SC upholds takeover of mills

By T. Padmanabha Rao

NEW DELHI, JAN. 12. A Constitution Bench of the Supreme Court has unanimously upheld the takeover by the Union Government of the management of three cotton mills - the Elphinstone Spinning and Weaving Mills Company Ltd., the Jam Manufacturing Mills and the New City Mills of Bombay - under the provisions of the Textile Undertakings (Taking over of Management) Ordinance, 1983, and the Textile Undertakings (Taking over of Management)) Act, 1983 - which replaced the Ordinance.

Delivering the judgment , Mr. Justice G. B. Pattanaik, set aside a verdict of the Bombay High Court which held that the action of the Centre infringed the fundamental right under Article 14 of the Constitution (equality before law) and therefore, qua them, it was invalid.

The Bench, which included Mr. Justice S. Rajendra Babu, Mr. Justice D. P. Mohapatra, Mr. Justice Doraiswamy Raju and Mr. Justice Shivraj V. Patil, said ``the writ petitions (from the petitioners), filed before the High Court stand dismissed.''

The decision to take over `the management' ``with a view to implementing the decision to nationalise the mills being the basis for enactment of the Taking Over of the Management of the Mills Act,'' the question of taking recourse to remedies available under the Companies Act or the Industries Development and Regulation Act ``really does not arise and on that score it cannot be said that there has been a violation of Article 19(1)(g)'' (to practise any profession or carry on any trade or business etc..), the Bench said.

``We are examining the enactment of a law by Parliament itself and the wisdom of 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,'' the Bench observed. ``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.''

``The title of the 1983 Act itself and the preamble also indicate that to make the mills viable, it would be necessary for the public financial institutions to invest very large sums of money, so that the mills will be rehabilitated and the interest of the workmen employed therein would be protected.''

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