Judges: A.N. Grover, A.N. Ray, C.A. Vaidialingam, G.K. Mitter, I.D. Dua, J.C. Shah, J.M. Shelat, K.S. Hegde, P. Jaganmohan Reddy, S.M. Sikri and Vashishtha Bhargava, JJ.

Facts:

Ordinance 8 of 1969 was promulgated by the Acting President on July 19, 1964, in accordance with the authority granted by Article 123(1) of the Constitution. It transferred to and vested the undertaking of 14 named Commercial Banks, which held deposits of not less than rupee fifty crores, in the corresponding new Banks established under the Ordinance.

The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969 (hereinafter 'impugned Act') was passed by Parliament before petitions challenging the validity of the Ordinance could be heard by the Court of Law. 

The Act's objective was to make provisions for the purchase and transfer of certain banking organisations' undertakings in order to better meet the demands of economic growth in accordance with national policy and objectives.

The Act, which repealed the Ordinance, went into effect on July 19, 1969, the day the Ordinance was published. The Undertaking of each listed Bank, along with all of its rights, obligations, and assets, was regarded to have been the property of the corresponding new bank as of that day.

The named Banks were permitted to do non-banking activities under Section 15(2)(e) of the Banking Regulation Act, 1949 (hereinafter, 'BRA') since they were not banned from doing so by Section 6(1) of the BRA.

The mechanism for calculating compensation for the purchase of the undertaking was provided for and specified by Section 6 read with Schedule 11 of BRA.

The amount of compensation was to be decided for the acquisition of the undertaking as a whole. However, under Section 6(2) of BRA, it was to be assumed to be a single compensation even if separate valuations were to be made in regard to the various things listed in Schedule 11 of BRA.

According to Schedule 11, the compensation was to be determined as the total of the assets valued under heads (a) to (h), calculated in accordance with the rules of Part I, less the total of the liabilities and obligations, computed in accordance with the provisions of Part 11. The lands and structures owned by the aforementioned Banks were transferred to the respective new Banks in form of vacant possession.

The petitioner possessed current and fixed deposit accounts, owned shares in several of the specified banks, and served as a director of one of the banks. He contested the constitutionality of the Act and the Ordinance in the present petitions filed under Article 32 of the Constitution.

Issues:

(i) Whether the present writ petition was maintainable?

(ii) Whether impugned Ordinance was invalid because the condition precedent to

the exercise of the power under Article 23 of Constitution did not exist?

(iii) Whether impugned Act was not within the legislative competence of Parliament, because, (a) to the extent to which the Act vested in the corresponding new Banks the assets of business other than Banking the Act trenched upon the authority of the State Legislature and (b) the power to legislate for acquisition of property in entry 42 List III did not include the power to legislate for acquisition of an undertaking

(iv) Whether Articles 19(1)(f) and 31(2) of the Constitution are not mutually exclusive? Whether a law providing for acquisition of property for a public purpose could be tested for its validity on the ground that it imposed limitations on the right to property which were not reasonable?

(v) Whether provisions of the impugned Act which transferred the undertaking of the named Banks and prohibited those Banks from carrying on business of Banking and practically prohibited them from carrying on non-banking business, impaired the freedoms guaranteed by Articles 19(1)(f) and (g) of the Constitution?

(vi) Whether provisions of the impugned Act which prohibited the named Banks from carrying on banking business and practically prohibited them from carrying on non-banking business violated the guarantee of equal protection and were, therefore, discriminatory?

(vii) Whether the impugned Act violated the guarantee of compensation under Article 31(2) of the Constitution?

Laws:

Constitution of India - Article 123 - Provides for power of President to promulgate ordinances during recess of parliament.

Constitution of India - Article 31(2) - Gives an inclusive definition of the expression 'estate' and the expression 'rights', in relation to an estate.

Constitution of India - Article 19(1)(f) - Guarantees to the Indian citizens a right to acquire, hold and dispose of property.

Constitution of India - Article 19(1)(g) - Provides right to practice any profession or to carry on any occupation, trade or business to all citizens.

Constitution of India - Article 19(2) - Permits the government to impose reasonable restrictions upon the freedom of speech and expression 'in the interests of public order'.

Constitution of India - Article 14 - State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India

Constitution of India - Article 301 - Provides for freedom of trade, commerce and intercourse

Constitution of India - Article 302 - Authorises parliament to impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest

Constitution of India - Article 305 - Provides for saving of existing laws and laws providing for State monopolies in matters relating to 'trade, commerce and intercourse' within the territory of India

Banking Regulation Act, 1949 - Section 6(1) - Enlists forms of business in which a banking company may engage, in addition to business of banking.

