"A Critical Comment On Supreme Court's Judgment In Forum For People's Collective Efforts v. State Of West Bengal"

Question no. 1 Whilst exercising its writ jurisdiction under Article 32 of the Constitution, could the Court have declared HIRA unconstitutional on the ground of repugnancy or legislative competence?

Question no. 2 Assuming that the Petitioners had alleged in the writ petition that their fundamental rights had been violated, was the petition filed at the instance of the Petitioner no. 1 company under Article 32 of the Constitution maintainable?

Question no. 3 Could the Court have declared that the 1993 Act is repugnant to RERA and hence impliedly repealed even though it was not specifically challenged?

The purpose of this column is to answer these questions in the backdrop of the FPCE case.

1. QUESTIONS THAT ARISE

Question no. 1 Whilst exercising its writ jurisdiction under Article 32 of the Constitution, could the Court have declared HIRA unconstitutional on the ground of repugnancy or legislative competence?

Answer to Question no. 1

The Challenge: In order to answer this question, it is essential to first examine the challenge in the petition. The essence of the challenge is set out in the very first paragraph of the Court's opinion in Part A.^[8] The basis for the challenge was that HIRA was a "virtual replica" of RERA and it was directly inconsistent with the provisions of RERA.^[9] HIRA had neither been reserved for nor had it received assent of the President of India under Article 254(2)^[10] of the Constitution and therefore it could not prevail over RERA.^[11] "Parliament having legislated on a field covered by the Concurrent List," it was not permissible for the State Legislature to enact a law on the same subject.^[12] It is pertinent to note that there does not appear to be any challenge on the ground that impugned legislation (HIRA) offends or violates the Petitioners' fundamental rights. Even if one were to peruse the submissions of the Petitioners recorded by the Court, there does not appear to be any argument on the ground of violation of the Petitioners' fundamental rights.^[13] Had such challenge been specifically raised, the Court would have certainly dealt with it in its opinion.

Scope of Article 32: A writ petition can only be filed under Article 32 to enforce fundamental rights in Part III of the Constitution.^[14] This is not to say that grounds apart from violation of fundamental rights, such as repugnancy, legislative competence or violation of other constitutional provisions cannot be raised in a petition under Article 32. However, while entertaining a petition under Article 32, it is essential to first show that there has been a violation of fundamental rights before proceeding to any other ancillary challenge. At least a prima facie case under Article 32 has to be made out to show that the Petitioners' fundamental rights have been violated.^[15] This position of law has been clearly set out in no uncertain terms by a five Judges Bench of the Supreme Court in D.A.V. College v. State of Punjab.^[16] The relevant portion of the judgment reads thus:

"It is apparent therefore that the validity or the invalidity of the impugned law on the ground of legislative competence should purport to infringe the fundamental rights of the petitioner as a necessary condition of its being adjudicated. But if in fact the law does not, even on the assumption that it is valid, infringe any fundamental rights, this Court will not decide that question in a petition under Article 32. The reason for it is obvious, namely that no petition under Article 32 will be entertained if fundamental rights are not affected and if the impugned law does not affect the fundamental rights it would be contrary to this principle to determine whether that law in fact has legislative competence or not."^[17] (emphasis supplied)

This being the position in law, the Court ought not to have entertained the challenge on the ground of repugnancy or legislative competence under Article 32 in the absence of any challenge on the ground of violation of fundamental rights. The Petitioners had to have first demonstrated that its fundamental rights had been violated before raising any challenge on the ground of legislative competence or repugnancy.

Question no. 2 Assuming that the Petitioners had alleged in the writ petition that their fundamental rights had been violated, was the petition filed at the instance of the Petitioner no. 1 company under Article 32 of the Constitution maintainable?

