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PETITIONER: THE STATE TRADING CORPORATION OF INDIA LTD. & OTHERS

       Vs.

RESPONDENT: THE COMMERCIAL TAX OFFICER, VISAKHAPATNAM AND OTHERS

DATE OF JUDGMENT: 26/07/1963

BENCH: SINHA, BHUVNESHWAR P.(CJ) BENCH: SINHA, BHUVNESHWAR P.(CJ) DAS, S.K. GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N. HIDAYATULLAH, M. GUPTA, K.C. DAS SHAH, J.C. AYYANGAR, N. RAJAGOPALA

CITATION:  1963 AIR 1811            1964 SCR  (4)  89  CITATOR INFO :  R          1964 SC1451  (10)  R          1965 SC  40  (4,6,23)  F          1966 SC1436  (5)  R          1967 SC 295  (17)  OPN        1967 SC1318  (4)  RF         1970 SC  82  (5)  RF         1970 SC 564  (7)  R          1971 SC 870  (7,13)  RF         1973 SC 106  (11)  MV         1975 SC1331  (127,177)  R          1975 SC1737  (2)  R          1981 SC1368  (7)  RF         1983 SC 937  (12)  F          1988 SC1708  (13)  D          1989 SC1713  (10)

ACT: Fundamental Right, Enforcement of-Corporation, if a  citizen entitled to claim fundamental rights-Constitution of  India, Arts. 19(1)(f) and (g), 32.

HEADNOTE: The State Trading Corporation of India is a private  limited company  registered  under the Indian Companies  Act,  1956, with  its  head Office at Delhi and its  entire  capital  is contributed  by  the  Government of  India.   The  Sales-tax Authorities of the States of Andhra Pradesh and Bihar sought to   assess  the  Corporation  to  sales  tax  under   their respective Sales Tax Acts and issued notices of demand.  The Corporation claiming to be an Indian citizen filed petitions under  Art.  32 of the Constitution for  quashing  the  said proceedings   on   the  ground  that  they   infringed   its fundamental  rights  under  Art. 19(1) (f) and  (g)  of  the Constitution.   Preliminary objections having been taken  by the   respondents  to  the  maintainability  of   the   said

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petitions,  the  Constitution  Bench  hearing  the   matters referred  the  two following questions for decision  by  the special bench.               "(1) Whether the State Trading Corporation,  a               company registered under the Indian  Companies               Act, 1956, is a citizen within the meaning  of               Art.  19 of the Constitution and can  ask  for               the enforcement of fundamental rights  granted               to  citizens under the said article;  and  (2)               whether  the  State  Trading  Corporation  is,               notwithstanding the formality of incorporation               under  the  Indian  Companies  Act,  1956,  in               substance,  a  department -,-id organ  of  the               Government  of India with the entirety of  its               capital contributed by Government; and can  it               claim to enforce fundamental rights under Part               III  of the Constitution against the State  as               defined in Art. 12 thereof. Held,  (DAS GUPTA and SHAH JJ., dissenting) that the  answer to the first question must be in the negative. Per SINHA, C. J., S. K. DAS, GAJENDRAGADKAR, SARKAR, WANCHoo and  Ayyangar  JJ.  There can be no citizens  of  India  not mentioned  in  Part  11  of  the  Constitution  or  by   the Citizenship   Act,  1955.   These  provisions   are   wholly exhaustive and contemplate only natural persons. Part  III  of  the Constitution makes  a  clear  distinction between  fundamental  rights available to "any  person"  and those guaranteed 100 to  "all  citizens",  indicating  thereby  that  under   the Constitution  all citizens are persons but all  persons  are not citizens Part  II  of the Constitution relating to  ’citizenship’  is clearly inapplicable to juristic persons and the  provisions of  the Citizenship Act, 1955, enacted by  Parliament  under Art.  11  of the Constitution, show that  such  persons  are outside the purview of the Act. It  cannot  therefore, be said that either Part  II  of  the Constitution or the Citizenship Act, 1955, confers the right of  citizenship  or recognises as citizen any  person  other than   a  natural  person.   They  do  not   contemplate   a corporation as a citizen. In none of the relevant decisions this Court gave its consi- dered  judgment on the present issues and the  question  now raised are open questions. Chiranjit Lal Chowdhuri v. Union of India [1950] S.C.R. 869, Dwarkadas  Srinivas  of Bombay v. The  Sholapur  Spinning  & Weaving  Co. Ltd. [1954] S.C.R. 674 and Bengal Immunity  Co. Ltd. v. State of Bihar, [1955] 2 S.C.R. 603, considered. ’Nationality’  and  ’citizenship’  are  not  synonymous.   A corporation  can  claim  nationality  which  is   ordinarily determined  by  the place of its incorporation.   But  while nationality  determines  the civil rights of  a  natural  or artificial   person,   particularly   with   reference    to international law, citizenship is intimately connected  with civic  rights  under  municipal  law.   All  citizens   are, therefore,  nationals of a particular State and  enjoy  full political  rights but all nationals are not citizens and  do not have full political rights. It was not correct to say that the word ’citizen’ in Art.  5 was  not as wide as in Art. 19 of the Constitution  or  that Part  II of the Constitution supplemented by the  provisions of   the  Citizenship  Act,  which  deals   with   citizens, deliberately left out of account citizenship in relation  to juristic   persons.   When  the  Constitution  confers   any

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particular  right  to be enjoyed by a citizen  it  uses  the words   "any   citizen"   or   "all   citizens"   in   clear contradistinction to those rights which are to be enjoyed by all,  whether  citizens  or  aliens,  natural  or   juristic persons. There is no reason to think that the word ’citizen’ in  Art. 19  is  used in a different sense from that in which  it  is used in Part II of the Constitution. Per  HIDYATULLAH J.-Both the questions must be  answered  in favour of the respondents. Before  independence  there  was no law  of  citizenship  in India.   Under  the British Nationality Act,  1948,  Indians became  Commonwealth  citizens or British  subjects  without citizenship  and  were  regarded as  potential  citizens  of India.    The   Indian  Constitution  made   provision   for citizenship under which certain natural persons alone  could be citizens of India and the Citizenship Act, 1955, excluded persons other than natural persons from citizenship. 101 It  is  not correct to say that corporations  were  citizens before the Constitution.  They enjoyed only such  privileges under  the municipal law which that law expressly  conferred on them. The  nature and personality of an incorporated company  have their  origin in a fiction of law.  This personality  arises from  the  moment of incorporation and from  that  date  the persons  subscribing  to the memorandum  of  association  or joining as members become a body corporate.  But they cannot be  said  to Pool their status and even if all of  them  are citizens of India, the Company does not become a citizens of India. G.   E.  Rly.  v.  Turner, (1872) L. R.  8  Ch.   App.  152, Salomon V.     Salomon  & Co. (1897) A. C. 22 and Janson  v. Driefontein  Consolidated  Mines  Ltd., (1902)  A.  C.  484, referred to. The  seven  freedoms guaranteed by Art. 19(1)  arc  for  the citizens  of  India.   The Constitution in  using  the  word "person",  a  word of larger import, in  some  other  places makes its intention to exclude corporations clear. Chiranjit  Lal  Chowdhuri v. Union of India,  [1950]  S.C.R. 869, explained. The  precedents  of the Supreme Court of the  United  States which  hold that corporations are citizens of the  State  of incorporation for purposes of federal jurisdiction cannot be followed  in India.  The diversity of citizenship which  has led  to  such  rulings  does  not  exist  in  India.   As  a corporation is a separate entity from its members, it is not possible  to pierce the veil of incorporation  to  determine the  citizenship  of  its  members  in  order  to  give  the corporation the benefit of Art. 19. The  State Trading Corporation is not, therefore, a  citizen either  by  itself or as the aggregate of  Indian  citizens. Its   Indian  nationality  is  not  to  be   confused   with citizenship  of  natural persons and the word  ’citizen’  in Art’  19(1) (f) and (g) can refer to no other  than  natural persons.    The  State  Trading  Corporation  is  really   a department of Government behind the corporate veil. Per DAS GUPTA J.-The first question must be answered in  the affirmative. It  has  been  repeatedly laid down by this  Court  that  in interpreting the Constitution a broad and a liberal and  not merely the grammatical view should be taken.  A  syllogistic or  mechanical  approach has always to be avoided,  more  so when  interpreting the Constitution.  The attempt should  be to  reach  the  intention  of  the  Constitution  makers  by

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examining  the substance and give effect to that  intention, if possible. So  judged,  it is clear that the Constitution  makers  when they  used the word ’citizen’ in Art. 19 had  the  intention that  at least a corporation constituted wholly by  citizens of India would get 102 the  benefit  of the fundamental rights  enshrined  in  that There  is  -nothing in the Constitution that stands  in  the giving all citizens of India, whether forming a  corporation the benefit of Arts. 19(1) (f) and (g). State  of  Bombay v. R. M. D. Chamarbaughwala,  I.L.R.  Bom. 680, Chiranjit Lal Chowdhuri v. Union of India, S.C.R.  869, Express  Newspapers (P) Ltd. v. Union of India,  S.C.R.  12, Bengal  Immunity Co. v. State of Bihar, [1955] 2 S.C.R.  603 and Bombay Dyeing Manufacturing Co. Ltd. v. State of Bombay, [1958] S.C.R. 112 2, referred to. The first part of the second question should be answered  in the negative and the second part in the affirmative. Per SHAH J.-In ascertaining the meaning of expressions  used in   a   vital   document  like  the   Constitution   of   a nation,mechanical    approach   is    impermissible.     The Constitution  is the declaration of the will of  the  people and  should be interpreted liberally and not in a narrow  or doctrinaire  spirit.   Such  interpretation  should  be   in accordance with the true purpose and intent as disclosed  by the  phraseology understood in its natural signification  in the light of its setting and its dynamic character which  is intended to fulfill the aspirations of the people. Citizenship  means the members of a jural society  investing the holder with all the rights and privileges enjoyed by its nationals  and  subjecting  him  to  corresponding   duties. Nationality links a person to a State and ensures his rights in  international affairs.  While a citizen is  a  national, every national is not always a citizen. Virginia L. Minor v. Reese Happersett, 21Wall. 162: 88 U.S. 627, referred to. Under the English Common Law which formed the foundation  of the  Indian  jurisprudence,  a  company  or  a   corporation aggregate  is  a  national  of the  State  in  which  it  is incorporated and is clothed with a personality given by  the law of the land, capable of exercising rights arid  entitled to protection a broad. Janson v. Driefontein Consolidated Mines Ltd.  L. R.  (1902) A.C.   492,   Attorney-General  v.   Jewish   Colononization Association,  (1901) 1 K.B. 133, Generali v.  Salim  Cotran, L.R.  (1932)  A.C.  288, Gasque v.  Commissioner  of  Inland Revenue,  L.R. (1940) 2 K.B. 36 and Kuenigl v.  Donnersmark, L.R. (1955) 1 Q.B. 515, referred to. So also in India a juridical person is capable of exercising to the fullest extent a large majority of civil rights which natural persons may exercise as citizens, its incapacity  to exercise  other  rights  arises  from  the  nature  of   its personality  and  constitution  and  not  from  any  special restriction  imposed  upon  it.   The  Constitution,  as  is apparent  from various other Articles, afforded  the  widest protection  to  corporation as it did  to  natural  persons. Unless 103 therefore, the language or the scheme of the Constitution is compulsive, it is impossible to put a limited connotation on the expression ’citizen’ occurring in Art. 19(1). To say that Arts. 5, 6 and 8 and the law made under Art.  11 are  exhaustive  and there can be no  citizen  except  those expressly  covered thereby is to assume that there  were  no

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citizens  in  India before the Constitution,  an  assumption which  is  not  warranted  either by  the  language  of  the Constitution or the’ history of our national evolution.  The legislative  history shows that British subjects  of  Indian origin  held  the status of citizens in  British  India  and there was no statute before the Constitution which indicated even indirectly that a corporation aggregate could not be  a citizen. Although this Court did not make any definite expression  of opinion,  it  has  consistently  assumed  that  corporations aggregate are entitled to claim protection under Art.  19(1) as citizens. Chiranjit  Lal  Chowdhuri v. Union of India.  [1950]  S.C.R. 869, Bengal Immunity Company Ltd. v. State of Bihar [1955] 2 S.C.R.  603,  State of Bombay v. R. M.  D.  Chamarbaughwala, [1957]  S.C.R.  874  and State of West Bengal  v.  Union  of India, [1964] 1 S.C.R. 371, referred to. In  numerous  cases in this Court it  was  assumed,  without contest, that a company is a citizen of India and  competent to enforce fundamental rights under Art. 19(1)(f) and (g) of the Constitution. Case law referred to. In  view  of  the  fact that  a  company  is  invested  with important fundamental rights under various other Articles of the Constitution and it is recognised as a person capable of holding and disposing of property and carrying on  business, commerce  and  intercourse, it could not be  held  that  the expression   ’citizen’  in  Art.  19  was  intended  to   be restricted to a natural person. A  corporation is, however, distinct from its  share-holders and  even if all the shareholders are Indian  Citizens,  its claim  to citizenship cannot be founded on that  ground  for that would lead to anomalous results. Salomon v. Salomon and Co. Ltd.  L.R. (1897) A.C. 22, relied on. State  of  Bombay, v. R.M.D. Chamarbaugwala,  I.L.R.  [1955] Bom. 680, disapproved. The question whether a corporation is an agent or servant of the State must be decided on the facts of each case.  In the absence of any statutory provision, a commercial corporation acting  on  its behalf, even if it is controlled  wholly  or partially  by a Government department, will be presumed  not to  be a servant or an agent of the State.  where,  however, the corporation is performing in substance Governmental, and not commercial, functions, an inference will readily be made that it is an agent of the Government. 104 Tamlin v. Hannaford, L.R. (1950) 1 K. B. 18, referred to. Bank  Voor Handel En Scheepvaart N. V. v. Administrator.  of Hungarian Property, L.R. (1954) A.C. 584, held inapplicable. There is no warrant for the proposition that a department or an  organ  of the Union or the State, if it  is  a  citizen, cannot  enforce  fundamental  rights against  the  State  as defined by Art. 12 of the Constitution.

JUDGMENT: ORIGINAL JURISDICTION : Writ Petitions Nos. 202-204 of 1961. Writ Petition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights. M.   C. Setalvad, G. S. Pathak, B. Parthasarthy, B. Dutta, B.  Dadachanji  O. C. Mathur and Ravinder  Narain,  for  the Petitioners (in all the petitions). D.   Narasarj  Advocate-General  for  the  State  of  Andhra

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Pradesh  and  T. V. R. Tatachari, for  the  respondents  (in Petitions Nos. 202 and 203 of 1961). V.   K.  Krishna Menon, Anil Kumar Gupta, R. K. Garg, D.  P. Singh,  M.  K.  Ramamurthi  and  S.  C.  Agarwala,  for  the respondents (in Petition No. 204 of 1961). A.   Ranganadham Chetty and A. V. Rangam, for Intervener No. 1. S.     M.  Sikri’,  Advocate-General  for  the  State  of Punjab and Gopal Singh, for Intervener No. 2. B.   Sen,  M. K. Banner" and P. K. Bose, for Intervener  No. 3. J.   M. Thakore, Advocate-General for the State of Gujarat   and K. L. Hathi, for Intervener No. 4. G.   C. Kasliwal, Advocate-General for the State of Rajasthan, S. K. Kapur and K. K. lain, for Intervener No. 5. July  26,  1963.-The  judgment of Sinha C. J.,  S.  K.  Das, Gajendragadakar,  Sarkar,  Wanchoo  and  Ayyangar  JJ.   was delivered by Sinha, C. J. Hidayatullah J., delivered a sepa- rate  opinion.   Das Gupta and Shah JJ.  delivered  separate dissenting opinions. SINHA C.J.-The following questions have been referred to the Special  Bench by the Constitution Bench before which  these cases came up for hearing :               (1)   whether the State Trading Corporation, a               company registered under the Indian  Companies               Act,               105               1956, is a citizen within the meaning of  Art.               19  of  the Constitution and can ask  for  the               enforcement  of fundamental rights granted  to               citizens under the said article, and               (2)   whether  the State  Trading  Corporation               is,    notwithstanding   the   formality    of               incorporation under the Indian Companies  Act,               1956,  in substance a department and organ  of               the  Government of India with the entirety  of               its capital contributed by Government; and can               it  claim to enforce fundamental rights  under               Part III of the Constitution against the State               as defined in Art. 12 thereof. The  questions were raised by way of preliminary  objections to  the maintainability of the Writ Petitions under Art.  32 of the Constitution. As the whole case is not before us, it is necessary to state only  the  following facts in order to  appreciate  how  the controversy arises.  The State Trading Corporation of  India Ltd., and K. B. Lal, the then Additional Secretary, Ministry of Commerce and Industries’ Government of India, moved  this Court  under Art. 32 of the Constitution for quashing  by  a writ of certiorari or any other appropriate writ,  direction or  order,  certain proceedings instituted by or  under  the authority   of  the  respondents,-(1)  The  Commercial   Tax Officer,  Visakhapatnam ; (2) the State of  Andhra  Pradesh; and  (3)  the  Deputy  Commissioner  of  Commercial   Taxes, Kakinada.  Those proceedings related to assessments of sales tax  under  the provisions of the Andhra Pradesh  Sales  Tax Act.   Writ  Petitions 202 and 203 of 1961 are  between  the parties  aforesaid.   In  Writ Petition  204  of  1961,  the parties  are  the  petitioners  aforesaid  against  (1)  the Assistant  Superintendent of Commercial Taxes, I/c  Chaibasa Sub-Circle,  Bihar  State; (2) the  Deputy  Commissioner  of Sales Tax, Bihar, Ranchi; and (3) the State of Bihar.  Thus, the petitioners are the same in all the three cases, but the respondents  are  the State of Andhra Pradesh  and  its  two officers  in the first two cases and the State of Bihar  and its two officers in the third case.

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The first petitioner is a private limited company registered under  the Indian Companies Act, 1956, with its head  office at  New  Delhi, in May, 1956.  The second  petitioner  is  a shareholder in the first petitioner company.  The   8-2 S. C.  India/64 106 two  petitioners  claim  to be Indian citizens  as  all  its shareholders  are Indian citizens.  Proceedings  were  taken for  assessment  of sales tax, and in due  course  of  those proceedings demand notices were issued.  It is not necessary for  the purposes of deciding the two points referred to  us to set out the details of the assessments or the grounds  of attack raised by the petitioners.  It is enough to say  that the petitioners claim to be Indian citizens and contend that their  fundamental rights under Art. 19 of the  Constitution had been infringed as a result of the proceedings taken  and the   demands  for  sales  tax  made  by   the   appropriate authorities.   When  the case was opened on  behalf  of  the petitioners  in this Court, before the  Constitution  Bench, counsel   for   the  respondents  raised   the   preliminary objections  which have taken the form now indicated  in  the two  questions, already set out.  The Bench rightly  pointed out  that those two questions were of  great  constitutional importance and should, therefore, be placed before a  larger Bench  for  determination.  Accordingly  they  referred  the matter  to the Chief Justice and this larger Bench has  been constituted to determine those questions. At  the very outset of the arguments, we indicated  that  we shall  give our decision only on the  preliminary  questions and  that the decision of the controversies on their  merits will be left to the Constitution Bench. Before  dealing  with  the  arguments  at  the  Bar,  it  is convenient  to set out the relevant provisions of  the  Con- stitution.   Part III of the Constitution deals with  Funda- mental  Rights.   Some fundamental rights are  available  to "any  person",  whereas  other  fundamental  rights  can  be available only to "all citizens".  "Equality before the law" or  "equal protection of the laws" within the  territory  of India is available to any person (Art. 14).  The  protection against  the  enforcement of ex-post-facto laws  or  against double-jeopardy or against compulsion of -self-incrimination is available to all persons (Art. 20); so is the  protection of  life and personal liberty under Art. 21  and  protection against  arrest and detention in certain cases,  under  Art. 22.   Similarly, freedom of conscience and free  profession, practice  and propagation of religion is guaranteed  to  all persons.  Under Art. 27, no person shall be compelled to pay ;any taxes for the promotion and maintenance of any 107 particular  religious denomination.  All persons  have  been guaranteed the freedom to attend or not to attend  religious instructions  or  religious worship in  certain  educational institutions  (Art. 28).  And, finally, no person  shall  be deprived  of  his property save by authority of law  and  no property  shall  be compulsorily acquired  or  requisitioned except  in accordance with law, as contemplated by Art.  31. These,  in general terms, without going into the details  of the  limitations  and  restrictions  provided  for  by   the Constitution, are the fundamental rights which are available to  any  person irrespective of whether he is a  citizen  of India  or  an alien or whether a natural  or  an  artificial person.  On the other hand, certain other fundamental rights have  been guaranteed by the Constitution only  to  citizens and certain disabilities imposed upon the State with respect to  citizens  only.   Article 15 prohibits  the  State  from

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discriminating  against  any  citizen  on  grounds  only  of religion, race, caste, etc., or from imposing any disability in  respect of certain matters referred to in  the  Article. By  Art.  16, equality of opportunity in matters  of  public employment  has been guaranteed to all citizens, subject  to reservations  in  favour of backward classes.  There  is  an absolute  prohibition  against all citizens  of  India  from accepting any tide from any foreign State, under Art. 18(2), and no person who is not a citizen of India shall accept any such  tide  without the consent of the President,  while  he holds  any office of profit or trust under the  State  [Art. 18(3)].   And  then  we come to Art. 19 with  which  we  are directly  concerned in the present controversy.  Under  this Article, all citizens have been guaranteed the right :- (a)  to freedom of speech and expression; (b)  to assemble peaceably and without arms; (c)  to form associations or unions; (d)  to move freely throughout the territory of India; (e)  to  reside and settle in any part of the  territory  of India; (f)  to acquire, hold and dispose of property; and (g)  to  practice  any  profession,  or  to  carry  on   any occupation, trade or business. Each one of these guaranteed rights under cls. (a) to (g) is subject to the limitations or restrictions indicated in cls 108 (2)  to 6) of the Article.  of the rights guaranteed to  all citizens,  those under cls. (a) to (e) aforesaid are  parti- cularly  apposite  to natural persons whereas  the  freedoms under  cls. (f) and (g) aforesaid may be equally enjoyed  by natural persons or by juristic persons.  Art. 29(2) provides that   no  citizen  shall  be  denied  admission  into   any educational  institution  maintained by the State  or  State said  on grounds only of religion, race, caste, language  or any  of them.  This short resume of the  fundamental  rights dealt  with by Part III of the Constitution  and  guaranteed either  to ’any person’ or to ’all citizens’ leaves  out  of account  other rights or prohibitions which concern  groups, classes  or associations of persons, with which we  are  not immediately concerned.  But irrespective of whether a person is  a  citizen or a non-citizen or whether he is  a  natural person  or a juristic person, the right to move the  Supreme Court  by  appropriate proceedings for  the  enforcement  of their respective rights has been guaranteed by Art. 32. It is clear on a consideration of the provisions of Part III of  the  Constitution that the makers  of  the  Constitution deliberately  and advisedly made a dear distinction  between fundamental  rights  available  to ’any  person’  and  those guaranteed to ’all citizens’.  In other words, all  citizens are  persons  but all persons are not  citizens,  under  the Constitution. The question next arises: What is the legal significance  of the  term  "citizen"?   It  has  not  been  defined  by  the Constitution.   Part  II  of  the  Constitution  deals  with ’Citizenship’,  at  the commencement  of  the  Constitution. Part 11, in general terms, lays down that citizenship  shall be  by birth, by descent, by migration and by  registration. Every  person  who has domicile in the  territory  of  India shall be a citizen of India, if he was born in the territory of  India or either of whose parents was so born or who  has been  ordinarily resident in the territory of India for  not less than five years immediately preceding the  commencement of  the Constitution (Art 5).  Secondly, any person who  has migrated  to  the  territory of  India  from  the  territory included  in  Pakistan shall be deemed to be  a  citizen  of