Banking Regulation Act, 1949 - Section 6(2) - Stipulates that no banking company shall engage in any form of business other than those referred to in Section 6(1) of BRA.

Banking Regulation Act, 1949 - Section 5(b) - Provides that 'banking' means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, and order or otherwise.

Banking Regulation Act, 1949 - Section 22 - Provides that no company shall carry on banking business in India unless it holds a licence issued in that behalf by the Reserve Bank of India.

Contentions:

Petitioner

(i) Impugned Ordinance promulgated under Article 123 of the Constitution was invalid, because the condition precedent to the exercise of the power did not exist.

(ii) In enacting the impugned Act, the Parliament encroached upon the State List in the Seventh Schedule of the Constitution. To that extent, the impugned Act is outside the legislative competence of the Parliament.

(iii) By enactment of impugned Act, fundamental rights of the petitioner guaranteed under Articles 14, 19(1)(f) & (g) and 31(2) of the Constitution are impaired.

(iv) By the impugned Act, the guarantee of freedom of trade under Article 301 of the Constitution is violated.

(v) Retrospective operation given to impugned Act is ineffective, since there was no valid Ordinance in existence. The provision in the Act retrospectively validating infringement of the fundamental rights of citizens was not within the competence of the Parliament.

(vi) Section 11(1) & (2) and Section 26 of the impugned are invalid.

Respondent

(i) Present petitions were not maintainable because, no fundamental right of the petitioner was directly impaired as he was not the owner of the property of the undertaking taken over.

Analysis:

Maintainable of Petitions

(i) A company registered under the Indian Companies Act is a legal entity that is independent and different from each of its members. Therefore, unless his rights are also violated by the activity in question, a shareholder, depositor, or director is not permitted to file a petition for infringement of the rights of the company.

However, the Court will not deny itself authority to give relief if the State action affects the rights of the shareholders as well as the firm, focusing only on the technical functioning of the action. The petitioner in the current case argued that the impugned Act and the Ordinance violated the rights that the Constitution afforded him under Articles 14, 19, and 31. Thus, he objected to the violation of his own rights rather than those of the Banks.

Promulgation of Ordinance under Article 123 of the Constitution

(i) The satisfaction clause is a composite clause that refers to both the existence of conditions and the need for urgent action as a result of those circumstances. The President's determination that certain conditions exist and that immediate action is required to achieve satisfaction is not deemed definitive.

Since the Act was declared unconstitutional, no opinion was given about the scope of the court's authority to determine whether the requirement pertaining to the President's satisfaction was met.

Legislative competence of Parliament

(i) Entries 43 and 44 of List I of the Seventh Schedule of the Constitution do not entirely encompass the authority of Parliament. A law governing a corporation's operations is not a legislation governing the regulation of a corporation.As stated in Entry 54 of List I, only Parliament has the authority to enact laws pertaining to "Banking".

Subject to inherent restrictions in the federal system that divides legislative authority between the union and the component entities, a legislative entry must be given a meaning that is favourable to the largest amplitude. However, the definition of 'banking' cannot be expanded to encompass trading operations that infringe on the definition of 'trade and commerce' in Entry 26 List II and are not ancillary to banking. The contention challenging Parliament's competence to legislate for acquisition of the named Banks in so far as it related to assets of the non-banking business had to fail for two reasons.

(ii) Legislative authority to acquire 'property' is found in Entry 42 of the Constitution. The ability to enact legislation to acquire an undertaking is listed in List III. In Entry 42 of List III, the term 'property' has a broad meaning and refers not only to assets but also to the organisation, liabilities, and responsibilities of a continuing concern taken collectively.

The term 'undertaking' in Section 4 of the Act plainly refers to a business that is still operating with all of its rights, obligations, and assets, as opposed to the numerous rights and assets that make up the business. 

The assets, rights, and privileges of the company are inextricably linked to its duties and liabilities since they are an essential component of the enterprise. Therefore, legislation authorising the compulsory acquisition of an undertaking as described in Section 5 of the Act might be passed.

Exclusiveness of Articles 19(1)(f) and 31(2) of the Constitution

(i) According to the Constitution, the degree of protection against the impairment of a fundamental right is decided by its direct impact on the individual's rights. It is not decided by the purpose of the legislature or the manner in which it is carried out. The form and scope of the protection of basic rights are determined by the goal of the State's activity rather than how it affects an individual's rights.