Let us assume for a moment that the writ petition contained specific grounds of fundamental rights violations. Could a writ petition filed by a corporate person under Article 32 be maintainable? Though the contesting Respondents have not raised a preliminary objection to this effect, it would be necessary to delve into this aspect. The case status from the Supreme Court website^[18] of the FPCE case shows that the Writ Petition consists of two Petitioners. Petitioner no. 1 is the Forum for Peoples Collective Efforts. The YouTube channel^[19] and Facebook page^[20] of the Petitioner no. 1 both indicate that it is a non-profit company incorporated in 2017 under Section 8^[21] of the Companies Act, 2013 and has been formed "primarily to work towards protection of consumers in general and home buyers in particular."^[22] The Petitioner no. 1 has filed the writ petition through its President one Mr. Abhay Upadhyay. The Petitioner no. 2 is Mr. Abhay Upadhyay. It would appear that the Petitioner no. 2 has filed the writ petition in his capacity as the President of the Petitioner no. 1 and also in his individual capacity. In light of this factual position, it would be apposite to refer to various authorities of the Supreme Court on this question.

State Trading Corporation of India Ltd. v. The Commercial Tax Officer and others (1963)

A Special Bench of nine Judges of the Supreme Court in State Trading Corporation of India Ltd. v. The Commercial Tax Officer and others (hereinafter referred to State Trading Corporation case) had the occasion to deal with this issue.^[23] Two questions^[24] had been referred to the Special Bench: (1) Whether State Trading Corporation, Private Limited Company registered under the Companies Act, 1956 was a citizen within the meaning of Article 19 of the Constitution and whether it could ask for enforcement of fundamental rights under the said Article? (2) Whether the said Corporation being a department and organ of the Government of India can claim to enforce its fundamental rights under Part III of the Constitution of India? "The questions were raised by way of preliminary objections to the maintainability of the Writ Petitions"^[25] under Article 32 of the Constitution. The Petitioner no. 1 was State Trading Corporation of India Ltd., and the Petitioner no. 2 was the Additional Secretary Ministry of Commerce and Industries who was a shareholder of the Petitioner no. 1.

Sinha C.J., who delivered the majority opinion, referred to a plethora of authorities^[27] and opined that a clear distinction is made between rights guaranteed to "persons" (say in Article 14^[28] and 21^[29]) vis-à-vis rights guaranteed to "citizens" (Article 19 (1)^[30]) in Part III of the Constitution.^[31] According to the Court, "all citizens are persons but all persons are not citizens, under the Constitution."^[32] The Court then went on to examine the provisions of Citizenship in Part II (Articles 5 to 11) of the Constitution and came to the conclusion that the provisions of the said Part are "clearly inapplicable to juristic persons."^[33] Having thus come to that conclusion, the Court held that the rights flowing from Article 19 do not apply to a corporate body and the rights of citizenships and the rights flowing from nationality or domicile of a corporation are not coterminous.^[34] Having thus held that the rights flowing from Article 19 would not apply to a body Corporate such as a Company, the majority did not deem it necessary to answer the second question on the right of a Government Corporation to claim infringement of fundamental rights.

Hidayatullah J. having concurred with the majority also held,

"….an incorporated company has a separate existence and the law recognises it as a legal person separate and distinct from its members. This new legal personality emerges from the moment of incorporation and from that date the persons subscribing to the memorandum of association and other persons joining as members are regarded as a body corporate or a corporation aggregate and the new person begins to function as an entity. But the members who form the incorporated company do not pool their status or their personality. If all of them are citizens of India the company does not become a citizens of India any more than if all are married the company would be a married person. The personality of the members has little to do with the persona of the incorporated company. ……The corporation really has no physical existence; it is a mere 'abstraction of law'…"

But the most crucial takeaway from the opinion of Hidayatullah J. was his view on the rights of the members of a Corporation who are citizens of India. According to Hidayatullah J.,

"Members of a corporation who are citizens can enforce the rights under Art. 19(1)(f) and (g). Even if corporations may not be able to do so directly, the members who are citizens by enforcing their personal right can effectively benefit the corporation. The only persons who are not able to do so are non-citizens whether as individuals or as members of a corporation;"

Therefore, with respect to the first question, Hidayatullah J. opined that the State Trading Corporation could not be regarded as a citizen for the purpose of enforcing its rights under Article 19(1) (f) and (g).^[37] So far as the second issue is concerned, unlike the majority, Hidayatullah J. decided the issue and held that State Trading Corporation being a Government Company could not enforce its rights under Part III of the Constitution against the State itself. 

