Ram Krishna Dalmia Vs Shri Justice S.R. Tendolkar and Ors

CASE BRIEF

Appellants- Ram Krishna Dalmia

Respondents- Shri Justice S.R. Tendolkar and Ors.

Decided On: 28.03.1958

Statues Referred-

1. Constitution of India
2. Commissions of Enquiry Act, 1952

Case Referred-

1. Budhan Choudhry and Ors. vs. The State of Bihar MANU/SC/0047/1954;
2. Chiranjit Lal Chowdhuri vs. The Union of India (UOI) and Ors. MANU/SC/0009/1950;
3. The State of Bombay and Anr. vs. F.N. Balsara MANU/SC/0009/1951;
4. The State of West Bengal vs. Anwar Ali Sarkar MANU/SC/0033/1952;
5. Kathi Raning Rawat vs. The State of Saurashtra MANU/SC/0041/1952;
6. Lachmandas Kewalram Ahuja and Anr. vs. The State of Bombay MANU/SC/0034/1952;
7. Rizwan-ul-Hasan and Anr. vs. The State of Uttar Pradesh MANU/SC/0021/1953;
8. Habeeb Mohamed vs. The State of Hyderabad MANU/SC/0080/1953;
9. Kedar Nath Bajoria vs. The State of West Bengal MANU/SC/0082/1953;
10. V.M. Syed Mohammad and Company vs. The State of Andhra MANU/SC/0019/1954;
11. Ameerunnissa Begum and Ors. vs. Mahboob Begum and Ors. MANU/SC/0026/1952;
12. Ram Prasad Narayan Sahi and Anr. vs. The State of Bihar and Ors. MANU/SC/0013/1953;
13. Dwarka Prasad Laxmi Narain vs. The State of Uttar Pradesh and Two Ors. MANU/SC/0030/1954;
14. Dhirendra Kumar Mandal vs. The Superintendent and Remembrancer of Legal Affairs to The Government of West Bengal and Anr. MANU/SC/0060/1954;
15. Matajog Dobey vs. H.C. Bhari MANU/SC/0071/1955;
16. A. Thangal Kunju Musaliar vs. M. Venkitachalam Potti and Anr. MANU/SC/0021/1955;
17. Pannalal Binjraj vs. Union of india (UOI) MANU/SC/0020/1956

FACTS:

1. An order which was passed April 29, 1957 by Division Bench of the Bombay High Court in three several Miscellaneous Applications under Art. 226 of the Constitution was challenged six appeals.
2. Union of India in exercise of powers bestowed on it by section 3 of the Commissions of Enquiry Act (LX of 1952) issued notification No. S.R.O. 2993 dated December 11, 1956 the same was challenged by several applications under Art. 226.
3. Many companies and some firms were controlled as well as promoted by petitioners.
4. Public invested by subscribing in the shares of these companies in huge quantities.
5. It was alleged that a lot of irregularities in the management which included manipulation of the accounts and specially unwarranted transfers and use of funds as well as of assets.
6. The money invested by the public was alleged to be used for the personal interests of those in control or management.
7. Ultimately due to the aforementioned reasons public suffered huge losses.
8. Central Government in exercise of the powers conferred by Section 3 of the Commissions of Inquiry Act (No. 60 of 1952), appointed a Commission of Inquiry.
9. This commission was required to enquire upon:
10. Management of the dealings of the Companies.
11. Nature as well as Extent of Control over the companies and firms by these petitioners.
12. Total Investment.
13. Amount of loss suffered by the public.
14. Amount of profit made by these petitioners.
15. Other irregularities, frauds or breach of trust or duty by the petitioners.

Contention by Parties

Appellant’s Arguments:

1. Government in appointing the Commission and Parliament in authorizing the same has assumed to themselves judicial powers.
2. The powers should be well within the legislative and executive domains respectively.
3. It was submitted that Parliament cannot function as a court until and unless there has been a breach which fundamentally affects its own privileges for which it may penalize the offender for contempt or of proceedings by way of impeachment.
4. In consideration of criminal prosecution, the preliminary investigation to be taken should be in accordance of Code of Criminal Procedure.
5. It was urged that any legislature shall not assume its power to start the investigation and thereby divest the citizen of the standard protection afforded to him by the provisions envisaged under the Code of Criminal Procedure

Respondent’s Arguments:

1. Solicitor-General on behalf of the respondents submitted that the section was sufficient enough to make a classification that the matter is of public importance and the same can be called for an inquiry by a Commission.
2. It was further submitted that the section also ascertains that the Parliament has the authority to provide for the appointment of Commissions so as to carry out the Inquiry in consideration of a matter of public importance.
3. It is impossible to forecast all the societal eventualities and therefore the duty of taking the necessary action hall be vested with the appropriate Government.

Judgment

The Apex Court bench comprising of Sinha, Bhuvneshwar P.(Cj), Gajendragadkar, P.B., Wanchoo, K.N., Gupta, K.C. Das, Shah, J.C.. Held:

1. That the principle to be remembered while determining if the statute is valid or is in violation of Article 14 is that Article 14 nowhere forbids any reasonable classification. However, it prohibits discrimination in both substantive as well as law of procedure.
2. The court further observed that if there are any special circumstances & not as able as other single individuals will be considered as a class by himself and the law favoring him will be constitutionally valid.
3. The burden to proof that any law violates constitution is on the one who asserts that.
4. Legislature has the power to distinguish degrees of harm and may impound its boundaries to choose cases where the need is deemed to be the clearest.
5. Matters of common knowledge, matters of common respect and history of the times may be taken in consideration by the court so as to sustain the presumption of constitutionality.
6. It has to be presumed that enactment of any law by the legislature was with good faith as well as knowledge of the existing circumstances.
7. Presumption of constitutionality is must but, the same cannot be extended so as to always hold that there must be some hidden and anonymous reasons for subjecting certain persons or corporations to antagonistic or discriminating legislation.

Rule of Law-

The provision of the law which was under scrutiny by the Hon’ble apex court of India was the Article 14 of Constitution of India.

Conclusion

In Conclusion it could be said that in this case the Supreme Court through its judgement has laid an observation that the principle to be remembered while determining if the statute is valid or is in violation of Article 14 is that Article 14 nowhere forbids any reasonable classification. However, it prohibits discrimination in both substantive as well as law of procedure.