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CASE NO.: Appeal (civil)  2995-2997 of 1984

PETITIONER: UNION OF INDIA

RESPONDENT: ELPHINSTONE SPINNING & WEAVING CO.LTD.& ORS.

DATE OF JUDGMENT: 01/01/2001

BENCH: G.B. PATTANAIK & S.RAJENDRA BABU & D.P.MOHAPATRA & DORAISWAMY RAJU & S.V.PATIL

JUDGMENT: JUDGMENT

DELIVERED BY: G.B. PATTANAIK (J)  

PATTANAIK,J.

     These  appeals  by  the Union of  India  are  directed against  the judgment of the Bombay High Court, Certificates under  Articles 132(1) and 133 of the Constitution for leave to  appeal  to the Supreme Court having been granted by  the High  Court  itself.  By the impugned judgment,  the  Bombay High  Court  came to the conclusion that the action  of  the Union Government in taking over the managements of the three Cotton  Mills, namely, The Elphinstone Spinning and  Weaving Mills  Company  Ltd., Jam Manufacturing Mills and  New  City Mills of Bombay under the provisions of Textile Undertakings (Taking  over  of Management) Ordinance, 1983,  (hereinafter referred to as The Ordinance) and the Textile Undertakings (Taking  over of Management) Act, 1983 (hereinafter referred to  as  The  Act), infringed the  fundamental  right  under Article  14 of the Constitution and, therefore, qua them  it was  invalid.  The High Court also further came to hold that the  Act infringed the petitioners fundamental rights under Article  19(1)(g)  and on that count qua the petitioner  was equally  invalid.  In coming to the aforesaid conclusion the High  Court  after thorough discussion of the  materials  on record  found that the Union Government failed to  establish either  directly or inferentially any mis-management on  the part of the three companies and failed to establish from the material on record that there was any nexus between the main object  or purpose of the Act, viz., to take over management of  only those mills whose financial condition before strike was wholly unsatisfactory by reason of mis-management.

     The  short  facts leading to the promulgation  of  the Ordinance  and  replacement of the same by the Act are  that the  Textile  Mills in and around Bombay had gone on  strike with  effect from 18.1.1982.  On 15.2.1982 the Government of India  declared its policy for nationalisation of all  these Textile  Industries.   In October 1982, the Reserve Bank  of India  had called a meeting to discuss the situation arising out  of the strike.  Depending upon the economic  conditions

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of  different mills the mills had been classified into three groups.   The continued Textile strike had deteriorated  the financial  condition of all the Textile Mills and the  Mills were  looking  forward  to the  Financial  Institutions  and Nationalised  Banks  for  financial aid to  make  the  Mills viable.   On 28th March, 1983, the Government of India wrote letters  to  the  Nationalised Banks and IDBI to  conduct  a viability study of these Mills.  The three Mills, with which we  are  concerned,  in these appeals had been  included  in category  III.   On 20th September, 1983, the Government  of India  in  the Ministry of Commerce had issued a  Memorandum constituting  a Task Force to collect data and submit a note for  being  placed before Economic Affairs Committee of  the Union Cabinet to enable it to take a decision as to which of the  Mills in category III would be Nationalised.  The  said Task  Force  submitted  its report by the end  of  September 1983.   On 18th October, 1983, the Ordinance was promulgated and  the  management of 13 Textile Mills enumerated  in  the First  Schedule  to  the Ordinance was  taken  over  pending Nationalisation   of   the   Undertakings.   The   Ordinance indicates  that  for re-organising and  re-habilitating  the Textile  Mills  to  protect  the  interest  of  the  workmen employed   therein,   and  to   augment  the   product   and distribution  at fair price of different varieties of  cloth and  yarn  so  as to subserve the interest  of  the  general public, investment of very large sums of money was necessary and  for  such investment, the Central Government felt  that the  acquisition of the Mills would be necessary, but  since acquisition  would  take some time and it was felt  that  it would  be expedient in the public interest to take over  the management  of  the Undertakings, pending  acquisition,  and that  Parliament was not in Session, the President, on being satisfied  that  circumstances exists for  taking  immediate action,  promulgated  the  Ordinance in exercise  of  powers conferred  under  Article 123(1) of the  Constitution.   The said  Ordinance was replaced by the Act and the Act provided that  the  same shall be deemed to have come into  force  on 18th   day   of  October,   1983.   Immediately  after   the promulgation  of the Ordinance the Management of the  Mills, enumerated  in the First Schedule thereof, having been taken over  by the Government, the three Mills referred to earlier filed  three Writ Petitions in Bombay High Court challenging the applicability of the Ordinance so far as those Mills are concerned.   After  replacement of the Ordinance by the  Act the Writ Petitions were amended and thus the validity of the Act  was challenged qua the three Writ Petitioners.   Though the  challenge  was  on three counts, namely,  violation  of Article  14, violation of Article 19(1)(g) and violation  of Article  300A,  but at the time of hearing the challenge  in relation  to violation of Article 300A was not pressed  and, therefore,  the High Court considered the challenge, so  far as  it  relates to violation of Articles 14 and 19(1)(g)  of the  Constitution.  The High Court in the impugned  judgment made elaborate discussion of the materials on record as well as  interpreted the different provisions of the Constitution and came to hold that the act with its object of only taking over  the  management  cannot be considered to  be  law  for taking  over  the ownership and control of the property,  as required  under Article 39(b), but would squarely fall under Article  31A (1)(b) and, therefore, Article 31(c) will  have no  application.  The High Court also came to the conclusion that  to  protect a legislation under Article  31(c),  there must be a declaration in the legislation itself that the Act was enacted to give effect to the Directive Principles under Article  39(b) and (c), and in the case in hand, there being

