhagwati J.  who  tried
\nthe suit held that the Ordinance was valid and dismissed the
\nsuit.  An appeal (Appeal No. 48 of 1950) was taken from that
\ndecision  which\t was dismissed by a Division  Bench  (Chagla
\nC.J.  and  Gajendragadkar J.) on August 29,  1950.   In\t the
\nmeantime,  on April 7, 1950, the Ordinance was\treplaced  by
\nAct  No. XXVIII of 1950.  The Act  substantially  reproduced
\nthe provisions of the Ordinance except that the preambles to
\nthe  Ordinance were omitted.  On May 29, 1950,\tthe  present
\npetition was filed by one Chiranjitlal Chowdhuri.
\n    The\t petitioner claims to be a shareholder of  the\tsaid
\ncompany holding 80 preference shares and 3 ordinary  shares.
\nThe preference shares,\taccording to  him, stand in the name
\nof  the\t Bank of Baroda to whom they are said to  have\tbeen
\npledged.  As those preference shares are not  registered  in
\nthe  name  of the petitioner he cannot assert any  right  as
\nholder\tof those shares. According to the  respondents,\t the
\npetitioner  appears  on the register as holder of  only\t one
\nfully  paid  up ordinary share.\t For the  purposes  of\tthis
\napplication,  then,  the petitioner’s interest in  the\tsaid
\ncompany\t must be taken as limited to only one fully paid  up
\nordinary share. The respondents are the Union of India,\t the
\nState  of Bombay and the new directors besides\tthe  company
\nitself.\t The  respondent  No. 5 having resigned,  he  is  no
\nlonger a director and has been wrongly impleaded as respond-
\nent.  The reliefs prayed for are that the Ordinance and\t the
\nAct  are ultra vires and void, that the\t Central  Government
\nand  the  State Government and the directors  be  restrained
\nfrom  exercising any powers under the Ordinance or the\tAct,
\nthat a writ of mandamus be issued restraining the new direc-
\ntors  from exercising any powers under the Ordinance or\t the
\nAct or from in any manner interfering with the management of
\nthe  affairs of the company under colour of or in  purported
\nexercise of any powers under the said Ordinance or Act.\n<\/p>\n
918<\/span><\/p>\n
    The\t validity  of  the Ordinance and the  Act  has\tbeen
\nchallenged before us on the following grounds:–(i) that  it
\nwas not within the legislative competence–(a) of the Gover-
\nnor-General  to\t promulgate  the Ordinance, or\t(b)  of\t the
\nParliament to enact the Act, and (ii) that the Ordinance and
\nthe Act infringe the fundamental rights of the\tshareholders
\nas  well  as those of the said company and  are,  therefore,
\nvoid and inoperative under article 13.\n<\/p>\n
    Re\t(i)-.-The present application has been made  by\t the
\npetitioner under article 52 of the Constitution. Sub-section
\n(1) of that article guarantees the right to move this  Court
\nby appropriate proceedings for the enforcement of the rights
\nconferred by Part [1] of the Constitution.  Sub-section\t (2)
\nempowers this Court to issue directions or orders or  writs,
\nincluding  certain specified writs, whichever may be  appro-
\npriate,\t for the enforcement of any of the rights  conferred
\nby  that Part.\tIt is clear, therefore, that article 32\t can
\nonly  be invoked for the purpose of the enforcement  of\t the
\nfundamental rights.  Article 32 does not permit an  applica-
\ntion  merely for the purpose of agitating the competence  of
\nthe appropriate legislature in passing any particular enact-
\nment  unless the enactment also infringes any of the  funda-
\nmental rights. In this case the claim is that the  fundamen-
\ntal rights have been infringed and, therefore, the  question
\nof legislative competence may also be incidentally raised on
\nthis  application.  It does not appear to me, however,\tthat
\nthere  is  any substance in this point for, in\tmy  opinion,
\nentry 33 of List I of the Seventh Schedule to the Government
\nof  India Act, 1935, and the corresponding entry 43  of\t the
\nUnion List set out in the Seventh Schedule to the  Constitu-
\ntion  clearly support these pieces of legislation as far  as
\nthe  question of legislative competency is concerned.\tSec-
\ntions  83A and 83-B of the Indian Companies Act can only  be
\nsupported  as  valid on the ground that\t they  regulate\t the
\nmanagement of companies and are, therefore, within the\tsaid
\nentry.\t Likewise, the provisions of the Ordinance  and\t the
\nAct relating to the appointment of directors by the
\n    919<\/span>
\nGovernment  and the curtailment of the shareholders’  rights
\nas regards the election of directors, passing of resolutions
\ngiving directions  with\t respect  to  the management of\t the
\ncompany\t and  to present a winding up petition\tare  matters
\ntouching the management of the company and, as such,  within
\nthe  legislative competence of the  appropriate\t legislative
\nauthority.  In my judgment, the Ordinance and the Act cannot
\nbe held to be invalid on the ground of legislative  incompe-
\ntency of the authority promulgating or passing the same.
\n    Re\t(ii)–The fundamental rights said to have  been\t in-
\nfringed\t are  the  right to acquire,  hold  and\t dispose  of
\nproperty guaranteed to every citizen by Article 19(1)(f) and
\nthe  right to property secured by article 31,  In  Gapalan’s
\ncase (1) 1 pointed out that the rights conferred by  article
\n19 (1) (a) to (e) and (g) would be available to the  citizen
\nuntil  he  was, under article 21, deprived of  his  life  or
\npersonal  liberty according to procedure established by\t law
\nand  that  the right to property guaranteed  by\t article  19
\n(1)(f)\twould likewise continue until the owner\t was,  under
\narticle\t 31, deprived of such property by authority of\tlaw.
\nTherefore,  it will be necessary to consider  first  whether
\nthe  shareholder or the company has been deprived of his  or
\nits property by authority of law under Article 31 for, if he
\nor it has been so deprived, then the question of his or\t its
\nfundamental right under article 19 (1) (f) will not arise.