The Tata Engineering and Locomotive Co. Ltd v. The State of Bihar and others (1965)

About two years later, this issue arose once again before a five Judges Bench in Tata Engineering and Locomotive Co. Ltd. v. State of Bihar and others^[39](hereinafter referred to as "the TELCO case"). Three groups of Petitioners who had filed writ petitions under Article 32 of the Constitution were being heard by the Supreme Court. In first group, petitions were filed by Tata Engineering and Locomotive Co. Ltd. (a company, whose majority shareholders were Indian citizens) as well as two shareholders of the said company who had also joined as Petitioners.^[40] The second group consisted of Automobile Products of India Ltd. (a company, whose majority shareholders were Indian citizens) and a shareholder of the said company as Petitioners;^[41] and in the last group, Petitions had been filed by State Trading Corporation of India Ltd.^[42] The shareholders of this Corporation were the President of India, and two Additional Secretaries, Ministry of Commerce and Industry, Government of India. One of these Secretaries was joined as a Petitioner.

Before the Supreme Court it was argued on behalf of the Petitioners that though in the State Trading Corporation case, the Petitioner in that case was held not to be a citizen, "the question as to whether the veil of the Corporation can be lifted and the rights of the share-holders of the said Corporation could be recognised under Art. 19 or not was not decided," and therefore, the Court could lift the corporate veil to decide whether the shareholders rights under Article 19 were being violated.

The Court however rejected this argument, dismissed the petitions and held that in light of the decision in the State Trading Corporation case, the Petitioners' plea could not be entertained, because if the plea was upheld, it would mean that "what the corporations or the companies cannot achieve directly, can be achieved by them 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."^[45] The Court then went onto to opine,

"The effect of confining Art. 19 to citizens as distinguished from persons to whom other Articles like 14 apply, clearly must be that it is only citizens to whom the rights under Art. 19 are guaranteed. If the legislature intends that the benefit of Art. 19 should be made available to the corporations, it would not be difficult for it to adopt a proper measure in that behalf by enlarging the definition of 'citizen' prescribed by the Citizenship Act passed by the Parliament by virtue of the powers conferred on it by Articles 10 and 11. On the other hand, the fact that the Parliament has not chosen to make any such provision indicates that it was not the intention of the Parliament to treat corporations as citizens. Therefore, it seems to us that in view of the decision of this Court in the case of the State Trading Corporation of India Ltd., AIR 1963SC 1811 the petitioners cannot be heard to say that their shareholders should be allowed to file the present petitions on the ground that, in substance, the corporations and companies are nothing more than associations of shareholders and members thereof."

Rustom Cavasjee Cooper v. Union of India -The Bank Nationalization Case (1970)

This issue again arose before the eleven Judges Bench in Rustom Cavasjee Cooper v. Union of India^[47](hereinafter referred to as "the Bank Nationalization case"). In this case, the Petitioner was a shareholder of Central Bank of India, the Bank of Baroda Ltd., the Union Bank of India Ltd., and the Bank of India Ltd., and also had current and fixed deposit accounts with the said banks. He was also a director of the Central Bank of India Ltd. He had filed two Writ Petitions under Article 32^[48] claiming that the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 8 of 1969 promulgated on July 19, 1969, and the Banking Companies (Acquisition and Transfer of Undertakings) Act 22 of 1969 impaired his rights guaranteed under Articles 14, 19 and 31 of the Constitution.

The Attorney General raised a preliminary objection regarding the maintainability of the writ petitions because according to him no fundamental rights of the Petitioners were directly impaired.^[50] The Court rejected the preliminary objection and after distinguishing the State Trading Corporation case and TELCO case held that since the Petitioner sought to challenge the infringement of his own rights and not of the Banks and therefore, the Petitions were maintainable.

