Writ Jurisdiction of the Supreme Court and High Courts in India

The Supreme Court of India, under Article 32 of the Constitution, and the High Courts, under Article
226, are empowered to issue writs for the enforcement of fundamental rights and, in the case of
High Courts, even for other legal rights. This power forms a crucial part of the Indian legal system
and serves as a key mechanism for the protection and enforcement of citizens’ rights.

The Supreme Court is considered the “custodian”, “guarantor”, and “defender” of the Fundamental
Rights. If any individual believes their rights are being violated by the state or any public authority,
they have the right to directly approach these higher courts through a writ petition.

A writ is essentially a formal written order issued by a court directing an individual, authority, or
organization to act or refrain from acting in a certain way. The objective is to provide speedy and
effective remedies against arbitrary state action or misuse of power.

Significance of Writ Jurisdiction

The writ jurisdiction ensures that:

• Citizens have direct access to the courts for protection of their rights.

• Public authorities are held accountable.

• The rule of law is upheld.

• Remedies are provided promptly in case of administrative or governmental overreach.

• Different types of writs

• Habeas corpus
• Mandamus
• Quo Warranto
• Certiorari
• Prohibition

• Writ of Habeas Corpus

Purpose and Scope of the Writ

The writ of Habeas Corpus is issued to secure the release of a person who is unlawfully detained or
imprisoned, whether by the state (police or judicial authority) or even a private individual. It is one
of the most effective legal remedies for protecting individual freedom from arbitrary or illegal
restraint.

Key features include:

 • The detained person is brought before the court.

• The detaining authority (public or private) must justify the detention.

• If the detention is found to be illegal or without legal basis, the court will order immediate
release.

Constitutional Foundation

• Article 21 of the Indian Constitution guarantees the Right to Life and Personal Liberty,
stating:
“No person shall be deprived of his life or personal liberty except according to procedure
established by law.”
The writ of Habeas Corpus is the primary mechanism to enforce this right.

• Article 20 is also relevant in the context of unlawful detention. It provides that:

o No person shall be convicted more than once for the same offence (Double
Jeopardy).

o No person shall be compelled to be a witness against themselves.

o No person can be punished for an act that was not an offence under the law at the
time of its commission.

While Article 21 is directly protected by the writ of Habeas Corpus, Article 20 safeguards an
individual from being wrongfully detained under unfair legal practices.

Who Can File the Writ?

• The detained individual can file the petition themselves.

• A friend, family member, or even a concerned citizen can file it on behalf of the detained
person, especially if the person is unable to approach the court directly.

Against Whom Can It Be Filed?

• It can be issued against public authorities, such as police, jail authorities, or any government
official.

• It can also be issued against private individuals—for example, in cases of kidnapping, illegal
confinement, or human trafficking.

Importance of the Writ

Habeas Corpus acts as a powerful constitutional remedy to:

• Prevent misuse of state power.

• Ensure that no person is held without legal justification.

• Reinforce the idea that liberty is the norm and detention is an exception.

In which situations can the writ be issued

1. When the detention is not by the procedure established by law.

2. When an arrest is made under a law that in itself is unconstitutional.

3. When the procedure established by law is not strictly followed.

In which situations can the writ not be issued

1. The writ is not available by operation of res judicata if the writ petition has already been
dismissed once by the competent court.

2. The writ is not available when the detention of the person is related to the order of the
court.

Illustration– Ram, an individual, was taken into police custody by B, a police officer, without a
warrant to arrest Ram. B did not present Ram before the magistrate and also did not allow his family
members to know about Ram’s whereabouts for many days. B was physically and mentally torturing
Ram. Thus, it can be said that B has wrongfully detained Ram, and a writ of habeas corpus can be
issued by Ram’s family on his behalf.

Kanu Sanyal vs Dist. Magistrate, Darjeeling & Ors on 5 February, 1974

Background:

In this case, Kanu Sanyal, a leader of the Naxalite movement, was arrested under the Maintenance
of Internal Security Act (MISA), which was a preventive detention law. The primary issue revolved
around his unlawful detention and whether his detention was justified under the law.

