KULBIR SINGH Vs. UNION OF LNDIA

JUDGEMENT

(1.) The petitioner is seeking a declaration that provisions of Hind Cycles Limited and Sen-Raleigh Limited (Nationalisation) Act, 1980, (hereinafter referred to as Act No. 70/1980) are ultra vires of the Constitution and is also seeking a Writ in the nature of Mandamus directing the respondents to clear off forthwith the dues of the petitioner as awarded by the arbitrator amounting to Rs. 1,39,57, 561/-.

(2.) The petitioner claims to be an Indian National having his business at Tehran (Iran) for the last several years and has been permanently residing there. However, in connection with his business he is required to travel abroad and often comes to India. Respondent No. 4 M/s. Hind Cycles Ltd. was carrying on business of manufacturing bicycles, auto-engines and bicycle parts having its factories at Worli in Bombay and at Ghaziabad in U. P. As there was mismanagement and difficult financial position, the Central Government by virtue of the powers conferred under Section 18-A of the Industries (Development and Regulation) Act, 1951, handed over Management of the two undertakings to the Board of Management initially for a period of 5 years which was extended from time to time up to 1-1-1980. The petitioner entered into an agreement with the Board of Management on 28-11-1975 whereby the petitioner was given sole selling agency rights for cycles and cycle parts manufactured in the two factories of the respondent No. 4 throughout the territory of India. Commission fixed was 5% on all sales whether direct, indirect or secret sales and the agreement was valid for 3 years. However, the agreement was terminated by the Board of Management on 23-11-1976 by invoking Clause 10 of the agreement. Again on 27-11-1976 by invoking Clause 2 of the agreement it was terminated on the ground of breaches committed by the petitioner. After exchange of notices, the petitioner filed Civil Suit No. 1085-A/77 under S.20 of the Arbitration Act against Union of India, respondent 1 and Hind Cycles Ltd. respondent 4, for referring the dispute to the named Arbitrator M/s. Indian Chamber of Commerce, Bombay. The suit was allowed and the matter was referred to the named Arbitrator on 4-5-1979. Thereafter Hind Cycles Limited and Sen-Raleigh Limited (Nationalisation) Ordinance, 1980 was promulgated on 25-10-1980 which was subsequently made Act No. 70/1980 - By notification dt. 28-10-1980 the Central Government transferred the ownership and Government Company National Bicycles Corporation of India Ltd. - Respondent 2 under Section 6 of the Act. The petitioner filed a claim of Rupees 20 lacs (approximately) on the accounts of agency commission for 3 years staring from 16-11-1975 as an agent of Hind Cycles Ltd. in Tehran to 28-8-1981. The petitioner was classified under Category IV(b) of the IIIrd Schedule initially which was later on re-classified under Category III(b). Since the named Arbitrator was not traceable, the petitioner filed a fresh petition under S.5/11 of the Arbitration Act which was registered as CMP No. 24/81. The Delhi High Court by Order dt. 12-11-1984 referred the dispute to Shri V.D. Mishra, Ex-Chief Justice of Himachal Pradesh High Court as the Sole Arbitrator. He gave an Award on 30-8-1985 only against Hind Cycles Lid., respondent 4 and not against Union of India. The petitioner then filed an application uniter Section 14 of the Arbitration Act for filing of the Award and for drawing up a decree in terms of the Award. The Delhi High Court passed a Decree in terms of the Award on 7-10-1986. It is said that the matter is pending in the Delhi High Court about the liability of Union of India to satisfy the Award.

(3.) According to the petitioner, although the Commissioner of Payments - respondent No. 3 has received an amount of Rupees 241. 47 lacs for disbursement to the creditors of Hind Cycles Ltd., the petitioner has not been paid any amount in spite of claim being preferred by him because of the Stay granted by this Court in M. P. No. 750/80 and M. P. No. 95/81 staying all disbursements, hence the petitioner has filed this petition, Accordings to the petitioner, Ss.5, 7, 18, 19, 20(1), 21(1) and 23(1) read with Third Sch. of Act No. 70/80 are bad, illegal, unconstitutional and ultra vires of Arts.14, 19(1)(g), 300-a and 301 of the Constitution by fixing priority of claims and mode and manner of their payment and abatement. The provisions are unjust, unreasonable, arbitraory, discriminatory, unconstitutional and void. There is no nexus between the object of the Act and the basis of differentia and the classification. There is no intelligible differentia, to distinguish the claims between post-take-over Management period and pre-take-over Management period and the various categories under Third Schedule. Favoured treatment given to the post-take-over management period is without any justification. The vesting of liabilities of the Central Government under S.5(2) of the Act in the Government Company, National Bicycles Corporation-respondent 2, is arbitrary and uncalled for. The dues of the petitioner as sole selling agent in Iran and the amounts due to him is covered under S.5(2) of the Act. In any case, his dues as sole selling agent should have been accorded a much higher priority comparable to Category I and above Category II in the Third Sch. The petitioner had worked in the Company, invested huge amounts, devoted all time and energy and, therefore, deserves high priority compared to the employees mentioned in Category-I. The respondent 3 has made disbursements to other creditors to the tune of Rupees 46 lacs and another 25 lacs towards wages of workmen while nothing has been paid to this petitioner.