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India, if he satisfied the conditions laid down in Art. 6(a) and 6(b) (i).  Any 109 person who. does; not come within the purview of Art.  6(a), and  6(b))(i), but who has. migrated to India and  has  been registered,  as, laid down in Art. 6(b)(ii), shall also,  be deemed  to  be a citizen of India.  Similarly, a  person  of Indian origin,. residing outside India, shall be deemed  to. be  a citizen of India if he has been registered as such  by an  accredited  diplomatic or  consular,  representative  of India  in the country where he has been residing  (Art.  8). Persons  coming  within the purview of Arts. 5, 6  &  8,  as aforesaid,  may still not be citizens of India if they  have migrated from India to Pakistan, as laid down in Art. 7,  or if  they have voluntarily acquired  the citizenship  of  any foreign State (Art. 9).  Those, in short, are the provisions of  the Constitution in Part II relating  to  ’Citizenship?, and  they are clearly inapplicable to juristic persons.   By Art.  11,  the Constitution has vested Parliament  with  the power   to   regulate,  by  legislation,   the   rights   to citizenship.   It  was in exercise of the said:  power  that Parliament  has enacted the Citizenship Act (LVII of  1955). It  is absolutely clear on a reference to the provisions  of this  statute that a juristic person is outside the  purview of  the  Act.  This is an act providing for  acqusition  and termination of Indian citizenship.  The Constitution in Part 11,  as  already indicated, has determined  who  are  Indian citizens  at the commencement of the Constitution.   As  the Constitution  does not lay down any provisions with  respect to  acquisition of citizenship or its termination  or  other matters  relating to citizenship, after the commencement  of the  Constitution,  this  law had to be enacted  by  way  of legislation  supplementary to the provisions of the  Consti- tution  as  summarised above.  The definition  of  the  word "person"  in  s.  2(1)(f) of this Act  says  that  the  word "person"  in  the  Act  "does not  include  any  company  or association  or body of individuals, whether  incorporatedor not".   Hence,  all  the subsequent provisions  of  the  Act relating to citizenship by birth (s. 3), citizenship by des- cent (s. 4), citizenship by registration (s. 5), citizenship by  naturalisation (s. 6) and citizenship by  incorporation: of  territory  (s.  7) have nothing to do  with  a  juristic person.  It  is  thus  absolutely  clear  that  neither  the provisions  of  the  Constitution,  Part  II,  nor  of   the Citizenship  Act  aforesaid,  either  confer  the  right  of citizenship on, or 110 recognise  as  citizen,  any person  other  than  a  natural person.   That  appears  to be the  legal  position,  on  an examination  of the relevant provisions of the  Constitution and  the  Citizenship Act.  But it was contended  that  this Court  had  expressed  itself to  the  contrary  in  certain decisions,  and  some of the High Courts have also  taken  a contrary  view’ which we may now proceed to  consider.   In, what is now known as the first Sholapur case, Chiranjit  Lal Chowdhuri’ v. The Union of India(1), Mukherjea, J., speaking for   the  majority  of  the  Court,  made   the   following observations  at  page 898, which seem  to  countenance  the contention  raised on behalf of the petitioners that  funda- mental rights are available to juristic persons also, as to citizens :               "The  fundamental  rights  guaranteed  by  the               Constitution  are  available  not  merely   to               individual citizens but to corporate bodies as               well   except  where  the  language   of   the

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             provision  or the nature of the right  compels               the inference that they are applicable only to               natural  persons.   An  incorporated  company,               therefore,  can  come  up to  this  Court  for               enforcement of its fundamental rights......" Though  the  observations quoted above would  seem  to  lend countenance  -to  the  contention raised on  behalf  of  the petitioners,  they really do not determine  the  controversy one  way or the other.  In that case, a shareholder  of  the Sholapur  Spinning and Weaving Company made  an  application under Art. 32 of the Constitution for a declaration that the Act  impugned  in  that  case was  void,  as  also  for  the enforcement of his fundamental rights by a writ of  mandamus against  the  Government,and the directors of  the  company, restraining  them from exercising any power under  the  Act. It  is  not  necessary  to  refer  to  the  details  of  the controversy in that case because it is plain that it was not the  company  which  was  seeking  the  enforcement  of  its fundamental  rights, if any, but only a shareholder.   As  a matter of fact, the company opposed the petition under  Art. 32   of   the  Constitution.   It  is  manifest   that   the observations  quoted  above were purely obiter and  did  not directly arise for decision of the Court. Then we come to the second Sholapur case, reported (1)  [1950] S.C.R. 869. 111 as Dwarkadas Shriniwas of Bombay v. The Sholapur Spinning  & Weaving Co. Ltd.(1). In the first-Sholapur case, this  Court had  been  moved  under Art. 32 of the  Constitution  by  an individual shareholder, as aforesaid, for enforcement of his alleged  fundamental  rights.  That  petition,  by  majority judgment,  stood dismissed.  The second case arose out of  a suit   instituted   by  a  preference  shareholder,   in   a representative  capacity  on behalf of  himself  -and  other preferential  shareholders, for a declaration that  the  law which  had  been  impugned in the previous  case  was  ultra Vires.   This  Court held that the law impugned  had  autho- rised,  in  effect, the deprivation of the property  of  the company  within the meaning of Art. 31 of the  Constitution, without compensation, and had thus violated the  fundamental rights of the company under Art. 31(2) of the  Constitution. It  will  thus  -appear  that the  decision  of  this  Court proceeded  on an examination of the provisions of  Art.  31, which  is  not confined to citizens only and  has  reference also  to  the  property  of "any  person".   But  there  are observations made in the course of the judgment which  would support  the view propounded on behalf of  the  respondents. At  page  694, Mahajan J., while discussing  the  scope  and effect  of the provisions of the Constitution in  Part  111, with  particular  reference  to Arts. 19 and  31,  made  the following observations :-               "In considering Article 31 it, is  significant               to note that it deals with private property of               persons residing in the Union of India,  while               Article 19 only deals with citizens defined in               Article  5  of the Constitution.  It  is  thus               obvious  that the scope of these two  articles               cannot  be  the same as they  cover  different               fields.  It cannot be seriously argued that so               far   as  citizens  are  concerned,   freedoms               regarding  enjoyment  of  property  have  been               granted  in two articles of the  Constitution,               while the protection to property qua all other               persons  has  been dealt with  in  Article  31               alone.   If  both articles  covered  the  same

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             ground,   it  was  unnecessary  to  have   two               articles on the same subject." These  observations would appear to support, the  view  that Art. 31 has reference to property of "persons" and (1)  [1954] S.C.R. 674. 112 Art.  19  deals  with fundamental rights  of  "citizens"  as described in Part II of the Constitution. Bose J, in the course of his judgment, at page 732  observed as follows:                "Article   19(1)   (f)  confers   a   certain               fundamental freedom on all citizens of  India,               namely,  the  freedom  to  acquire,  hold  and               dispose of property.  Article 31(1) is a  sort               of corollary, namely, that after the  property               has been acquired it cannot be taken away save               by authority of law.  Article 31 is wider than               Article 19 because it applies to everyone  and               is  not  restricted  to  citizens.   But  what               Article  19(1)(f) means is that whereas a  law               can  be passed to prevent persons who are  not               citizens  of India from acquiring and  holding               property  in this country no such  restriction               can be placed on citizens.  But in the absence               of  such a law non-citizens can  also  acquire               property  in  India and if they do  then  they               cannot  be  deprived  of  it  any  more   than               citizens, save by authority of law." But  it has got to be said that those  observations,  though they  may appear to support the contention raised on  behalf of the respondents, were not made directly with reference to the  question now before us, namely, whether  a  corporation could claim the status of a citizen.  That question did  not arise  in that case also because the company, as  such,  was not seeking any relief.  Even if the company were interested in  seeking  relief under Art. 31 of  the  Constitution,  it could do so without having the status of a citizen. In  the case of The Bengal Immunity Company Limited, v.  The State of Bihar,(1) the appellant company had moved the  High Court under Art. 226 of the Constitution for certain reliefs against the provisions of the Bihar Sales Tax Act, but  this Court  (per  S.R.  Das,  Acting C.J. at  page  618  and  per Venkatarama  Ayyar  J. at pages 765-766) left  the  question open and granted relief to the company without deciding that question.  This case only serves the purpose of showing that the  question now before us was still an open one  and  that this Court had, not given its (1)  [1955] 2 S.C.R. 603. 113 considered judgment on the issue now before us. It  is, therefore, not necessary to refer to  certain  deci- sions‘  of the Madras, Bombay and Calcutta High  ’Courts  as they cannot be decisive one way or the other in the  absence of  a clear decision of this Court.  We have, therefore,  to examine the legal position afresh on the footing that it  is still an open question. On  an  examination  of  the  relevant  provisions  of   the Constitution  and the Citizenship Act aforesaid, we have  as already  indicated, reached the conclusion that they do  not contemplate  a corporation as a citizen.  But Mr.  Setalvad, appearing on behalf of the petitioners, contended that  Part II  of  the  Constitution relating  to  citizenship  is  not relevant  for  our purposes because it does  not  define  "a citizen"  nor  does  it deal with  the  totality  of  "citi- zenship".   It  was further submitted that the same  is  the

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position with reference to the provisions of the Citizenship Act.    It   is   common   ground,   therefore,   that   the constitutional and the statutory provisions discussed  above have no reference to juristic persons.  But even so, it  was contended, we have to review the legal position in the light of  the preexisting law, i.e., the Common Law, which it  was claimed, was preserved by Art. 372 of the Constitution.   In this  connection, reference was made to Halsbury’s  Laws  of England, Vol. 6, 3rd Edition, pages 113-114, para 235, which lays  down  that,  on incorporation, a company  is  a  legal entity the nationality or domicile of which is determined by its place of registration.  Reference was also made to  Vol. 9 of Halsbury’s Laws of England, page 19, paragraphs  29-30, which  say that the concept of nationality is applicable  to corporations  and  it  depends  upon  the  country  of   its incorporation.  A corporation incorporated in England has  a British nationality, irrespective of the nationality of  its members.   So  far as domicile is concerned,  the  place  of incorporation  fixes  its  domicile,  which  clings  to   it throughout its existence.  In this connection, reference was made  to  the  case of Janson  v.  Driefontain  Consolidated Mines(1) for the proposition that a company may be  regarded as  a  national of the country where  it  was  incorporated, notwithstanding (1)  [1902] A.C.1,484, 497, 501, 505. 114 the  nationality of its shareholders.  It is -not  necessary to  refer to other decisions, because the position is  abso- lutely  clear  that a corporation may  claim  a  nationality which  ordinarily  is  determined by the place  of  its  in- corporation.   But  the  question still  remains  whether  " nationality"  and "citizenship" are  interchangeable  terms. "Nationality" has. reference to the rural relationship which may arise for consideration under international law.  On the other   hand  "citizenship"  has  reference  to  the   jural relationship  "  under  municipal  law.   In  other   words, nationality determines the civil rights of a person, natural or artificial, particularly with reference to  international law, whereas citizenship is intimately connected with  civic rights  under  municipal  law.   Hence,  all  citizens   are nationals  of a particular State, but all nationals may  not be  citizens  of the State.  In other words,  citizens,  are those   persons   who   have  full   political   rights   as distinguished,  from  nationals,  who  may  not  enjoy  full political  rights  and are still domiciled in  that  country (vide P. Weis-Nationality and Statelessness in International Law pp. 4-6; and Oppenheim’s International Law, Vol. 1,  pp. 642, 644). In  our opinion, it is not correct to say, as was  contended on. behalf of the petitioners, that the expression "citizen" in  Art.  5 is not as -wide as the same expression  used  in Art.  19  of  the Constitution.  One  could  understand  the argument that both the Constitution and the Citizenship  Act have not dealt with juristic persons at all, but it is  more difficult  to  accept  the  argument  that  the   expression "citizen" in Part 11 of the Constitution is not conterminous with  the same expression in Part III of  the  Constitution. Part II of the Constitution, supplemented by the  provisions of the Citizenship Act (LVII of 1955) deals with  "citizens" and it is not correct to say that citizenship in relation to juristic persons was deliberately left out of account so far as the Constitution and the Citizenship Act were  concerned. On  the other hand, the more reasonable view to take of  the provisions  of the Constitution is to say that whenever  any particular  right was to be enjoyed by a citizen  of  India,

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the  Constitution  takes  care to use  the  expression  "any citizen"  or "all citizens", in clear  contradistinction  to those rights 115 which  were  to be enjoyed by all, irrespective  of  whether they  were citizens or aliens, or whether they were  natural persons   or  juristic  persons  On  the  analogy   of   the Constitution  of the United States of America, the  equality clause  in Art. 14 was made available to "any  person".   On the  other  hand, the protection against  discrimination  on denominational  grounds  (Art.  15)  and  the  equality   of opportunity  in matters of public employment (Art. 16)  were deliberately  made  available  only to  citizens.   In  this connection, reference may be made to the Constitution of the United States of America(1)               "Corporations               Citizens  of  the  United  States  within  the               meaning  of this article must be  natural  and               not  artificial persons ; a corporate body  is               not a citizen of the United States." (p. 965)               "Persons" defined               "Notwithstanding  the  historical  controversy               that has been waged as to whether the  framers               of the Fourteenth Amendment intended the word,               "persons"  to  mean only natural  persons,  or               whether  the word, "persons"  was  substituted               for   the  word  "citizen"  with  a  view   to               protecting corporations from oppressive  State               legislation,  the Supreme Court, as  early  as               the Granger cases, decided in 1877, upheld  on               the merits various State laws without  raising               any  question  as  to the  status  of  railway               corporation-plaintiffs to advance, due process               contentions.    There  is  no  doubt  that   a               corporation   may  not  be  deprived  of   its               property  without  due process of  law  ;  and               although  prior decisions have held  that  the               "liberty"   guaranteed   by   the   Fourteenth               Amendment  is  the liberty  ’of  natural,  not               artificial, persons, nevertheless a  newspaper               corporation  was  sustained, in 1936,  in  its               objection  that  a State law  deprived  it  of               liberty  of press.  As to the natural  persons               protected  by  the due process  clause,  these               include all human beings regardless, of  race,               colour or citizenship." (p. 981) We have already referred, in general terms, to those  Senate  Document  No. 170, 82d.  Congress, Ed.   Edward  S. Corwin, 116 provisions  of the Constitution, Part III,  which  guarantee certain rights to "all persons" and the other provisions  of the  same part of the Constitution relating  to  fundamental rights  available to ’citizens’ only, and, therefore, it  is not necessary to recount all those provisions.  It is enough to say that the makers of the -Constitution were fully alive to the distinction between the expressions "any person"  and "any  citizen",  and  when the Constitution  laid  down  the freedoms  contained  in Art. 19(1)(a)-(g), as  available  to "all  citizens", it deliberately kept out  all  noncitizens. In  that  context,  non-citizens would  include  aliens  and artificial  persons.   In  this  connection,  the  following statement  in Private International Law by Martin  Wolff  is quite apposite :-               "It  is usual to speak of the  nationality  of

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             legal  per,sons, and thus to import  something               that we predicate ,of natural persons into  an               area  in  which it can be applied  by  analogy               only.  Most of the effects of being an ’alien’               or  a ’citizen’ of the State are  inapplicable               in  the  field  of corporations  ;  duties  of               allegiance or military service, the  franchise               and other political rights do not exist."  (p.               308) This  apart, it is necessary to refer to another aspect  ,of the controversy.  It was argued on behalf of the petitioners that  the  distinction  made  by  the  Constitution  between "persons"  and  "citizens"  is  not  the  same  thing  as  a distinction  between natural and juristic persons, and  that as  "persons" would include all citizens  and  non-citizens, natural  and artificial persons, the makers of  the  Consti- tution  deliberately left artificial persons out  of  consi- deration  because it may be that the pre-existing  law  -was left  untouched.   It  is  very  difficult  to  accept   the contention that when the makers of the Constitution -were at pains  to lay down in exact terms the fundamental rights  to be  enjoyed  by  "citizens"  and  those  available  to   all "persons",  they  did not think it  necessary  or  advisable clearly  to  indicate the classes of persons  who  would  be included  within the expression " citizens".  On  the  other hand,  there is clear indication in the provisions  of  Part III  of  the  Constitution  itself  that  they  were   fully cognizant  of  the provisions ,of the Constitution.  of  the United States of America, 117 where the Fourteenth Amendment (s. 1) clearly brings out the antithesis between the privileges or immunities of  citizens of  the United States and life, liberty or property  of  any person,  besides  laying down who are the  citizens  of  the United  States.  Section I aforesaid is in these  terms  and brings out the distinction very clearly :-               "All persons born or naturalised in the United               States,   and  subject  to  the   jurisdiction               thereof, are citizens of the United States and               of  the State wherein they reside.   No  State               shall  make  or enforce any  law  which  shall               abridge   the  privileges  or  immunities   of               citizens of the United States ; nor shall  any               State deprive any person of life, liberty,  or               property,  without  due process of law  ;  nor               deny to any person within its jurisdiction the               equal protection of the laws." The  question may be looked at from another point  of  view. Art.  19 lays down that "all citizens" shall have the  right to freedoms enumerated in cls. (a) to (g).  Those  freedoms, each and all of them, are available to "all citizens".   The Article  does not say that those freedoms, or only  such  of them  as  may  be  appropriate  to  particular  classes   of citizens, shall be available to them.  If the Court were  to hold  that a corporation is a citizen within the meaning  of Art.  19, then all the rights contained in cls. (a)  to  (g) should  be available to a corporation.. But clearly some  of them, particularly those contained in cls. (b), (d) and  (e) cannot  possibly have any application to a corporation.   It is  thus clear that the Tights of citizenship  envisaged  in Art. 19 are not wholly appropriate to a corporate body.   In other  words,,  the  rights of citizenship  and  the  rights flowing  from the nationality or domicile of  a  corporation are not conterminous.  It would thus appear that the  makers of the Constitution had altogether left out of consideration

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juristic   persons  when  they  enacted  Part  II   of   the Constitution  relating  to "citizenship", and made  a  clear distinction between "persons" and "citizens" in Part III  of the  Constitution.   Part III, which  proclaims  fundamental rights, was very accurately drafted, delimiting those rights like freedoms of speech and expression, the right to. 118 assemble  peaceably, the right to practise  any  profession, etc., as belonging to "citizens" only and those more general rights  like  the  right  to equality  before  the  law,  as belonging to "all persons". In view of what has been said above, it is not necessary  to refer  to  the  controversy as to  whether  there  were  any citizens of India before the advent of the Constitution.  It seems to us, in view of what we have said already as to  the distinction between citizenship and nationality, that corpo- rations may have nationality in accordance with the  country of their incorporation; but that does not necessarily confer citizenship  on  them.  There is also no doubt in  our  mind that Part 11 of the Constitution when it deals with citizen- ship  refers to natural persons only.  This is further  made absolutely  clear  by the Citizenship Act which  deals  with citizenship  after  the  Constitution came  into  force  and confines  it only to natural persons.  We cannot accept  the argument that there can be citizens of this country who  are neither  to be found within the four corners of Part  II  of the Constitution or within the four     corners    of    the Citizenship Act.  We are of opinion that     these       two provisions must be exhaustive of the citizens     of    this country, Part II dealing with citizens on the date     the Constitution  came  into  force  and  the  Citizenship   Act dealing with citizens thereafter.  We must, therefore,  hold that  these two provisions are completely exhaustive of  the citizens  of  this country and these citizens  can  only  be natural   persons.   The  fact  that  corporations  may   be nationals  of the country for purposes of international  law will not make them citizens of this country for purposes  of municipal law or the Constitution.  Nor do we think that the word "citizen" used in Art. 19 of the Constitution was  used in a different sense from that in which it was used in  Part II of the Constitution.  The first question, therefore, must be answered in the negative. In  view of this answer, we do not consider it necessary  to answer the second question as that would have arisen only if the first question had been answered in the affirmative. Let  the  cases go back to the Bench for hearing  on  merits with this opinion.  Costs of the hearing before the  special Bench will be dealt with by the Bench which ulti- 119 mately hears and determines the controversy. .lm15 HIDAYATULLAH  J.-Two  questions have been referred  to  this Bench for opinion.  They are : (1)  Whether  the  State  Trading  Corporation,  a   Company registered  under  the  Indian Companies  Act,  1956,  is  a citizen within the meaning of Article 19 of the Constitution and  can  ask  for the  enforcement  of  fundamental  rights granted to citizens under the said Article ; and (2)  Whether   the   State  Trading  Corporation   is   not- withstanding the formality of incorporation under the Indian Companies  Act 1956, in substance a department and organ  of the  Government  of India with the entirety of  its  capital contributed by Government ; and can it claim to enforce fun- damental  rights under Part III of the Constitution  against the State as defined in Article 12 thereof ?