\nThe relevant clauses of article 31 run as follows
\n    “31.   (1) No person shall be deprived of  his  property
\nsave by authority of law.\n<\/p>\n
    (2)\t No  property, movable or immovable,  including\t any
\ninterest  in,  or in any company owning, any  commercial  or
\nindustrial  undertaking,  shall be taken  possession  of  or
\nacquired  for public purposes under any\t law  authorisingthe
\ntaking\tof such possession or such acquisition,\t unless\t the
\nlaw provides for compensation for the property taken posses-
\nsion of or acquired
\n (1) [1950] S.C.R. 88
\n920<\/span>
\nand  either fixes the amount of the compensation, or  speci-
\nfies  the principles on which, and the manner in which,\t the
\ncompensation is to be determined and given.”\n<\/p>\n
    Article  31 protects every person, whether such’  person
\nis a citizen or not. and it is wide enough to cover a  natu-
\nral person as well as an artificial person.  Whether or not,
\nhaving regard to the language used in article 5, a  corpora-
\ntion  can  be called a citizen and as such entitled  to\t the
\nrights\tguaranteed under article 19, it is quite clear\tthat
\nthe corporation is protected by article 31, for that article
\nprotects every “person” which expression certainly  includes
\nan artificial person.\n<\/p>\n
    The\t contention of the peitioner is that  the  Ordinance
\nand the Act have infringed his fundamental right to property
\nas  a  shareholder  in the said company.  Article  31,\tlike
\narticle\t 19(1) (f), is concerned with “property “. Both\t the
\narticles  are in the same chapter and deal with\t fundamental
\nrights.\t  Therefore, it is reasonable to say that  the\tword
\n“property”  must  be given the same  meaning  in  construing
\nthose two articles.  What, then, is the meaning of the\tword
\n“property”?   It may mean either the bundle of rights  which
\nthe  owner  has over or in respect of a thing,\ttangible  or
\nintangible,  or\t it  may mean the thing itself\tover  or  in
\nrespect of which the owner may exercise these rights. It  is
\nquite  clear that the Ordinance or the Act has not  deprived
\nthe  shareholder of his share itself.  The share  still\t be-
\nlongs  to  the\tshareholder.  He is still  entitled  to\t the
\ndividend that may be declared.\tHe can deal with or  dispose
\nof  the share as he  pleases.  The learned  Attorney-General
\ncontends that even if the other meaning of the word “proper-
\nty”  is\t adopted, the shareholder has not been\tdeprived  of
\nhis”  property” understood in that sense, that is to say  he
\nhas  not been deprived of the entire bundle of rights  which
\nput  together constitute his “property “. According  to\t him
\nthe”  property” of the shareholder, besides and\t apart\tfrom
\nhis  right  to elect directors, to pass\t resolutions  giving
\ndirections  to\tthe directors and to present  a\t winding  up
\npetition, consists in his right to participate
\n921<\/span>
\nin the dividends declared on the profits made by the working
\nof the company and, in case of winding up, to participate in
\nthe  surplus that may be left after meeting the\t winding  up
\nexpenses  and  paying the creditors.  Those  last  mentioned
\nrights, he points out, have not been touched at all and\t the
\nshareholder can yet deal with or dispose of his shares as he
\npleases\t and  is  still entitled to dividends  if  and\twhen
\ndeclared. Therefore, concludes the learned Attorney-General,
\nthe shareholder cannot complain that he has been deprived of
\nhis “property”, for the totality of his rights have not been
\ntaken  away.  The argument thus formulated appears to me  to
\nbe  somewhat too wide, for it will then permit the  legisla-
\nture  to authorise the State to acquire or take\t possession,
\nwithout any compensation, of almost the entire rights of the
\nowner  leaving to him only a few subsidiary  rights.\tThis
\nresult could not,  in  my opinion, have been intended by our
\nConstitution.  As said by Rich J. in the Minister for  State
\nfor  the Army v. Datziel (i) while dealing with\t section  31
\n(XXXI) of the Australian Constitution–\n<\/p>\n
    “Property,\tin relation to land, is a bundle  of  rights
\nexercisable  with  respect to the land.\t The  tenant  of  an
\nunencurnbered  estate  in fee simple in possession  has\t the
\nlargest possible bundle.  But there is nothing in the placi-
\ntum to suggest that  the  legislature  was intended to be at
\nliberty to  free  itself from the restrictive provisions  of
\nthe placitum by taking care to seize something short of\t the
\nwhole bundle owned by the person whom it is expropriating.”\n<\/p>\n
    The\t learned Judge then concluded as follows  at p.\t 286
\n:-\n<\/p>\n
    “It would in my opinion, be wholly inconsistent with the
\nlanguage of the placitum to hold that whilst preventing\t the
\nlegislature   from  authorising\t the acquisition of a  citi-
\nzen’s  full title except upon just terms, it leaves it\topen
\nto  the legislature to seize possession and enjoy  the\tfull
\nfruits\tof possession indefinitely, on any terms it  chooses
\nor upon no terms at all.”\n<\/p>\n
(1) (1943-1944) 68 C,L.R. 261.\n<\/p>\n
118<\/span>
\n922<\/span><\/p>\n
    In my judgment the question whether the Ordinance or the
\nAct  has  deprived the shareholder of  his  “property”\tmust
\ndepend,\t for  its answer, on whether it has taken  away\t the
\nsubstantial bulk of the rights constituting his\t “property”.
\nIn  other words,  if the rights taken away by the  Ordinance
\nor  the\t Act are such as would render the  rights  left\t un-
\ntouched\t illusory and practically valueless, then there\t can
\nbe  no question that in effect and substance the  “property”
\nof  the shareholder has been taken away by the Ordinance  or
\nthe Act.  Judged by this test can it be said that the  right
\nto  dispose of the share and the right to receive  dividend,
\nif  any,  or to participate in\tthe surplus in the  case  of
\nwinding up that have been left to the shareholder are  illu-
\nsory or\t practically valueless, because the right to control
\nthe  management\t by directors elected by him, the  right  to
\npass resolutions giving directions to the directors and\t the
\nright  to present a winding up petition have, for  the\ttime
\nbeing,\tbeen suspended ? I think not.  The right still\tpos-
\nsessed\tby  the shareholder are the most  important  of\t the
\nrights constituting his “property”, although certain  privi-
\nleges incidental to the ownership have been put in  abeyance
\nfor the time being.  It is, in my opinion, impossible to say
\nthat  the Ordinance or the Act has deprived the\t shareholder
\nof his “property” in the sense in which that word is used in
\narticle\t 19 (1) (f) and article 31.  The curtailment of\t the
\nincidental privileges, namely, the right to elect directors,
\nto pass resolutions and to apply for winding up may well  be
\nsupported  as  a reasonable restraint on  the  exercise\t and
\nenjoyment of the shareholder’s right of property imposed  in
\nthe  interests of the general public under article  19\t(5),
\nnamely,\t to secure the supply of an essential commodity\t and
\nto prevent unemployment.\n<\/p>\n
      Learned  counsel\tfor the petitioner,  however,  urges
\nthat the Ordinance and the Act have infringed the sharehold-
\ner’s  right to property in that he has been deprived of\t his
\nvaluable  right\t to elect directors, to give  directions  by
\npassing resolutions and, in case of apprehension of loss, to
\npresent a petition for the winding
\n923<\/span>
\nup of the company.  These rights, it is urged, are by  them-
\nselves\t“property”  and it is of this  “property”  that\t the
\nshareholder is said to have been deprived bythe State  under
\na law which does not provide for payment of compensation and
\nwhich is, as such, an infraction of the shareholder’s funda-
\nmental\tright  to property under article 31 (2).  Two  ques-
\ntions  arise on this argument.\tAre these rights  “property”
\nwithin\tthe meaning of the two articles I have\tmentioned  ?
