1972 (10) TMI 127 - SC - Companies Law

Import Policy for Newsprint for the year April 1972 to March 1973 challenged on ground of infringement of fundamental rights to freedom of speech and expression in Article 19 (1) (a) and right to equality in Article 14 of the Constitution Held that - In the present case, it cannot be said that the newsprint policy is a reasonable restriction within the ambit of Article 19(2). The newsprint policy abridges the fundamental rights of the petitioners in regard to freedom of speech and expression. The newspapers are not allowed their right of circulation- The newspapers are not allowed right of page growth. The common ownership units of newspapers cannot bring out newspapers or new editions. The newspapers operating above 10 page level and newspapers Operating below 10 page level have been treated equally for assessing the needs and requirements of newspapers with newspapers which are not their equal. Once the quota is fixed and direction to use the quota in accordance with the newsprint policy is made applicable the big newspapers are prevented any increase in page number. Both page numbers and circulation are relevant for calculating the basic quota and allowance for increases. In the garb of distribution of newsprint the Government has tended to control the growth and circulation of newspapers. Freedom of the press is both qualitative and quantitative. Freedom lies both in circulation and in content. The newsprint policy which permits newspapers to increase circulation by reducing the number of pages, page area and periodicity, prohibits them to increase the number of pages, page area and periodicity by reducing circulation. These restrictions constrict the newspapers in adjusting their page number and circulation. The newsprint policy is not a measure to combat monopolies. The newsprint policy should allow the newspapers that amount of freedom of discussion and information which is needed or will appropriately enable the Members of the society to preserve their political expression of comment not only upon public affairs but also upon the vast range of views and matters needed for free society. the newsprint policy for 1972-73 violates Articles 19 (1) (a) and 14 of the Constitution. The restrictions by fixing 10 page limit in Remarks V and VIII of the policy infringe Articles 19 (1)(a) and 14 of the Constitution and are therefore, declared unconstitutional and struck down. The policy of basic entitlement to quota in Remark V is violative of Articles 19(1)(a) and 14 of the Constitution and is therefore struck down. The measure in Remark VII(a) is violative of Articles 14 and 19 (1) (a) of the Constitution and is struck down. The measures in Remark VII(C) read with Remark VIII are violative of Articles 19(1)(a) and 14 of the Constitution and are struck down. The prohibition in Remark X against common ownership unit from starting a new newspaper/periodical or a new edition is declared unconstitutional and struck down as violative of Article 19(1)(a) of the Constitution. For these reasons the petitioners succeed. The import policy for newsprint for the year 1972-73 in regard to Remarks V, VII(a), VII(c), VIII and X as indicated above is struck down.

Summary

Issues Involved:
1. Violation of Fundamental Rights under Article 19(1)(a) and Article 14 of the Constitution.
2. Validity of the Newsprint Control Order, 1962.
3. Validity of the Newsprint Import Control Policy for 1972-73.
4. Powers of the Government under the Essential Commodities Act, 1955, and the Imports and Exports (Control) Act, 1947.
5. Maintainability of the Writ Petitions by Companies.
6. Application of Article 358 during the Proclamation of Emergency.

Detailed Analysis:

1. Violation of Fundamental Rights under Article 19(1)(a) and Article 14 of the Constitution:
The petitioners argued that the Newsprint Policy for 1972-73 infringes their fundamental rights to freedom of speech and expression under Article 19(1)(a) and the right to equality under Article 14. The policy imposed several restrictions, including a 10-page ceiling for newspapers, prohibition on starting new newspapers or new editions by common ownership units, and restrictions on the use of newsprint.

The court held that these restrictions directly affect the volume of circulation, the size, and the growth of newspapers, thereby infringing Article 19(1)(a). The restrictions were not reasonable within the ambit of Article 19(2). The court also found that these restrictions were discriminatory and violated Article 14, as they treated unequals equally by imposing the same page limit on all newspapers regardless of their size and circulation.

2. Validity of the Newsprint Control Order, 1962:
The Newsprint Control Order, 1962, was challenged on the grounds that certain clauses conferred unfettered and unregulated power on the Controller, which could lead to arbitrary decisions. The court found that the provisions of the Newsprint Control Order, particularly sub-clauses 3 and 3A, were discriminatory and violated Article 14. The court held that these clauses imposed unreasonable restrictions on the freedom of speech and expression, thereby violating Article 19(1)(a).

3. Validity of the Newsprint Import Control Policy for 1972-73:
The Newsprint Import Control Policy for 1972-73 was challenged for imposing several restrictions that were claimed to be arbitrary and discriminatory. The court found that the policy's restrictions on page limits, prohibition on starting new newspapers or editions, and restrictions on interchangeability of quotas were unconstitutional. These restrictions were found to infringe the fundamental rights under Articles 19(1)(a) and 14.

4. Powers of the Government under the Essential Commodities Act, 1955, and the Imports and Exports (Control) Act, 1947:
The court examined whether the restrictions imposed by the Newsprint Policy were within the powers conferred by the Essential Commodities Act, 1955, and the Imports and Exports (Control) Act, 1947. The court held that the restrictions went beyond the scope of these Acts. The Essential Commodities Act allowed for the regulation of production, supply, and distribution of essential commodities, but the restrictions imposed by the Newsprint Policy were found to be more about controlling newspapers rather than regulating newsprint.

5. Maintainability of the Writ Petitions by Companies:
The Additional Solicitor General argued that companies could not invoke fundamental rights under Article 19. However, the court referred to previous decisions where relief was granted to petitioners claiming fundamental rights as shareholders or editors of newspaper companies. The court held that the shareholders, editors, and publishers, who are citizens, could invoke their fundamental rights for freedom of speech and expression through their newspapers.

6. Application of Article 358 during the Proclamation of Emergency:
The government argued that Article 358 barred any challenge to the Newsprint Policy during the proclamation of emergency. The court held that Article 358 did not apply to executive actions taken during the emergency if they were a continuation of prior executive actions or emanations of previous laws that were unconstitutional. The court found that the Newsprint Policy was a continuation of the old policy and could be challenged despite the proclamation of emergency.

Conclusion:
The court declared the Newsprint Policy for 1972-73 unconstitutional and struck down the restrictions imposed by it. The court held that the policy violated Articles 19(1)(a) and 14 of the Constitution. The restrictions on page limits, prohibition on starting new newspapers or editions, and restrictions on interchangeability of quotas were found to be unreasonable and discriminatory. The court also found that the Newsprint Control Order, 1962, conferred arbitrary powers on the Controller, violating Article 14. The petitions were allowed, and the impugned policy and provisions were struck down.