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The State Trading Corporation has been assessed to sales tax by  the Commercial Tax Officer, Vishakhapatnam and a  demand has been made upon it.  By this petition under Article 32 of the  Constitution  it challenges the demand  on  the  ground inter  alia that the impugned order and the demand  for  the tax infringe its fundamental rights which are guaranteed  to citizens  by Art. 19 sub-clauses (f) and (g) and these  sub- clauses read : Art. 19(1).  All citizens shall have the right (f)  to acquire, hold and dispose of property; (g)  to  practice any profession, or to carry on  any  occu- pation, trade or business. The State Trading Corporation claims to be a citizen for the application of these sub-clauses, which fact being  disputed on  the  other side, has given rise to  the  two  question,s above  set out.  As the questions amply indicate, the  share capital  of  the  State  Trading  Corporation  is   entirely contributed :by the Central Government.  The shares are held by the President of India and two Secretaries to Government. The  State  of Andhra Pradesh, therefore,  denies  that  the State  Trading Corporation being an artificial person  is  a citizen   and   consequently  contends  that  Art.   19   is inapplicable  because  the  word ’citizen’  in  the  article refers 120 to natural persons.  Additionally, it contends that being  a department  of  Government, the  State  Trading  Corporation cannot claim protection of Art. 19 against an action of  the State. Mr.  Setalvad in formulating the grounds on which  he  rests the  claim of the State Trading Corporation to  citizenship, points  out that the Constitution does not define  the  word ’citizen’, that Part 11 of the Constitution which deals with citizenship is not material inasmuch as it is concerned with natural  persons  only and is not exhaustive  and  that  the Citizenship  Act (LVII of 1955) which provides  for  certain matters  relating  to  citizenship  but  defines  the   word ’person’   so   as  to  exclude  artificial   persons   like corporations   aggregate,   cannot  also  be   regarded   as exhaustive.   He thus contends that  corporations  aggregate which,   according   to  him,  were  citizens   before   the Constitution and the Citizenship Act, continue to enjoy  the privileges  of  citizens, one of which is the  guarantee  in Article 19.  In support of his submission that  corporations were  and continue to be citizens, he relies upon  the  fact that  corporations possess a nationality and claims that  in this  connection  ’nationality’ and ’citizenship’  bear  the same meaning.  He relies upon the observations of Mukherjea, J. (as he then was), in Chiranjit Lal Chowdhuri v. The Union of India(1) where the learned Judge observed obiter :               "The fundamental rights guaranteed by the Con-               stitution   are   available  not   merely   to               individual citizens but to corporate bodies as               well   except  where  the  language   of   the               provision  or the nature of the right  compels               the inference that they are applicable only to               natural  persons.  An  incorporated,  company,               therefore,    can   come   this   Court    for               enforcement  of its fundamental rights and  so               may  the  individual shareholders  to  enforce               their  own  ; but it would not be open  to  an               individual  shareholder to complain of an  Act               which  affects the fundamental rights  of  the               company   except   to  the  extent   that   it               constitutes an infraction of his own rights as

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             well." Mr. Setalvad also refers to other cases in which, though the point was not decided, several corporations claimed the (1) [1950] S.C.R. 869, 898. 121 protection  of  Article  19 and  no  objection  was  raised. Lastly,  he  contends  that the  word  ’citizen’  should  be liberally construed to include a corporation aggregate which consists of Indian citizens only.  On the second question he contends   that  a  company  has  an  existence   which   is independent of its members and the State Trading Corporation cannot  be equated with the shareholders or  the  Government since  the corporate veil cannot be allowed to  be  pierced. He points out that there are several States in our  Republic and there is a great danger of one.  Government stifling the trading  activities of another Government either by  law  or executive  action  against  which Article  19  is  the  only effective safeguard.  He submits that it could not have been intended  that  while  every individual  citizen  should  be protected,   a   group   of   citizens,   should   by   mere incorporation, lose the benefits of the guarantee in Article 19. We are dealing here with an incorporated company. The nature of  the personality of an incorporated company which  arises from a fiction of law, must be clearly under stood before we proceed to. determine whether the word ’citizen’ used in the Constitution generally or in Article 19 specially, covers an incorporated  company.   Unlike an  unincorporated  company, which  has no separate existence and which the law does  not distinguish  from its members 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 citizen 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  persona that  comes into being is not the aggregate of the  personae either in law or in metaphor.  The corporation really has no physical  existence ; it is a mere ’abstraction of  law’  as Lord Selborne described it in G. E. Rly. v. 9-2 S. C. India/64 122 Turner(1), or as Lord Macnaghten said in the well-known case of  Salomon v. Salomon & Co. (2) it is "at law  a  different person altogether from the subscribers to the memorandum  of association."  This  distinction  is  brought  home  if  one remembers that a company cannot commit crimes like  periury, bigamy  or  capital  murder’.  This persona  dicta  being  a creature  of a fiction, is protected by natural  limitations as  pointed out by Palmer in his Company Law (20th edn.)  p. 130  and  which were tersely summed up by counsel in  R.  v. City  of  London(3) when he asked "Can you hang  its  common seal?".   It  is  true that sometimes the  law  permits  the corporate veil to be lifted, but of that later. There  is  a  rule  of English Law  that  a  company  or  an incorporated corporation has a nationality and this nationa- lity is determined by the law of the country in which it  is incorporated.   Mr. Setalvad thus begins his  contention  by

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citing certain obiter statements from Janson v.  Driefontein Consolidated Mines Ltd.(4) such as :               "I  assume that the corporation......  was  to               all intents and purposes in the position of  a               natural born subject of the late South African               Republic." (Lord Macnaghten-p. 497)               "I think it must be taken that the  respondent               company  was technically an alien and  became,               on  the breaking out, of  hostilities  between               this  country  and South African  Republic  an               alien enemy". (Lord Davey-p. 498)               "The  company  must clearly be  treated  as  a               subject  of the Republic  notwithstanding  the               nationality     of     its      shareholders."               (Lord Brampton-p. 501) He   contends   that   there  is   no   difference   between ’nationality’ and "citizenship" and the two words are  syno- nymous  and relies upon the following passage from  Weis  on Nationality  and Statelessness in International  Law  (1956) pp. 4-5-               "One of the terms frequently used synonymously               with      nationality     is      citizenship.               Historically, this is correct for States  with               the Roman conception of nationa-               (1)   [1872] L.R. 8 Ch.  App. 152. (2)  [1897]               A.C. 22, 51.               (3)  [1632] 8 St. Tr. 1087, 1138. (4 ) L.R.  r               1902 1 A.C. 492.               123               lity,  but  not  for States  with  the  feudal               conception  of nationality, where  citizenship               is  used  to denote not political  status  but               membership  of  a local  community.   It  has,               however, become usual to employ the term citi-               zen  instead of subject in republican  States-               including  common  law countries such  as  the               United  States ; he who before was a  ’subject               of the King’ is now a ’citizen of the State’ -               and  in  that sense and in  those  States  the               terms ’nationality’ and ’citizenship’ must  be               regarded as synonymous." It  is, therefore, contended somewhat  syllogistically  that all  incorporated corporations have the nationality  of  the State  under the laws of which they are  incorporated,  that nationality  is  synonymous with citizenship  and  therefore incorporated companies are citizens.  From this it is but  a mere step, which is also taken, that incorporated  companies in   India  were  and  still  are  citizens  and  that   the Constitution  and the Citizenship Act have nowhere  deprived than  of this citizenship or of the right to  protect  them- selves by invoking Article 19(1) (f) and (g).  Alternatively it  is contended that if all the members of the  Corporation are Indian citizens then the Corporation as a whole must  be a citizen, for the whole cannot be different from its parts. Both  the  arguments involve fallacies.  The  first  assumes that  ’nationality’  of  corporations  and  citizenship   of natural  persons are the same concepts and caps it with  the fallacy of ignorantio elenchi which in English is called the fallacy of irrelevant conclusion because instead of  proving that  corporations  are citizens, it is sought to  be  shown that they ought to be citizens for the remedy is so good and effective.   The  second involves the  fallacy  of  petition principle because it tends to beg the question and founds  a conclusion.  on a basis that as much needs to be  proved  as the  conclusion  itself.  In my opinion, the  State  Trading

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Corporation cannot be said to be a citizen either by  itself or  by  taking  it  as  the  aggregate  of  citizens,   that nationality  of a corporation is a different concept not  to be  confused  with citizenship of natural  persons,that  the word "citizen" in Art. 19(1) sub-clauses (f) and (g)  refers to  a  natural  person, that State  Trading  Corporation  is really a Department of Government behind the corporate  veil and that for all these 124 reasons the two questions must be answered in favour of  the objectors.   I  shall now make good these  conclusions  with reasons. Article  19 uses the word ’citizen’ while the word  ’person’ is  used in some other articles in Part III notably Art.  14 (creating  equality before the law), Art. 21 (protection  of life  and  personal  liberty).  By  Art.  367,  (unless  the context  otherwise requires) the General Clauses  Act,  1897 applies to the interpretation of the Constitution.  The word ’citizen’ is not defined in the Constitution or the  General Clauses  Act but the word ’person’ is defined in the  latter to   include  ’any  company  or  association  or   body   of individuals  whether incorporated or not.’ The  word"person" therefore, conceivably bears this extended meaning at  least in  some places in Part III of the Constitution.  But it  is not  necessary  to determine where in the  Constitution  the word ’person’ includes a company etc. because that word  has not  been  used in Article 19.  The  claim  of  corporations aggregate,  like the petitioner, to the benefits which  Art. 19 gives, must depend on whether the word ’citizen’ which is actually  used  can bear a similar  enlarged  meaning.   Mr. Setalvad  is  right  in  contending that  use  of  the  word ’person’ with an enlarged meaning in some places and of  the word ’citizen’ in other places does not by itself prove that artificial  persons  are  outside the meaning  of  the  word ’citizen’.   The  contrast may not be  between  natural  and artificial  persons  so much as between  citizens  and  non- citizens,  and  it  is possible that where  the  benefit  is intended  to  go to noncitizens, a word of wide  meaning  is used  and where the benefit is meant for citizens  only  the word ’citizen’ is used.  It is true that the word  ’citizen’ cannot  include an enemy or an alien while the more  general word  ’person’  may but that does not  answer  the  question whether   the  word  citizen’  can  include  a  company   or association  or body of individuals, to borrow the words  of the definition.  The answer to that question must depend, as already  pointed  out,  on  the  connotation  of  the   word ’citizen’ which must be found out. In  attempting  to determine whether the word  ’citizen’  in Art. 19 denotes only a natural person or includes a  company etc.,  we must turn first to the Constitution to see if  the use of the word ’citizen’ or citizenship in any other 125 place bears the extended meaning or throws any light on this problem.   The word ’citizen’ is used in 29 places  and  the word  ’citizenship’ in 6 places.  These words are also  used in headings to Chapters and marginal notes but these may  be ignored.  It is worth inquiring if there is any place at all other than Art. 19 where not only a natural person but  also an artificial person is meant.  The word first occurs in the preamble thus               "We  the  people  of  India  having   solemnly               resolved   to  secure  to  all  its   citizens               justice, social, economic and political               Liberty of throught, expression, belief, faith               and worship ;

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             Equality of status and of opportunity; and  to               promote among them all               Fraternity   assuring  the  dignity   of   the               individual and the Nation," etc. ’Liberty of thought, expression, belief, faith and  worship, equality  of  status’  and ’dignity of  the  individual  are expressions  appropriate  to natural persons  and  not  com- panies,  associations and other corporations  aggregate  and the word ’citizen’ in the preamble refers to individuals for whom  the Constitution was being made.  In this  connection, it must be remembered that a Constitution is a bond  between the  citizens  and the administration  and  regulates  their respective actions.  It is as Ahrens defined it : "L.’  ensemble des institutions et des  lois  fondamentales, destine eargler l’action de l’administration et de tous  les cityens. (Ahren : Course de Droit Naturel & C. iii p. 380) (The  body of institutions and fundamental law designed to regulate the action of the Administration and all the citizens). The preamble in solemn words sums up what is later  provided in the Constitution.  ’Citizens’ in the preamble mean  those individuals who under the Constitution are guaranteed  civic rights  in the body politic that is India and who  can  hold public offices and elect their representatives to Parliament and  Assemblies  of the people.  They are persons  who  were declared  citizens on the inauguration of  the  Constitution and those on whom the rights of citizens were conferred  and on whom they may 126 be  conferred by law.  of course the Constitution also  con- fers some rights on aliens and assists and protects them but the guarantee in the preamble is to the citizens alone  that is  individuals  who  enjoy full civic rights  in  the  body politic. Then follows a special chapter entitled "Citizenship".  That part  contains  seven Articles.  Art. 5 spoke  at  the  com- mencement of this Constitution.  That article uses the  word ’person’  but  the context shows that only  natural  persons were  meant.  Citizenship was conferred on every person  who had his domicile in the territory of India and (a)  who was born in the territory of India ; or (b)  either  of whose parents was born in the  territory  of India or (c)  who  has been ordinarily resident in the  territory  of India  for  not less than five years  immediately  preceding such commencement. The  reference to the birth of the person or of  Ms  parents clearly  shows that only natural persons were meant  because corporations though born in a metaphorical sense do not have parents.   By the same token Art. 6 also refers  to  natural persons.   Articles  7, 8, 9 and 10 so clearly  speak  of  a natural person as to need no elaboration.  That leaves  Art. 11  which  gives Parliament the power to make laws  for  the acquisition  and termination of citizenship, and  all  other matters relating to citizenship.  That article reaffirms the power which is given to Parliament by Entry 17 of List I  of Schedule   VII  of  the  Constitution.   As  we  shall   see presently,  the Citizenship Act of 1955  expressly  excludes companies, etc. from its provisions.  The power conferred by Art.  11  or  Entry No. 17 may give rise  hereafter  to  the question   whether   Parliament  can   invest   corporations institutions,  trusts,  funds,  ships  or  aeroplanes   with citizenship but till Parliament does so there is nothing  in Part   11   to  indicate  that  the  words   ’citizen’   and ’citizenship’ were used to include any of them.

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In the fourth part which is entitled ’Directive  Principles’ the  word ’citizen’ is used twice.  In Art. 39 it is  quali- fied  by the words ’men and women’ which addition tells  its own story.  In Article 44 the State is asked to endeavour to secure  a uniform Civil Code for all citizens and  the  word plainly means men and women because it is impos- 127 sible  to  think  that the Constitution  is  thinking  of  a uniform Civil Code for corporations.  In the other parts  of the Constitution ’citizenship’ is a condition precedent  for some  office, post or privilege.  The President,  the  Vice- President, the Governors, the Members of Parliament and  the Legislative Assemblies, the judges of the Supreme Court  and High  Courts  must be citizens.  Members of  Parliament  and Legislatures  cease  to  be  members if  they  cease  to  be citizens  of  India  or acquire  the  citizenship  of  other countries.  The words ’citizen’ and ’citizenship’ thus refer to  natural persons because these offices cannot be held  by corporations aggregate.  Art. 326 says that every citizen 21 years in age has a vote.  This means only a natural person. There  remains only Part III entitled ’Fundamental  Rights’. In  Articles  15 and 16, the word clearly  means  a  natural person.   The  words religion, race,  caste,  sex,  descent, Place  of  birth and residence mark out a human  being.   In Art.  18, which mentions titles, a natural person  is  again meant   because   titles   are   ordinarily   conferred   on individuals.  In Art. 29(1), where citizens residing in  the territory  of  India  having distinct  language,  script  or culture of their own have been given a right to preserve the same,  the  word definitely refers to natural  persons.   In Art.   29(2)   entrance  to  educational   institutions   is guaranteed to citizens and the entrant can only be a natural person and not a corporation. The  above  analysis  shows that in  34  places,  the  words citizen’   and  ’citizenship’  refer  to  natural  and   not artificial persons.  The question is whether in the  thirty- fifth  place  the  word is  meant  to  include  corporations aggregate.   For this purpose we must ascertain if there  is anything  special  which points to a different  use  of  the word.  Sub-clauses (a) to (e) of Art. 19 contemplate natural persons.   The claim is that the word ’citizen’ must bear  a different meaning in respect of clauses (f) and (g)  because corporations acquire, hold and dispose of property and carry on trade or business.  It is argued that if several citizens carry  on business together as an incorporated company  they cannot lose the guarantee which is given to citizens, and we are  invited  to give a meaning to the word  which  is  wide enough  to include companies.  It has been shown above  that the way in which the words ’citizen’ and ’citizenship’ 128 have  been used in the Constitution goes to show  that  such was  not the intention at least in 34 other places.  It  may however  be conceded that this is not decisive and  if  cor- porations can possess citizenship there is no reason for not interpreting  the  Constitution liberally to give  them  the benefits  of  clauses (f) and (g) of Art. 19(1).   For  this purpose  it  is  necessary  to find out  what  is  meant  by ’citizen   and   citizenship’   generally   and   to   trace historically  the  concept  of citizenship to  see  if  that concept  included  at  any  time  artificial  persons   like corporations so that the word can be said to be intended  to bear such a meaning. The  word  ’citizen’  which  is  used  in  Art.  19  of  the Constitution  has  not  been defined.  Its  meaning  in  the context of Art.. 19 must be found out.  If it bore the  same

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meaning as in the other parts of the Constitution, it  would mean  a member, born or naturalised, of the State, on  which the Constitution or a law of Parliament confers citizenship. Is there in law a citizenship of a group of persons who  may be  all citizens or some of whom may be  non-citizens?   The answer is that the word in its normal meaning does not admit "bulk  citizenship"  which is the only way to  describe  it. Salmond in an article on "Citizenship and Allegiance"  1901- 1902  Law Quarterly Review Part I pp. 270-82, says that  the word is derived from the Latin ’civitas’ and ’civis’.   More directly,  of  course,  the  root is  in  the  French  words ’citoyen’  or  ’citeyen’.   From  the  earliest  times,  the concept  of  citizenship concerned natural persons  and  not groups   of  persons.   In  ancient  Greece,  according   to Aristotle, the population of Attica was divided into  groups which  were  brotherhoods (phratriai) and of  clans  (gene). Groups  of brotherhoods formed tribes (phylai).  The  entire citizen   body   was  thus  included  in  the   tribes   and brotherhoods  but  the  wealthy  formed  the  clans.    When monarchy was abolished through the efforts of the clans, the citizenship  of the members of the brotherhoods was in  name only  because they had no civic rights.   Draconian  reforms created  four classes according to wealth and Solon gave  to the  four classes the right to act in a political  capacity. (ecclesia)  and  also in a judicial capacity  (heliaia)  and thus  earned the title ’the first champion of  the  people’. But even under him, the concept of citizenship was immature. The first recognition of citizenship came with Cleisthenes 129 under  whose reforms there was a distribution of  the  popu- lation  on  a geographical basis and an  enfranchisement  of persons  of  pure  or partial  Athenian  descent.   Resident foreigners had inter-married and though there was a  partial recognition  of foreigners permanently settled domiciled  in Athens  even  from  the days of Peisistratus  there  was  no recognition  of the offsprings of mixed marriages  as  citi- zens.   These  were added to the list  of  citizens  because citizenship   no  longer  depended  on  membership  of   the phratries.   This state of affairs continued till  -Pericles abrogated  the enlightened measure.  He limited  citizenship to  those  of Athenian descent on both sides.  Had  he  come earlier  some famous men of Athens like  Themistocles  would have  been  barred  from not only  office  but  other  civic rights.  It is not necessary to follow the history of Athens further.  It is reasonable to believe that all other  States in  Greece except Sparta followed this kind of  citizenship. The Spartans had their own system of rule with two kings and an  elected council (gerusia) elected by the citizens  which was both advisory and judicial.  There was also an  assembly of all citizens over twenty called the appella which elected the  magistrates and met monthly.  The right of vote in  the election  of the gerusia and membership of the  appella  was open  to  those  who  were selected  at  the  birth  by  the spartiate.   All  children were inspected at  birth  by  the heads of the tribe and those who were sickly were exposed in a ravine of Mt.  Taygetus and of the others those that lived all boys were taken away at the age of seven and trained  as citizens.  All the Hellenic States followed Athens but Crete perhaps was influenced by Sparta. This is the earliest recognition of citizenship that we need consider in Europe.  The next to consider is the  conception of  citizenship  in Rome.  The words ’civitas’  and  ’civis’ were  used  in  Roman Law to describe persons  who  had  the freedom of the city and who enjoyed all political and  civic privileges of Government.  In this way were distinguished  a

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slave  (servus),  an enemy (hostis) who had  none  of  these rights  on  the  one  hand  and  a  foreigner   (peregrinus) particularly from a country with which Rome was on terms  of peaceful intercourse on the other, from citizens.  Though by Justinian’s time everyon 130 became  a citizen, unless he was an unmanumitted  slave,  in the  time of Gaius citizenship was the privilege  of  Romans and  carried with it the right to vote (jus  suffragii)  and the right to hold public office (jus honorum) the right to a Roman  marriage  (jus  connubium) and  the  right  to  legal relations (’us commericum).  The son of a Roman citizen  was also a Roman citizen irrespective of where he was born.  The peregrinus had no civic rights unless he belonged to a Latin country.  There were different laws for a long time for  the citizens and the latini and the peregrini.  The first to  be given  the  status of citizens were the latini.   Later  all free  subjects  were to be cives.  The only  peregrines  who were  left  were foreigners and barbarians and they  had  no civic   rights  just  as  members  of  certain   treacherous communities (dediticii) and persons deprived of  citizenship (deportati) had none. Thus  both  in Greece and Rome the idea of  citizenship  was bound  up with natural persons in whom certain civic  rights were  considered  to inhere and which marked them  out  from others.  Sometimes descent, sometimes the wealth,  sometimes the status, military or other, determined the privilege  but at  no time was there a concept of citizenship of any but  a natural person.  In Roman Law citizenship was transmitted by birth to an offspring of a Roman citizen. So  far we have dealt with citizenship namely membership  of body  politic  with full civic rights.  In the  middle  ages this membership of the State began to carry a dual status  : one  status was political and the other civil.   The  double status  came in Central Europe in the wake of Roman Law  and was  partly due to the growth of feudal vassalage  by  which what  might  have  grown into nations  composed  of  ’clans’ became  divided into feudal Chieftanships.  The feudal  lord did not concern himself with descent as such so long as  his follower  held  land or rendered service  according  to  his laws.   Such  laws did not apply to foreigners  but  if  the foreigners held lands or chattels or rendered service he was equally  bound.   But  the main reason  was  the  impact  of international  relations.  An individual began to be  viewed in two capacities.  Firstly, he was regarded as the  subject of a certain State 131 (a political status) and secondly as one entitled to certain rights  and  privileges in his own State (a  civil  status). Both arose from the bond to a particular State or  territory but  it  would be wrong to say that the  word  ’nationality’ describes the civil status.  The word ’nationality’  whether denoting an ethnic group or political membership of a  State is a word of much later origin.  M. Cogordan (La Nationalite p.  2)  has  given  the  origin  of  the  word  and  in  the Dictionnaire  de 1, Academie frans ais it appeared  for  the first time in 1835.  Even the Code Napoleon dealt with rules concerning  the  status  of Frenchmen  abroad  but  did  not provide  for  the  status  of  foreigners  in  France.   The recognition  of nationality as a test of the law  applicable to an individual -followed the famous lecture by Mancini  at the   University   of  Turin  in  1851.    The   impact   of international relations added to the civic rights  possessed by  a citizen by investing him with a policial status  which he  could claim abroad.  The word ’nationality’  itself  has

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now  come to acquire two distinct meanings political one  by which  is indicated the membership of a State and the  other an  ethnic  one denoting membership of a nation.   All  this time citizenship has also meant membership of a State but in a municipal aspect.  In this sense, the words ’national’ and ’citizen’  are not inter-’ changeable as has been  sometimes supposed.   In  the  United  States  Public  Law  414  (82nd Congress,  2nd session) section 308 is  entitled  "Nationals but not citizens of the United States at birth".   According to Weis Nationality and Citizens-hip p. 5: "That  the term American National has a wider  meaning  than the  United States citizen was recognised in  Administrative Decision  No. V of the Mixed Claims Commission  between  the United  States and Germany ,’Decisions and Opinions Vol.   I pp. 18-19; Hackworth Digest of International Law, Vol.   III p. 5 Annual Digest, 1923-24, Case No. 100)." Weis  has given other examples of the disparate use  of  the two words in the Constitution of the Netherlands,  Honduras, Nicaragua   and  Roumania.   Even  in  the   United   States Immigration  and Nationality Act, 1952, the  distinction  is preserved.   This  dual  status which  has  caused  all  the trouble in this case was summed up by Lord Westbury 132 in Udny v. Udny(1) by saying that the political status :               "May  depend upon different laws in  different               countries,  wheras  civil status  is  governed               universally  by one single  principle,  namely               that  of  domicile,  which  is  the  criterion               established by law for purposes of determining               civil  status.  For it is on this  basis  that               the  personal rights of the party, that is               to say, the law which determines his  majority               or minority, his marriage, succession, testacy               or intestacy, must depend." Thus,  in the Middle ages, it was begun to be realised  that the legal personality of persons was composed of a political status and a civil status.  It was possible for a person  to have political status but not civil status, that is to  say, he  could  be  a  national but not  a  citizen  but  it  was difficult  to  imagine a citizen without  political  status. This  political  status  was  determined  according  to  two different  theories.   One was the theory  of  descent  (’us sanguinis)  and  the other a theory of domicile  (us  soli). The European countries applied the former and the Common Law countries  the  latter  to determine the  status.   We  have already seen that according to Roman Law the son of a  Roman citizen was also a Roman citizen and it did not matter where he was born and this was the theory which was recognised  in Central Europe.  In the Common Law countries (and 1  include the United States of America) birth in the territory of  the King (us soli) determined political as well as civil status. Descent from a citizen or subject outside the territory  was recognised  statutorily.  Statutes from the time  of  Edward III recognised descent as one of the modes of acquisition of political as well as civil status in England.  In the United States   the  principle  of  descent  also  was   recognised statutorily  except  in the case of children  whose  parents though  citizens  had never resided in the States,  but  the governing theory was birth in the territory of the States. I have, I think, sufficiently explained that citizenship and nationality  are  not entirely similar concepts  though  the words  are sometimes used interchangeably owing to the  fact that  most citizens are also nationals and vice versa.   But strictly speaking citizenship: (1)  L.R. I H.L. S.C. 441.

