dedol-hf/india-case-legal-rag huggingface dataset:
fication, the Court will not hold it invalid merely  because
the  law  might have been extended to other persons  who  in
some respects might resemble the class for which the law was
made, for the legislature is the best judge of the needs  of
the particular classes and to estimate the degree of evil so
as to adjust its legislation according to the exigency found
to  exist.  If, however, there is, on the face of the  stat-
ute,  no classification at all or none on the basis  of  any
apparent  difference  specially peculiar to  any  particular
individual  or class and not applicable to any other  person
or class of persons and yet the law hits only the particular
individual  or class it is nothing but an attempt  to  arbi-
trarily single out an individual or class for discriminating
and  hostile legislation. The presumption in favour  of  the
legislature cannot in such a case be legitimately  stretched
so  as  to throw the impossible onus on the  complainant  to
prove  affirmatively  that there are  other  individuals  or
class of individuals who also possess the precise amount  of
the identical qualities which are attributed to him so as to
form  a class with him.  As pointed out by Brewer J. in  the
Gulf, Colorado and Santa Fe'Railway v.W.H. Ellis (3),  while
good faith
(1}  249 U.S. 152.      (2) 220 U.S. 61.      (3) 165  U.S..
150.
934
and  a  knowledge of existing conditions on the  part  of  a
legislature  was to be presumed, yet to carry that  presump-
tion to the extent of always holding that there must be some
undisclosed and unknown reason for subjecting certain  indi-
viduals or corporations to hostile and discriminating legis-
lation  was  to make the protecting clause a  mere  rope  of
sand, in no manner restraining State action.
    The complaint of the petitioner on this head  is  formu-
lated  in  paragraph  8 (iii) of  the  petition  as  follows
:---"The Ordinance denied to the company and its  sharehold-
ers equality before the law and equal protection of the laws
and was thus a violation of article 14 of the  Constitution.
The  power  to  make regulations relating to trading  corpo-
rations  or  the control or production of industries  was  a
power which consistently with article 14 could be  exercised
only  generally  or with reference to a class and  not  with
reference to a single company or to shareholders of a single
company."  The Act is also challenged on the same ground  in
paragraph 9 of the petition.   The learned  Attorney-General
contends  that the petitioner as an  individual  shareholder
cannot  complain of discrimination against the company.   It
will  be  noticed  that it is not a case  of  a  shareholder
complaining only about discrimination against the company or
fighting  the  battle of the company but it is a case  of  a
shareholder  complaining of discrimination  against  himself
and  other  shareholders of this company.  It is  true  that
there is no complaint of discrimination inter se the  share-
holders of this company but the complaint is that the share-
holders of this company, taken as a unit, have been discrim-
inated  vis-a-vis  the   shareholders  of  other  companies.
Therefore,  the question as to the right of the  shareholder
to  question the validity of a law infringing the  right  of
the  company  does not arise. Here the shareholder  is  com-
plaining  of the infringement of his own rights and if  such
infringement  can  be established I see no  reason  why  the
shareholder  cannot come within article 32 to vindicate  his
own rights. The fact that these proceedings have been  taken
by
     935
one single shareholder holding only one single fully paid up
share does not appear to me to make any the least difference
in  principle.  If this petitioner has, by the Ordinance  or
the Act, been discriminated against and denied equal protec-
tion  of the law, his fundamental right has  been  infringed
and  his right to approach this Court for redress cannot  be
made  dependent  on the readiness or  willingness  of  other
shareholders  whose rights have also been infringed to  join
him in these proceedings or of the company to take  substan-
tive proceedings.  To take an example, if any law  discrimi-
nates  against  a class, say the Punjabis, any  Punjabi  may
question  the constitutionality of the law, without  joining
the  whole Punjabi community or without acting on behalf  of
all the Punjabis.  To insist on his doing so will be to  put
a fetter on his fundamental right under article 32 which the
Constitution has not imposed on him.  Similarly, if any  law
deprives  a particular shareholder or the shareholders of  a
particular  company  of the  ordinary  rights of  sharehold-
ers under the general law for reasons not particularly   and
specially  applicable to him or them but also applicable  to
other  shareholders  of  other companies,  such  law  surely
offends  against article 14 and any one so denied the  equal
protection of law may legitimately complain of the infringe-
ment of his fundamental right and is entitled as of right to
approach  this  Court under article 32 to  enforce  his  own
fundamental right under article 14, irrespective of  whether
any other person joins him or not.
