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TMI Blog1988 (4) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... Swadeshi Cotton Mills, Maunath Bhanjan, (v) Udaipur Cotton Mills, Udaipur and (vi) Rae Bareli Textile Mills, Rae Bareli for a period of five years. There were several proceedings in the High Court of Delhi and in other High Courts. It is not necessary in view of the judgment of this Court in M/s Doypack Systems Pvt. Ltd. v. Union of India ((1988) 2 SCC 299) dated February 12, 1988 to set out in extenso all these facts. By the aforesaid judgment it was held that the 10,00,000 shares in Swadeshi Polytex Limited and 17,18,344 shares in Swadeshi Mining and Manufacturing Company Limited held by the Swadeshi Cotton Mills vested in the Central Government and National Textile Corporation (hereinafter called NTC ), under Section 3 and 4 of the Act. It was further held that in view of the amplitude of the language used, the immovable properties, namely, the Bungalow No. 1 and the Administrative Block, Civil Lines, Kanpur had also vested in NTC Directions were given by this Court in the said judgment to enter the name of the NTC in its register of members of the said Companies and to treat the NTC as their shareholder instead of other erstwhile shareholders. 3. This petition under Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be some compensation paid for that acquisition. It was submitted that implicit in the concept of acquisition which is akin to the power of eminent domain is the concept of payment of compensation. It was urged that after the legislative change made by the Constitution (Seventh Amendment) Act, 1956, the power of the State as well as of the Union to enact any law governing acquisition of property must necessarily be governed by the provisions of entry 42 in List III of the Seventh Schedule to the Constitution. After the amendment, there was no specific entry in List III which empowered the Union or the State to enact law for payment of compensation, so it is now implicit in the concept of acquisition and requisition of property. It was further urged that under Article 300-A of the Constitution, no person could be deprived of his property save by the authority of law. It was further submitted that the law contemplated by this article was obviously a law providing for acquisition of property and, therefore, it was interlinked with entry 42 of List III of the Seventh Schedule to the Constitution. All these contentions, in our opinion, are not tenable because all these contentions we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) It appears to us that Section 3 and 4 of the Act evolve a legislative policy and set out the parameters within which it has to be implemented. We cannot find that there was any special intention to exclude the shares in this case as seen from the existence of at least four other Acquisition Acts which used identical phraseology in Sections 3 and 4 and in the other sections as well. Reference was made to the Aluminum Corporation of India Limited (Acquisition and Transfer of Aluminium Undertakings) Act, 1984, the Amritsar Oil Workers (Acquisition and Transfer of Undertakings) Act, 1982, the Britannia Engineering Company Limited (Mokameh Unit) and the Arthur Butler and Company (Muzaffarpore) Limited (Acquisition and Transfer of Undertakings) Act, 1978 and the Ganesh Flour Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1984. In the present case we are satisfied that the shares in question were held and utilised for the benefit of the undertakings for the reasons that (a) the shares in Swadeshi Polytex Limited were acquires from the income of the Kanpur Unit. Reference may be made to page 23 of the Compilation D-III, (b) the shares held in Swadeshi Mining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to enlarge the meaning of a particular word or to include matters which otherwise may or may not fall within the main provisions. It is well settled that the word 'includes' is an inclusive definition and expands the meaning. See Corporation of the City of Nagpur v. Employees ((1960) 2 SCR 942 AIR 1960 SC 675 (1960) 1 LLJ 523) and Vasudev Ramchandra Shelat v. Pranlal Jayanand Thakar ((1975) 1 SCR 534 (1974) 2 SCC 323 AIR 1974 SC 1728). The words 'all other rights and interests' are words of wides amplitude. Section 4 also uses the words 'ownership, possession, power or control of the company in relation to the said undertakings'. The words 'pertaining to' are not restrictive as mentioned hereinbefore. 5. It was further held that Section 8 provides for payment of compensation in lump sum and the transfer and vesting of whatever is comprised in Section 3. The compensation provided in Section 8 is not calculated as a total of the value of various individual assets. It is a lump sum compensation. It is observed in the said judgment as follows (SCC P. 335, para 67) Section 8 provides for payment of compensation in lump sum and the transfer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of take over, was negative, hence Section 3 and 4 can be meaningfully read if all the assets including the shares are considered to be taken over by the acquisition. That is the only irresistible conclusion that follows from the construction of the documents and the history of this Act. We have to bear in mind the Preamble of the Act which expressly recites that it was to ensure the principles enunciated in clauses (b) and (c) of Article 39 of the Constitution. The Act must be so read that it further ensures such meaning and secures the ownership and control of the material resources to the community to subserve the common good to see that operation of the economic system does not result in injustice. We therefore, reiterate that the shares vested in the Central Government. Accordingly the shares in question are vested in NTC and it has right over the said 34 per cent. of the shareholdings. 