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133               "is  a term of municipal law, and denotes  the               possession within the particular State of full               civil and political rights, subject to special               disqualification such as minority or sex.  The               conditions  on which citizenship  is  acquired               are regulated by municipal law."               J.    B.  Moore (Digest of  International  Law               Vol.  III (1906) p. 273.) The  disqualifications of citizenship in the past  and  even today are many and different from country to country.   Some of  them which operate even today in several countries  are: minority, heresy, colour, lack of settled abode, insolvency, infamy, treason, sex etc. I  have wondered what would have been the argument  in  this case to support the claim of citizenship if our Constitution had  thought with Bluntschli (Die Lehre Vom modernen  State, i, p. 246) "die Politik ist Sache des Mannes." It  will thus be seen that the concepts of  citizenship  and nationality  have  been influenced either by descent  or  by birth  in a particular place.  Some countries like  the  Re- publics  of South America do not recognise descent  because, it  is reasoned, to do so enables succeeding generations  of former  citizens  to  claim the  privileges  of  citizenship irrespective of where they are born, while being outside the territory  they  do not contribute to the country  of  which they are citizens.  Some countries recognise both the  prin- ciples but there are many differences in the approach to the problem  of  descent.   In some  countries,  citizenship  is confined  to  children born from a  citizen-father  resident abroad  and in others such descent is considered  applicable upto grandchildren.  Thus certain statutes before the Act of 1914  conferred  British citizenship  and  nationality  upon grand-children  born abroad of natural born subjects,  while the  French Naturalization Law (1889) gave recognition  only to  children born in France of a father also born in  France and to children born abroad of a French father.  The  former German  law  adhered only to the principle  of  descent  but later  recognised  marriage, naturalization etc.   In  Italy long  residence of the father and his domicile in  Italy  is considered sufficient.  Today nationality has assum- *Politics is men’s concern. 134 ed  enormous importance and the principles of dual  nationa- lity  and  statelessness  cut  across  some  of  the  former theories   and   Cogordon’s  statement   "quc   tout   homme doitposseder une nationalite*" is no longer true because  of many stateless persons. It  is  not my intention to speak exhaustively  about  citi- zenship and nationality.  I have, I hope, sufficiently esta- blished  my point that citizenship and nationality from  the earliest times to date have been viewed as the attributes of natural  persons.  We are not concerned however, with  other peoples  or nations or States.  We arc concerned  only  with our  laws ’on the subject.  When the  French  Naturalization Law  of  1889  differed  from the  English  law,  Sir  James Ferguson  stated  on  the  advice of  the  law  officers  in Parliament that if the English and the French laws  differed there  was no help and each country was entitled to its  own laws.   We  have  thus to see how our  own  citizenship  has evolved  and who are the persons who are citizens  and  what further   arrangement  exists  for  investing  others   with citizenship. As  India  was,  for centuries, ruled  by  Britain  we  have necessarily  to examine the laws on the subject of  citizen-

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ship and nationality before independence.  There was no  law of citizenship in India.  The Indian Naturalization Act  was merely  supplemental to the Imperial Act and hardly  needed. I  have  already  pointed out that the  English  Common  Law recognised the principle of jus soli but English Statute Law (the  Naturalization Act of 1870 in particular)  recognising descent conferred British nationality on persons, (a)  born in Great Britain or the Dominions (]’us soli) (b)  upto  and  including the second generation  of  descent from natural born British subjects born abroad; and (c)  by naturalization, denization and resumption. The statutes on the subject are collected by Clive Parry  in his  Nationality  and  Citizenship  Laws  and  need  not  be referred  to in detail here as we are really  not  concerned with  them except as the background of our laws.   In  1914, the British Nationality and Status of Aliens Act, *Every person must posses a nationality. 135 1914  was  passed  which was later  amended  in  1943.   The definition  of  a natural-born British subject in  that  Act shows  the classes of persons who were regarded  as  British subjects  by  birth.  The word ’subject’ need  not  be  con- sidered in a sinister sense.  It only meant a citizen though the  feudal concept of subjection seemed to persist  in  the word.   The  Act  of  1914  as  amended  in  1943  made  one significant  departure and it was the limitation of  British nationality  on birth to the first foreign-born  generation. The Act of 1914 as amended in 1943 ruled the field till  the British Nationality Act, 1948 was passed.  By that time  the problem  of  British-born subjects underwent  a  cataclysmic change along with the changes in the British Empire.  A  new conception  namely that of Commonwealth citizenship came  to be  recognised  but  it  was obvious  that  members  of  the Commonwealth  countries  were  about  to  enact  their   own citizenship  and nationality laws.  The Act of 1948 did  two things  with which we are concerned.  It laid down rules  by which  the  status  of British  subjects  was  conferred  on persons who were citizens of certain countries named in  the Act.    India  was  one  of  such  countries.  -  This   new citizenship was Commonwealth citizenship.  It also contained transitional provisions and s. 12(4) provided:               S.    12(4)  :-A  person  who  was  a  British               subject  immediately before the (late  of  the               commencement of this Act and does not become a               citizen of the United Kingdom and colonies  by               virtue  of any of the foregoing provisions  of               this section shall on that date become such  a               citizen unless-               (a)   he  is  then a citizen  of  any  country               mentioned  in subsection (3) of section  1  of               this Act under a citizenship law having effect               in that country or a citizen of Eire ; or               (b)   he is then potentially a citizen of  any               country  ,mentioned  in  sub-section  (3)   of               section I of this Act. One of the Commonwealth countries (Canada) had already  such laws  but  others followed  immediately  afterwards.   India lagged   behind  and  the  citizenship  laws  came  in   the Constitution  and  in the Act of 1955.   During  the  period between 1948 and 1950 Indian citizens were only 136 potentially  so.   They however enjoyed  Commonwealth  citi- zenship  which term was synonymous with British  subject  in effect  but  ’was more appropriate to certain  countries  in view  of  the attainment by them of full  nationhood.’  Thus

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every  Indian  in  British India by virtue of s.  I  of  the English Act of 1948 and every Indian in the Indian States as a  protected  person enjoyed Commonwealth  citizenship.   of course  this citizenship was to continue till India  enacted its own citizenship laws and thereafter if there was a  com- mon  clause preserving this citizenship and was to cease  if there was an express abrogation of Commonwealth citizenship. Under  the English Act of 1948, Indians became  Commonwealth citizens  or British subjects without citizenship  and  were regarded  as  potential  citizens  of  India.   The   Indian Constitution   made  provisions  for  citizenship  on.   the inauguration  of the Constitution but it was not a  law  for the  purpose of the British Nationality Act, 1948.  It  only provided that certain natural persons were to be regarded as citizens of India from January 26, 1950. In so far as we are concerned this created a hiatus  because the  scheme of Indian citizenship was not completely  worked out  on  26th  January, 1950.   The  Constitution  no  doubt declared  who  were  Indian citizens on that  date  but  the status  of a British subject without citizenship  which  was mellifluously called Commonwealth Citizenship "could not  be liquidated"   unless   there  was  a  citizenship   law   as contemplated  by the English Act of 1948.  As a  result,  in the words of Clive Parry, "Pending the completion of the scheme of Indian citizenship, persons  who were potentially citizens of India but are  not citizens   thereof   remained   British   subjects   without citizenship in the eyes of the United Kingdom." No  doubt  in 1955, the Citizenship Act was enacted  by  the Indian Parliament.  Some writers think that even that is not the citizenship law contemplated by the English Act of 1948. Whether or not it fulfills the test, it is not necessary  to decide  here  because  it  does not  affect  the  status  of corporations.   Its provisions are applicable  to  ’persons’ and the definition of the word ’person’ in the Act expressly excludes "any company or association or body of individuals, whether incorporated or not." 137 I  have  attempted to establish that citizenship  as  viewed from  country  to  country and from one period  of  time  to another  was concerned with natural persons.  The manner  of acquisition  of citizenship and/or nationality described  by me  are  admirably  summed up by Mervyn Jones  in  his  book "British Nationality Law" at p. 9 in the form of a  pedigree which  may  be  seen.   It is enough  to  read  the  various headings  in the pedigree to realize that there is  no  room for artificial persons there.  From the point of view of Mr. Setalvad’s argument this raises an intriguing situation.  If corporations  possessed citizenship immediately  before  our Constitution they would be citizens under the English Act of 1948,  that is to say, British subjects without  citizenship or  Commonwealth  citizens and only  potential  citizens  of India.   The Indian Constitution dealt with natural  persons and  not artificial persons in its provisions  dealing  with citizenship and the status of corporations was not disturbed by  those provisions.  When the Citizenship Act was  enacted in  1955, it began to speak from January 26, 1950,  ’and  it might  have affected corporations but for the fact  that  it excluded them.  Thus if there was any citizenship which  the corporations  enjoyed,  it  remained  where  it  was.    The corporations,   if  at  all,  would  thus  be   Commonwealth citizens,  not Indian citizens because no law has made  them Indian  citizens.   But I do not accept the  basic  argument that  corporations enjoyed citizenship even before,  because in the sense in which I have explained citizenship, there is

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no room for artificial persons. The  argument  here repelled is sought to  be  supported  by referring  to the rule of law under which  corporations  are said to possess nationality.  Nationality in this context is not  to be confused with the status of a citizen.   What  is meant  by  that nationality may next  be  seen.   Ordinarily corporations are given recognition by law as persons who can sue  or be sued.  Corporations also own property,  carry  on business  or  trade.   But  it is not  to  be  thought  that corporations have an access to courts as a matter of course. The courts are open as a matter of course to natural persons and not to ’intangible concepts’ like corporations.   Unless the law gives this right to corporations they cannot sue  or be sued.  What the law does is to invest corpo  10-2 S. C. India/64 138 rations with a distinct personality and with a right to  sue and  with a disability to be sued.  Ordinarily  such  rights and disabilities attach to ’persons’ but that word is  given an  extended meaning to include corporations.  In  this  way the  law  invests  an  intangible  body  with  a  unity  and individuality and creates a legal person capable of suing or being  sued.  Foreign corporations enjoy the same  privilege by  a  comity of nations and also sue and are  sued.   These privileges which corporations share with natural persons  do not  make them ’citizens’ entitled to every other  privilege which the municipal law gives, to citizens.  In other  words corporations enjoy only such privileges under the  municipal law which that law expressly confers on them. It  is,  of  course, undeniable that  corporations  have  an existence  in the eye of law.  The law further regards  that corporations have a domicile and a residence.  The law  also recognises that corporations have a nationality.  What  does the  law mean by that?  The concept of the nationality of  a corporation is comparatively new and it was really developed during  the  First World War.  Nationality  of  corporations becomes  important  when  it  is  necessary  to  apply   the ’nationality  of claims’ principle before  an  international tribunal  or to give effect to law-making treaties  applying to   ’nationals’.    See   Starke   (An   Introduction    to International Law 4th edn. p. 256).  Starke has pointed ,out that there is no unanimity of opinion regarding the tests to be  applied  to ascertain the nationality  of  corporations. Clive Parry does not recognise this nationality and calls it quasi-nationality.   I shall now explain in what  sense  the word ’nationality’ is used in this connection. There  have  been  many theories about  the  nationality  of corporations which were again reconsidered during the  First World War.  According to Hilton Young 22 Harvard Law  Review p.  2,  there were four main theories at first.   The  first theory viewed a corporation as the national of the State  in which  its  members or the majority of them  or  owning  the greater  part of the capital, were nationals.   This  theory considered the word ’corporation’ as ’a collective name  for the corporators’, the corporate veil being considered to  be of  such gossamer texture as to hide almost  nothing.   This theory  of  which the chief proponents  were  sommieres  and Morawetz was criticised on all hands 139 and  particularly by Maitland and was abandoned as  it  made nationality a matter of accident and liable to change day in and  day  out.  The second theory  regarded  nationality  as determined  by the nationality of the State under  which  it was created.  The United States of America has adhered to it but England may be said to have adopted this theory modified

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by considerations of domicile.  The Germans call this theory Grundungstheorie  that is the theory of the place of  birth. The  theory has great names behind it-Calvo, Fiore,  Pineau, Weiss etc.  This theory is inadequate to cover  corporations which are not authorised by the State and has been  modified in  the  United  States by evolving  a  theory  of  ’Implied consent  to  extraterrestrial service’.   The  third  theory considers that a corporation acquires the nationality of the place where its acts or any of its acts are performed.  This theory is rejected universally by lawyers but it was adopted by businessmen in the Congress of Joint Stock Companies held at  Paris  in 1889.  Under this theory  nationality  can  be changed  at will.  Obviously enough difficulty is likely  to be  felt in the event of simultaneous actions  in  different countries.   The fourth theory considers  that  corporations are domiciled where they have a permanent home.  This Theory was  influenced  by  Von  Bar  who  considered  that  though juristic   persons  could  not  be  nationals  either   lure sanguinis or jure soli, they could be nationals by domicile. Chief Justice Taney summed up the thought by saying that  "a corporation  must  dwell in the place of  its  creation  and cannot migrate to another sovereignty".  The Bank of Augusta v. Erle (1).  Domicile of a corporation has more foundations than one.  It may be fixed by the territory of the sovereign which  created  it or by the charter or  other  constitutive documents  or by the place where the corporation  discharges its   functions   or  by  the  bona  fide  centre   of   its administrative business.  These different concepts have  led to diverse theories. English  Law regarded nationality as dependent  on  domicile and  was  at first content to regard a  corporation  as  the national of a State where it was incorporated.  But a glance at the history of the law of corporations shows (1)  [1839] 13 Pet. 519, 588-10 L. Ed. 274. 140 that there is a variation in this theme in later years.  The conception of domicile was adopted in the English Common Law merely   for   purposes   of  jurisdiction   and   law.    A corporation’s domicile, it was held, depended upon where  it came into being and this domicile was not changeable  though Lord  St. Leonards was of a contrary opinion in Carron  Iron Co. v. McLaren(1).  Similarly it was held that a corporation had  a  residence though it could change its  residence  and even  have more than one residence under certain  laws.   On what  then  did nationality depend?   According  to  English Common Law a corporation incorporated under the English  Law had British nationality and it did not matter if its members held  a different nationality.  A corporation which was  not of British nationality was an alien corporation.   According to the laws of many European countries particularly  France, nationality depended upon the siege social by which is meant the seat or centre of control.  Both these theories suffered during  the First World War.  As regards the English  Common Law  the  leading case was Janson v. Driefontein  (2).  from which I have already quoted certain extracts.  In that  case it  was decided that a company possessed the nationality  of the country under the laws of which it was incorporated  and that   the   nationality  of  the  share-holders   was   not determinative  of the question.  Once this  nationality  was determined then the corporation received the treatment as  a national,  as  an alien, or as an enemy as the case  was  in peace  or in war.  This view was revised in the First  World War.   In Daimler Co.  Ltd. v. Continental Tyre  and  Rubber Co.  (Great  Britain  Ltd.  (3),  all  the  shares  of   the respondent  company  (except  one) were  held  by  a  German

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company  and all directors were Germans though  the  company was  incorporated in Great Britain.  If the  principle  that nationality  follows incorporation applied,  the  respondent company  would have had a British nationality and  it  could not change it.  But the House of Lords applied the principle of  effective control to determine its nationality.  In  the Court of Appeal the case was heard by the full Court and (1) [1952] 5 H.L.C. 416. (2) [1902] A.C. 484. (3)  [1916] 2 A.C. 307. 141 the  above  principle  was held applicable  (Buckley  L.  J. dissenting).   The majority view was confirmed by  the  full judicial strength of the House of Lords by majority.   Lords Shaw and Parmoor considered that enemy character depended on whether  it  was  incorporated in  an  enemy  country.   The majority (Lords Hatlsbury, Mersey, Kinnear, Atkinson, Parker and Sumner) however, considered that it depended upon  where the  effective control lay.  Lord Parker summarized the  law in six propositions as under :               (1)   A  company  incorporated in  the  United               Kingdom  is a legal entity, a creation of  law               with  the  status and capacity which  the  law               confers.  It is not a natural person with mind               or conscience.  To use the language of Buckley               L. J., "It can be neither loyal nor  disloyal.               It can be neither friend nor enemy."               (2)   Such  a  company can  only  act  through               agents properly authorized, and so long as  it               is  carrying  on  business  in  this   country               through  agents so authorized and residing  in               this or a friendly country, it is prima  facie               to,  be  regarded  as a friend,  and  all  His               Majesty’s lieges may deal with it as such.               (3)   Such  a company may, however, assume  an               enemy character.  This will be the case if its               agents  or the persons in de facto control  of               its  affairs, whether authorized or  not,  are               resident  in  an enemy country,  or,  wherever               resident, are adhering to the enemy or  taking               instructions from or acting under the  control               of  enemies.  A person knowingly dealing  with               the company in such a case is trading with the               enemy.               (4)   The character of individual shareholders               cannot  of itself affect the character of  the               company.   This is admittedly so in  times  of               peace,  during which every shareholder  is  at               liberty  to exercise and enjoy such rights  as               are   by  law  incident  to  his   status   as               shareholder.               (5)   In a similar way a company registered in               the, United Kingdom, but carrying on  business               in  a neutral country through agents  properly               authori-               142               zed  and  resident  here  or  in  the  neutral               country,  is prima facie to be regarded  as  a               friend, but may, through its agents or persons               in de facto control of its affairs, assume  an               enemy character.               (6)   A  company  registered  in  the   United               Kingdom  but carrying on business in an  enemy               country is to be regarded as an enemy. The  House  of  Lords case is regarded  as  an  instance  of

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judicial legislation on the subject of ’enemy character’ and it undoubtedly was so.  It is not as if this theory has been universally  accepted.   It  was criticised  by  Sir  Arnold Mcnair in 1923/24 British Year Book of International Law  p. 44   and  by  Mr.  Ralph  A.  Norem:  American  Journal   of International Law Vol. 24 p. 310. We  have seen that in the United States a corporation  is  a domestic  corporation of the State which incorporates it  or under  the  laws of which it is incorporated.  Some  of  the States have even laws to this effect.  While other countries were  revising their attitude in Europe, the  United  States adhered  to this theory and the Supreme Court observed  that the   Congress   had  definitely  adopted  the   policy   of disregarding  stock ownership as a test of enemy  character. In other words, in the United States there was no attempt to look  behind  the corporate veil.  We have  also  seen  that England   drifted  from  the  theory  of  domicile  to   the continental  theory of siege social.  But  France,  Germany, Italy and Belgium went a step further than before. The  Cour de Cassation departed from the principle of siege social  in Societe  Conserve  Lenzburg in which it was  held  that  the court  was  entitled  "to go to the  bottom  of  things  and ascertain  whether a corporation was really French or  not." The  French  Minister of justice issued a circular  in  1916 which stated the French approach to the question thus : Les formes juridique dont la societe est revetue, le lieu de son  principal  establissement, tous  les  indices  auxquels s’attache  le  droit prive pour  determiner  la  nationalite d’une  societe, sont inoperants, alors qu’il s’agit  defixer au  point de vue du droit public le caractre reel  de  cette societe.  Elle doit etre assimilee aux sujets de nationalite ennemie  des  qne notoirement sa direction ou  ses  capitaux sont en totalite ou en majeure partic 143 entre  les  mains  de sujets ennemis, car,  en  pareil  cas, derriere  la fiction du droit privi se dissimule vivante  et agissante la personnaliti ennemie elle-meme."               (The  juridical forms in which the society  is               dressed, the place of its principal office and               all  the indicia on which Private Law  fastens               to determine the nationality of a society, are               inoperative  when  one tries to fix  from  the               point of view of Public Law the real character               of this society.  The society ’must be counted               among   enemy  nationals  if  manifestly   its               direction  or its capital wholly or  in  major               part  is  in enemy hands for in  such  a  case               behind  the fiction of the Private  Law  lurks               the active personality of an enemy.) The  Cour de Cassation justified the change by holding  that the corporation was a personne interposee under the cover of which  an  enemy  did business.  The  German  attitude  also changed to Geschaftssitz from der Mittelpunkt des Geschaftes i.e., to the "seat" of real control from the "centre of  its enterprise".   The  corporation was said to  have  its  seat where  the  "brain" was and not where it had its  centre  of exploitation.  The Italians also adopted the same test.  The Belgians framed a law which sums up the new theory in  crisp legal language (Act 172-Mai 23, 1913) : "Toute  societe  dont  le  principal  etablissement  est  en Belgique  est  soumise  a  la  loi  belge  bien  que  I’acte constitutif ait ete passe en pays etranger.  " (Every  society of which the principal establishment  is  in Belgium  is under the laws of Belgium, notwithstanding  that the incorporation took place in a foreign country.)