Facts of the Case:

• Kanu Sanyal, along with other leaders of the Naxalite movement, was arrested under MISA,
which allowed for preventive detention without trial.

• Sanyal's detention was challenged through a Habeas Corpus petition filed by his wife,
arguing that the detention was unlawful and violated his constitutional rights.

• The main question raised was whether the detention was illegal or violative of Article 21 of
the Indian Constitution (Right to Life and Personal Liberty).

Key Issues:
 1. Whether a person can be detained under preventive detention laws (like MISA) without the
right to challenge the grounds of detention.

2. Whether the Habeas Corpus writ could be used in this case to challenge the legality of
preventive detention.

Judgment:

The Supreme Court, in its judgment, ruled that the writ of Habeas Corpus could not be used to
challenge preventive detention laws on grounds of the legality of detention if the detention was in
accordance with the provisions of a valid preventive detention law.

• The court upheld the legality of preventive detention under MISA but stressed that the
detainee must be informed of the reasons for detention.

• The Court observed that the Habeas Corpus petition could not be used to scrutinize the
subjective satisfaction of the detaining authority (in this case, the District Magistrate) unless
the authority failed to follow the procedures set by law.

It highlighted the tension between personal liberty (Article 21) and the state’s power to detain
individuals for reasons of national security or public order under preventive detention laws. It
upheld the power of the state to detain individuals under such laws, as long as the procedural
safeguards were followed.

Writ of Mandamus

Mandamus is a Latin term which means “to command”.This writ is issued by a court of higher
authority directing the lower courts, or any other public servant, who has failed to perform their
duty, to perform their mandatory public duty correctly and efficiently. This writ is the last resort, i.e.,
it is issued only when all other attempts to solve the problem have been made. The writ can be
issued against any type of authority: legislative, judicial, quasi-judicial or administrative.

The writ petition can be filed by any person who, in good faith, wants a public authority to function
properly. The writ can be issued against any person or public authority who has failed to perform
their mandatory public duty.

In which situations can the writ be issued

1. The person or any public authority against whom the writ has to be issued must be under an
obligation by law to perform a certain duty, which he has failed or neglected to do.

2. The public duty must be mandatory, and there must be a failure to perform such a
mandatory act.

3. The petitioner must have a legal right to compel the performance of such public duty.

In which situations can the writ not be issued

 1. This writ cannot be issued against the judges of the High Courts and Supreme Court,
compelling them to perform their duty.

2. This writ cannot be issued against the President of India and the Governor of any state,
compelling them to perform their duty.

3. This writ cannot be issued against the working Chief Justice of India, compelling him to
perform his duty.

4. This writ cannot be issued when the nature of the duty is discretionary.

5. This writ cannot be issued against a private individual.

6. This writ cannot be issued to enforce a private contract.

Example– The writ can be issued to compel the performance of certain public duties like holding
elections, preventing dissolution of panchayats and municipalities, or restoration of public offices.

Everest Apartments Co-Operative ... vs State Of Maharashtra & Ors on 18 January, 1966

Background:

The case involved the Everest Apartments Co-operative Society, which challenged the actions of the
State of Maharashtra and its authorities. The cooperative society had certain legal disputes
regarding the regulation of its property and the powers of the state in regulating housing societies
under specific state laws.

The cooperative society was established for the benefit of its members, and the issue arose
concerning the enforcement of certain regulations by the Maharashtra State Government, which
were seen as conflicting with the rights and functions of the society.

Facts of the Case:

• The Everest Apartments Co-operative Society Ltd. was a housing society formed by
residents of a particular apartment complex.

• The State of Maharashtra enacted certain laws regarding the management and regulation of
cooperative housing societies in the state.

• The Everest Society objected to some of the provisions imposed by the state, arguing that
they were unconstitutional and violated the fundamental rights of the society and its
members under Article 19(1)(c) of the Indian Constitution, which guarantees the right to
form associations or unions.

Key Issues:

1. **Whether the state law regulating cooperative societies violated the fundamental rights of
the cooperative society members under Article 19.

2. The extent of the State’s power to interfere with the management of cooperative housing
societies.
 3. Whether the provisions of the law imposed on the society were reasonable restrictions in
the interest of public welfare.