    To the charge of denial of equal protection of the  laws
the respondents in the affidavit of Sri Vithal N. Chandavar-
kar  filed in opposition to the petition make the  following
reply:--"With  reference to paragraph 6 of the  petition,  I
deny  the soundness of the submissions that on or  from  the
26th January, 1950, when the Constitution of India came into
force the said Ordinance became void under article 13(1)  of
the  Constitution  or  that  the  provisions  thereof   were
inconsistent  with  the provisions of Part III of  the  said
Constitution  or for any of the other grounds  mentioned  in
paragraph 8
936
of  the  said petition."  In the whole of the  affidavit  in
opposition there is no suggestion as to why the promulgation
of  the Ordinance or the passing of the Act  was  considered
necessary  at all or on what principle or  basis  either  of
them was founded.  No attempt has been made in the affidavit
to  show  that the Ordinance or the Act was based  upon  any
principle of classification at all or even that the particu-
lar company and its shareholders possess any special  quali-
ties which are not to be found in other companies and  their
shareholders  and which, therefore, render  this  particular
company and its shareholders a class by themselves.  Neither
the affidavit in opposition nor the learned Attorney-General
in course of his arguments referred to the statement  of the
objects  and   reasons for introducing the  bill  which  was
eventually  enacted or the Parliamentary debates as  showing
the  reason  why and under what circumstances this  law  was
made and, therefore, apart from the question of their admis-
sibility in evidence, the petitioner has had no  opportunity
to  deal  with  or rebut them and the same  cannot  be  used
against him.
     The  learned  Attorney-General takes his stand  on  the
presumption  that  the law was founded on a valid  basis  of
classification,  that  its discriminations were  based  upon
adequate grounds and that the law was passed for  safeguard-
ing  the needs of the people and that, therefore,  the  onus
was upon the petitioner to allege and prove that the classi-
fication which he challenged did not rest upon any  reasona-
ble basis but was essentially arbitrary. I have already said
that if on the face of the law there is no classification at
all  or,  at  any rate, none on the basis  of  any  apparent
difference  specially  peculiar to the individual  or  class
affected by the law, it is only an instance of an  arbitrary
selection  of an individual or class for discriminating  and
hostile  legislation and, therefore, no presumption can,  in
such  circumstances, arise at all.  Assuming, however,  that
even  in such a case the onus is thrown on the  complainant,
there can be nothing to prevent him from proving, if he can,
from the text of. the law itself, that
937
it is "actually and palpably unreasonable and arbitrary" and
thereby discharging the initial onus.
    The  Act is intituled an Act to make  special  provision
for the proper management and administration of the Sholapur
Spinning and Weaving Company, Limited." There is not even  a
single preamble alleging that the company was being  misman-
aged at all or that any special reason existed which made it
expedient to enact this law.  The Act, on its face, does not
purport to make any classification at all or to specify  any
special'  vice  to  which this particular  company  and  its
shareholders  are  subject and which is not to be  found  in
other companies and their shareholders so as to justify  any
special  treatment.   Therefore.,  this Act,  ex  facie,  is
nothing but an arbitrary selection of this particular compa-
ny  and  its  shareholders for  discriminating  and  hostile
treatment and read by itself.is palpably an infringement  of
Article 14 of the Constitution.