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no  such declaration either in the Ordinance and in the Act, Article  31(c)  will have no application and,  squarely  the challenge on the ground of violation of Article 14 or 19 has to  be  examined.  On examining Article 31A(1)(b)  the  High Court  was  of  the  opinion that  two  conditions  must  be satisfied for attracting Clause 1(b) of Article 31A, namely, that  the  taking over of the management of the property  by the  State  would be for a limited period, and  such  taking over must be either in public interest or in order to secure the proper management of the property, since the taking over of  management  was not for any limited period and  in  fact such management had been taken over pending nationalisation, the  provisions of Clause 1(b) of Article 31A would not  get attracted.   According  to  the High  Court  the  expression Pending Nationalisation cannot be held to be for a limited period  and  the protection of Article 31A (1)(b)  would  be available only when there is a definite limit in the law for the  period of management and, consequently the challenge on the anvil of violation of Articles 14 and 19(1)(g) has to be examined.   The High Court then examined the factual  aspect for  considering  the question as to whether there were  any materials  to  put the three Mills in a class of  Mills  for which   the  taking  over  of   the  management  was   meant notwithstanding  a  declaration or recital in  the  Preamble itself,  the same being Mills whose financial condition had become  wholly unsatisfactory by reason of  mis-management. The  High Court then examined the different datas  collected by  the  Government  of  India as well  as  several  reports including  the Task Force Report and ultimately came to  the conclusion  that  even  though the financial  condition  had become unsatisfactory but the Union Government has failed to establish that such unsatisfactory financial condition is by reason  of mis-management and, therefore, there was no nexus between  the  basis of the classification of the  petitioner Mills  with  other mismanaged Mills and the said object  and the purpose of the Act.  In other words, the High Court came to  the conclusion that inclusion of the three Mills in  the Schedule appended to the Ordinance and the Act was arbitrary and,  on  the other hand, the figures given by the Union  of India  itself show that the financial position of the  three Mills  were  far  better than even the Mills which  were  in category  II.   Consequently,  the  High Court  was  of  the opinion  that the Government could not have, for taking over of  the  management  of the petitioners  Mills,  classified those  Mills as Mills whose financial condition was bad  due to  mis-management.   The High Court, therefore,  ultimately came to the conclusion that there has been a gross violation of  Article 14 in clubbing the three Mills with other  Mills in  category  three, enumerated in the Schedule appended  to the  Act  and such inclusion violates the fundamental  right guaranteed  under Article 14 of the Constitution.  The  High Court  also  came  to the conclusion that the  impugned  Act infringed  the petitioners right under Article 19(1)(g) and on  that count qua petitioners was equally invalid.   Having come  to  the aforesaid conclusion the Writ  Petitions  were allowed  and  the order of taking over of the management  of three  Mills was set aside.  But the operation of the  order had  been  stayed for 8 weeks and certain  restrictions  had been  imposed  and the High Court also  granted  Certificate under  Article 132(1) and 133 of the Constitution for  Leave to  Appeal to the Supreme Court.  When the matter was listed before  this  Court the aforesaid interim order staying  the operation of the judgment was continued and later on certain Misc.   Applications being filed by different Mills  certain orders  have  been  passed by the Court with regard  to  the

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possession   of  certain  assets,   like,   car,   telephone connections etc.  When the appeals were taken up for hearing in  January  1985,  the same had been heard before  a  Three Judge  Bench but after hearing for some time the Three Judge Bench  felt  that in view of the questions which  arise  for consideration, and in view of Clause 3 of Article 145 of the Constitution  the  cases should be heard by a Bench  of  not less  than Five Honble Judges and that is why these appeals were heard by us.