Judgment:

The Supreme Court ruled in favor of the State of Maharashtra, holding that the state's regulations
on cooperative societies were valid and that they did not infringe upon the fundamental rights of
the society members. The Court stated that:

• Article 19(1)(c) does guarantee the right to form associations, but such rights are subject to
reasonable restrictions in the interests of public order, morality, and general welfare, as
provided under Article 19(4).

• The Court held that the regulations imposed by the state were within the legitimate scope
of the state’s power to ensure proper governance and accountability in cooperative
societies.

• The State's action was seen as being within its rights to regulate these societies to ensure
their functioning in accordance with laws governing public welfare and order.

Significance of the Case:

1. Balancing Fundamental Rights and State Powers:

o The case is significant for the way it balanced individual and collective rights with
the state's regulatory powers. It clarified that while individuals have the right to
form associations under Article 19(1)(c), the state can impose reasonable
restrictions under Article 19(4) to ensure proper governance, regulation, and
welfare in matters affecting the public interest.

2. Role of the State in Cooperative Societies:

o The ruling affirmed that the state has the authority to regulate cooperative societies
in the interest of public order, justice, and fair governance, provided such
regulations are reasonable and justifiable.

3. Regulation of Property and Housing Societies:

o The case became a reference point in matters concerning the regulation of

cooperative housing societies, particularly with respect to the state’s role in
imposing laws on cooperative property management.

4. Interpretation of Article 19(1)(c) and Article 19(4):

o This case serves as an important precedent in understanding the relationship

between freedom of association and the state's power to regulate. It clarified that
the right to form associations or societies is not absolute and may be subject to
restrictions in the interest of public welfare and order.

Writ of Quo Warranto

Quo Warranto is a Latin term which means “by what authority”. This writ is issued asking public
servants or any private person to prove under what authority they are holding a certain public office.
The burden of proof lies with the concerned person. However, if the concerned person fails to prove
his authority, he can be removed from public office. This writ prevents any person from wrongfully
usurping a public office without any authority.

The writ petition can be filed by any person whose fundamental rights are being violated, or in the
public interest. The writ can be issued against any unlawful holder of a public office (public or private
person).

In which situations can the writ be issued

1. There must be an existence of a public office created by law.

2. The public office must be substantive and permanent.

3. The position in a public office may be unlawfully held by a private person.

4. There has been a contravention of the law in appointing a person to the concerned public
office.

5. The duties arising from public office must be public.

In which situations can the writ not be issued

1. This writ cannot be issued if there is any political gain to the petitioner by the issuance of
this writ.

2. This writ cannot be issued against any state minister.

Illustration– If A, a public servant, is holding a public office even after his retirement, then this writ
can be issued against him as he no longer has the authority to hold such a public office.

Amarendra Chandra vs Narendra Kumar Basu And Ors. on 28 March, 1952

Background:

This case dealt with a contractual dispute and raised questions regarding the legality and
enforceability of certain agreements. The dispute centered around the legitimacy of the contract
between the parties and whether the contract was enforceable under Indian Contract Act, 1872. In
this case, Amarendra Chandra was seeking to enforce a contract against Narendra Kumar Basu and
others, involving issues related to ownership, payment, and performance under the contract terms.

Facts of the Case:

• Amarendra Chandra and Narendra Kumar Basu entered into a contractual agreement.

• A dispute arose regarding the performance of the terms of the agreement, and Amarendra
Chandra sought to enforce the contract through legal means.
 • The primary issue was whether the contract, as formed, was valid and whether the terms
were enforceable under Indian contract law.

• The case also dealt with the issue of wrongful detention of property and whether one party
had a right to possession under the contractual arrangement.

Key Legal Issues:

1. Enforceability of the Contract:

Whether the contract between the parties was legally enforceable and binding under the
provisions of the Indian Contract Act.

2. Breach of Contract:
Whether the parties had violated the terms of the contract and if so, what legal remedies
were available to the aggrieved party.

3. Rights to Possession and Property:

Whether possession of property or assets, which were central to the agreement, had been
wrongfully withheld or misused by one of the parties, and whether the other party had the
right to claim it.

