Professional Documents
Culture Documents
Business Law - S1
Business Law - S1
Business Law - S1
For Education Use Only. Not to be shared or uploaded in full or part. All rights reserved.
Recent issues
Future-Reliance Rule of seat belts for
Takeover deal all riders in Indian Fire in E-scooters
objection by Amazon cars
Chinese Mobile
Trading with Russian phone manufacturers Ban on Battlegrounds
companies diverting funds from India Mobile
India
2/16/2023 2
Definition of Law
Idealistic the standard of what is just and unjust
Customs or
customary Law
Sources of Law
Personal Laws
2/16/2023 4
Meaning of law- Art. 13(3)(a), Constitution of India-
“law” includes any Ordinance, order, bye-law, rule, regulation, notification, custom or
usage having in the territory of India the force of law;
Rules
Order Regulations
Act Delegated
Legislation
Ordinances
(in
Notifications
Educational
Institutions)
Bye-laws
Concepts
“rule” shall mean a rule made in exercise of a power conferred by any enactment, and shall include a Regulation
made as a rule under any enactment
• Section 21 of the General Clauses Act: Power to issue, to include power to add to, amend, vary or rescind
notifications, orders, rules or bye-laws.—If a power to issue orders, rules or bye-laws is conferred, then
that power includes a power, exercisable in the like manner and subject to the like sanction and conditions
(if any), to add to, amend, vary or rescind any notifications, orders, rules or bye-laws
Background
• Acts frequently talk about the broad aspects of the welfare of people and the legislature
sets the broad provisions and principles
• The legislature gives out powers to the executive to implement the legislation based on
the actual ground scenario.
2/16/2023 9
Other key concepts
• Common Law: It originated with the legal reforms of King Henry II in the
12th century and was called “common” because it applied equally
across the whole country. At first it meant simply the law that was the
same, or ‘common,’ throughout the country, as opposed to the
diversity of regional or local law.
• General Conditions of Contract (GCC): Standard contract terms which
are available and used in contracts
• Shared GCCs: Contracts based on common sense became prevalent
around the world. English law used for dispute resolution across various
countries.
• Laws created to codify common law principles and use them in
business
2/16/2023 10
IDEA OF CONSTITUTION
Why do we need Constitution?
2/16/2023 11
IDEOLOGY OF CONSTITUTION
I own Myself.
No Grass Root Level Participation till 1993 (73rd and 74th Amendment-
Panchayati Raj and Nagar Palika)
2/16/2023 12
PREAMBLE OF CONSTITUTION
We, the people of India, ……………
It is this declaration that makes our Constitution sublime and it
is the guarantees mentioned in the chapter on Fundamental
To constitute India into a ………….. Rights that make it one of the greatest charters of liberty and of
which the people, of this country 'may well be proud. This
charter has not been forced out of unwilling hands of a
Sovereign, Socialist, Democratic, Republic sovereign like the Magna Carta but it has been given to
themselves by the people of the country through their
Give to ourselves …………. Constituent Assembly.
-A.K Gopalan v. State of Madras, AIR 1950 SC 27
2/16/2023 13
CONCEPT OF RIGHTS
Prof. Laski asserts that the “state does not create rights, it only recognizes rights.”
Article 32 (Supreme Court) and Article 226 (High Courts) – Writ Jurisdiction. Soul of the Constitution!- Habeas
Corpus, Mandamus, Certiorari, Prohibition and Quo- Warranto.