     Mr.   Salve, the learned Solicitor General,  appearing for  the appellant Union Government contended that the basic approach  of the High Court in examining the  constitutional validity  of the Act is grossly erroneous and such  approach has  vitiated  the  ultimate conclusion.  According  to  the learned  Solicitor General, the financial condition of these mills  had become so bad that unless large sum of money from the  public exchequer was pumped into it, the mills were not in  a  position  to  run and that in turn  would  have  made thousands  of  labourers  idle.  To overcome  the  aforesaid crisis  and since large scale government money was going  to be  pumped  into  the  Mills   for  making  it  viable,  the Parliament  itself  thought it appropriate to take step  for acquiring  the Mills and pending finalisation of acquisition the  Parliament  thought it fit to take over the  management which  was  absolutely  necessary in  the  public  interest. According  to  Mr.   Salve this is apparent  from  the  Bill introduced  by  the  concerned Minister as well as  the  Act itself  and in such a case the Court would not be  justified in  examining  the datas which persuaded the  Parliament  to take the aforesaid decision to come to a conclusion that the said decision of the Parliament could not have been taken on the  available materials.  According to Mr.  Salve the  fact that  the management of the Mills had been taken over  until the  Mills are acquired by enacting an Acquisition Act,  for all  practical  purposes the taking over was for  a  limited period thereby attracting Clause 1(b) of Article 31A and the High  Court was in error in concluding that the taking  over was  not  for a limited period and, as such, Clause 1(b)  of Article  31A  will not get attracted.  According to  learned Solicitor  General  the  Act in question was for  a  limited period  and  had been enacted in the public interest  coming within  the  purview  of Clause (1)(b) of Article  31A  and, therefore,  provisions of Article 14 or Article 19 cannot at all  be  attracted for assailing the validity of the  action taken  under  the Act.  The learned Solicitor  General  also further urged that the materials which were there before the Government  before promulgation of the Ordinance and  before the  Parliament before enactment of the Act were  sufficient for  classifying the Mills into three categories and in fact by  inclusion of the three Mills with which we are concerned in  the present appeals with the group of 13, the Management of  which was being taken over by the Act, by no stretch  of imagination  can  be  held  to  be  discriminatory  nor  the conclusion  of  the  High  Court  that  there  has  been  an infringement  of Article 19(1)(g) of the Constitution is  at all  sustainable.  The learned Solicitor General also placed reliance  on the averments made by the Union of India in its Counter  Affidavit  filed before the High Court to  indicate how  it was absolutely necessary to promulgate the Ordinance and  how the Government took the decision after  considering the  reports  submitted  by  the IDBI  and  other  financial institutions  as  well as the report of the so  called  Task Force.   He  also  placed reliance on the Affidavit  of  Mr. Prabhat  Kumar,  the then Secretary Commerce explaining  the

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Task  Force Report and contended that the High Court was  in error  in basing its conclusion on the earlier Affidavit  of one Mr.  Singh.  According to learned Solicitor General that while  considering the constitutional validity of a statute, more particularly a statute on economic matter, certain well established  principles  evolved by the Courts as  rules  of guidance  in  discharge  of its constitutional  function  of judicial review have to be borne in mind, and in the case in hand the impugned judgment of the High Court, on the face of it,  indicates  that those guiding principles have not  been borne  in mind.  According to the learned Solicitor  General one  cardinal  principle  well accepted  and  recognized  by Courts  is  that the legislature understands  and  correctly appreciates  the  needs of its own people and its  laws  are directed  to  problems made manifest by experience  and  its discrimination  are  based  on   adequate  grounds  and  the presumption of constitutionality is indeed so strong that in order  to  sustain it the Court may take into  consideration matters  of common knowledge, matters of common report,  the history  of  the times and may assume every state  of  facts which  can be conceived existing at the time of legislation. He  further  emphasised  that the law relating  to  economic activities  should be viewed with greater latitude than laws touching  civil  rights such as freedom of speech,  religion etc.   and the High Court totally over-looked the  aforesaid approach and guidelines in basing its conclusion.  According to  the  learned Solicitor General the preamble of  the  Act unequivocally indicates the Act to be a piece of legislation for  taking over in the public interest of the management of the  Textile Undertakings of the Companies specified in  the First Schedule pending nationalisation of such undertakings. It  no  doubt,  further stipulates that by  reason  of  mis- management  of  the  affairs  of  the  Textile  Undertakings specified  in  the First Schedule their financial  condition became  wholly unsatisfactory but the financial condition of these  Mills had become so precarious and unsatisfactory  as was   found   from  the   reports  of  different   financial institutions  including  IDBI  that  mis-management  is  the natural  inference  and the preamble read as a  whole  would indicate  that the Parliament thought it appropriate to take over  the  management of Textile Undertakings in the  public interest  pending nationalisation of such undertaking and in this  view of the matter the High Court was  hyper-technical in  recording  a  finding  that even  though  the  financial condition  become  wholly unsatisfactory but the  Government failed  to  establish the mis-management of the  undertaking which   had   brought  the   financial  condition  to   such unsatisfactory  stage and, therefore, by including the three mills  in  question  in  the  group of  13  there  has  been violation of Article 14.  The learned Solicitor General also seriously  commented  upon the conclusion of the High  Court and  submitted  that  the  High  Court  committed  error  in assuming mis-management as fraud and such fraud has not been established  by the Union Government .  According to learned Solicitor General the High Court mis-understood the basis of the classification itself and taking an over all view of the financial  position  of these three Mills the conclusion  is irresistible  that  these three Mills were  rightly  clubbed together  with the group of 13 whose financial position  was wholly  unsatisfactory and government money was required  to be  pumped  into  it  for making the mills  viable  and  for effective  running of the Mills so that the large number  of workers  will  not face the misery of closure of the  Mills. The learned Solicitor General also urged that in view of the prevailing  situation  in the 13 Mills including  the  three

