RAM KRISHNA DALMIA v.

JUSTICE TENDOLKAR- AIR 1958 SC 538

Submitted by
Ishan Mitra

Division B. Semester - 3
Lloyd Law College

In
NOVEMBER, 2017

Under the guidance of

Ms. Ankita Pandey
PETITIONER:
SHRI RAM KRISHNA DALMIA

Vs.

RESPONDENT:
SHRI JUSTICE S. R. TENDOLKAR & OTHERS
DATE OF JUDGMENT:
28/03/1958

BENCH:
DAS, SUDHI RANJAN (CJ)
BENCH:
DAS, SUDHI RANJAN (CJ)
AIYYAR, T.L. VENKATARAMA
SINHA, BHUVNESHWAR P.
DAS, S.K.
SARKAR, A.K.

CITATION:
1958 AIR 538 1959 SCR 279
INTRODUCTION
The case dealt with the constitutionality of the legislation empowering the
government to appoint a commission- further, the legality of the notification
setting up the commission and conferring powers thereupon was also
questioned - in exercise of the powers conferred upon it by section 3 of the
Commission of Enquiry act,1952, the central government by a notification,
appointed a commission to inquire about certain companies and the interest
which certain persons named in the notification exercised over these companies
- on the question of the validity of the act and the notification, it was held that,
the act was valid and intra vires and that the notification was also valid except
the use of some words, which went beyond the act - Indian penal code, 1890
sections 300, 304 part (i) & order new Delhi, the 11th December, 1956 s.r.o.
2993 - whereas it has been made to appear to the central government that : (1)
a large number of companies and some firms were promoted and/or controlled
by Sarvashri Ramakrishna Dalmia, Jaidayal Dalmia, Shanti Prasad Jain, Shriyans
Prasad Jain, Shital Prasad Jain or some one or more of them and by others being
either relatives or employees of the said person or persons, closely connected
with the said persons; (2) large amounts were subscribed by the investing public
in the shares of some of these companies; (3) there have been gross
irregularities (which may in several respects and materials amount to illegalities)
in the management of such companies including manipulation of the accounts
and unjustified transfers and use of funds.
ACTS MENTIONED IN THE CASE:-
COMMISSIONS OF ENQUIRY ACT, 1952
An Act to provide for the appointment of Commissions of Inquiry and for vesting
such Commissions with certain powers.
Article 14 in The Constitution of India 1949
Equality before law The State shall not deny to any person equality before the
law or the equal protection of the laws within the territory of India Prohibition
of discrimination on grounds of religion, race, caste, sex or place of birth
Article 246 in The Constitution of India 1949
Subject matter of laws made by Parliament and by the Legislatures of States
(1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive
power to make laws with respect to any of the matters enumerated in List I in
the Seventh Schedule (in this Constitution referred to as the Union List)
(2) Notwithstanding anything in clause ( 3 ), Parliament, and, subject to clause (
1 ), the Legislature of any State also, have power to make laws with respect to
any of the matters enumerated in List III in the Seventh Schedule (in this
Constitution referred to as the Concurrent List).
(4) Parliament has power to make laws with respect to any matter for any part
of the territory of India not included (in a State) notwithstanding that such
matter is a matter enumerated in the State List.