   The  learned  Attorney-General promptly takes us  to  the
preambles  to the Ordinance which has been replaced  by  the
Act and suggests that the Act is based on the same consider-
ations   on which the  Ordinance was promulgated.   Assuming
that it is right and permissible to refer to and utilise the
preambles, do they alter the situation ?  The preambles were
as  follows :-"Whereas on account of mismanagement  and  ne-
glect a situation has arisen in the affairs of the  Sholapur
Spinning  and Weaving Company, Limited, which  has  prejudi-
cially affected the production of an essential commodity and
has  caused serious  unemployment amongst a certain  section
of  the community;And whereas an emergency has arisen  which
renders  it  necessary  to make special  provision  for  the
proper management and administration of the aforesaid compa-
ny;-"  The above preambles quite clearly indicate  that  the
justification  of  the  Ordinance  rested  on  mismanagement
and neglect producing certain results therein specified.  It
will be noticed that apart from these preambles there is  no
material whatever before us establishing or even  suggesting
that  this  company and its shareholders have in  fact  been
guilty of any
938
mismanagement  or  neglect.   Be that as it  may,  the  only
reason put forward for the promulgation of the Ordinance was
mismanagement resulting in falling off of production and  in
producing  unemployment.  I do not find it necessary to  say
that mismanagement and neglect in conducting the affairs  of
companies  can never be a criterion or basis of  classifica-
tion  for legislative purposes.  I shall assume that  it  is
permissible  to make a law whereby all delinquent  companies
and  'their  shareholders  may be brought to  book  and  all
companies mismanaging their affairs and the shareholders  of
such  companies may, in the interest of the general  public,
be  deprived of their right to manage the affairs  of  their
companies.  Such a classification made by a law would bear a
reasonable relation to the conduct of all delinquent  compa-
nies and shareholders and may, therefore, create no inequal-
ity,  for  the delinquent companies and  their  shareholders
from a separate class and cannot claim equality of treatment
with  good  companies and their shareholders who  are  their
betters.  But a distinction  cannot  be made   between   the
delinquent  companies  inter se or between  shareholders  of
equally delinquent companies and one set cannot be  punished
for  its  delinquency   while another set  is  permitted  to
continue, or become, in like manner, delinquent without  any
punishment unless there be some other apparent difference in
their respective obligations and unless there be some cogent
reason why prevention of mismanagement is more imperative in
one  instance than in the other.  To do so will  be  nothing
but an arbitrary selection which can never be justified as a
permissible  classiffication.   I am not  saying  that  this
particular company and its shareholders may not be guilty of
mismanagement and negligence which has brought  about  seri-
ous  fall in production of an essential commodity  and  also
considerable  unemployment.  But  if  mismanagement  affect-
ing  production and resulting in unemployment is to  be  the
basis  of a classification for making a law  for  preventing
mismanagement  and securing production and  employment,  the
law must embrace within its
939
ambit  all companies which now are or may  hereafter  become
subject  to the vice. This basis of classification,  by  its
very nature, cannot be exclusively applicable to any partic-
ular  company and its shareholders but is capable  of  wider
application  and, therefore, the law founded on  that  basis
must  also be wide enough so as to be capable of  being  ap-
plicable  to whoever may happen at any time to  fall  within
that classification. Mismanagement affecting production  can
never  be  reserved  as a special attribute  peculiar  to  a
particular  company  or  the shareholders  of  a  particular
company.  It  it  were permissible for  the  legislature  to
single  out an individual or class and to punish him  or  it
for  some  delinquency which may equally be found  in  other
individuals or classes and to leave out the other  individu-
als or classes from the ambit of the law the prohibition  of
the  denial of equal protection of the laws would only be  a
meaningless and barren form of words. The argument that  the
presumption being in favour of the legislature, the onus  is
on  the  petitioner to show there are other  individuals  or
companies  equally  guilty  of  mismanagement  prejudicially
affecting  the  production  of an  essential  commodity  and
causing  serious unemployment amongst a certain  section  of
the  community does not, in such. circumstances, arise,  for
the simple reason that here there has been no classification
at all and, in any case, the basis of classification by  its
very nature is much wider and cannot, in it application,  be
limited only to this company and its shareholders and,  that
being so, there is no reason to throw on the petitioner  the
almost  impossible  burden of proving that there  are  other
companies  which  are in fact precisely and in all  particu-
lars similarly situated  In any event, the petitioner, in my
opinion,  may  well  claim to have discharged  the  onus  of
showing  that  this company and its shareholders  have  been
singled out for discriminating treatment by showing that the
Act,  on the face of it, has adopted a basis of  classifica-
tion  which, by its very nature, cannot be  exclusively  ap-
plicable to this company and its shareholders but Which  may
be equally appplicable to other companies
940
and  their  shareholders and has penalised  this  particular
company and its shareholders, leaving out other companms and
their shareholders who may be equally guilty of the  alleged
vice of mismanagement and neglect of the type referred to in
the  preambles.  In my opinion the legislation  in  question
infringes  the  fundamental  rights of  the  petitioner  and
offends against article 14 of our Constitution.