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with  which  we  are  concerned,   in  these  appeals,   the Parliament  thought  that only way to put the management  on the  wheels  was  to take over the management of  the  Mills which  is  permissible  in the larger  public  interest,  as contained  in  Article 31A (1)(b) of the  Constitution,  and such Parliamentary wisdom cannot be scrutinised by the Court in  a scale on the basis that certain reports might not have been  placed  before  the Parliament or on the  ground  that factually  the  Mills  were  not  mis-managed  and  yet  had sustained  heavy  financial  loss and thereby  putting  them alongwith  the  group  of 13 constitutes  an  infraction  of Article  14  of the Constitution.  According to the  learned Solicitor  General the burden being on a person who  attacks the  constitutionality on the grounds of discrimination  the said  burden  cannot be held to have been discharged by  the Mills  and  the  High  Court   committed  serious  error  in annulling  the  taking over of the management of  the  three Mills  under the Act on the ground that Government failed to establish  the  relevant  material before  the  Court.   The learned  Solicitor  General also argued that  Article  31(c) does  apply  to the legislation in question, and  therefore, infraction  of  Article 14 or 19 should not have  been  gone into by the Court.

     Mr.   F.S.  Nariman, learned senior counsel  appearing for the Elphinstone Spinning and Weaving Mills Company Ltd., emphatically  urged that Article 31 A (1)(b) was  introduced by the Constitution IVth Amendment Act of 1955 which enables to  make  law  for  taking over of  the  management  of  any property  by  the State for a limited period either  in  the public  interest or in order to secure proper management  of the  same.   The law made by the Parliament is the  Textiles Undertakings  (Taking  over of Management) Act,  1983.   The said law permits take over only when the financial condition became  unsatisfactory  by reason of mis-management  of  the affairs  of  the Textile Undertakings.  And, this being  the position,  if  there  is  no   material  to  establish  that financial  losses  is on account of mis-management then  the taking over of the management of the mill by taking recourse to  the impugned Act must be held to be invalid and the High Court  in fact has held it to be invalid.  According to  Mr. Nariman  mere  losses will not entitle to take over  of  the management of mill, inasmuch as, all the mills have suffered loss  and,  therefore, there must be some other  factors  on account  of which it will be possible for the Government  to take over the management of only 13 mills as included in the First  Schedule  to the Act.  He also further urged that  in view  of  the  language of Article 31A (1)(b)  the  law  for taking  over of the management must be for a limited  period and the expression pending nationalisation in the impugned Act cannot be construed to be a definite limited period and, therefore,  the Act in question is not referable to  Article 31A  (1)(b).  It is in this connection he cited the decision of Raman Lal as well as the decision of the Delhi High Court in  ILR  74  (1)  Delhi 311 and also a  decision  of  Andhra Pradesh High Court in AIR 1977 A.P.  420.  Mr.  Nariman also argued  that in the impugned Act there is intrinsic evidence to indicate that the taking over of management was not for a limited period as it would be apparent from Sections 33, 34, 36  and  Sections  6,  8   and  11(1),  and  essentially  it constitutes  acquisition and not take over of management for a  limited  period.   Mr.   Nariman   also  urged  that  the legislative  declaration  of facts are not  beyond  judicial scrutiny in the constitutional context of Articles 14 and 16 and  the  Court can always tear the veil to decide the  real