Waiver of Fundamental Rights. Can FRs be waived? Basheshar Nath v. Commissioner of Income Tax AIR 1959
SC 149
Article 13(2) - The State shall not make any law which takes away or abridges the rights conferred by this Part and
any law made in contravention of this clause shall, to the extent of the contravention, be void
Article 13(4) - Nothing in this article shall apply to any amendment of this Constitution made under Article 368
2/16/2023 14
ARCHITECTURE OF CONSTITUTION
448 Articles, 12 schedules and 5 appendices with 104 amendments
Territory
Citizenship
Fundamental Rights
Three wings of Federal Government [Center & State] – Executive, Legislature and Judiciary
Other provisions
2/16/2023 15
CONSTITUTIONAL
DOCTRINES
Doctrine of Harmonious Construction
State of Bihar v Kameshwar Singh 1952 (1) SCR 889
Article 367(1) – Application of General Clauses Act, 1897
2/16/2023 16
CONSTITUTIONAL
DOCTRINES
Doctrine of Colorable Legislation
Balaji vs State of Mysore, [1963] Suppl. 1 S.C.R. 439
Doctrine of Waiver
Basheshar Nath v Commissioner of Income Tax, AIR 1959 SC 149
Doctrine of Eclipse
Bhikaji v/s State of MP 1955 AIR 781
2/16/2023 17
Fundamental Rights – Part III – Art. 12 – 35
Art.20-30 RIGHT TO
LIFE AND Art.19
PERSONAL FUNDAMENTAL
LIBERTY FREEDOMS
2/16/2023 18
EQUALITY FUNDAMENTAL FREEDOMS LIFE AND PERSONAL LIBERTY
Art. 14 – Equality before Law Art.19 which includes Arts. 20 – protection in respect of conviction for offences
Art.19(1)(a) -Freedom of speech and Protection against ex-post facto law
expression Protection against double jeopardy
Art. 19(1) (b) - To assemble peaceably and Protection against self-incrimination
without arms
Art. 15 – Prohibition of Art. 19(1) (c) - To form associations or Art.21 – protection of life and personal liberty
discrimination on grounds of unions or co-operative societies
religion, race, caste, sex or place Art. 19(1) (d) - To move freely throughout Art.21A – Right to education
of birth the territory of India
Art. 19(1) (e) - To reside and settle in any Art.22 – Protection against arrest and detention in certain areas
part of the territory of India and
Art.16 – Equality of opportunity Art. 19(1) (g) - To practice any profession Art.23 & 24 – Right against exploitation
in matters of Public or to carry on any occupation, trade or Art.23 – prohibition of traffic in human beings and forced labour
Employment business Art.24 – Prohibition of employment of children in factories etc.,
2/16/2023 19
Questions to Ponder
2/16/2023 20
FUNDAMENTAL RIGHTS AGAINST? STATE
• Article 12
• The state includes
The government and Parliament of India
The Government and Legislature of each of the States
All local or other authorities within the territory of India or under the
control of the Government of India
2/16/2023 21
State?
• Sukhdev v. Bhagatram AIR 1975 SC 1331
Three statutory bodies viz., LIC, ONGC and Finance Corporation, were held to be authorities
Mathew J., - A public authority is a body which performs public function/sovereign function
2/16/2023 22
State?
• Pradeep Kr Biswas v. Indian Institute of Chemical Biology (2002) 5 SCC 111
Cumulative effect test
The question in each case would be whether in the light of the cumulative facts as established, the body
is financially, functionally and administratively dominated by or under the control of the government.
Can a private company be a state? Writ jurisdiction of high court (Art. 226)may be exercised against private
companies which exercise state function. Binny Ltd. & Anr vs V. Sadasivan & Ors [2005] INSC 401
2/16/2023 23
FUNDAMENTAL RIGHT OF
BUSINESS
Article 19(1)(g)
2/16/2023 24
Reasonable restrictions in particular to
Professional or Technical qualifications necessary for practicing any profession or carrying on any occupation
trade or business
Carrying on by the state, or by a corporation owned or controlled by the State,
• of any trade, business, industry or service,
• whether to the exclusion, complete or partial, of citizens.
Prohibition & Excise Supdt., A.P v Toddy Tappers Co-op. Society, AIR 2004 S.C. 658
No citizen has got any fundamental right for the trade in liquor and it is for the government to evolve the
excise policy and implement the same in the interest of the public.
2/16/2023 25
State of Karnataka v. Hansa Corporation. AIR 1981 SC 463
Restriction may be imposed by any of the authorities who are included in the definition of State in Article 12 and
competent to make a law.
