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TMI Blog1960 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... he Essential Commodities Act, 1955, was in operation. This Order superseded the Iron and Steel (Control of Production and Distribution) Order, 1951, and the Iron and Steel (Scrap Control) Order, 1943. Before I proceed further, it is necessary to consider some of the provisions of the Iron and Steel (Control) Order, 1956 (hereinafter referred to as the "control order"). Under clause 2, the term "controlled source" includes a "producer" which term means a person carrying on the business of manufacturing iron and steel. The term "registered producer" means a producer who is registered as such by the Controller. The term "Controller" means a person appointed as Iron and Steel Controller by the Central Government and includes any person exercising, upon authorisation by the Central Government all or any of the powers of the Iron and Steel Controller. A "controlled stockholder" means a stockholder appointed by the Controller to hold stocks of iron and steel under such terms and conditions as he may prescribe from time to time. The term "stockholder" means a person holding stocks of iron or steel for sale who is registered as a stockholder by the Controller. Clause 4 of the Control Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificates, permits or written orders, referred to in clauses 4 and 5, as to the maintenance by the Controller of records in connection with the distribution of iron or steel and generally for the purpose of giving effect to the provisions of Part II of the said Order (Part II contains clauses 3 to 17). The procedure that is followed in the manufacture and distribution of iron or steel is as follows : The Iron and Steel Controller collects the demands from sponsoring authorities and the State Governments and forwards the same to the Ministry of Steel, Mines and Fuel, Government of India at New Delhi, along with the statement of availability of iron and steel in the country. The Ministry of Steel, Mines and Fuel then allocates quotas of iron or steel to the sponsoring authorities and the State Governments. The State Governments distribute their quota through registered stockholders. The registered stockholders procure their orders and submit their indents to the Iron and Steel Controller who ultimately plans the same which means that after due scrutiny he gives an order to the producers or registered producers to producer and supply the subject matter of the indents. This order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the orders aforesaid the petitioner company has been placed in a difficult position with its buyers. There was correspondence between the Controller and the registered stockists as also the Tata-Tisco Dealers' Association, but ultimately it has not resulted in anything. On behalf of the respondents it is stated that the orders mentioned above were made for the following reasons. It is stated that the producers had in their books, lying outstanding, orders which they could not complete. It was therefore decided that despatches outstanding against orders booked prior to April 1, 1956, should be suspended, but despatches against orders booked subsequent to April 1, 1956, should continue to be made. It is stated that these orders were given pursuant to the decision of the Central Government. On behalf of the petitioner company, a point is taken that the Controller has no power to stop despatches of the goods by the producer which were covered by existing planning orders already accepted by the producer. It is said that if it amounts to a revocation of the permits under clause 8 of the Control Order, then, in the absence of any directions given by the Central Government under claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and modifications that may be made therein under article 372. Section 2(39) of the General Clauses Act, 1897, defines the word "person" to include any company or association or body of individuals, whether incorporated or not. According to this definition, the word "person" in article 5 of the Constitution would include a company incorporated in India. Thus, article 5 lays down that at the commencement of the Constitution, that is to say, January 26, 1950, every person who is ordinarily a resident in India for not less than five years immediately preceding such commencement, shall be a citizen. If a company is included within the ambit of this article, then the petitioner company became a citizen, because it was exclusively carrying on business within the territory of India for a period longer than five years prior to the date above-mentioned. Article 10 lays down that such a person would continue to be such a citizen subject to the provisions of any law that may be made by Parliament. Article 11 gives power to Parliament to make any provision with respect to acquisition or termination of citizenship and all other matters relating to citizenship. Thus, Parliament would have the pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o was born or either of whose parents was born or who has been ordinarily resident for not less than five years immediately preceding the commencement of the Constitution in the territory of India. The definition prima facie does not appear to take in any corporate bodies. A company would certainly be a person, but it is difficult to speak of a company having a domicile " The next case to be considered is a decision of the Punjab High Court, Jupiter General Insurance Co. Ltd. v. Rajagopalan [1951] 22 Comp. (Ins.) 33, 50. In this case, Harnam Singh J. considered