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TMI Blog1982 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator, the secured creditors and the workers all are ad idem that the management of the industrial unit in question should be taken over by the Central Govt.) In fact no material was placed before the learned judge to show that any prejudice would be caused to the appellant. It was not even argued that there would be any prejudice or detriment to the appellant or anyone else (in granting or refusing permission to take over which would possibly be the prime, if not the sole consideration). (2)Prospects of a sponsor coming forward to offer a scheme to run the mills will brighten. (3)The industrial unit may reasonably be expected to fetch a better price as a running unit as compared to what it would fetch on the machinery being sold at a public auction. (4)The court will retain control and can at any time review the situation arid sanction a scheme or a sale in favour of a purchaser of the running unit in case a reasonable officer is forthcoming. Taking into account the pros and cons, the likely impact on interests of all concerned, the balance-sheet of balance of convenience leaves the answer in no doubt. In fact, one and only one answer is possible, unless one can subscri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e management of the company in exercise of the power under section 18FA(i) was taken out on July 9, 1981. We are told that the company which was engaged in the manufacture of cotton textile was closed down on July 11, 1980. Since that date about four thousand workmen employed by the company (about 2,500 permanent and about 1,500 temporary workmen) have become unemployed and are starving, as they are not in a position to obtain alternative employment in Bhavnagar where there are no opportunities for securing employment in any other textile unit. Under section 18FA contained in Chap. III-AA of the Act relating to "Management or control of industrial undertakings owned by companies in liquidation", the Central Govt. has the power to authorise, with the permission of the High Court, the taking over of management or control of industrial undertakings. The relevant provisions require to be quoted : "Power of Central Government to authorise, with the permission of the High Court, persons to take over management or control of industrial undertakings : (1)If the Central Govt. is of opinion that there are possibilities of running or restarting an industrial undertaking, in relation to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18FA, would go to show that in the opinion of the Central Govt. there are possibilities of restarting the industrial undertaking. The satisfaction is the subjective satisfaction of the Central Govt. Who else can determine whether the mill can be restarted if the onerous responsibility for taking over and running rests on the shoulders of the Central Govt.? That is not a question which is possibly justiciable. The second condition which is required to be satisfied is whether it is desirable to restart the industrial undertaking for maintaining or increasing production, supply or distribution of articles relatable to the scheduled industry, needed by the general public. Entry 23 of the Schedule to the Act, inter alia , pertains to "Textiles made wholly or in part of cotton, including cotton yarn, hosiery and rope ". It is, therefore, clear that the articles in question are those which are relatable to the scheduled industry needed by the general public. It is obvious that if the mill is restarted, supply of such articles would be augmented. It cannot be, and it has not been, argued otherwise. The Central Govt. appears to have taken out this summons in order to authorise the taking o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resenting a scheme or the running of the factory by way of a scheme sanctioned under section 391 of the Companies Act, but the efforts did not succeed. These efforts were made when the summons was being heard by the learned company judge in October, 1981. Some four months have passed thereafter and vet the appellant is not in a position to present any scheme. It does not appear that there is any sponsor who is prepared to offer any scheme for the running of the mill in the near future. If the stay is not granted and the authorised person is permitted to take over the management in exercise of powers under section 18FA subject to the result of the present appeal, the appellant will get sufficient time and opportunity to procure some sponsor who can present a scheme for the running of the mill. The other alternative would be to sell the lands and the machinery by public auction and the price which it would fetch would understandably be very small. The extent of the secured debts itself is to the tune of about rupees three crores (it is so stated at the Bar). The interest burden would go on mounting. The assets may very likely not fetch even sufficient funds to meet the claims of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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