4. Jurisdiction of Courts in Enforcing Contracts:

The case also explored the jurisdictional boundaries in enforcing contracts and whether the
case fell under the jurisdiction of the court in Calcutta, where the matter was brought.

Judgment:

The Calcutta High Court delivered the judgment, addressing several important points:

1. Enforceability of the Contract:

The court ruled that the contract was indeed enforceable as long as it was in accordance
with the provisions laid down in the Indian Contract Act, and there were no illegalities or
defects in its formation.

2. Breach of Contract:
The court held that breach of contract could be remedied through specific performance or
damages, depending on the nature of the breach. The court considered whether the breach
was substantial enough to justify such remedies.

3. Rights to Possession:
The Court reaffirmed that in matters of contractual agreements related to property, the
right to possession is an essential element, and a person who unlawfully withholds
possession of property could be held liable for wrongful detention.

4. Jurisdictional Aspects:
The Court acknowledged that the Calcutta High Court had jurisdiction to hear the case, as
the contract and issues at hand were tied to the location.
 The University Of Mysore And Anr vs C. D. Govinda Rao And Anr on 26 August,
1963

Background:

In this case, C. D. Govinda Rao, a professor at the University of Mysore, had his employment
terminated. The dispute arose regarding the legality of his termination and the conditions under
which the termination occurred. The case primarily dealt with the issue of the scope of judicial
review in employment disputes, particularly when the employer is a public authority like a
university.

Facts of the Case:

• C. D. Govinda Rao was a professor at the University of Mysore.

• His services were terminated by the university, which was a public institution.

• The termination was challenged on the grounds that the University's action was not in
accordance with the contractual terms of employment and violated principles of natural
justice.

• The case revolved around the right to a fair hearing and whether the university had
followed proper procedures in terminating the professor's employment.

Key Legal Issues:

1. Legality of Termination of Employment:

Whether the termination of employment by the University of Mysore was valid and
whether the procedural aspects, such as the right to a fair hearing, were followed.

2. Scope of Judicial Review in Employment Matters:

Whether a court has the jurisdiction to review the decisions of public authorities, such as
universities, regarding employment and termination of services.

3. Principles of Natural Justice:

Whether the principles of natural justice (such as the right to be heard) were violated in the
process of terminating the professor's employment.

4. Whether the University acted within its rights:

Whether the University had the legal authority to terminate the services of an employee
under the terms and conditions of the employment contract.

Judgment:

The Supreme Court delivered its judgment on August 26, 1963, and ruled in favor of C. D. Govinda
Rao. The key points of the judgment were:

1. Principles of Natural Justice:

The Court emphasized that natural justice required that an employee must be given a fair
 hearing before the termination of employment. This principle applies even in the case of
public servants or employees of public institutions like universities.

2. Jurisdiction of Courts in Employment Disputes:

The Court held that the court could exercise judicial review over the actions of a public
authority in matters related to employment, especially when the action affects an
individual’s right to livelihood. The Court ruled that courts have the jurisdiction to intervene
if the action of the public institution is illegal or unreasonable.

3. Validity of Termination:
The Court found that the University of Mysore had not followed the proper procedure and
had violated the principles of natural justice in terminating the professor’s employment. It
ruled that Govinda Rao’s dismissal was unlawful because he had not been given a
reasonable opportunity to present his case.

4. Contractual Rights of Employees:

The Court held that the contractual rights of an employee cannot be violated arbitrarily by a
public institution. The university, being a public authority, was bound by the terms of the
contract and was required to act in accordance with legal norms and fair procedures.

Significance of the Case:

1. Enforcement of Natural Justice in Employment Matters:

The case reinforced the doctrine of natural justice, particularly the right to a fair hearing,
for employees in public institutions. This decision established that public institutions must
act in a fair and transparent manner when dealing with employment matters, including
termination.

2. Judicial Review of Public Authority Decisions:

The judgment affirmed that decisions of public authorities (such as universities) are subject
to judicial review, especially when they affect an individual’s fundamental rights. It
underscored that employees of public institutions have the right to challenge illegal or
unjust actions by the institution.