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nature of the statute if the facts and circumstances warrant such  a course.  A mere declaration in the legislation would not  be  permissible so as to defeat the fundamental  right. If the legislation in question was merely a pretence and the object  was discrimination the validity of the statute could be  examined  by the Court notwithstanding  the  declaration made  by the legislature and, therefore, the High Court  was fully  justified  in examining the facts and coming  to  the conclusion  that in grouping the three mills alongwith other 13  mills  for  the purpose of taking  over  the  management constitutes an infraction of Article 14 of the Constitution. In  support  of  this contention he places reliance  on  the decision of this Court in Indira Sawhney vs.  Union of India and  others  (2000)  1 Supreme Court Cases 168.   Mr.   R.F. Nariman,  learned  senior  counsel   pursued  the  arguments advanced  by  Mr.   F.S.   Nariman and  contended  that  the classification  itself  may be valid but while choosing  the mills to be included in such classification and clubbing the Elphinstone Mill within the group of 13 is discriminatory in as  much as a well managed mill is being clubbed with a mis- managed   mill.    According   to    Mr.    R.F.     Nariman categorisation  of the Elphistone mill as a mis-managed mill is  contrary to the facts available on record, and as  such, it  violates  Article 14.  Mr.  R.F.  Nariman  also  further urged  that  a  machinery  available under IDR  Act  for  an inquiry  not having been resorted to it contravenes  Article 19(1)(g).  According to learned counsel the Parliament chose to  adopt  a procedure without any urgency being  there  and without any machinery to look into the facts on the basis of which  categorisation  could be made, the classification  is bad  in  law.  Mr.  Nariman also contended that in  view  of Article 300A the law must be reasonable and fair and in view of  the  judgment  of this Court in Dwarkadas  Shrinivas  of Bombay  vs,.  The Sholapur Spinning & Weaving Co.  Ltd.  and others  1954 Supreme Court Reports 674, the impugned action is  bad in law.  Mr.  RF Nariman also contended that it  was open  for  the Writ Petitioners to place and establish  that the  legislative  facts  are  incorrect   and  in  fact  the petitioners have discharged that burden by placing materials on record and the High Court, therefore, was fully justified in  arriving at its decision on the materials produced.   He placed  reliance on the decision of this Court in Dr.   K.R. Lakshmanan  vs.  State of T.N.  and another (1996) 2 Supreme Court   Cases  226  in   support  of  aforesaid  contention. According  to  Mr.  Nariman the following facts  establishes that  the  Elphinstone Mill was not a mis-managed  mill  and Parliament  erroneously  clubbed  the same with  other  mis- managed  mills.  Those facts are :- (a) IDBI viability study report  (b)  Task Force Report (c) Approval of  the  Central Government  itself  to  appoint  a  Managing  Director   (d) Sanction  of loan by IRCI AND IDBI in September 1993 (e)  No investigation  done  under Section 15 and 15(a) of IDR  Act, and  (f)  No  action  of any kind under  the  provisions  of Companies  Act, and on this score the conclusion of the High Court is unassailable.

     Mr.   Ganesh,  learned counsel appearing for  the  New City Mills contended, that the High Court itself has given a positive  finding  on the basis of the materials those  have been  produced that the performance of the mill;  was  good. Even  the  Counter Affidavit of the Union Government  before the High Court does not indicate that the performance of the New  City  Mill  was  in any way made out  a  case  of  mis- management.   The  analysis of Mr.  Bilmoria, the letter  of RBI  dated  23rd March, 1983 and the very Task Force  Report

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clearly demonstrates that the New City Mill was not at all a mis-managed mill and these materials could be looked into by the  Court  when the Mill itself had alleged  discrimination under  Article 14.  In support of this contention he  places reliance  on the decision of this Court in Shashikant Laxman Kale  and  Another vs.  Union of India and  Another  1990(4) Supreme  Court Cases 366 and Mrs.  Maneka Gandhi vs.   Union of  India  and  Another 1978 Supreme Court Cases  248.   Mr. Ganesh also placed reliance on the decision of this Court in Chiranjit  Lal Chowdhuri vs.  The Union of India and  Others 1950  Supreme  Court Reports 869 and submitted that in  that case  the  Court did go into the materials and came  to  the conclusion  about the mis-management and, therefore, in  the case  in  hand  the  High   Court  was  fully  justified  in interfering with the order of taking over qua New City Mill.

     Ms.  Indira Jaisingh, learned senior counsel appearing for  the  workers of the Mills supported the stand taken  by the learned Solicitor General and placed before us different materials  on record to establish the mis-management of  the mills concerned.

     In  view  of  the   rival  submissions  the  following questions arise for our consideration:-

     1.  Can the impugned Act be held to be a law providing for  the  taking over of the management of the Mills  for  a limited  period?  2.  The Act read as a whole expresses  the intention  of the Parliament for taking over the  management of  the Textile Undertakings specified in the First Schedule in  the  public interest or is it capable of indicating  the legislative  intent  that only those Mills  whose  financial condition  became  wholly  unsatisfactory   by  reasons   of mis-management  of  the affairs of the Textile  Undertakings which  are sought to be specified in the First Schedule  and management  of  those Mills are being taken over  under  the Act?   3.  Has any case been made out by the Mills concerned to  enable a Court that in fact by clubbing the three  Mills in  the  group  of 13 there has been the  violation  of  the mandate  under Article 14?  4.  Was the High Court justified in recording a conclusion that there has been a violation of Article  19(1)(g)?  5.  On the available materials on record was the High Court justified in going behind the legislative intent  apparent  on the face of the Act to find out the  so called  true  intention and thereby coming to  the  ultimate conclusion  that  there has been a gross  discrimination  in clubbing the three mills with the other admitted mis-managed mills which are enumerated in the Schedule to the Act?

