tition Civil No 1129 of 1977 Under Article 32 of the Constitution of India
R Sharma and Dalveer Bhandari for the Petitioner
BDatta Additional Solicitor General Ms ASubhashini AK Goel TVSN Chari RK Jain Dr NM Ghatate DN Mishra and HS Parihar for the Respondents
The Judgment of the Court was delivered by DUTT J
In this writ petition the petitioner Panipat Woollen  General Mills Co Ltd hereinafter referred to as the Company  has challenged the taking over of the management of its two textile mills under the Sick Textile Undertakings Taking over of Management Act 1972 for short Take over Act  and also the constitutional validity of the Take over Act and the Sick Textile Undertakings Nationalisation Act 1974 for short the Nationalisation Act 
It appears that the Company had falled on evil days resulting in initiation of liquidation proceedings against the Company and the 940 appointment of a provisional liquidator
The mills of the Company were closed sometime in May 1972
On the application by the Industrial Finance Corporation of India the Punjab  Haryana High Court directed the Board of Directors of the Company to hand over possession of the two mills to the Corporation to which the Company was indebted for a huge sum of money
The Corporation was also directed by the High Court to lease out the mills and it appears that Padmashree Textile Industries Ltd was granted the lease of the mills that is to say the textile undertakings of the Company
At this stage it may be mentioned that the lessee the said Padmashree Textile Industries Ltd also filed a writ petition before this Court inter alia challenging the Take over Act and the Nationalisation Act
That writ petition has since been disposed of by this Court upon settlement between the parties
Section 41 of the Take over Act provides that on or before the appointed day the management of the sick textile undertakings specified in the First Schedule shall vest in the Central Government
Under Section 2a appointed day means 31st day of October 1972
Section 2d defines sick textile undertaking as follows section 2d
sick textile undertaking means the textile undertaking which falls within one or more of the following categories namely i which is owned by a textile company which is being wound up whether voluntarily or by or under the supervision of any Court or in respect of which a provisional liquidator has been appointed by a Court ii which had remained closed for a period of not less than three months immediately before the appointed day and the closure of which is prejudicial to the textile industry and the condition of the undertaking is such that it may with reasonable inputs be re started in the interests of the general public iii which has been leased to Government or any other person or the management of which has been taken over by Government or any other person under any leave or licence granted by any Receiver or Liquidator by or under the orders of or with the approval of any Court 941 iv the management of which was authorised by the Central Government by a notified order made under section 18A or in pursuance of an order made by the High Court under section 18FA of the Industries Development and Regulation Act 1951 to be taken over by a person or body of persons but such management could not be taken over by such person or body of persons before the appointed day v the management of which ought to be according to the report made after investigation by any person or body of persons appointed after the 1st day of January 1970 under section 15 or section 15A of the Industries Development and Regulation Act 1951 taken over under section 18A of that Act but in relation to which no notified order authorising any person or body of persons to take over the management of such undertaking was made before the appointed day vi in respect of which an investigation was caused to be made before the appointed day by the Central Government under section 15 or section 15A of the Industries Development and Regulation Act 1951 and the report of such investigation was not received by the Central Government before the appointed day and includes any textile undertaking which is deemed under sub section 2 of section 4 to be a sick textile undertaking In view of sub clause i of section 2d as a provisional liquidator was appointed in respect of the textile undertakings of the Company they were sick textile undertakings
Moreover the sick textile undertakings of the Company have been specified in the First Schedule to the Take over Act and by virtue of section 41 of the Take over Act the undertakings of the Company have vested in the Central Government as sick textile undertakings
It is vehemently urged by Mr Sharma learned Counsel appearing on behalf of the petitioners that before actually taking possession of the undertakings of the Company the Company should have been given an opportunity of being heard
It is submitted that if such an 942 opportunity had been given the Company could have shown that its undertakings were not sick undertakings
Counsel submits that the intention of the Legislature to give such an opportunity of being heard is apparent from the provisions of clauses iv v and vi of section 2d of the Take over Act which relate to the taking over of manage ment of an undertaking under the Industries Development and Regulation Act 1951
In support of this contention the learned Counsel has placed reliance upon three decisions of this Court in A K Kraipak  Ors
vs Union of India  Ors
  Maneka Gandhi vs Union of India 1978 2 SCR 621 and Smt
Indira Nehru Gandhi vs Shri Raj Narain In our opinion none of the above decisions is applicable to the facts and circumstances of the instant case
In the First Schedule to the Take over Act the undertakings of the Company have been specified as sick textile undertakings
In other words the Legislature has itself decided the undertakings of the Company to be sick textile undertakings
Indeed in the First Schedule all the sick textile undertakings have been specified
