Constitution
irfan
(Querist) 22 November 2011
This query is : Resolved
sir,
i have to prove that company is not citizen.
i have all the material regarding this like state trading corporation case, telco case etc.......
now i have problem where from to start.
what will be the possible arguments to prove this point?
Raj Kumar Makkad
(Expert) 22 November 2011
Company might not be a citizen but it is an artificial person.
You my start from the definition of Citizen as defined under Indian Citizenship Act and then may define company as per Companies Act and then can compare both definitions and can provide relevant citation in support of your reply.
irfan
(Querist) 22 November 2011
can i plea the arguement of not lifting the corporate veil of company.
Advocate. Arunagiri
(Expert) 22 November 2011
You need not prove that company is not a citizen. That is the fact.
Company is only a artificial person created by statute.
Company takes birth on the date of Incorporation. Dies when it is wind up.
You can not compare a citizen with a artificial person.
Kiran Kumar
(Expert) 22 November 2011
rightly advised by Mr. Makkad.
firstly find out the definitions of both the terms 'citizen' and 'company'
distinguish the two with appropriate interpretations.
some work upon English and American Law will provide you good understanding over the issue.
irfan
(Querist) 23 November 2011
But if share holders r made parties to the petition,,,wat will be the position then...
irfan
(Querist) 23 November 2011
But if share holders r made parties to the petition,,,wat will be the position then...
irfan
(Querist) 23 November 2011
But if share holders r made parties to the petition,,,wat will be the position then...
Guest
(Expert) 23 November 2011
I endorse the views of Shri Makkad.
But, your supplementary question creates just a hypothetical issue without stating the nature of the case, where along with the company, you want to make shareholders also as parties to the petition and on what account.
Position about making individual Directors as party to the petition can be understood, but if a company has more than one lakh shareholders, would you like to make them also a party and on what account, when they do not participate in any of the day to day decisions of the company and their liability is also limited only to the extent of their shareholding?
Sailesh Kumar Shah
(Expert) 23 November 2011
state the facts of case,without this, further advise can not given.
ajay sethi
(Expert) 23 November 2011
dhingraji has raised a valid query? how many shareholders have been made party? wha are the facts of your case?
prabhakar singh
(Expert) 23 November 2011
COMPANY IS NOT A CITIZEN
A corporate entity is not a citizen of India and has no rights under Article 19 of the constitution of India even though it is treated as a separate legal entity. It does not enjoy any fundamental rights under the said article.[State Trading Corpn. Of India v. C.T.O. (1963) 33 Comp Cas 1057 (SC)]
A share holder being a citizen of India has access to Article 226 of the Constitution.[Bennet Coleman & Co. Ltd. Union Of India, AIR 1973 SC 106]
The following principles emerge out of the various judicial pronouncements.
i] A company is a separate legal entity.
ii] A company is not a citizen and has no fundamental rights under the constitution.
iii]A company can sue and can be sued
iv] A company cannot maintain a writ under article 226 for the enforcement of fundamental rights.
v] The rights of company and its share holders are separate and are not co-extensive.
vi] A writ filed by the company and the share holders is maintainable.
The general trend that has emerged out is that the rights of the members and the company which the share holders have formed are rather co-extensive and the denial to one of the fundamental freedom would mount to the denial to another.[Dehli Cloth and general Mills Co. Ltd.v. Union Of India AIR 1973 SC 106]]
In Louisville, C. & C.R. Co. v. Letson[Louisville, C. & C.R. Co. v. Letson, 2 How. 497, 558, 11 L.Ed. 353 (1844)], the U.S. Supreme Court held that for the purposes of the case at hand, a corporation is "capable of being treated as a citizen of [the State which created it], as much as a natural person." Ten years later, they reaffirmed the result of Letson, though on the somewhat different theory that "those who use the corporate name, and exercise the faculties conferred by it," should be presumed conclusively to be citizens of the corporation's State of incorporation.[Marshall v. Baltimore & Ohio R. Co., 16 How. 314, 329, 14 L.Ed. 953 (1854]
These concepts have been codified by statute, as U.S. jurisdictional statutes specifically address the domicile of corporations. A company is a legal person, but it is not a ‘citizen’ so as to claim the fundamental rights granted to citizens by the Constitution[Tata Engineering &; Locomotive Co Ltd vs State of Bihar : 1965 AIR 40,].
