Legality Ensues: India

One the most distinguishing features of the Indian Constitution has to be the manner in which it has been drafted and adopted. While Constitution of other countries was imposed on them by exercise of power, the Indian Constitution was made by people themselves, though by representatives in the Constituent Assembly.

HISTORICAL BACKGROUND:

1. Government of India Act, 1858: Making of the modern Constitution at the earliest began from 1858, when India first came under direct rule of the British Crown. The Govt. of India Act, 1858 marks as a starting point towards making of the Indian Constitution because it was dominated by principle of absolute imperial control, without any popular participation in the administration of the country. The powers of the Crown were to be exercised absolutely by Secretary State of India, assisted by an Executive Council comprising 15 members, which was composed exclusively of people from England, thereby resulting in no concern for public opinion by the State.

2. Indian Councils Act, 1861: The Act introduced only a minute element of popular participation by providing that the Council would include certain non-officio members as well which would then function as a Legislative Council. The inclusion of non-officio members in the Council however was not considered representative, as their functions was restricted only to consideration of legislative proposals made before it.

3. Indian Councils Act, 1892: The Act comprised of 2 major improvements from the previous act:

Non-officio members were to be now elected by Chamber of Commerce and Local Bodies for State and Province respectively.
The functions performed by the Council was now widened, and had the power to discuss the Budget as well as to address the questions to Executive.

4. Indian Councils Act, 1909 (Morley-Minto Reforms): Morley Minto reforms is considered as the first attempt at introducing a representative and popular element in the governance in the truest sense. The size of the Legislative Council was enlarged by increasing the number of non-officio members, making the official majority in the Council disappear. The Act also introduced an element of election by announcing separate electorate for Muslims.

5. Government of India Act, 1919: The Act is considered as a landmark in the constitutional development of India, which introduced substantive changes in the existing system of governance. The major features of the Act were:

Dyarchy (dual government) in Provinces
Relaxation of Central control over Provinces
Increase in representative nature of Indian Government.

The Act of 1919 failed to fulfill the aspirations of the nation as the Government structure remained by and large Unitary, with Governor-General being the one through which the British Parliament discharged their duties.

6. Government of India Act, 1935: The Indian Constitution is, to an extent, based on the said Act, whose major features included:

a. Separate electorate not only for Muslims, but also for Sikhs, Indian Christians and Anglo-Indians.
Federal System of Governance
Dyarchy at the Centre
Bi-cameral Legislature
Distribution of power.

7. Indian Independence Act, 1947: The said Act provided an interim Constitution to both India and then newly-formed Pakistan, until the two dominions established a Constituent Assembly and draft its own Constitution. The Act abolished the sovereignty and responsibility of British Parliament over India and the Governor General were now merely the Constitutional heads for the Government.

8. The Constituent Assembly began working on the making of the Indian Constitution on 9th December, 1946 and it received the signature of the President on 26th November, 1949. While the provisions relating to citizenship, elections, provisional Parliament and transitional provisions were given immediate effect i.e. from 26th November, the rest of the Constitution came into force on 26th January, 1950.

THE PREAMBLE:
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens:

JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity;

and to promote among them all

FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation;

IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.

FEATURES OF THE CONSTITUTION:

Sovereign: means the independent authority of the State, and that it is not subject to the control of any other State or external power.

Republic: A government of the people and for the people, all source of authority as bestowed by the Constitution is the people of India.

Socialist: The principle means of production are under social ownership leading to progressive speeding up of production and equitable distribution of national wealth.

Secular: The State protects all religions equally and does not itself uphold any religion as the State religion. The question of secularism is not one of sentiments, but of law.

Democratic: The Constitution envisages democratic not only political, but also social meaning not only a democratic form of government but also a democratic society, infused with the spirit of justice, liberty, equality and fraternity.

Other important features, inter alia, include:

1. It is a bag of borrowings: The Constitution is a curation of best features of Constitutions all around the world which is then modified to suit the conditions prevalent in India.

2. Partly rigid and partly flexible: As aptly put by H.R. Khanna, J. in the landmark judgement of Kesavananda Bharati v. State of Kerala [(1973) 4 SCC 225], the Constitution is dynamic in nature and therefore contains room for experiment, however the basic structure of the Constitution cannot be altered, that India is a Sovereign, Democratic, Republic.

3. Quasi-federal form of Government: Federalism essentially means two or more governments exercising concurrent jurisdiction over a territory, where none of the government is subordinate to the other. As laid down in the case of S.R. Bommai v. Union of India [(1994) 2 SCR 644], a state has a federal status but state qua the Union is quasi-federal and that India practises both unitary and federal principle of governance, depending on time and circumstances.

4. Universal Adult Franchise: One person one vote, one vote one value.

5. Cooperative Federalism: the state and centre work in harmony, with the spirit of togetherness and sharing the same goal: of all round development of the nation.