\nThese  rights, as already stated, are, no doubt,  privileges
\nincidental  to\tthe ownership of the share which  itself  is
\nproperty,  but it cannot, in my opinion, be said that  these
\nrights, by themselves, and apart from the share are “proper-
\nty” within the meaning of those articles, for those articles
\nonly  regard that as “property” which can by itself  be\t ac-
\nquired,\t disposed  of or taken possession of. The  right  to
\nvote for the election of directors, the right to pass  reso-
\nlutions and the right to present a petition  for winding  up
\nare personal rights flowing from the ownership of the  share
\nand  cannot  by themselves and apart from the share  be\t ac-
\nquired or disposed of or taken possession of as contemplated
\nby  those  articles.  The second question is  assuming\tthat
\nthese  rights  are by themselves “property “,  what  is\t the
\neffect of the Ordinance and the Act on such “property”.\t  It
\nis  nobody’s case that the Ordinance  or the Act has  autho-
\nrised any acquisition by the State of this “property” of the
\nshareholder or that there has in fact been any such acquisi-
\ntion.  The only question then is whether this “property”  of
\nthe  shareholder, meaning thereby only the rights  mentioned
\nabove,\thas been taken possession of by the State.  It\twill
\nbe noticed that by the Ordinance or the Act these particular
\nrights of the shareholder have not been entirely taken away,
\nfor he can still exercise these rights subject 0 course,  to
\nthe  sanction of the Government.  Assuming,   however,\tthat
\nthe  fetters  placed on these rights are tantamount  to\t the
\ntaking\taway of the rights altogether, there is\t nothing  to
\nindicate  that\tthe Ordinance or the Act has,  after  taking
\naway the rights from the shareholder,
\n924<\/span>
\nvested them in the State or in any other person named by  it
\nso  as to enable the State or any other person to   exercise
\nthose rights of the shareholder.  The Government undoubtedly
\nappoints  directors under the Act, but such  appointment  is
\nmade in exercise of the the powers vested in the  Government
\nby  the\t Ordinance  or the Act and not in  exercise  of\t the
\nshareholder’s right.  As already indicated, entry 43 in\t the
\nUnion List authorises Parliament to make laws with  respect,
\namongst other things, to the regulation of trading  corpora-
\ntions.\tThere was, therefore, nothing to prevent  Parliament
\nfrom  amending the Companies Act or from passing a  new\t law
\nregulating  the management of the company by providing\tthat
\nthe directors, instead of being elected by the shareholders,
\nshould\tbe  appointed by the Government.  The  new  law\t has
\nundoubtedly cut down the existing rights of the\t shareholder
\nand thereby deprived the shareholder of his unfettered right
\nto  appoint directors or to pass resolutions  giving  direc-
\ntions  or to present a winding up petition.   Such  depriva-
\ntion,  however, has not vested the rights in the  Government
\nor  its\t nominee.  What has happened to the  rights  of\t the
\nshareholder  is that such rights have been  temporarily\t de-
\nstroyed or kept in abeyance. The result, therefore, has been
\nthat  although the shareholder has been for the\t time  being
\ndeprived  of  his “property”, assuming these  rights  to  be
\n“property”,  such “property” has not been acquired or  taken
\npossession  of\tby the Government.  If this  be\t the  result
\nbrought\t about by the Ordinance and the Act, do they  offend
\nagainst\t the fundamental rights guaranteed by article  31  ?
\nArticle\t 31 (1) formulates the fundamental right in a  nega-
\ntive form prohibiting the deprivation of property except  by
\nauthority of law.  It implies that a person may be  deprived
\nof his property by authority of law.  Article 31 (2) prohib-
\nits the acquisition or taking  possession of property for  a
\npublic\tpurpose under any law, unless such law provides\t for
\npayment\t of compensation.  It is suggested that clauses\t (1)
\nand  (2)o[  article  31 deal with the  same  topic,  namely,
\ncompulsory acquisition or taking possession
\n      925<\/span>
\nof property, clause (2) being only an elaboration of  clause
\n(1).   There appear to me to be two objections to this\tsug-
\ngestion.   If  that  were  the\tcorrect\t view,\tthen  clause
\n(1).must  be held to be wholly redundant and clause (2),  by
\nitself, would have been sufficient. In the next place,\tsuch
\na view would exclude deprivation of property otherwise\tthan
\nby acquisition or taking of possession.\t One can conceive of
\ncircumstances  where the State may have to deprive a  person
\nof  his property without acquiring or taking  possession  of
\nthe same. For example, in any emergency, in order to prevent
\na  fire spreading, the authorities may have to\tdemolish  an
\nintervening  building. This deprivation of property is\tsup-
\nported\tin  the United States of America as an\texercise  of
\n“police\t power “.This deprivation of property  is  different
\nfrom  acquisition or taking of possession of property  which
\ngoes  by the name of “eminent domain” in the American\tLaw.