A theory that some Constitutional Articles enact a Code that deals exclusively with the topics covered therein and that the protection that an aggrieved person may claim is limited by the goal of State action gained traction as a result of the constitutional scheme, which makes the guaranteed rights subject to the permissible restrictions within their allotted field, fundamental, becoming muddled.

Article 19(5) and Articles 31(1) and (2) of the Constitution specify limitations on State action that must be met in order for the right to property to be exercised.

A broad generalisation in Article 19(5) of the Constitution describes the kind of restrictions that the 'right to property' may be subject to under the law. The guarantees under Articles 31(1) and (2) of Constitution result from the legal restrictions placed on the State's ability to acquire an individual's property. The actual nature of the restrictions under the two Articles is the same.

(ii) Article 19(5) and Articles 31(1) & (2) of Constitution form a single pattern.

Article 19(1)(f) states about citizen's fundamental right to property.

Article 19(5) and Articles 31(1) & (2) of Constitution deals with the restrictions that may be imposed by law on the exercise of those rights. Therefore, certain categories of limits on the right to property occurring under Article 19(1)(f) of Constitution are limitations mandated for guaranteeing correct exercise of the State's authority to take away a person's property and of the ability to forcibly acquire his property.

There is no set pattern for how rights are stated in the Constitution, either explicitly or implicitly. However, they are all connected by the common goal of defending individuals' or organisations' rights against violation within certain bounds.

(iii) Article 31(2)'s formal requirements are not enough to negate the protection of the guarantee of the right to property. The same standards must be applied to determine if a 'law' that permits property deprivation is lawful as well as one that permits the forced purchase of property for public use.

Acquisition must be permitted by law. 'Law' mean a statute that falls under the purview of the government and does not jeopardise the guarantee of the rights in Part III. The court may assume that a reasonable restriction on the exercise of the right to own property is imposed by the acquisition in the interest of the general public. This shall be done if property is compulsorily acquired for a public purpose and the law complies with the 'requirements' of Articles 31(2) and 31(2A) of the Constitution.

Validity of Act under Article 19(6)(ii) of the Constitution

(i) It was a necessary incident of the right that the Union acquired. Law that forbade the specified Banks from conducting banking operations after July 19, 1969, could not be challenged under Article 19(6)(ii) of the Constitution insofar as it impacted the right to conduct business.

The primary limb of the Article's criteria must be met before limitations that are incidental or ancillary to the State's business operations, whether they exclude citizens or not, be imposed. The limitations placed on the designated Banks' ability to do 'non-banking' operations were obviously illogical.

(ii) Section 15(2)(e) of the impugned Act allowed banks to conduct operations outside of banking. Even if a business organisation had the right to carry on non- banking business, it would not be able to do so if it lost all of its assets, its undertaking, its managerial and other staff, its premises, and its name. This is especially true if even the portion of the undertaking's value that was paid to it as compensation was not made immediately payable.

Validity of Section 15(2) of the Act

(i) It is blatantly hostile discrimination when, after purchasing the assets, undertaking, organisation, goodwill, and names of the specified institutions, they are barred from conducting banking business while other banks, both Indian and international, are allowed to do so. No justification is given as to why the named Banks were chosen specifically to experience this handicap.

Although theoretically capable, the named Banks are in fact not allowed to engage in non-banking activities. The guarantee of equality was compromised by forbidding the specified Banks from engaging in nonbanking operations, for the same reasons stated for determining that the limitation is unjustified.

The Court did not express an opinion on the issue of whether choosing one banking institution out of several for forced purchase could be ruled to be hostile discrimination in the absence of any valid facts.

Legality of Act in view of guarantee of compensation under Article 31(2) of Constitution

(i) The provision of giving certain amounts determined in accordance with principles that were irrelevant in determining compensation for the undertaking of the named Banks violated the guarantee of compensation under Article 31(2) of Constitution. By the method specified, the amounts so declared could not be regarded as compensation.

The law specifying for compensation determination principle is unchallengeable if it pertains to compensation determination, and is a recognised principle that applies to compensation determination for property acquired through coercion, and is appropriate in determining the value of the class of property sought to be acquired. Since the impugned Act did not give the expropriated Banks the compensation set in accordance with pertinent principles, it had to be repealed.

