INDIA BUSINESS WORLD - APRIL 1^st - APRIL 15^th - 2008

RIGHT TO PROPERTY CANNOT BE ENCROACHED WITHOUT THE DUE PROCESS OF LAW, RULES SUPREME COURT

The Supreme Court has ruled that the right to property is a constitutional as well as human right of a citizen and it cannot be encroached upon without due process of law.The ruling has been handed down by a Bench comprising Justices S B Sinha and Lokeshwar Singh Panta who imposed a cost of Rs 50,000 also on Karanataka State Financial Corporation for proceeding against the guarantors of a loan taken by an industrial concern A P Rocks Pvt Ltd.The apex court also dismissed the appeal of the corporation which had proceeded against the two directors of the company namely S K Rajan and N Narasimahaiah under Section 29 and 31 of the State Financial Corporation Act 1951.The company had taken a loan of Rs 100 lakh from the corporation.The apex court in its ruling said, " A surety may be a director of the company. He also may not be. Even if he is a close relative of the director or the managing director the same is not relevant.A director of the company is not an industrial concern. He in his capacity as a surety would certainly not be. A juristic person is a separate legal entity. Its will can be lifted or pierced only in certain situation." The court also noted, " Right of property, although no longer a Fundamental Right, is still a constitutional right. It is also human right. In the absence of any provision either expressly or by necessary implication, depriving a person there from, the court shall not construe a provision leaning in favour of such deprivation.Interpretation of a statute would not depend upon a contingency. It has to be interpreted on its own. It is not a case where we are dealing with a defect in the Legislative drafting. In a case where a court has to weigh between a right of recovery and protection of a right it would also lean in favour of the person who is going to be deprived there from. It would not be the other way round."