Principles of Indian Environment Law – Environment Law Notes

You can grab notes on other topics from here.

Polluter Pays Principle

Whoever pollutes the environment has to pay compensation for the pollution caused. Restitution is the basic idea behind compensation. This principle is applied after the pollution has been caused (ex-post application).

It is after the pollution has been caused since you need to establish a harm or causality between the action of polluter and harm caused. Causality is important to measure the damage.

Polluter pays principle is only applied to actual damage which is substantial in nature. It cannot be applied to future or potential damage.

Based on Utilitarian ethics – the Greatest good for the greater number – since you are not holding the state liable but the polluter liable for the damage caused.

Economic principle – encourages rational/ efficient use of scarce resources- internalize the cost of pollution control.

You can grab notes on other topics from here.

Constitutional Remedies – Environment Law Notes

You can grab notes on other topics from here.

  • Entries in List I, II and III.
  • List I – Entry 56 and 57
  • List II – Entry 17, 21 and 57
  • List III- Entry 17, 7A and 17B
  • Fundamental duties (Articles 48A, 51-A(g))
  • 21 – Right to life jurisprudence
  • 245 and 246 – distribution of powers between State and Parliament – Concurrent list – both have powers
  • Article 248 – Parliament has residuary powers
  • Article 249 – power of parliament to legislate with respect to matter in the State list in national interest (2/3’s majority in Rajya Sabha)
  • Article 250 – power of parliament to legislate with respect to matter in the State list (during emergency)
  • Article 251 – Inconsistency between laws – Parliament and State – Parliamentary act will prevail
  • Article 252 – Parliament power to legislate when 2 or more states consent
  • Article 253 – legislation for giving effect to international agreements
  • Article 254 – Inconsistency between laws made by Parliament and laws made by Legislature
    •  Parliament law will prevail over state law – subjects under list I or Concurrent List
    • Repugnant state law – if it  has been reserved for the consideration of the President – subject under Concurrent list – will prevail in the State
    • Proviso – nothing shall prevent Parliament – wrt same matter – any law amending, varying or repealing the law made by the legislature of the State
  • Constitutional (Forty Second) Amendment Act 1976 (Part IV – DPSP)
    • Article 48 – The State shall endeavour to protect and improve the environment and to safeguard the forests and wildlife of the country
    • Article 51-A(g) – It shall be the duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wildlife, and to have compassion for living creatures

Fundamental Duties cases

K. Koolwal v. State of Rajasthan

L.K.Koolwal moves to the court in the matter of sanitation of Jaipur city. It is against the municipality and its failure to provide clean streets.

Article 51A – states that it is the duty of citizens, but in fact, it is also the right of citizens as it gives them a right to move to the court. Article 51A gives the right to move to the court for the enforcement of the duty cast on state, instrumentalities, agencies, departments, local bodies and statutory authorities created under the particular law of the state.

It is the primary duty of the municipal council to remove filth, rubbish, noxious odour or any offensive matter and financial inability cannot be a plea.

Mumbai Kamgar Sabha v Abdulbhai

Fundamental duties cannot be enforced by writs- they can be promoted only through constitutional methods – can be used for interpreting ambiguous statutes.

Sachinand pandey v. State of WB

Group of citizens challenged the location of a hotel on the ground that the construction would interfere with the flight path of migratory birds. The question raised is whether the government of WB has shown such lack of awareness of the problem of the environment in making allotment of land.

Whenever a problem of ecology is brought before the court, the court is bound to bear in mind Article 48 and Article 51 A(g). When the court is called upon to give effect to DP and fundamental duties, the court may examine whether appropriate considerations are borne in mind and irrelevancies are excluded.

Right to Life and Right to live in a Healthy Environment

RELK v. State of UP

The case arose from haphazard and dangerous limestone quarrying practices in the Mussoorie hill range of Himalayas. Miners blasted out the hills with dynamite, extracting limestone from thousands of acres. Landslides killed villagers and destroyed their homes, cattle and agricultural lands.

The court prohibited blasting operations pending a review to determine if the mines were being operated in compliance with safety standards. Court-appointed an expert committee to assess the mines.