\nThe construction suggested implies that our Constitution has
\ndealt  with only the law of “eminent domain “, but  has\t not
\nprovided  for deprivation of property in exercise of  police
\npowers’\t ‘.  I am not prepared to adopt\t such  construction,
\nfor  I do not feel pressed to do so by the language used  in
\narticle\t 31. On the contrary, the language of clause (1)  of
\narticle 31 is wider than that of clause (2), for deprivation
\nof  property  may well be brought about\t otherwise  than  by
\nacquiring  or  taking possession of it. I think\t clause\t (1)
\nenunciates  the\t general principle that no person  shall  be
\ndeprived of his property except by authority of law,  which,
\nput  in\t a positive form, implies that a person may  be\t de-
\nprived\tof his property, provided he is so deprived  by\t au-
\nthority\t of  law. No question of compensation  arises  under
\nclause\t(1). The effect of clause (2) is that  only  certain
\nkinds  of  deprivation\tof property,  namely  those  brought
\nabout by acquisition or taking possession of it, will not be
\npermissible  under  any law, unless such  law  provides\t for
\npayment of compensation.  If the deprivation of property  is
\nbrought\t about\tby means other than  acquisition  or  taking
\npossession  of\tit, no compensation is\trequired,   provided
\nthat  such  deprivation\t is by
\n926<\/span>
\nauthority of law.  In this case, as already stated, although
\nthe  shareholder has been deprived of certain  rights,\tsuch
\ndeprivation has been by authority of law passed by a  compe-
\ntent  legislative authority.  This deprivation\thaving\tbeen
\nbrought\t about otherwise than by acquisition or taking\tpos-
\nsession\t of  such rights, no question  of  compensation\t can
\narise\tand,  therefore,  there can be no  question  of\t the
\ninfraction  of fundamental rights under article 31 (2).\t  It
\nis  clear,  therefore,\tthat so far as\tthe  shareholder  is
\nconcerned there has been no infringement of his\t fundamental
\nrights\tunder  article\t19 (1) (f) or article  31,  and\t the
\nshareholder  cannot  question the constitutionality  of\t the
\nOrdinance or the Act on this ground.\n<\/p>\n
    As\tregards the company it is contended that  the  Ordi-
\nnance  and  the Act by empowering the State to\tdismiss\t the
\nmanaging agent, to discharge the directors elected  by\t the
\nshareholders  and  to appoint new directors have  in  effect
\nauthorised  the State to take possession of the\t undertaking
\nand assets of the company through the new directors appoint-
\ned  by\tit without paying any compensation  and,  therefore,
\nsuch law is repugnant to article 31 (2) of our Constitution.
\nIt  is, however, urged by the learned Attorney-General\tthat
\nthe  mills  and all other assets now in the  possession\t and
\ncustody of the new directors who are only servants or agents
\nof  the\t said  company are, in the eye of the  law,  in\t the
\npossession  and custody of the company and have\t not  really
\nbeen  taken  possession\t of by the  State.   This  argument,
\nhowever,  overlooks the fact that in order that the  posses-
\nsion of the servant or agent may be juridically regarded  as
\nthe  possession of the master or principal, the\t servant  or
\nagent  must be obedient to, and amenable to  the  directions
\nof, the master or principal.  If the master or principal has
\nno hand in the appointment of the servant or agent or has no
\ncontrol\t over  him or has no power to dismiss  or  discharge
\nhim,  as  in this case, the possession of  such\t servant  or
\nagent  can hardly, in law, be regarded as the possession  of
\nthe company(1).\t In this view of the
\n(1) See Elements of Law by Markby. 6th Edition. Para 371. p.\n<\/p>\n
192.
\n927<\/span>
\nmatter there is great force in the argument that the proper-
\nty of the company has been taken possession of by the  State
\nthrough\t directors who have been appointed by the  State  in
\nexercise  of the powers conferred by the Ordinance  and\t the
\nAct  and  who  are under the direction and  control  of\t the
\nState and this has been done without payment of any  compen-
\nsation.\t The appropriate legislative authority was no  doubt
\ninduced to enact this law, because,  as the  preamble to the
\nOrdinance stated, on account of mismanagement and neglect, a
\nsituation had arisen in the affairs of the company which had
\nprejudicially-affected\tthe production of an essential\tcom-
\nmodity and had caused serious unemployment amongst a certain
\nsection\t of  the community, but, as stated by Holmes  J.  in
\nPennsylvania  Coal  Company v. Mahon(1),  “A  strong  public
\ndesire\tto  improve the public condition is  not  enough  to
\nwarrant\t achieving  the\t desire by a shorter  cut  than\t the
\nconstitutional. way of paying for the change.”\tHere, there-
\nfore, it may well be argued that the property of the company
\nhaving been taken possession of by the State in exercise  of
\npowers conferred by a law which does not provide for payment
\nof  any compensation, the fundamental right of\tthe  company
\nhas, in the eye of the law, been infringed.\n<\/p>\n
    If\tthe  fundamental right of the company has  been\t in-
\nfringed, at all, who can complain about such infringement  ?
\nPrimafacie  the company would be the proper person  to\tcome
\nforward\t in vindication of its own rights. It is  said\tthat
\nthe directors having been dismissed, the company cannot act.
\nThis, however, is a misapprehension, for if the Act be\tvoid
\non  account  of its being  unconstitutional,  the  directors
\nappointed  by the shareholders have never in law  been\tdis-
\ncharged and are still in the eye of the law the directors of
\nthe  company,  and there was nothing to\t prevent  them\tfrom
\ntaking\tproceedings in the name of the company at their\t own
\nrisk  as to costs.  Seeing that the directors have not\tcome
\nforward to make the application on behalf of the company and
\nin its name the question arises whether
\n(1) 260 U,S. 393.\n<\/p>\n
928<\/span><\/p>\n
an individual shareholder can complain.\t It is well  settled
\nin the United States that no one but those whose rights\t are
\ndirectly  affected by a law can raise the question   of\t the
\nconstitutionality   of\t that  law.  Thus  in\t McCabe\t  v.
\nAtchison(1) which  arose  out of a suit filed by five Negros
\nagainst five Railway Companies to restrain them from  making
\nany distinction in service on account of race pursuant to an
\nOklahoma Act known as ‘ ‘The Separate Coach Law,” in uphold-
\ning the dismissal of the suit Hughes J. observed :–\n<\/p>\n
    “It is an elementary principle that in order to  justify
\nthe granting of this extraordinary relief, the complainants’
\nneed of it and the absence of an adequate remedy at law must
\nclearly appear.\t The complaint cannot succeed because  some-
\none  else may be hurt. Nor does it make any difference\tthat
\nother  persons\twho may be injured are persons of  the\tsame
\nrace  or occupation.  It is the fact,  clearly\testablished,
\nof injury to the  complainant–not to  others -which  justi-
\nfies judicial interference.”\n<\/p>\n
    In that case there was no allegation that anyone of\t the
\nplaintiffs had ever travelled on anyone of the rail roans or
\nhad requested any accommodation in any of the sleeping\tcars
\nor  that  such request was refused. The same  principle\t was
\nlaid  down  in Jeffrey Manufacturing  Company  v.  Blagg(2),
\nHendrick  v.  MaCyland(3) and Newark Natural  Gas  and\tFuel
\nCompany\t v. The City of Newark(1).  In each of\tthese  cases
\nthe Court declined to permit the person raising the question
\nof constitutionality to do so on the ground that his  rights
\nwere not directly affected by the law or Ordinance in  ques-
\ntion.\tOn the other hand, in Truax v. Raich(5) and  in\t Bu-
\nchanan\tv. Warley(5) the Court allowed the plea\t because  in
\nboth the cases the person raising it was directly  affected.
