Input:
minal Appeal No. 132 of 1954.
Appeal by Special Leave granted by the Supreme Court by its Order dated the 3rd September, 1954 from the Judgment and Order dated the 15th June ' 1954 of the High Court of Judicature for the State of Punjab at Simla in Criminal in Appeal No. 287 of 1954 arising out of the Judgment and Order dated the 14th April 1954 of the Court of Additional Sessions Judge in Session Case No. 4 of 1954.
J.G. Sethi, (Naunit Lal, with him), for the appellant.
1204 Gopal Singh and P. G. Gokhale, for the respondent.
January 25.
The Judgment of the Court was delivered by IMAM J.
This appeal by Nanak Chand comes by special leave against the judgment of the Punjab (1) High Court.
The appellant was convicted by the High Court under section 302 of the Indian Penal Code and the sentence of death passed on him by the Additional Sessions Judge of Jullundur was con firmed.
On the facts alleged by the prosecution there can be no doubt that Sadhu Ram was killed on the 5th of November, 1953, at about 6 45 P.m. at the shop of Vas Dev P. W. 2.
It is alleged that the appellant along with others assaulted Sadhu Ram.
The appellant was armed with a takwa.
Numerous injuries were found on the person of Sadhu Ram.
According to the doctor, who held the postmortem examination, injuries 1, 3 and 4 were due to a heavy sharp edged weapon and could be caused by a takwa.
It was denied by the prosecution that the deceased was assaulted by any other person with a takwa.
According to the Medical evidence, injuries 1, 3 and 4 individually, as well as collectively, were enough to cause: death in the ordinary course of nature.
In the Court of Sessions the appellant along with others was charged under section 148 and section 302, read with section 149 of the Indian Penal Code.
The Additional Sessions Judge, however, held, that the charge of rioting was not proved.
He, accordingly found the appellant and three others guilty under section 302 read with section 34 of the Indian Penal Code.
He acquitted the other three accussed There was an appeal by three convicted persons to the High Court and the high court convicted the appellant alone under section 302 of the Indian Penal Code, confirming the sentence of death but altered the conviction of the other accused 'from section 302/34 to section 323, Indian Penal Code.
it held that the provisions of section 34 of the Indian Penal Code did not apply.
1205 On behalf of the appellant questions of law and questions of fact were urged.
It will be unnecessary to deal with the questions of fact if the argument on points of law is accepted.
The principal question of law to be considered is as to whether the appellant could legally be convicted for murder and sentenced under section 302, Indian Penal Code when he was not charged with that offence.
It was urged that as the appellant had been acquitted of the charge of rioting and the offence under section 302/149 of the Indian Penal Code, he could not be convicted for the substantive offence of murder under section 302, Indian Penal Code, without a charge having been framed against him under that section.
Reliance has been placed on the provisions of the Code of Criminal Procedure relating to the framing of charges, the observations of the Privy Council in Barendra Kumar Ghosh vs Emperor(1) and certain decisions of the Calcutta High Court to which reference will be made later on.
It was urged that for every distinct offence of which a person is accused, there shall be a separate charge and every such charge shall be tried separately except in cases mentioned under sections 234, 235, 236) 237 and 239 of the Code of Criminal Procedure.
Section 149 of the Indian Penal Code creates a specific offence and it is a separate offence from the offence of murder punishable under section 302 of the Indian Penal Code.
The provisions of sections 236, 237 and 238 of the Code of Criminal Procedure did not apply to the facts and circumstances of the present case.
Off behalf of the Prosecution, however, it was urged that section 149 did not create any offence at all and therefore no separate charge was obligatory under section 233 of the Code of Criminal Procedure and that in any event the provisions of sections 236 and 237 of the Code of Criminal Procedure did apply and the appellant could have been convicted and sentenced, under section 302 of the Indian Penal Code, although no charge for the substantive offence of murder had been framed against him.
(1) Cal, 197, 1206 It is necessary, therefore, to examine the provisions of section 149 of the Indian Penal Code and consider as to whether this section creates a specific offence.
Section 149 of the Indian Penal Code is to be found in Chapter VIII of that Code which deals with offences against the public tranquillity.
Section 149 of the Indian Penal Code reads: "If an offence is committed by any member of an unlawful assembly in prosecution of the common object of that assembly, or such as the members of that assembly knew to be likely to be committed in prosecution of that object, every person who, at the time of the committing of that offence, is a member of the same assembly, is guilty of that offence".
This section postulates that an offence is committed by a member of an unlawful assembly in prosecution of the common object of that assembly or such as a member of the assembly knew to be likely to be committed in prosecution of that object and declares that in such circumstances every person, who was a member of the same assembly at the time of the commission of the offence, was guilty of that offence.
Under this section a person, who is a member of an unlawful assembly is made guilty of the offence committed by another member of the same assembly, in the circumstances mentioned in the section, although he had no intention to commit that offence and had done no overt act except his presence in the assembly and sharing the common object of that assembly.
Without the provisions of this section a member of an unlawful assembly could not have been made liable for the offence committed not by him but by another member of that assembly.
Therefore when the accused are acquitted of riot and the charge for being members of an unlawful assembly fails, there can be no conviction of any one of them for an offence which he had not himself committed.
Similarly under section 150 of the Indian Penal Code, a specific offence is created.
Under this section a person need not be a member of an unlawful assembly and yet he would be guilty of being a member of an unlawful assembly and guilty of an offence which may be committed by 1207 a member of the unlawful assembly in the circumstances mentioned in the section.
Sections 149 and 150 of the Indian Penal Code are not the only sections in that Code which create a specific offence.
Section 471 of the Indian Penal Code makes it an offence to fraudulently or dishonestly use as genuine any document which a person knows or has reason to believe to be a forged document and it provides that such a person shall be punished in the same manner as if he had forged such document.
Abetment is an offence under the Indian Penal Code and is a separate crime to the principal offence.
The sentence to be inflicted may be the same as for the principal offence.
In Chapter XI of the Indian Penal Code offences of false evidence and against public justice are mentioned.
Section 193 prescribes the punishment for giving false evidence in any stage of a judicial proceeding or fabricating false evidence for the purpose of being used in any stage of a judicial proceeding.
Section 195 creates an offence and the person convicted of this offence is liable in certain circumstances to be punished in the same manner as a person convicted of the principal offence.
Sections 196 and 197 to 200 of the Indian Penal Code also create offences and a person convicted under any one of them would be liable to be punished in the same manner as if he had given false evidence.
It was, however, urged on behalf of the Prosecution that section 149 merely provides for constructive guilt similar to section 34 of the Indian Penal Code.
Section 34 reads: "When a criminal act is done by several persons, in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone".
This section is merely explanatory.
Several persons must be actuated by a common intention and when in furtherance of that common intention a criminal act is done by them, each of them is liable for that act as if the act bad been done by him alone.
This section does not create any specific offence.
As was pointed out by Lord Sumner in Barendra Kumar Ghosh vs Emperor(1) " 'a criminal act ' means that (1) Cal. 197, 1208 unity of criminal behaviour which results in something, for which an individual would be punishable, if it were all done by himself alone, that is, in a criminal offence".
There is a clear distinction between the provisions of sections 34 and 149 of the Indian Penal Code and the two sections are not to be confused.
The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime.
In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime.
In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone. ' There is no question of common intention in section 149 of the Indian Penal Code.
An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled.
Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence.
In Barendra Kumar Ghosh vs Emperor(1) Lord Sumner dealt with the argument that if section 34 of the Indian Penal Code bore the meaning adopted by the Calcutta High Court, then sections 114 and 149 of that Code would be otiose.
In the opinion of Lord Sumner, however, section 149 is certainly not otiose,, for in any case it created a specific offence.
It postulated an assembly of five or more persons having a common object, as named in section 141 of the Indian Penal Code and then the commission of an offence by one member of it in prosecution of that object and he referred to Queen vs Sabid Ali and (1) Cal, 197, 1209 Others(1).
He pointed out that there was a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in respect that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, was replaced in section 149 by membership of the assembly at the time of the committing of the offence.
It was argued, however, that these observations of Lord Sumner were obiter dicta.
Assuming though not conceding that may be so, the observations of a Judge of such eminence must carry weight particularly if the observations are in keeping with the provisions of the Indian Penal Code.
It is, however, to be remembered that the observations of Lord Sumner did directly arise on the argument made before the Privy Council, the Privy Council reviewing as a whole the provisions of sections 34, 114 and 149 of the Indian Penal Code.
On behalf of the appellant certain decisions of the Calcutta High Court were relied upon in support of the submission made, viz. Panchu Das vs Emperor(2), Reazuddi and Others vs King Emperor(3) and Emperor vs Madan Mandal and Others( ' ).
These decisions support the contention that it will be illegal to convict an accused of the substantive offence under a section without a charge being framed if he was acquitted of the offence under that section read with section 149 of the Indian Penal Code.
, On the other hand, the prosecution relied upon a decision of the.
