Company citizenship and delegated control powers: Calcutta HC upheld Article 19(1)(g) protection and struck arbitrary revocation power.

An incorporated company in India may, if it satisfies the constitutional test of citizenship under Article 5, be treated as a citizen and invoke Article 19(1)(g); the Court held that a company could fall within the constitutional concept of citizenship and rejected the preliminary objection. The Court also held that clause 8 of the Iron and Steel (Control) Order, 1956, insofar as it enabled revocation or suspension of accepted despatches and planning orders without guiding directions under clause 17, was unguided and arbitrary. That unrestricted power imposed an unreasonable restriction on the right to carry on business and was therefore void as exercised.

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Issues: (i) Whether an incorporated company could be treated as a citizen and invoke the protection of Article 19(1)(g) of the Constitution of India. (ii) Whether the power to stop or revoke despatches and planning orders under clause 8 of the Iron and Steel (Control) Order, 1956, without directions under clause 17, was constitutionally valid.

Issue (i): Whether an incorporated company could be treated as a citizen and invoke the protection of Article 19(1)(g) of the Constitution of India.

Analysis: The Court held that the word "person" in Article 5, read with the General Clauses Act, 1897, included a company. A company incorporated in India and ordinarily resident in India could therefore fall within the constitutional concept of citizenship at the commencement of the Constitution and continue to enjoy that status under Article 10, subject to Article 11 and any law made by Parliament. The fact that the Citizenship Act excluded companies did not negate the position of companies which had already acquired citizenship under Article 5.

Conclusion: The company could claim the protection of Article 19(1)(g) and the preliminary objection failed.

Issue (ii): Whether the power to stop or revoke despatches and planning orders under clause 8 of the Iron and Steel (Control) Order, 1956, without directions under clause 17, was constitutionally valid.

Analysis: Clause 8 enabled revocation of quota certificates, permits and written orders, and the impugned notices operated to suspend or cancel existing planning orders already accepted by producers. In the absence of controlling directions under clause 17, the power was treated as unguided and arbitrary. Such an unrestricted revocation power was held to impose an unreasonable restriction on the petitioner's right to carry on business.

Conclusion: The power, as exercised, was void as an unreasonable restriction on the petitioner's fundamental right under Article 19(1)(g).

Final Conclusion: The petitioner succeeded on the constitutional challenge, and the impugned action under the control order was held invalid.

Ratio Decidendi: A company incorporated in India may, if it satisfies the constitutional test of citizenship under Article 5, invoke Article 19(1)(g); and a delegated power affecting trade or business must be guided by intelligible limits, otherwise it is an unreasonable and arbitrary restriction.

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