Most dangerous mines and those falling within the Mussorie city board limits be denied leases and their operations cease immediately.

Damador Rao v. S.O, Municipal Corporation of Hyderabad

The people living in a residential area challenged the attempt to convert open space in their vicinity into another residential complex.

The court noted that the owners of the area concerned can only use their property with the law and in conformity with the provisions of the developmental plan.

Protection of the environment is not only the duty of the citizen but it is also the obligation of the state and all other organs including the court. Enjoyment of life and its attainment and fulfilment guaranteed by Article 21 embraces the protection and preservation of nature’s gifts.

Slow poisoning by the polluted atmosphere caused by environmental pollution should also be regarded as amounting to a violation of Article 21. It, therefore, becomes the legitimate duty of the courts as the enforcing organs of constitutional objectives to forbid all action of the state and citizen from upsetting the environmental balance.

Subhash Kumar v. State of Bihar

Subhash Kumar wanted to carry away slurry from the Tata Iron & Steel Company’s ponds. Kumar tried various means to pressure the company into giving him business. When the company refused, he filed a PIL under Article 32 claiming that the slurry discharged was polluting the river and was a serious health risk.

Court stated that personal interest cannot be enforced through the process of this court under Article 32 of the constitution.

A person invoking the jurisdiction of court under Article 32 must approach this court for vindication of fundamental rights of the affected persons and not for vindication of personal rights. Right to life includes the right to enjoy unpolluted air and water.

Right to Livelihood

Pradeep Kishan v. Union of India

Petitioner is an environmentalist – filed a petition under Article 32- challenging legality and constitutionality of an order which permitted collection of tendu leaves from sanctuaries and NP’s by villagers living around the boundaries – object of maintenance of traditional rights.

Petitioner contends that this is ultra vires to the provisions of Wildlife Protection Act. Petition denied

C. Mehta v. Union of India – 1996

M.C. Mehta asked the SC to enforce a plan for Delhi which contemplated shifting of hazardous industries away from the city. Environmental pollution in Delhi – relocation of 168 industries in Delhi – compensation package for workers

Right to know

Article 19(1)(a) – close link to article 21- people have a right to know with reference to a policy decision that impacts environment and health.

Bombay Environment Action Group v. Pune Cantonment

Petitioners wanted that they should be granted either inspection or copies of applications made for building permissions, plans accompanying such applications and official proceedings relating to permissions including renewals. The concept of an open government is the direct emanation from the right to know which seems to be implicit in the right of free speech and expression guaranteed under Article 19(1)(a).

Research Foundation for Science Technology v. UOI (2005-sc)

Right to information and community participation important with respect to matters relating to environmental pollution.

Right to know – since people are most affected by it and right to know is a precursor to right to information.

Right to practice any profession

Art. 91(1)(g) – right to practice any profession or to carry on any occupation, trade or business  – Art. 19(1)(6) – reasonable restriction can be  imposed by the State in the interest of the general public

Abhilash Textile v. Rajkot Municipal Corporation

The petitioners are discharging dirty water from the factory on public road/ public drainage without purifying the same, thereby causing damage to public health. The petitioners contended that they are carrying on the business since last about 20 to 25 years and the industry is providing employment to a lot of families.

The contention that the petitioners are carrying out the business since past 20-25 years has no merit. Business activity that results in general public health hazard cannot be carried out. It is not an absolute right.

C. Mehta v. Union of India (1988-SC)

PIL filed for restraining the respondents from letting out the trade effluents into the Ganga river till they put up necessary treatment plants for treating the trade effluents. If the tannery does not set up a primary treatment plant, it will have to stop its business.

You can grab notes on other topics from here.

Tort Law and Remedies – Environment Law Notes

You can grab notes for other law subjects from here.


A plaintiff in tort law/action may sue for damages or an injunction, or both.