This is the effect of section 2(f) of the Citizenship Act, 1955 which expressly excludes a company or association or body of individuals from citizenship.
Article 19 of Indian Constitution
Article 19 guarantees rights to citizens as such and associations cannot lay claim to the fundamental rights guaranteed by that Article solely on the basis of their being an aggregation of citizens. Once a company or a corporation is formed, the business which is carried on by the said company or corporation is the business of the company or corporation and is not the business of the citizens who got the company or corporation formed or incorporated and the rights of the incorporated body must be judged on that footing and cannot be judged on the assumption that they are the right attributable to the business of individual citizens. The petitioners cannot be heard to say that their share-holders should be allowed to file the present petitions on the ground that in substance, the corporations and companies are nothing more than association of shareholders and members thereof. If their contention is accepted, it would really mean that what the corporations or companies cannot achieve directly, they can achieve indirectly by relying upon the doctrine of lifting the veil. If the corporations and companies are not citizens, it means that the Constitution intended that they should not get the benefit of Art. 19.[Tata Engineering & Locomotive Co Ltd vs State of Bihar : 1965 AIR 40]
I shall not comment upon this aspect and leave it to you to interpret the law on this subject for yourself . If company is not a citizen obviously it cannot enjoy any fundamental rights. One may usefully refer to the case of State Trading Corporation [Apthorpe v. Peter Schoenhofen Brewing Co. 4 T.C. 41 CASE] that illustrates the Law, in general. A company has a domicile but no citizenship status is axiomatic. It is further fortified by the fact that during war times we make a classification as to the companies that have 'enemy character' or not.
Try it if found helpful for you.
best wishes from me.
Advocate. Arunagiri
(Expert) 23 November 2011
Case against the company can not be equated with the case against share holders.
You have to give the relevant info for a fruitful discussion.
Raj Kumar Makkad
(Expert) 24 November 2011
Thanks Prabhakar singh ji for seconding me.
irfan
(Querist) 25 November 2011
facts of the case are below.............
ELECTRONICS INDIA LTD.
Vs.
UNION OF INDIA
In order to increase employment opportunities to the weaker sections of the society and to check growing nepotism and favoritism in the matter of employment in the private sector, Parliament enacted a law, called The Regulation of Employment in the Private Sector Act. Section 3 provides that every post in the private sector shall be filled only after proper advertisement & after consideration of the relative merits of all eligible candidates by a selection committee constituted in accordance with the provisions of the Act & with reference to the qualifications & other conditions of eligibility, approved by the officer in charge of the Employment Exchange of the District. S. 4 provides that 40% of the posts shall be reserved for candidates belonging to the scheduled castes, 10% to candidates belonging to the scheduled tribes, and out of the remaining 50% at least half the number of posts shall be reserved for woman. S. 5 exempts domestic service from the operation of the Act. Section 6 provides for the constitution of the Selection Committee which shall consist of three members of whom the Regional Employment Officer shall be the Chairman & one member to be nominated by the State Government and one nominee of the management.
S.7 makes it offence to fill up a post in the private sector except in accordance with the provisions of this Act, punishable with imprisonment of either description for a term extending up to three years and a fine up to Rs. 500/.
S.8 contains a transitional provision permitting appointments to be made against existing vacancies of candidates sponsored by the local Employment Exchange within a period of three months from the commencement of the Act.
A reputed private company Electronics India Ltd. which recruits thousands of employees every year all over the country is aggrieved by this law and wants to challenge the same in the Supreme Court under Article 32 of the Constitution on the ground that it violates the Fundamental Rights.
sir, i have to plead from respondent side that the concerned company has no locus standi under article 32 of constitution?
how i can plead this...
R.Ramachandran
(Expert) 25 November 2011
Dear Mr. Irfan,
Is it a moot problem or a real life fact situation?
irfan
(Querist) 25 November 2011
Moot problem......
plz help me in this regard here
irfan
(Querist) 27 November 2011
Plz somebody help me