\nIn the first of the two last mentioned cases an Arizona\t Act
\nof 1914 requiring employers employing more than five workers
\nto  employ not less than eighty per cent. native born  citi-
\nzens was
\n     (1) 235 u.s. 151.\t    (4) 242 u.s. 403.\n<\/p>\n
     (2) 235 u.s. 571.\t    (5) 239 u.s. 33.\n<\/p>\n
     (3) 235 U.S. 610\t    (6) 245 u.s. 60.\n<\/p>\n
929<\/span><\/p>\n
challenged by an alien who had been employed as a cook in  a
\nrestaurant.  That statute made a violation of the Act by  an
\nemployer  punishable.  The fact that the employment  was  at
\nwill  or that the employer and not the employee was  subject
\nto prosecution did not prevent the employee from raising the
\nquestion  of constitutionality because the statute,  if\t en-
\nforced, would compel the employer to discharge the  employee
\nand,  therefore, the employee was directly affected  by\t the
\nstatute.   In the second of the two last mentioned  cases  a
\ncity  Ordinance\t prevented  the occupation of a\t plot  by  a
\ncolored person in a block where a majority of the residences
\nwere  occupied\tby  white persons.  A  white  man  sold\t his
\nproperty  in such a block to a Negro under a contract  which
\nprovided that the purchaser should not be required to accept
\na  deed unless he would have a right, under the laws of\t the
\ncity,  to occupy the same as a residence.  The\tvendor\tsued
\nfor  specific performance and contended that  the  Ordinance
\nwas  unconstitutional.\tAlthough the alleged denial of\tcon-
\nstitutional  rights  involved only  the rights\tof  coloured
\npersons\t and the vendor was a white person yet it  was\theld
\nthat  the vendor was directly affected, because\t the  Courts
\nbelow,\tin  view of the Ordinance, declined to\tenforce\t his
\ncontract and thereby directly affected his right to sell his
\nproperty.   It is, therefore, clear that the  constitutional
\nvalidity  of a law can be challenged only by a person  whose
\ninterest  is  directly affected by the law.   The   question
\nthen  arises   whether\tthe infringement  of  the  company’s
\nrights\tso directly affects its shareholders as\t to  entitle
\nany  of\t its  shareholders to  question\t the  constitutional
\nvalidity  of the law infringing the company’s  rights.\t The
\nquestion  has been answered in the negative by\tthe  Supreme
\nCourt of the United States in Darnell v. The State of  Indi-
\nana(1).\t In  that case the owner of a share in\ta  Tennessee
\ncorporation  was  not allowed to complain  that\t an  Indiana
\nlaw discriminated against Tennessee corporations in that  it
\ndid not make any allowance, as it did in the case of Indiana
\ncorporations, where the corporation
\n(1) 226 U.S. 388.\n<\/p>\n
119<\/span>
\n930<\/span><\/p>\n
  had property\ttaxed within the State.\t This is in   accord
\nwith the well established legal principle that a corporation
\nis  a  legal ‘entity capable of holding pro   perty  and  of
\nsuing  or being sued and the corporators   are not, in\tcon-
\ntemplation of law, the owners of the  assets of the corpora-
\ntion.\tIn all the cases referred to  above the question  of
\nconstitutionality was raised in\t  connection with the  equal
\nprotection  clause  in\tthe   Fourteenth  Amendment  of\t the
\nAmerican  Federal Constitution.\t If  such  be  the  require-
\nments  of  law\tin  connection\twith the  equal\t  protection
\nclause\t which corresponds to  our article  14, it   appears
\nto  me\tto follow  that only a person who is the   owner  of
\nthe property can  raise the question  of   constitutionality
\nunder  article\t31 of  a  law  by   which he is so  deprived
\nof his property.  If direct interest is necessary to  permit
\na  person to raise the question of  constitutionality  under
\narticle\t 14,  a\t direct\t interest in the  property  will,  I
\napprehend, be necessary\t to entitle a person to challenge  a
\nlaw  which is said to  infringe the right to  that  property
\nunder  article\t31.  In my opinion, although  a\t shareholder
\nmay,  in a sense  be interested to see that the\t company  of
\nwhich  he is a\tshareholder is not deprived of its  property
\nhe  cannot,  as held in Darnell v. Indiana(1), be  heard  to
\ncomplain,   in\this own name and on his own behalf,  of\t the
\ninfringement  of  the fundamental right to property  of\t the
\ncompany,  for,\tin law, his own right to  property  has\t not
\nbeen  infringed\t as  he is not the owner  of  the  company’s
\nproperties.  An interest in the company owning an  undertak-
\ning  is\t not  an interest in the  undertaking  itself.\t The
\ninterest  in  the company which owns an undertaking  is\t the
\n“property” of the shareholder under  article 31 (2), but the
\nundertaking  is the property of the company and not that  of
\nthe  shareholder  and the latter cannot be said\t to  have  a
\ndirect interest in the property of the company. This is\t the
\ninevitable  result  of attributing a legal personality to  a
\ncorporation.  The proceedings for a writ in the nature of  a
\nwrit  of  habeas corpus appear to be somewhat different\t for
\nthe
\n(1) 226 u.S. 338
\n931<\/span>
\nrules governing those proceedings permit, besides the person
\nimprisoned, any person, provided he is not an utter  strang-
\ner,  but is at least a friend or relation of the  imprisoned
\nperson, to apply for that particular writ. But that  special
\nrule  does  not appear to be applicable to the\tother  writs
\nwhich  require a direct and tangible interest in the  appli-
\ncant to support his application. This must also be the\tcase
\nwhere  the  applicant  seeks to raise the  question  of\t the
\nconstitutionality of a under articles 14, 19 and 31.
\n    For\t the reasons set out  above the\t present  petitioner
\ncannot\traise  the  question of\t constitutionality  of\t the
\nimpugned law under article 31.\tHe cannot  complain  of\t any
\ninfringement   of  his own rights as a shareholder,  because
\nhis  “property” has  not  been acquired or taken  possession
\nof  by the State although he has been deprived of his  right
\nto vote and to present a winding up petition by authority of
\nlaw.   Nor can he complain of an infringement of the  compa-
\nny’s right to property because he is not, in the eye of law,
\nthe  owner of the property in question and  accordingly\t not
\ndirectly  interested in\t it.  In certain  exceptional  cases
\nwhere  the  company’s property is injured  by  outsiders,  a
\nshareholder  may,  under the English law, alter\t making\t all
\nendeavours to induce the persons in charge of the affairs of
\nthe company to take steps, file a suit on behalf of  himself
\nand other shareholders for redressing the wrong done to\t the
\ncompany, but that principle does not apply here for this  is
\nnot a suit, nor has it been shown that any attempt was\tmade
\nby the petitioner to induce the old directors to take  steps
\nnor  do these proceedings purport to have been taken by\t the
\npetitioner  on behalf of himself and the other\tshareholders
\nof the.company.\n<\/p>\n
    The only other ground on which the Ordinance and the Act
\nhave been challenged is that they infringe the the fundamen-
\ntal  rights  guaranteed by article 14 of  the  Constitution.