Bennett Coleman & Co. and others v. Union of India and others (1972)

In Bennett Coleman & Co. and others v. Union of India and others,^[52] a similar plea was raised by the Additional Solicitor General before the five Judges Bench on the ground that the Writ Petition filed by the Companies for enforcement of fundamental rights under Article 19 (1) (a) and Article 14 was not maintainable.^[53] Before the Supreme Court, the Petitioners in each case were, in addition to the respective companies, shareholders, editors and publishers.^[54] For instance, in the Bennett Coleman group of cases one shareholder, a reader of the publication and three editors of the three dailies published by the Bennett Coleman Group were the Petitioners.^[55] While in the Hindustan Times case a shareholder, who happened to be a Deputy Director, another shareholder, a Deputy Editor of one of the publications, the printer and the publisher of the publications and a reader were the Petitioners.

In light of the aforesaid factual position, the majority opinion delivered by S.M. Sikri C.J. referred to the State Trading Corporation case, the TELCO case and the Bank Nationalization case and held,

"In the present case, the individual rights of freedom of speech and expression of editors, Directors and shareholders are all exercised through their newspapers through which they speak. The press reaches the public through the Newspapers. The shareholders speak through their editors- The fact that the companies are the petitioners does not prevent this Court from giving relief to the shareholders, editors, printers who have asked for protection of their fundamental rights by reason of the effect of the law and of the action upon their rights. The locus standi of the shareholder petitioners is beyond challenge after the ruling of this Court in the Bank Nationalisation case (supra). The presence of the company is on the same ruling not a bar to the grant of relief."

Thus, a collective reading of the aforesaid authorities would indicate that a writ petition cannot be filed by a company/corporate entity under Article 32 of the Constitution for enforcement of "citizen based" fundamental rights emanating from Article 19, unless such a petition also consists of individual shareholders, employees, account holders etc. as Petitioners, who are citizens of India, and whose fundamental rights under Article 19 are personally impinged. However, from a reading of the above authorities, it can also be inferred that so far as the rights emanating from Part III that are not "citizen based" (such as Article 19) but "person based" (such as Article 14 and 21), a company having a corporate personality and a juristic existence could file a writ petition under Article 32 on the grounds that its "person based" fundamental rights, such as the rights under Articles 14 or 21, are being violated.

Answer to Question no. 2

So far as the FPCE case is concerned, according to the author, the writ petition that had been filed by the Petitioner no. 1 Company would have been maintainable to the extent that "person based" fundamental rights in Part III of the Constitution had been allegedly violated. Considering the facts of FPCE, the only two Articles in Part III that may have been applicable were Article 14 (Equality before Law) and Article 21 (Protection of Life and Personal Liberty). The Petitioner no. 1 Company would not have been able to allege violation of "citizen based rights" under Article 19(1), but the Petitioner no. 2 in his individual capacity would have been able to allege violation of these rights under Article 19 (assuming that he is a citizen of India). Therefore, to make out a case under Article 19, both the Petitioner no. 1 and 2 would have had to file the writ petition together, (which has been done in the instant case) and not solely by the Petitioner no. 1. However, perusal of the Court's opinion in FPCE would show that no such ground alleging violation of fundamental rights has been specifically recorded or dealt with. But assuming for the sake of argument that such grounds had been raised, so far as Article 19 is concerned, the Petitioner no.2 would have had to demonstrate that HIRA violated his rights under Article 19 of the Constitution. For alleging violation under Article 14 and Article 21 both the Petitioner no. 1 and 2 would have had to demonstrate that HIRA violated these fundamental rights. In the authors opinion, it would have been an uphill task for the Petitioners to specifically make a case that rights under Article 14, 19, 21 or any other Article in Part III of the Constitution had been violated. This is why it appears that the challenge was primarily confined to the grounds of legislative competence and repugnancy. Moreover, what has been filed by the Petitioners is a writ petition and not a public interest litigation. Had a public interest litigation been filed, the flexible rules of locus standi would have been applicable to the present case.

Question no. 3 Could the Court have declared that the 1993 Act is repugnant to RERA and hence impliedly repealed even though it was not specifically challenged?