Writ of Certiorari
Certiorari is a Latin term which means “to certify”. This writ is issued by the higher courts
(Supreme Court or High Courts) directing a lower court to transfer a particular case to the
higher court for consideration. The higher courts also have the authority to quash an already
passed order by the subordinate courts. This writ aims to correct the mistakes made by the
judiciary at the lower level.

A writ petition can be filed by any aggrieved person to the Supreme Court or High Courts
against the decision given by the lower courts.

In which situations can the writ be issued

1. This writ can be issued when a person is bound by a legal authority.

2. This writ can be issued when such a person acts beyond their jurisdiction.

3. This writ can be issued when a person acting judicially commits an error of law.

4. This writ can be issued when such a person has committed fraud or has violated the
principles of natural justice.

In which situations can the writ not be issued

1. This writ cannot be issued in cases when the judge refuses to accept the request for review.

2. This writ cannot be issued when the only objective is to waste the time and effort of the
court.

Example– When the decision of the lower court violates the fundamental rights of either of
the parties, the aggrieved party can file for the writ of certiorari.

Noor Mohammad vs State Of U.P. on 20 January, 2020

Background:

The case involves Noor Mohammad, who was arrested and detained by the State of Uttar
Pradesh in connection with a criminal investigation. Noor Mohammad challenged his arrest
and subsequent detention, arguing that the police had violated his legal rights and failed to
adhere to the procedures laid down in Indian criminal law and constitutional provisions.

Facts of the Case:

• Noor Mohammad was accused of a criminal offense, though the specific charges were not
made clear in the initial proceedings.

• He was arrested by the Uttar Pradesh Police and detained in custody for a significant period
of time.

• Noor Mohammad claimed that his fundamental rights were violated during the
investigation and detention process, particularly under Article 21 (Right to Life and Personal
Liberty) of the Indian Constitution, and Section 41 of the Criminal Procedure Code (CrPC),
which governs the power of arrest by the police.

Key Legal Issues:

1. Violation of Fundamental Rights (Article 21):

Whether the right to personal liberty (under Article 21 of the Constitution) was violated due
to the illegal detention and lack of proper procedure during the arrest and investigation.

2. Compliance with CrPC Procedures:

Whether the police followed proper procedures under the Criminal Procedure Code during
the arrest, including providing reasons for arrest and ensuring the accused’s right to be
produced before a magistrate.
3. Right to Bail:
Whether Noor Mohammad was unjustly denied the right to bail and whether the denial was
consistent with the principles of fair trial and due process.

4. Detention Beyond Legal Limits:

Whether the detention of Noor Mohammad exceeded the time limits set by law and
whether it was in violation of the CrPC and the Constitution.

Judgment:

The Supreme Court of India in this case made significant observations:

1. Violation of Rights:
The Court found that the police did not follow due process during the arrest of Noor
Mohammad. His fundamental rights under Article 21 (Right to Life and Personal Liberty)
were violated, particularly in regard to unlawful detention and the failure to provide
adequate legal safeguards.

2. Failure to Adhere to CrPC Provisions:

The Court observed that the police failed to comply with the procedural requirements
under the Criminal Procedure Code, particularly Section 41, which mandates the police to
provide reasons for arrest and to inform the accused of their right to bail. This violation of
procedure was considered a serious breach of legal rights.

3. Direction to Release on Bail:

The Court held that Noor Mohammad’s detention was illegal and directed his immediate
release on bail. It emphasized that the right to be informed of charges and to be presented
before a magistrate within the time limits was an essential safeguard against arbitrary
detention.

4. Affirmation of Legal Safeguards:

The judgment underscored the importance of legal safeguards against unlawful arrest and
detention. The Court reiterated that no one can be deprived of their liberty except through
due process of law and that due process includes ensuring that an individual’s rights are
respected during arrest and detention.

Significance of the Case:

1. Enforcement of Fundamental Rights:

The case reinforces the importance of fundamental rights under Article 21 of the
Constitution, which guarantees personal liberty and protection against arbitrary arrest and
detention. It highlights that violations of these rights cannot be overlooked, especially by
public authorities like the police.