Full Bench of the Madras High Court in Theetkumalai Gounder and Others vs King Emperor(5) and the case Queen Empress vs Bisheshar and Others(6).
The decision of the Madras High Court was given in April, 1924, and reliance was placed upon the decision of the Allahabad High Court.
The decision of the Privy Council in Barendra Kumar Ghosh 's case was in October, 1924.
The Madras High Court, therefore, did not have before it the decision of the Privy Council.
It is impossible to, say what view might have been expressed (1) [1873] 20 W.R. (Cr.) 5.(2) Cal.
(3) [1961] 6 O.W.N 98.(4) ,Cal.
(5) Mad. 746.(6) All.
1210 by that court if the Privy Council 's judgment in the aforesaid case had been available to the court.
The view of the Calcutta High Court had been noticed and it appears that a decision of the Madras High Court in Taikkottathil Kunheen(1) was to the effect that section 149 of the Indian Penal Code is a distinct offence from section 325 of the Indian Penal Code.
Because of this it was thought advisable to refer the matter.
to a Full Bench.
Two questions were referred to the Full Bench: (1) When a charge omits section 149, Indian Penal Code, and the conviction is based on the provisions of that section, is that conviction necessarily bad, or does it depend on whether the accused has or has not been materially rejudiced by the omission? (2) When a charge has been framed under sections 326 and 149, Indian Penal Code, is a conviction under section 326, Indian Penal Code, necessarily bad, or does this also depend on whether the accused has or has not been materially prejudiced by the form of the charge? The Full Bench agreed with the view expressed by Sir John Edge in the Allahabad case that section 149 created no offence, but was, like section 34, merely declaratory of a principle of the common law, and its object was to make it clear that an accused who comes within that section cannot put forward as a defence that it was not his hand which inflicted the grievous hurt.
It was observed by Spencer, J. that a person could not be tried and sentenced under section 149 alone, as no punishment is provided by the section.
Therefore the omission of section 149 from a charge does not create an illegality by reason of section 233 of the Code of Criminal Procedure which provides that for every distinct offence of which any person is accused there shall be a separate charge.
They did not agree, with the general statement in Reazuddi 's case(2) that it is, settled law that when a person is charged by implication under section 149, he cannot be convicted of the substantive offence.
A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc.
is for a distinct and separate offence from that under section (1) [1928] 18 L.W. 946.
(2) (1901] 1211 302, read with section 149 or section 325, read with section 149, etc.
and to that extent the Madras view is incorrect.
It was urged by reference to section 40 of the Indian Penal Code that section 149 cannot be regarded as creating an 'offence ' because it does not itself provide for a punishment.
Section 149 creates an offence but the punishment must depend on the offence of which the offender is by that section made guilty.
Therefore the appropriate punishment section must be read with it.
It was neither desirable nor possible to prescribe one uniform punishment for all cases which may fall within it.
The finding that all the members of an unlawful assembly are guilty of the offence committed by one of them in the prosecution of the common object at once subjects all the members to the punishment prescribed for that offence and the relative sentence.
Reliance was also placed upon the decision of the Patna High Court in Ramasray Ahir vs King Emperor(1) as well as the decision of the Allahabad High Court in Sheo Ram and Others vs Emperor(1).
In the former case the decision of the Privy Council in Barendra Kumar Ghosh 's case was not considered and the decision followed the Full Bench of the Madras High Court and the opinion of Sir John Edge.
In the latter case the Allahabad High Court definitely declined to answer the question as to whether the accused charged with an offence read with section 149, Indian Penal Code, or with an offence read with section 34, Indian Penal Code, could be convicted of the substantive offence only.
After an examination of the cases referred to on behalf of the appellant and the prosecution we are of the opinion that the view taken by the Calcutta High Court is the correct view namely, that a person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed 'as required by section 233 of the Code of Criminal Procedure.
It was urged that in view of the decision of this Court in Karnail Singh and another vs State of Punjab(1) a conviction under section 302, read with see (1) Patna 484.
(2) A.I.R. 1948 All. 162, (3) , 155 1212 tion 149, could be converted into a conviction under section 302/34 which the trial Court did.
There could be no valid objection, therefore, to converting a conviction under section 302/34 into one under section 302 which the High Court did. ' This argument is unacceptable.
The High Court clearly found that section 34 was not applicable to the facts of the case and acquitted the other accused under section 302/34, that is to say the other accused were wrongly convicted by the trial court in that way but the appellant should have been convicted under section 302.
The High Court could not do what the trial court itself could not do, namely, convict under section 302, as no separate charge had been framed under that section.
It was urged by the Prosecution that under the provisions of section 236 and section 237 of the Code of Criminal Procedure a person could be convicted of an offence which he is shown to have committed although he was not charged with it.
Section 237 of the Code of Criminal Procedure is entirely dependent on the provisions of section 236 of that Code.
The provisions of section 236 can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed.
In these circumstances if there had been an omission to frame a charge, then under section 237, a conviction could be arrived at on the evidence although no charge had been framed.
In the present case there is no doubt about the facts and if the allegations against the ap pellant that he bad caused the injuries to the deceased with takwa was established by evidence, then there could be no doubt that the offence of murder bad been committed.
There was no room for the application of section 236 of the Code of Criminal Procedure.
It had been argued on behalf of the prosecution that no finding or sentence pronounced shall be deemed invalid merely on the ground that no charge was framed.
Reliance was placed on the provisions of section 535 of the code of criminal procedure 1213 Reference was also made to the provisions of section 537 of that Code.
Section 535 does permit.
a court of appeal or revision to set aside the finding or sentence if in its opinion the non framing of a charge has resulted in a failure of justice.
Section 537 also permits a court of appeal or revision to set aside a finding or sentence if any error, omission or irregularity in the charge has, in fact, occasioned a failure of justice.
The explanation to the section no doubt directs that the court shall have regard to the fact that the objection could and should have been raised at an earlier stage in the proceedings.
In the present case, however, there is no question of any error, omission or irregularity in the charge because no charge under section 302 of the Indian Penal Code was in fact framed.
Section 232 of the Code of Criminal Proce.
dure permits an appellate court or a court of revision, if satisfied that any person convicted of an offence was misled in his defence in the absence of a charge or by an error in the charge, to direct a new trial to be had upon a charge framed in whatever manner it thinks fit.
In the present case we are of the opinion that there was an illegality and not an irregularity curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure.
Assuming, however, for a moment that there was merely an irregularity which was curable we are satisfied that, in the circum stances of the present case, the irregularity is not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code.
By framing a charge under section 302, read with section 149 of the Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged.
In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease, Attention has been 1214 drawn to the Medical evidence.
With reference to injury No. I the doctor stated that the wounds were not very clean cut.
It is further pointed out that the other incised injuries on the head were bone deep.
The bone, however, had not been out.
Injuries on the head although inflicted by a blunt weapon may sometimes assume the characteristics of an incised wound.
Reference was made to Glasgow on Medical Jurisprudence, 9th Ed., at page 241, where it is stated that under certain circumstances, and in certain situations on the body, wounds produced by a blunt instrument may stimulate the appearance of an incised wound.
These wounds are usually found over the bone which is thinly covered with tissue, in the regions of the head, forehead, eyebrow, cheek, and lower jaw, among others.
It is also pointed that Vas Dev P.W. 2 bad admitted that Mitu took away the takwa from the appellant after Sadhu Ram had been dragged out of the shop but no takwa blow was given outside the shop.
Prakash Chand P.W. 4, another eye witness, also admitted that Mitu had taken the takwa from the appellant when they had come out of the shop.
It was urged that if a specific charge for murder had been framed against the appellant, he would have questioned the doctor more closely about the incised injuries on the head of the deceased, as well as the prosecution witnesses.
It is difficult to hold in the circumstances of the present case that the appellant was not prejudiced by the non framing of a charge under section 302, Indian Penal Code.
Having regard to the view expressed on the question of law, it is unnecessary to refer to the arguments on the facts.
The appeal is accordingly allowed and the conviction and the sentence of the appellant is set aside and the case of the appellant is remanded to the court of Sessions at Jullundur for retrial after framing a charge under section 302 of the Indian Penal Code and in accordance with law.
Appeal allowed.

Output:
Section 34 of the Indian Penal Code is merely explanatory.
It does not create any specific offence.
Under this section several persons must be actuated by a common intention and when in further (1) A.I.R. 1936 Lah.
1202 ance of that common intention a criminal act is done by them, each of them is liable for that act as if the act had been done by him alone.
There is a clear distinction between the provisions of section 34 and section 149 of the Indian Penal Code and the two sections are not to be confused.
The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime.
In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime.
In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone.
There is no question of common intention in section 149 of the Indian Penal Code.
An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and the other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled.
Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence.
There is a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in one respect namely that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, is replaced in section 149 by membership of the assembly at the time of the committing of the offence.
A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc.
is for a distinct and separate offence from that under section 302, read with section 149 or section 325, read with section 149, etc.
