Reading Judgement : Bennett Coleman & Co. & Ors vs Union Of India & Ors on 30 October, 1972

Backgrounder:

  1. The Import Control Order 1955 passed by the Central Government under ss. 3 and 4A of the Imports and Exports Control Act 1947 laid restrictions on the import of newsprint.
  2. As an essential commodity newsprint was also subject to control under s.3 of the Essential Commodities Act 1955. The Newsprint Control Order 1962 was passed under s. 3 of the Essential Commodities Act. Sub-clause 3 of clause 3 of the 1962 Order states that no consumer of newsprint shall in any licensing period consume or use newsprint in excess of quantity authorized by the Controller from time to time. Sub-clause 3A of clause 3 states that no consumer of newsprint other than a publisher of text books of general interest shall use any kind of paper other than newsprint except with the permission in writing of the Controller.
  3. Sub-clause (5) of Clause 3 of the 1962 Order states that in issuing an authorization under this clause the Controller shall have regard to the principles laid down in the Import Control Policy with respect to newsprint announced by the Central Government from time to time.

The Congress of Indira Gandhi and Nehru were romantics of Communism or its watered down form Socialism. Imported the centralized planning from Russia. Not only that, they fantasized dictatorship and loathed democracy.

In line with the core principles of Communism which she espoused, Indira Gandhi imposed Emergency on India on false pretensions to enslave India in modern times.

Now the first step of Communist dictatorship is to quell dissent. One should only look at Russia on how they have quelled (or killed) dissent by physically eliminating people with dissenting opinions.

Now for Indira Gandhi to quell the dissent at a mass level required her control the media. Those days with no Internet and no social media, print media was the only means to express an independent opinion and inform the public.

As a student of law my experience at law school has been that a routine advise given by teachers to students is don’t talk politics in campus etc., But how is it possible to delink politics with law? Law is an outcome of political processes. To discuss about the output but not to discuss about the process is indeed unscientific.

Though this review is primarily written to understand things from a legal stand point, it is entirely appropriate to talk about the political motive and significance behind the case. In an effort to muzzle the independent opinion Indira Gandhi brought in an order/policy – Newsprint policy 1972-73, that excessively regulates the number of pages a Newspaper group can publish citing the scarcity of Newsprint that has to be imported. Hence the attempt is to ration the available scarce resource, by imposing limitations.

So, the papers were told – “don’t print more than 10 pages” and don’t start any new edition without the permission of the government. This was the height of Inspector Raj or License Raj.

Indians born in the last 3 decades when they look at these historical events, he or she would be at pains to understand whether there was difference between British Colonization and Congress Raj?

The Bennett Coleman & Co the main petitioner in this case petitioned the supreme court under the Article 32 of Indian constitution to declare Newsprint Policy 1972-73 unconstitutional.

Petition before the court:

The newsprint Policy for 1972-73 was challenged in this Court in petitions under Art. 32 of the Constitution.

Questions for consideration:

  1. Whether the petitioners being companies could invoke fundamental rights?
  2. whether Art. 358 of the Constitution was a bar to any challenge by the petitioners on violations of fundamental rights?
  3. whether the restriction on newsprint import under the 1955 Order was violative of Art. 19(1) (a) of the Constitution?
  4. whether the newsprint Policy fell within clause 5(1) of the Import, Control Order 1955 and was valid?
  5. whether clauses 3 and 3A of clause 3 of the 1962 Newsprint Order were violative of Arts. 19(1) (a) and 14 of the Constitution?
  6. whether Remarks V, VII(a), VII(c), VIII, and X of the Newsprint Policy for 1972-73 were violative of Arts. 19(1) (a) and 14 of the Constitution because of the following objectionable features:
  • No new paper or new edition could be started by a common ownership unit (i.e., a newspaper establishment or concern owning two or more news interest newspapers including at least one daily) even within the authorized quota of newsprint;
  • there was a limitation on the maximum number of pages to 10, no adjustment being permitted between circulation and the pages so as to increase the pages.
  • no interchangeability was permitted between different papers of common ownership unit or different editions of the same paper.
  • Allowance of 20 per cent increase in page level up to a, maximum of 10 had been given to newspapers with less than 10 pages.
  • A big newspaper was prohibited and prevented from increasing the number of pages, page areas, and periodicity by reducing circulation to meet its requirement even within its admissible quota.
  • there was discrimination in entitlement between newspapers with an average of more than 10 pages as compared with newspapers of 10 or less than 10 pages.