     But  before examining the aforesaid questions it would be  appropriate  for  us  to notice the  legal  position  on certain  general  principles relating to the challenge of  a statute  in  the  anvil  of  Articles  14  and  19  and  the parameters  of Courts jurisdiction to examine materials for arriving  at the legislative intent behind a statute as well as the presumption of constitutionality of a statute.

     A  statute is construed so as to make it effective and operative.    There  is  always  a  presumption   that   the legislature  does not exceed its jurisdiction and the burden of  establishing  that  the   legislature  has  transgressed constitutional   mandates  such  as,   those   relating   to fundamental  rights  is always on the person who  challenges its  vires.  Unless it becomes clear beyond reasonable doubt

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that  the  legislation in question transgresses  the  limits laid  down by the organic law of the constitution it must be allowed to stand as the true expression of the national will -  Shell  Company of Australia vs.  Federal Commissioner  of Taxation  (1931)  AC  275 (Privy  Council).   The  aforesaid principle,  however,  is subject to one exception that if  a citizen  is  able  to  establish that  the  legislation  has invaded  its fundamental rights then the State must  justify that  the  law  is  saved.  It is also a  cardinal  rule  of construction  that  if one construction being given  statute will  become  ultra  vires  the powers  of  the  legislature whereas  on  another  construction which may  be  open,  the statute  remains effective and operative then the Court will prefer  the  latter, on the ground that the  legislature  is presumed not to have intended an excess of jurisdiction.  In Sanjeev  Coke Manufacturing Company vs.  M/s.  Bharat Coking Coal  Limited  (1983)  1  Supreme   Court  Cases  147,   the Constitution Bench speaking through Chinnappa Reddy, J., had observed, in the context of interpretation of the provisions of  Coking  Coal Mines (Nationalisation) Act, 1972 that  the Court  is  not  concerned with the statements  made  in  the Affidavits  filed by the parties to justify and sustain  the legislation.  The deponents of the affidavits filed into the court  may speak for the parties on whose behalf they  swear to  the  statements.  They do not speak for the  Parliament. No  one may speak for the Parliament and Parliament is never before the court.  After Parliament has said what it intends to  say, only the court may say what the Parliament meant to say.   None  else.  Once a statute leaves Parliament  House, the  Court  is the only authentic voice which may  echo  the Parliament.   This  the Court will do with reference to  the language  of  the statute and other permissible  aids.   The executive  Government  may  place  before  the  court  their understanding of what Parliament has said or intended to say or what they think was Parliaments object and all the facts and   circumstances  which  in  their   view  led   to   the legislation.   When  they  do  so, they  do  not  speak  for Parliament.  No Act of Parliament may be struck down because of  the  understanding or misunderstanding of  parliamentary intention  by  the  executive Government  or  because  their spokesmen  do  not  bring  out  relevant  circumstances  but indulge in empty and self-defeating affidavits.  They do not and they cannot bind Parliament.  Validity of legislation is not to be judged merely by affidavits filed on behalf of the State, but by all the relevant circumstances which the court may  ultimately  find  and more especially by  what  may  be gathered  from what the legislature has itself said.  In the facts  of  that  case  the Court had held that  We  do  not entertain  the  slightest doubt that the nationalisation  of the coking coal mines and the specified coke oven plants for the  above purpose was towards securing that the  ownership and  control of the material resources of the community  are so distributed as best to subserve the common good and there has  been no discrimination or infringement of Article 14 of the Constitution Justice A.N.  Sen in his separate judgment also agreed with the ultimate conclusion of Chinnappa Reddy, J  and  had  said  that  there was  logical  basis  for  the nationalisation  of  the 4 oven plants of  the  petitioners, leaving out a few and I am not satisfied that there has been any  wrong and arbitrary discrimination of Article 14 of the Constitution.   While examining the constitutional  validity of the special courts bill in the anvil of Article 14 of the Constitution,   after  an  exhaustive   review  of  all  the decisions  bearing on the question, in 1979(1) S.C.C.   380, it was held as follows:-

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     (3) The constitutional command to the State to afford equal  protection of its laws sets a goal not attainable  by the   invention  and  application  of  a  precise   formula. Therefore,  classification  need  not be constituted  by  an exact  or  scientific exclusion or inclusion of  persons  or things.   The courts should not insist on delusive exactness or  apply doctrinaire tests for determining the validity  of classification  in  any  given   case.   Classification   is justified  if  it  is  not   palpably  arbitrary.   (4)  The principle underlying the guarantee of Article 14 is not that the  same  rules of law should be applicable to all  persons within the Indian territory or that the same remedies should be  made  available to them irrespective of  differences  of circumstances.   It  only means that all  persons  similarly circumstanced  shall  be  treated alike both  in  privileges conferred and liabilities imposed.  Equal laws would have to be applied to all in the same situation, and there should be no  discrimination  between  one person and  another  if  as regards the subject-matter of the legislation their position is  substantially  the same.  x x x x x x x x x (6) The  law can  make  and set apart the classes according to the  needs and   exigencies  of  the  society   and  as  suggested   by experience.   It can recognise even degree of evil, but  the classification  should  never  be arbitrary,  artificial  or evasive.   (7) The classification must not be arbitrary  but must  be rational, that is to say, it must not only be based on  some qualities or characteristics which are to be  found in  all  the persons grouped together and not in others  who are  left  out but those qualities or  characteristics  must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely,  (1)  that the classification must be founded on  an intelligible  differentia which distinguishes those that are grouped  together from others and (2) that that  differentia must  have  a rational relation to the object sought  to  be achieved by the Act.