Damages are the pecuniary compensation payable to the commission of a tort. Damages may be:

  • Substantial
  • Exemplary

Substantial damages are awarded to compensate the plaintiff for the wrong suffered. The purpose of such damages is restitution. i.e. restore the plaintiff to the position he or she would have been in if the tort has not been committed

Exemplary damages are intended to punish the defendant for the outrageous nature of his/her conduct. Damage is irreversible damage. – punish the person for committing the tort

  1. Injunction

An injunction is a judicial process where a person who has infringed or is about to infringe the rights of another, is restrained from pursuing such acts. It may require a party to do a particular thing or to not do. Injunctions are of two types:

  • Temporary
  • Permanent


A nuisance means anything that annoys, hurts or offends; but for an interference to be an actionable nuisance, the conduct of the defendant must be unreasonable and must exist for a reasonable period of time.

  • Public
  • Private

A public nuisance interferes with the quality of life of a class of persons who come within its neighbourhood. It is both a tort and crime.

A private nuisance is a substantial and unreasonable interference with the use and enjoyment of land. An action for private nuisance may seek injunctive relief as well as damages.

Private Nuisance Cases

J.C. Galstaun v. Dunia Lal seal

  • Plaintiff has a garden house and the defendant has a shellac factory situated 200 or 300 yards to the north-west of it.
  • The defendant discharges the refuse liquid of his manufactory into a municipal drain that passes along the north of plaintiff’s garden. This has damaged him in health, comfort and the market value of his garden property. The liquid is foul smelling.

Held: Plaintiff is entitled to restrain the defendant from discharging the refuse liquid of his factory into Municipal Drain. Injunction and substantial damages awarded.

B. Venkatappa v. B. Lovis

  • Mandatory Injunction directing the defendant directing the defendant to close the holes in a chimney facing the plaintiff’s property.
  • The smokes and fumes that materially interfered with ordinary comfort were enough to constitute an actionable nuisance.

Three important points from this case:

  • Actual injury to health need not be proved
  • Existence of other sources of discomfort in the neighbourhood was no defence
  • Court rejected the defence that plaintiff came to the nuisance

The fact that nuisance existed long before the complainant occupied his premises, does not relieve the offender.

Kuldip Singh v. Subhash Chandra Jain

  • The plaintiff feared that the baking oven and 12-foot chimney built by his neighbour would cause a nuisance when the bakery commenced.
  • The Supreme Court drew a distinction between an existing nuisance and future nuisance.
  • In case of a future nuisance, a mere possibility of injury will not provide the plaintiff with a cause of action unless the threat is so certain or imminent that an injury actionable in law will arise unless prevented by an injunction.

Actionable Nuisance

Ram Baj Singh (Dr.) v. Babulal

  • Doctor complained (plaintiff) – the brick grinding machine was generating dust which polluted the atmosphere and entered the consulting chamber of the plaintiff. – caused physical inconvenience to him and his patients.
  • The test which has always been used is the test of ascertaining the reaction of a reasonable person according to the ordinary usage of mankind living in a particular society in respect of the thing complained of.
  • Special Damage & Substantial Injury: Doctor complained asking for both of these
  • Special Damage is used to indicate damage caused to a party in contra-distinction to damage caused to the public at large.
  • However, a single act may amount to a public nuisance and also give rise to a cause of action to an individual to sue on basis of public nuisance.
  • In assessing the nature of the substantial injury, the test to be applied is again the appraisement made of the injury by a reasonable person belonging to the society.

Public Nuisance

  • A public nuisance may be broadly defined as an unreasonable interference with a general right of the public. It is not tied to interference with enjoyment and use of the property.
  • Section 268 of IPC – a person is guilty of public nuisance that does any act or is guilty of an illegal omission which causes any injury, danger or annoyance to the public.
  • A common nuisance is not excused on the ground that it causes some convenience or advantage.
  • Section 133 of CRPC provides an independent, speedy and summary remedy against a public nuisance. Section empowers a magistrate to pass a conditional order for removal of public nuisance within a fixed period of time.


Deshi Sugar Mills v. Tupsi Kahar

  • The sub-divisional magistrate ordered that the two sugar mills in the locality should discontinue draining dirty and toxic water into the river. On Appeal, Patna HC held categorically that under the law, the magistrate had the power to proceed against discharge of effluents.
  • However, it could not be decided merely because a number of persons thought that stagnation and impurity of water was due to sugar mills. The decision was specific to the point that section 133 can be used for preventing public nuisance. However, the discretion is on the magistrate to decide what type or quantum of evidence should support the decision, is left to the magistrate. The discretion has to based on sufficient evidence.