A crucial aspect of the Court's opinion has to be addressed before answering this question. Was there any reason for the Court to also declare the 1993 Act repugnant to RERA even though it had already been repealed by HIRA earlier? Would the striking down of HIRA result in automatic revival of the 1993 Act? While striking down the 1993 Act, in the concluding portion of its opinion, the Court has not once, but twice clarified and reiterated that striking down the provisions of HIRA would not result in revival of the 1993 Act.^[58] What was the basis for this reiteration? This needs to be examined first before proceeding further.

Revival of a repealed Act- Legislative Action: Earlier under English Common Law, "when a repealing enactment was repealed by another statute, the repeal of the second Act revived the former Act 'ab initio'."^[59] However, the position in English Common Law changed after 1850; as a result if "an Act repealing a former Act is itself repealed, the last repeal does not revive the Act before repealed unless words are added reviving it."^[60] This change took place as a result of the introduction of the Interpretation Act of 1889 in England. Though this Act does not apply to India, the Supreme Court in Ameer-Un-Nissa Begum and others v. Mahboob Begum and others adopted this Common Law doctrine and opined that "the repeal of the repealing enactment would not revive the original Act" unless "the second reporting enactment manifests an intention to the contrary."^[61] This intention may be implicit or explicit.^[62] An implicit intent may result in the application of the doctrine of implied repeal, as has been made applicable in the FPCE case by declaring the 1993 Act repugnant to RERA and thus impliedly repealing it. Repeal connotes "abrogation or obliteration of one statute by another, from the statute book as completely as if it had never been passed."^[63] The repealed statute may be made applicable for certain limited purposes as provided in Section 6 of the General Clauses Act, 1897 or in similar state enactments.^[64] "Repeal is not a matter of mere form but one of substance….. If the intention, indicated expressly or by necessary implication in the subsequent statute, was to abrogate or wipe off the former enactment, wholly or in part, then it would be a case of total or pro tanto repeal. If the intention was merely to modify the former enactment by engrafting an exception or granting an exemption, or by super-adding conditions, or by restricting, intercepting or suspending its operation, such modification would not amount to a repeal."^[65] However, Section 7 of the General Clauses Act, 1897 makes it clear that when a Union law or regulation intends to revive a previously repealed statute or regulation, purpose of such revival has to be expressly stated by the legislature.^[66] Similar provisions are also found in state enactments.

Revival of a repealed Act- Judicial intervention: Would the aforesaid doctrine also apply when a Constitutional Court strikes down a law or declares it repugnant, ultra vires or void? The answer is found in a three Judges Bench decision delivered by the Supreme Court in State of Uttar Pradesh and others v. Hirendra Pal Singh and others^[68]in which the Court opined that "while examining the validity of the amended provisions" the Court may "reach a conclusion that the said provisions are ultra vires and unconstitutional and strike down the same but that may not automatically revive the provisions which stood repealed by the said amendment."^[69] This has been more clearly articulated by the Court in another three Judges Bench decision in State of Tamil Nadu and others v. K. Shyam Sunder and others^[70]in which the Court held,

"56…..Thus, undoubtedly, submission made by learned senior counsel on behalf of the respondents that once the Act stands repealed and the amending Act is struck down by the Court being invalid and ultra vires/unconstitutional on the ground of legislative incompetence, the repealed Act will automatically revive is preponderous and needs no further consideration.

59. Thus, the law on the issues stands crystallised that in case the Amending Act is struck down by the court for want of legislative competence or is violative of any of the fundamental rights enshrined in Part III of the Constitution, it would be unenforceable in view of the provision under Article 13(2) of the Constitution and in such circumstances the old Act would revive, but not otherwise. This proposition of law is, however, not applicable so far as subordinate legislation is concerned."

Though the aforesaid opinions are delivered in the context of amending Acts repealing earlier Acts, the principle law down would equally apply to the FPCE case in which the 1993 Act was repealed by Section 86 of HIRA subject to any previous acts done or rules made thereinunder.^[71] Keeping this legal position in mind, it may be inferred that the Court, being mindful of afore stated legal principle, did not intend for the 1993 Act to revive on striking down HIRA and it is perhaps for this reason that it held that Sections 3 to 17 of the 1993 Act stand impliedly repealed "upon the enactment of the RERA in 2016, in accordance with Sections 88^[72] and 89^[73] read with Article 254(1)^[74] of the Constitution."^[75] Therefore, the Court clarified twice that the 1993 Act is repugnant to RERA and is impliedly repealed. Since 15 out of the 17 Sections of the 1993 Act were declared repugnant, it is obvious that nothing more in the said Act would survive and thus the Court declared the entire Act repugnant. The question that now remains to be answered is should the Court have taken this this step? The answer for the same is set out below.

