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Issues Involved:
1. Constitutionality of Sections 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958. 2. Constitutionality of Sections 18A and 18E(1)(c) of the Industries (Development and Regulation) Act, 1951. 3. Validity of notifications issued under Sections 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958. 4. Alleged infringement of Articles 14 and 19(1)(f) of the Constitution of India. Detailed Analysis: Issue 1: Constitutionality of Sections 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958 The petitioners argued that Sections 3 and 4 of the State Act are ultra vires Articles 245 and 246 of the Constitution, as they encroach upon the legislative powers of Parliament. They contended that the State Legislature lacked the competency to enact these sections. Analysis: - Legislative Competency: The court held that the pith and substance of the State Act is to prevent unemployment, which falls under Entry 23 of the Concurrent List (List III) of the Seventh Schedule. The court emphasized that the main object of the State Act is to provide temporary provisions for industrial relations and financial assistance to prevent unemployment. - Complementarity with Central Act: The court found that the provisions of the State Act complement the Central Act, as both aim to stabilize the economy of the industrial undertaking and prevent unemployment. The State Act provides temporary relief from financial liabilities, aiding the undertaking to stand on its feet. - Incidental Encroachment: The court ruled that any incidental encroachment on the Union List is permissible if the primary objective of the State Act falls within the legislative competency of the State Legislature. Issue 2: Constitutionality of Sections 18A and 18E(1)(c) of the Industries (Development and Regulation) Act, 1951 The petitioners challenged the validity of these sections but conceded that this challenge does not survive due to Entry 19 of the Ninth Schedule read with Article 31B of the Constitution. Analysis: - Concession by Petitioners: The court noted that the petitioners conceded the point, and therefore, this issue was not further examined. Issue 3: Validity of Notifications Issued under Sections 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958 The petitioners argued that the notifications issued under Sections 3 and 4 were invalid as they were beyond the scope of the sections and issued without proper application of mind. Analysis: - Notification under Section 3: The court held that the notification complied with the conditions precedent for issuing such a declaration, as the loan guarantee by the State was provided in the past to prevent unemployment. - Notification under Section 4: The court found no evidence to support the claim that the government issued the notification without applying its mind. The burden of proof was on the petitioners, who failed to provide sufficient evidence. Issue 4: Alleged Infringement of Articles 14 and 19(1)(f) of the Constitution of India The petitioners contended that Sections 3 and 4 of the State Act delegate excessive powers to the State Government, leading to potential discrimination and infringement of their fundamental rights. Analysis: - Article 14 (Equality Clause): The court held that the classification under Sections 3 and 4 is reasonable and has a rational nexus with the object of preventing unemployment. The State-controlled or State-aided industries form a distinct class due to the involvement of public interest and finance. - Article 19(1)(f) (Right to Property): The court found that the restrictions imposed by Section 4 are reasonable and in public interest. The temporary suspension of rights and liabilities is necessary to prevent the closure of the industry and resultant unemployment. The court emphasized that the restrictions are guided by the policy of preventing unemployment and are subject to periodic review. Conclusion: The court dismissed both petitions, upholding the constitutionality of Sections 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958, and the validity of the notifications issued under these sections. The court granted leave to appeal to the Supreme Court under Article 133(1)(b) and (c).
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