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In  the  Mixed Arbitral Tribunals which followed  the  First World  War there were some cases which were decided  on  the theory of control but many others were decided on the theory of domicile depending upon the composition of the  Tribunal. There are indeed many other tests which I have not mentioned such  as the test of beneficial interest, or of  substantial ownership or of responsibility which it is not necessary  to describe here. It would not be wrong to say that the control theory is also losing  ground and there is a great support for  the  theory that the juridical life of the corporation must ulti- 144 mately  fix its nationality.  It is also to be noticed  that Herr Marburg and M. Mazeaud two noted thinkers have  pointed out that all this law is not so much to fix the  nationality of  a  corporation but its enemy  character.   Many  writers (including Dicey, Cheshire, Foote and Farnsworth) have  also pointed  out  that the conception of the  nationality  of  a corporation is important only in war and it has significance not so much in Municipal Law as in Public International Law. During  times of peace the domicile of a corporation  which, as  Lord Westbury pointed out, is an idea of law creating  a relationship between an individual and a particular  country is allowed to operate a fiction.  A corporation resembles  a natural  person  in the matter of domicile  except  that  an individual  can  choose  his domicile  but  a  corporation’s domicile  is  tied to its place of birth.  The  law  of  the country  of its birth gives it such rights as  it  considers practicable  and foreign corporations share in those  rights subject  to any special provisions.  In times of  war  these rules  and the rule of corporate entity give way and  public policy  dictated by the consideration whether the  resources of the corporation are likely to be used for enemy  purposes determines the issue.  Thus in the Daimler case the fons  et origo of the control theory"- "The  acts of a company’s organs, its  directors,  managers, secretary  and  so forth, functioning within  the  scope  of their authority are regarded as the company’s acts. . . . " (1) The  operatives  are  regarded as the ’brain’  of  the  cor- poration  and where the brain functions the  corporation  is held  to function.  During times of peace a corporation  may own   property,  do  business  because  the  Municipal   law expressly  permits  that all this can be  done  and  foreign corporations  also  obtain the benefit of such  laws  either because of provisions of the Municipal law or by a comity of nations.   In  times of war all this changes.   The  law  of nationality  is thus a law to determine the enemy  character and not a law recognising nationality either in a  political or  municipal sense.  There may be some analogy  between  an individual  and  a corporation but as Mr.  Vaughan  Williams said  (49 L.Q.R. 334) in an article which has been of  great assistance to me, it is not necessary ’to ride (1)  [1916] 2 A.C. 307, 340. 145 the  analogy  to death.’ The English Law was  summed  up  by Mervyn Jones (British Nationality Law, Revised Edn.               "A  corporation  is a  juridical  person,  but               could not be a subject at Common Law,  because               allegiance, being essentially a personal bond,               was a conception limited in its application to               individuals.    Nor  have  corporations   been               recognised as statutory British subjects or as               citizens of the United Kingdom and colonies."               Oppenheim also points out (International Law,,

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             Lauterpacht Edition) p. 642 n. 3-               "The  nationality of corporations is mainly  a               matter  of  Private  International  Law,   and               considerations   of  Public  policy   have   a               decisive influence upon the attitude of  every               State with regard to it."               Citizenship depends upon Municipal Law and the               same learned author says (ibid p. 643) :               "It  is  not  for International  Law  but  for               Municipal Law to determine, who is, and who is               not, to be considered a subject."               Hyde  in  his International Law  Vol.  2  (2nd               Edn.) 1066 also says:               "Citizenship as distinct from nationality,  is               a creature solely of domestic law.  It  refers               to  rights  which a State sees fit  to  confer               upon  certain  individuals who  are  also  its               nationals."               But   perhaps  the  most  practical   argument               against  the  recognition of  corporations  as               citizens  comes from M. Niboyet (who,  as  Mr.               Vaughan  Williams points out) observed in  his               Manual  of Private International Law  that  in               computing  the total number of citizens  of  a               country  we  do  not  add  to  the  number  of               physical  persons the number ,of  corporations               of  that  nationality.  Indeed  Lord  Atkinson               (and  all who formed the majority except  Lord               Halsbury)  was of opinion in the Daimler  case               that-               "The question of the residence of the  company               apart,  I do not think that the legal  entity,               the  company, can be so completely  identified               with  its  share-holders, or the  majority  of               them,   as  to  make  their  nationality   its               nationality."(1) We  have only two laws on the subject of  citizenship  -:and none on the subject of the nationality of corporations. (1) (1) [1916] 2 A.C. 327. 146 The fundamental law provides only for natural persons. where it   enacts  rules  for  determining  citizenship  and   the Citizenship Act excludes corporations.  The chapter on  fun- damental  rights does not altogether ignore corporations  as did the American Constitution.  In places the word  ’person’ is used which attracts the definition in the General Clauses Act  and in others the word ’citizen’.  The  word  ’citizen’ could have been defined specially for Article 19(1) (f)  and (g) but it is not.  There is nothing which can justify us in giving a special meaning to the word "citizen" for  purposes of  clauses  (f) and (g).  The fact  that  corporations  are regarded  in  some circumstances as  possessing  nationality does  not make them citizens.  As Mr. Menon rightly  pointed out   ships  and  aircraft  also  possess   nationality   in International Law but it cannot be claimed that they possess citizenship in Municipal Law. Which  corporations should be regarded as possessing  Indian Nationality  is  a question to be answered when  it  arises. Whether  the  provisions of the Companies Act  dealing  with foreign companies furnish any assistance in this behalf must also be left unanswered.  It is sufficient to say that  even if  it be established that a corporation,  possesses  Indian Nationality  this has not the result which is contended  for namely that all or any of the citizens rights arise.  It may be  admitted  that the State Trading  Corporation  which  is

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incorporated  in  India is not a foreign company  under  the Companies Act.  If we were to lift the veil of incorporation it  will be found that the entire capital is  subscribed  by the  Government  of India, that the  share-holders  are  the President  of  India and two Secretaries to  Government,  in their  official  capacities  and that its  management  is  a governmental function for the benefit of the nation.  It may be conceded that it possesses Indian Nationality in an ideal sense and that there is also no possibility of its acquiring an enemy character.  But even so it is not a ’national’ that is  to say an individual who is a part of our nation.   When we count Indian nationals, for purposes of census we do  not count  the corporations as nationals.  The argument  is  not one  what advanced by dropping the word ’citizen’ and  using the word ’national’.  No doubt the existence of corporations as  entities is recognised but the entity obtains only  such rights as the law 147 confers  on it.  This entity cannot claim other rights as  a matter of course or by standing side by side with  citizens. This  entity  cannot aspire to hold a. public office  or  to membership of Parliament or the Legislatures or to franchise or to entry into educational institutions.  This is  because it  is  not  a citizen in the true sense  of  the  term  and because its ’nationality’ though of consequence in Public or Private  International Law, in treaties, in conventions  and in  protocols, is of no consequence in Municipal Law  except to the extent that the Municipal Law says so. This is not to say that corporations have not been given any protection under our Constitution.  Unlike the  Constitution of  the United States of America our Constitution  does  not overlook   corporations.    The  General  Clauses   Act   is applicable  to interpret the Constitution and that  Act,  as has been pointed out already, defines ’person’ as  including corporations.   The following articles of  the  Constitution employ   the   word  ’person’  which  applies   equally   to individuals and to corporations etc. Art. 14  Equality before the law. Art.  20   Protection     in  respect  of  convictions   for offences. Art. 27   Freedom  as to payment of taxes for  promotion  of any particular religion. Art. 31  Compulsory     acquisition of property. The  seven  freedoms  guaranteed  by  Art.  19(1)  are   for ’citizens’.   It  was easy to say that  the  word  ’citizen’ included   corporations  etc.  of  Indian  Nationality   for purposes of any of the clauses of Art. 19(1) but it has  not been  so said.  It is to be noticed that in the  third  part the  Constitution defines ’the State’, ’the law’,  ’laws  in force’, ’estate’ and rights’.  The expression ’law in force’ is  defined twice and differently.  Can it be said that  the word ’citizen’ was purposely left vague so that a broad  and liberal  spirit  could  enter the  interpretation?   What  a chance  to  take.   It must have  been  well-known  that  an attempt by the Supreme Court of the United States to give an artificial  meaning to the word ’citizen’ has been  regarded on all hands as Constitution making.  It is easy to see that our  Constitution  was circumspect enough to use a  word  of larger  import  (person) in some places but not  in  others. The intention may well have been that the seven freedoms 148 shall  guarantee  the rights of individuals  whom  the  body politic  recognised  as  ’citizens’ and not  the  rights  of abstractions  like corporations.  The observations of  Chief Justice Mukherjea quoted earlier mean that a corporation  is

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protected  only where the language admits the  inclusion  of corporations otherwise only individuals are meant. It  is however argued that in the United States the  Supreme Court   has   held   that  the   word   ’citizen’   includes corporations.  Reference was also made to the  Constitutions of  some  minor countries where corporations  are  expressly mentioned.  It is not necessary to refer to these  Constitu- tions  because  no  inspiration can be drawn  from  them  to rewrite  our Constitution.  As Willis. said (and he  is  not alone in this) of the position in the United States that the rights and liabilities of corporations "have been worked out under   and  through  the  judge-made  United  States   Con- stitution".  Perhaps this was forced upon the Supreme  Court by  the  diversity  of citizenship existing  in  the  United States  but it may be noted that the word ’citizen’ has  not been held to include corporations in other articles.   Since this  precedent  was strongly relied upon  I  shall  briefly refer to it. The Constitution of the United States of America  overlooked corporations  and this has made the language intractable  in places.   The  Supreme  Court  has  supplied  this  want  by ’judicial legislation’.  How this was done may be explained. I have already referred to the dictum of Chief justice Taney and to the attitude of the Congress and the Supreme Court on the  subject  of nationality of corporations.   There  is  a fixed  view  that nationality follows incorporation  and  is unalterable.   This  geographical theory coupled  with  dual citizenship  of the State and United States has led to  some difficulties.   Corporations  were always  regarded  as  the citizens of the State of incorporation but not of the United States.  The citizenship of the State has been accepted  for purpose  of  exercise of the Judicial power  of  the  United States. The  following provisions of the Constitution of the  United States may be read at this stage :               Art.    I   Sec.  8.  "Congress   shall   have               power........ to establish an uniform Rule  of               Naturalization."               Art.   III Sec. 1. "The judicial Power of  the               United States,               149               shall  be vested in one Supreme Court, and  in               such inferior Courts as the Congress may  from               time to time ordain and establish               Art.   III Sec. 2. "The judicial  Power  shall               extend    to controversies between a State and               Citizens  of another State ; between  Citizens               of different States ; between Citizens of  the               same  State  claiming Lands  under  Grants  of               different States, and between a State, or  the               Citizens thereof, and foreign States, Citizens               or Subjects."               Art.   IV  Sec. 2 The citizens of  each  State               shall  be  entitled  to  all  Privileges   and               Immunities of Citizens in the several States."               Amendment  XIV  Sec. I "All  persons  born  or               naturalized in the United States, and  subject               to  the jurisdiction thereof, are citizens  of               the  United, States and of the  State  wherein               they  reside.  No State shall make or  enforce               any law which shall abridge the privileges  or               immunities of citizens of the United States  ;               nor  shall  any State deprive  any  person  of               life, liberty or property, without due process               of  law  ; nor deny to any person  within  its

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             jurisdiction  the  equal  protection  of   the               laws." The Supreme Court has held that a corporation is the citizen of  the  State  of incorporation  for  purposes  of  federal Jurisdiction  on  the ground of  diversity  of  citizenship. Though  Art.   I sec. 8 and Amendment XIV refer  to  natural persons  the word ’citizen’ was given a larger  meaning  for purposes  of  controversies between  citizens  of  different States  over which federal courts alone  have  jurisdiction. The jurisdiction of the national courts could not be invoked if the defendant was a corporation but the Supreme Court has by  slow  stages  created  a  fictional  jurisdiction.   The development  of  the  law has  had  an  interesting  course. Rather  than  describe it in my own words 1  quote  a  small passage from Willis, Constitutional Law of the United States (p. 850) :-               "At first a corporation was not regarded as  a               citizen  for any purpose and it could not  get               into  or be taken into the federal  courts  on               the ground of diversity of citizenship.   Then               a case arose where all of the stockholders  of               the corporation were citizens of the               150               same   State   where   the   corporation   was               incorporated  and the plaintiff was a  citizen               of  another  State, and it was held  that  the               Court would look behind the corporate veil  to               the  stockholders and give the federal  courts               Jurisdiction  because  of  the  diversity   of               citizenship thus found.  In a later case  some               of  the stockholders were not citizens of  the               State  where the corporation was  incorporated               but  of  the  state  in  which  the   opposing               litigant was a citizen.  To avoid robbing  the               federal  courts  of  their  jurisdiction,  the               Court  held that for purposes of diversity  of               citizenship  all  of  the  stockholders  of  a               corporation would be conclusively presumed  to               be  citizens  of the chartering  state.   This               rule, however, had to be modified later so  as               to  make  an  exception  in  the  case  of   a               stockholder  plaintiff.   Now it  is  believed               that the courts have come to the position that               the  corporation  is itself a citizen  of  the               state of its incorporation for the purposes of               diversity of citizenship."                 The  following extract from St. Louis &  San               Francisco  Ramawy Co. v. James(1) sums up  the               position  so  far  as  the  Supreme  Court  is               concerned               "There  is an indisputable  legal  presumption               that  a State corporation, when sued or  suing               in  a circuit court of the United  States,  is               composed  of  citizens  of  the  State   which               created it........ That doctrine began, as  we               have  seen,  in  the  assumption  that   State               corporations were composed of citizens of  the               State which created them ; but such assumption               was  one  of  fact, and  was  the  subject  of               allegation   and   traverse,  and   thus   the               jurisdiction  of the Federal courts  might  be               defeated.   Then after a long contest in  this               court, it was settled that the presumption  of               citizenship is one of law, not to be  defeated               by  allegation  or evidence to  the  contrary.

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             There we are content to leave it." States have, however, begun to destroy the presumption which is thus erected by requiring a corporation as a condition to doing business there to incorporate in the State.  This  can be done because the Supreme Court (1) [1896] 161 U.S. 545, 562, 563. 151 has  rejected the claim of corporations to  citizenship  for purposes  of  the privileges and immunities  clauses  quoted above.  As Corwin pointed out in The Constitution and   what it means today 11th edn. p. 166 :               "Nor   does   the  term   ’citizens’   include               corporations.   Thus a  corporation  chartered               elsewhere may enter a State to engage in local               business  only  on  such terms  as  the  State               chooses  to  lay down, provided these  do  not               deprive  the corporation of its  rights  under               the  Constitution-of its right, for  instance,               to engage in interstate commerce, or to appeal               to  the national courts or, once it  has  been               admitted  into  a  State,  to  receive   equal               treatment  with corporations chartered by  the               latter." It remains to point out that corporations have been held  to be  ’persons’  within  the  Fourteenth  Amendment  and   are entitled  to  equal protection of the laws.  But  a  foreign corporation as Corwin points out (at p. 268) is entitled  to equal  treatment with the corporations chartered by a  State if there is submission to the Jurisdiction of the State. The Nationality Act of 1940 declared that for the purpose of that  Act  a  ’national’  meant  a  person  owing   personal allegiance  to a State in the United  States.   Corporations were thus not included because in the words of Buckley  L.J. a   corporation   cannot   be  loyal   or   disloyal.    For international  purposes  a  corporation  is  treated  as   a national   if   subjected  to  illegal   treatment   in   an international  aspect by a foreign power.  The  position  of corporations  is  protected in treaties as for  example  the treaties between Great Britain and the United States of 1783 and  1794  and the treaty of Guadalupe Hidalgo  between  the United States and Mexico.  Other examples are found in  Hyde and international documents.  Similarly treaties of commerce are  construed  to include corporations  within  expressions denoting natural persons.  But even in international  sphere corporations  are  not  on a par  with  natural  persons  or nationals.  As Hyde points out:               "........  at  least in a technical  sense,  a               corporation  is not, for many purposes  to  be               deemed  a national of the State to  which  its               life is due, and lacks many privileges               152               that enure to a natural person........               The  question is whether the precedent of  the               United   States   Supreme  Court   should   be               followed.   Apart  from  the  fact  that  this               involves   a  conscious  effort  at   judicial               legislation,  I  am  of opinion  that  such  a               spirit  of  libre  recherche  scientifique  is               hardly justified in India in view of the  fol-               lowing considerations --               (a)   We  have a single citizenship and  there               is  no  citizenship of the  States  to  create               diversity ;               (b)   We  have only one set of courts and  not               two with separate jurisdiction ;

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             (c)   Our  Constitution  has  not   completely               overlooked   corporations  and  some  of   the               fundamental rights are prima facie  guaranteed               to corporations as well ;               (d)   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               rights    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 ;               (e)   There has never been a recognition of  a               corporation as a citizen ; and               (f)   Unless a presumption juris et de jure is               raised  that corporations whether composed  of               citizens  only or of non-citizens only  or  of               citizens  and  noncitizens  are  citizens   of               India,  every time an inquiry will have to  be               made  into their composition and there  is  no               discernible principle on which the citizenship               can  be  based  when  there  is  diversity  of               citizenship   in   the  composition   of   the               corporation. I   am,  therefore,  of  opinion  that  the  State   Trading Corporation cannot be regarded as citizen for the purpose of enforcing rights under Art. 19(1)(f) and (g). The  next question is whether the State Trading  Corporation is  a department or organ of Government notwithstanding  the formality of incorporation.  On behalf of the Corporation it is contended that if the corporate veil is pierced one  sees that the right to invoke Art. 153 19(1)(f)  and (g) is being claimed by three persons who  are admittedly citizens of India namely the President of   India and the two secretaries. The contention on the other side is that the corporate veil cannot be pierced at all and that if it  is,  then behind that veil there is  the  Government  of India. It  is quite clear that none of the shareholders  holds  his share or shares for his personal beneficial enjoyment.  None of  them  has  paid for the shares held in  his  name.   The administration  of  the affairs of  the  corporation  though technically  a  company, is a concern of the  Government  of India.    The   legal  and  beneficial  ownership   of   the corporation vests in the Government of India.  Now there are not two veils so to speak, so that by lifting the first  one sees   the  shareholders  and  by  lifting  the  other   the Government of India.  There is but one veil and if it is  at all  to  be lifted, it must be lifted right off.   What  one would see on lifting the veil may be described in the  words of  Martin Wolff (Private International Law, 1945 p. 56)  as follows :- "It  occurs  frequently  that a state creates  e.g.,  for  a commercial purpose, a separate legal entity, in law distinct from  the state, but in fact, if the veil of personality  is pierced,  identical with it.  Examples  are........  notably many companies under state control, the state possessing all or practically all the Shares in that company." If  the corporation is to be regarded as a  separate  entity from  its  members  and  not merely  as  an  association  of individuals,  it is not permissible to tear the veil  aside. Corporations  in which the State owns the stock do  not,  in the  United States, benefit from the immunity of the  State.

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It  is because of these difficulties that the Supreme  Court of  the  United  States  settled  the  question  of  federal jurisdiction  in  the face of diversity  of  citizenship  by making   an  irrebuttable  presumption  of  law   that   the stockholders  of a corporation incorporated in a  State  are citizens  of that State and the corporation is thus  also  a citizen  of that State.  There is a fiction upon a  fiction. I  do  not think that it is permissible under  our  laws  to raise such an irrebuttable presump 11-2 S. C. India/64 154 tion  of Indian citizenship in respect of every member of  a corporation  in  India  and it is obvious that  if  no  such presumption  can be raised the citizenship  of  corporations raises  an  issue  of  fact.  Can we say  that  if  all  the corporators  arc  found to be Indian citizens then  we  must hold that the corporation is an Indian citizen?  Such a view was held in an early case by the Supreme Court of the United States-see Bank of the United States v. Deveaux(1).  In that case  Chief  Justice  Marshal,  while  recognising  that   a corporation aggregate was certainly not a citizen because it was  an ’invisible’, ’intangible’ and ’  artificial’  being, held   that  since  the  Constitution  dealt  with   matters generally  and  not in detail, and the general  purpose  and object  of  the  law of incorporation showed  that  such  an artificial  person  was  to  have  corporeal  qualities,   a corporation  had  the character of a citizen if  those  that composed  it had that character.  In the Daimler  case  (op- cit. sup.) Lord Parker seemed to be of the opinion that this was the established law in the United States but  Farnsworth (The Residence and Domicile of Corporations p. 311) supports Dr.  Schuster  (The Nationality of  Trading  Corporations  2 Grotius  Society  (1916) at p. 195) in the  view  that  Lord Parker’s  statement  was inaccurate.   Farnsworth  has  also quoted from Garner’s International Law in the World War Vol. I  p. 227 where the opinion of the Federal Judge  in  Fritz- Schultz Jr. Co. v. Raines & Co. (2) is quoted with  approval :-               "In  upholding the right to bring  the  action               the  Court  expressed  the  opinion  that  the               authority  in  the case of  United  States  v.               Deveaux   has  been  much  limited,   if   not               overruled,  by subsequent cases and  that  ’at               the  present time the courts of  this  country               are  entirely wedded to the doctrine that  the               corporators of a corporation are  conclusively               presumed  to be citizens of the same State  as               the  corporation’.   The  statements  of  Lord               Reading  and Lord Parker in the Daimler  case,               that  the  Supreme  Court had  laid  down  the               principle  that  a court may look  behind  the               corporate  name to ascertain the character  of               the indivi-               (1)  (1809)  5 Cranch 61 : 3 L. Ed.  38.   (2)               (1917) 166 N.Y. S. 567.               155               duals comprising it, was, said Justice Lehman,               obviously not accurate." I have earlier quoted from St. Louis & San Francisco Railway Co., v. James (cit. sup.) which also supports Dr. Schuster’s view. In  my  judgment it is not possible to pierce  the  veil  of incorporation in our country to determine the citizenship of the members and then to give the corporation the benefit  of Art.  19.   If  we  did  pierce  the  1  and  saw  that  the

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corporation  was  identical with Government there  would  be difficulty  in giving, relief unless we held that the  State can  be  its own citizen.  Nor is it possible  to  raise  an irrebuttable  presumption  about  the  citizenship  of   the members. I have given detailed reasons already in answer  to the first question posed for our decision.  If we go by  the corporate  entity then we must hold that Art. 19 applies  to natural  persons.  On that subject I have said a great  deal but  what I have said sums up to the following passage  from Ducat  v. Chicago (1) quoted by Farnsworth (op. cit.) at  p. 310 and approved by the United States Supreme Court :-               "The term citizen can be correctly  understood               in  no other sense than that in which  it  was               understood  in  common  acceptation  when  the               Constitution   was  adopted,  and  as  it   is               universally    explained   by    writers    on               government,  without exception.  A citizen  is               of  the  genus homo,  inhabiting,  and  having               certain    rights    in    some    State    or               district........  these privileges  attach  to               him in every State into which he may enter, as               to a human being-as a person with faculties to               appreciate them, and enjoy them, and not to an               intangibility,   a  mere  legal   entity,   an               invisible artificial being, but to a man, made               in God’s image." It  is not necessary to refer to the earlier cases  of  this court.   The  point was not raised in this form  before  and ,even the observations of Mukherjea J. (as he then was) were obiter.  In most cases an individual member also joined  the corporation   in  the  petition  for  the   enforcement   of fundamental rights (as is the case here also) and this Court was content to leave the matter there.  Joseph Kur- (1) (1868) 48 111. 172. 156 villa  Vellukunnel v. Reserve Bank of India(1) was heard  by this  Court in which the Palai Bank Ltd. was a  party  along with  others.  No objection was raised about the  competency of the Palai Bank to claim the benefit of Art. 19.  The main case  (there were two heard together) was an appeal  from  a decision of Raman Nayar J. in proceedings for the winding up of  the  Palai Bank [I.L.R. (1961) Kerala 166].  It  was  an action  properly  brought against the Palai Bank  under  the Banking Companies Act.  The main question in this Court  was whether a section of the Banking Companies Act which enabled the  Reserve  Bank  to  decide  whether  a  banking  company deserved  to  be wound up was ultra vires in as much  as  it took away the right of the court to decide this matter.   It was  held by majority that there was no flaw in the law  and that  it  was  for  Parliament to say at  what  stage  in  a particular  case, the judicial process should begin and  not for the courts who come into the picture from the stage  the judicial process commences under the law.  This point  could be  decided  in an appeal in which  beside  the  corporation there were other interested parties. Lastly,  I have no cause for anxiety about  Corporations  in general  and  companies in which the States own all  or  the majority  of  the  shares in  particular.   They  are  amply protected   under  our  Constitution.   There  can   be   no discrimination,  no  taxation without authority of  law,  no curbs  involving freedom of trade, commerce  or  intercourse and  no  compulsory  acquisition  of  property.   There   is sufficient  guarantee there and if more is needed  then  any member (if citizen) is free to invoke Art. 19(1) (f) and (g) and  there  is no doubt that the corporation in  most  cases