Bank Nationalization case, R.C. Cooper v. Union of lndia, AIR 1970 SC 564
Though a company has no fundamental right under Article 19, a share-holder and the managing director have the
right under that Article.
The state may enter into trade like any other person either for administrative reasons or with the object of mitigating the
evils in the trade, or even for the purpose of making profits in order to enrich the state exchequer.
2/16/2023 26
RIGHTS OF SHAREHOLDER IN CORPORATION – FR?
2/16/2023 27
PART XIII | TRADE, COMMERCE AND INTERCOURSE
2/16/2023 28
PART XIII | TRADE, COMMERCE AND INTERCOURSE
2/16/2023 29
PART XIII | TRADE, COMMERCE AND INTERCOURSE
2/16/2023 30
PART XIII | TRADE, COMMERCE AND INTERCOURSE
• Article 301
• Subject to other provisions of this part, trade, commerce and intercourse,
throughout the territory of India, shall be free.
• Article 302
• Parliament may by law impose such restrictions on freedom of trade,
commerce or intercourse between one state and another or within any
part of the territory of India as may be required for the public interest.
2/16/2023 31
PART XIII | TRADE, COMMERCE AND INTERCOURSE
This judgement gave the widest flexibility to the words of Art. 302 and
observed that the power conferred on Parliament is extremely wide and the
only limitation placed on that power by Art. 302 is that the law in question
must be required in the public interest.
2/16/2023 32
Atiabari Tea Co. v. State of Assam, AIR 1961 SC 232
A tax levied by the State of Assam on the carriage of tea by road or inland waterways was
held bad for "the transport or movement of goods is taxed solely on the basis that the goods
are thus carried or transported, and thus "directly affects the freedom of trade as
contemplated by Art. 301.“
The Supreme Court took the view that the freedom guaranteed by Art. 301 would become
illusory if the movement, transport, or the carrying of goods were allowed to be impeded,
obstructed or hampered by the taxation without satisfying the requirements of Art. 302 to 304.
The view propounded in Atiabari was bound to have great adverse effect upon the financial
autonomy of the states. It would have rendered their taxing power under entries 56 and 57,
List II.
Accordingly, the matter came to be re-considered by the Supreme Court in Automobile Case.
2/16/2023 33
Automobile Transport (Raj) Ltd. and ors. Vs. State of Rajasthan
Art. 301 should not unduly cripple state autonomy, and that it should be consistent with an orderly society,
the Supreme Court now ruled that regulatory measures and compensatory taxes for the use of trading
facilities were not hit by Art. 301 as these did not hamper, .but rather facilitated, trade, commerce and
intercourse.
A working test to decide whether a tax is compensatory or not would be to enquire whether the trades
people are having the use of certain facilities for the better conduct of their business and paying not
patently much more than what is required for providing the facilities? A tax does not cease to be
compensatory because the precise or specific amount collected is not actually used in providing facilities.
The concept of compensatory tax evolved in this case was something new as in Atiabari, the court had
dismissed the argument that the money realized through the tax would be used to improve roads and
waterways
2/16/2023 34
PART XIII | TRADE, COMMERCE AND INTERCOURSE
2/16/2023 35
PART XIII | TRADE, COMMERCE AND INTERCOURSE
• Article 304
Restrictions on trade, commerce and intercourse among States
Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law
a) impose on goods imported from other States or the Union territories any tax to which
similar goods manufactured or produced in that State are subject, so, however, as not
to discriminate between goods so imported and goods so manufactured or produced;
and
b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse
with or within that State as may be required in the public interest:
Provided that no Bill or amendment for the purposes of clause shall be introduced or
moved in the Legislature of a State without the previous sanction of the President.
2/16/2023 36
Comparative Analysis of
Art 302 and Art 304 (b) and Art 301 and Art 303
• Article 305
2/16/2023 38
THANKS
• Angshuman Hazarika
• angshuman.hazarika@iimranchi.ac.in
2/16/2023 39