What was the main question in this case?

Whether Section 76 of the Mines Act allowing prosecution of shareholders and directors violates Article 14, and whether the Coal Mines Regulations were valid without mandatory consultation.

What did the Supreme Court say about Article 14?

Section 76 did not violate Article 14. The phrase “any one” was read as “every one,” ensuring equal liability among all similarly placed persons.

Were the Coal Mines Regulations, 1957 valid?

They would be invalid if framed without the mandatory consultation under Section 59(3) of the Mines Act, 1952. The matter was remanded to decide this fact.

What happened to the case after the Supreme Court’s decision?

It was sent back to the Sub-Divisional Magistrate to verify whether proper consultation occurred. If not, the regulations fail and the accused must be acquitted.

Why is this case important for company directors?

It clarifies that recognized statutory duties can make every director or shareholder liable, and equality means equal responsibility, not immunity.

Banwarilal Agarwalla v. The State of Bihar

Quick Summary

The Supreme Court explained two things. First, Section 76 of the Mines Act, 1952 treats every shareholder or director the same for mine offences. This is not against Article 14 because it fixes equal duty on all who are in the same position. Second, Coal Mines Regulations, 1957 must follow the law’s mandatory consultation rule. If consultation did not happen, the regulations are invalid. The case was sent back to check this fact.

1961 AIR 849 Equality (Art. 14) Mines Act, 1952 Mandatory Consultation

Issues

Does Section 76, which lets the State prosecute shareholders/directors of a private mine, break Article 14?
Are regulations valid if they were made without mandatory consultation under Section 59(3)?

Rules

A law that fixes equal liability on all in the same class usually passes Article 14, if it is rational and non-arbitrary.
When the parent Act demands consultation, it is a must. Skipping it makes the regulations invalid, unless the Act says otherwise.

Facts — Timeline

Feb 20, 1958: Explosion at Central Bhowra Colliery, Dhanbad; 23 workers died. Inquiry under Section 24, Mines Act.

Regional Inspector filed a complaint against Banwarilal Agarwalla, a shareholder and director. Alleged breaches: Section 74 read with Regulations 107 and 127 of the 1957 Regulations.

SDO, Dhanbad, took cognizance and issued process.

Agarwalla moved Patna High Court under Article 226 to quash the case; petition dismissed.

He sought special leave from the Supreme Court.

Supreme Court examined Section 76 and the validity of the 1957 Regulations vis-à-vis Section 59(3) consultation.

Arguments

Appellant (Agarwalla)

Section 76 targets directors/shareholders unfairly; violates Article 14.
The 1957 Regulations are invalid due to no proper consultation as required.
Without valid regulations, prosecution cannot stand.

Respondent (State)

Equal liability for all in control ensures safety; Section 76 is reasonable.
Regulations were framed lawfully; consultation requirement met or substantially complied.
Public safety in mines justifies strict responsibility.

Judgment

Section 76 upheld: “any one” means every one in the class (directors/shareholders). No Article 14 breach.
If the mandatory consultation under Section 59(3) was not done, the 1957 Regulations are invalid.
Remand: Matter sent to the Sub-Divisional Magistrate to find whether proper consultation actually took place.

Case remanded for fact-finding on consultation; outcome depends on that finding.

Ratio Decidendi

A classification that covers all directors/shareholders equally and serves mine safety is valid under Article 14. Where the parent Act makes consultation mandatory, regulations without such consultation are void.

Why It Matters

Sets a clear Article 14 test for director/shareholder liability.
Reinforces that delegated legislation must follow procedural safeguards.
Protects mine workers’ safety through accountable management.

Key Takeaways

Equality

“Any one” = every one in the same class.
No arbitrary selection among directors/shareholders.

Procedure

Mandatory consultation cannot be skipped.
If skipped, regulations fail.

Mnemonic + 3-Step Hook

Mnemonic: “Directors? All liable; Rules? Ask first.”

All in the class are treated the same — passes Article 14.
Ask the Board (consultation) before making regulations.
Fail to ask? Regulations fail.

IRAC Outline

Issue	Rule	Analysis	Conclusion
Is Section 76 discriminatory? Are 1957 Regulations valid without consultation?	Equal liability within a class passes Art. 14; mandatory consultation is a precondition for valid regulations.	“Any one” read as “every one” avoids arbitrariness; absence of consultation would invalidate regulations.	Section 76 upheld; case remanded to verify consultation and decide validity of regulations.

Glossary

Article 14: Equality before the law and equal protection of the laws.
Mandatory Consultation: A required step before making regulations; skipping it makes the rules invalid.
Delegated Legislation: Rules made under authority of a statute, which must follow that statute’s procedure.