Bryce says that “If the law be dishonestly administered, the salt has lost its flavour.” It means if a lamp of justice goes out the judiciary gives a gloried about the importance, intendment and necessity of the judiciary in a government particularly in a democratic. For every nation, ‘Justice’ is ivory.1 2
It is essentially people’s will which is reflected in the Fundamental Laws. They are contained in the Indian Constitution, Part III including the right to equality, the right to life and freedom, etc. But it is not justified merely to provide for Fundamental Rights, it is a remedy that makes rights much more effective and exact. Therefore it is well said, “A right without a remedy is the most grotesque kind of legal conundrum.” In order to safeguard fundamental rights, the Indian Constitution grants, under Articles 32 and 226, the right to approach, in both, the Supreme Court or the High Court of Justice of any person who has been infringed.3
Writs in the Indian constitution were embraced as such from the English law, but with a slight difference that it can be accessible by any individual to exercise or claim his right against the order of the courts when served injustice or impugned, as the case may be.4 A Writ petition for a civil or criminal nature depending on the situation can be filed by an Individual/aggrieved party to a higher level of court against the order/decision of the lower court. 5 6 So any individual whose fundamental rights the State has breached can file a writ petition7
Company under the Companies Act 2013:
Section 2(20) of the Companies Act, 2013, defines the term ‘Company’
In the late nineteenth and early twentieth century’s, with the growth of corporate business structure, the corporations began to offer so much political and economic influence that legal theorist had to reconsider corporate theory in the light of the degree to which the state should exert control over such entities. The “Grant Theory” or “Concession Theory” or “Artificial Entity Theory”, asserts that the corporation is an artificial entity.8 9 10
In HL Bolton Engineering Co Ltd v TJ Graham Sons Ltd11, Denning LJ has described companies as A company can be compared to a human body in many ways. It has a core of brain and nerve which controls what it is doing. . Many of the people in the company are pure [employees] and agents who are nothing more than hands for doing the job and can’t be assumed to represent the mind or will. These are managers and directors who represent the company ‘s driving mind and will and monitor what it does. Such managers’ state of mind is the company’s state of mind and is regarded as such by law.12
A corporation is regarded as an artificial human being, and it offers a different legal body.
The best concept of a separate legal entity can be defined in the case of Sunrise Sdn Bhd v First Profile (M) Sdn Bhd & Anor13 whereby there was no dispute of who the identity controller of the company was. Unlimited liability is whereby a company cannot lose more than the amount invested. The members are not personally liable for the debts and obligations of the company.14
Principle of Separate Legal Entity of Companies:15 16 17
The rule of separate legal entity of a company was recognized in the case of Salomon v. Salomon and Co. Ltd18, which claimed that the company had a separate life from its employees. In addition the Supreme Court in the case of Tata Engineering Locomotive Co. Ltd. v. State of Bihar and Ors., It has been held that the company is a natural person and has its own life.
Status of companies under the Constitution of India:
Corporate bodies are autonomous legal organizations that are allowed to own, enter into contracts, sue or be sued. And these corporate bodies are not human structures but artificial structures. So the essential question that sometimes arises as to whether the corporations are entitled to same legally guaranteed fundamental rights as granted to human persons. Part III of the Constitution speaks about fundamental rights, but there is a thin line of distinction between the rights provided for in Part III as some are available only to citizens, others are available to persons.
The debate relating to nature if corporate bodies and the right they are entitled to arise in India no sooner India got its independence in 1947. It was as early as 1950 that we found Indian courts delivering decisions on the issue of whether the companies are entitled to fundamental rights and with this comes whether a company can file a writ petition?
An incorporated company is indeed a juristic person with certain privileges and responsibilities in the eye of law. It is a well-settled proposition in law that these incorporated persons are entitled to the protection of those fundamental rights in the Constitution which are as broad as covering all ‘persons.’19 Since a company gets recognized as a legal person even in different cases, Indian courts have granted certain fundamental rights that the company can enjoy, as we have seen in the above case scenarios. As stated in the case of Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh, Additional Collector of Customs20, the Supreme Court of India clearly held that a company which was both- a company and a foreign company- is not entitled to claim the benefits of Article 19(1)(g) of the Constitution of India. Therefore, the foundations of petitioning the courts are confined to certain provisions of the Constitution only.
Thus, it can be concluded from the above-mentioned case that a company can file a writ petition for infringement of its rights
Following are examples of corporations filing the writ petition.
In State Trading Corporation of India Ltd. vs. the Commercial Tax Officer21, the Supreme Court held that though a company is a legal person/juristic person or a person in the eye of the law, it is not a citizen of India. So, it cannot enjoy all the fundamental rights guaranteed by the Constitution of India and the provisions of Citizenship Act. In the particular case the Corporation filed a writ petition to the Supreme Court challenging the notices for tax assessment as it was violative of Article 19(1)(f) and (g) i.e. right to practice any profession and business to the citizen. So whatever rights are guaranteed to any ‘person’, such right is applicable to a legal person also. The corporations which are incorporated under Companies Act, 1956 are juristic persons and so they cannot be termed as citizens though they may be of Indian nationality due to incorporation in India. Thus the court distinguished that corporate body being Indian national is entitled to civil rights accruing from international law but such corporate body is not a citizen.22
Amazon’s India Unit has also recently filed a writ petition to the Karnataka High Court requesting a stay on the check ordered by the Indian Competition Commission (CCI) against the corporation for alleged infringements of competition law. This writ is against the order of the CCI of 14 January to investigate the suspected illegal activities of the online retail giant.23
In another case of Shanghai Banking Corporation Ltd v. Union of India24, In the particular case, a written petition was filed in which the petitioner, Hong Kong & Shanghai Banking Corporation Ltd. (the bank), a Hong Kong-based banking company, substantially challenged the legal validity of a conciliation procedure initiated under the Industrial Disputes Act of 1947. The conciliation process started after a bank employee had initiated a labour dispute over the claim that his work was terminated unlawfully. The bank’s argument is that he had tendered resignation on his own, while the respondent’s contention is that he was compelled to do so.25
Pragya Toolss Corporation v. Shri C.A Imanual and Ors.26 in the particular case the writ of mandamus was filled though the court rejected it by stating that an application for mandamus will not lie for an order of reinstatement to an office which is essential of a private character nor can such an application be maintained to secure the performance of obligations owed by a company its workmen or to resolve any private dispute.27
The Government also ordered tax officers to deal promptly with written petitions filed by companies in order to prevent interruption of the Goods and Services Tax (GST) regime.28
11 1957 1 QB 159
15 https://www.hg.org/le gal-articles/principle-of-separate-legal-entity-of-companies-in-bangladesh-54236
18 1897, A.C 22
19 The State Trading Corporation of India Ltd And Ors Vs The Commercial Tax Officer, Vishakhapatnam 1963 AIR
20 AIR 1964 SC 1140
21 1963 AIR 1811, 1964 SCR (4) 89
24 WP No. 388 of 2003, Decided in 2011
This article is authored by Astitva Kumar, Fourth-Year, BBA. LL.B, Engineering Management Technical Campus School of Law, (GGSIP University, New Delhi)
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