Case: Union of India Vs. Elphinstone Spinning &amp; Weaving Co. Ltd

either on the materials on record or applying the rules of interpretation of a Statute. The said conclusion of the High Court as to the spirit behind the Statute, therefore, cannot be sustained. 19. Apart from answering the five points, formulated by us, we may also deal with some other ancillary points, which have been raised in course of arguments. Mr. R.F. Nariman had argued on the basis of Article 300A of the constitution and relied upon the judgment of this Court in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co.Ltd., and others, 1954, S.C.R. 674, but we find from the impugned judgment that the said contention had not been pressed before the High Court and, therefore, we are not called upon to examine the contention to find out whether the Act can be held to be reasonable and fair. That apart, the impugned Act merely takes over the management of the property by a legislation permitted under Article 31A (1)(b) of the Constitution. This being the position, Article 300A will have no application. 20. Mr. Nariman also had raised a contention that the very fact that the other provisions, available under the Companies Act or under Industrial Development and Regulation Act has not been adhered to and a drastic step had been taken by immediately taking over of the management of the mills, would constitute an infraction of Article 19(1)(g) and in support of the said contention, reliance has been placed on the decision of this Court in the case of Mohd. Faruk v. State of Madhya Pradesh and others, 1970(1) S.C.R. 156. In the aforesaid case, the Court was consider in the validity of the notification issued by the Government of Madhya Pradesh in canceling the confirmation of the bye-laws made by Jabalpur Municipality, in so far as the bye-laws relate to slaughter of bulls and bullocks. This Court had observed "that the Court in considering the validity of the impugned law imposing a prohibition on the carrying on of a business or profession, attempt an evaluation of its direct and immediate impact upon the fundamental rights of the citizens affected thereby and the larger public interest sought to be ensured in the light of the object sought to be achieved, the necessity to restrict the citizens freedom, the inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public, the possibility of achieving the object by imposing a less drastic restraint, and in the absence of exceptional situations such as the prevalence of a state of emergency - national or local - or the necessity to maintain essential supplies, or the necessity to stop activities inherently dangerous, the existence of a machinery to satisfy the administrative authority that no case for imposing the restriction is made out of that a less drastic restriction may ensure the object intended to be achieved". It is these observations on which Mr. R.F. Nariman strongly relied upon, since in the case in hand, the appropriate Government did not take any action under the provisions of the Companies Act, nor there had been any investigation as provided under Section 15 and 15A of the Industrial Development and Regulation Act, according to Mr. Nariman, obviously, those provisions are less drastic in nature than the impugned Act and in fact, there was no urgent necessity for enacting a law and taking a drastic measure of taking over the management of the mills. We are unable to accept this contention, since we have already discussed the public interest involved and how the Parliament thought of taking over the management of the mills without which, it would not be feasible to pump in, large sums of money from the public exchequer and leave the management with the erstwhile managers for whose mismanagement, the mills would not have been in the situation in which the law was enacted. The decision to take over the management of the mills with a view to implement the decision to nationalise the mills being the basis for enactment of the Taking Over of the Management of the Mills Act, question of taking recourse to the remedies available under the Companies Act or Industries Development and Regulation Act really do not arise and on that score it cannot be said that there has been a violation of Article 19(1)(g). Applying the observations of this Court in Dwarka Das, in fact a somewhat similar contention had been noticed in Sitaram Mills case in paragraph 14 of the judgment. We are, therefore, unable to persuade ourselves to accept the contention that the very fact that Government did not proceed with the remedies available under other Act and proceeded to enact a legislation for taking over of th management of the Mills would constitute an infraction of Article 19(1)(g) of the Constitution. We may reiterate that we are examining the enactment of a law by the Parliament itself and the wisdom of the Parliament in taking a decision to take over the management of the mills in the larger public interest and not an executive decision of the Government which could have taken recourse to some other remedial measure provided under the Industries Development and Regulation Act or the Companies Act. If Parliament decides to enact a law for taking over the management of the Textile Mills, pending completion of the process of nationalisation, on a genuine apprehension that there might be a large scale flittering away of assets if the management is not taken over and that would be grossly detrimental to the public interest it would not be open for the Court to examine the question whether other remedies could have been taken and not being taken there has been an infraction of Article 19(1)(g). In the aforesaid premises, we have no hesitation in coming to the conclusion that the High court was in error to hold that there has been an infraction of Article 19(1)(g) in the case in hand. 21.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]During the pendency of these appeals this Court had passed some interim orders with regard to possession of certain land and other assets as well as with regard to cars and telephone connections. In view of our decision setting aside the impugned judgment of Bombay High Court and in view of Section 3(2) of the Act all interim orders would stand vacated. But the Elphinstone Spinning and Weaving Mills in its Writ Petition No. 2401 of 1983 having made a specific case that notwithstanding the Act being valid and the management of the mills can be taken over and its properties and assets vest with the Central Government under Section 3(2) of the Act, but their are certain other assets which cannot be held to form a part of the assets of Elphinstone Spinning and Weaving Mill and, therefore, cannot be taken over, the High Court has not considered this question as the Act itself was struck down but it would be meet and properthe High Courte, bearing in mind the law laid down by this Court in Sitaram Mills case interpreting the provisions of Section 3(2) of the Act on the materials to the produced by the parties. Be it stated that until a decision is given bythe High Courton this score, by virtue of operation of law all the assets would stand vested and such vesting would be subject to a final decision ofthe High Courtin respect of any of these so-called assets which the petitioner establishes not to be an asset of Elphinstone Mill notwithstanding the wider meaning given to Section 3(2) in Sitaram Mills case.