(ii) A technique that is acceptable for assessing the value of one type of property may be completely improper for determining the value of another class. Various procedures are applicable to different classes of property. A guideline set forth by the legislature for calculating the cost of the property to be bought is not definitive.

However, if many principles are applicable and one is chosen to determine the worth of the property to be acquired, the decision to exclude the other factors from consideration cannot be contested since the choice must be made in accordance with the wisdom of the Parliament. The goal of valuation is to provide the owner the equivalent of their property with all of its current benefits and future possibilities. The value issue is not too difficult to solve when the property bought has a stable market.

When an undertaking is bought as a whole, the criteria for determining compensation must be applicable and appropriate to the acquisition of the complete undertaking.

(iii) Compensation was to be established in accordance with the Act for the acquisition of the undertaking. Impugned Act did not call for valuing the entire endeavour as a whole. Rather, it called for assessing the worth, less liabilities, of only some of the components that made up the undertaking, as well as alternative ways to calculate remuneration for each of those components.

This technique is, at first glance, irrelevant for determining compensation for the acquisition of the enterprise. This is because the whole value of a component is not always equal to the total value of a unit of acquired property, particularly when the property is a going concern with a structured company.

This reason alone may have led to the undertaking's purchase being deemed illegal since it compromised the constitutional guarantee for the payment of compensation for the statutory acquisition of property.

(iv) The principles indicated did not provide a real compensation to the bank for loss of the undertaking. In calculating the compensation for the undertaking, certain significant asset classes were left out of the heads (a) to (h). Method for valuing lands and buildings was irrelevant to the calculation of compensation and, in some cases, the value determined thereby was illusory as compensation.

Principle for determining the aggregate value of liabilities was also irrelevant. The goodwill and the value of the remaining long-term leases under the current urban conditions would typically be included in the undertaking of a banking company taken once as a going concern. However, the banks' goodwill was not listed among the assets in the schedule of assets.

As a result, the value obtained by discounting crucial elements of the undertaking, such as goodwill and the value of the remaining time in instances, would not serve as payment for the undertaking. The shortcomings of the impugned Act did not just lead to inadequate compensation as defined by Article 31(2) of the Constitution.

(v) The right to compensation, the financial equivalent of the property that was forcibly acquired, is guaranteed under the Constitution. Compensation must be provided by legislation, and applicable rules must be stated for its calculation since otherwise, the final value would not be compensation.

As a result, determining the amount of compensation to be paid for the acquisition of an undertaking as a whole after awarding compensation for some items that contribute to the undertaking and leaving out crucial items amounted to using an irrelevant principle in determining the undertaking's value. It did not provide compensation to the expropriated owner.

(vi) The constitutional guarantee was also perhaps violated by paying the expropriated owner compensation in bonds with a face value of the specified sum and a long maturity period and fixed rate of interest. The expropriated owner may complain that the guarantee under Article 31(2) of the Constitution is compromised if the market value of the bonds is not roughly equivalent to their face value.

The Court did not express an opinion on the issue of whether a composite undertaking of two or more distinct lines of business may be acquired where there is a public purpose for the acquisition of the assets of one or more lines of business but not in respect of all the lines of business. This is because it was determined that there was no evidence that the named banks owned distinct assets aside from the assets of the banking business. The rule that cash and choses-in-action are not subject to compulsory acquisition. It may be applied when using the technique of determining compensation that involves adding up the worth of the assets that make up the business. The Act had to be declared invalid in its entirety.

Dissenting opinion by A.N. Ray, J.

(i) The language of Article 123 must be taken into consideration first, followed by the circumstances in which the President is granted that power. The President is given this authority, and the circumstances mentioned in the article serve as guidance for the President in using it.

The legislative authority to promulgate an Ordinance is vested in the President in instances of urgency and emergency as Parliament is not in session throughout the year. The President is the only person who can decide whether to make the Ordinance.

According to Article 74(1) of the Constitution, the President acts on the advice of Ministers who are answerable to Parliament, and according to Article 74(2), no Court may inquire into such advice. The life of the Ordinances proclaimed in accordance with Article 123 is constrained, and the life of the Ordinance may be further condensed. The Ordinance must be placed before Parliament. According to Article 361(1), the President is not liable to any court for actions taken while carrying out his responsibilities.

The power under Article 123 relates to policy and to an emergency where immediate action is deemed necessary. If an objective test is applied, the satisfaction of the President contemplated in the Article will be stripped of the power of the President himself. Additionally, because the President will be acting on the advice of Ministers, this could result in the disclosure of facts that are prohibited under Article 75(4) of the Constitution.

