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TMI Blog1986 (9) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking of the petitioner, Minerva Mills Ltd., and the constitution; validity of the Sick Textile Undertakings (Nationalisation) Act, 1974. On August 20, 1970, the Central Government appointed a Committee under section 15 of the Industries (Development and Regulation) Act, 1951, to make a full and complete investigation of the affairs of Minerva Mills Ltd., hereinafter referred to as the company . After the investigation was made, the Central Government, by an order dated October 19, 1971 authorised the National Textile Corporation to take over the management of the undertaking of the company. The petitioners did not challenge the order to take over the management before any court of law. During the pendency of the management of the undertaking by the National Textile Corporation, the Sick Textile Undertakings (Nationalisation) Act, 1974 was promulgated and it was replaced by the Sick Textile Undertakings (Nationalisation) Act, 1974. Section 3(1) of the Sick Textile Undertakings (Nationalisation) Act, 1974, provides that on the appointed day, every sick textile undertaking and the right, title and interest of the owner in relation to every such sick textile undertaking shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 15 of the Industries (Development and Regulation) Act, 1951. A few months thereafter, on October 19, 1971, the order under section 18A of the Industries (Development and Regulation) Act, 1951, was passed taking over the management of the undertaking of the company on the ground that the Central Government was of the opinion that the undertaking was being managed in a manner highly detrimental to public interest. It is strenuously urged on behalf of the petitioners that the order section 18A dated October 19, 1971, was passed without any application of mind, regard being had to the earlier order dated April 24, 1971, sanctioning the guarantee of a loan. It is submitted that there was no foundation for the finding of the Central Government that the undertaking of the company was being managed in a manner highly detrimental to public interest, for, if that was the condition of management, the Government could not sanction a guarantee for incurring a loan of ₹ 20 lakhs. It is, accordingly, contended that the order under section 18A was illegal and invalid. It is accordingly, contended that the order under section 18A was illegal and invalid. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ick textile undertaking by including the same in the First Schedule to the Sick Textile Undertakings (Nationalisation) Act, 1974. There can be no doubt that the legislative judgment should be looked upon with respect and it requires very strong grounds to set it at naught. In our opinion, there is no existence of any such ground. The next ground of attack of the petitioners on the validity of the order under section 18A is that it was vitiated as there was no direction by the Central Government under section 16 of the Industries (Development and Regulation) Act, 1951. Section 16 authorises the Central Government to issue directions to the industrial undertaking concerned for certain purposes as are mentioned in clauses ( a ) to ( d ) of section 16 after an investigation under section 15 is made and the Central Government is satisfied that action under section 16 is desirable. It is apparent from section 16 that it is not obligatory on the Central Government to issue directions for all or any of the purposes as mentioned in the said section. One of the two grounds for taking over the management of an industrial undertaking, as contained in clause ( a ) of section 18A, is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and Regulation) Act and that, in any event, they should have been supplied with a copy of the report of the Investigation Committee. One of the grounds that weighed with this court for rejecting the contention was that since the appellants had received a fair treatment and also all reasonable opportunities to make out their own case before the Government, they should not be allowed to make any grievance of the fact that they were not given a formal notice calling upon them to show cause why their undertaking should not be taken over or that they had not been furnished with a copy of the report. In the instant case also, as has been already noticed, the company was given a reasonable opportunity of being heard by the Investigation Committee during the investigation under section 15 of the Industries (Development and Regulation) Act, 1951. In our opinion, the petitioners were not in the least prejudiced for the non-supply to them of a copy of the report. The view we take finds support in sonic other facts stated hereafter. It. does not appear that the petitioners ever asked for a copy of the report. They did not also move against the order under section before the undertaking w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, the petitioners are not entitled to challenge the impugned order under section 18A. We may now consider the challenge of the petitioners to the constitutional validity of the Sick Textile Undertaking (Nationalisation) Act. It is contended on behalf of the petitioners that the provisions of sections 5(1), 19(3) and 21 read with the Second Schedule, 25 and 27 impose restrictions on the exercise by the petitioners of their fundamental right; such restrictions, being arbitrary and excessive, are not reasonable within the meaning of article 19(6) and are violative of articles 14 and 19(1)( g ) of the