    The  result, therefore, is that this petition  ought  to
succeed and the petitioner should have an order in terms  of
prayer (3) of the petition with costs.
                          Petition dismissed.
Agent  for the petitioner: M.S.K. Aiyengar.
Agent for opposite party Nos. 1 & 2:P.A. Mehta.
Agent  for opposite party Nos. 3 to 5 and 7 to 10:
            Rajinder Narain.
PETITIONER:
YESWANT DEORAO DESHMUKH
        Vs.
RESPONDENT:
WALCHAND RAMCHAND KOTHARI.
DATE OF JUDGMENT:
01/12/1950
BENCH:
AIYAR, N. CHANDRASEKHARA
BENCH:
AIYAR, N. CHANDRASEKHARA
KANIA, HIRALAL J. (CJ)
DAS, SUDHI RANJAN
CITATION:
 1951 AIR   16            1950 SCR  852
 CITATOR INFO :
 R          1965 SC1325  (6,58)
 R          1979 SC1165  (15)
ACT:
    Limitation  Act  (II  of 1908), ss. 14 (2  ),  18,  Art.
182--Civil  Procedure Code (V of 1908), s. 48--Execution  of
decree--Application  after 12 years from decree and 3  years
from  order on last application--Fraudulent  concealment  of
property  to prevent execution-Maintainability  of  applica-
tion--Limitation--Fraud preventing execution against partic-
ular   property--Whether   saves   limitation   under   Art.
182--Applicability  of  s. 18--Decree directing  payment  of
deficit  court fee before   execution--Whether   conditional
decree--Starting point of limitation--Time spent in proceed-
ings to adjudge judgmentdebtor insolvent, whether should  be
excluded.
HEADNOTE:
    An application for execution of a decree was made  after
the  expiry  of 12'years from the date of the decree  and  3
years from the date of the final order on the last  previous
application for execution. The decree-holder contended  that
the  judgment-debtor had "fraudulently purchased a  business
in the name of a stranger and had conducted the same in  the
name of the latter with a view to prevent the assets of  the
business  from being proceeded against in execution  by  the
decree-holder  and that therefore under s. 48 of  the  Civil
Procedure  Code he was entitled to make an application  even
after  the expiry of 19, years.  The High Court found  that,
as  the  decree-holder  was prevented by the  fraud  of  the
judgment-debtor  from executing the decree, the  application
was  not barred under s. 48 of the Code, but as it was  made
more  than  3 years from the date of the order on  the  last
application  it was barred under Art. 182 of the  Limitation
Act.   The decree-holder appealed contending for  the  first
time before the Supreme Court as fraud for the purpose of s.
48 of Civil Procedure Code was proved, s. 18 of the  Limita-
tion Act was applicable to the case and his application  was
not barred under Art. 189. as it was made within three years
of the date when he became aware of the fraud and the proper
article applicable was Art. 181:
Held,  (i) that the question whether on the proved facts  s.
18 was applicable to the case was a pure question of law and
the decree-holder was entitled to raise the question  before
the  Supreme Court, even though he had not raised it  before
the  lower courts; (ii) though s. 48, Civil Procedure  Code,
and Arts. 181 and 189. of the Limitation Act dealt with  the
time limit for making applications for execution of  decrees
and  should be read together, they were different  in  their
scope and object, and the fact that the application was  not
barred  under s. 48, Civil Procedure Code, did  not  obviate
the necessity of considering whether it was barred
853
under  Art. 182; (iii) that, as the fraud committed  by  the
judgment-debtor did not in any way conceal from the  decree-
holder the knowledge of his right to make an application for
execution of , the decree but only prevented him from  exer-
cising that right in respect of a particular property, s. 18
had  no  application to the case, and  the  application  was
therefore barred under Art. 182 of the Limitation Act;  (iv)
the  fact that there was no provision in Art. 182 for  cases
where  the judgment-debtor had committed a fraud as  in  the
present  case did not render that article  inapplicable  and
bring  the case within the purview of Art. 181 as  Art.  182
has to be read with the general provisions contained in s.18
relating to eases where there is fraud.
    Held  also, (i) A decree which provides that the  plain-
tiff  should pay the deficient court fees  before  executing
the  decree is not a conditional decree and time for  making
an application for execution of such a decree runs from  the
date  of  the  decree, and not from the date  on  which  the
plaintiff pays the deficit court fees.