A person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed as required by section 233 of the Code of Criminal Procedure.
There was no room for the application of section 236 of the Code of Criminal Procedure to the facts of the present case.
The provisions of section 236 of the Code of Criminal Procedure can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed.
In the present case there was no doubt about the facts and if the allegation against the appellant that he had caused the injuries to the deceeased with takwa was established by evidence, then there could be no doubt that the offence of murder had been committed, 1203 In the present case there was no question of any error, omission or irregularity, in the charge within the meaning of section 537 of the Code of Criminal Procedure because no charge under section 302 of the Indian Penal Code was in fact framed.
There was an illegality in the present case and not an irregularity which was curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure.
Assuming however that there was merely an irregularity which was curable, the irregularity in the circumstances of the case was not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code.
By framing a charge under section 302, read with section 149, Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged.
In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease.
Barendra Kumar Ghosh vs Emperor ( (1925] I.L.R. 52 Cal. 197), Queen vs Sabid Ali and others ( [1873] 20 W.R. (Cr.) 5), Panchu Das vs Emperor ( Cal.
698), Beazuddi and Others vs King Emperor ([1901] , Emperor vs Madan Mandal and Others ( Cal. 662), Theethumalai Gounder and Others vs King Emperor ([1924] I.L.R. , Queen Empress vs Bisheshar and Others ( All. 645), Taikkottathil Kunheen ( [1923] 18 L.W. 946), Bamasray Ahir vs King Emperor ( Patna 484), Sheo Ram and Others vs Emperor (A.I.R. 1948 All. 162), and Karnail Singh and another vs State of Punjab ( , referred to.


Input:
328 of 1951.Petition under article 32 of the Constitution for issue of writs in the nature of certiorari, prohibition and mandamus.
The facts appear in the judgment.
The petitioner in person.
C.K. Daphtary, Solicitor General of India, (J. B. Dadachanji, with him) for the respondent.
December 21.
The Judgment of the Court was delivered by PATANJALI SASTRI.C.J.
This is a petition under article 32 of the Constitution for the enforcement of the petition er 's fundamental rights under article 19 (1) (f) and article 31(1) alleged to have been violated by the Central Bank of India Ltd., a company incorporated under the Indian Compa nies Act, 1882, and having its registered office at Bombay, (hereinafter referred to as "the Bank").
It appears that the petitioner held five shares in the Share capital of the Bank which sold those shales to a 51 392 third party in purported exercise of its right of lien for recovery of a debt due to it from the petitioner, and the transfer was registered in the books of the Bank in the year 1937.
The petitioner thereupon instituted a series of pro ceedings in the High Court at Bombay on its original and appellate jurisdiction challenging the validity of the said sale and transfer.
The latest of these proceedings was a suit filed against the Bank in 1951 wherein the plaint was rejected on 2nd March, 1951, under Order 7, Rule 11 (d), of the Code of Civil Procedure as barred by limitation.
The petitioner now prays that all the adverse orders made in the previous proceedings be quashed and the said High Court be directed to have "the above suit set down to be heard as undefended and pronounce judgment against the respondent or to make such orders as it thinks fit in relation to the said suit".
It may be mentioned here that though the aforesaid order rejecting the petitioner 's plaint was appealable, the petitioner did not prefer an appeal on the somewhat extraor dinary ground that "the appeal if filed could not be heard by the Judges of the said Court as all of them were disqual ified from hearing such appeal" either because of their interest in the Bank or because of their prejudice against him.
We are of opinion that the petitioner has misconceived his remedy and the petition must fail on a preliminary ground.
Neither article 19 (1) (f) nor article 31 (1) on its true construction was intended to prevent wrongful individual acts or to provide protection against merely private conduct.
Article 19 deals with the "right to free dom" and by clause (1) assures to the citizen certain funda mental freedoms including the freedom "to acquire, hold and dispose of property" subject to the power of the State to impose restrictions on the exercise of such rights to the extent and on the grounds mentioned in clauses (2) to (6).
The language and structure of article 19 and its setting in Part III of the Constitution clearly show that the article was intended to protect those freedoms against State action other than in the legitimate exercise of its power to regu late private rights in the public interest, 393 Violation of rights of property by individuals is not within the purview of the article.
The position is no better under article 31 (1).
The petitioner has urged that clause (1) should be construed apart from and independently of the rest of the article and, if so construed, its language is wide enough to cover in fringements of rights of property by private individuals.
He laid emphasis on the omission of the word "State" in clause (1) while it was used in clause (2) of the same article as well as in many other articles in Part III.
Referring to entry No. 33 of the Union List, entry No. 36 of the State List and entry No, 42 of the Concurrent List of the Seventh Schedule to the Constitution, he also argued that, while these entries read with article 246 empowered Parliament and the State Legislatures to make laws regarding acquisition or requisitioning of property for the purposes of the Union or the State as the case may be.
no power was conferred to make laws regarding "deprivation of property" by the State, so that the "deprivation" contemplated in clause (1) could only be deprivation by individuals.
Sub section (1) of section 299 of the Government of India Act, 1935, corresponding to clause (1) of article a 1 was, it was pointed out, omitted in the draft article 19 (later numbered as article 81) which retained in a modified form only the provision contained in sub section (2) of that section relating to compulsory acquisition of property for public purposes.
But, clause (1) was subsequently restored and article was enacted in its present form as recommended in Drafting Committee 's Report and this, it was claimed, showed that clause (1) was intended to operate as a distinct provi sion apart from clause (2).
We see no force in any of these arguments.
In support of the argument that clause (1 ) should be construed in isolation from the rest of the article, the petitioner relied on certain observations of our learned brother Das in Chiranjit Lal vs The Union of India (1), where the view was expressed that clause (1)enunciated the general principle that no person should be deprived (1) [1950] S.C,R,. 860.
394 of his property except by authority of law and laid down no condition for payment of compensation, while clause (2) dealt with deprivation of property brought about by acquisi tion or taking possession of it and required payment of compensation.
In other words, deprivation referred to in clause(1) must be taken to cover deprivation otherwise than by acquisition or requisitioning of property dealt with in clause (2).
We consider it unnecessary for the purpose of the present petition to go into that question.
Even assuming that clause (1) has to be read and construed apart from clause (2), it is clear that it is a declaration of the fundamental right of private property in the same negative form in which article 21 declares the fundamental right to life and liberty.
There is no express reference to the State in article 21.
But could it be suggested on that account that that article was intended to afford protection to life and personal liberty against violation by private individuals ? The words "except by procedure established by law" plainly exclude such a suggestion.
Similarly, the words "save by authority of law" in clause (1) of article 31 show that it is a prohibition of unauthorised governmental action against private property, as there can be no question of one private individual being authorised by law to deprive anoth er of his property.
The argument based on the entries in the Lists is fallacious.
It is not correct to suggest that, merely be cause there is no entry in the Lists of the Seventh Schedule relating to "deprivation of property" as such, it is not within the competence of the legislatures in the country to enact a law authorising deprivation of property.
Such a law could be made, for instance, under entry No. 1 of List II, entry No. 1 of List II or entry No. 1 of List III.
Article 31 (1) itself contemplates a law being passed authorising deprivation of the properties, and it is futile to deny the existence of the requisite legislative power.
Nor does the legislative history of the article lend any support to the petitioner 's contention.
Section 299 395 (1) of the Government of India Act, 1935, was never inter preted as prohibiting deprivation of property by private individuals.
Its restoration, therefore, in the same form in article 31, after omission in the original draft article 19, could lead to no inference in support c. of the peti tioner 's contention, which indeed proceeds on the fundamen tal misconception that article 19(1)(f) and article 31 (1), which are great constitutional safeguards against State aggression on private property, are directed against in fringements by private individuals for which remedies should be sought in the ordinary law.
In this view it is unnecessary to deal with certain other objections to the maintainability of the petition raised by the Solicitor General on behalf of the Bank.
The petition is dismissed.
We make no order as to costs.
Petition dismissed.

Output:
Article 19(1)(f) of the Constitution is clearly intended to protect the freedom to acquire, hold and dispose of property against State action other than in the legitimate exercise of its power to regulate private rights in the public interest.
Similarly, article S1(1) provides a safe guard against deprivation of property by the State except by procedure established by law.
Violation of rights of property by private individuals is not within the purview of those articles.
A person whose rights of property are infringed by a private individual must therefore seek his remedy under the ordinary law and not by way of an application under article 32.


Input:
ons Nos.112 and 113 of 1961 etc.
Petition under article 32 of the Constitution of India for enforcement of, Fundamental rights.
N. A. Palkhivala, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the petitioners (in W.P. Nos. 112 and 113 of 61 and 79 to 80 of 1962).
M. C. setalvad, D. P. Singh, m. K. Ramamurthi, R. K. Garg and section C. Agarwal.
for the respondents (in W.P. Nos. 112 and 113 of, 1961).
