UNION OF INDIA Vs. JAGIR SINGH

JUDGEMENT

(1.) This letters patent appeal arises out of the judgement of learned single Judge delivered in C.W.P. No. 1294 of 1975 on 4/06/1991, whereby while allowing the writ petition filed by one Jagir Singh, shareholder of Messrs Suraj Textile Mills Limited, Malout Mandi (in the State of Punjab), the learned single Judge has held the inclusion of the Suraj Textile Mills in the First Schedule to the Sick Textile Undertakings (Taking Over of Management) Act, 1972, as sick textile Mills, and further inclusion of the said Mills in the First Schedule to the Sick Textile Undertakings (Nationalisation) Act, 1974, as illegal. As a necessary consequence, a number of directions have been issued by the learned single Judge to the Central Government, the principal direction being, - that "the Central Government would hand over the management of the Mills immediately to the erstwhile Management which was there at the time of the taking over of the Mills by the Central Government".

(2.) Briefly stating, Messrs Suraj Textile Mills Limited (hereinafter referred to as 'the Mills') was incorporated and established in June, 1960, in Malout Mandi, District Faridkot, in the State of Punjab, In April, 1962, the Mills executed English mortgage in favour of the Industrial Finance Corporation and went into production. However, in 1965, as an aftermath of the Pakistan aggression, the Mills suffered a set back as the labour of the Mills started running away from the area. The economic condition of the Mills became bad to worse resulting into the non-payment of taxes and instalments of loans. The Excise and Taxation Department even attached the Mills for recovery of the taxes and the Mills stopped working completely in 1969. In the very next year, that is, on 17/12/1970, an inquiry was ordered by the Central Government under Section 15 of the Industries (Development and Regulation) Act, 1951. The report of the Investigating Committee was submitted to the Central Government on 8/11/1971, and it was thereafter on 31/10/1972, that management of the Mills was taken over by the Central Government under the Sick Textile Undertakings (Taking Over of Management) Act, 1972, and since then it has been under the management of the Central Government. Since a number of other mills in the country had also been taken over, the name of the Mills in question, that is, Suraj Textile Mills, finds inclusion at serial No. 43 in the first Schedule to the aforesaid Act.

(3.) The vires of the Sick Textile Undertakings (Taking Over of Management) Act, 1972 - Central Act No. 72 of 1972, hereinafter referred to as 'the Take-over Act', were challenged by the respondent in C.W.P. No. 4420 of 1974. However, this petition was dismissed as withdrawn on 23/04/1974, as with effect from Ist April, 1974, the Sick Textile Undertakings (Nationalisation) Ordinance, 1974 (Ord. 12 of 1974), had come into force. Later on, this Ordinance was repealed by the Sick Textile Undertakings (Nationalization) Act, 1974, hereinafter referred no as 'the Nationalisation Act', thereby maintaining the continuity of the provisions with effect from Ist April, 1974 itself. In the Nationalisation Act, the name of the Suraj Textile Mills, Malout Mandi, finds inclusion at serial No. 99 in the First Schedule.