CHIRANJIT LAL CHOWDHURI versus THE UNION OF INDIA AND OTHERS.

Citation: [1950] 1 S.C.R. 869 · Decided: 04-12-1950 · Supreme Court of India · Bench: HARILAL JEKISUNDAS KANIA · Disposal: Dismissed

Cited by 10 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

-
S.C.R. 
SUPREME COURT REPORTS 
CHIRANJIT LAL CHOWDHURI 
v. 
THE UNION OF INDIA AND OTHERS. 
869 
[SHRI HARILAL KANIA, C.J., SAIYID FAZL ALI, 
PATANJALI SASTRI, MuKHERJEA and DAS JJ.] 
Sholapllr Spinning and Weaving Company (Emergency Pro· 
<isions) Act (XXVIII of 1950)-Act dismissing managing agents of 
a company, removing its 
directors, 
a~ahorising Government 
to 
appoint new dir<ctors, and «irtuiling !"lghts of shareholders in the 
matter of voting, etc.-Validity-Wliether infringes fundamental 
rights-Right not to be 
de~rived of property save by attthority of 
law-Right to acqiiire, hold and dispose of property-Right to equal 
protection of law-Constit,.tion of India, Arts. 14, 19 (1) (!), 19(5), 
31, 32-" Deprivation of properly", 
11 Property"," acqiiisitio1z", 
''taking possession", 
11 eqital protection'', meanings of-Right to 
apply under Art. 32-Corporntwn's right to apply-Shareholders' 
··ight. 
The Governor-General of India, finding that on account of 
mismanagement and neglect a situation had arirsen in the affairs 
of the Sholapur Spinning and Weaving Company Ltd., which had 
prejudicially affected the production of an essential commodity 
and bad caused serious unemployment amongst a certain section of 
the community, and that au emergency had thereby a.risen which 
rendered it necessary to make special provision for the proper 
management and adminietration of the said company, promulgat-
ed an Ordinance, which was subsequently re-enacted in the form 
of an Act of the Legislature called the Sholapur Spinning and 
Weaving Company (Emergency Provisions) Act, 1950, the net 
result of which was that the Managing .~gents of the said com-
pany were dismissed, the directors holding office at the time 
automatically vacated their office, the Government was authorised 
to appoint new directors, the'.rights of the shareholders of the com· 
pany were curtailed in the matters of voting, appointment of 
directors, passing of resolutions and applying for winding up, anJ 
power was also given to the Government to further modify the 
Indian Companies Act in its application to the company; and in 
accordance with the provisions of the Ordinance new directors 
were appointed by the Government. A shareholder of the com-
pany made an application under Art. 32 of the Constitution for 
a declaratior. that the Act was void and for enforcement of his 
fundamental rights by a writ of mandamus against the Central 
Government, the Government of Bombay and the directors res· 
training them from exercising any powers under the Act and 
from interfering with the management of the company, on the 
ground that the Act was not within the Legislative competence 
1950 
Deo. 4. 
1950 
ChiranjitlaZ 
Chowdhuri 
v. 
The Union of 
India and 
Other a. 
870 
SUPREME COURT REPORTS 
[1950) 
of the Parliament and infringed his fundamental rights goaran· 
teed by Arts. 19 (1) \f), 31 and 14 of the Constitution and was 
consequently void under Art. 13. 
The company was mado a 
respondent and opposed the petition. 
Held per KANIA C.J., FAZL ALI, MUKHERJEA and DAS JJ.-
(i) that the impugned Act did not infringe any fundamental right 
of the petitioner under Art. 31 (1), as it did nGt deprive the com. 
pany or the petitioner of any property save under authority of 
law; 
(ii) that the impu~ned Act did not infringe any fundamental 
right guaranteed by Art. 31 (2) inasmuch as it did not authorise 
the ''acquisition" of any property of the company or of the share-
holders or '' the taking possession " of the property of the peti-
tioner, namely, the shares which he held in the company, though 
he wag disabled from exercising some of the rights which &n 
ordinary shareholder in a. company could exercise in respect of 
his shares, such as the right to vote, to appoint directors, and to 
apply for winding up; and, if the Act had anthorised the "taking 
possession" of the proper~y of the company, the petitioner was 
not entitled to any relief on that score under Art. 32; 
(iii) that, as the Act did not impose any restrictions on the 
petitioner's right "to acquire, hold and dispose of'' his shares, 
there was no infringement of Art. 19 (1) (f); and assuming that 
the restrictions imposed on the right of voting etc. were restric-
tions on the right to acquire, hold or dispose of property within 
Art. 19 (1) (f), such restrictions were reasonable restrictions im-
posed in the interests of the public, namely, to secure the supply 
of a. commodity essential 

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