    (ii)  The period of time during which the  decree-holder
was  prosecuting  proceedings for  adjudging  the  judgment-
debtor  an  insolvent cannot be excluded under 6.14  (2)  of
Limitation  Act, in computing the period of  limitation  for
making an application for executing the decree.
Judgment of the Bombay High Court affirmed.
JUDGMENT:
APPELLATE JURISDICTION: Civil Appeal No. 37 of 1950.
    Appeal from a judgment of the Bombay High Court  (Chagla
C.J. and Dixit J.) in Appeal No. 281 of 1947.
    K.   S. Krishnaswami  Aiyangar (K.  Narasimha  Aiyangar,
with him) for the appellant.
M.C. Setalvad, Attorney-General for India, (B. Sen, with
him) for the respondent.
    1950.  December 1.  The Judgment of the court was deliv-
ered by
    CHANDRASEKHARA AIYAR J. --This appeal, preferred ch from
the  decree  of the Bombay High Court in Appeal No.  281  of
1947,  raises the question whether an execution  application
seeking  to execute a final decree, passed by the let  Class
Subordinate  Judge's Court at Poona, on 6th December,  1932,
for a sum of Rs. 1,24,215 and odd, is barred by  limitation.
The decree was made in a suit for dissolution of a  partner-
ship and the taking of accounts.
854
    The  execution  application was filed  on  4th  October,
1946,  and the amount stated to be due under the  decree  on
that  date was Rs. 2,30,986 and odd. The previous  execution
application  No-946  of 1940 filed in the Court of  the  1st
Class  Sub-Judge,  Sholapur, to which the  decree  had  been
transferred  for execution, was made on 24th June, 1940.  It
was dismissed on 9th September,  1940, for non-prosecution.
     It would thus be seen that the present application  was
filed after the lapse of 12 years from the date of the final
decree  and 3 years from the date of the final order on  the
previous  application.  To surmount the bar  of  limitation,
the  decree-holder, who is the appellant before  us,  raised
four  contentions:firstly,  that  the  final  decree,  which
provided  that  the plaintiff should pay the  deficit  court
fees  on  the decretal amount before the  execution  of  the
decree, was a conditional decree, and that time began to run
from the date when the condition was fulfilled on 5th Decem-
ber, 1935, by payment; secondly, that the period occupied by
the  insolvency proceedings from 10th August, 1937, to  14th
December,  1942, initiated by the decree-holder to  get  the
first  judgment-debtor Walchand Ramchand Kothari (with  whom
alone we are now concerned) adjudged an insolvent, should be
excluded under section 14 (2) of the Limitation Act;  third-
ly,  that the period occupied by one Tendulkar, who was  the
creditor  of  the  present  decree-holder,  in   seeking  to
execute this decree, should be deducted; and lastly, that as
the  judgment-debtor  prevented  execution  of  the   decree
against the 'Prabhat' newspaper by suppressing his ownership
of the same, a fresh starting point of limitation springs up
in the decree-holder's favour from the date of the discovery
of the fraud.
     The Subordinate Judge held that the execution  applica-
tion  was not barred, agreeing with every one of these  con-
tentions.  On appeal to the High Court Chagla C.J. and Dixit
J. reversed this decision, holding that it was not a  condi-
tional decree, that the steps taken by Tendulkar to  execute
this  decree were of no avail, and that the insolvency  pro-
ceedings were for a
855
different relief altogether, so that section 14 (2) of the
Limitation Act could not be invoked. They concurred with the
finding    of    the    Subordinate    Judge    that     the
judgment-debtor prevented the execution of the decree within
12  years by fraudulent concealment of his ownership of  the
'Prabhat' newspaper and that the twelve years' bar of  limi-
tation did not apply; but they held that the application was
barred under article 182 of the Limitation Act, as more than
three  years had run from 9th September, 1940, the  date  of
the dismissal of the previous execution application,  before
the present application was filed on 4th October, 1946.
Points 1 to 3 above mentioned are of no avail to the  appel-
lant.   The  decree was not a conditional one in  the  sense
that  some extraneous event was to happen on the  fulfilment
of  which alone it could be executed. The payment  of  court
fees  on the amount found due was entirely in the  power  of