\n“Equal\tprotection of the laws”,  as observed by Day  3.  in
\nSouthern Railway Company v. Greene (1), “means subjection to
\nequal laws, applying
\n(1) 216 U.S. 400
\n932<\/span>
\nalike to all in the same situation”.  The inhibition of\t the
\narticle that the State shall not deny to any person equality
\nbefore\tthe  law  or the equal protection of  the  laws\t was
\ndesigned to protect all persons against legislative discrim-
\nination amongst equals and to prevent any person or class of
\npersons\t from  being singled out as a  special\tsubject\t for
\ndiscriminating and hostile legislation.\t It does not, howev-
\ner, mean that every law must have universal application, for
\nall persons are not, by nature, attainment or circumstances,
\nin the same position.  The varying needs of different class-
\nes  of persons often require separate treatment and  it\t is,
\ntherefore, established by judicial decisions that the  equal
\nprotection clause of the Fourteenth Amendment of the  Ameri-
\ncan Constitution does not take away from the State the power
\nto classify persons for\t legislative purposes.\tThis classi-
\nfication may be on  different bases.  It may be geographical
\nor according to objects or occupations or the like.  If\t law
\ndeals equally with all of a certain well-defined class it is
\nnot  obnoxious and it is not open to the charge of a  denial
\nof  equal protection  on the ground that it has no  applica-
\ntion to\t other\tpersons,  for  the  class for whom the\t law
\nhas  been  made is different from other persons and,  there-
\nfore,  there  is no discrimination amongst  equals.   It  is
\nplain that every classification is in some degree likely’ to
\nproduce\t some inequality, but mere production of  inequality
\nis  not by itself enough. The inequality produced, in  order
\nto  encounter  the challenge of the  Constitution,  must  be
\n“actually  and palpably unreasonable and  arbitrary.”\tSaid
\nDay J. in Southern Railway Company v. Greene(1) :—”  While
\nreasonable  classification is permitted, without doing\tvio-
\nlence to the equal protection of the laws, such\t classifica-
\ntion  must be based upon some real and substantial  distinc-
\ntion,  bearing a reasonable and just relation to the  things
\nin respect to which such classification is imposed; and\t the
\nclassification\tcannot\tbe arbitrarily\tmade   without\t any
\nsubstantial  basis.   Arbitrary selection, it has been said,
\ncannot\tbe  justified by calling it  classification”.  Quite
\nconceivably there may be a law
\n933<\/span>
\nrelating to a single individual if it is made apparent that,
\non  account of some special reasons applicable\tonly to\t him
\nand inapplicable to anyone else, that single individual is a
\nclass by himself.  In Middieton v. Texas  Power\t and   Light
\nCompany(1)   it was pointed  out that  there was  a   strong
\npresumption  that  a legislature  understood  and  correctly
\nappreciated the needs of its own people, that  its laws were
\ndirected  to problems made manifest by experience  and\tthat
\nthe  discriminations were based upon adequate  grounds.\t  It
\nwas  also pointed out in that case that the burden was\tupon
\nhim who attacked a law for unconstitutionality.\t In Lindsley
\nv. Natural Carbonic Gas Company(2) It was also said that one
\nwho assailed the classification made in a law must carry the
\nburden\tof showing that it did not rest upon any  reasonable
\nbasis but was essentially arbitrary.   If there is a classi-
\nfication, the Court will not hold it invalid merely  because
\nthe  law  might have been extended to other persons  who  in
\nsome respects might resemble the class for which the law was
\nmade, for the legislature is the best judge of the needs  of
\nthe particular classes and to estimate the degree of evil so
\nas to adjust its legislation according to the exigency found
\nto  exist.  If, however, there is, on the face of the  stat-
\nute,  no classification at all or none on the basis  of\t any
\napparent  difference  specially peculiar to  any  particular
\nindividual  or class and not applicable to any other  person
\nor class of persons and yet the law hits only the particular
\nindividual  or class it is nothing but an attempt  to  arbi-
\ntrarily single out an individual or class for discriminating
\nand  hostile legislation. The presumption in favour  of\t the
\nlegislature cannot in such a case be legitimately  stretched
\nso  as\tto throw the impossible onus on the  complainant  to
\nprove  affirmatively  that there are  other  individuals  or
\nclass of individuals who also possess the precise amount  of
\nthe identical qualities which are attributed to him so as to
\nform  a class with him.\t As pointed out by Brewer J. in\t the
\nGulf, Colorado and Santa Fe’Railway v.W.H. Ellis (3),  while
\ngood faith
\n(1}  249 U.S. 152.\t(2) 220 U.S. 61.      (3) 165  U.S..\n<\/p>\n
150.
\n934<\/span>
\nand  a\tknowledge of existing conditions on the\t part  of  a
\nlegislature  was to be presumed, yet to carry that  presump-
\ntion to the extent of always holding that there must be some
\nundisclosed and unknown reason for subjecting certain  indi-
\nviduals or corporations to hostile and discriminating legis-
\nlation\twas  to make the protecting clause a  mere  rope  of
\nsand, in no manner restraining State action.
\n    The complaint of the petitioner on this head  is  formu-
\nlated  in  paragraph  8 (iii) of  the  petition\t as  follows
\n:—“The Ordinance denied to the company and its  sharehold-
\ners equality before the law and equal protection of the laws
\nand was thus a violation of article 14 of the  Constitution.
\nThe  power  to\tmake regulations relating to trading  corpo-
\nrations\t or  the control or production of industries  was  a
\npower which consistently with article 14 could be  exercised
\nonly  generally\t or with reference to a class and  not\twith
\nreference to a single company or to shareholders of a single
\ncompany.”  The Act is also challenged on the same ground  in
\nparagraph 9 of the petition.   The learned  Attorney-General
\ncontends  that the petitioner as an  individual\t shareholder
\ncannot\tcomplain of discrimination against the company.\t  It
\nwill  be  noticed  that it is not a case  of  a\t shareholder
\ncomplaining only about discrimination against the company or
\nfighting  the  battle of the company but it is a case  of  a
\nshareholder  complaining of discrimination  against  himself
\nand  other  shareholders of this company.  It is  true\tthat
\nthere is no complaint of discrimination inter se the  share-
\nholders of this company but the complaint is that the share-
\nholders of this company, taken as a unit, have been discrim-
\ninated\tvis-a-vis  the\t shareholders  of  other  companies.