887 section V. Gupte, Additional Solicitor General, N. section Bindra and R. H. Dhebar, for the respondents (in W.P. Nos. 79 and 80 of 62).
G. section Pathak, B. Dutta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the petitioners (in W.P. Nos.
202 204/1961).
A. Ranganadham Chetty and T. V. R. Tatachari, for the respondents (in W.P. Nos. 202 and 203 of 1961).
Lal Narain Sinha, M. K. Ramamurthi, R. K. Garg and section C. Agarwal, for the respondent (in W.P. 204 of 1961).
February 25, 1964.
The Judgment of the Court was delivered by GAJENDRAGADKAR, C.J.
These writ petitions have been placed for hearing before us in a group, because they raise a common question of law in regard to the validity of the demand for sales tax which has been made against the respective petitioners by the Sales tax Officers for different areas.
The facts in respect of each one of the writ petitions are not the same and the years for which the demand is made are also different; but the pattern of contention is uniform and the arguments urged in each one of them are exactly the same.
Broadly stated.
the case for the petitioners is that the appropriate authorities purporting to act under the different Sales Tax Acts are attempting to recover from the petitioners sales tax in respect of transactions to which the petitioners were parties, though the said transactions are not taxable under article 286 of the Constitution.
article 286(1) (a) provides that no law of a Sales shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place outside the State; and the argument is that the sales in question are all sales which took place outside the State and as such, are entitled to the protection of article 286(1) (a).
The authorities under the respective Sales Tax Acts have rejected the petitioners ' contention that the transactions in question are inter State sales and have held that article 286(1)(a) is not applicable to them.
A similar finding has been recorded against the petitioners under article 286(2).
The petitioners ' grievance 888 is that by coming to this erroneous conclusion, a tax is being levied against them in respect of transactions protected by article 286(1)(a) and that constitutes a breach of their fundamental rights under article 3 1 (1).
It is this alleged infringement of their fundamental rights that they seek to bring before this Court under article 32(1).
It has been urged on their behalf that the right to move this Court under article 32(1) is itself a fundamental right, and so, under article 32(2) an appropriate order should be passed setting aside the directions issued by the Sales tax Authorities calling, upon the petitioners either to pay the sales tax, or to comply with other directions issued by them in that behalf.
For dealing with the points raised by these writ petitions, it is not necessary to set out the facts in respect of each one of them.
For convenience we will refer to the facts set out by the Tata Engineering & Locomotive Co. Ltd., the petitioner in W.Ps.
Nos. 112 and 113 of 1961.
The peti tioner is a company registered under the Indian Companies Act, 1913 and carries on the business of manufacturing, inter alia, Diesel Truck and Bus chassis and the spare parts and accessories thereof at Jamshedpur in the State of Bihar.
The company sells these products to dealers, State Transport Organisations and others doing business in various States of India.
The registered office of the petitioner is in Bombay.
In order to promote its trade throughout the country, the petitioner has entered into Dealership Agree ments with different persons.
The modus adopted by the petitioner in carrying on its business in different parts of India is to sell its products to the dealers by virtue of the relevant provisions of the Dealership Agreements.
Accordingly, the petitioner distributes and sells its vehicles to dealers, State Transport Organisations and consumers in the manner set out in the petition.
The petitioner contends that the sales in respect of which the present petitions have been filed were effected in the course of inter State trade and as such, were not liable to be taxed under the relevant provisions of the Sales Tax Act.
The Sales tax Officer, on the other hand, has head that the sales had taken place within the State of Bihar and were intra State sales and as such, were liable to assessment under the Bihar Sales Tax 889 Act.
In accordance with this conclusion, further steps are threatened against the petitioner in the matter of recovery of the sales tax calculated by the appropriate authorities.
The petitioner is a company and a majority of its share holders are Indian citizens, two of whom have joined the present petitions.
The petitioners in W.Ps.
79 and 80/ 1962 are the Automobile Products of India Ltd. and Another.
The majority of the share holders of this company are also citizens of India and one of them has joined the petitions.
Writ petitions Nos. 202 204/1961 have been filed by the State Trading Corporation of India Ltd. The shareholders of this Corporation are the President of India, and two Additional Secretaries, Ministry of Commerce and Industry, Government of India; one of these Secretaries, has joined the petitions.
It may incidentally be stated at this stage that these writ petitions were heard by a Special Bench of this Court on the 26th July, 1963 in order to determine the constitutional question as to whether the State Trading Corporation Ltd. can claim to be a citizen within the meaning of article 19 of the Constitution.
The majority decision rendered in these writ petitions on the preliminary, issue referred to the Special Bench was that the petitioner as a State Trading Corporation is not a citizen under article 19, and so, could not claim the protection of the fundamental rights guaranteed by the said Article [vide State Trading Corporation of India Ltd. vs The Commercial Tax Officer and Others(1)].
That is why this petitioner along with other petitioners have made the petitions in the names of the companies as well as one or two of their shareholders respectively.
It is argued on behalf of the petitioners that though the company or the Corporation may not be an Indian citizen under article 19, that should not prejudice the petitioners case, because, in substance, the Corporation is no more than an instrument or agent appointed by its Indian share holders and as such, it should be open to the petitioners either acting themselves as companies or acting through (1) ; , 890 their shareholders to claim the relief for which the present petitions have been filed under article 32.
These petitions are resisted by the respective States on the ground that the petitions are not competent under article 32.
The respondents contend that the main attack of the petitioners is against the findings of the Sales tax Officers in regard to the character of the impugned sale transactions and they urge that even if the said findings are wrong, that cannot attract the provisions of article 32.
The validity of the respective Sales tax Acts is not challenged and if purporting to exercise their powers under the relevant provisions of the said Acts, the appropriate authorities have, during the course of the assessment proceedings, come to the conclusion that the impugned transactions are intra State sales and do not fall under article 286(1)(a), that is a decision which is quasi judicial in character and even an erroneous decision rendered in such assessment proceedings cannot be said to contravene the fundamental rights of a citizen which would justify recourse to article 32.
In other words, the alleged breach of the petitioners ' fundamental rights being referable to a quasi judicial order made by a Tribunal appointed under a valid Sales tax Act, does not bring the case within article 32.
That is the first preliminary ground on which the competence of the writ petitions is challenged.
In support of this plea, reliance is placed by the respondents on a recent decision of a Special Bench of this Court in Smt.
Ujjam Bai vs State of Uttar Pradesh(1).
There is another preliminary objection raised by the respondents against the, competence of the writ petitions, and that is based upon the decision of this Court in the case of the State Trading Corporation of India Ltd. (2).
It is urged that the decision of this Court that the State Trading Corporation is not a citizen, necessarily means that the fundamental rights guaranteed by article 19 which can be claimed only by citizens cannot be claimed by such a Corporation, and so, there can be no scope for looking at the substance of the matter and giving to the shareholders indirectly the right which the Corporation as a separate (1) [1963] 1 S.C.R. 778.
(2) ; 891 legal entity is not directly entitled to claim.
The respondents have urged that in dealing with the plea of the petitioners that the veil worn by the Corporation as a separate legal entity should be lifted and the substantial character of the Corporation should be determined without reference to the technical position that the Corporation is a separae entity, we ought to bear in mind the decision of this Court in the case of the State Trading Corporation of India Ltd.(1).
Basing themselves on this contention, the respondents have also argued that if the fundamental rights guaranteed by article 19 are not available to the petitioners, then their plea that the sales tax is being collected from them contrary to article 31(1) must fail and in support of this contention reliance is placed upon a recent decision of this Court in the case of Indo China Steam Navigation Co. Ltd. vs The Additional Collector of Customs and Others(2).
Logically, the second preliminary objection would come first, because if the petitioners cannot claim the status of citizens and are not, therefore, entitled to base their petitions on the allegation that their fundamental rights under article 19 have been contravened, that would be the end of the petitions.
It has been conceded before us by all the learned counsel appearing for the petitioners that it is only if both the preliminary objections raised by the respondents are over ruled that the hearing of the writ petitions would reach the stage of considering the merits of their pleas that the sales which are sought to be taxed fall under article 28 6 (1) (a) of the Constitution.
If the respondents succeed in either of the two preliminary objections raised by them, the writ petitions would fail and there would be no occasion to consider the merits of the pleas raised by them.
Since we have come to the conclusion that the second preliminary objection raised by the respondents must be upheld, we do not propose to pronounce any decision on the first preliminary objection.
However, as the point covered by the said objection has been elaborately argued before us, we would prefer to indicate briefly the broad arguments urged fry both the parties in that behalf.
(1) ; (2) ; 892 The controversy between the parties as to the scope and effect of the provisions contained in article 32 on which the validity of the first preliminary objection rests, substantially centres round the question as to what is the effect of the decision of this Court in Smt.
Ujjam Bai 's case(1).
