AMBALAL M SHAH Vs. HATHISINGH MANUFACTURING COMPANY LIMITED

JUDGEMENT

(1.) This appeal by special leave raises a question of the correct interpretation of some words in S. 18A (1) (b) of the Industries (Development and Regulation) Act, 1951. The Central Government made an order under S. 15 of that Act appointing a committee of three persons for the purpose of making full and complete investigation into the circumstances of the case as it was of opinion that there had been or was likely to be a substantial fall in the volume of production in respect of cotton textile manufactured in the industrial undertaking known as Hathisingh Manufacturing Company Ltd., Ahmedabad, for which having regard to the economic conditions prevailing there was no justification. After the committee made its report the Central Government being of opinion thereupon that this industrial undertaking was being managed in a manner highly detrimental to public interest made an order under S. 18A of the Act authorising Ambalal Shah (the first appellant before us) to take over the management of the whole of the said undertaking.

(2.) Against this order the industrial undertaking and its proprietor-who are the two respondents before us-filed a petition in the Gujarat High Court under Art. 226 of the Constitution praying for issue of writs directing the authorised controller and the Union of India not to take over the management on the basis of the order under Section 18A. The main ground on which the application was based was that on a proper construction of S. 18A (1) (b) the Central Government has the right to make an order threreunder only where the investigation made under S. 15 was initiated on the basis of the opinion as mentioned in S. 15 (b)-that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. It was also urged that in fact the committee appointed to investigate had not directed its investigation into the question whether the industrial undertaking was being managed in the manner mentioned above. The other grounds mentioned in the petition which were however abandoned at the time of the hearing included one that the alleged opinion formed by the Government as mentioned in the order under S. 18A was in the absence of any material for the same in the report of the investigating committee and therefore was arbitrary, capricious and mala fide.

(3.) On behalf of the Government and the authorised controller it was urged that the question which one of the five opinions mentioned in S. 15 formed the basis of the investigation under that section was wholly immaterial. The allegation that the investigating committee had not directed its investigation into the question whether the undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest was also denied.