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will  share the benefit.  We need not be  apprehensive  that corporations are at the mercy of State Governments. For  these  reasons  my answers to the  question  posed  are against the State Trading Corporation. DAS GUPTA J.-I think the State Trading Corporation of  India is entitled to fundamental rights under Art. (1)  [1962] Supp. 3 S.C.R. 632. 157 19(1)(f)  and (g) of the Constitution as citizen  of  India. The  petitioner bases its claim to these fundamental  rights on the fact that all its members are citizens.  That this is so  is not disputed by the respondent.  But  the  respondent resists the claim on the legal basis that the Corporation is not a natural person but only an artificial person forming a distinct  entity  from  the  natural  persons  who  are  its members.   According to the respondent no artificial  person is a citizen of India either under the Constitution or under the  Citizenship Act which was passed in 1955 in  accordance with the Constitution.  The respondent also contends that it would  be a mistake to confuse nationality with  citizenship and  while it is correct that the present petitioner  having been incorporated in India under the Indian Companies Act is a  national of India it would be wholly erroneous  to  think that  it  also  became on such incorporation  a  citizen  of India.   The fact that it is a national of India puts it  in no  better  position  that  any  other  person,  natural  or artificial, which is not a citizen of India in the matter of fundamental rights. While  creating  fundamental rights "the  people  of  India" created some which they conferred on all persons (Arts.  14, 20,  21, 22, 23, 24, 25, 26, 27, 28 and 30); but  some  were created that were conferred only on citizens and were denied to  others.  Among those conferred on citizens only are  the fundamental rights created by Arts. 15, 16, 19 and 29.   The word "citizen" was not, however defined in the  Constitution and  so  we have not got a key that is provided by  a  clear definition,  to the minds of those who framed the  Constitu- tion, on the question whether they intended to exclude  cor- porations  as such from the fundamental rights conferred  on citizens.  The respondent points out that immediately before dealing with the question of fundamental rights, the Consti- tution deals with question of citizenship in seven Articles, viz.,  Arts.  5 to 11.  There is force in  the  respondent’s contention that these articles do not appear to  contemplate any  artificial  person, like a corporation,  being  in  its capacity of corporation, a citizen of India.  Article 5, the first  and the main article dealing with the question  makes persons, (1) born in the territory of India, or (2) born  of parents  one or both of whom were born in the  territory  of India, or (3) persons who have been ordinarily residents  in the territory of 158 for not less than 5 years preceding the commencement of  the Constitution, citizens of India.  Article 6 and 7 deal  with the cases of certain persons who have migrated to India from Pakistan, while Art. 8 deals with the question of rights  of citizenship  of  persons of Indian origin  residing  outside India.  Article 9 lays down that inspite of Arts. 5, 6 or  8 a person who has voluntarily acquired the citizenship of any foreign  State shall not be a citizen of India.  Article  10 embodies   the  provisions  of  continuity  of   citizenship "subject  to the provisions of any law that may be  made  by Parliament";  Article  11 makes an  express  provision  that Parliament  would  be competent to make any  provision  with respect  to acquisition and termination of  citizenship  and

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all other matters relating to citizenship. I  agree  with the contention raised on behalf of  the  res- pondent  that  it is not reasonably possible  to  read  into these  articles  of the Constitution any intention  that  an artificial  person  might also be a citizen.  We  also  find that  the  Citizenship  Act,  1955,  which  was  enacted  by Parliament in exercise of the powers preserved to it by Art. 11 of the Constitution, expressly excludes from its  benefit "any company or association or body of individuals,  whether incorporated  or not." A Corporation is not a citizen  under the  Citizenship Act, 1955, nor is a corporation as  such  a Citizen  under the constitutional provisions on question  of citizenship.  From this it seems an easy step to say : Arts. 5  to  11  do  not  make  the  corporation  a  citizen;  the Citizenship  Act  does not make the  corporation  a  citizen there  is no other Indian law that makes the  corporation  a citizens; and so the problem is solved : corporation is  not citizen for the purpose  of fundamental rights. That" according to the respondent, should end the search for light.    I  am  unable  Lo  agree.   After  all  it  is   a constitution  that we are interpreting and it has again  and again been laid down that those on whom falls this task have to  take a broad and liberal view of what has been  provided and should not rest content with the mere grammarians’ role. If,  as  is undoubtedly true, a  syllogistic  or  mechanical approach  of  construction and  interpretation  of  statutes should always be avoided, it is even more important when  we construe   a  Constitution  that  we  should   not   proceed mechanically but try to reach the intention of the 159 Constitution-makers by examining the substance of the  thing and to give effect to that intention, if possible-. There  was  some discussion at the Bar as to  whether  there were  citizens of India, even before the  Constitution.   It will  serve no useful purpose, in my opinion, to enter  into that  controversy.   For, I am inclined to  think  that  the Constitution  in dealing with the matter of citizenship  bad no intention to keep any former citizenship alive.  If  that had been intended a suitable provision would have been  made to make that clear.  In the absence of any provision to that effect  it  is difficult to hold that citizenship  as  might have existed in pre-Constitution India continued even  after the Constitution. Nor  do I find it possible to agree that because  a  company incorporated in India would be a national of India it  would necessarily  be  a citizen of India.   Nationality  and  ci- tizenship  are not identical; and it has been  rightly  said that while every citizen will be a national, every  national is not necessarily a citizen. We  are still left with the question whether the framers  of the Constitution when conferring some fundamental rights  on citizens only intended-that citizens forming themselves into a  corporation  would  cease to  enjoy  these  rights.   The peculiar  position that results from the strict  ’legalistic approach  to  the problem can be best shown by means  of  an illustration. A,  a  citizen of India, whether under the  Constitution  or under  the  Citizenship Act is entitled to  the  fundamental right to acquire, hold and dispose of property under Art. 19 of  the  Constitution.   When A engages  with  another  such citizen, B, in business the two can still come to the courts to  claim  the benefit of the same fundamental  right.   The position  remains  the  same if A and B  join  more  persons without  incorporating themselves into a company :  even  if the number is seven or more they can still join in the  same

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application and come to the court jointly for enforcement of their fundamental right under Art. 19 when they are  jointly engaged  in the same business.  For, in all these cases  the claim  of  each to the fundamental right cannot  be  in  law defeated by the fact that several other citizens have joined him  in making a similar claim for themselves.  As soon  as, however, two or more persons who are in their 160 own  right citizens of India form themselves into a  private company, or seven or more persons, each of whom is a citizen in  his own right, form a public incorporated company,  they are faced with the proposition that the company not being  a citizen, it is excluded from the right which they could have claimed. It  is  well  known that many years  before  1950  when  the Constitution came into force much of the trade and  industry of this country was being carried on by corporations.   Most of  these corporations were and are composed of persons  who are  clearly citizens of India under the provisions  of  the Constitution.  The obvious effect of the strictly legalistic approach  that  a  corporation being  an  artificial  person cannot  be  a  citizen  for  the  purpose  of  any  of   the fundamental rights even when all its members are citizens of India  would thus be to deny a considerable part-if not  the major  part of Indian industry and commerce (using the  word "Indian"  to mean ’carried on by Indian citizens’)  the  va- luable  protection  of  the fundamental  rights  under  Art. 19(1)(f) and (g).  No doubt the mere fact that the effect is inconvenient or even regrettable can be no justification for a forced construction of a constitutional provision.  But it is permissible, nay proper, often to consider the effect  of proposed construction to find an answer to the question  was that the intention of the Constitution makers? What  do  we  find  here?  In  Art.  19(1)(f)  and  (g)  the Constitution-makers  are creating a right intended to be  of great  benefit  to  industry  and  trade.   They  decide  to restrict  this benefit to only citizens of India.  They  are aware  that  much  if not most-of  the  trade  and  industry carried on by Indian citizens are carried on by them,  after forming  themselves  into corporations.  They  know  equally well  that  corporations are in law distinct  entities  from their members and so the ’State’ naturally anxious to extend the domain where the restriction of fundamental right on its powers  does not operate, may well argue  that  corporations even  though composed entirely of citizens are not  entitled to  fundamental  rights.  The concern  of  the  Constitution makers  to improve the economic condition of the country  is writ  large  over the Constitution’s many  provisions.   The question  has reasonably been asked : why then did  not  the Constitution-makers distinctly provide that corpora- 161 tions  composed  of  Indian citizens will be  deemed  to  be citizens  for  at least the fundamental  rights  under  Art. 19(1) (f) and (g) ?  The mystery disappears, however, if  we credit  the Constitution-makers with the  further  knowledge that  in the United States of America when somewhat  similar questions had arisen regarding the character of corporations composed  of citizens of a particular State the  courts  had not  hesitated to apply the process of what has been  called "tearing the veil" and granted to a corporation composed  of citizens of a State some of the rights of a citizen of  that State,  inspite of the fact that the corporation as such  is an  artificial person distinct from its members.  Is it  not reasonable  to  think that the makers  of  our  Constitution trusted  that  courts in India would also  not  hesitate  to

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apply  a  similar  process of going under  the  surface  and looking  at the composition of the corporation, in  deciding whether  the corporation is entitled to fundamental  rights? In  my  judgment the answer to the question must be  in  the affirmative.  Indeed I would go further and say that to take another   view  is  an  insult  to  the   intelligence   and understanding of those who drafted the Constitution. I  am thus clearly of opinion that the  Constitution  makers when  they used the word "citizen" in Art. 19 intended  that at  least  a  corporation  of which  all  the  members  were citizens  of India would get the benefit of the  fundamental rights  enshrined in that Article.  The legal position  that the  corporation is a distinct entity from its members  does not appear to me to create any real difficulty in the way of giving  effect  to this intention.  The  proposition,  viz., that  the  corporation is a distinct legal entity  from  its members is too well established to require discusion.  I see no  reason  however  why the charm of  this  legal  learning should so hold us captives as to blind us to the great  rule of interpretation of giving effect to the intention of those who  made the law unless the words make that impossible.   I can find nothing in the words of the Constitution that stand in  the  way  of  giving effect  to  the  intention  of  the Constitution-makers  of  giving  all.  citizens  of   India, whether  forming into a corporation or not, the  benefit  of the fundamental rights under Art. 19(1) (f) and (g). Whether the Constitution-makers also 162 intended  that a corporation of which the major  portion  of the  interest was held by citizens of India would  also  get the  benefits of the rights, it is unnecessary for the  pur- pose of this case to investigate. This  view of the law was taken, and in my opinion  rightly, by  the Bombay High Court in The State of Bombay  v.  R.M.D. Chamarbaughuala(1).  It is of interest also to mention  that in  this view of the law it is possible to  appreciate  what was  said  by way of dicta by Mr. justice Mukherjea  (as  he then was) in Chiranjit Lal Choudhuri’ v.   The Union of India & ors.(2) : "The  fundamental rights guaranteed by the Constitution  are available not merely to individual citizens but to corporate bodies as well except where the language of the provision or the nature of the right compels the inference that they  are applicable   only  to  natural  persons.   An   incorporated company,   therefore,  can  come  up  to  this   Court   for enforcement of its fundamental rights......." In  that  case the Court had to consider  an  allegation  of infringement of the fundamental rights not only under  Arts. 31 and 14 but also under Art. 19(1) (f).  While the observa- tions  of Mr. Justice Mukherjea may not perhaps be  regarded as  a considered decision on the question now before us,  it is  not  unreasonable  to think that his  Lordship  felt  no difficulty about extending the fundamental rights under Art. 19(1)(f)  to the Sholapur Spinning and Weaving Company,  the share-holders of which were Indian citizens. It  is  proper to mention  this connection that  in  the  13 years  that have rolled by since the Constitution came  into force there have been many cases in which this Court as also the  High Courts have given companies of which  the  members were  Indian  citizens the benefit  of  fundamental  rights, special  to citizens.  In some of these cases  the  question was  sometimes  raised whether or not a  corporation  was  a citizen  for the purpose of the fundamental rights but  that was  left  unanswered.   Among the  cases  in  which  relief claimed  on  fundamental  rights,  specially  conferred   on

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citizens has been granted to corporations may be  mentioned: The Express Newspapers (Private) Ltd., v. Union of (1) I.L.R. [1955] Bom. 680. (2) [1950] S.C.R. 869. 163 India(1); The Bengal Immunity Co., v. State of Bihar(2); The Bombay  Dyeing  &  Manufacturing  Co.,  Ltd.,  v.  State  of Bombay(3). In  my judgment, therefore, the first question  referred  to this Special Bench should be answered in the affirmative. On  the other question that has been referred, I agree  with the conclusion of my learned brother Shah J. that the  State Trading  Corporation  is not in substance a  department  and organ of the Government of India.  As I entirely agree  with the  reasoning on which he has based this conclusion,  I  do not propose to discuss the matter further. For  the  reasons  mentioned above I would  answer  the  two questions referred to this Special Bench thus:- (1)  The  State Trading Corporation, so long as it  consists wholly of citizens of India, can ask for enforcement of  the fundamental rights granted to citizens under Art. 19(1)  (f) and (g) of the Constitution; (2)  The  State Trading Corporation is not a department   or organ orthe Government of India and can claim to enforce the fundamental  rights  under  Part  III  of  the  Constitution against the State as defined in Art. 12 thereof. SHAH  J.-Or. May 18, 1956, the State Trading Corporation  of India Ltd.-hereinafter called ’the Company’ was incorporated as a Private Limited Company under the Indian Companies Act, 1956,  with  an authorised capital of Rs. 5  crores  divided into five hundred thousand shares of Rs. 1.00 each.   Ninety eight  per  cent  of  the  subscribed  capital  which.   was contributed  out  of the funds of the  Government  of  India stood  registered in the name of the President of India  and the  remaining  two  per  cent in the  names  of  two  joint Secretaries  in the Ministry of commerce &  Industries.   On February 12 1961, the Commercial Tax Officer, Vishakhapatnam assessed  the Company in the sum of Rs. 5,79,198.17  nP.  to sales  tax in respect of certain transactions and  issued  a notice demanding payment of the amount.  The Company and Mr. K.  B.  Lall,  Joint  Secretary,  Ministry  of  Commerce   & Industries  then petitioned this Court for a  writ  quashing the order of the Commercial Tax Officer and the notice (1)  [1959] S.C.R. 12. (2) [1955] (2) S.C.R. 603. (3)  [1958] S.C.R. 1122. 164 of  demand  on the plea that the assessment  order  and  the notice  of  demand infringed the fundamental rights  of  the petitioners,  amongst others, under Art. 19(1)(f)  and  (g). At  the hearing of the petition; counsel for the  Commercial Tax  Officer and the State of Andhra Pradesh submitted  that the  petition was not maintainable because the  Company  was not  a ’citizen’ within the meaning of Art. 19 of  the  Con- stitution,  and  in any event the Company being  "an  organ, department  or instrumentality" of the Government  of  India was incompetent to enforce any fundamental right against the State  of Andhra Pradesh.  The Court thereupon referred  the following questions to a larger Bench               "(1)  Whether the State Trading Corporation  a               Company registered under the Indian  Companies               Act  1956 is a citizen within the  meaning  of               Art.  19 of the Constitution and can  ask  for               the enforcement of fundamental rights  granted               to  citizens under the said article;  and  (2)

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             Whether  the  State  Trading  Corporation   is               notwithstanding the formality of incorporation               under   the  Indian  Companies  Act  1956   in               substance  a  department  and  organ  of   the               Government  of India with the entirety of  its               capital  contributed by Government and can  it               claim to enforce fundamental rights under Part               III  of the Constitution against the State  as               defined in Art. 12 thereof ?" We  are not at this stage concerned to deal with  any  right which the second petitioner K. B. Lall may have, to maintain the petition, for the questions deal only with the right  of the Company to set up the protection of Art. 19(1)(f) &  (g) of the Constitution. Article  19 guarantees certain basic freedoms in  favour  of Citizens : it provides that - "(1) All citizens shall have the right- (a)  to freedom of speech and expression; (b)  to assemble peaceably and without arms; (c)  to form associations or unions; (d)  to move freely throughout the territory of India-, (e)  to  reside and settle in any part of the  territory  of India; (f)  to acquire, hold and dispose of property; and (g)  to  practise any profession, or to carry on  any  occu- pation, trade or business." 165 The fundamental freedoms (exercise whereof is by cls. (2) to (6)  subject to certain restrictions) being  expressly  gua- ranteed  to citizens, the question which presents itself  at the  threshold  is  whether the Company can claim  to  be  a citizen  and on that basis claim protection of the  freedoms to  acquire, hold and dispose of property, and to  carry  on any trade, occupation or business.  The plea that a  Company incorporated  under  the  Indian  Companies  Act  is  not  a ’citizen’ within the meaning of Art. 19 of the  Constitution is advanced principally on two grounds:               (1)   That  prior to January 26,  1950,  there               was no law relating to citizenship in force in               India and by Arts. 5 to 10 of the Constitution               only  natural persons were for the first  time               declared  citizens.  Under the  provisions  of               the   Citizenship  Act,  1955,  only   natural               persons may claim rights of citizenship  since               the  commencement  of the  Constitution.   The               Company  which came into existence  after  the               promulgation  of the Constitution not being  a               citizen  under the Citizenship Act,  1955,  is               therefore  incompetent to enforce  the  rights               claimed by it, for Arts. 5 to 11 constitute an               exhaustive  code  relating to  citizenship  in               India,  and an artificial person not being  of               the classes enumerated in Arts. 5, 6 & 8,  nor               under  the Citizenship Act, 1955  (enacted  in               exercise  of powers under Art. 11), the  claim               of  the  Company  to  citizenship  must  stand               rejected;   and  (2)  Citizenship   postulates               allegiance  to  the State of  which  a  person               claims to be a citizen and involves a duty  to               serve   when   called  upon   in   the   Civil               Administration,  and in the defence forces  in               the  maintenance  of peace or defence  of  the               State  in  an  emergency,  and  an  artificial               person being incapable of owing allegiance and               of rendering these services cannot be regarded

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             as citizen.  This argument is based on what is               called the traditional concept of citizenship. Counsel  for  the Company submits that  citizenship  is  the status which a person endowed with full civil and  political rights  in  a State possesses under its municipal  law,  and such rights inhere the status of natural and artificial per- sons alike. In determining the content of the expression ’citizen’  used in Art. 19, which is defined neither in the Constitution 166 nor  in  the  General  Clauses Act, it  may,  in  the  first instance,  be useful to consider the scheme under which  the diverse  fundamental rights are declared and  guaranteed  by Part  III of the Constitution and the extent  of  protection afforded  against infringement of those fundamental  rights. The  Constitution in declaring the fundamental  rights  uses different   expressions  to  denote  the  beneficiaries   of different rights.  By Arts. 14, 20(1), (2) & (3), 21, 22(1), (2)  &  (4),  25(1), 27, 28(3) and  31  certain  fundamental rights  are declared in favour of persons  By Arts. 16(1)  & (2),  26(1)  &  (2),  19(1)  and  29(2)  citizens  are   the recipients   of  fundamental  rights   guaranteed   thereby. Certain fundamental rights are declared in favour of  groups such as denominations, sections, minorities or  institutions e.g.  Arts. 26, 29(1), 30(1) and 30(2): these would  in  the very nature of things be groups of individuals.  By  certain other Articles prohibitions are declared e.g. 17, 23(1), and 24  and 28(1) for removal of evils, such as  untouchability, traffic  in  human  beings,  forced  labour,  employment  of children  in hazardous employment, and against imparting  of religious  instructions  in educational  institutions.   The expression  ’citizen’  used  in  Ch.   III  has  undoubtedly narrower  connotation  than ’person’.  By Art.  367  of  the Constitution read with s. 3(42) of the General Clauses Act a "person"  includes  any company or association  or  body  of individuals  whether  incorporated  or  not.   By  declaring rights  in favour of persons, it may at first  sight  appear that  it  was intended to confer those rights  upon  persons artificial as well as natural.  But this presumption is  not in fact uniformly true.  In Arts. 25(1), 28(3) and  probably Art.  20(3)  by the use of the  expression  "person"  having regard  to  the  character of the  right  conferred  natural persons  only  could  be the  beneficiaries  of  the  rights declared thereby.  By Art. 15(1) & (2) prohibitions are  Im- posed  against  the State in making  discrimination  between citizens  on  the ground of religion, race,  caste,  sex  or place  of birth- cls. (1) & (2) of Art. 16 declare  equality of opportunity to citizens in matters of public  employment, and  Art.  18(2) imposes restrictions  on  citizens  against acceptance  of  titles  from any foreign  State.   In  these Articles, the expression citizen may refer only to a natural person.   But that cannot be decisive of the meaning of  the expression  ’citizen"  in  Art.  19.   In  ascertaining  the meaning of expres- 167 sions  used in a vital document like the Constitution  of  a nation,  a mechanical approach would be impermissible.   The Constitution  is  but  the declaration of the  will  of  the people,  and must be interpreted liberally, and not  in  any narrow  or  doctrinaire  spirit.   It  must  be  interpreted according to its true purpose and intent as disclosed by the phraseology in its natural signification in the light of its setting  and  its  dynamic character which  is  intended  to fulfill the aspirations of the people.  There can be  little doubt  that  an  artificial person  like  a  Corporation  is