The petitioners argue that though the majority view in that case was that the writ petition filed by Ujjam Bai was incompetent, it would appear that the reasons given in most of the judgments support the petitioners ' case that where the fundamental rights of a citizen are contravened, may be by a quasi judicial order, in pursuance of which a tax is attempted to be recovered from a citizen, the erroneous conclusion in regard to the nature of the transaction must be held to contravene the fundamental right of the citizen, and as such, would justify the petitioners in moving this Court under article 32.
On the other hand, the respondents urge that the effect of the decision.
in Ujiam Bai 's case plainly tends.
to show that if a quasi judicial decision has determined a matter in regard to the taxability of a given transaction, there can be no question about the breach of fundamental rights which would justify an application under article 32.
The argument is that the intervention of a quasi judicial order changes the complexion of the dispute between the parties, and in cases of that character, the only remedy available to an aggrieved citizen is to take recourse to the appeals and other proceedings prescribed by the taxing statute in question.
article 32 is not intended to confer appellate jurisdiction on this Court so as to review or examine the propriety of quasi judicial orders passed by appropriate authorities purporting to exercise their powers and jurisdictions under the several taxing statutes.
It may be that after exhausting the remedies by way of appeals and revisions prescribed by the statute, the party may come to this Court under article 136, but article 32 is inapplicable in such cases.
In Ujjam Bai 's case(1), the first issue which was referred to the Special Bench was whether an order of assessment made by an authority under a taxing statute which is intra vires is open to challenge as repugnant to (1) [1963] 1 S.C.R. 778. 893 article 19 (1)(g), on the sole ground that it was based on a misconstruction of a provision of the Act or of a notification issued thereunder; and the second question was, can the validity of such an order be questioned in a petition under article 32 of the Constitution? The majority view expressed in this case was against the petitioner.
section K. Das J. who delivered the main judgment on behalf of the majority view observed that where a quasi judicial authority makes an ,order in the undoubted exercise of its jurisdiction in pursuance of a provision of law which is intra vires, an error of law or fact committed by that authority cannot be impeached otherwise than on appeal, unless the erroneous determination relates to a matter on which the jurisdiction of that body depends; and so, he held that if the impugned order of assessment is made by an authority under a valid taxing statute in the undoubted exercise of its jurisdiction it cannot be challenged under article 32 on the sole ground that it is passed on a misconstruction of a provision of the Act or of a notification issued thereunder.
Subba Rao J., on the other hand, took the view that article 32 confers wide jurisdiction on this Court to enforce the fundamental rights, and he held that it is the duty of this Court to entertain a writ petition wherever a fundamental right of a citizen is alleged to have been contravened, irrespective of whether the question raised involves a question of jurisdiction, law, or fact; this is the minority view pronounced in Ujjam Bai 's case.
Hidayatullah J., who agreed broadly with the majority view, expressed the opinion that if a quasi judicial tribunal embarks upon an action wholly outside the pale of the law he is enforcing, a question of jurisdiction would be involved and that would justify an application under article 32.
Ayyangar J. held that if it appeared that the impugned order of assessment was based upon a plain and patent misconstruction of the provisions of the taxing statute, that itself would give rise to a plea that the authority was acting beyond its jurisdiction and in such a case, a petition under article 32 may be justified.
Proceeding on this view, the learned Judge held that the construction placed by the taxing authority was not shown to be patently erroneous.
894 and so, he was not prepared to grant any relief to Ujjam Bai.
That is how the learned Judge agreed with the majority decision.
Mudholkar J., who also agreed with the majority decision, was disposed to make an exception in cases where an erroneous construction of the law would lead to the recovery of a tax which is beyond the competence of the legislature, or is violative of the provisions of Part III or of any other provisions of the Constitution.
It would, thus, be seen that though the majority decision was that Ujjam Bai 's petition should be dismissed, the reasons given in the judgments pronounced by the learned Judges who agreed with the majority decision are not all uniform and do not disclose an identity of approach or of reasons, and that naturally has given rise to the arguments in the present writ petitions, both parties suggesting that the majority decision in the case of Ujjam Bai supports the rival views for which they contend.
Mr. Setalvad has strongly urged that if a misconstruction of the notification on which Ujjam Bai rested her case, was not held to justify a petition under article 32, that would necessarily mean that the misconstruction of the nature of the transaction would be no better, even though in this 'latter case, the wrong decision on the question as to the character of the sale transaction may involve taxing a transaction which is protected by article 286(1) (a).
One can understand the argument, said Mr. Setalvad, that a breach of the fundamental rights, however it is caused would justify recourse to article 32; that would be consistent and logical; but once it is held that a breach of the fundamental rights alleged to have been caused by a misconstruction of a notification or a statute placed by an appropriate authority acting under the provisions of a valid taxing law does not attract article 32, it is not logically possible to urge that another kind of breach alleged to have been caused by a misappreciation of the nature of the transaction and an erroneous conclusion as to its taxable character would make any difference.
In the first case, the erroneous construction of the notification violates the provisions of article 265 of the Constitution and thereby brings in the breach of article 895 31 (1); in the other case, the misconstruction as to the taxable character of the transaction violates article 28 6 (1 ) (a) and thereby brings in article 31 (1).
Therefore, it is urged that he necessary consequence of the decision in Ujjam Bai is that even if the Sales tax Officer has held wrongly that the impugned transactions are not inter State transactions, the remedy of petition under article 32 is not open to the aggrieved citizen.
On the other hand, Mr. Palkhivala has strenuously urged that the decision in Ujjam Bai rested on the basis that the misinterpretation of the notification did not involve the violation of any constitutional limitations or prohibitions and he has referred us to some passages in the judgments of Das, Kapur and Mudholkar JJ.
In support of his argument that where an erroneous decision of a salestax officer results in the violation of a constitutional prohibition or limitation, different considerations would arise and an aggrieved citizen would be entitled to move this Court under article 32, Mr. Palkhivala has emphasised the fact that whereas Das J. expressly held that the view taken in Kailash Nath vs State of U.P.(1) was not right, he approved of the other decisions which were cited at the Bar and exhaustively discussed on the ground that those decisions 'fall under the category in which an executive authority acts without authority of law, or a quasi judicial authority acts in transgression of a constitutional prohibition and without jurisdiction"(2).
These decisions are: Thakur Amar Singhji vs State of Rajasthan(3); M/s. Mohanlal Hargovind Dass vs The State of Madhya Pradesh(4); Y. Mahaboob Sheriff vs Mysore State Transport Authority(5); J. V. Gokar & Co. (Private) Ltd. vs The Assistant Collector of Sales tax (Inspection) (6); and Universal Imports Agency vs Chief Controller of Imports and Exports ( 7 ) .
To the same effect is the observation made by Kapur J. when the learned Judge stated that in the case of M/s. Mohanlal Hargovind Dass ( 4 ) ':he dispute did not turn upon a misconstruction of any statute by any quasi judicial authority, but that was a case (1) A.I.R. 1957 S.C. 790(2) [1963] 1 S.C.R. at 842.
(3) ; [1955] 8 S.C.R. 303.(4) (5) ; (7) ; 896 in which the very transaction was outside the taxing powers of the State and any action taken by the taxing authorities was one without authority of law.
In support of the same argument, both Mr. Pathak and Mr. Palkhivala strongly relied upon the two subsequent decisions of this Court where writ petitions filed under article 32 were entertained on grounds somewhat similar to those on which the present writ petitions are founded, The State Trading Corporation of India Ltd. and Another vs The State of Mysore and Another(1) and The State Trading Corporation of India Ltd. and Others vs The State of Mysore and Another(2).
Basing himself on these decisions, Mr. Pathak has argued that the question as to whether a particular transaction of sale attracts the protection of article 286(1) (a) is a collateral fact the decision of which confers jurisdiction on the Sales tax Officer; and he contends that the decision of the Sales tax Officer, who is a Tribunal of limited jurisdiction, on a collateral jurisdictional point can always be challenged under article 32 of the Constitution if the said decision impinges upon the citizen 's right protected by article 28 6 (1) (a).
Mr. Palkhivala urged the argument of jurisdiction in a slightly different way.
He contended that the concept of jurisdiction on which he relied was not based on the view that jurisdiction means authority to decide.
According to him, the concept of jurisdiction was of a different category and was of a vital character when constitutional limitations or prohibitions were involved in the decision of any case brought before a Sales tax Officer.
On the other hand, Mr. Setalvad has urged that the Sales tax Officer is not a Tribunal of limited jurisdiction and the charging sections in the respective Sales tax Acts leave it to the Sales tax Officer and the heirarchy of officers contemplated by them to decide the question about the taxability of any given transaction and impose a tax on it in accordance with the provisions of the Acts.
Where a tribunal is entitled to deal with transactions which fall (1) 14 S.T.C. 188.
(2) 14 S.T.C. 416.
897 under the charging sections of the statute, it would be erroneous to contend that the decision of the Tribunal on the said question about the taxability of the transaction is the decision on a collateral jurisdictional fact.