Answer to Question 3

Travelling beyond the scope of the Petition: As has been stated earlier, a reading of the Court's opinion would show that the challenge in the petition appeared to be confined to HIRA. The Petitioners did not appear to have challenged the 1993 Act. There is nothing in the Court's opinion to show that the Petition had been amended or modified to incorporate a challenge to the 1993 Act. Nor has the Court recorded that the Petitioners had attacked the 1993 Act through a counter affidavit or a separate application. However, it is interesting to note that the Court has recorded the Petitioner's submissions on the 1993 Act in Part G(1) (VI) of its opinion which is reproduced below:

"Upon the declaration of WB-HIRA as unconstitutional, the 1993 legislation in West Bengal may also be declared as repealed in view of the following:

a. Section 89 of the RERA impliedly repeals all earlier state acts with Presidential assent under the proviso to Article 254(2); and

b. In the alternative, Section 86 of WB-HIRA which repeals WB 1993 Act may be severed by applying the doctrine of severability."^[76]

It is submitted that "a decision of a case cannot be based on grounds outside the pleadings of the parties."^[77] Further, in Yadlapati Venkateswarlu v. State Of Andhra Pradesh and Another,^[78] the Supreme Court has clearly opined that a "statute will not be declared unconstitutional unless it is specifically challenged."^[79] Therefore, the moment the Court took refuge in Article 254(1) and opined that the "provisions of the WB 1993 Act impliedly stand repealed upon the enactment of the RERA in 2016, in accordance with Sections 88 and 89 read with Article 254(1) of the Constitution", the Court went beyond the scope of the writ petition and the challenge made therein.^[80] If the Court wanted to deal with the 1993 Act and test its validity, the Court could have advised the Petitioner to either amend the petition, place a separate application or affidavit on record or file a fresh petition altogether. The Court's opinion does specify whether this exercise took place.

However, since the author has not had the benefit of perusing the authentic copy of the entire pleadings of the parties, for a moment let us presume that specific grounds concerning the validity of the 1993 Act were pleaded by the Petitioners in the writ petition or an additional application or affidavit. If that had been done, then the Court ought to have given detailed reasons explaining why the 1993 Act was repugnant to RERA and Article 254(1) of the Constitution. Unlike the detailed comparison made by the Court between HIRA and RERA, no such comparison had been made between the 1993 Act and RERA to examine whether there was repugnancy or not. In fact, while declaring Sections 3 to 17 of the 1993 Act as repugnant to RERA, no clear reasons have been set out by the Court stating why it has come to this conclusion. It is surprising that the Court has declared the 1993 Act repugnant in merely two paragraphs in the concluding portion of its opinion. It is also submitted that the Court has not exercised its jurisdiction under Article 142 to arrive at this finding. The jurisdiction under Article 142^[81] has only been exercised to the limited extent of clarifying that its judgment will apply prospectively and that the "striking down" of HIRA "will not affect the registrations, sanctions and permissions previously granted under the legislation prior to the date of this judgment."^[82] Therefore, for these reasons, it is submitted that the Court ought not to have declared the 1993 Act repugnant to RERA.

1. CONCLUDING COMMENTS

There is no doubt that HIRA deserved to be struck down by the Court. But the Court ought not to have struck down the said Act on the ground of repugnancy and legislative competence while exercising its writ jurisdiction under Article 32 of the Constitution. Further, by declaring the 1993 Act repugnant to RERA in the absence of a specific challenge to the same and also in the absence of detailed reasons, the Court has set a dangerous trend in the process. While there is a tendency to frequently expand upon its own powers for doing complete justice, the Courts need to be mindful of the unintended consequences and ramifications that could follow.

Views are Personal