MANGALAM AMMAL AND ORS. Vs. SWADESHI COTTON MILLS CO., LTD., BY ITS MILL SECRETARY AND PRINCIPAL OFFICER, K.P. AGARWAL AND ANR.

JUDGEMENT

(1.) THIS revision petition has been filed against the order of the learned First Additional Subordinate Judge of Pondicherry, rejecting the contention of the defendants, who are the petitioners before me, that the suit is not maintainable in law, because the second plaintiff, who has taken over the liabilities and assets of the first plaintiff by reason of an order dated 13th April, 1978 issued by the Government of India and published in the Gazette of India, Extraordinary, Part II, Section 3, Sub -section (1) of Section 18 -A of the Industries (Development and Regulation) Act, 1951, has not been authorised to continue pending suits. By the notification aforesaid the Government of India, in exercise of the powers conferred by Clause (a) of Sub -section (1) of Section 18 -A of the Act has authorised the National Textile Corporation Limited (here -in after referred to as the Authorised Person) to take over the management of the whole of the industrial undertaking referred to in the order, among which is the Swadeshi Cotton Mills Company Limited, Pondicherry, subject to the condition that the authorised person shall comply with the directions issued from time to time by the Central Government and shall hold office for a period of five years from : the date of the publication of the order in the official gazette. By reason of Section 18 -B of the Act -

(2.) BY reason of Section 18 -B (1) of the Act, all persons in charge of the management, including persons holding office as managers or directors of the industrial undertaking immediately before the issue of the notified order, shall be deemed to have vacated their office as such. By reason of this provision the former directors, including the managing director, if any, ceased to exercise any power in regard to the management of the first plaintiff company and therefore cannot continue the suit. The second plaintiff, who is represented by the Chief Executive Officer, has taken over the entire company and is vested with power to continue the suit, because it is an actionable claim, and the right to sue has been specifically vested in the second plaintiff.