\nTherefore,  the question as to the right of the\t shareholder
\nto  question the validity of a law infringing the  right  of
\nthe  company  does not arise. Here the shareholder  is\tcom-
\nplaining  of the infringement of his own rights and if\tsuch
\ninfringement  can  be established I see no  reason  why\t the
\nshareholder  cannot come within article 32 to vindicate\t his
\nown rights. The fact that these proceedings have been  taken
\nby
\n     935<\/span>
\none single shareholder holding only one single fully paid up
\nshare does not appear to me to make any the least difference
\nin  principle.\tIf this petitioner has, by the Ordinance  or
\nthe Act, been discriminated against and denied equal protec-
\ntion  of the law, his fundamental right has  been  infringed
\nand  his right to approach this Court for redress cannot  be
\nmade  dependent\t on the readiness or  willingness  of  other
\nshareholders  whose rights have also been infringed to\tjoin
\nhim in these proceedings or of the company to take  substan-
\ntive proceedings.  To take an example, if any law  discrimi-
\nnates  against\ta class, say the Punjabis, any\tPunjabi\t may
\nquestion  the constitutionality of the law, without  joining
\nthe  whole Punjabi community or without acting on behalf  of
\nall the Punjabis.  To insist on his doing so will be to\t put
\na fetter on his fundamental right under article 32 which the
\nConstitution has not imposed on him.  Similarly, if any\t law
\ndeprives  a particular shareholder or the shareholders of  a
\nparticular  company  of the  ordinary  rights of  sharehold-
\ners under the general law for reasons not particularly\t and
\nspecially  applicable to him or them but also applicable  to
\nother  shareholders  of\t other companies,  such\t law  surely
\noffends\t against article 14 and any one so denied the  equal
\nprotection of law may legitimately complain of the infringe-
\nment of his fundamental right and is entitled as of right to
\napproach  this\tCourt under article 32 to  enforce  his\t own
\nfundamental right under article 14, irrespective of  whether
\nany other person joins him or not.\n<\/p>\n
    To the charge of denial of equal protection of the\tlaws
\nthe respondents in the affidavit of Sri Vithal N. Chandavar-
\nkar  filed in opposition to the petition make the  following
\nreply:–“With  reference to paragraph 6 of the\tpetition,  I
\ndeny  the soundness of the submissions that on or  from\t the
\n26th January, 1950, when the Constitution of India came into
\nforce the said Ordinance became void under article 13(1)  of
\nthe  Constitution  or  that  the  provisions  thereof\twere
\ninconsistent  with  the provisions of Part III of  the\tsaid
\nConstitution  or for any of the other grounds  mentioned  in
\nparagraph 8
\n936<\/span>
\nof  the\t said petition.”  In the whole of the  affidavit  in
\nopposition there is no suggestion as to why the promulgation
\nof  the Ordinance or the passing of the Act  was  considered
\nnecessary  at all or on what principle or  basis  either  of
\nthem was founded.  No attempt has been made in the affidavit
\nto  show  that the Ordinance or the Act was based  upon\t any
\nprinciple of classification at all or even that the particu-
\nlar company and its shareholders possess any special  quali-
\nties which are not to be found in other companies and  their
\nshareholders  and which, therefore, render  this  particular
\ncompany and its shareholders a class by themselves.  Neither
\nthe affidavit in opposition nor the learned Attorney-General
\nin course of his arguments referred to the statement  of the
\nobjects\t and   reasons for introducing the  bill  which\t was
\neventually  enacted or the Parliamentary debates as  showing
\nthe  reason  why and under what circumstances this  law\t was
\nmade and, therefore, apart from the question of their admis-
\nsibility in evidence, the petitioner has had no\t opportunity
\nto  deal  with\tor rebut them and the same  cannot  be\tused
\nagainst him.\n<\/p>\n
     The  learned  Attorney-General takes his stand  on\t the
\npresumption  that  the law was founded on a valid  basis  of
\nclassification,\t that  its discriminations were\t based\tupon
\nadequate grounds and that the law was passed for  safeguard-
\ning  the needs of the people and that, therefore,  the\tonus
\nwas upon the petitioner to allege and prove that the classi-
\nfication which he challenged did not rest upon any  reasona-
\nble basis but was essentially arbitrary. I have already said
\nthat if on the face of the law there is no classification at
\nall  or,  at  any rate, none on the basis  of  any  apparent
\ndifference  specially  peculiar to the individual  or  class
\naffected by the law, it is only an instance of an  arbitrary
\nselection  of an individual or class for discriminating\t and
\nhostile\t legislation and, therefore, no presumption can,  in
\nsuch  circumstances, arise at all.  Assuming, however,\tthat
\neven  in such a case the onus is thrown on the\tcomplainant,
\nthere can be nothing to prevent him from proving, if he can,
\nfrom the text of. the law itself, that
\n937<\/span>
\nit is “actually and palpably unreasonable and arbitrary” and
\nthereby discharging the initial onus.\n<\/p>\n
    The\t Act is intituled an Act to make  special  provision
\nfor the proper management and administration of the Sholapur
\nSpinning and Weaving Company, Limited.” There is not even  a
\nsingle preamble alleging that the company was being  misman-
\naged at all or that any special reason existed which made it
\nexpedient to enact this law.  The Act, on its face, does not
\npurport to make any classification at all or to specify\t any
\nspecial’  vice\tto  which this particular  company  and\t its
\nshareholders  are  subject and which is not to be  found  in
\nother companies and their shareholders so as to justify\t any
\nspecial\t treatment.   Therefore.,  this Act,  ex  facie,  is
\nnothing but an arbitrary selection of this particular compa-
\nny  and\t its  shareholders for\tdiscriminating\tand  hostile
\ntreatment and read by itself.is palpably an infringement  of
\nArticle 14 of the Constitution.\n<\/p>\n
   The\tlearned\t Attorney-General promptly takes us  to\t the
\npreambles  to the Ordinance which has been replaced  by\t the
\nAct and suggests that the Act is based on the same consider-
\nations\t on which the  Ordinance was promulgated.   Assuming
\nthat it is right and permissible to refer to and utilise the
\npreambles, do they alter the situation ?  The preambles were
\nas  follows :-“Whereas on account of mismanagement  and\t ne-
\nglect a situation has arisen in the affairs of the  Sholapur
\nSpinning  and Weaving Company, Limited, which  has  prejudi-
\ncially affected the production of an essential commodity and
\nhas  caused serious  unemployment amongst a certain  section
\nof  the community;And whereas an emergency has arisen  which
