ELIZEBATH SAMUEL AARON Vs. STATE OF KERALA

JUDGEMENT

(1.) This original petition under Art.226 of the Constitution essentially challenges S.3 and 7 of the Super Clays and Minerals Mining Company (Private) Ltd. (Acquisition of Undertakings) Act, 1983, Kerala Act 3 of 1984, (for brevity the Act), and seeks a declaration that the said Act is unconstitutional, though the prayers, as they are, are couched in inartistic language. The original petition is filed in the following circumstances.

(2.) There are three petitioners of which the second petitioner is the Company, The Super Clays and Minerals Mining Company (Private) Limited (hereinafter referred to as the Company). Petitioners land 3 are two of its share holders, the first petitioner Smt. Elizebath Samuel Aaron claiming to be its single largest share holder. The main object of the Company is to mine China Clay, purify and supply the same to various industries for the manufacture of fire bricks, refactories lining bricks, China ware etc. The Company commenced its operations in 1973, but soon ran into great financial difficulties, which constrained the management to declare a lay off on January 13, 1975 for the period upto March 2,1976. The Company was employing about 600 workers. The declaration of lay off led to labour unrest consequent on the Company's failure to pay the lay off compensation. At the third annual general body meeting of the Company held on November 22,1975, it was resolved to request the Government to take over the Company and to restart production, to avoid complete deterioration of its assets. A true copy of the minutes of the said general body meeting is Ext. R1(a).

(3.) After lengthy discussions, Government decided to declare the industrial undertaking of the Company as a relief undertaking under S.3 of the Kerala Relief Undertakings (Special Provisions) Act, 1961 (Act 6 of 1962) (Relief Undertakings Act, for short) for a period of two years. Government accordingly issued notification on March 2,1976 declaring the industrial undertaking of the Company as a relief undertaking under the said Act. Simultaneously another notification was issued declaring moratorium on certain liabilities of the Company. The management of the Company was taken over and entrusted to the Kerala State Industrial Enterprises Ltd., a Government Company, as its agent. The Board of Directors of the Company also passed resolution Ext. R1(b) on March 4,1976 regarding handing over of the management to Government. The notification under the Relief Undertakings Act was extended from time to time upto March 1,1984. It is said that under the management of the Kerala State Industrial Enterprises Ltd., the Company started making marginal profits. Petitioners 1 and 2 then challenged the extension of the notification under the Relief Undertakings Act, made in 1981, and subsequently, by filing a writ petition O.P.No. 1817 of 1981, despite the fact that all the shareholders had joined together in requesting the Government to take over the Company (vide Ext. R1(a), at the third annual general body meeting held on November 22,1975. The original petition was dismissed by a Division Bench of this court by judgment dated March 23,1983, a true copy of which is produced and marked as Ext. P1. The judgment is also reported as Mrs. Elizabeth Samuel Aaron v. State of Kerala, at page 225 of 1983 All India Reporter (Kerala). Inter alia, this court found that the main object of the Company was to produce crude china clay and to purify and supply the same to various industries. This court rejected the contention of the petitioners that "the Company must be deemed to be an undertaking engaged in ceramic industry because it produces purified clay". Consequently it was held that S.20 of the Industries (Development and Regulation) Act (Central Act 65 of 1951) (Industries Regulation) Act, in brief) did not apply as to interdict the State of Kerala from taking over the control or management of the Company under the Relief Undertakings Act. It was further held that the State Legislature was not denuded of all its powers to legislate in respect of any matter affecting mines and minerals once a declaration is made under S.2 of the Mines and Minerals (Regulation and Development) Act (Central Act 67 of 1957) (Mines & Minerals Regulation Act for easy reference). We are referring to these findings, as the very same contentions as those raised earlier have been repeated before us in this original petition as well. The Super Clays and Minerals Mining Company (Private) Ltd. (Acquisition of Undertakings) Ordinance No. 38 of 1983 was thereafter promulgated by which the undertakings of the Company, the right, title and interest of the Company in relation to its undertakings, and its liabilities in relation to the undertakings, save as expressly provided, stood transferred to and vested in the Government on the "appointed day". The Ordinance was replaced by an Act of the same name by Act 3 of 1984, which was deemed to have come into force on November 5,1983, which was the "appointed day" referred to earlier. Therefore, the undertakings of the Company with the liabilities other than those expressly provided, stood vested in the Government on November 5,1983. S.7 of the Act provided for payment of an amount of Rs.10,43,245.97 to the Company for the transfer to, and vesting in, the Government of its undertakings and its right, title and interest in relation to the undertakings. It was specified in sub-s.(4) of the section that the liabilities of the Company in relation to its undertakings which have vested in Government under S.3, and not specified in the schedule, shall be discharged by the Government as and when they fall due for payment. The enactment of the Act led to the filing of this original petition for the reliefs mentioned above.