Thus it is apparent that the Legislature has not left it to the Executive to decide whether a particular textile undertaking is a sick textile undertaking or not
If under the Take over Act the question whether a textile undertaking is a sick textile undertaking or not had been directed to be decided by the executive authorities the owner of such undertaking could claim an opportunity of being heard
But when an undertaking has been specified in the First Schedule to the Take over Act as a sick textile undertaking the question of giving an opportunity to the owner of the undertaking does not at all arise
We are unable to accept the contention of the petitioners that sub clauses iv v and vi of section 2d indicate that principles of natural justice should be complied with
The provisions of these sub clauses are some of the categories under any one of which the undertaking may fall and in that case it will be a sick textile undertaking
There is therefore no substance in the contention made on behalf of the petitioners that the Company should have been given an opportunity of being heard before the management of its undertakings was taken over as sick textile undertakings
It is next urged by the learned Counsel for the petitioners that the Legislature having itself decided the question whether an under taking is a sick textile undertaking or not without giving any opportunity to the owner of such undertaking to make a representation has damaged the basic structure of the Constitution of India namely 943 separation of power between the Legislature the Executive and the Judiciary
Our attention has been drawn to the observations made by Sikri CJ in Kesavananda Bharati vs State of Kerala 1973 2 Supp
SCR 1 and that of Mathew J in Smt
lndira Nehru Gandhi vs Shri Raj Narain at page 503 to the effect inter alia that separation of powers among the Legislature the Executive and the Judiciary is one of the basic structures of the Constitution
It is accordingly submitted on behalf of the petitioners that the doctrine of separation of powers implies that the Legislature should define civil or criminal wrong or a default and create an independent machinery judicial or quasi judicial to determine the liability of the status of an individual
Further the Legislature itself cannot give a judgment and in any case if such a judgment is given by the Legislature it must act in accordance with the principles of natural justice
The above submissions of the petitioners in our opinion are misconceived
There can be no doubt that in respect of each sick textile undertaking a Take over Act and a Nationalisation Act could be passed and in that case a large number of enactments would come into existence to the inconvenience of all concerned
In order to avoid such cumbersome course and for the sake of convenience the Legislature has mentioned in the First Schedule in both the Take over Act and the Nationalisation Act the names of all sick textile undertakings in the country
By including certain textile undertakings as sick textile E undertakings in the First Schedule to the Take over Act the Legislature has not made any judicial or quasi judicial determination nor has the Legislature given any judgment as contended on behalf of the petitioners although such inclusion is sometimes loosely expressed as legislative judgment 
In section 2d the Legislature has laid down the criteria for a sick undertaking
The sick textile undertakings have been specified in the First Schedule on the basis of the tests laid down in section 2d
In including the sick textile undertakings in the First Schedule the Legislature has not acted arbitrarily for it has also laid down the criteria or tests for such inclusion
If any undertaking which has been so specified in the First Schedule does not satisfy the tests under section 2d of the Take over Act the owner of it is entitled to t challenge such inclusion or take over in a court of law although such challenge has to be founded on a strong ground
Thus there is no finality or conclusiveness in the legislative determination of an under taking as a sick textile undertaking
Such determination is neither judicial nor quasi judicial
Therefore the question of damaging or altering the basic structure of the Constitution namely separation of 944 powers among the Legislature the Executive and the Judiciary does not at all arise
So also the question of the validity of the constitutional amendments by which the Take over Act and the Nationalisation Act have been included in the Ninth Schedule on the ground that by such amendments the basic structure of the Constitution is damaged as contended on behalf of the petitioners does not arise
The contentions are misconceived and are rejected
As a last resort the petitioners have challenged the validity of the Nationalisation Act on the ground of inadequacy of compensation
The Company had two undertakings namely Panipat Woollen Mills and Kharar Textile Mills
In the third column of the First Schedule to the Nationalisation Act a sum of Rs 640000 has been specified for the Panipat Woollen Mills and a sum of Rs 1289000 has been specified for the Kharar Textile Mills by way of compensation for the acquisition of these two undertakings
It is the contention of the petitioners that the amounts of compensation which have been specified for the acquisition of these two undertakings are inadequate
We are afraid as on the date the Nationalisation Act had come into force Article 31 of the Constitution was not repealed the validity of the Nationalisation Act cannot be challenged on the ground of inadequacy of compensation
In Minerva Mills Ltd  Ors
vs Union of India  Ors Writ Petition Nos
356 361 of 1977 decided on September 9 1986 it has been already held by us that the Nationalisation Act gives effect to the policy of the State towards securing the ownership and control of the material resources of the community which are so distributed as best to subserve the common good as contained in Article 39b of the Constitution
In the circumstances the Nationalisation Act falls within the provision of Article 31C of the Constitution before it was amended by the Constitution Forty Second Amendment Act 1976