If the said argument is accepted, logically, it may mean that all questions the decision of which inevitably precedes the imposition of the tax, would be collateral jurisdictional fact; and that clearly cannot be the effect of the charging sections of the different Acts.
In regard to the point of constitutional limitations and prohibitions raised by Mr. Palkhivala, Mr. Setalvad contends that if the provisions of article 286(1) (a) makes the decision of the Sales tax Officer on the character of the sale trans action one of jurisdiction, then it is difficult to see why his decision on other points should also not partake of the same character.
In that connection, he emphasised the fact that the provisions of article 286(1) (a) cannot be distinguished from the provisions of article 265.
As we have already indicated, having regard to the fact that we have come to the conclusion that the other preliminary objection urged by the respondents must be upheld, we do not propose to express any opinion on this part of the controversy between the parties.
That takes us to the question as to whether the petitioners, some of whom are companies registered under the Indian Companies Act and one of whom is the State Trading Corporation, can claim to file the present writ petitions under article 32 having regard to the decision of this Court in the case of the State Trading Corporation of India Ltd. (1).
The petitioners argue that the said decision merely held that the State Trading Corporation of India Ltd. was not a citizen.
The question as to whether the veil of the Corporation can be lifted and the rights of the shareholders of the said Corporation could be recognised under article 19 or not, was not decided, and it is on this aspect of the question that arguments have been urged before us in the present writ petitions.
The true legal position in regard to the character of a corporation or a company which owes its incorporation to (1) ; 134 159 S.C. 57 898 a statutory authority, is not in doubt or dispute.
The corporation in law is equal to a natural person and has a legal entity of its own.
The entity of the corporation is entirely separate from that of its shareholders; it bears its own name and has a seal of its own; its assets are separate and distinct from those of its members; it can sue and be sued exclusively for its own purpose; its creditors cannot obtain satisfaction from the assets of its members; the liability of the members or shareholders is limited to the capital invested by them; similarly, the creditors of the members have no right to the assets of the corporation.
This position has been well established ever since the decision in the case of Salomon vs Salomon & Co. (1) was pronounced in 1897; and indeed, it has always been the well recognised principle of common law.
However, in the course of time, the doctrine that the corporation or a company has a legal and separate entity of its own has been subjected to certain exceptions by the application of the fiction that the veil of the corporation can be lifted and its face examined in substance.
The doctrine of the lifting of the veil thus marks a change in the attitude that law had originally adopted towards the concept of the separate entity or personality of the corporation.
As a result of the impact of the complexity of economic factors, juidical decisions have sometimes recognised exceptions to the rule about the juristic personality of the corporation.
It may be that in course of time these exceptions may grow in number and to meet the requirements of different economic problems, the theory about the personality of the corporation may be confined more and more.
But the question which we have to consider is whether in the circumstances of the present petitions, we would be justified in acceding to the argument that the veil of the petitioning corporations should be lifted and it should be held that their shareholders who are Indian citizens should be permitted to invoke the protection of article 19, and on that basis, move this Court under article 32 to challenge the validity of the orders passed by the Sales tax Officers in respect of transactions which, it is alleged, are not taxable.
(1) ; H.L. 899 Mr. Palkhivala has very strongly urged before us that having regard to the fact that the controversy between the parties relates to the fundamental rights of citizens, we should not hesitate to look at the substance of the matter and disregard the doctrinaire approach which recognises the existence of companies as separate juristic or legal persons.
If all the shareholders of the petitioning companies are Indian citizens, why should not the Court look at the substance of the matter and give the shareholders the right to challenge that the contravention of their fundamental rights should be prevented.
He does not dispute that the shareholders cannot claim that the property of the companies is their own and cannot plead that the business of the companies is their business in the strict legal sense.
The doctrine of lifting of the veil postulates the existence of dualism between the corporation or company on the one hand and its members or shareholders on the other.
So, it is no good emphasising that technical aspect of the matter in dealing with the question as to whether the veil should be lifted or not.
In support of his plea, he has invited our attention to the decision of the Privy Council in The English and Scottish Joint Co operative Wholesale Society Ltd. vs Commissioner of Agricultural Income tax, Assam(1), as well as the decision of the House of Lords in Daimler Company Ltd. vs Continental Tyre and Rubber Company (Great Britain) Ltd.(2).
It is unnecessary to refer to the facts in these two cases and the principles enunciated by them, because it is not disputed by the respondents that some exceptions have been recognised to the rule that a corporation or a company has a juristic or legal separate entity.
The doctrine of the lifting of the veil has been applied in the words of Palmer in five categories of cases : where companies are in the relationship of holding and subsidiary (or sub subsidiary) companies; where a shareholder has lost the privilege of limited liability and has become directly liable to certain creditors of the company on the ground that, with his knowledge, the company continued to carry on business six months after the number of its members was reduced (1) (2) 900 below the legal minimum; in certain matters pertaining to the law of taxes, death duties and stamps, particularly where the question of the "controlling interest" is in issue; in the law relating to exchange control; and in the law relating to trading with the enemy where the test of control is adopted(1).
In some of these cases, judicial decisions have no doubt lifted the veil and considered the substance of the matter.
Gower has similarly summarised this position with the observation that in a number of important respects, the legislature has rent the veil woven by the Salomon case.
Particularly is this so, 'says Gower, in the sphere of taxation and in the steps which have been taken towards the recognition of enterprise entity rather than corporate entity.
It is significant, however, that according to Gower, the courts have only construed statutes as "cracking open the corporate shell" when compelled to do so by the clear words of the statute; indeed they have gone ' out of their way to avoid this construction whenever possible.
Thus, at present, the judicial approach in cracking open the corporate shell is somewhat cautious and circumspect.
It is only where the legislative provision justifies the adoption of such a course that the veil has been lifted.
In exceptional cases where courts have felt "themselves able to ignore the corporate entity and to treat the individual shareholders as liable for its acts",(2) the same course has been adopted.
Summarising his conclusions, Gower has classified seven categories of cases where the veil of a corporate body has been lifted.
But it would not be possible to evolve a rational, consistent and inflexible principle which can be invoked in determining the question as to whether the veil of the corporation should be lifted or not.
Broadly stated, where fraud is intended to be prevented, or trading with an enemy is sought to be defeated, the veil of a corporation is lifted by judicial decisions and the shareholders are held to be the persons who actually work for the corporation.
That being the position with regard to the doctrine of the veil of a corporation and the principle that the said (1) Palmer 's Company Law 20th Ed.
p. 136.
(2) Gower" Modern Company Law, 2nd Ed. pp. 193 & 195.
901 veil can be lifted in some cases, the question which arises for our decision is; can we lift the veil of the petitioners and say that it is the shareholders who are really moving the Court under article 32, and so, the existence of the legal and juristic separate entity of the petitioners as a corporation or as a company should not make the petitions filed by them under article 32 incompetent? We do not think we can answer this question in the affirmative.
No doubt, the complaint made by the petitioners is that their fundamental rights are infringed and it is a truism to say that this Court as the guardian of the fundamental rights of the citizens will always attempt to safeguard the said fundamental rights; but having regard to the decision of this Court in State Trading Corporation of India Ltd. (1) we do not see how we can legitimately entertain the petitioners ' plea in the present petitions, because if their plea was upheld, it would really mean that what the corporations or the companies cannot achieve directly, can be achieved by them indirectly by relying upon the doctrine of lifting the veil.
If the corporations and companies are not citizens, it means that the Constitution intended that they should not get the benefit of article 19.
It is no doubt suggested by the petitioners that though article 19 is confined to citizens, the Constitution makers may have thought that in dealing with the claims of corporations to invoke the provisions of article 19, courts would act upon the doctrine of lifting the veil and would not treat the attempts of the corporations in that behalf as falling outside article 19.
We do not think this argument is well founded.
The effect of confining article 19 to citizens as distinguished from persons to whom other Articles like 14 apply, clearly must be that it is only citizens to whom the rights under article 19 are guaranteed.
If the legislature intends that the benefit of article 19 should be made available to the corporations, it would not be difficult for it to adopt a proper measure in that behalf by enlarging the definition of 'citizen ' prescribed by the Citizenship Act passed by the Parliament by virtue of the powers conferred on it by Articles 10 and 11.
On the other hand, the fact that the Parliament has not chosen to make any such provision indicates that it was not the intention of the (1) ; 902 Parliament to treat corporations as citizens.
Therefore, it seems to us that in view of the decision of this Court in the case of the State Trading Corporation of India Ltd.(1) the petitioners cannot be heard to say that their shareholders should be allowed to file the present petitions on the ground that, in substance, the corporations and companies are nothing more than associations of shareholders and members thereof.
In our opinion, therefore, the argument that in the present petitions we would be justified in lifting the veil cannot be sustained.
Mr. Palkhivala sought to draw a distinction between the right of a citizen to carry on trade or business which is contemplated by article 19(1)(g) from his right to form associations or unions contemplated by article 19 (1) (c).