     In  the Doypack System Pvt.  Ltd.  vs.  Union of India   (1988) 2 Supreme Court Cases 299, the Court had  observed that  when  the constitutionality of a legislation is  being assailed  before  a Court it is the collective will  of  the Parliament with which the Court is concerned.  No officer of the   department   can  speak   for  the  Parliament.    The interpreter  of the statute must take note of the well known historical  facts.  In conventional language the interpreter must  put himself in the armchair of those who were  passing the  Act  i.e.   the Members of the Parliament.  It  is  the collective  will  of  the  Parliament   with  which  we  are concerned.   The aforesaid observation had been made in  the context  of  an  argument sought for by the  petitioner  for production  of  certain documents to ascertain the  question whether the shares vested in the Government or not?

     In  Bearer  Bonds case (1981) 4 Supreme  Court  Cases 675,  this Court held that it is a rule of equal  importance that  laws relating to economic activities should be  viewed with  greater latitude than law touching civil rights,  such as freedom of speech, religion etc.  The Court observed that :-

     It  has been said by no less a person than Holmes, J. that  the  legislature  should be allowed some play  in  the joints,  because it has to deal with complex problems  which

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do  not  admit  of  solution   through  any  doctrinaire  or strait-jacket  formula and this is particularly true in case of  legislation dealing with economic matters, where  having regard  to  the nature of the problems required to be  dealt with,  greater  play in the joints has to be allowed to  the legislature.   The  court should feel more inclined to  give judicial  deference to legislative judgment in the field  of economic  regulation  than in other areas where  fundamental human rights are involved.  Nowhere has this admonition been more  felicitously expressed than in Morey v.  Doud (354  US 457:1 L Ed 2d 1485 (1957) where Frankfurter, J.  said in his intimitable style:

     In  the utilities, tax and economic regulation  cases, there  are  good reasons for judicial self-restraint if  not judicial deference to legislative judgment.  The legislature after  all  has the affirmative responsibility.  The  courts have  only  the  power to destroy, not to  reconstruct,  the uncertainty,  the  liability  to   error,  the   bewildering conflict  of the experts, and the number of times the judges have been overruled by events  self- limitation can be seen to be the path to judicial wisdom and institutional prestige and stability.

     The  Court  must always remember that legislation  is directed  to practical problems, that the economic mechanism is  highly  sensitive  and complex, that many  problems  are singular   and  contingent,  that   laws  are  not   abstrct propositions and do not relate to abstract units and are not to  be  measured by abstract symmetry;  that exact  wisdom and  nice  adaption of remedy are not always  possible  and that  judgment  is largely a prophecy based on  meagre  and uninterpreted  experience.  Every legislation  particularly in  economic matters is essentially empiric and it is  based on  experimentation  or  what one may call trial  and  error method  and  therefore  it cannot provide for  all  possible situations  or anticipate all possible abuses.  There may be crudities   and  inequities  in   complicated   experimental economic  legislation but on that account alone it cannot be struck  down as invalid.  The courts cannot, as pointed  out by  the  United  States  Supreme   Court  in  Secretary   of Agriculture  v.  Central Reig Refining Company (94 L Ed 381: 338  US  604 (1950)) be converted into tribunals for  relief from  such  crudities  and inequities.  There  may  even  be possibilities  of abuse, but that too cannot of itself be  a ground  for invalidating the legislation, because it is  not possible  for  any legislature to anticipate as if  by  some divine prescience, distortions and abuses of its legislation which  may be made by those subject to its provisions and to provide  against  such  distortions   and  abuses.   Indeed, howsoever  great may be the care bestowed on its framing, it is  difficult  to  conceive of a legislation  which  is  not capable  of being abused by perverted human ingenuity.   The Court  must therefore adjudge the constitutionality of  such legislation  by the generality of its provisions and not  by its crudities or inequities or by the possibilities of abuse of  any of its provisions.  If any crudities, inequities  or possibilities  of  abuse come to light, the legislature  can always  step  in and enact suitable amendatory  legislation. That  is the essence of pragmatic approach which must  guide and inspire the legislature in dealing with complex economic issues.

