Shareholder rights and special legislation upheld where restrictions were treated as incidents of shareholding and not deprivation of property.

A majority of the SC held that temporary restrictions on a shareholder's voting, resolution-making, and winding-up rights did not amount to deprivation of property under article 31, because the shares, dividends, and transfer rights remained intact. The same restrictions were treated as incidents of shareholding and, in any event, as measures directed to securing production of an essential commodity and preventing unemployment, so the article 19 challenge failed. The Court also upheld the special legislation under article 14, finding no proof of arbitrary selection or hostile discrimination against the company. Finally, the enactment was held to fall within Union competence over incorporation, regulation, and winding up of trading corporations, though one Judge dissented on discrimination.

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Issues: (i) Whether the impugned legislation deprived the petitioner or the company of property so as to attract article 31 of the Constitution; (ii) Whether the restrictions placed on the shareholder's rights were protected as reasonable restrictions under article 19(5); (iii) Whether the legislation denied equal protection of the laws under article 14 by singling out one company; (iv) Whether the enactment was beyond legislative competence.

Issue (i): Whether the impugned legislation deprived the petitioner or the company of property so as to attract article 31 of the Constitution.

Analysis: The majority held that the petitioner, as a shareholder, retained his shares, the right to dividends, and the power to transfer them. The temporary curtailment of voting, resolution-making, and winding-up rights did not amount to dispossession of his property. As regards the company, the majority treated the real grievance as one affecting corporate management, but held that the petition, brought by an individual shareholder, could not be sustained on the footing of deprivation of the company's property.

Conclusion: The challenge under article 31 failed in the majority view.

Issue (ii): Whether the restrictions placed on the shareholder's rights were protected as reasonable restrictions under article 19(5).

Analysis: The majority treated the impugned restrictions on voting, passing resolutions, and initiating winding-up proceedings as incidents of shareholding rather than as property rights independently protected by article 19(1)(f). In any event, the restrictions were viewed as directed to securing production of an essential commodity and preventing unemployment, and therefore as serving the general public.

Conclusion: The challenge under article 19(1)(f) also failed.

Issue (iii): Whether the legislation denied equal protection of the laws under article 14 by singling out one company.

Analysis: The majority accepted that article 14 forbids hostile discrimination but held that reasonable classification is permissible. On the material before the Court, the petitioner had not shown that the company was arbitrarily selected or that the legislature lacked a rational basis for treating it as a separate class in light of the exceptional circumstances surrounding its mismanagement and closure. The presumption of constitutionality was not displaced.

Conclusion: The article 14 challenge failed in the majority view.

Issue (iv): Whether the enactment was beyond legislative competence.

Analysis: The majority held that legislation regulating the management and winding up of trading corporations fell within the Union legislative field covering incorporation, regulation, and winding up of trading corporations. The impugned Act was therefore within competence.

Conclusion: The challenge to legislative competence failed.

Final Conclusion: The majority upheld the validity of the impugned enactment and refused relief, while one Judge dissented and would have granted the petition on the ground of discrimination.

Ratio Decidendi: An individual shareholder cannot succeed merely by showing that a special statute affects one company alone; to invalidate such legislation under article 14 or article 31, the challenger must establish an actual infringement of his own protected right or demonstrate that the classification is arbitrary and without a rational relation to the legislative object.

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