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capable of exercising rights conferred by cls. (a), (c), (f) and (g) of Art. 19(1) and the right to hold property and the right to carry on trade or business are two rights of  vital importance  vested in artificial persons and  a  substantial segment of trade and business in India and abroad is carried on  through  corporate activity.  On the view  that  only  a natural person having certain attributes under the municipal law  may  be  a citizen, the rights  conferred  by  Art.  14 (equality before the law and equal protection of the  laws), Art. 27 (freedom from payment of taxes for promotion of  any particular religion or religious denomination), Art. 20(1) & (2) (bar against retrospective operation of penal  statutes, and  rule against double jeopardy) and Art. 31 (bar  against deprivation of property otherwise than by authority of  law) are  guaranteed even in the case of artificial persons,  but some  of  the most cherished rights i.e. right  to  acquire, hold  and  dispose  of property, and to carry  on  trade  or business of artificial persons may not be Protected  against executive  or  legislative action.  Was it intended  by  the Constituent Assembly when declaring the freedoms under  Art. 19 to make a deliberate departure, and in respect ,of rights declared  under Art. 19 to restrict the enforcement  thereof against  action of the law makers or the executive ,only  in favour  of natural persons and not in favour  of  artificial persons;) It  is  in  this  background we may  turn  to  the  question whether, the declaration of citizenship under Arts. 5, 6 & 8 of  the Constitution, and the Citizenship Act, 1955, was  to be exhaustive; or merely to deal with the rights of  natural persons.   It may be necessary first to have a true  concept of  -citizenship and to ascertain whether the common law  of England  which  formed the foundation of the  Indian  juris- prudence,  attributed  to artificial persons  prior  to  the Cons- 168 titution  the  status of citizens or ’subjects’  as  it  was usual to call them in a monarchical form of Government. Waite  C.J.  in  Virginia L. Miner  v.  Reese  Happersett(1) observed :               "There  cannot be a nation without  a  people.               The  very idea of a political community,  such               as  a  nation is,, implies an  association  of               persons  for  the promotion of  their  general               welfare.   Each one of the persons  associated               becomes  a member of the nation formed by  the               association.   He  owes it allegiance  and  is               entitled  to its protection.  Allegiance,  and               protection are, in this connection, reciprocal               obligations.   The one is a  compensation  for               the  other allegiance for protection and  pro-               tection for allegiance.               For convenience it has been found necessary to               give a name to this membership.  The object is               to  designate  by a title the person  and  the               relation  he  bears to the nation.   For  this               purpose the words "subject", "inhabitant"  and               "citizen"  have  been  used,  and  the  choice               between them is sometimes made to depend  upon               the  form of the government.  Citizen  is  now               more commonly employed, however, and as it has               been   considered   better   suited   to   the               description  of one living under a  republican               government,  it was adopted by nearly  all  of               the  States upon their separation  from  Great               Britain,  and  was afterwards adopted  in  the

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             Articles   of   Confederation   and   in   the               Constitution of the United States.  When  used               in  this sense it is understood  as  conveying               the  idea  of  membership of  a,  nation,  and               nothing more."               In  the  Digest of International Law  (J.   B.               Moore) Vol.  III,, 1906 Edn. at p. 273, it  is               stated:               "Citizenship, strictly speaking’ is a term  of               municipal’  law,  and denotes  the  possession               within the particular state of full civil  and               political    rights,   subject   to    special               disqualification,  such  as minority  or  sex.               The   condition’s  on  which  citizenship   is               acquired are regulated by, municipal law."               In Oppenheim’s International Law (Lauterpacht)               Vol. 1’. p.     644 it is stated:               (1) 21 Wall. 162 :88 U.S. 627.               169               "In  the United States of America,  while  the               expressions  ’citizenship’  and  ’nationality’               are  often  used  interchangeably,  the   term               ’citizen’ is, as a rule, employed to designate               persons   endowed  with  full  political   and               personal  rights  within  the  United  States,               while some persons-such as those belonging  to               territories  and  possessions  which  are  not               among   the  States  forming   the   Union-are               described as ’nationals’.  They owe allegiance               to  the  United States and are  United  States               nationals  in  the  contemplation  of   Inter-               national Law; they do not possess full  rights               of  citizenship  in the United States  In  the               British  Commonwealth  of Nations  it  is  the               citizenship  of the individual States  of  the               Commonwealth which is primarily of  importance               for International Law, while the quality of  a               ’British subject’ or ’Commonwealth citizen’ is               probably  relevant  only as a  matter  of  the               Municipal Law of the countries concerned." Citizenship and nationality emphasize different facets of  a single  concept  of  association with  or  membership  of  a political  community.   The form and content  of  the  asso- ciation  have varied in their historical evolution with  the complexion  of  the governmental machinery, but  in  essence they  denote the relation which a person bears to the  sove- reign authority.  Citizenship is the relation that a  person bears  to  the State in its national  or  municipal  aspect; nationality  appertains to the domain of International  Law, and  represents the political status of a person, by  virtue of  which  he  owes allegiance  to  a  particular  sovereign authority.  ’Citizen’ and ’national’ are frequently used  as interchangeable terms, but the two terms are not synonymous. Citizenship  in  most  societies is  the  highest  political status  in  the  State, it is  employed  to  denote  persons endowed with full political and civil rights.  There are  in some  States  nationals who though  owing  allegiance,  lack citizenship  such  as those belong to  colonial  possessions which  are not included within the  metropolitan  territory, and  (lo not participate in the Government.  Even in  States where association of nationals in the governmental machinery does  not  exist  or is too tenuous  to  be  effective,  the national  endowed  with capacity to  exercise  personal  and political.  12-2 S. C. India 64

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170 rights may be called a citizen.  Again there may be citizens even in States having a form of government, which permits an effective  association of its citizens with the  administra- tion,  who do not participate in the government, or  who  by reason  of  sex, minority or personal  disqualification  are incompetent  or are unable to participate.   Citizenship  is therefore membership of a jural society investing the holder with  all  the  rights and  privileges  which  are  normally enjoyed   by   its   nationals,  and   subjecting   him   to corresponding  duties;  nationality is the  link  between  a person  and  a State, ensuring that effect be given  to  his rights  in  international  affairs.   Every  citizen  is   a national,  but every national is not always a citizen.   The tie  which binds the national and the citizen is the tie  of allegiance to the State; it arises by birth,  naturalisation or otherwise in a political society which is called a State, Kingdom or Empire. Under  the  English common law, a company or  a  corporation aggregate  is regarded as possessing attributes which  would make it a national of the State in which it was incorporated and  the incapacity of a corporation aggregate to  discharge obligations  such  as  performance  of  military  or   civil service, or to exercise franchise, has not been held to be a bar  to the recognition of its status as a national  of  the State  of  its  incorporation.  This  is  reflected  in  the judicial  decisions that public corporations  aggregate  are nationals  of the country of incorporation, irrespective  of the  nationality of the share-holders.  The English  Statute Law  did not regulate the nationality of  Corporations,  but the  decisions  of the highest tribunals regarded  them  for certain purposes as capable of possessing all the attributes of nationality.  In Janson v. Driefontain Consolidated Mines Ltd.(1)  the  House of Lords regarded a  company  registered under  the laws of the South African Republic as a  national of  that State.  The observations of Lord Macnaghten  at  p. 497, of Lord Davey at p. 498, of Lord Barmpton p. 501 and of Lord Lindley at p. 505 proceed on the view that the  Company concerned  in  that case was a national of the  Republic  of South  Africa  and the question as to the  validity  of  the contract of insurance by British underwriters against cap- (1)  L.R. (1902) A.C. 494. 171 ture  during  transit to the United Kingdom by  the  foreign State  before  declaration  of  war  was  valid.   Similarly Attorney  General v. Jewish Colonization Association(1)  was decided on the footing that a public Corporation is ,capable of  nationality,  and in General v. Selim Cotrap(2)  it  was accepted  that  a public Corporation has the  attributes  of nationality.    In   Gasque  v.  Commissioners   of   Inland Revenue(3) Macnaughten J., observed :               "But  by  analogy with a  natural  person  the               attributes   of   residence,   domicile    and               nationality  can be given, and are,  I  think,               given  by  the  law  of  England  to  a   body               corporate.  It is not disputed that a               company  formed under the compaines Acts,  has               British nationality, though, unlike a  natural               person, it cannot change its nationality."               In Kuenigi v. Donnersmarck(4) it was held that               a  company  incorporated  under  the  laws  of               England  and  registered  in  England  and  so               having  an English domicile, and  by  analogy,               British nationality, did not cease by  English               law  to  be  an  English  company  subject  to

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             English law merely because it was under  enemy               control.  Mc.  Nair J. observed at p. 535:               ’I think that it is also clear that, in so far               as nationality can by analogy be supplied to a               juristic person, its nationality is determined               in  an inalienable manner by the laws  of  the               country    from   which   it    derives    its               personality." The personality of a Corporation aggregate therefore springs from  the laws of the country in which it  is  incorporated, and  upon that personality is impressed the  nationality  of that  country, for the Corporation is by virtue of  the  law incorporating it capable of exercising rights, is subject to obligations  and by common acceptance is entitled  to  claim protection  in  international affairs of the  State  of  its incorporation. If a Corporation aggregate is a national, can it be regarded as  a citizen?  According to our law a juridical person  may normally  exercise all civil rights except those which  from the  nature of its constitution or of the rights, cannot  be exercised or enforced by the Corporation.  A (1) [1901] 1 K.B. 123. (2)  L.R. (1932) A.C. 288. (3) L.R. [1940] 2 K.B. 80. (4)  L.R. [1955] 1 Q.B. 515. 172 juridical person may acquire, hold and dispose of  property, carry  on  trade or business, take up residence  within  the territory  and  form  associations.  It is  also  liable  to discharge obligations which the nature of its  incorporation permits.  There are no special restrictions placed upon  its activity  and upon exercise of its rights in  its  corporate character.   It  is  capable of exercising  to  the  fullest extent  a  large  majority of  civil  rights  which  natural persons may exercise as citizens, its incapacity to exercise others  arises  from  the  nature  of  its  personality  and constitution  and not from any special  restriction  imposed upon  it.  Undoubtedly franchise cannot be exercised by  the Corporations but the capacity to exercise franchise is not a sine qua non of citizenship.  The State normally affords  to Corporations  protection  as  to its  nationals  abroad  and recognises its corporate character with capacity to exercise rights  within the realm.  In the matter of protection,  the law  makes  no  distinction  between  natural  persons   and artificial persons like corporations.  Was it then  intended by the Constitution which afforded protection of the  widest amplitude  in  favour  of Corporations as  well  as  natural persons  against  discrimination  under  Art.  14,   against deprivation of property under Art. 31(1), against compulsory acquisition  or,  requisition of property for  purposes  not public and without payment of compensation under Art. 31(2), against  imposition  of  taxes the  proceeds  of  which  are specifically  appropriated  for  payment  of  expenses   for maintenance of a particular religion or religious  denomina- tion  under  Art. 27, against being  subjected  to  taxation without authority of law under Art. 265, and to the  freedom of  trade,  commerce and intercourse, subject  only  to  the provisions  of Part XIII, still did not guarantee the  right to carry on business of trade, to acquire, hold, and dispose of property and the right to form associations. or the right to  take up residence of its choice within the  territory  ? Unless the language or the scheme of the Constitution is  so compulsive, it would be difficult to reach that  conclusion, on  any  predilection  as to a limited  connotation  of  the expression  citizen  occurring  in Art. 19(1).   It  may  he

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remembered that Constitutional practice is not  inconsistent with the recognition of artificial persons as citizens.  The Constitution  of  the United States of Maxico  1917,  of  El Salvador 1950, and of the Spanish People 173 do recognise the status of Corporations as citizens.  It was also  not  disputed at the Bar and could not  reasonably  be disputed  that it was open to the  Constitution-makers,  and the Parliament of India to make express provisions declaring artificial persons as citizens of India. But  it  is urged that the intention  of  the  Constitution- makers  was  not to recognise the corporate character  of  a Company  as  a citizen.  It is said that the  provisions  of Arts.  5, 6 and 8 and the law made under Art. 11 in  matters post-constitutional, are exhaustive of the conferral of  the right  of citizenship and there can be no citizen  who  does not satisfy the prescribed requirements.  A necessary corol- lary of that thesis is that there were no citizens in  India before the Constitution-natural or artificial-and it was  by the  Constitution and the Citizenship Act, 1955,  that  only natural persons are made citizens and no one else. To examine the validity of this assumption, it is  necessary to   examine  carefully  the  relevant  provisions  of   the Constitution and the material provisions which preceded  the Constitution.  It must be conceded that persons mentioned in Arts.  5(1),  5(b),  6 and 8 are  natural  persons  and  the expression ’person’ in the context of those provisions  does not include artificial persons.  Clause (c) of Art. 5 refers to  persons resident within the territory of India  for  not less  than  five  years, and it may be  presumed  that  this clause was also intended to apply to natural persons.  Simi- larly  by  the  definition  contained  in  s.  2(f)  of  the Citizenship  Act, 1955, the Act is made applicable  only  to natural  persons.   But the assumption that  there  were  in India   prior  to  January  26,  1950,  no   citizens,   and citizenship rights were conferred for the first time by  the Constitution is not warranted either by the language used in the Constitution, or the history of our national  evolution. The status of British Indians prior to 1947 was governed  by the  British  Nationality and Status of  Aliens  Act,  1914. They  were  regarded as British subjects,  and  entitled  in British India to such rights and privileges as were accorded to  British  nationals in India.  Their  status  as  British subjects  was  analogous  to the status  of  citizens  of  a republic.   They exercised civil rights, and such  political rights as the form of Government permitted.  If a citizen is a  national  who under the law of the state is  entitled  to enforce full civil and political rights, 174 British Indian subjects prior to the Constitution had within the territory of British India that quality of rights  which would  go to make them citizens.  Similarly the subjects  of the Indian States had the rights of citizenship within their own States, and those rights were not affected by the stand- still  and merger agreements of their rulers with the  Domi- nion  of  India.  The thesis being merely to  establish  the existence of rights which were analogous to rights of  citi- zenship  prior to the enactment of the Constitution,  it  is unnecessary to enter upon a detailed examination of the con- stitutional  developments  which took place  between  August 1947,  and the 26th of November, 1949, which  culminated  in the  setting  up of the Republic of India by  the  erstwhile British  Indian  subjects  and the subjects  of  the  Indian States.   It  may be sufficient to observe that  before  the Indian Independence Act, 1947, the Legislature was  invested

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with  the power to confer upon foreigners rights as  British Indians by naturalization, and had also sought to invest the Government of the day with power to deny entry into India to foreigners  or  even of nationals  of  British  possessions. Part  II of the British Nationality & Status of Aliens  Act, 1914,  relating  to  the naturalization of  aliens  was  not extended  to  British  India,  though Parts  I  &  III  were intended  to apply to all territories which formed  part  of the British empire subject to the provisions of s. 26 of the Act  which  preserved  the power  of  Colonial  or  Dominion Governments and Legislatures to legislate on the subject  of nationality and to safeguard the validity of laws passed  by them  relative  to  the treatment of  different  classes  of British subjects.  Under the Act of 1914 the place of  birth within  the  British  empire was  determinative  of  British nationality, but power was reserved to the Dominions and the Colonies by legislation to make provision for naturalization restricted   to  their  territory.   ’the   British   Indian legislature  in 1926 enacted the Indian Naturalization  Act, 1926,   which  enabled  the  local  Governments   to   grant certificates  of naturalization to persons applying in  that behalf  and  satisfying  the  local  Government  on  matters specified  therein.  Power was also reserved to  revoke  the certificates   of  naturalization.   The  Legislature   also enacted  the Immigration into India Act, III of 1924,  which authorised  the  Central Government to make  rules  for  the purpose of securing that persons not being of Indian ori- 175 gin,  domiciled  in any British Possession,  shall  have  no greater  rights  and privileges, as regards entry  into  and residence in British India than are accorded by the law  and administration  of  such  possession to  persons  of  Indian domicile.   The  effect of these statutory  provisions  was- subject  to  certain exceptions to recognize  the  right  of British  subjects  in India and to approximate them  to  the rights   of   citizenship,   to   grant   such   rights   by naturalization and to restrict immigration into India.   The British Nationality Act, 1948, was enacted after the  Indian Independence  Act,  1947, and was not  incorporated  in  the stream of the statute law in India.  The effect of that  Act was to create a new statutory concept of citizenship of  the various constituent units of the British Commonwealth and to provide  for a dual citizenship of the country in which  the local  community  resided  within  the  units  and  of   the Commonwealth.   The  concept  of allegiance  which  was  the foundation of the status of a subject, was excluded from the rules governing local citizen-Acts by various Dominions  and till the enactment of such Acts    accorded to the  citizens potential  or  actual  of  any  Dominion  (which  expression included  India)  the status of  Commonwealth  citizen.   In relation  to  this citizenship, allegiance  to  the  British Crown was not a condition. This  brief review of the legislative history is  sufficient to destroy the assumption that the status of citizenship was not recognized under the common law operative in India prior to  January 26, 1950, for, in my judgment, British  subjects of Indian origin held for all purposes the status in British India  of  citizens.  That status arose by birth  and  could also be conferred by naturalization. If a natural person could be a citizen prior to November 26, 1949  (the day on which by Art. 394, Arts. 5 to 9 came  into force),  there  is  no reason  to  suppose  that  artificial persons  who  were nationals of the British Empire  and  who could claim the protection abroad could not claim rights  of citizenship within the territory of India, when they were in

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fact exercising all the rights and privileges which  natural persons  who were citizens exercised, except those which  by their  incorporation  they could not  exercise.   There  was before the Constitution no statute which indicated even  in- directly  that  a  Corporation  aggregate  could  not  be  a citizen. 176 At  the time when the Constitution of the United  States  of America  was proclaimed, no citizenship laws  were  enacted, but  rights  of citizenship were  recognized  under  diverse provisions  of the Constitution of the United  States.   The American  Constitution recognised even without  any  express statute  law, citizenship of States, and also of the  Union. Under the Constitution of the United States of America,  the expression "citizen" has been given different meanings under diverse Articles.  In some clauses the expression  "citizen" meant only natural persons, in others it included artificial persons   like   Corporations.    Though   Constitution   as originally   proclaimed   was  silent  upon   the   subject, corporations were regarded as citizens of the State of their incorporation  for  the  purpose  of  federal  Jurisdiction. Initially no corporation was regarded according to     the decisions  of  the Court in the United States as  a  citizen within  the meaning of Art. 3 s. 2 : The Bank of the  United States  v. Deveaux et(1).  But this view was modified  in  a later  case  :  The  Louisville,  Cincinnati  &   Charleston Railroad  Company v. Thomas W. Letson (2 ). This case  arose on the interpretation of-’ the "diversity clause" in Art.  3 s.  2.  In  neither  of these  cases  was  the  capacity  of corporations to be citizens of the State in which they  were incorporated, denied.  For the purpose of the 14th Amendment which  prohibits  a State from making or enforcing  any  law which  abridged privileges or immunities of citizens of  the United States, an individual alone was regarded as a citizen : Orient Insurance Company v. Robert E. Daggs(3) and Bankers Trust  Company  v.  Texas & Pacific  Railway(4).   In  cases arising  under  Art.  4  s.  2  it  was  also  held  that  a corporation  could not be regarded as a citizen of  a  State other  than  the  State of its incorporation.   In  Paul  v. Firginia(5)  Field  J. delivering the opinion of  the  Court observed at p. 359.               "But  in  no  case which has  come  under  our               observation,  either in the State  or  Federal               Courts,  has a corporation been  considered  a               citizen  within the meaning of that  provision               of  the Constitution which declares  that  the               citizens  of each State shall be  entitled  to               all the               (1)   3 L.Ed. 38. (2)   11 L.Ed. 353.               (3) 172 U.S. 552. (4) 241 U.S. 295.               (5) 75 U.S. 357.               177               privileges  and immunities of citizens of  the               several States."               The  learned judge however made it clear  that               he  was restricting the observations  only  to               the claim of citizenship made by a Corporation               in   a  State  other  than  the  State   which               incorporated it.On p. 360 he observed :               "......a  grant  of corporate existence  is  a               grant    of   special   privileges   to    the               corporators, enabling them to act for  certain               designated  purposes as a  single  individual,               and exempting them (unless otherwise specially               provided)  from  individual  liability.    The

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             corporation  being the mere creation of  local               law,  can have no legal existence  beyond  the               limits  of  the  sovereignty  where   created.               Having  no  absolute right of  recognition  in               other   States,   but   depending   for   such               recognition   and  the  enforcement   of   its               contracts upon their assent, it follows, as  a               matter  of  course, that such  assent  may  be               granted  upon  such terms  and  conditions  as               those States may think proper to impose." It  may be noticed that corporations have been  regarded  as persons  within  the  meaning  of  the  14th  Amendment  and therefore  they  cannot  be deprived of  their  property  or rights  without  due process of law : Smyth v.  Ames(1)  and Kentucky  Finance  Corporation v.  Paramount  Auto  Exchange Corporation(2).   Our  Constitution  has  not  accepted  the doctrine  of due process as a test for protection of  funda- mental freedoms, but has sought to effectuate protection  of those freedoms by the 19tb Article. In  this  Court  there has been no  definite  expression  of opinion  about the rights of corporations aggregate  to  en- force  the fundamental freedoms under Art. 19 of  the  Cons- titution, though it seems to have been consistently  assumed that corporations aggregate are entitled to claim protection of  the  Courts against violation  of  fundamental  freedoms enumerated  in Art. 19(1).  In Chiranjit Lal  Chowdhuri’  v. The Union of India(1), Mukherjea J., observed               "The fundamenal rights guaranteed by the Cons-               (1)  169 U.S. 466.            (2  )  262  U.S.               544.               (3)   [1950] S.C.R. 869, 893. 178               titution   are   available   not   merely   to               individual citizens but to corporate bodies as               well   except  where  the  language   of   the               provision  or the nature of the right  compels               the inference that they are applicable only to               natural  persons.   An  incorporated  company,               therefore,  can  come  up to  this  court  for               enforcement  of its fundamental rights and  so               may  the  individual shareholders  to  enforce               their  own,  but it would not be  open  to  an               individual  shareholder to complain of an  Act               which  affects the fundamental rights  of  the               company   except   to  the  extent   that   it               constitutes an infraction of his own rights as               well." In that case an individual shareholder petitioned this Court for the issue of a writ declaring that the Sholapur Spinning and  Weaving Company (Emergency Provisions.) Act (XXVIII  of 1950) which enacted that the managing agents of the  Company stood  dismissed  and the  Directors  automatically  vacated their office, and which authorised the Government to appoint new  Directors and restricted the rights of shareholders  in the  matter of voting and appointment of Directors,  passing resolutions  and applying for winding up and  which  further authorised the Government to modify the Indian Companies Act was ultma vires the legislative authority of Parliament,  in that it infringed the fundamental rights of the shareholders and the action taken thereunder infringed the  shareholders’ fundamental  rights under Arts. 19(1)(f), 31 and 14  of  the Constitution.  The Court in that case dismissed the petition holding that the fundamental rights of the petitioner  under Art.  31(1) & (2), 19(1)(f) and 14 were not infringed.   The observations  of  Mukherjea  J., cannot be  regarded  as  an