Writ of prohibition
 Prohibition is an English term which means “to forbid or to stop”. This writ is issued to
prevent a lower court or tribunal from acting beyond its authorised jurisdiction. After
the issuance of this writ, the proceedings in the lower court stop immediately, and the
case is transferred to the authority that has jurisdiction over the case. This writ can also
be termed a “stay order.” This writ can be issued against any judicial or quasi-judicial
body acting beyond its jurisdiction. This writ can be issued in the same situations in
which the writ of certiorari is issued, except in cases of error of law.

S. Govinda Menon vs The Union Of India & Anr on 2 February, 1967

Background:

S. Govinda Menon, the petitioner, was a civil servant in the Indian Administrative Service
(IAS). He was facing disciplinary action from the Union of India for alleged misconduct in
the course of his official duties. The case centers around the dismissal of Menon from
service and the legalities surrounding the dismissal procedure, particularly in the context of
fundamental rights and the scope of judicial review.

Facts of the Case:

• S. Govinda Menon was a senior Indian Administrative Service (IAS) officer.

• He was accused of misconduct in the performance of his official duties, although the specific
allegations related to his conduct were not disclosed in the case.

• The Union of India took disciplinary action against him, which led to his dismissal from
service.

• Menon challenged the dismissal, arguing that the process followed by the Union of India was
not in compliance with constitutional provisions or the rules of natural justice.

• He filed a petition seeking judicial intervention and revocation of his dismissal, arguing that
he had not been given an adequate opportunity to defend himself during the disciplinary
proceedings.

Key Legal Issues:

1. Judicial Review of Disciplinary Action:

Whether the court could intervene in a case where a public authority, like the Union of
India, had exercised its discretion to dismiss a civil servant from service. Could the discretion
exercised by the Union of India be subject to judicial review?

2. Violation of Principles of Natural Justice:

Whether natural justice had been violated in the disciplinary proceedings against Govinda
Menon. Specifically, the issue was whether Menon had been provided with an adequate
 opportunity to be heard and whether the disciplinary action followed proper procedural
safeguards.

3. Scope of Fundamental Rights for Civil Servants:

Whether a civil servant can invoke fundamental rights under the Indian Constitution in
cases of dismissal or disciplinary action. In particular, the case raised questions about the
extent to which Article 14 (Right to Equality) and Article 21 (Right to Life and Personal
Liberty) apply to the rights of government employees.

4. Right to Defend Oneself in Disciplinary Proceedings:

The case examined whether civil servants are entitled to the same rights to defend
themselves as any individual subject to disciplinary action.

Judgment:

The Supreme Court of India ruled in favor of the Union of India and upheld the dismissal of
S. Govinda Menon. The Court’s key findings were as follows:

1. Judicial Review and Disciplinary Actions:

The Court ruled that disciplinary actions taken by the Union of India or any other public
authority against its employees are generally not subject to judicial review unless the action
is clearly arbitrary, unreasonable, or violates the principles of natural justice. The Court
emphasized that public authorities have discretionary powers in disciplinary matters, and
such powers should not be lightly interfered with by the courts.

2. Principles of Natural Justice:

The Court found that the principles of natural justice were followed in this case, as S.
Govinda Menon had been given a reasonable opportunity to present his case and defend
himself. The Court clarified that while natural justice must be adhered to, there was no
requirement for an elaborate or formal hearing in all cases. As long as the individual is given
a fair opportunity to present their defense, the procedure can be considered valid.

3. Civil Servants’ Rights:

The Court ruled that while civil servants do enjoy constitutional rights, they are subject to
the limitations of the public service rules and the discretionary powers of the government
in disciplinary matters. The Court held that fundamental rights like freedom of speech and
equality do not necessarily override the rules of public service when it comes to issues of
misconduct and disciplinary action.

4. Power of the Government in Dismissals:

The Court concluded that the government’s power to dismiss civil servants for misconduct
is subject to certain conditions, but as long as those conditions are met and the proper
procedures are followed, the action is within the government’s discretion and should not be
disturbed by the court.

