Case: National Textile Corporation Ltd Vs. Durga Trading Co. &amp; Ors.

by or against the National Textile Corporation.” Thus, it is clear that all other rights and interests in or arising out of such property as were existing immediately before the appointed day in the ownership, possession, power or control of the textile company in relation to the said undertaking vested with the Central Government and by virtue of sub-section (2) of Section (3) stood transferred to, and vested in, the National Textile Corporation. Liability if any of the owner of a textile undertaking i.e. SSML of any period to the appointed day is liability of such owner (SSML) and can be enforceable against him and not against the Central Government or the National Textile Corporation in view of Section 5(1) of 1995 Act, which reads as follows: “5 (1) Every liability, other than the liability specified in sub-section (2), of the owner of a textile undertaking, in relation to the textile undertakings in respect of any period prior to the appointed day, shall be the liability of such owner and shall be enforceable against him and not against the Central Government or the National Textile Corporation.” 15. Therefore respondent No. 1 cannot derive any advantage against the Central Government or the National Textile Corporation on the ground of pendency of a suit against the owner CSSML). 16. In M/s. Doypack Systems Pvt. Ltd. v. Union of India & Ors., (1988) 2 SCC 299 , while dealing with a case involving National Textile Corporation-appellant herein, the Court noticed the meaning of the expressions “arising out of, pertaining to and in relation to” and observed: “49. The words “arising out of” have been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur undertaking. We are of the opinion that the words “pertaining to” and ‘in relation to” have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method followed in good drafting. The word “pertain” is synpnymous with the word “relate”, see Corpus Juris Secundum, Volume 17, page 693.50. The expression “in relation to” (so also “pertaining to”), is a very broad expression which presupposes another subject matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context, see State Wakf Board v. Abdul Azeez 29, following and approving Nita Charan Bagchi v. Suresh Chandra Paul 30, Shyam Lai v. M. Shyamlal 31 and 76 Corpus Juris Secundum 621. Assuming that the investments in shares and in lands do not form part of the undertakings but are different subject matters, even then these would be brought within the purview of the vesting by reason of the above expressions. In this connection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the term “relate” is also defined as meaning to bring into association or connection with, It has been clearly mentioned that “relating to” has been held to be equivalent to or synonymous with as to “concerning with” and “pertaining to”. The expression “pertaining to" is an expression of expansion and not of contraction.” 17. The First Schedule of the 1995 Act provides the amount which the Central Government has to pay to the owner of every textile undertaking for the transfer and vesting of such undertaking to it. This provision cannot be the starting point of investigation as to which amount relates to which property or as a guide to construction (See paragraph 54 of M/s. Doypack Systems Pvt. Ltd. v. Union of India & Ors., (1988) 2 SCC 299. In the said case of M/s. Doypack Systems Pvt. Ltd. the Court further held: “57. The expression “and all other rights and interests in or arising out of such property, as were immediately before the appointed day, in the ownership, possession, power or control of the company in relation to the said undertakings”, appearing in sub-section (1) of Section 4 of the Act indicates that the shares which have been purchased from out of the funds of the textile undertakings and which have been held for the benefit of the said textile undertakings, would come within the scope of Section 4 of the Act and thus would also vest in Central Government under Section 3. The origin of these shares and their connection with the textile undertakings have been fully corroborated. The textile business is the only business of Swadeshi Cotton Mills. There is interconnection and interrelation between all the six undertakings. Investments in Swadeshi Polytex Limited from the funds of Kanpur undertaking have always been made. Investments in Swadeshi Mining and Manufacturing Company Ltd. were always made from the funds of the Kanpur undertaking. Assets/ investments held and used for the benefit of the textile business of SCM, were carried on in its textile undertakings.” Therefore, it is clear that the property in question stood vested in the Central Government and, in turn, stood transferred and vested with National Textile Corporation under sub-section (2) of Section 3 of 1995 Act. Even if it is admitted that respondent No. 1 has acted on the agreement to sell and has paid the entire consideration, it cannot be a ground to hold that respondent No. 1 is authorized occupant within the meaning of Section 2(g) of the 1971 Act18. We are of the view that the Division Bench of the High Court failed to analyze the provisions correctly and wrongly presumed that the property in question has been sold to the Textile Undertaking prior to the commencement of 1983 Act. The Court wrongly relied on Section 53A of the Transfer of Property Act to hold that respondent No. 1 has valid defence available under the said provision and hence erred in holding that respondent No. 1 is an authorized occupant within the meaning of Section 2(g) of the 1971 Act. 19.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Therefore, it is clear that the property in question stood vested in the Central Government and, in turn, stood transferred and vested with National Textile Corporation under(2) of Section 3 of 1995 Act. Even if it is admitted that respondent No. 1 has acted on the agreement to sell and has paid the entire consideration, it cannot be a ground to hold that respondent No. 1 is authorized occupant within the meaning of Section 2(g) of the 1971 Act18. We are of the view that the Division Bench of the High Court failed to analyze the provisions correctly and wrongly presumed that the property in question has been sold to the Textile Undertaking prior to the commencement of 1983 Act. The Court wrongly relied on Section 53A of the Transfer of Property Act to hold that respondent No. 1 has valid defence available under the said provision and hence erred in holding that respondent No. 1 is an authorized occupant within the meaning of Section 2(g) of the 1971 Act.