Raghunandan v. Emperor

  • The Allahabad HC upheld the order of a magistrate forbidding a factory owner from operating his factory engines from 9 pm to 5 am on the ground that it was ‘injurious to the physical comfort of the community’.
  • The nuisance of such a nature would undoubtedly affect those living in the neighbourhood of the factory.

Shaukat Hussain v. Sheodayal

  • The court tried to limit the application of provision only to actual nuisance and not to entitle it to the case of potential nuisance.

SECTION 133 Code of Criminal Procedure

Municipal council, Ratlam v. Vardichand

Sub-divisional magistrate was moved to take action under s. 133 CRPC to abate the nuisance by ordering the municipality to construct drain pipes with the flow of water to stop the stench. The municipality cannot extricate itself from the responsibility. The plea that notwithstanding the public nuisance financial inability validly exonerates it from statutory liability has no judicial basis.

Magistrate’s responsibility under s. 133 CRPC is to order the removal of such nuisance at a time to be fixed in the order. Failure to comply with the direction will be visited with a punishment contemplated by sec. 188 IPC.

Krishna Gopal v. State of MP

A complaint against noise and air pollution from a glucose saline manufacturing company installed in a residential locality. A lady resident complained about constantly being disturbed in sleep. The magistrate acted quickly and ordered it to close it down. Sessions court – instead of removal of the whole factory, the only boiler needs to be removed.

HC- preferred the standby magistrate and ordered closure of factory

Issue- whether an order of public nuisance can be made by a single person?

It is not the intent of the law that community as a whole or large should come forward to lodge their complaint. A mere reading of Section 133 would show that jurisdiction of sub-divisional magistrate can be invoked on receiving a report of a police officer or other information and on taking such evidence if any, as he thinks fit. It can be made by a single person.

Himmat Singh v. Bhagwana

Working with fodder cutting machines caused noise and smell. Sand laden winds carried particles of fodder to a residential colony. Rajasthan HC- all of these constituted public nuisance justifying the interference of district magistrate.

Do specific Legislations repeal Sec. 133 CRPC?

Kerela HC and MP HC held that Water and Air Acts are later special enactments which are presumed to have repealed the prohibitions of a public nuisance under CRPC. ( implied repeal)

Cases: Tata Tea Ltd v. State of Kerela , Abdul Hamid v. Gwalior Rayon Silk Manu. Co.

Abdul case: Discharge of pollutants into the river had caused the death of children and animals. The executive magistrate abstained from taking action under sec. 133 of CRPC pointing out to remedies under Water and Air Acts, limiting the law of public nuisance by the application of the doctrine of implied repeal.

However, Division Bench Kerela HC overruled the decision of Tata Tea of implied repeal – M. Krishna Panicker v. Appukuttam Nair – the water act did not repeal the law of public nuisance under CRPC. Zrepeal is a legislative exercise, Tata tea’s assumption of implied repeal could not be agreed upon.

State of MP v. Kedia Leather & Liquor Ltd.

The sub-divisional magistrate directed the respondents to close their industries on the ground that discharge of effluents to the nearby stream caused danger to the health of villagers thereby resulting in public nuisance.

Implied repeal can be found only when the provisions of the later act are inconsistent with or repugnant to the provision of an earlier act so that the two cannot stand together. Section 133 does not deal with future/ potential nuisance – only with Actual. Section 133 coexists with water and Air act.


A common law action for negligence may be brought to prevent environmental pollution.

The plaintiff must show that:

  1. The defendant was under the duty to take reasonable care to avoid damage complained of
  2. There was a breach of duty
  3. Breach of duty caused damage
  • An act of negligence may also constitute a nuisance if it unlawfully interferes with the enjoyment of another right in the land.
  • The causal connection between the negligent act and the plaintiff’s injury is often the most problematic link in pollution cases.
  • The causal link is more tenuous when the effect of the injury remains latent over a long period of time.

