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Issues: (i) Whether the State Legislature had legislative competence to enact the law conferring power on the company to prematurely redeem the deep discount bonds and whether the law fell within Entry 43 of List II or Entry 20 of List III. (ii) Whether the impugned enactment was repugnant to and displaced by the central laws governing securities, securities regulation and company law. (iii) Whether consequential monetary relief could be granted in writ jurisdiction after the enactment was held unconstitutional.
Issue (i): Whether the State Legislature had legislative competence to enact the law conferring power on the company to prematurely redeem the deep discount bonds and whether the law fell within Entry 43 of List II or Entry 20 of List III.
Analysis: The governing test was the true nature of the enactment seen through pith and substance, with the Entries in the Lists being construed broadly but not so broadly as to destroy their essential content or override another Entry. The impugned law, in substance, altered the redemption terms of securities and substituted the contractual conditions attached to the bonds. It did not genuinely answer to the concept of public debt of the State, nor to economic and social planning, and at best could be viewed as touching special contracts. The substance of the enactment was not within the State field relied upon.
Conclusion: The enactment did not fall within Entry 43 of List II or Entry 20 of List III and was not supported by legislative competence on that footing.
Issue (ii): Whether the impugned enactment was repugnant to and displaced by the central laws governing securities, securities regulation and company law.
Analysis: The central enactments governing securities, listing, investor protection, issue and transfer of securities, prospectus conditions and variation of contract terms constituted a pervasive and exhaustive statutory framework. The impugned law directly altered the conditions of the bond issue, permitted premature redemption contrary to the original terms and overrode the statutory regime governing securities and related contractual incidents. In operation and effect, the State law could not co-exist with the central legislation without collision, and the field was already occupied by Parliament.
Conclusion: The impugned enactment was repugnant to the central laws and could not stand.
Issue (iii): Whether consequential monetary relief could be granted in writ jurisdiction after the enactment was held unconstitutional.
Analysis: The claim for loss or damages depended upon individual facts, including acceptance of redemption amounts, protest if any, benefit obtained, and actual loss suffered. Such issues required evidence and factual inquiry, which could not be undertaken in writ proceedings. The invalidation of the enactment removed the statutory bar to civil proceedings, but no monetary award could be granted on the writ record.
Conclusion: Consequential monetary relief was not granted in writ jurisdiction.
Final Conclusion: The impugned Act was struck down as constitutionally invalid for want of legislative competence and for trenching upon an occupied central field, while leaving affected parties to pursue civil remedies where legally available.
Ratio Decidendi: A State law altering the terms of securities or bond redemption is invalid if, in pith and substance, it falls outside the State List and operates in a field already comprehensively occupied by Parliamentary legislation regulating securities and related contractual terms.
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