Even assuming that the Nationalisation Act violates the provision of Article 31 no challenge to its validity can be made on that ground
Apart from that we are of the view that the compensation that has been awarded to the Company is neither inadequate nor illusory as contended on behalf of the petitioners
It is not in dispute that the paid up share capital of the Company was Rs60 lakhs and it paid dividend up to 1965
Thereafter the Company did not pay any dividend from 1965 to 1970
It will not be unreasonable to presume that in specifying the compensation the Legislature has taken these facts into consideration
There is therefore no substance in the contention of the petitioners that the compensation specified in First Schedule to the Nationalisation Act in respect of the undertakings of 945 the Company is illusory
The contention is rejected
No other point has been urged on behalf of the petitioners
For the reasons aforesaid the writ petition is dismissed and the rule nisi is discharged
There will however be no order as to costs
MLA Petition dismissed


Summary:
A provisional liquidator was appointed in respect of two textile undertakings of the petitioner company since they had gone into huge loss and had to be closed sometime in May 1972
As the textile undertakings of the petitioner company were sick textile undertakings  within the meaning of sub clause i of section 2d of the Sick Textiles Undertakings Taking over of Management Act 1972 for short Take over Act and have also been specified in the First Schedule to the Take over Act they vested in the Central Government as sick textile undertakings  by virtue of section 41 of the Take over Act
The petitioner company challenged before the Supreme Court the taking over of the management of the aforesaid two textile mills under the Take over Act and also the constitutional validity of the Take over Act and the Sick Textile Undertakings Nationalisation Act 1974 on the grounds a that the Company should have been given an opportunity of being heard before the management of its undertakings was taken over as sick textiles undertakings  and if such an opportunity had been given the company could have shown that its undertakings were not sick undertakings b that the legislature having itself decided the question whether an undertaking is sick textile undertaking or not without giving any opportunity to the owner of such undertaking to make a representation has damaged the basic structure of the Constitution 938 namely separation of power between the legislature the executive and the judicially and c that the Nationalisa tion Act is consititutionally invalid on the ground of inadequacy of compensation
Dismissing the petition  HELD 11 In the First Schedule to the Take over Act the undertakings of the company have been specified as sick textile undertakings
In other words the Legislature has itself decided the undertakings of the Company to be sick textile undertakings
Indeed in the First Schedule all the sick textile undertakings have been specified
Thus it is apparent that the Legislature has not left it to the Executive to decide whether a particular textile undertaking is a sick textile undertaking or not
If under the Take over Act the question whether a textile undertaking is a sick textile undertaking or not had been directed to be decided by the executive authorities the owner of such undertaking could claim an opportunity of being heard
But when an undertaking has been specified in the First Schedule to the Take over Act as a sick textile undertaking the question of giving an opportunity to the owner of the undertaking does not at all arise
942C F 12 In including the sick textile undertakings in the First Schedule the Legislature has not acted arbitrarily for it has also laid down the criteria or tests for such inclusion
If any undertaking which has been so specified in the First Schedule does not satisfy the tests under section 2d of the Take over Act the owner of it is entitled to challenge such inclusion or take over in a court of law although such challenge has to be founded on a strong ground
Thus there is no finality or conclusiveness in the legislative determination of an undertaking as a sick textile undertaking
Such determination is neither judicial nor quasi judicial
Therefore the question of damaging or altering the basic structure of the Constitution namely separation of powers among the Legislature the Executive and the Judiciary does not at all arise
So also the question of the validity of the constitutional amendments by which the Take over Act and the Nationalisation Act have been included in the Ninth Schedule on the ground that by such amendments the basic structure of the Constitution is damaged as contended on behalf of the petitioners does not arise
943F H 944A B 2
The Nationalisation Act gives effect to the policy of the State towards securing the ownership and control of the material resources of the community which are so distributed as best to subserve the common 939 good as contained in article 39b of the Constitution
It falls within the provision of article 31C of the Constitution before it was amended by the Constitution Forty Second Amendment Act 1976
Even assuming that the Nationalisation Act violates the provision of article 31 no challenge to its validity can be made on that ground
944E G Minerva Mills Ltd  Ors
vs Union of India  Ors Writ Petition Nos
356 361 of 1977 decided on September 9 1986 relied upon
In the instant case the compensation that has been awarded to the Company is neither inadequate nor illusory
It is not in dispute that the paid up share capital of the Company was Rs60 lakhs and it paid dividend from 1965 to 1970
It will not be unreasonable to presume that in specifying the compensation the Legislature has taken these facts into consideration
There is therefore no substance in the contention of the petitioners that the compensation specified in First Schedule to the Nationalisation Act in respect of the undertakings of the Company is illusory
944G H 945A