Significance of the Case:

1. Limits of Judicial Review in Public Service Matters:
This case set a precedent for the limits of judicial review in matters concerning disciplinary
actions by public authorities. The Court made it clear that while judicial review can be
exercised in cases of arbitrary or unreasonable actions, courts are reluctant to interfere
with the discretionary powers of public authorities unless there are clear violations of
natural justice or constitutional provisions.

Prudential Capital Markets Ltd., ... vs State Of A.P. And Others on 2 August, 2000

Background:

In this case, Prudential Capital Markets Ltd. (the petitioner), a company involved in the
financial services industry, challenged certain actions of the State of Andhra Pradesh and its
regulatory authorities. The core issue was related to government actions affecting the
operations of financial services firms, particularly with regard to securities trading and the
regulatory framework under which such companies operated.

Facts of the Case:

• Prudential Capital Markets Ltd. was engaged in securities market operations, such as
investment management and financial trading.

• The State of Andhra Pradesh issued a series of orders and regulations that affected the
operations of financial market players like Prudential Capital Markets.

• The petitioner argued that these orders were arbitrary and unconstitutional because they
violated its business rights and the principles of natural justice.

• Specifically, Prudential Capital Markets sought a declaration that the actions taken by the
State Government violated the legal framework governing financial markets and were
detrimental to their business operations.

Key Legal Issues:

1. Violation of Fundamental Rights:

Whether the actions of the State of Andhra Pradesh in regulating financial market
operations violated the fundamental rights of the petitioner, particularly under Article
19(1)(g) (Right to Practice Any Profession or Carry on Any Occupation, Trade, or Business)
and Article 14 (Right to Equality) of the Indian Constitution.

2. Regulation of Financial Markets:

Whether the State's actions in regulating financial services businesses, including those of
Prudential Capital Markets, were valid under the legal framework of financial markets
regulation in India, especially concerning the role of the State in regulating private
businesses within the financial sector.

3. Scope of Governmental Powers in Regulating Financial Institutions:

The issue of whether the State Government had the authority to impose such restrictions on
the financial markets, and whether the central government or regulatory authorities like
 SEBI (Securities and Exchange Board of India) had the primary role in regulating financial
services in India.

Judgment:

The Supreme Court of India delivered its judgment on August 2, 2000, and the key points of
the decision were:

1. Protection of Business Rights:

The Court upheld the right of the petitioner (Prudential Capital Markets) to operate its
business in accordance with Article 19(1)(g), which guarantees the right to carry on any
business. However, the Court also acknowledged that reasonable restrictions can be
imposed on this right, particularly for the public interest.

2. State vs. Central Authority in Financial Regulation:

The Court reaffirmed that financial markets regulation falls within the domain of central
authorities, such as the Securities and Exchange Board of India (SEBI), and not the State
Governments. The judgment clarified that the role of state governments in regulating
financial services and securities is limited, and regulatory powers are largely vested in SEBI
and other central regulatory bodies.

3. Invalidity of State Orders:

The Court ruled that the orders issued by the State of Andhra Pradesh were ultra vires
(beyond the legal power) and were not in compliance with the framework of financial
market regulation established by SEBI and other central laws. The State's interference in
regulating securities trading by private companies like Prudential Capital Markets was
considered inappropriate.

4. Natural Justice and Fairness in Regulation:

The Court emphasized that the principles of natural justice must be followed in any
regulatory or disciplinary actions against private companies. It was pointed out that the
petitioner had not been given an adequate opportunity to respond to the State's actions,
which violated the due process of law.

Significance of the Case:

1. Clarification on the Role of State and Central Authorities in Financial Regulation:

This case clarified the limited role of state governments in regulating the financial markets.
The SEBI was reaffirmed as the primary regulatory authority in the financial markets,
particularly for securities trading and investment activities. It drew a clear line between the
powers of state and central governments in regulating businesses in the financial sector.

2. Right to Carry on Business and its Limitations:

The judgment emphasized that while business rights are constitutionally protected, they
are not absolute and can be restricted by the state if the restrictions are reasonable and in
the public interest. This case thus balanced the right to carry on business with the need for
regulatory oversight in sensitive areas like the financial markets.