7. It was found by the said judgment that the net wealth of the company was negative and therefore, Section 3 and 4 could be meaningfully read if all the assets including the shares were considered to be taken over by the acquisition. That was the only irresistible conclusion that followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he existence of a public purpose is undoubtedly an implied condition of the exercise of compulsory power of acquisition by the State, but the language of Article 31(2) of the Constitution does not expressly make it a condition precedent to acquisition. It assumes that compulsory acquisition can be for a public purpose only, which is thus inherent in such acquisition. It was further observed at page 935 of the report that public purpose is an essential ingredient in the very definition of the expression eminent domain as given by Nicholas and other constitutional writers, even though obligation to pay compensation is not a content of the definition but has been added to it by judicial interpretation. The exercise of the power to acquire compulsorily is conditional on the existence of a public purpose and that being so, this condition is not an express provision of Article 31(2) but exists aliunde in the content of the power itself and that in fact is the assumption upon which this clause of the article proceeds. 10. Our attention was drawn by Shri Sorabjee to the observations of Chandrasekhara Aiyar. J. at pages 1008 and 1009 of the aforesaid report, where the learned Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be taken without payment of compensation. Entry 42 in List III and clause (2) of Article 31, operate in the same field of legislation the former enunciates the content of legislative power, and the latter restraints upon the exercise of that power. For ascertaining whether an impugned piece of legislation in relation to acquisition or requisition of property is within legislative competence, the two provisions must be read together. The two provisions being parts of a single legislative pattern relating to the exercise of the right which may for the sake of convenience be called of eminent domain the expression 'property' in the two provisions must have the same import in defining the extent of the power and delineating restraints thereon. In other words Article 31(2) imposes restrictions on the exercise of legislative power under entry 42 of List III. Property vested in the State may not therefore be acquired under a statute enacted in exercise of legislative power under entry 42 unless the statue complies with the requirement of the relevant clauses of article 31. 13. As mentioned hereinbefore these contentions are not open to the petitioners in the instant case. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to him indicative of the intention of acquiring of only the textile undertakings and no other. There existed no public purpose, according to Shri Nariman, for acquiring these shares. The public purposes mentioned in the Act with reference to Article 39(b) and (c) related to the acquisition of only the textile undertakings of Swadeshi Cotton Mills and not acquisition of the synthetic fibre undertakings of Swadeshi Polytex or sugar undertakings of Swadeshi Mining and Manufacturing Company Limited. 15. These contentions were dealt with and repelled as mentioned in the passages set out hereinbefore. We reiterate the said reasons. It has further to be borne in mind that the shares held in the Swadeshi Polytex Limited themselves wore the subject matter of both pledge and attachment to secure loans from the U.P. State Government of about ₹ 66 lakhs for payment of wages to workers of the Kanpur undertaking and ₹ 95 lakhs being electricity dues of the Kanpur undertaking owing to the U.P. State Electricity Board. From all these, it would appear that the acceptance of the petitioners' case would mean that the State would pump in ₹ 15 crores of public money to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Doypack Systems Pvt. Ltd. ((1988) 2 SCC 299) is binding on the petitioners and this question is no longer res integra in view of Article 141 of the Constitution. See the observations of this Court in M/s Shenoy and Co. v. CTO ((1985) 3 SCR 659 (1985) 2 SCC 512 AIR 1985 SC 621), where this Court observed that the judgment of this Court in Hansa Corporation case (State of Karnataka v. M/s Hansa Corporation, (1981) 1 SCR 823 (1980) 4 SCC 697 AIR 1981 SC 463) is binding on all concerned whether they were parties to the judgment or not. This Court further observed that to contend that the conclusion therein applied only to the parties before this Court was to destroy the efficacy and integrity of the judgment and to make the mandate of Article 141 illusory. 18. In that view of the matter this question is no longer open for agitation by the petitioners. It is also no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged. See in this connection the observations of this Court in T. Govindaraja Mudaliar v. State of Tamil Nadu ((1973) 3 SCR 222 (1973) 1 SCC 336 AIR 1973 SC 974), where this Court at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut it would be still open to challenge under Article 19(1)(f), had been examined or considered. Therefore, the decision of the court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided. 19. In view of the preamble to the Act which states and proclaims that the Act was passed to carry out the object of Article 39(b) and (c) of the Constitution and in view of the scheme of the Act as analysed before us and as also apparent from the aforesaid judgment, it is clearly manifest that the Act in question was passed for a public purpose and for the acquisition of shares there was a public purpose. The acquisition subserved the object of the Act. The compensation in the manner indicated above and in the manner indicated in the aforesaid judgment for such acquisition has been provided for. No separate compensation need be provided in the circumstances of the case for these shares. The factual basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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