6. It is the longest constitution, comprising of 448 articles in 25 parts, 12 schedules, 5 appendices and 101 amendments.

7. Supremacy of Constitution: The Indian Constitution is supreme in the land and nothing can override the Constitution. The Constitution also provides for redressal mechanism in case of breakdown in any of the state or Union.

SOURCES:
Introduction to the Constitution of India by D.D. Basu;
Case Material on Constitutional Law – I, Faculty of Law, University of Delhi.

Rapid growth of multinationals and the era of cross border mergers has given rise to complex problems of implementation of international law. Purely national solutions to the problems of corporate control are of no avail. Therefore, the mechanisms and processes by which such international companies are governed becomes an area of vital importance for the nations they function in.

Given hereunder is an international perspective with regards to how the corporate affairs are governed, administered and regulated in the world’s significant economies.

NATION	GOVERNING ACT	ADMINISTRATIVE BODY	ADJUDICATING BODY
India	The Companies Act, 2013	Ministry of Corporate Affairs Registrar of Companies	NCLT
United Kingdom	The UK Companies Act, 2006	Secretary of State	Company Names Tribunal UK Courts of competent jurisdiction
United States of America	State Laws The Federal Constitution The Revised Model Business Corporation Act US Securities Act, 1934	Securities and Exchange Commission Federal Trade Commission	Federal Courts of USA
Australia	The Corporations Act, 2001	Australian Securities and Investments Commission	Federal Circuit Court of Australia Federal Courts of Australia

INDIA:

The Ministry of Corporate Affairs, Government of India is responsible for formulating strategies and policies related to the corporate affairs in the country. Governed by the Companies Act, 2013, the Registrar of Companies acts as the administrative body for the companies in India. Securities and Exchange Board of India (SEBI) acts as the regulatory body for the publically listed companies. The adjudicating authority for matters of corporate affairs lies with the newly constituted NCLT and NCLAT. The jurisdiction of all other civil courts will be dispensed with, once the NCLT becomes fully functional. The Supreme Court of India, subject to certain restrictions, still however remains the court of highest appeal in matters of corporate affairs.

It must also be noted that with the onset of The Insolvency and Bankruptcy Code, 2016, the power of adjudication in matters of bankruptcy and insolvency in companies, which earlier vested with the Debt Recovery Tribunal, will also be shifted over to the National Company Law Tribunal.

UNITED KINGDOM:

The Company Law in UK had undergone a major reform in UK under the Company Law Reforms. The Department of Trade and Industry was responsible for bringing out the new company law, which is now known as the UK Companies Act, 2006. While the Indian Legal System updated itself by constituting a Tribunal which specifically relates to corporate affairs, there is no separate adjudicating body specifically formed for such matters in UK. Usually, the powers of sanctioning the scheme of restructuring or of resolving an application for grievances of the stakeholders are vested with the courts of competent jurisdiction.

However, the Company Names Tribunal is a separate adjudicating body specifically constituted to provide a remedy for parties who are aggrieved by the registration of a company name in which they have a goodwill/reputation; specifically, that they suspect the name has been registered in order to extract money or to prevent the aggrieved party from registering the name.

UNITED STATES OF AMERICA:

There is no federal corporation statute as such in the US. Each state has its own corporate law regime and it provides for wide diversity of legislation and experimentation in the corporate form. However, the Federal Constitution ensures uniformity and harmony across the United States. Another harmonising factor is existence of model statutes which serve as uniform acts or drafting guides which may be customised by individual states. Revised Model Business Corporation Act largely serves as a guide for corporate laws for most of the states in US. Since the US has a long tradition of individual ownership of securities, the most significant of these federal laws applicable to corporations is the federal securities regime. Therefore many matters characterised as company law elsewhere have been characterised in the US as securities law and taken out of the ambit of state legislatures.

There is no special court formed for matters relating to corporate affairs. The Securities and Exchange Commission is the administrative body for corporate affairs in the US. The Federal Trade Commission can be approached when issues related to consumer protection and competition aspects come into question. The rest of the jurisdiction lies in Federal Courts of the US.

AUSTRALIA:

Heavily borrowed from the common law of UK, the Australian companies are governed by Corporations Act, 2001 and administered by a single national regulatory authority, the Australian Securities and Investments Commission.

The adjudicating bodies for corporate affairs include Federal Circuit Court of Australia which hears less complex disputes in matters under family law, administrative, bankruptcy, industrial relations, migration and trade practices law. The Federal Court of Australia hears matters on a range of different subjects including bankruptcy, corporations, industrial relations, native title, taxation and trade practices laws, and hears appeals from decisions (except family law decisions) of the Federal Magistrates Court.

SOURCES:

Advanced Company Law – ICSI;

The UK Companies Act, 2006;

www.nclt.in;

www.mca.gov.in;

www.gov.uk;

www.australia.gov.au;

www.ftc.gov;

www.uscourts.gov