Bennett Coleman & Co. and Ors. Vs.

Union of India and Ors.

Facts of the Case

The petitioners were media conglomerates involved in the publication

of newspapers. They challenged the restrictions on the import of
newsprint under Import Control Order 1955 and on the manner in
which this is used by newspapers under the Newsprint Order 1962.
Further, the Newsprint Policy of 1972-73 placed further restrictions
based on four features: first, no new newspapers may be started by
establishments owning more than two newspapers if at least one of
which is a daily; second, the total number of pages may not exceed
ten; third, the increase in number of pages may not be more than 20%
for newspapers that are under ten pages; and, finally, no-
interchangeability of newsprint may permitted between different
newspapers of the same establishment or between different editions of
the same paper. Therefore, the petitioners were not allowed to make
adjustments in circulation, etc., under these newsprint policies even
within the quota limit. This was challenged for violation of Article
19(1)(a) of the Indian Constitution.

The respondents argued that the petitions were not maintainable

because companies do not enjoy fundamental rights, which are
available only to natural persons. Further, the respondents argued that
Article 358—the Constitution’s provision for “emergency powers”—
barred any challenge on grounds of fundamental rights. They also
proposed a subject-matter test of restriction rather than an “effects
test.” Accordingly, the restrictions were valid because they regulated
the commercial operations of newspapers in order to prevent
monopolies, by which any effect on freedom of expression was
incidental. Finally, they asserted that the question of whether
newsprint import must be increased was a question of policy that
could not be challenge on any grounds except “mala fide.”
Issues

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

Contentions Raised

On merits, the Court noted that freedom of the press was an essential
element of Article 19(1)(a) and the absence of an express mention of
such freedoms as a special category was irrelevant. Free press was to
be regarded as an essential element of freedom of expression in
general. The Court also observed that shortage of newsprint could be
tackled by fixing the quotas. However, direct interference in terms of
page limits and other such regulation was not justified. The page limit
meant that the newspapers would either lose economic viability due to
reduction in advertisements or be forced to reduce news content. This
would limit freedom of expression because, in the first case,
circulation would drop due to increased costs, and, in the second,
there were quantitative restrictions on content.
The Court observed that freedom of the press had both quantitative
and qualitative elements and, therefore, the quantitative controls
constituted restrictions on freedom of expression. Since they were not
justified on the basis of shortage of newsprint, they could not be
considered to be reasonable restrictions. The Court held that the
Newsprint Policy of 1972-73 was unconstitutional. However, the
Newsprint Order and Import Control Order were considered not to be
the source of these restrictions and were not struck down.

J.Beg, in a concurrence, observed that the Newsprint Policy of 1972-

73 was outside the scope of the Import Control Order, which provided
only for fixing of quotas and no further interference. Therefore, the
question of whether the restrictions were reasonable did not arise, as
the government action had no legal basis in the first place.

J.Mathew, in a dissent, observed that there was no direct regulation of

content and that a restriction on number of pages did not mean an
abridgment of freedom of expression. He reasoned that the control of
newsprint and regulating its distribution was necessary to ensure that
it was efficiently utilized. Insofar as it made newsprint utilization
efficient and prevented monopoly by a few newspapers, the policy
expanded rather than abridged freedom of speech and expression. He
disagreed with the majority judgment and held that the policy was not
unconstitutional.

Judgement

J.Ray delivered the opinion of the court. As a preliminary question,

the Supreme Court observed that the petitions were maintainable. The
fact that the petitioners were companies was not a bar to award relief
for violation of the rights of shareholders and editorial staff (who
were also petitioners). Further, the bar under Article 358 did not apply
to laws passed before the proclamation of emergency, and, therefore,
the newsprint policy could be challenged as a continuation of the
previous year’s policy and relevant orders.
While acting under Section 398 and section 402 of the companies act
of 1956, the court has ample jurisdiction and very wide powers to
pass such orders and give directions as it thinks fit to achieve the
object and same will not be violative of section 255.

Case comment

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 use corporate veil to achieve
malafide objectives or someone should not use it to claim that he is
doing a particular act for the company not to the individuals. The
court cited Express Newspapers (Private) Ltd. & Anr. v. The Union of
India & Ors.[1] and Sakal Papers Ltd. & Ors. v. The Union of
India[2] as reference and said that in these cases, 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. 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.
[References]

[1]1986 AIR 872, 1985 SCR Suppl. (3) 382.

[2]1962 AIR 305, 1962 SCR (3) 842.