1956 (9) TMI 57 - HC - Indian Laws

Government Excluded as 'Person' under Constitution; Upholds Insolvency Act Validity

Shiv Prashad Versus Punjab State

The court held that a Government cannot be deemed a 'person' under Article 14 of the Constitution of India. The judgment emphasized that the term 'person' ... - Issues:1. Whether a Government can be deemed a person within the meaning of Article 14 of the Constitution of India.Analysis:The judgment in question revolves around the interpretation of whether a Government can be considered a 'person' as per Article 14 of the Constitution of India. The case involved an insolvent individual challenging the validity of Section 44 of the Provincial Insolvency Act, which stated that an order of discharge shall not release the insolvent from any debt due to the Government. The petitioner argued that the State should be deemed a person under Article 14, citing legal precedents where the State was treated as an artificial person. However, the court disagreed, stating that the natural and obvious meaning of the term 'person' refers to a living human being or artificial persons like corporations, excluding the State or Government. The court emphasized that the State and Government are distinct from the inhabitants and cannot be equated with the term 'person.'The judgment further delves into the classification of debts and the prerogative of the sovereign to preferential treatment over other creditors. It highlights that the Legislature has accorded priority to debts due to the Government in the hierarchy of debts, not based on the prerogative of the Crown but on statutory provisions. The court emphasized that the provision in question, Section 44, operates uniformly on all individuals within its scope, treating all alike without discrimination. It clarified that the provision does not violate the constitutional principle of equal protection of laws as it serves a public purpose and applies uniformly to all individuals in similar circumstances.The court also discussed the exercise of powers analogous to police powers by the Provincial Legislature in enacting the Provincial Insolvency Act. It explained that the Act's provisions, including the priority given to debts due to the State, align with the purpose of promoting public welfare and regulating liberty and property. The judgment concluded that neither the State nor the Government can be considered a 'person' under Article 14 of the Constitution. The court provided a detailed analysis supporting its conclusion, emphasizing the distinction between natural persons, artificial persons, and entities like the State or Government within the legal framework.In a concurring opinion, another judge agreed with the analysis and conclusion of the Chief Justice, further solidifying the decision. The judgment provides a comprehensive examination of the legal principles, constitutional provisions, and precedents relevant to the interpretation of the term 'person' in the context of governmental entities and their treatment under the law.