Review:

It was not so great an argument by the counsel of the government to say that since companies are not individual citizens hence they cannot invoke fundamental rights. After all companies are formed by individuals. Either the counsel has not taken the “doctrine of lifting the corporate veil” in to account or is in an assumption that it is applied only on cases where individuals (foreign or Indian) commit mistakes using the identity of company as a veil. Actually it works both ways.

Our motive should be one should not user corporate veil to malafide objectives or someone should not use it to claim that he is doing what he is doing only to the company not to the individuals. The court cites Express Newspapers (Private) Ltd. & Anr. v. The Union of India & Ors. (4)’and Sakal Papers (P) Ltd. & Ors. v. The Union of India (5) as reference. And says in the cases mentioned above that the court observed that all the petitioners in those cases like shareholders, editors, deputy editors and readers etc., were all Indian citizens. Now the question that arises is whether in cases where one of the shareholders is not an Indian or is a correspondent of a foreign press in India or a head of its bureau in India, what stand the court will take is an important question.

For now, it is settled that the companies could also invoke fundamental rights as long as its members are Indian citizens. Hence these individuals petition that Policy Newsprint Control Policy of 1972-73 violates their freedom of speech and the locus standi is established. The court said “That individual right is not lost by reason of the fact that he is a shareholder of the company” . The locus standi of the shareholder petitioners is beyond challenge after the ruling of the court in the Bank Nationalization Case. The doctrine of pith and substance is used in ascertaining whether the act falls under one entry while incidentally encroaching upon another entry. The direct operation of the act upon the rights forms the real test.

The court concluded that since the policy (Newsprint policy 1972-73) was made on the basis of 1962 order the court said that there is no bar, because the 1962 order was made before emergency. It means if there is any law which is independently made during the period of emergency then it would be impossible to invoke fundamental rights, which is right. Because that is exactly what the emergency provision of article 358 of the Indian constitution says.

The court agreed the argument of the petitioners is that this policy is a continuation of an old policy. And said that article 358 “does not apply to the executive action taken during the emergency if the same is a continuation of the prior executive action or an emanation of the previous law which prior executive action or previous law would otherwise be violative of article 19 or otherwise be unconstitutional”. For eg: – MISA could never be challenged in the court, because it is an act during the emergency.

The intention is not genuine. The policy has discriminated between large and small newspaper organizations. As the favour is tilted towards the small newspaper organizations. May be because the government did not feel threatened by the activities of the small newspaper organizations. The court found that the remark V of the said policy violates article 19(1)(a) and also 14 of the constitution, freedom of speech and expression and also equality before law.

Remark VII(c) of 72-73 policy amounts to newspaper control not newsprint control, the court observed. As it said those papers which are running under 10 pagers right now are allowed to increase by 20% in the number of pages, but the English papers which are required to increase the pages are not permitted to do so. It is not only a step to muzzle their freedom of expression but also prohibiting to earn money through legitimate means, hence a violation of article 19(1)(g) in my opinion, though this was not raised as an issue.

The court said that Remarks V, VII(a), VII(c), VIII, of the Newsprint Policy for 1972-73 were violative of Arts. 19(1) (a) and 14.

What is indeed unfathomable is the restriction of common ownership unit from starting a new newspaper periodical or a new edition or remark X which is also violative of article 19(1)(a).

The court did not find it necessary to express an opinion on clause 3(3A) of the control order.

It seems that the intention of the govt. was to have less restriction on papers of vernacular languages. It may be because it might have felt threatened by the English papers.

Important points to learn:

  1. Companies can invoke fundamental rights.
  2. During the emergency (art. 358) the fundamental rights could be taken away only by the authority of the law passed during the emergency and not on the ones which were passed earlier.
  3. Application of the doctrine of pith and substance – ie., one rule is used to encroach the rights given under another law or rule. In this case, in the name of newsprint control, govt. actually attempted to do newspaper control. Ie., in the name of regulating the usage of the newsprint by calling it as an essential commodity through essential commodities act, import export order 1955, import export control act 1947, the state tried to take away the fundamental rights given to its citizens as per articles 19(1)(a) and 14.

Read the full Judgement here.

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