this particular point as to whether a company can claim protection under article 19 of the Constitution. So-far as a company is ordinarily resident within the Indian territory, the learned judge correctly held that a corporation resides where the principal direction of the corporate business is located. The learned judge proceeded to say as follows : "As stated above, the answer to the question whether a corporation is a citizen within the particular statute depends upon the intent to be gathered from the context and general purpose of that statute. Clauses ( a ) and ( b ) of article 5 do not apply to corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight. The case involved both articles 14 and 19, but it is not clear whether the observations of the learned judge were intended to govern the provisions of both. In Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 S.C.R. 603, 618 Das C.J. states as follows: "It is urged that the appellant being a company is not a citizen and cannot, therefore, claim any fundamental right under article 19 which is available only to citizens and, therefore, the decisions of this court referred to above have no application. While it is noteworthy that the second case mentioned above was concerned with the rights of a company, it is nevertheless unnecessary, for the purposes of this appeal, to decide whether a juristic person like a company is a citizen as denned in Part II of the Constitution and as such entitled to the benefits of article 19." The case was decided upon the footing that no tax can be levied or collected except by authority of law. Therefore, it was not necessary to find out whether the fundamental rights of the petitioner were affected. It is clear that in this case the issue was avoided and, therefore, the conclusion is of no assistance. The next case in which the point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the fundamental rights conferred by article 19 were applicable to a company or not. Similarly in Messrs. Fedco ( India ) Ltd. v. S.N. Bilgrami [1960] 2 S.C.R. 408 the petitioner was a company registered under the Indian Companies Act, having its registered office in Bombay. It was held that the provision in clause g( a ) of the Imports (Control) Order, 1955, to the effect that a licence granted under the order may be cancelled, if it is found, after giving a reasonable opportunity to the licensee to be heard, to have been obtained by fraud or misrepresentation, is a reasonable restriction in the interests of the general public on the exercise of the fundamental rights of a citizen guaranteed under article 19(1)( f ) and ( g ) of the Constitution. In this case also, the point as to whether a company can at all be called a "citizen" or whether it can claim fundamental rights conferred by article 19 was not discussed. It was assumed that the company could maintain the application by claiming such a right. The question, therefore, arises as to whether the Supreme Court should be taken to have decided the point and, if so, in what manner. The judgment of Mukherje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arises where the shareholders are not citizens or the directors are not citizens, then the court may well consider whether the particular corporation is a citizen or not." In this case also, we are not concerned with the difficulties referred to in the judgment of Chagla C.J. because the company is an Indian company and all the shareholders as well as directors are residents within the territory of India. In Liberty Cinema v. Commissioner of Corporation, AIR 1959 Cal. 45 , I considered the application of 62 petitioners, some of ' whom were companies and others were firms. Relief was given on the ground that there was infringement of the fundamental rights granted under article 10(1)( g ), although this particular point was not raised or discussed. The learned standing counsel has referred to the American law on the subject and asks me to hold that although a corporation can be a citizen for the purpose of a particular statute, it cannot, as has been held in the United States, be a citizen under the Constitution. He has drawn my attention to a passage in Corpus Juris, volume 18, page 388. The law in the United States has been thus summarised : "A corporation is a 'cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the provisions of article 5( c ) of the Constitution. A company is a distinct entity from its shareholders. It is said to be domiciled or ordinarily resident at a place where it has its head office or from where it can be said to be controlled. There is, therefore, no difficulty in satisfying the provisions in the said article for being domiciled or "ordinarily resident" in Indian territory. It follows, therefore, that under article 5 the petitioner company is a citizen. While article 5 lays down as to who should be considered as a citizen at the commencement of the Constitution, article 10 merely continues that status until provision is made by any law that may be made by Parliament. Under article 11, power has been granted to Parliament to make laws providing for the acquisition and termination of citizenship and all other laws relating to citizenship. Parliament has promulgated a law namely the "Citizenship Act". In that Act, however, companies and corporations have been excluded. The position, therefore, is somewhat anomalous. A company which has been ordinarily resident in India for five years preceding the commencement of the Constitution, namely, 26th January, 1950, would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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