For these reasons, it has to be decided that the President's satisfaction under Article 123 of the Constitution is subjective. The only means to contest the President's use of his or her authority is to prove that they had a corrupt, mala fide, or bad-faith purpose. The promulgation of the Ordinance just before the start of the Parliamentary session did not indicate any malice.

(ii) Impugned Act dealt with the business of banking and was a law for acquisition of property. The law did not apply to Entry 26 LIST II of the Constitution, which is about trade and commerce inside the State. It did apply to Entry 42 List III of the Constitution relating to 'acquisition and requisitioning of property' and Entry 45 List I which is related to 'banking'.

According to Section 6(1) of the BRA, a banking company may legally engage in the following four types of business, which the petitioner disputes are banking businesses -

1. receiving securities or other valuables on deposit or for safe custody and providing safe deposit vaults;
2. agency business;
3. business of guarantee, giving of indemnity, and underwriting; and
4. business of acting as executors and trustees.

There is only one term, 'banking', in List I of the Seventh Schedule of the Constitution. It does not include any qualifiers, such as 'the conduct of business', which appears in Entry 38 of the Government of India Act, 1935. Banking will consequently have a broad definition that covers any lawful operations conducted by a banking organisation as defined in both Sections 6(1) and 5(b) of BRA.

Furthermore, the prohibition in Section 6(2) of BRA that prohibits banking companies from engaging in any type of business other than those mentioned in Section (1) proves that the various types of business mentioned in Section (1) are, in fact, normal recognised business of a banking company and, as such, are included in the Undertaking of the bank. A banking company's undertaking is a piece of real estate that can be lawfully purchased in accordance with Article 31(2) of the Constitution.

The term 'property' need to be given a liberal and inclusive meaning that encompasses those well-known categories of interest that bear the signs or traits of a proprietary right. When referring to a bank's "undertaking", what is meant is fully integrated organisation that consists of all property, both movable and immovable, and that is one idea that cannot be broken down into parts or ingredients.

(iii) The realm of Article 31 is not at all touched by Article 19(1)(f) & (g) and (2) of the Constitution. Constitutional provisions must be construed harmoniously. Each provision must be allowed to work vigorously in its appropriate context. Harmony is rejected and Article 31(2) of the Constitution becomes meaningless if the requirement of a reasonable limitation in the interest of the general public must be met again when acquiring or requisitioning property for a public purpose. Public aim is inherently and implicitly subject to a fair constraint. Because of this, Article 31(2) deals with public purpose separately.To claim that an acquisition made for a public purpose is not in the best interests of the general public would be pedantry.

Articles 31(2) and 31(2)(A) of the Constitution form a self contained code, because -

• It allows for acquisition or requisition with the authority of a law
• Acquisition or requisition must be for a public purpose
• Law should provide for compensation
• Adequacy of compensation is not to be questioned

Even if it were assumed that purchase or requisition of property covered by Article 31(2) would trigger Article 19(1)(f) or (g), the Act would still need to be sustained as a reasonable limitation in the interest of the general public.

(iv) Article 14 of the Constitution was not violated by the acquisition of the undertaking. This is due to their intelligible differentia and their rational relation to the goal of the Act. It followed that these Banks could not be permitted to conduct banking operations in order to defeat the purpose of the Act itself. Comparable to other scheduled banks, the fourteen banks were not in the same league.

The fourteen banks with deposits totalling at least Rs. 50 crores were categorised. The Act's objective was to manage the nation's deposit resources as it developed, so the selection of the fourteen banks was rational, sound, and related to the Act's objective. This was done while taking into account the banks' larger resources, wider geographic reach, managerial and human resources, and organisational and administrative expansion factors. These fourteen banks were more resource-suited than others, which allowed them to operate with the speed and efficiency needed to carry out the Act's objective. This was possible with this categorization.

(v) There is no infraction of Article 31(2) of the Constitution. There is no violation of Article 31(2) and the owner cannot challenge it on the basis of 'just equivalent' of the acquired property when principles are established in a statute. Those principles are relevant to the determination of compensation. They are principles in relation to the property acquired or are principles relevant to the time of acquisition of property. The relevance is to remuneration, not sufficiency.

It is inconceivable that Parliament would have meant, following the Constitution Fourth Amendment Act, for the term 'compensation' to mean 'just equal'. Parliament had previously prohibited challenges to the appropriateness of compensation. Adequacy is threatened by anything that is questioned as being unfair or unjust, therefore equitable recompense cannot be insufficient. According to impugned Act, the entire business was the target of the acquisition. Compensation was to be given for the undertaking as a whole rather than for each of its individual assets.