Naresh Dutt Tyagi v. State of UP

Chemical pesticides stored in a go-down in residential area – Death of 3 children and foetus in mother’s womb – clear case of negligence

Strict and Absolute Liability

Strict liability

Rylands v. Fletcher

A person is strictly liable when he brings or accumulates anything on his land, something likely to cause harm if it escapes, and damage arises as a natural consequence of its escape. Strict Liability is subject to a number of exceptions:

  1. Act of God
  2. Contributory negligence
  3. Plaintiff’s consent
  4. Act of third party

Absolute Liability

Where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting for example, in the escape of toxic gas, the enterprise is strictly and absolutely liable to compensate all those are affected by the accident and such liability is not subject to any exceptions.

Prescriptive Right to commit Nuisance

Prescriptive right to commit (private) nuisance may be acquired if a person has continued with an activity on the land of another person for 20 years or more.

Khurshid Hussain v. Secretary of state – Nature of Easement

You can grab notes for other law subjects from here.

Contact Us

Code of Civil Procedure, 1908 Case Briefs

You can grab notes for other law subjects from here.


Forum non-conveniens and anti-suit injunction

Res judicata

Res Sub Judice

Joinder of Parties and Claims

Pleadings and amendment of pleadings

Plaint-Return of plaint and rejection of plaint

Suits against the government and consolidation of suits

Written Statement (Set off Rule)

Counter Claim and Summons

Discovery (Order XI)

Class 14 – Injunctions (Order XXXIX)


First Appeal


You can grab notes for other law subjects from here.

Privacy Policy

Privacy Policy for NotesforFree

t we consider the privacy of our visitors to be extremely important. This privacy policy document describes in detail the types of personal information is collected and recorded by and how we use it.

Log Files
Like many other Web sites, makes use of log files. These files merely logs visitors to the site – usually a standard procedure for hosting companies and a part of hosting services’s analytics. The information inside the log files includes internet protocol (IP) addresses, browser type, Internet Service Provider (ISP), date/time stamp, referring/exit pages, and possibly the number of clicks. This information is used to analyze trends, administer the site, track user’s movement around the site, and gather demographic information. IP addresses, and other such information are not linked to any information that is personally identifiable.

Cookies and Web Beacons uses cookies to store information about visitors’ preferences, to record user-specific information on which pages the site visitor accesses or visits, and to personalize or customize our web page content based upon visitors’ browser type or other information that the visitor sends via their browser.

DoubleClick DART Cookie

→ Google, as a third party vendor, uses cookies to serve ads on
→ Google’s use of the DART cookie enables it to serve ads to our site’s visitors based upon their visit to and other sites on the Internet.
→ Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy at the following URL –

Our Advertising Partners

Some of our advertising partners may use cookies and web beacons on our site. Our advertising partners include

  • Google
  • Other

These third-party ad servers or ad networks use technology in their respective advertisements and links that appear on and which are sent directly to your browser. They automatically receive your IP address when this occurs. Other technologies (such as cookies, JavaScript, or Web Beacons) may also be used by our site’s third-party ad networks to measure the effectiveness of their advertising campaigns and/or to personalize the advertising content that you see on the site. has no access to or control over these cookies that are used by third-party advertisers.

Third Party Privacy Policies

You should consult the respective privacy policies of these third-party ad servers for more detailed information on their practices as well as for instructions about how to opt-out of certain practices.’s privacy policy does not apply to, and we cannot control the activities of, such other advertisers or web sites.

If you wish to disable cookies, you may do so through your individual browser options. More detailed information about cookie management with specific web browsers can be found at the browsers’ respective websites.

Children’s Information
We believe it is important to provide added protection for children online. We encourage parents and guardians to spend time online with their children to observe, participate in and/or monitor and guide their online activity. does not knowingly collect any personally identifiable information from children under the age of 13. If a parent or guardian believes that has in its database the personally-identifiable information of a child under the age of 13, please contact us immediately (using the contact in the first paragraph) and we will use our best efforts to promptly remove such information from our records.

Online Privacy Policy Only
This privacy policy applies only to our online activities and is valid for visitors to our website and regarding information shared and/or collected there. This policy does not apply to any information collected offline or via channels other than this website.

By using our website, you hereby consent to our privacy policy and agree to its terms.

This Privacy Policy was last updated on: Friday, January 26th, 2018.
Should we update, amend or make any changes to our privacy policy, those changes will be posted here.

