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Report No. 101

3.3. Decision of 1970.-

In 1970, the Supreme Court1 held that the jurisdiction of the Court to grant relief cannot be denied when the rights of the individual shareholder are impaired by State action, if the state action impairs the rights of the company as well. The test for determining whether the share-holders' rights is impaired is not formal; it is essentially qualitative; if the State action impairs the rights of the share-holders as well as of the company, the court will not, concentrating merely upon the technical operation of the action, deny itself jurisdiction to grant relief. However, it should be pointed out that Shah, J. in the above decision, definitely said that the Supreme Court rulings of 19642 had no relevance to the question at issue. The petitioner had sought to challenge an infringement of his own rights, and not an infringement of rights of the bank (of which he was a shareholder and a director, and with which he had accounts current and in fixed deposit).

1. R.C. Cooper v. Union of India, (1970) 3 SCR 530.

2. Para. 3.2, supra.

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