\nrenders\t it  necessary\tto make special\t provision  for\t the
\nproper management and administration of the aforesaid compa-
\nny;-”  The above preambles quite clearly indicate  that\t the
\njustification  of  the\tOrdinance  rested  on  mismanagement
\nand neglect producing certain results therein specified.  It
\nwill be noticed that apart from these preambles there is  no
\nmaterial whatever before us establishing or even  suggesting
\nthat  this  company and its shareholders have in  fact\tbeen
\nguilty of any
\n938<\/span>
\nmismanagement  or  neglect.   Be that as it  may,  the\tonly
\nreason put forward for the promulgation of the Ordinance was
\nmismanagement resulting in falling off of production and  in
\nproducing  unemployment.  I do not find it necessary to\t say
\nthat mismanagement and neglect in conducting the affairs  of
\ncompanies  can never be a criterion or basis of\t classifica-
\ntion  for legislative purposes.\t I shall assume that  it  is
\npermissible  to make a law whereby all delinquent  companies
\nand  ‘their  shareholders  may be brought to  book  and\t all
\ncompanies mismanaging their affairs and the shareholders  of
\nsuch  companies may, in the interest of the general  public,
\nbe  deprived of their right to manage the affairs  of  their
\ncompanies.  Such a classification made by a law would bear a
\nreasonable relation to the conduct of all delinquent  compa-
\nnies and shareholders and may, therefore, create no inequal-
\nity,  for  the delinquent companies and\t their\tshareholders
\nfrom a separate class and cannot claim equality of treatment
\nwith  good  companies and their shareholders who  are  their
\nbetters.  But a distinction  cannot  be made   between\t the
\ndelinquent  companies  inter se or between  shareholders  of
\nequally delinquent companies and one set cannot be  punished
\nfor  its  delinquency\twhile another set  is  permitted  to
\ncontinue, or become, in like manner, delinquent without\t any
\npunishment unless there be some other apparent difference in
\ntheir respective obligations and unless there be some cogent
\nreason why prevention of mismanagement is more imperative in
\none  instance than in the other.  To do so will\t be  nothing
\nbut an arbitrary selection which can never be justified as a
\npermissible  classiffication.\tI am not  saying  that\tthis
\nparticular company and its shareholders may not be guilty of
\nmismanagement and negligence which has brought\tabout  seri-
\nous  fall in production of an essential commodity  and\talso
\nconsiderable  unemployment.  But  if  mismanagement  affect-
\ning  production and resulting in unemployment is to  be\t the
\nbasis  of a classification for making a law  for  preventing
\nmismanagement  and securing production and  employment,\t the
\nlaw must embrace within its
\n939<\/span>
\nambit  all companies which now are or may  hereafter  become
\nsubject\t to the vice. This basis of classification,  by\t its
\nvery nature, cannot be exclusively applicable to any partic-
\nular  company and its shareholders but is capable  of  wider
\napplication  and, therefore, the law founded on\t that  basis
\nmust  also be wide enough so as to be capable of  being\t ap-
\nplicable  to whoever may happen at any time to\tfall  within
\nthat classification. Mismanagement affecting production\t can
\nnever  be  reserved  as a special attribute  peculiar  to  a
\nparticular  company  or\t the shareholders  of  a  particular
\ncompany.  It  it  were permissible for\tthe  legislature  to
\nsingle\tout an individual or class and to punish him  or  it
\nfor  some  delinquency which may equally be found  in  other
\nindividuals or classes and to leave out the other  individu-
\nals or classes from the ambit of the law the prohibition  of
\nthe  denial of equal protection of the laws would only be  a
\nmeaningless and barren form of words. The argument that\t the
\npresumption being in favour of the legislature, the onus  is
\non  the\t petitioner to show there are other  individuals  or
\ncompanies  equally  guilty  of\tmismanagement  prejudicially
\naffecting  the\tproduction  of an  essential  commodity\t and
\ncausing\t serious unemployment amongst a certain\t section  of
\nthe  community does not, in such. circumstances, arise,\t for
\nthe simple reason that here there has been no classification
\nat all and, in any case, the basis of classification by\t its
\nvery nature is much wider and cannot, in it application,  be
\nlimited only to this company and its shareholders and,\tthat
\nbeing so, there is no reason to throw on the petitioner\t the
\nalmost\timpossible  burden of proving that there  are  other
\ncompanies  which  are in fact precisely and in all  particu-
\nlars similarly situated\t In any event, the petitioner, in my
\nopinion,  may  well  claim to have discharged  the  onus  of
\nshowing\t that  this company and its shareholders  have\tbeen
\nsingled out for discriminating treatment by showing that the
\nAct,  on the face of it, has adopted a basis of\t classifica-
\ntion  which, by its very nature, cannot be  exclusively\t ap-
\nplicable to this company and its shareholders but Which\t may
\nbe equally appplicable to other companies
\n940<\/span>
\nand  their  shareholders and has penalised  this  particular
\ncompany and its shareholders, leaving out other companms and
\ntheir shareholders who may be equally guilty of the  alleged
\nvice of mismanagement and neglect of the type referred to in
\nthe  preambles.\t In my opinion the legislation\tin  question
\ninfringes  the\tfundamental  rights of\tthe  petitioner\t and
\noffends against article 14 of our Constitution.
\n    The\t result, therefore, is that this petition  ought  to
\nsucceed and the petitioner should have an order in terms  of
\nprayer (3) of the petition with costs.\n<\/p>\n
\t\t\t  Petition dismissed.\n<\/p>\n
Agent  for the petitioner: M.S.K. Aiyengar.
\nAgent for opposite party Nos. 1 & 2:P.A. Mehta.
\nAgent  for opposite party Nos. 3 to 5 and 7 to 10:\n<\/p>\n
\t    Rajinder Narain.\n<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Chiranjit Lal Chowdhuri vs The Union Of India And Others on 4 December, 1950 Equivalent citations: 1951 AIR 41, 1950 SCR 869 Author: H J Kania Bench: Kania, Hiralal J. (Cj), Fazal Ali, Saiyid, Sastri, M. Patanjali, Mukherjea, B.K., Das, Sudhi Ranjan PETITIONER: CHIRANJIT LAL CHOWDHURI Vs. RESPONDENT: THE UNION OF […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-3713","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nChiranjit Lal Chowdhuri vs The Union Of India And Others on 4 December, 1950 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/chiranjit-lal-chowdhuri-vs-the-union-of-india-and-others-on-4-december-1950\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chiranjit Lal Chowdhuri vs The Union Of India And Others on 4 December, 1950 - 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