V S T SHAIK MANSOOR Vs. SIRKAR

JUDGEMENT

(1.) This is an application for issuing a writ in the nature of certiorari to quash two Notifications published by Government, one under S.11 and 14 of the Travancore Salt Act III of 1088 closing down a salt factory, and the other under S.11 of the said Act establishing a Government salt factory on the premises of the salt factory closed down and for issuing another writ in the nature of prohibition prohibiting Government from taking any further steps by way of implementing those Notifications and to prevent Government or their officers from entering upon or taking possession of the existing factory or the premises thereof and for other ancillary or incidental orders and directions, upon the ground that the said Notifications and all actions taken or proposed to be taken thereunder are ultra vires the Government. The salt factory in question belongs to the Cape Comorin General Traffic Co. Ltd., (here after in this order referred to as the Company) now under liquidation and the petitioners are two shareholders of the Company. A scheme for the reconstruction of the Company filed by them and other shareholders is now pending before the Company Court viz., the District Judge's Court, Nagercoil. The Government of Travancore - Cochin State and two of their officers - The Commissioners of Excise (the First Member of the Board of Revenue) and the Division Peishkar (now District Collector) Trivandrum - are made counter petitioners 1, 2 and 3 respectively to the application. The Official Liquidator of the Company is the 4th counter petitioner. The main application filed on 21.6.1949 was accompanied by a subsidiary petition (C.M.P. 1813 of 1125) asking for interim reliefs and on 23.12.1949, the Court directed notices to be issued on them to the opposite parties. In due course the learned Advocate General entered appearance on behalf of Government and opposed both petitions. The Official Liquidator also entered appearance through counsel, but his attitude has throughout been one of neutrality.

(2.) The Cape Comorin General Traffic Co., Salt factory, known as the Extension Salt Factory No. 11, was established by the Company in the lands mentioned and described in schedules A and B of the main petition, under an agreement (Ext. F, copy) entered into by the Company on 7.5.1909 with the then Government of Travancore. The lands in which the salt factory was established belonged to Government, but they transferred to the Company under the said agreement on lease for a period of 50 years. By that agreement the Company undertook to establish in those lands a salt factory at their own cost and to maintain it in such condition as Government may from time to time prescribe. According to the petitioners the Company had to invest more than fifteen lakhs of rupees in establishing their salt factory and after that was done the Company applied for and obtained from Government the necessary license for manufacturing salt. The license was being renewed from time to time and Ext. G is one such renewed license issued in Kumbhom 1122. Even after the Company went into liquidation manufacture of salt continued to be undertaken in this factory by a contractor on terms and conditions fixed by the liquidation court. But the first Notification among the series which form the subject of this application cancelled the license then current. That, at any rate, is what the Notification purported to do. The petitioners aver in their petition that the Company had not committed any default within the intent of the agreement or of the law and that the Company is entitled to continue in possession of the lands and factory for the full period of 50 years, 9 years of which are yet to expire and manufacture salt so long as they do not commit any breach of the agreement or contravene the law. According to the petitioners that is a right guaranteed to them by the then Government of Travancore under the agreement, Ext. F. The present Government however with a view to carry out a proposed scheme for nationalization of the salt industry intend taking possession of the factory under the purported authority of the Notifications sought to be impugned in this proceeding. The salt factory was in existence when the Travancore Salt Act III of 1088 was enacted and the law in force when it was established was the Travancore Salt Act VII of 1063. The petitioner's case is that Ss. 11 and 14 of Act III of 1088 under which sections these Notifications are published do not contemplate any such power as Government assume to close down a salt factory other than their own or to establish one on lands in the lawful possession and occupation of other persons or bodies without the consent of the persons in lawful possession. On the other hand Government's case is that under the powers vested in them by the said sections they can close down any salt factory by whomsoever established and if so advised, enter into possession or establish a salt factory of their own which in this case can only mean converting the Company's salt factory into Government's own.

(3.) The principal questions that fall for decision in this proceeding are which of these contentions should prevail, and assuming the petitioner's contention to be sound whether this Court can or need exercise the jurisdiction invoked to protect the rights and interests of the Company by averting the threatened wrong. Before these questions are discussed there are certain preliminary points to be disposed of, but I shall first refer to the several Notifications Government published in this matter and the steps taken by the petitioners to prevent immediate dispossession by Government of the Company's salt factory from the hands of the Company.