Corporate Law Case Brief – Chandrakant Khare v Shantaram Kale

You can grab other case briefs on Corporate law from here.


  • The first meeting of the Aurangabad Municipal Corporation was held on May 6, 1983 at 2 PM and the polling for the offices of mayor, deputy mayor and members of the standing committee was supposed to be held at 2: 30 PM. But at 2: 30 PM, the opposition created chaos and demanded that the meeting to be adjourned at a later date.
  • When the situation was brought under control, the Municipal Commissioner announced that the meeting would continue and the elections would be held at 4.30 p.m. The petitioner filed a protest at 4.15 p.m. stating that the meeting had been adjourned by the Municipal Commissioner for the day and hence meeting can’t be held.
  • Subsequently Respondents 1 and 2 were declared elected as Mayor and Deputy Mayor respectively. The appellant filed a writ petition before the high court on the ground that the meeting in which the election was held was invalid. The High Court held that the meeting was not adjourned for the day or sine die, but was only postponed, to be held as soon as peace was restored on the very day and upheld the election of Respondents 1 to 8. Against the judgment of the High Court, the petitioner has filed the present special leave petition.


Whether the first meeting of the corporation presided over by the commissioner was adjourned for the day/adjourned sine die or was merely suspended?


  • A chairman by himself cannot postpone a meeting. The proper course to adopt is to hold a meeting and then adjourn it to a more convenient date.
  • An adjournment will be within his competence in the case of a disorder but for no longer than he considers necessary and his decision should be communicated to the meeting at least to the extent to which it is possible for him to do so.
  • If the chairman adopts any other course, the members who can constitute a ‘quoram’ (the minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid) may continue with the meeting and lawfully transact the announced business.
  • Adjournment is the act is postponing a meeting of any private or public body or any business until another time, or indefinitely, in which case it is an adjournment sine die. The word applies also to the period during which the meeting or business stands adjourned.
  • An Adjournment may be:
  1.   For an interval expiring on the day of the adjournment.
  2. For an interval expiring on some later date.
  3. For an indefinite time (i.e. sine die).
  4. Until a fixed time and date.
  5. To another place.


The first meeting of the Municipal Corporation fixed by the municipal commissioner was not adjourned or adjourned sine die but was only suspended and was to resume when peace and order was restored.

You can grab other case briefs on Corporate law from here.


Corporate Law Case Brief – LIC of India v. Escorts Ltd.

You can grab other case briefs on Corporate law from here.


With an intention to earn foreign exchange by attracting non-resident individuals of Indian nationality or origin to invest in shares of Indian companies, the Government of India decided to provide incentives to such individuals with prior permission of RBI.

Desiring to take advantage of the Non-Resident Portfolio Investment Scheme and to invest in the shares of Escorts Ltd., (an Indian company), thirteen overseas companies, twelve out of whose shares was owned 100% and the thirteenth out of whose shares was owned 98 per cent by Caparo Group Ltd., designated the Punjab National Bank as their banker (authorised dealer) and M/s. Raja Ram Bhasin & Co. as their broker for the purpose of such investment.

Escorts Ltd. sought detailed information from Punjab National Bank and the brokers about the names of investors and also whether the Reserve Bank of India has given permission to them. And Escorts didn’t register the transfer of share.

Life Insurance Corporation of India who along with other financial institutions held as many as 52% of the total number of shares in the company, issued a requisition dated 11.2.84 to the company to hold an extra ordinary general meeting for the purpose of removing nine of the part-time Directors of the company and for nominating nine others in their place.

Union of India, the Reserve Bank of India and the Caparo Group Ltd. claimed that the requisition to hold the meeting was arbitrary, illegal, ultra vires etc.


Whether LIC has right of issuing requisition notice to hold extra ordinary general meeting?