Constitution. It is submitted that the Sick Textile Undertakings (Nationalisation) Act containing the said provisions alters or damages the basic structure of the Constitution as reflected in articles 14 and 19 of the Constitution. Further, it is submitted that though the Sick Textile Undertakings (Nationalisation) Act has been included in the Ninth Schedule to the Constitution, yet, in view of the decision of this court in Waman Rao v. Union of India [1981] 2 SCR 1; AIR 1981 SC 271, as the inclusion has been made after April 24, 1973, such challenge can be made. We fail to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t) Act does not damage any of the basic or essential features of the Constitution or its basic structure. It is apparent from the above observation that only constitution amendments made on or after April 24, 1973, by which Acts or Regulations were included in the Ninth Schedule can be challenged on the ground that they damage the basic or essential features of the Constitution or its basic structure. But, if any of such Acts and Regulations is saved by article 31A or by article 31C, as it stood prior to the amendment of the Constitution by the Forty-Second Amendment, such challenge on the ground that the constitutional amendment damages or destroys a basic or essential feature of the Constitution or its basic structure as reflected in article 14 or article 19, will become otiose. The Sick Textile Undertakings (Nationalisation) Act, 1974, has been enacted to give effect to the policy of the State towards securing the principles specified in clause ( b ) of article 39 of the Constitution. Indeed a declaration in that regard has been made in section 39 of the Sick Textile Undertakings (Nationlaisation) Act. It was, however, open to the petitioners to challenge this declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as violative of articles 14 and 19 of the Constitution. It has been already noticed that the Sick Textile Undertakings (Nationalisation) Act falls squarely within the ambit of article 31C and, consequently, none of its provisions can be challenged on the ground of violation of article 14 or article 19 of the Constitution. Much reliance has, however, been placed by the petitioners on a majority decision of this court in Bhim Singh v. Union of India , AIR 1981 SC 234. In that case, the question that has been considered relates to whether the Urban Land (Ceiling and Regulation) Act, 1976, furthers the Directive Principles of State Policy in clauses ( b ) and ( c ) of article 39 of the Constitution. It has been held by the majority consisting of Chandrachud C.J., P. N. Bhagwati J. (as he then was) and Krishna Iyer J. that the said Act implements or achieves the purposes of clauses ( b ) and ( c ) of article 39 and is valid except that section 27(1) of the said Act in so far as it imposes a restriction on the transfer of any urban or urbanisable land with a building or a portion only of such building, which is within the ceiling area, is invalid. It has been observed by Chandrachu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question that had to be considered by the Court of Appeal was whether it was bound by the reasoning in the speeches of the House of Lords in Dodd's case [1972] 2 All ER 1135; [1973] AC 518; [1972] 3 WLR 333. In that contention, Lord Denning MR observed as follows (at page 446 of [1974] 2 All ER): How then do we stand on the law ? We have listened to a most helpful discussion by counsel for the proposed plaintiffs on the doctrine of precedent. One thing is clear. We can only accept a line of reasoning which supports the actual decision of the House of Lords. By no possibility can we accept any reasoning which would show the decision itself to be wrong. The second proposition is that, if we can discover the reasoning on which the majority based their decision, then we should accept that as binding on us. The third proposition is that, if we can discover the reasoning on which the minority base their decision, we should reject it. It must be wrong because it led them to the wrong result. The fourth proposition is that if we can of discover the reasoning on wh.ch the majority based their decision, we ire not bound by it. We are free to adopt any reasoning which appears to us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king. It is urged that as the vacant land was illegally and wrongfully taken possession of by the National Textile Corporation, although the same had not vested in the Central Government, the same should be released and given back to the company. In any event, it is submitted on behalf of the petitioners that possession o. : the said 4.37 acres of land which does not form part of the compact block of the vacant land measuring 13.57 acres should be delivered back to the petitioners. The respondents, in their affidavit in opposition, have denied and disputed the contention of the petitioners that the said 17.52 acres or the said 4.37 acres of land does not form part of the sick textile undertaking. It is the case of the respondents that except the land measuring 4 acres 14 gunthas (stated to be equivalent to 4.37 acres), the rest of the land forms one compact block in which the building, office and quarters of undertaking are situate. Further, it is said that the National Tex Corporation has a programme for locating an institution to train technical personnel and to build quarters as a welfare measure and, necessarily, such a complex must have vacant land to implement the expansi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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