He argued that article 19(1)(c) enables the citizens to choose their instruments or agents for carrying on the business which it is their fundamental right to carry on.
If citizens decide to set up a corporation or a company as their agent for the purpose of carrying on trade or business, that is a right which is guaranteed to them under article 19(1)(c).
Basing himself on this distinction between the two rights guaranteed by article 19(1)(g) and (c) respectively, Mr. Palkhivala somewhat ingeniously contended that we should not hesitate to lift the veil, because by looking at the substance of the matter, we would really be giving effect to the two fundamental rights guaranteed by article 19(1).
We are not impressed by this argument either.
The fundamental right to form an association cannot in this manner be coupled with the fundamental right to carry on any trade or business.
As has been held by this Court in All India Bank Employees ' Association vs National Industrial Tribunal and Others(2), the argument which is thus attractively presented before us overlooks the fact that article 19, as contrasted with certain other articles like articles 26, 29 and 30, guarantees rights to the citizens as such, and associations cannot lay claim to the fundamental rights guaranteed by that Article solely on the basis of their being an aggregation of citizens, that is to say, the right of the citizens composing the body.
The respective rights guaranteed by article 19(1) (1) ; (2) ; 903 Cannot be combined as suggested by Mr. Palkhivala, but must be asserted each in its own way and within its own limits; the sweep of the several rights is no doubt wide, but the combination of any of those two rights would not justify a claim such as is made by Mr. Palkhivala in the present petitions.
As soon as citizens form a company, the right guaranteed to them by article 19(1)(c) has been exercised and no restraint has been placed on that right and no infringement of that right is made.
Once a company or a corporation is formed, the business which is carried on by the said company or corporation is the business of the company or corporation and is not the business of the ,citizens who get the company or corporation formed or incorporated, and the rights of the incorporated body must be judged on that footing and cannot be judged on the assumption that they are the rights attributable to the business of individual citizens.
Therefore, we are satisfied that the argument based on the distinction between the two rights guaranteed by article 19(1)(c) and (g) and the effect of their combination cannot take the petitioners ' case very far when they seek to invoke the doctrine that the veil of the corporation should be lifted.
That is why we have come to the conclusion that the petitions filed by the petitioners are incompetent under article 32, even though in each of these petitions one or two of the shareholders of the petitioning companies or corporation have joined.
The result is, the second preliminary objection raised by the respondents is upheld and the writ petitions are dismissed as being incompetent under article 32 of the Constitution.
There would be no order as to costs.
Petitions dismissed.

Output:
The petitioners were ordered to pay sales tax on account of certain transactions made by them in the State of Bihar.
Their contention was that the sales in question took place outside the state and hence they were entitled to the protection of article 286(1)(a).
Their plea was rejected by the Sales tax authorities and it was held that article 286(1)(a) did not apply to them.
The petitioners challenged the orders of the sales tax authorities by writ petitions filed by them under article 32 of the Constitution.
A preliminary objection was taken on behalf of respondents that the petitions were not competent as those were filed by corporations or companies and the provisions of article 19 did not apply to them as corporations were not citizens.
Dismissing the writ petition, Held.
The petitions under article 32 were incompetent although in each of them one or two of the share holders of the petitioning companies or corporations had also joined.
Article 19 guarantees rights to citizens as such and associations cannot lay claim to the fundamental rights guaranteed by that Article solely on the basis of their being an aggregation of citizens.
Once a company or a corporation is formed, the business which is carried on by the said company or corporation is the business of the company or corporation and is not the business of the citizens who got the company or corporation formed or incor porated and the rights of the incorporated body must be judged on that footing and cannot be judged on the assumption that they are the right attributable to the business of individual citizens.
The petitioners cannot be heard to say that their share holders should be allowed to file the present petitions on the ground that in substance, the corporations and companies are nothing more than association of share horders and members thereof.
If their contention is accepted, it would really mean that what the corporations or companies cannot achieve directly, they can achieve indirectly by relying upon the doctrine of lifting the veil.
If the corporations and companies are not citizens, it means that the Constitution intended that they should not get the benefit of article 19. 886 The position of a corporation is that it is in law equal to a natural person and has a legal entity of its own.
That entity is entirely separate from that of its shareholders.
It bears its own name and has a seal of its own.
Its assets are separate and distinct from those of its members.
It can sue and be sued exclusively for its own purpose.
Its creditors cannot obtain satisfaction from the assets of its members.
The liability of the members or share holders is limited to the capital invested by them.
The creditors of the members have no right to the assets of the corporation.
However.
there are some exceptions to the rule that the corporation or a company has a jurisfic or legal entity and the doctrine of lifting the veil of a corporation and examining its face in substance has been applied in many cases but the same does not apply in the present case.
State of Trading Corporation of India Ltd. vs The Commercial Tax Officer & Ors. ; , Smt.
Ujjam Bai vs State of Uttar Pradesh.
[1963] 1 S.C.R. 778, Indo China Steam Navigation Co. Ltd. vs Additional Collector of Customs.
; , Kailash Nath vs State of U.P.
A.I.R. 1957 S.C. 790, Thakur Amar Singhji V. State of Rajasthan, ; , M/s. Mohanlal Hargovind vs State of Madhya Pradesh.
; , Y. Mahaboob Sheriff V. Mysore State Transport Authority.
[1960] 2 S.C.R. 146, J. V. Gokar & Co. (P) Ltd. vs Assistant Collector of Sales tax (inspection), ; , Universal Imports Agency vs Chief Controller of Imports & Exports , State Trading Corporation of India Ltd. vs State of Mysore, 14 S.T.C. 188, State Trading Corporation of India Ltd. vs State of Mysore.
14 S.T.C. 416, Salomon vs Salomon & Co. ; , H.L. The English & Scottish Joint Co operative Wholesale Society Ltd. vs Commissioner of Agricultural Income tax Assam. , Daimler Company Ltd. vs Continental Tyre and Rubber Co. (Great Britain) Ltd. and All India Bank Employees ' Association vs National Industrial Tribunal & Ors. ; , referred to.


Input:
: Criminal Appeal No. 69 of 1981 Appeal by special leave from the Judgment and order dated the 16th December, 1980 of the Allahabad High Court in Criminal Appeal No. 342 of 1976.
Soli J. Sorabjee, R.K Jain, R.P. Singh and Natin Mohan Popli for the Appellant.
P.R. Mridul, Praveen Kumar, A.K. Sharma and Dalveer Bhandari for the Respondent.
The Judgment of the Court was delivered by MISRA J.
The present appeal by special leave is directed against the judgment of the High Court of Judicature at Allahabad, 873 dated 16th December, 1980, convicting the appellant under section 448 of the Indian Penal Code.
Premises Aranya Kutir bearing Municipal No. 47A Jakhan in Dehra Dun was owned by one R.C. Sood.
He executed a gift deed in favour of Shri Anand Mayee Sangh, Dehra Dun with the stipulation that the donor shall remain in possession of the premises during his life time and after his death his widow if alive would remain in possession.
The management of the same would be taken up by the Sangh after their death.
The appellant is the widow of the brother of Shri R.C Sood.
It appears that in 1967 the appellant was invited by Shri R.C. Sood to reside with him in the aforesaid house and ever since she has been residing peacefully there.
On 10th of October, 1973, Shri R.C. Sood expired.
The appellant, however, continued to live in the said house.
Respondent No. 1, Shri Nawal Kishore as Secretary of the aforesaid Sangh served a notice dated 13th November, 1973 on the appellant asking her to vacate the premises in dispute immediately, failing which a criminal action under section 448 of the Indian Penal Code would be taken against her as her further stay in the premises would be deemed to be in the nature of a criminal trespass.
The appellant, however, did not vacate the premises as she was convinced that her stay in the said premises could not amount to criminal trespass.
Respondent No. 1, Shri Nawal Kishore thereupon filed a complaint under section 448 of the Indian Penal Code against the appellant in the Court of Sub Divisional Magistrate, Mussoorie.
He examined himself as P.W. 1 and also produced Shri K. Bose as P.W.2.
The appellant in her statement under section 313, as well as in her statement as a witness D.W. 1 admitted the services of notice on her but denied that any criminal action was called for.
She further stated that she had met Anand Mayee who had permitted her to live in the house.
The learned Magistrate, however, took the view t hat the premises in dispute has been vested in the Anand Mayee Sangh by 874 virtue of the gift deed and a notice to vacate having been served upon the appellant, the continued stay of the appellant in the said premises amounted to a criminal trespass within the meaning of section 441 of the Indian Penal Code.
He accordingly convicted the appellant under section 448 to the Indian Penal Code and sentenced her to pay 1 fine of Rs. 100 and in default to undergo simple imprisonment for 40 days.
In addition, the learned Magistrate also passed an order directing the appellant to vacate the premises within two months of the passing of the order, purporting to be one under section 456 of the Criminal Procedure Code.
The appellant feeling aggrieved by the order of the learned Magistrate went up in appeal and took up various grounds.
