EASTERN DISTILLERIES PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This Rule is directed against an order passed by the Union, of India on 8th Oct., 1974 under section 18A of the Industries (Development and Regulation). Act, 1974 and the notification dated 25th Sept., 1978 and 7th Oct., 1980 being Annexure 'B' to the petition.

(2.) The petitioner no. 1 is a company and the petitioner no, 2 has acquired 63% of the total paid up shares of the company. The petitioner stated that the petitioner no. 1 is the owner of the distillery known as-the Russa Distillery situated at B. Rs.Saha Road, P. S. Behala. District 24-parganas. The said distillery was running at a loss for some time past and its accumulated losses amounted to Rs. 27 lakhs. The licence for the distillery granted by the Excise Commissioner, West Bengal. was suspended since September. 1973. in or about Nov. 1975, the Government of India started an enquiry and investigation under section 13 of the Industries (Development and Regulation) Act. 1951. It appears that the petitioner no. 1 was in dire necessity of foods and as such the petitioner no. 2 purchased 63% paid up shares of the company and it is alleged that the petitioner also arranged for a loan to the extent of Rs. 10,000,00 to take, care of the purchases and raw materials sufficient to run the unit to its 40% capacity and to pay other pressing outstanding/ expenses; This fact was intimated to the Government of West Bengal and also to Sri A. Bose, Special -Officer and Ex-officio Secretary, Closed and Sick Industries Department, Government of West Bengal and Chairman, Investigation Committee of the Company appointed under the order here-in-before stated.: Immediately after the change of-management of the petitioner' no. 1, the respondent No. 3 from 1st March, 1974 withdrew the suspension of the licence and the petitioner no. 1 was permitted to sell its products since 19th April, 1974. The petitioner no. 2 thereafter invested a sum of Rs. 10 lakhs byway of cash as also arranged for loan He also ensured strict supervision of the work of the distillery. This has caused. bringing down of the accumulated loan by over Rs. 8 lakhs in the course of the last six months. Thereafter the company approached the Secretary, Excise Department, Government of West-Bengal, for issue of necessary import authorisation and passes for importing rectified spirit from Bihar and for allocation as much molasses and possible and for re transfer of ware houses temporarily transferred 10 other distillers as soon as rectified spirit is brought from Bihar. By another letter Dated 15/21 Feb., 1974 addressed to the Secretary, Excise Department, Government of West Bengal, the company petitioner intimated that it had overcome financial problems and have arranged necessary funds for working the distillery Without any interruption and asked for necessary orders for delivery of the Excise Licence duly extended upto 31st March, 1974 and thereafter renewal of the same and for allocation of at least 20,000 bulk liters or distilled in the company's still each month and liquor and for supply of Industrial alcohol out of the surplus Imported rectified spirit ex-other states and for issue of no objection certificate as and when asked for the import of molasses. Be that as it may the investigating Team headed by the Chairman, A Bose. wrote to the Director of the company to appear before the committee on 18th March 1974 for giving evidence it must be stated that while the government of West Bengal was considering grant of licence and or other requests made by the company to run the distillery with the finance and loans secured by it form bank and friends. the chairmen was proceeding with investigation which in any event was limited in scope as stated in the aforesaid letter dated 22/24 Nov. 1973. Pursuant to the said letter Sri K. A Himanshu Director-in-charge of the company duly appeared before the committee and gave evidence by an order dated 7th March 1974 the commissioner of Excise Government of West Bengal issued an order and intimated the same to the company by his Memo dated 7th March 1974 allotting to the company petitioner 640 M T of molasses produced or to be produced by M/S Ramnagar Cane and Sugar Company Ltd during the sugar season 1973-74.

(3.) Be that as it may. by order dated 8th Oct. 1974 the management of the company was taken over by Central Government under the Industries (Development and Regulation's Act. 1951, in particular, under section 18A of the said Act By a subsequent notification, the running management was made over to a body of persons. The said body of persons was appointed as such by the Central Government. It Was further stated that subsequent thereto the management was transferred by the Central Government to he State Government and the State Government from time to time changed the personnel of the Board. By the said order of 8th Oct., 1974 the Government of India authorised the Board of Management to take over the management for a period of 5 years which. expired on 8th Oct. 1979. By the notification dated 8th October 1979 after the lapse of 5 years, the Central Government under section 18A(2) of the Act directed that the order of taking over of management will continue for a further period of 1 year from 8th Oct. 1979 on 7th Oct. 1980 it was again extended till 7th Oct. 1981 for 1 year. In the affidavit filed by the respondent it has been stared inter alia, that the petitioners were given all opportunity as provided under section 18A of the Act. They were heard and thereafter the order was made. It was further stated that no further hearing is necessary for the purpose of extension under section 18A(2) of the Act. It was further stated that the company was in dire financial position and now they are running smoothly There was a dispute between the parties whether the proper hearing was given or not before passing the order under section 18A of the Act but now the period of 5 years was over., The petitioner company stated that there was no hearing at all and the respondent, however, contended that all the opportunities of being heard were given to the petitioner before taking over the management under section 18a of the Act.