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Report No. 101

3.6. Supreme Court judgment of 1983.-

At this stage, it may be appropriate to refer to a recent Supreme Court judgment1 which relates to the question how far Article 19 applies to corporations. A rare regulating deposits accepted by companies was challenged in the above case. The challenge to the above rule was mainly based on alleged violation of Article 19(1)(g) of the Constitution and the writ petition in this case was filed by the company. The Attorney General objected to the maintainability of the petition.

His contention was that an incorporated company, not being a "citizen", cannot complain of a breach of Article 19(1)(g), and that the situation was not improved by joining, as a co-petitioner, either a share-holder or a director of the company. The objection of the Attorney General did not succeed. Desai, J., after reviewing the case law on the subject of the position of corporations with reference to Article 19, and after commenting that the law was in a "nebulous state", made the following observations2:-

"Thus, apart from the law being in a nebulous state, the trend is in the direction of holding that in the matter of fundamental freedoms guaranteed by Article 19, the rights of a shareholder and the company which the shareholders have formed are rather co-extensive and the denial to one, of the fundamental freedom, would be denial to the other. It is time to put an end to this controversy, but in the present state of law we are of the opinion that the petitions should not be thrown out at the threshold. We reach this conclusion for the additional reasons that apart from the complaint of denial of fundamental right to carry on trade or business, numerous other contentions have been raised which the High Court had to examine in a petition under Article 226. And there is a grievance of denial of equality before law as guaranteed by Article 14. We accordingly overrule the preliminary objection and proceed to examine the contentions on merits."

1. Delhi Cloth Mills v. Union of India, AIR 1983 SC 973 (October).

2. Delhi Cloth Mills v. Union of India, AIR 1983 SC 937 (943), para. 12 (October).

Freedom of Speech and Expression under Article 19 of the Constitution - Recommendation to Extend it to Indian Corporations Back

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