The learned Sessions Judge allowed the appeal, set aside the order of the learned Magistrate and acquitted the appellant by his judgment Dated 19th August, 1975.
Respondent No. 1 Shri Nawal Kishore assailed the order of acquittal by filing criminal appeal in the High Court and the High Court in its turn allowed the appeal and reversed the order of acquittal passed by the learned Sessions Judge and convicted the appellant.
In the opinion of the High Court the appeal filed by the appellant before the Sessions Judge was incompetent as no appeal could lie against the imposition of fine.
It also took the view under the provisions of section 401(5) of the Criminal Procedure Code it is permissible to treat a revision as an appeal but not vice versa.
It therefore, declined to treat the appeal against the order of Magistrate as a revision.
The High Court further expressed the opinion that the appellant may file a revision if she so chooses which would be considered by the Court of Admission and then It proper the same may be allowed.
The appellant feeling aggrieved by the judgment of the High Court bas filed the present appeal with the special leave as stated earlier.
Shri Soli J. Sorabji appearing for the appellant has contended that on the allegations made in the complaint no offence under section 411 of the Indian Penal Code is made out.
In order to appreciate the contention it will he appropriate at this stage to read section 441 of the Indian Penal Code: "441.
Criminal trespass : Whoever enters into or upon property in the possession of another with intent to commit an offence or to intimidate, insult or annoy any person in possession of such property, or having lawfully entered into or upon such property, unlawfully remains 875 there with intent thereby to intimate, insult or annoy any such person, or with intent to commit an offence.
is said to commit "criminal trespass".
There has been local amendment by U.P. Act 31 of 1961 for section 441 of the Indian Penal Code, 1 960, the following shall be substituted: "441.
Criminal Trespass: Whoever enters into or upon property in possession of another with intent to commit an offence or to intimidiate, insult or annoy any person in possession of such property, or, having lawfully entered into or upon such property, unlawfully remains there with intent thereby to intimidiate, insult or annoy any such person, or with intent to commit an offences, or having entered into or upon such property, whether before or after the coming into force of the Criminal Law (U.P.Amendment) Act, 1961, with the intention of taking unauthorised possession or making unauthorised use of such property fails to withdraw from such property, or its possession or use when called upon to do so by that another person by notice in writing, duly served upon him, by the date specified in the notice, is said to commit, 'criminal trespass '.
It may be pointed out that the appellant was allowed to occupy the premises in 1967 by Shri R.C. Sood.
Under the terms of gift deed Shri Sood was entitled to remain in occupation of the premises during his life time.
He could as well grant, leave and licence to p the appellant to occupy the premises along with him.
Now the question arises about her status after the death of Shri R.C. Sood.
At the most, it can be said that after the death of Shri Sood the leave and license granted by Shri Sood came to an end and if she stayed in the premises after the death of Shri Sood, her possession may be that of a trespasser but every trespass does not amount to criminal trespass within the meaning of section 141 of the Indian Penal Code.
In order to satisfy the conditions of section 441 it must be established that the appellant entered in possession over the premises with intent to commit an offence.
A bare persual of the complaint filed by Respondent No. I makes it abundantly clear that there is absolutely no allegation about the intention of the appellant to commit any offence or to intimidate, insult or annoy 876 any person in possession, as will be evident from three material paragraphs which are quoted below: "2.
That the late Shri R.C. Sood was occupying the said premises in accordance with clause No. I of a gift deed executed by him in favour of Shri Anand Mayee Sangh and after his demise the said premises had to be delivered to Shri Anand Mayee Sangh.
That after the demise of Shri R.".
Sood, the accused was repeatedly requested to voluntarily vacate and deliver the possession of the said premises to the Sangh but the accused paid no heed and hence a notice dated 13.11.1973, copy of which enclosed, was sent to the accused as required by U.P. Amendment of Section 448 I.P.C. the said notice was served upon accused on 14.11.73 as per postal A.D. receipt attached herewith.
That the accused was required to quit and vacate the said premises by the 20th day of November, 1973 but instead of vacating the premises the accused has been making unusual pretext and has thus committed an offence under section 448 I.P.C." The appellant may be fondly thinking that she had a right to occupy the premises even after the death of Shri R.C. Sood.
If a suit for eviction is filed in Civil Court she might be in a position to vindicate her right and justify her possession.
This is essentially a civil matter which could be properly adjudicated upon by a competent Civil Court.
To initiate criminal proceedings in the circumstances appears to be only an abuse of the process of the Court.
We also do not agree with the view taken by the Court that the appeal filed by the appellant before the Sessions Judge was incompetent.
If the learned Magistrate had only awarded a sentence of fine, in that case revision alone would be competent and not an appeal but in the instant case the Magistrate not only awarded the fine of Rs. 100 but also directed the appellant to vacate the premises within two months from the date of the order.
This part of the order presumably was passed under section 456 of the Criminal Procedure Code, and this made the order appealable and the High Court has gone wrong in holding that appeal filed by the appellant before the Sessions Judge was not maintainable.
877 There were certain other pleas taken by the respondent before the High Court but it is not necessary to refer to those pleas in the view that we have taken that on the complaint itself no offence under section 448 of the Indian Penal Code is made out.
For the foregoing discussion, the appeal must succeed.
It is accordingly allowed.
The judgment of the High Court dated 16th December, 1980 is set aside and that of the Court of Sessions is restored.
The bail bond if any shall be cancelled.
S.R. Appeal allowed.

Output:
Premises, "Aranaya Kutir" bearing Municipal No. 47A Jakhan in Dehradun was owned by one Shri R.C. Sood.
He executed a gift deed in favour of Shree Anand Mayee Sangh, Dehradun, with a stipulation that the donor shall remain in possession of the premises during his life time and after his death his widow if alive would remain in possession.
The management of the same would be taken up by the Sangh after their death.
In 1967, the appellant, the widow of the brother of Shri R.C. Sood was invited by Shri Sood to reside with him in the aforesaid house and ever since she has been residing peacefully there.
On 10th of October, 1973 Shri R.C. Sood expired.
Respondent No. 1, Shri Nawal Kishore as secretary of the Anand Mayee Saogh, served a notice dated 13th November, 1973 on the appellant asking her to vacate the premises immediately, and threatening to take criminal action against her on failure to do so, as her further stay in the premises would be deemed to be in the nature of a criminal trespass.
When the appellant did not vacate the premises, respondent No. 1 filed a complaint under section 468 of the Penal Code.
The Sub Divisional Magistrate, Mussorie found that the continued stay of the appellant amounted to criminal trespass within the meaning of section 441 of the Penal Code, convicted her under section 448 and sentenced her to pay a fine of Rs. 100 or in lieu thereof to undergo simple imprisonment for 40 days.
In addition, the learned Magistrate also passed an order directing the appellant to vacate the premises within two months of the order, purporting to be one under section 456 o; the Criminal Procedure Code.
The appeal preferred by the appellant was allowed and the conviction and sentence passed were set aside.
Respondent No. 1, therefore assailed the order of acquittal by filing a criminal appeal before the High Court.
The High Court allowed it and reversed the order of acquittal passed by the Sessions Judge and convicted the appellant.
In the opinion of the High Court, the appeal filed by the appellant before the Sessions Judge was incompetent, as no appeal would lie against the imposition of fine.
The High Court declined to treat the appeal as a division in as much as under the provisions of section 401(5) of the Criminal 872 Procedure Code, it is permissible to treat a revision as an appeal but not vice versa.
Hence the appeal by special leave.
Allowing the appeal, the Court ^ HELD: 1.1.
In order to satisfy the conditions of section 441 of the Penal Code, it must be established that the party, complained of entered in possession over the premises with intent to commit an offence.
Every trespass does not amount to criminal trespass within the meaning of that section.
[875 G] 1:2.
Initiating criminal proceedings in the circumstances of this instant case is only an abuse of the process of the court.
This is essentially a civil matter which could be properly adjudicated upon by a competent civil court.
(a) The appellant was allowed to occupy tho premises in 1967 by Mr. Sood perhaps on 'lease and license ' basis.
(b) A bare perusal of the complaint filed by Respondent No. 1 makes it abundantly clear that there is absolutely no allegation about the intention of the appellant to commit any offence, or to intimidate, insult or annoy any person in possession; and (c) If a suit for eviction is filed in the civil court, the appellant, who may be fondly thinking that she had a right to occupy the premises even after the death of Shri Sood, might be in a position to vindicate her right and justify her possession.
[875 E H, 876 A, E F] 2.
The appeal filed by the appellant before the Sessions Judge was competent and maintainable.
If the learned Magistrate had only awarded a sentence of fine, in that case revision alone would be competent and not an appeal.
But in the instant case, the Magistrate not only awarded the fine of Rs. 100 but also directed the appellant to vacate the premises within two months from the date of the order.
This part of the order presumably was passed under section 456 of Criminal Procedure Code, and this made the order appealable.
[876 F H]