M ASGHAR Vs. UNION OF INDIA

JUDGEMENT

(1.) Shri Raju Ramachandran appearing for an employee who claims that a sum of Rs. 5712.61 p. is due to him from the Lord Krishna Textile Mill, out of which a sum of Rs. 3722.20p had become due before the take over of management of the Mill under the Sick Textile Undertakings (Taking Over of Management) Act made a concise, but interesting submission that the low priority given to amounts due to employees relating to the pre-take-over management period in the Second Schedule of the Sick Textile Undertakings (Nationalisation) Act was unconstitutional both because it did not sub-serve the object of giving effect to the policy of the State towards securing the directive principle specified in Art. 39(b) of the Constitution and also because the classification had no nexus with the object of the statute as stated in the Preamble.

(2.) Section 21 of the Sick Textile Undertakings (Nationalisation) Act is as follows:-

(3.) From Sec. 21 it is clear that the liabilities of the post-take-over management period are given priority over the liabilities of the pre-take-over management period and among the liabilities of the pre-take-over management period, arrears in relation to provident fund, salaries and wages and other amounts, due to an employee are given priority. Sec. 39 of the Act declares that the Nationalisation Act is "for giving effect to the policy of the State towards securing the principles specified in cl. (b) in Art. 39 of the Constitution." Art. 39(b) of the Constitution enjoins the State to direct its policy towards securing "that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good." It is obvious that any legislation which nationalises an undertaking towards securing the directive principles contained in Art. 39(b) must ordinarily provide for the discharge of the liabilities of the undertaking and if so, the legislation must also arrange the priorities for the discharge of the liabilities. The distinction made between the liabilities of the post-take-over management period and the pre-take-over management period is prima facie sound as the former liabilities are those incurred pursuant to the public management of the undertaking under the statute, while the latter liabilities are those incurred in the course of the private management by the owner of the undertaking. Sec. 5(1) of the Nationalisation Act makes the position clear that every liability, other than the liabilities specified in sub-sec. (2) of the owner of a sick textile undertaking, in respect of any period prior to the appointed day, shall be the liability of such owner and shall be enforceable against him and not against the Central Government or the National Textile Corporation. Sec. 5(2)(c) expressly provides that any liability arising in respect of wages, salaries and other dues of employees of the sick textile undertaking, in respect of any period after the management of the undertaking had been taken over by the Central Government, shall be the liability of the Central Government and shall be discharged with and on behalf of that Government by the National Textile Corporation. The classification of the liabilities made in the schedule is in tune with Sec. 5 of the Act. And, as stated by us, any law for the acquisition of a sick undertaking must ordinarily provide for the discharge of the liabilities and arrange priorities among the liabilities. That is what the schedule has done. There is, therefore, no force in the submission of the learned counsel and the writ petition is according dismissed.