ASSOCIATED BUILDING COMPANY LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Associated Building Co. Ltd.-petitioner No. 1 is the owner of building known as `bombay House situate at Homi Mody Street, Fort, Bombay. The Tata Mills Limited-petitioner No. 5 is a public limited company engaged in manufacture of cotton textiles and yarn. The petitioner Nos. 2 to 4 are also public limited companies engaged in variety of businesses. The textile undertaking of Tata Mills Limited is located at Dr. Ambedkar Road, Dadar, Bombay. The petitioner No1 had permitted the Tata Mills Limited and petitioner Nos. 2 to 4 to use the part or portion of Bombay House as a registered office. The petitioner Nos. 2 to 5 were collectively known as Tata Textiles. The petitioners claim that specific space or area was not delineated or demarcated for use of Tata Mills Limited in the Bombay House premises and the arrangement was a fluid and flexible one depending upon business needs and exigencies and the changing conditions and circumstances. The petitioner No. 1 used to recover amount of compensation from Tata Textiles and the amount payable was contributed by petitioner Nos. 2 to 5 and the share of Tata Mills Limited came to approximately Rs. 468. 30 per month. The petitioners claim that with effect from April 1982, Tata Mills Limited ceased to make any payment for the use of the space in Bombay House and the amount payable by Tata Mills Limited was contributed by petitioner Nos. 2 to 4. The petitioners claim that Tata Mills Limited was permitted to use the space in Bombay House gratuitously and Tata Mills Limited had no right whatsoever to continue to remain in any part or portion of Bombay House. The petitioners further claim that Tata Mills Limited shifted the office with effect from January 2, 1984 from Bombay House to Army and Navy Building, Fort, Bombay.

(2.) ON October 18, 1983, the President of India promulgated the Textile Undertakings (Taking Over of Management) Ordinance, 1983 and the Ordinance provided that the management of 13 textile undertakings, pending the nationalisation, shall vest in the Central Government. Tata Mills Limited was one of the undertaking set out in the Ordinance. The Ordinance inter-alia provided that on and from the appointed day, i. e. the day on which the Ordinance came into force, the management of textile undertakings named in the first schedule shall vest in the Central Government. The Ordinance was subsequently replaced by the Textile Undertakings (Taking Over of Management) Act, 1983 and the Act is virtually identical with the Ordinance. The statement of objects and reasons for enactment of legislation provides that by reason of mismanagement of the affairs of undertakings, their financial condition became wholly unsatisfactory even before the commencement in January 1982 of the textile strike in Bombay and the condition further deteriorated after the strike was enforced. Certain public financial institutions had advanced large sums of money to the companies owning the undertakings and further investment of very large sums of money was found to be necessary for reorganising and rehabilitating the said undertakings and thereby to protect the interest of the workmen employed therein and to augment the production and distribution at fair price of different varieties of cloth and yarn so as to subserve the interests of general public. The statement of objects further recites that once the basic decision of nationalisation was taken, a genuine apprehension arose that unless the management of the concerned undertakings was taken over on immediate basis, there might be large scale frittering away of assets which would be detrimental to the public interest. In pursuance of the Ordinance, the management of 13 mills was taken over on October 19, 1983. Section 4 of the Act provides for appointment of Custodian of the textile undertakings for the purpose of carrying on the management of such undertakings on behalf of the Central Government and National Textile Corporation was appointed as custodian while respondent No. 3 as Additional Custodian. The respondent No. 4 is authorised representative of the Custodian.

(3.) ON January 16, 1984, the respondent Nos. 2 to 4 addressed a letter to Tata Mills setting out that the Additional Custodian had appointed and authorised Shri M. N. Acharya, the bearer of the letter to take immediate possession and control of Tata Mills Office at Bombay House together with all fixtures, furnitures, instruments, machines, equipments, automobiles and other vehicles and all goods on or about the said premises. The Tata Mills Limited sent a reply on January 18, 1984 pointing out that the entire Bombay House belongs to the Associated Building Co. Ltd. and Tata Mills Limited was permitted to use part of the Bombay House premises without allotting any specific part or portion and since October 1982 Tata Millls Limited was in occupation gratuitously and the same could be demonstrated with reference to the records of the company. The Tata Mills Limited then pointed out that the company has no right, title or interest whatsoever in the Bombay House or any part thereof of which possession could be handed over to the representative of the Custodian. The Associated Building Company Ltd. also addressed a letter to the Custodian on January 18, 1984 confirming the claim made by Tata Mills Limited. Apprehending that the Custodian might take forcible possession of portion of the Bombay House, the petitioners filed the present petition under Article 226 of the Constitution seeking writ of mandamus prohibiting the respondents from taking any action to take over possession or control of any area of Bombay House.