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expression of a considered opinion of the Court holding that all   fundamental  rights  are  enforceable  by   individual citizens  as  well as corporate bodies.   The  question  was mooted  in two later cases: The Bengal Immunity Company  Ltd v.  The State of Bihar(1) and The State of Bombay v.  R.M.D. Chamarbauguvala(2).   It  may be pointed out that  the  High Court  of  Bombay in The State of Bombay v.  R.M.D.  Chamar- baugwala(3)  held that an application at the instance  of  a corporation alleging infringement of a fundamental right (1) [1955] 2 S.C.R. 603.    (2) [1957] S.C.R. 874. (3)  I.L.R. [1955] Bom. 680. 179 to carry on business was maintainable. Again in The State of West  Bengal  v.  The  Union  of  India(1)  Sinha  C.J.,  in delivering the judgment of the majority observed : "The fundamental rights are primarily for the protection  of rights  of individuals and Corporations enforceable  against executive and legislative action of a governmental agency. It  may be pointed out that there have been scores of  cases in  this Court in which it has been assumed without  contest that  a company is a citizen, and competent to enforce  fun- damental rights under Art. 19(1) (f) & (g) of the  Constitu- tion, I propose only to set out a short illustrative list of cases picked up at random : (1) [1955] I. S. C. R. 752       Bijay Cotton Mills Ltd. v.                                  State of Ajmer. (2) [1959] S. C. R. 1          Messrs Kasturi and Sons (Pri-                                vate) Ltd. v. Shri N. Saliva-                                 teeswaran. (3) [1959] S. C. R. 12         Express Newspapers (Private)                                  Ltd. v. Union of India. (4) [1960] 2 S. C. R. 408       Messrs Fedco (P) Ltd. & Ano-                                  ther v. S. M. Bilgram". (5) [1960] 3 S. C. R. 328    ... M/S Hathisingh Manufactur-                                   ing Co. Ltd. v.                                    Union of India. (6) [1961] 1 S. C. R. 379      Tata Iron & Steel Co. Ltd.                                 v.    S.     R. Sarkar. (7) A. I. R. 1963 S.C. 548     State Trading Corporation of                               India Ltd. v. The State of                                    Mysore. There  have arisen a number of cases in the High  Courts  in which  conflicting  views  have  been  expressed.   In   the Narasaraopeta  Electric  Corporation Ltd. v.  The  State  of Madras(2)  the  Madras High Court held that Art.  19(1)  (f) applies  only to citizens and a company  incorporated  under the  Indian Companies Act does not satisfy the  requirements of  the definition of citizen in Art. 5. This  case  reached the Supreme Court in Rajahmundry Electric Supply Corporation Ltd.  v.  A Nageswara Rao(3), but the question  whether  the fundamental  right  could be enforced by a company  was,  it appears,  not raised.  In Jupiter General Insurance  Company Ltd. v. Rajgojalan(4), it was held by the Punjab (1) [1964] 1 S.C.R. 371.      (2) A.I.R. 1951 Mad. 979. ( 3)  [1955] 2 S.C.R. 1066.   (4)  I.L.R. [1952] Punjab 1. 180 High Court that a company cannot raise the question that  an impugned  legislation  takes  away or  abridges  the  rights conferred  by  Art.  19(1)(f) &  (g)  of  the  Constitution, because a company is not a citizen.  In Amrita Bazar Patrika Ltd.  v.  Board of High School  and  Intermediate  Education U.P.(1) a single judge of the Allahabad High Court held that Art. 5 applied to natural-born persons and not to artificial persons and hence a corporation is not a citizen within  the meaning  of  Art.  19.   But the  Rajasthan  High  Court  in

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Maharaja  Kishangarh  Mills Ltd. v. State of  Rajasthan  (2) assumed  that  the  question whether  a  corporation  was  a citizen for the purpose of Art. 19 was generally decided  in Chairanjitlal Chowdhur’s case(3) and held that a corporation was entitled to raise by a petition under Art. 226 a plea of a breach of a fundamental right under Art. 19.   Authorities in   the   Calcutta  High  Court  appear  to   be   somewhat conflicting.  In Everett Orient Line Incorporated v.  Jasjit Singh(4)  it was held that the rights conferred by  Art.  19 being  granted  only  to citizens,  non-citizens  could  not enforce  such rights and the Company incorporated  in  India not being a citizen could not challenge the validity of  ss. 52-A and 167(12-A) of the Sea Customs Act on the ground that those   provisions   infringed   Art.   19(1)(g)   of    the Constitution.  The same view was affirmed in Cherry  Holsery Mills Ltd. v. S. K. Ghose(5).  It was held in that case that a company was not entitled to enforce the fundamental rights granted under Art. 19, which are available only to citizens. But it was held in M/s T. D. Kumar and Brothers Private Ltd. v.   Iron  and  Steel  Controller(6)  that   a   corporation ordinarily  resident  in India for a period  exceeding  five years prior to the commencement of the Constitution being  a person  was a citizen within the provisions of Art. 5(c)  of the Constitution and entitled to enforce fundamental  rights under  Art. 19(1), but a company incorporated after  January 26,  1950,  will  not be regarded as  a  citizen.,  for  the Citizenship  Act expressly excludes artificial persons  from the  benefit  of  citizenship  rights.   In  recording  this conclusion the earlier judgment of the Calcutta (1) A.I.R. 195) All. 595.  (2)  I.L.R. [1953] Raj. 363. (3) [1950] S.C.R. 869, 893.  (4)  A.I.R. 1959 Cal. 237. (5) A.I.R. 1959 Cal. 397.  (6) A.I.R. 1961 Cal. 258. 181 High  Court  in  Liberty Cinema v.  The  Commissioner,  Cor- Poration of Calcutta(1) was referred to, and it was  pointed out that in the group of cases which were then heard  relief was  granted to petitioners some of whom  were  corporations claiming that their fundamental rights were infringed. In  The  State  of Bombay v.  R.M.D.  Chamarbaugtvala(2)  in considering whether a company incorporated under the  Indian Companies   Act  prior  to  the  Constitution  could   claim protection  of its fundamental rights under  Art.  19(1)(g), Chagla C.J., speaking for the Court observed               ".......can it be said in the first place that               a  corporation  can  ever be  under  any  cir-               cumstances  a  citizen, and if it  can  be  so               said,  ’What must be the constitution  of  the               corporation before it could be said that it is               a citizen?  "Citizen" has not been defined  by               the Constitution and the only provision  which               is relevant is the provision contained in Art.               5.  But  that  article  only  deals  with  the               citizenship   at  the  commencement   of   the               Constitution  and  it  lays  down  who  was  a               citizen    at   the   commencement   of    the               Constitution. although domicile is a  question               of  private  international  law,  rights   and               acquisition  of citizenship is a  creation  of               municipal  law  and it is only  Parliament  by               municipal  law  that can determine  who  is  a               citizen.   It would be perfectly competent  to               Parliament  by legislation to provide  that  a               corporation   satisfying  certain   conditions               should  be  deemed  to be a  citizen  for  the               purpose  of Art. 19(1) but Parliament has  not

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             done  so.  But the very curious  anomaly  that               arises  is  that when we turn to some  of  the               provisions  of Art. 19(1) it is impossible  to               contend  that  it  could ever  have  been  the               intention of the Constituent Assembly that the               rights guaranteed by those provisions were not               to   apply   to  corporations  but   only   to               individual  citizens.  Take two of the  rights               guarantied  under Art. 19(1)(f) and (g).   Can               it be suggested that a corporation which,  let                             us               (1) A.I.R. 1959 Cal. 45.               (2) I.L.R. [1955] Bom. 680.               182               assume, is Indian in every sense of its  term-               its  shareholders are Indians,  its  directors               are Indians, its capital is Indian-that such a               corporation  should not have the  right  under               cl.  (f)  to  acquire,  hold  and  dispose  of               property,  or  under cl. (g) to  practise  any               occupation, trade or business?"               In The Assam Company Ltd. v. The State of  As-               sam(1)  the High Court of Assam  proceeded  to               consider   the   claim   for   protection   of               fundamental rights under Art. 19(1)(f) on  the               assumption  that a corporation could  seek  to               enforce those rights.               In Reserve Bank of India v. Palai Central Bank               Ltd.(2) Raman Nayar J. observed :               "Many  of  the rights in Art.  19(1)  and,  in               particular  those  in  clauses  (f)  and   (g)               thereof,   are   capable  of.   enjoyment   by               companies.  Our Constitution-makers could  not               have  been unaware of the existence  of  legal               persons.   By Article 19(1)(c) they  gave  all               "citizens  the right to form associations  and               unions,  and  it  could not  have  been  their               intention that the corporate bodies so  formed               by  citizens,  should  be  denied  the  rights               guaranteed  to  the  individual  citizens,  in               particular  that the agencies through which  a               substantial  portion  of  their  business   is               conducted by the citizens of this country  and               a considerable portion of their property held,               should not have the protection of clauses  (f)               and (g).               That  would mean a denial of  the  fundamental               rights  to property and occupation not  merely               to companies but to all corporate bodies  even               though  they may be Indian in every  sense  of               the  term,  their  members  Indian,  directors               Indian,  and  capital  Indian,a  denial  which               virtually   amounts  to  a  denial  of   those               fundamental   rights  to  the   citizens   who               (though, of course, different persons)  really               constitute those bodies." The  Palai Central Bank’s case(2) was carried to this  Court in  appeal,  and  the  Court  entered  upon  an   exhaustive discussion of the complicated questions raised (1)  A.I.R. 1953 Assam 177. (2) I.L.R. [1961] Kerala 166. 183 therein,  instead of disposing of the appeal on the  limited ground  that the Palai Bank was not a citizen and could  not claim  any fundamental rights under Art. 19(1)(f) and (g)  : Joseph Kuruvilla Vellukunnel v. Reserve Bank of India(1).

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It was submitted that he alone can be a citizen who can take an  oath  of  allegiance to the State because  the  bond  of citizenship  arises  by virtue of the allegiance  which  the citizen  bears  to  the State.  Municipal  laws  of  various States  do insist upon an oath of allegiance being taken  on naturalisation,  but  the  actual swearing  of  an  oath  of allegiance is not one of the conditions which go to make  or constitute  the  right of citizenship.  Children  of  Indian citizens  become citizens by their birth and taking of  oath or  even  capacity  to swear an oath of  allegiance  is  not predicated as a condition of citizenship.  If allegiance may be  presumed  from  birth and the requirement  of  taking  a formal oath of allegiance is not a condition of  citizenship the  law  proceeding  upon a presumption  of  allegiance  in respect  of  natural  persons, I see no reason  why  such  a presumption  of  allegiance may not be made  in  respect  of artificial persons like corporations. It  was  also submitted that corporations are  incapable  of rendering military service, or to assist in the  maintenance of  peace  when called upon to serve the  State.   But  that again,  in my view, is not a ground on which the  rights  of citizenship  could be denied.  Incapacity to render  service may  arise  on account of diverse causes  such  as  infancy, physical  or mental incapacity, and such incapacity  in  the case of a natural person will not deprive him of the  rights of citizenship.  By reason of their constitution, artificial persons  are  incapable  of  rendering  service-military  or civil  but  that may not by itself be a ground  for  holding that  they  cannot  be citizens.   If  the  corporations  or artificial persons can be regarded as nationals of the State where  they  are incorporated and if they are  permitted  to exercise   the   various  functions  for  which   they   are constituted  and no prohibition is imposed upon them in  the enforcement  of  the  rights  similar  to  those  which  are enforceable by natural per (1) A.I.R. 1962 S.C. 1371. 184 sons who are citizens, notwithstanding the special character of  the corporations and their incapacity to perform  duties or  to exercise such other rights which natural persons  may possess,  it will not be a ground for depriving them of  the rights  of citizenship for enforcing the fundamental  rights under Art. 19. Two  views are presented before us as to the meaning of  the expression "citizen" used in Art. 19(1).  On the one hand it is said that a citizen is a person natural or artificial who is  entitled  to all the rights which are capable  of  being enjoyed  by the citizens under the municipal law as  distin- guished  from persons who are aliens or persons who arc  not competent to exercise such rights.  The distinction, accord- ing to this view, springs from the capacity to exercise  the rights-whether  the  body which exercises the  rights  is  a natural  person or an artificial person.  The other view  is that  citizens are only natural persons who  being  national and  not  aliens are under the municipal  law  competent  to exercise all the rights which the State permits.  This  view proceeds  on  the assumption that an artificial  person  can never  be a citizen and it is only the natural  persons  who can  be citizens.  But having regard to the  privileges  and duties of nationals competent by the municipal law to  exer- cise full political and civil rights, and also having regard to  the  fact that companies invested  with  important  fun- damental rights like equality before law, protection against taking  of  property without authority  of  law,  protection against   acquisition   of  property  without   payment   of

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compensation  or  without public  purpose,  protection  from imposition of taxes for sectional purposes, and also  having regard  to the fact that the companies are persons by  their constitution  and  by the recognition afforded to  them  are competent to hold property and a dispose of property and  to carry  on  trade, business, vocation or occupation  and  are protected  from levy of taxes without authority of. law  and are  guaranteed  the freedom of trade, commerce  and  inter- course  it  would be difficult to hold that  the  expression citizen"  used in Art. 19 was intended to have a  restricted meaning of one who is a natural person. The  alternative  argument submitted by Mr.  Setalvad  based upon the decision of the Bombay High Court in The 185 State of Bombay v. R.M.D. Chamarbaugwala(1) need not then be considered  in any detail.  Chagla, C.J., in delivering  the judgment  of the Court relying upon a number of cases  which arose  under Art. 3 s. 2 of the Constitution of  the  United States of America expressed the view that it was open to the Court "to tear the corporate veil" and to look behind it and if  all the shareholders of the corporation are found to  be citizens,   the  corporation  should  not  be   denied   the fundamental rights which each of the shareholders has  under Art.  19(1)(g)  of  the  Constitution.   In  reaching   that conclusion the learned Chief justice relied upon the  obser- vation  made by Mukherjea J., in Chiranjit  Lal  Chowdhury’s case(2)  which  have  already been set out.   I  am  however unable to agree with the principle enunciated by the learned Chief   justice.   A  corporation  is  distinct   from   the shareholders  who  constitute it.  The theory  of  corporate existence  independent of shareholders, and its capacity  to exercise  rights has been built on Salomon v.  Saloman  and. Company  Ltd.(3). The rights and obligations of the  company are  different  from  the  rights  and  obligations  of  the shareholders.   By  action taken against  the  company,  the shareholders  may be indirectly affected because  their  in- terest in the capital of the company is reduced.  But action taken  against  the  company does not  directly  affect  the shareholders.   The  company  in holding  its  property  and carrying   on  its  business  is  not  the  agent   of   the shareholders.   Mukherjea  J. in Chiranjit  Lal  Chowdhury’s case  (2) pointed out the difference in the passage  already quoted   between   the  rights  of  the  company   and   the shareholders.   Even if a company consists  of  shareholders who  are  all  Indian  citizens, the  company  has  still  a distinct  personality and an infringement of the  rights  of the company alone will not furnish a cause of action to  the share holders.  The doctrine of what is called ripping  open the  Corporate  veil  was evolved  by  American  jurists  in dealing  with  cases under the "diversity  of  jurisdiction" clause  to enable companies constituted within one State  to have  recourse to the Federal Courts in respect of  disputes arising in other States as citizens.  If the company is  not a  citizen it would be difficult to found a claim upon  this doctrine attributing status of (1) I.L.R. [1955] Bom. 680.  (2)  [1950] S.C.R. 869, 893. (3) L.R. (1897) A.C. 22. 13-2 S. C. India/64 186 citizenship  to the company relying upon the status  of  its shareholders  and  thereby to enforce rights of  the  share- holders  as if they were the fundamental rights of the  Com- pany.   In enforcing the rights of the shareholders,  as  if they  were the rights of the company as envisaged by  Chagla C.J. numerous practical difficulties may arise.  Suppose  in

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the  case of a company a substantial number of  shareholders though  not the majority are aliens, would it  be  -possible for the Court to attribute right of citizenship to the  com- pany relying upon the citizenship of some of its members  so as to enable it to enforce fundamental rights under Art. 19? Similarly  in a case where a company incorporated  in  India may have a majority of its shareholders aliens.  Would it be possible for the Court to enter upon an enquiry and to  deny the  rights of citizenship notwithstanding the place of  its incorporation, because a majority of its members are aliens? The  shareholding  may vary from time to time :  to-day  the shareholding  of  aliens  may  exceed  the  shareholding  of citizens and the next day the position may be revised.   Can it   be  said  that  the  company  goes  on   changing   its citizenship,   according  as  the  shareholding   fluctuates between nationals and aliens?  If the place of incorporation and  the centre of management of its affairs do  not  confer right   of  citizenship  upon  the  company,  it  would   be impossible  to project the citizenship of  the  shareholders upon the company so as to enable it to claim this  reflected right  and  on  that basis to claim  relief  for  breach  of fundamental rights.  The  first  part  of the second  question  raises  what  is essentially a question of fact.  The State Trading  Corpora- tion was, on the date of the petition, functioning under the direct  supervision of the Government of India,  the  share- holding  was in the names of the President and two  Secreta- ries to the Government and its entire subscribed capital was contributed  by the Government of India.  But it is  a  com- mercial body, incorporated as the Memorandum of  Association indicates  to  organise and undertake trade  generally  with State  Trading  countries  as well  as  other  countries  in commodities  entrusted to it for such purpose by  the  Union Government from time to time and to undertake purchase, sale and transport of such commodities in India or any where else in the world and to do various acts for that pur- 187 pose.   The Articles of Association make  minute  provisions for  sale  and  transfer  of  shares,  calling  of   general meetings,  procedure  for the general  meetings,  voting  by members,  Board of Directors and their powers, the issue  of dividend,  maintenance  of accounts  and  capitalisation  of profits.  The State Trading Corporation has been constituted not  by any special statute or charter but under the  Indian Companies Act as a Private Limited Company.  It may be wound up by order of a competent Court.  Though it functions under the  supervision  of the Government of India and  its  Dire- ctors;  it is not concerned with performance of any  govern- mental functions.  Its functions being commercial, it cannot be  regarded  as  either a department or  an  organ  of  the Government of India.  It is a circumstance of accident  that on  the date of its incorporation and thereafter its  entire share-holding  was held by the President and the two  Secre- taries to the Government of India. Strong reliance was sought to be placed upon the decision of the  House of Lords in Bank Voor Handel En Scheepvasrt  N.V. v. Administration of Hungarian Property(1) in support of the contention that the State Trading Corporation, which is  the first  petitioner in this case, was merely an agent  of  the Government  of  India.  That was a case in which  after  the invasion  of  Holland  in  1940,  certain  stocks  of   gold belonging  to  a Dutch banking corporation  in  London  were transferred to the Custodian of Enemy Property, who sold the same  and  invested  and  reinvested  the  proceeds.   These investments    were   subsequently   transferred   to    the

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Administrator of Enemy Property in the erroneous belief that they  were the property of a Hungarian national.  After  the termination  of hostilities the Bank obtained  judgment  for recovery of the proceeds of sale, together with interest  or other profits earned thereon.  During the management of  the Custodian,  tax  was  paid to the British  Treasury  on  the income received by him by the sale of the stocks of gold but the  Bank  claimed  that it was entitled to  recover  a  sum equivalent to an amount assessed on the Custodian as tax  in respect  of the income of the invested proceeds of sale  and paid by him.  The House of Lords by a majority held that  if the Custodian had asserted Crown (1) L.R. (1954). 584. 188 immunity,  he would not have been obliged to pay tax on  the income,  for  the Custodian was a servant or  agent  of  the Crown and under the ’trading with the enemy legislation’ the Crown  had  sufficient interest to enable it to  invoke  im- munity  from tax if it chose to do so even if the Crown  had no beneficial interest in the income.  The principle of that case,  in  my judgment, has no application  in  the  present case.  The Custodian who was constituted a Corporation  sole was  regarded  by  the House of Lords  as  entitled  in  the circumstances of the case to Crown immunity from payment  of income-tax. The   question  whether  the  corporation  either  sole   or aggregate  is an agent or servant of the State  must  depend upon  the  facts  of  each case.   In  the  absence  of  any statutory  provision a commercial corporation acting on  its own behalf, even if it is controlled wholly or partially  by a  Government  Department,  will be presumed  not  to  be  a servant or an agent of the State.  The fact that a  Minister appoints  the members of the Corporation and is entitled  to call  for  information and to supervise the conduct  of  the business,  does  not make the Corporation an  agent  of  the Government.   Where, however, the Corporation is  performing in  substance governmental, and not commercial functions  an inference that it is an agent of the Government may  readily be made. In  Tamlin  v.  Hannaford(1)  a  house  had  vested  by  the operation of the Transport Act, 1947, in the British  Trans- port  Commission  and the question arose whether  the  house could be regarded as owned by the Crown and administered  by the British Transport Commission as Crown’s agent.   Denning L.J.,  pointed  out  that  the  Minister  of  Transport  had extensive powers over the British Transport Commission.  The Minister  had powers as great as those of a man who  holding all the shares in a private company possesses.  He appointed the  Directors i.e. the Members of the Commission and  fixed their  remuneration.   They  were  bound  to  give  him  the information  he wanted, he was entrusted with power to  give directions of a general nature, in matters which appeared to him to affect the national interest, as to which he was  the sole  judge  and the Commissioners were bound to  obey  him. Notwithstanding these great powers (1) L.R. (1950) 1 K.B 18. 189 the  Corporation  could not be regarded as an agent  of  the Minister  any  more  than the Company is the  agent  of  the share-holders  or  even of the  sole  shareholder.   Denning L.J., observed :               "In the eye of the law, the corporation is its               own  master and is answerable as fully as  any               other  person or corporation.  It is  not  the               Crown  and  has  none  of  the  immunities  or

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             privileges of the Crown.  Its servants are not               civil servants, and its property is not  Crown               property.  It  is  as much bound  by  Acts  of               Parliament  as any other subject of the  King.               It  is, of course, a public authority and  its               purposes,  no doubt, are public purposes,  but               it  is not a government department nor do  its               powers    fall   within   the   province    of               government." The  assumption  underlying  the  second  question  that   a department and organ of the Union or the State even if it is entitled  to  be called a citizen cannot claim  to,  enforce fundamental  rights  under  Part  III  of  the  Constitution against  the "State" as defined in Art. 12 thereof needs  to be examined. Assuming that the State Trading Corporation  is a department or organ of the Government of India, it is  not still seeking to enforce any fundamental rights against  the Union of India; it is seeking to enforce its rights  against the State of Andhra Pradesh.  By Art. 12 of the Constitution the Union as well as the State of Andhra Pradesh are States. Assuming  that the State Trading Corporation be regarded  as ’the  State’ within the meaning of Art. 12 of the  Constitu- tion,  if  it be regarded as a citizen there is  nothing  in Art.  19 which prohibits enforcement by the citizen  of  the fundamental  rights  vested in it.  For the  application  of Art. 19, two conditions are necessary-(1) that the  claimant to  the  protection of the right must be a citizen  and  (2) that  the  right infringed must be one  of  the  fundamental freedoms  mentioned in Art. 19 If these two  conditions  are fulfilled,  the citizen would, in my judgment,  be  entitled subject  to  the  restrictions imposed  by  the  Article  to enforce  the  rights against their  infringement  by  action executive   or   legislative  by  any  Government   or   the Legislature of the Union or the State and all local or other authorities  within  the  territory of India  or  under  the control of the Government of India.  There is no warrant for restricting  the  enforcement  of  these  rights  on   :some implication that an agent or servant of the State if he 190 or  it  be a citizen cannot enforce the  fundamental  rights against  another body which can be regarded also as a  State within the meaning of Art. 12 of the Constitution. In my view, therefore, the first question should be answered in  the  affirmative,  and  the first  part  of  the  second question in the negative.  The answer to the second part  of the  second question will be as follows : even if the  State Trading Corporation be regarded as a department or organ  of the  Government  of  India,  it will, if  it  be  a  citizen competent  to enforce fundamental rights under Part  III  of the Constitution against the State as defined in Art. 12  of the Constitution.