There isn't a single, widely accepted formula for valuing an enterprise as a continuing concern, the standard formula is assets less liabilities. Because pay was given for the overall effort, it would be questionable if it were to be claimed that no recompense was given for any specific asset. It was not possible to argue that market value should have been the guiding concept when the key principle stated was ascertained value.

By favouring the metrics of one principle over that of the other for the indirect aim of getting at what was stated to be just comparable, it would really be entering adequacy of remuneration. The fourteen banks operated under licence in accordance with Section 22 of BRA, and the idea of a sale in such circumstances is illogical. In a compelled acquisition, the acquiring authority does not get any goodwill. Furthermore, no evidence was included in the petition to demonstrate the goodwill the banks had.

Market value is not the only guiding criterion in the appraisal of properties and structures. For this reason, the Constitution gives the legislature the authority to establish the guiding principles. Ascertained value is a valid and solid theory based on the capitalization technique that is used to evaluate land and other assets. The Act's guiding principles were pertinent to the calculation of compensation. It's possible that adopting one principle might result in receiving less money than adopting another, but that wouldn't be the case for claiming that the concept wasn't applicable.

(vi) Article 305 of the Constitution is directly applicable in present case. A statute pertaining to banking and any necessary activities ancillary to it carried out by the State to the whole or partial exclusion of the fourteen banks is directly covered by Article 305.

In this situation, Article 302 cannot be applied, and a person cannot claim that Article 301 was violated. Since Article 305 was in effect in this instance, neither Articles 301 nor 302 were relevant.

(vii) A law that affects the acquisition or requisition of property retrospectively is legitimate and is not unconstitutional. Article 31(2) of the Constitution refers to 'authority of law' without any qualifiers or restrictions on the law being in effect at the time. Therefore, the Act's retrospective application did not violate Article 31(2). Additionally, it is important to keep in mind the crucial distinction between Articles 20(1) and 31(2). The latter can have retrospective effects of its own accord while the former cannot.

Conclusion:

(i) Impugned Act is within the legislative competence of the Parliament, but -

• It makes hostile discrimination against the named banks in that it prohibits the named banks from carrying on banking business. This is because other Banks, Indian and Foreign, were permitted to carry on banking business. Even formation of new Banks was allowed, which may engage in banking business.
• It in reality restricts the named banks from carrying on business other than banking as defined in Section 5(b) of BRA.
• Impugned Act violated the guarantee of compensation under Article 31(2) of the Constitution. This is because it provided for giving certain amounts determined according to principles which are not relevant in the determination of compensation of the undertaking of the named banks.

(ii) Section 4 of the impugned Act is a kingpin in the mechanism of the Act.

(iii) Section 4, 5 and 6 read with Schedule II of the impugned Act provide for the statutory transfer and vesting of the undertaking of the named banks in the corresponding new banks. It prescribed the method of determining compensation for expropriation of the undertaking. Those provisions are void as they impair the fundamental guarantee under Article 31(2) of the Constitution.

(iv) Sections 4, 5 & 6 and Schedule II of the impugned Act are not severable from the rest of the Act. The Act must, in its entirety, be declared void.

(v) The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969 is invalid.

Important Precedents:

(i) The State Trading Corporation of India Ltd. and Ors. vs. The Commercial Tax Officer, Visakhapatnam and Ors. MANU/SC/0038/1963

(ii) The Rajahmundry Electric Supply Corporation Ltd. vs. The State of Andhra MANU/SC/0023/1954

(iii) A.K. Gopalan vs. The State of Madras MANU/SC/0012/1950

(iv) Kavalappara Kottarathil Kochuni and Ors. vs. The State of Madras and Ors. MANU/SC/0019/1960

(v) Akadasi Padhan vs. State of Orissa MANU/SC/0089/1962

(vi) Mohammad Yasin vs. The Town Area Committee, Jalalabad and Anr. MANU/SC/0012/1952

(vii) Chiranjit Lal Chowdhuri vs. The Union of India (UOI) and Ors. MANU/SC/0009/1950

(viii) P. Vajravelu Mudaliar vs. Special Deputy Collector, Madras and Anr. MANU/SC/0049/1964

(ix) The Barium Chemicals Ltd. and Anr. vs. The Company Law Board and Ors. MANU/SC/0037/1966