Case: P.D Shamdasani   Vs. Central Bank of India Ltd

Patanjali Sastri, CJ.1. This is a petition under Art. 32 of the Constitution for the enforcement of the petitioners fundamental rights under Art. 19 (1) (f) and Art. 31 (1) alleged to have been violated by the Central Bank of India Ltd., a company incorporated under the Indian Companies, Act. 1882, and having its registered office at Bombay, (hereinafter referred to as "the Bank").2. It appears that the petitioner held five shares in the share capital of the Bank which sold those shares to a 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 proceedings 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 2-3-1951 under O. 7, R. 11 (d), Civil P. C 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 petitioners plaint was appealable, the petitioner did not prefer an appeal on the somewhat extraordinary ground that "the appeal if filed could not be heard by the judges of the said Court as all of them were disqualified from hearing such appeal" either because of their interest in the Bank or because of their prejudice against him.3. We are of opinion that the petitioner has misconceived his remedy and the petition must fail on a preliminary ground. Neither Art. 19(1) (f) nor Art. 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 freedom" and by cl. (1) assures to the citizen certain fundamental 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 Cls. (2) to (6).The language and structure of Art. 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 regulate private rights in the public interest. Violation of rights of property by individuals is not within the purview of the article.4. The position is no better under Art. 31 (1). The petitioner has urged that Cl. (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 infringements of rights of property by private individuals. He laid emphasis on the omission of the word "State" in Cl. (1) while it was used in Cl. (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 Art. 246 empowered Parliament and the State Legislatures to make laws regarding acquisition or reacquisitioning 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 Cl. (1) could only be deprivation by individuals. Sub-section (1) of S. 299, Government of India Act, 1936, corresponding to Cl. (1) of Art. 31 was, it was pointed out omitted in the draft Art. 19 (later numbered as Art. 31) which retained in a modified form only the provision contained in sub-s. (2) of that section relating to compulsory acquisition of property for public purposes. But Cl. (1) was subsequently restored and Art. 31 was enacted in its present form as recommended in Drafting Committees report and this, it was claimed, showed that Cl. (1) was intended to operate as a distinct provision apart from Cl. (2). We see no force in any of these arguments.5. In support of the argument that Cl. (1) should be construed in isolation from the rest of the article the petitioner relied on certain observations of our learned brother Das in Charanjit Lal v. The Union of India, 1950 S. C. R. 869, where the view was expressed that Cl. (1) enunciated the general principle that no person should be deprived of his property except by authority of law and laid down no condition for payment of compensation, while Cl. (2) dealt with deprivation of property brought about by acquisition or taking possession of it and required payment of compensation. In other words, deprivation referred to in Cl. (1) must be taken to cover deprivation otherwise than by acquisition or requisitioning of property dealt with in Cl. (2). We consider it unnecessary for the purpose of the present petitioner to go into that question. Even assuming that Cl. (1) has to be read and construed apart from Cl. (2), it is clear that is a declaration of the fundamental right of private property in the same negative form in which Art. 21 declares the fundamental right to life and liberty. There is no express reference to the State in Art. 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 Cl. (1) of Art. 31 show that it is prohibition of unauthorised governmental action against private property, as there can be no question of one private individual being authorised by law to deprive another of his property.6. The argument based on the Entries in the Lists is fallacious. It is not correct to suggest that, merely because 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 of property. Such a law could be made, for instance, under Entry No. 1 of List I, Entry No.1 of List 2 or Entry No.1. of List3. 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.7. Nor does the legislative history of the article lend any support to the petitioners contention. Section 299 (1), Government of India act, 1935, was never interpreted as prohibiting deprivation of property by private individuals. Its restoration, therefore, therefore, in the same form in Art. 31, after omission in the original draft Art. 19, could lead to no inference in support of the petitioners contention, which indeed proceeds on the fundamental misconception that Art. 19 (1) (f) and Art. (1), which are great constitutional safeguard against State aggression on private property, are directed against infringements by private individuals for which remedies should be sought in the ordinary law.

Decision:
0[ds]3. We are of opinion that the petitioner has misconceived his remedy and the petition must fail on a preliminary ground. Neither Art. 19(1) (f) nor Art. 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 freedom" and by cl. (1) assures to the citizen certain fundamental 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 Cls. (2) to (6).The language and structure of Art. 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 regulate private rights in the public interest. Violation of rights of property by individuals is not within the purview of the article.4. The position is no better under Art. 31 (1). The petitioner has urged that Cl. (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 infringements of rights of property by private individuals. He laid emphasis on the omission of the word "State" in Cl. (1) while it was used in Cl. (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 Art. 246 empowered Parliament and the State Legislatures to make laws regarding acquisition or reacquisitioning 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 Cl. (1) could only be deprivation by individuals.(1) of S. 299, Government of India Act, 1936, corresponding to Cl. (1) of Art. 31 was, it was pointed out omitted in the draft Art. 19 (later numbered as Art. 31) which retained in a modified form only the provision contained in(2) of that section relating to compulsory acquisition of property for public purposes. But Cl. (1) was subsequently restored and Art. 31 was enacted in its present form as recommended in Drafting Committees report and this, it was claimed, showed that Cl. (1) was intended to operate as a distinct provision apart from Cl. (2). We see no force in any of these arguments.5. In support of the argument that Cl. (1) should be construed in isolation from the rest of the article the petitioner relied on certain observations of our learned brother Das in Charanjit Lal v. The Union of India, 1950 S. C. R. 869, where the view was expressed that Cl. (1) enunciated the general principle that no person should be deprived of his property except by authority of law and laid down no condition for payment of compensation, while Cl. (2) dealt with deprivation of property brought about by acquisition or taking possession of it and required payment of compensation. In other words, deprivation referred to in Cl. (1) must be taken to cover deprivation otherwise than by acquisition or requisitioning of property dealt with in Cl. (2). We consider it unnecessary for the purpose of the present petitioner to go into that question. Even assuming that Cl. (1) has to be read and construed apart from Cl. (2), it is clear that is a declaration of the fundamental right of private property in the same negative form in which Art. 21 declares the fundamental right to life and liberty. There is no express reference to the State in Art. 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 Cl. (1) of Art. 31 show that it is prohibition of unauthorised governmental action against private property, as there can be no question of one private individual being authorised by law to deprive another of his property.6. The argument based on the Entries in the Lists is fallacious. It is not correct to suggest that, merely because 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 of property. Such a law could be made, for instance, under Entry No. 1 of List I, Entry No.1 of List 2 or Entry No.1. of List3. 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.7. Nor does the legislative history of the article lend any support to the petitioners contention. Section 299 (1), Government of India act, 1935, was never interpreted as prohibiting deprivation of property by private individuals. Its restoration, therefore, therefore, in the same form in Art. 31, after omission in the original draft Art. 19, could lead to no inference in support of the petitioners contention, which indeed proceeds on the fundamental misconception that Art. 19 (1) (f) and Art. (1), which are great constitutional safeguard against State aggression on private property, are directed against infringements by private individuals for which remedies should be sought in the ordinary law.