FACTS
Six appeals were made against a common judgment and order pronounced on
April 29, 1957, by a Division Bench of the Bombay High Court in three several
Miscellaneous Applications under Art. 226 of the Constitution, namely, No. 48
of 1957 filed by Shri Ram Krishna Dalmia (the appellant in Civil Appeal No. 455
of 1957), No. 49 of 1957 by Shri Shriyans Prasad Jain and Shri Sital Prasad Jain
(the appellants in Civil Appeal No. 456 of 1957) and No. 50 of 1957 by Shri Jai
Dayal Dalmia and Shri Shanti Prasad Jain (the appellants in Civil Appeal No. 457
of 1957). The case dealt with the constitutionality of the Legislation empowering
the Government to appoint a commission. Further, the legality of the
notification setting up the commission and conferring powers thereupon was
also questioned. In exercise of the powers conferred upon it by Section 3 of the
Commission of Enquiry Act,1952, the Central Government by a notification,
appointed a commission to inquire about certain companies and the interest
which certain persons named in the notification exercised over these companies
On the question of the validity of the Act and the notification, it was held that,
the Act was valid and intra vires and that the notification was also valid except
the use of some words, which went beyond the Act. In the applications made
they prayed for an appropriate direction or order under Art. 226 for quashing
and setting aside notification No. S.R.O. 2993 dated December 11, 1956, issued
by the Union of India in exercise of powers conferred on it by section 3 of the
Commissions of Enquiry Act (LX of 1952) and for other reliefs.
ISSUES RAISED
The Hon’ble Court had bifurcated the issues raised into minor issues and major
issues, major being the ones related to constitutionality of the Act and Article
14, rest all being minor ones.
MINOR ISSUES
1. NOTIFICATION HAS GONE BEYOND THE ACT It was contended by the
petitioner that the Notification issued by the Government has gone
beyond the Act. They argued that the Act mentioned Public Importance
as an important factor in the setting up of a commission which seems to
be absent in the present case. Besides, Section 3 itself authorises the
appropriate Government to appoint a commission of Inquiry not only for
the purpose of making an inquiry into a definite matter of public
importance but also for the purpose of performing such functions as may
be specified in the notification. Therefore, the notification is well within
the powers conferred on the appropriate Government by section 3 of the
Act and it cannot be questioned on the ground of its going beyond the
provisions of the Act. The Honourable Supreme Court has stated, “We see
no warrant for the proposition that a definite matter of public
importance must necessarily mean only some matter involving the
public benefit or advantage in the abstract, e.g., public health,
sanitation or the like or some public evil or prejudice, e.g., floods, famine
or pestilence or the like.” The Court has said that the conduct of a single
person (or a company or a group of persons) which may assume a
dangerous proposition so as to affect the public being is equally a matter
of public importance as the ones stated above; And hence, the
notification is completely intra vires the Act.
2. THE ACTIONS OF THE COMMISSION WOULD AMOUNT TO USURPATION
OF JUDICIARY The Court to this has said that as the Commission can only
make recommendations which are not enforceable proprio vigore there
can be no question of usurpation of judicial functions.
3. THE COMMISSION CANNOT BE ASKED TO SUGGEST ANY MEASURES
The petitioners then went on to argue that the Commission cannot be
asked to suggest any measures.
MAJOR ISSUES
1. WHETHER THERE WAS A NECESSITY FOR CONSTITUTING THE
COMMISSION.
Under this issue, two points have been discussed, firstly, sufficient grounds
to set up a commission, and secondly, public importance.

2. WHETHER IT IS DISCRIMINATORY TO SINGLE OUT THE PETITIONERS FOR

THE PURPOSES OF THE COMMISSION.
The petitioners, under this issue, have made a reference to the reports of the
Bhabha Committee which showed similar allegations against other people
and/or companies or firm owners.
3. WHETHER CONFERRING OF DISCRETIONARY POWERS TO THE
GOVERNEMENT IS UNCONSTITUIONAL AND DISCRIMINATORY.

4. WHETHER THERE EXISTS ANY NEXUS BETWEEN THE CLASSIFICATION AND

THE OBJECTIVE SOUGHT.
It was contended whether the statue is valid as to is there any nexus attached
to it. It was held by the court that on the Court will also show that a statute
which may come up for consideration on a question of its validity under
Article 14 of the Constitution, may be placed in one or other of the following
five classes.
JUDGEMENT:-
The court dismissed the plea and put forth that there was no violation of
Article 14 because the firms and companies listed had alleged to have
swindling public money and most of the objectives for picking up a firm were
being fulfilled so there was intelligible differentia in this case. In the Dalmia
case it was said that discretionary powers to the Government cannot be
deemed to be discriminatory for the power is vested in the government and
not in a minor official of the government. It was held by the court that on the
Court will also show that a statute which may come up for consideration on
a question of its validity under Article 14 of the Constitution, may be placed
in one or other of the following five classes.
(i) A statute may itself indicate the persons or things to whom its
provisions are intended to apply and the basis of the classification of
such persons or things may appear on the face of the statute or may
be gathered from the surrounding circumstances known to or brought
to the notice of the court. Where the court finds that the classification
satisfied the tests, the court will uphold the validity of the law or
statute.
(ii) (ii) A statute may direct its provisions against one individual person or
thing or to several individual person or things but no reasonable basis
of classification may appear on the face of it or be deducible from the
surrounding circumstances, or matters of common knowledge. In such
a case the court will strike down the law as an instance of naked
discrimination.
(iii) A statute may not make any classification of the persons or things for
the purpose of applying its provisions but may leave it to the discretion
of the Government to select and classify persons or things to whom its
provisions are to apply.
(iv) A statute may not make a classification of the persons or things for the
purpose of applying its provisions and may leave it to the discretion of
the Government to select and classify the persons or things to whom
its provisions are to apply but may at the same time lay down a policy
or principle for the guidance of the exercise of discretion by the
Government in the matter of such selection or classification, the court
will uphold the law as constitutional13
(v) A statute may not make a classification of the persons or things to
whom their provisions are intended to apply and leave it to the
discretion of the Government to select or classify the person or things
for applying those provisions according to the policy or the principle
laid down by the statute itself for guidance of the exercise of discretion
by the Government in the matter of such selection or classification. If
the Government in making the selection or classification does not
proceed on or follow such policy or principle, it has been held by this
Court.
In the case of Ram Krishna Dalmia v Justice Tendolkar, the 5 classes were
made for the future conflicts of any statute that the case would come under
one of the 5 classes. In the Dalmia case, Class 4 was applied.