ISHWARI KHETAN SUGAR MILLS PRIVATE LIMITED R B LACHMANDAS SUGAR AND GENERAL MILLS PRIVATE LIMITED Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) Acquisition of industrial undertakings involved in manufacturing sugar, a commodity satisfying the basic necessity, in larger public interest and the attempt of the owners of the undertakings to thwart the same, paints the familiar landscape in this group of appeals.

(2.) As a sequel to the serious problems created by the owners of certain sugar mills in the State of Uttar Pradesh for cane growers and labour employed in sugar mills, having an adverse impact on the general economy of the areas where these sugar mills were situated and with a view to ameliorating the situation posing a threat to the economy, the Governor of Uttar Pradesh promulgated an Ordinance on July 3, 1971, styled as U. P. Sugar Undertakings (Acquisition) Ordinance, 1971 (13 of 1971) ('Ordinance' for short)' with a view to transferring and vesting sugar undertaking set out in the Schedule to the Ordinance in the U. P. State Sugar Corporation Ltd. ('Corporation' for short), Government Company within the meaning of S. 617 of the Companies Act, 1956. Subsequently, by U. P. Sugar Undertakings (Acquisition) Act, 1971, (U. P. Act 23 of 1971) ('Act' for short), the Ordinance was repealed and was replaced. Schedule to the Act enumerates 12 sugar undertakings (referred to as 'scheduled undertakings') and by the operation of S. 3, these scheduled undertakings stood transferred to and vested in the Corporation from the appointed day, i. e., July 3, 1971, the date on which the Ordinance was issued. On the promulgation of the Ordinance 11 writ petitions were filed in the Allahabad High Court under Article 226 of the Constitution challenging the constitutional validity of the Ordinance and when the Act replaced the Ordinance effective from August 27, 1971, the writ petitions were amended incorporating the challenge to the Act also. The Ordinance and the Act were challenged in the High Court on the following grounds:

(3.) Mr. F. S. Nariman, learned counsel who led on behalf of the appellants, confined his attack to two grounds: (1) U. P. State legislature lacked legislative competence to enact the impugned Act; and (b) compensation awarded for acquisition is violative of Art. 31 (2) as it stood prior to its amendment by the Constitution (Twentyfifth Amendment) Act, 1971; which came into force on April 20, 1972. Mr. R. A. Gupta who appeared in S. L. P. 6252/79, canvassed an additional contention that the impugned Act is violative of Art. 14 inasmuch as those similarly situated and similarly circumstanced sugar undertaking have not been acquired and the petitioners' scheduled undertakings have been singled out for a drastic treatment of take-over by way of acquisition.