REPUGANCY UNDER ARTICLE 254 & TEST OF VALIDATING LAW

 COMPANY LAW WITH A  DIFFERENT PROSPECTIVE 

                                                                                            ( BY SHUBHAM BUDHIRAJA )

SHUBHAM BUDHIRAJA

MOBILE-9654055315

CSSHUBHAMBUDIRAJA1994@GMAIL.COM

OBJECTIVE :-

This article meant for all individuals either pursuing any professional course or have entered into this era of opportunities

PERKS OF READING THIS ARTICLE :-

1.Well After reading this article, you will into the position of having basics of indian history in different manner .

2.This article will put its best efforts to having a slight different analysis of company law .

3. Brushed up of your skills in different way

4. Few more facts to your vast knowledge

5. you will have more words while debating on issues

NOTE:- BASICS OF HISTORY + BASICS OF CONSTITUTION + BASICS OF LEGAL SYSTEM

1.

Well before understand this plethora of legal hustle and tussle , lets use our time machine and go before thousand of years .

The concept of Democracy and liberty is not new to our country. The concept of   “DHARMA” (धर्म) can be easily viewed in Ancient India which was not very different from “ RULE OF LAW “.

VEDIC TEXTS mentions the  “SABHA “ ( GENERAL ASSEMBLY ) and  “SAMITI “ ( HOUSE OF ELDERS ) which were Democratic  institutions.

Even “ KAUTILYA ARTHASHSTRA “ also records that AUTOCRACRY/DICTATORSHIP had no place in Ancient polity.

Hence It would be pretty vague to say that INDIAN Parliamentary system is entirely derived from BRITISH RULE.

QUESTION :- INDIAN PARLIAMENTARY SYSTEM DERVIED FROM ?

2.

  Since we already aware of the fact that company law has to be read along with all circulars, notifications, rules , case laws BUT let’s not forget the JURISDICTION OF COMPANY LAW . YES, The fundamental law of land which is CONSTITUTION OF INDIA .  let’s assume you aware of major provisions of companies act,2013 and all related laws .

QUESTION :- Right to form company , LLP , Partnership firm derived from ?

ANSWER :- It is worth to be noted that it is FUNDAMENTAL RIGHT OF EVERY CITIZEN TO HAVE RIGHT TO FORM ASSOCIATIONS Like company , LLP , cooperative societies , political party  under Article 19 (1)(c)  Part III of constitution of India .

3.

We all are aware of concept of TRIBUNAL But let’s not forget that originally there was no concept of Tribunal in constitution of India . However by 42^nd amendment act ,1976 ( AKA MINI PARLIAMENT ) the concept of TRIBUNAL  introduced under ARTICLE 323A and ARTICLE 323B .

Please note that NCLT is a statutory body because it derived its authority from a statute (Companies act 2013) but let’s not forget NCLT fall under purview of Article 323B.

Question :- HOW Tribunals differ from High courts ? who is superior ?

Answer :- Well It is worth to be noted that High courts supersede Tribunals because

a)      High courts are constitutional body whereas Tribunals created by statute and are statutory body ( however all tribunals, others than that of ARTICLE 323A, Derived authority from ARTICLE 323B )

b)      Writ jurisdiction entrusted upon High courts under article 226 for violation of fundamental rights as well as legal rights which is not available to any tribunal

c)       High courts exercise supervisory jurisdiction over all tribunals within its respective state / Union Territory of Delhi.

NOTE :- Delhi is the only Union Territory which have its own High court ( 69^TH Amendment act of 1991 )

And Delhi & puducherry are two Union territories out of 7 which have concept of state legislature ( only assembly )

NOTE :- Out of 29 states and 7 union territory , only 7 states have concept of Bicameralism ( assembly +council ) and rest 22 states and 2 Union territory have concept of unicameralism ( only assembly )

4.

we all must be  aware of power of parliament to amalgamate the companies in national interest or takeover  them or acquisition of properties . But wait did you ever thought isn’t it arbitrary and unjust ?

Well , no actions can be taken unless federal law of land ( constitution ) permits

And ARTICLE 31A contains list of 5 categories of laws which cannot be challenged on violation of article 14 and article 19.

NOTE:- Amalgamation of  companies arbitrary is violation of article 19 ( Right to profession & business ) but protected by ARTICLE31A

QUESTION :- How parliament misuse their powers to protect laws from being challenged ?

ANSWER :- Originally constitution consist of 8 schedules ( presently 12 ). However By  1^st amendment act,1951 SCHEDULE IX introduced .

Schedule ix contain list of all the laws which cannot be challenged on violation of fundamental rights.

Latest example is SC/ST atrocities act which supreme court find unconstitutional as was violating the fundamental rights and now Union Govt. is in all mood to insert this act under Schedule IX.

5.

The word company gets very  famous during colonial rule . well let me remind you Britishers were not the first western who invaded india for business . in 1498, vasco da gama discovered the sea route to India and from 1500 to 1600 Portuguese east India company did business with India . However on 31^st December 1600, Queen Elizabeth I gave her consent to Royal charter act, 1600 through which British east India company authorized to do business in western part of Asia and Africa for 15 years on renewal basis. So as we can observe the intention was to business and not rule. However in the meantime , Dutch East India company also attempt to have roots in India but failed and French were last who settled in India ( Puducherry ) .

Company came into picture when Company rule started in India ( 1773 – 1858) through Regulating act of 1773 . However since lot of corruption practices and to have more control over India ,

Crown rule started ( 1858- 1947 ) and concept of viceroy  introduced .

NOTE :- Concept of Governor is very similar that of viceroy. Viceroy used to be direct representative of British crown in india. Similarly , Governor is a direct representative of centre( President ) at state level. Governor performs two functions , one that of agent of union and other being nominal executive of state .

NOTE :- Around 240 provisions of our constitution have derived from Government of India act ,1935. (MAJOR) . Even the federal structure of Indian constitution influenced from the said act. Though India follow Canadian model of federal structure.

FINAL NOTE :- This is just 10% of what actual I can present about plethora of these laws and system in interesting manner . we can link up the other provisions of company law with that of other laws such as Indian Trust act, 1882 , Indian contract act,1872 and otherwise. For example- Whenever Debenture trust deed executed under form SH-12  [Section 71 of companies act,2013 read with companies (sharecapital & debenture )rules,2014 ] OR Whenever Deposit Trust Deed executed under Form DPT-2 [ Sec 73 to 76A read with companies ( Acceptance of deposits )rules, 2014 ] . Now if we analysis of these sections with Indian Trust act,1872 all general provisions such as

-author of trust

-Trust property ( movable or immovable capable of Transfer )

-Beneficiary

-Trustee

-Revocation of Trust

NOW, They do have linked up with Indian contract act,1872 because if we read both acts together alongwith companies act,2013 we will find that competency of Trustee only required where he have to exercise certain discretions such as enter into contracts .

Now one thing is quite interesting that competency  have no relation to Beneficiary. Anyone can become beneficiary either a deity or minor .  and  Revocation clause play very important role in trust deed.

DISCLAIMER:- Whatever mentioned in article is  best to my knowledge  and in exercise of my

Fundamental right to speech and expression under article 19(1) (a) with no intention to hurt sentiments of any religion, community, sex, caste, culture or otherwise in relation to them.