  1. New directors to continue as Managing Directors until the Board of Directors take a decision in the matter.
  2. The action of the Life Insurance Corporation of India in issuing the requisition notice to hold an extra ordinary general meeting of the Escorts Company Ltd. for the purpose of removing nine of the part time Directors of the company and for nominating nine others in their place is neither contrary to the provisions of section 284 of the Companies Act, 1956 nor ultra vires to the powers vested in the Life Insurance Corporation under section 6 of the Life Insurance Corporation of India Act.
  3. The holders of the majority of the stock of a Corporation have the power to appoint, by election, Directors of their choice and the power to regulate them by a resolution for their removal. This is the essence of corporate democracy.
  4. Every shareholder of a company has the right, subject to statutorily prescribed procedural and numerical requirements to call an extra ordinary general meeting in accordance with the provisions of the Companies Act, 1956. He cannot be restrained from calling a meeting and he is not bound to disclose the 918 reasons for the resolution proposed to be moved at the meeting. Nor are the reasons for the resolutions subject to judicial review.
  5. When a requisition is made by a shareholder calling for a general meeting of the company under the provisions of the companies Act validly to remove a director and appoint another, an injunction cannot be granted by the Court to restrain the holding of a general meeting.
  6. When the State or an instrumentality of the State ventures into the corporate world and purchases shares of a company it assumes to itself the ordinary role of a shareholder and dons the robes of a shareholder, with all the rights available to such a shareholder. Therefore, the State as a shareholder should not be expected to state its reasons when it seeks to change the management by a resolution of the company, like any other shareholder.
  7. The rights of a share holder are (i) to elect directors and thus to participate in the management through them; (ii) to vote on resolutions at meetings of the company; (iii) to enjoy the profits of the company in the shape of dividends; (iv) to apply to the court for relief in the case of oppression; (v) to apply to the court for relief in the case of mismanagement; (vi) to apply to the court for winding up of the company; and (vii) to share in the surplus on winding up.
  8. The Reserve Bank of India alone that has to decide whether permission may or may not be granted. The Act makes it its exclusive privilege and function. No other authority is vested with any power nor may it assume to itself the power to decide the question whether permission may or may not be granted or whether it ought or ought not to have been granted. The question may not be permitted to be raised either directly or collaterally before any Court. The Reserve Bank of India was not guilty of any malafides in granting permission to the Caparo Group of companies. Nor was it guilty of non-application of mind.
  9. There was a total and signal failure on the part of Punjab National Bank in the discharge of their duties as authorised dealers.

Court asked RBI to look into matter and gave them power to take actions against Punjab National Bank as they think are necessary.

You can grab other case briefs on Corporate law from here.


Corporate Law Case Brief – World Phone India Pvt. Ltd v. WPI Group Inc USA

You can grab other case briefs on Corporate law from here.


  • WPIPL, is a private company partly owned by WPI Group (43.75%), Mr. Viviek Dhir (43.75%)and Mr. Pankaj Patel (12.5%).
  • On 22nd September, the shares of Mr. Pankaj Patel were transferred to Mr. Vivek Dhir and his wife, Mrs. Malini Dhi, who was also appointed as an Additional Director.
  • On 31st October, in the Board Meeting, the Board of Directors of the company passed a resolution approving a rights issue of 1,49,303 equity shares in accordance with the Articles of the company. Mr. Aditya Ahluwalia had not been present for this meeting as he had not been in the country at that time.
  • The result of this transfer of shares was that the chairman of WPI Group, Mr. Aditya Ahluwalia was now a minority stakeholder in the company.
  • He, therefore, challenge the validity of the board meeting on the grounds of Clause 6.2 of the JVA entered between the Board Members giving an affirmative vote to Mr. Aditya Ahluwalia in all matters.


  • Whether the provisions of an agreement, that are not inconsistent with the Act, but are also not part of the AoA, can be said to be applicable?


  • The legal position is that where the AoA is silent on the existence of an affirmative vote, it will not be possible to hold that a clause in an agreement between the shareholders would be binding without being incorporated in the AoA.
  • In the present case, although the JVA was entered into in 1999 itself, there was no move made by Mr. Aditya Ahluwalia or WPIGI to have the AoA amended at any point in time to incorporate the affirmative vote provided to WPIGI under Clause 6.2 of the JVA.


  • The court held that even a provision in the Shareholders’ Agreement which is not contrary to the Articles of Association or the Companies Act, 1956 cannot be enforced against the company if it is not mentioned in the AoA.

You can grab other case briefs on Corporate law from here.