9911796707
TMI Blog1998 (3) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... break and the management of the undertaking should continue with the Government even after February 11, 1986. The so called overlapping of the management for one or two days, i.e., February 10, 11, 1986, would not and cannot affect the validity of the Adhiniyam. - CIVIL APPEAL NO. 6815 OF 1983 WITH WRIT PETITION (CIVIL) NO. 742 OF 1986 - - - Dated:- 2-3-1998 - M.M. PUNCHHI, I.B.N. KIRPAL AND K.T. THOMAS, JJ. G.L. Sanghi, V.C. Mahajan, K.N. Shukla, (S.K. Gambhir, Vivek Gambhir, Ms. Charu Bhardwaj, Satish K. Agnihotri, Mrs. Yogmaya, (Y.P. Mahajan), C.V. Subba Rao, (Sakesh Kumar) and Uma Nath Singh for the Appearing Parties. JUDGMENT B.N. Kirpal, J. The acquisition of the undertaking of the Indore Textiles Ltd. by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition an interim order was passed by the High Court directing the Central Government to pass an order pursuant to the hearing which had been given to the petitioners on November 15, 1980. Thereafter, the petitioners were informed that an order dated January 2, 1982, had been passed by the Central Government to the effect that the conditions for the taking over of the management of the mill did exist and that the take over was justified in the facts and circumstances of the case. On amendment being allowed, this communication dated January 2, 1982, was challenged before the High Court in the writ petition which was pending. During the pendency of the writ petition an order dated May 22, 1982, signed by the Joint Secretary, Ministry of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company vesting with the Government. After the promulgation of the Act the petitioners filed the present petition under article 32 of the Constitution challenging the validity of the said Act. Even though in the writ petition the principal challenge to the Act was on the ground that neither the State Legislature nor the Governor of the State had legislative competence to promulgate the Act and the Ordinance inasmuch as the appropriate entry for the enactment of such an Ordinance or Act was entry 52 of List I of the Seventh Schedule, this contention, at the time of arguments, was not raised by Shri G. L. Sanghi, learned senior counsel for the petitioners, presumably because in cases of similar enactments such a contention had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The preamble to the Act does not show that the same was passed with a view only to secure the proper management of the industrial undertaking. The reading of the preamble and of the Act as a whole makes it clear that the said legislation was undertaken with a view to secure the proper management of the same " so as to subserve the interest of the general public by ensuring the continuity of production of cloth which is vital to the needs of the country and for matters connected therewith or incidental thereto" (emphasis * added). The anxiety in promulgating the Ordinance and replacing it with the Act clearly was to see that the mill, which had been closed for more than three months at the time when the notification under section 18AA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or forbid a State Legislature from exercising legislative powers under an entry other than entry 24 of List II and if in exercise of that legislative power the consequential transfer of management or control over the industry or undertaking follows as a result of an acquisition of such an undertaking as an incident of acquisition then such taking over of the management or control pursuant to an exercise of legislative power is not within the inhibition of section 20 of the IDR Act. To the same effect is a recent judgment of this court in Mahesh Kumar Saharia v. State of Nagaland [1997] 8 SCC 176 ; [1998] 92 Comp Cas 96, where a similar challenge to the Nagaland Forest Products Limited (Acquisition of Shares) Act, 1982, was repelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986, would not and cannot affect the validity of the Adhiniyam. It was lastly submitted by Shri Sanghi that the undertaking was under the control and management of the Government from August 12, 1977, till its acquisition. According to section 5 of the Adhiniyam every liability in respect of the period prior to the appointed date shall be the liability of the company and shall be enforceable against the owners and not against the State Government. It was contended that during this period of management after August 12, 1977, the liabilities had been incurred by the Government when it was managing the undertaking and it will be unfair and arbitrary if the liabilities incurred during this period, when the management of the undertaking was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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