     In  Shri  Ram  Krishna Dalmia vs.  Shri  Justice  S.R. Tendolkar and Ors., 1959, S.C.R., 279, this Court held:

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     (a)  xxxxxxx  xxxxxxxx  (b)that  there  is  always  a presumption  in  favour  of   the  constitutionality  of  an enactment  and the burden is upon him who attacks it to show that   there   has  been  a  clear  transgression   of   the constitutional principles;  (c)that it must be presumed that the  legislature  understands and correctly appreciates  the need  of  its  own  people, that its laws  are  directed  to problems   made   manifest  by   experience  and  that   its discriminations  are based on adequate grounds;  (d)that the legislature  is  free  to recognise derees of harm  and  may confine  its  restrictions to those cases where the need  is deemed to be the clearest;  (e) that in order to sustain the presumption  of  constitutionality the court may  take  into consideration matters of common knowledge, matters of common report,  the history of the times and may assume every state of  facts  which  can be conceived existing at the  time  of legislation.

     In  the case of The Superintendent and Remberancer  of Legal  Affairs, West Bengal vs.  Girish Kumar Navalakha  and Ors., 1975(4) S.C.C., 754, this Court held:

     The  preamble provides the key to the general purpose of  the  Act.   That purpose is the  regulation  of  certain payments,  dealings  in foreign exchange and securities  and the  import  and  export  of currency  and  bullion  in  the economic  and  financial  interest of  India.   The  general purpose  or object of the Act given in the preamble may  not show  the  specific  purpose of the classification  made  in Section 23(1)(a) and Section 23(1A) .The Court has therefore to  ascribe  a purpose to the statutory  classification  and co-ordinate the purpose with the more general purpose of the Act  and with other relevant Acts and public policies.   For achieving  this the Court may not only consider the language of Section 23 but also other public knowledge about the evil sought  to be remedied, the prior law, the statement of  the purpose  of  the  change in the prior law and  the  internal legislative  history.   When  the purpose  of  a  challenged classification  is  in  doubt, the court  attribute  to  the classification  the  purpose  thought to be  most  probable. Instead  of asking what purpose or purposes the statute  and other   materials   reflect,   the   Court  may   ask   what constitutionally  permissible  objective  this  statute  and other  relevant  materials could plausibly be  construed  to reflect.   The latter approach is the proper one in economic regulation  cases.   The  decisions  dealing  with  economic regulation  indicate  that courts have used the  concept  of purpose  and  similar situations in a manner which  give considerable  leeway  to the Legislature.  This approach  of judicial  restraint  and  presumption  of  constitutionality requires  that the Legislature is given the benefit of doubt about its purpose.  How far a court will go in attributing a purpose  which  though perhaps not the probable is at  least conceivable  and  which  would allow the  classification  to stand depends to a certain extent upon its imaginative power and its devotion to the theory of judicial restraint.

     The Court further held:

     It  would seem that in fiscal and regulatory  matters the  Court  not  only entertains a  greater  presumption  of constitutionality  but  also places the burden on the  party

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challenging  its validity to show that it has no  reasonable basis for making the classification.

     The  Legislation  in a modern State is  actuated  with some  policy to curb some public evils or to effectuate some public  benefit.   The Legislation is primarily directed  to the  problems  before the legislature based  on  information derived  from  past and present experience.  It may also  be designed  by use of general words to cover similar  problems arising  in future.  But from the very nature of things,  it is  impossible  to anticipate fully, the  varied  situations arising   in  future  in  which   the  application  of   the legislation  in hand may be called for, and, words chosen to communicate  such  indefinite reference are bound to  be  in many  cases,  lacking  in clarity and  precision,  and  thus giving  rise to the controversial question of  construction. Bearing in mind the aforesaid general principles, let us now examine the five questions formulated earlier.

     Coming  to  the first question, the contention of  the Companies, who were the petitioners before the High Court is that  under  Article 31A(1)(b), a law providing  for  taking over  of  the management of any property by the State for  a limited period, either in the public interest or in order to secure  the  proper  management of the property,  cannot  be assailed  on the ground of violation of Article 14 or 19 but the  impugned  ordinance and the Act cannot be held to be  a law  for  providing for taking over of the management for  a limited  period, even though, the same may be in the  public interest and as such, such a law cannot be held to be immune from  attack being violative of Article 14 or 19 within  the ambit  of Article 31A(1)(b) of the Constitution.   According to  the learned counsel, appearing for these textile  mills, the  expression  for  a  limited   period  as  a  definite connotation  and the impugned legislation being a law  until the acquisition proceedings are over, cannot be held to be a law  for a limited period.  This argument found favour  with the  High Court and following the decision of this Court  in Raman  lals case, the High Court held that the  legislation in  question  cannot  be held to be within  the  purview  of Article  31A(1)(b)  of  the Constitution.  Mr.   Salve,  the learned  Solicitor General, appearing for the Union of India contended  before us that it is the usual pattern of  taking over  of  such  undertaking  to take  over  the  management, immediately by a law made by the appropriate legislature and since  it  was apparent at the time of enactment of the  law that   the  taking  over  of   the  management  is   pending nationalisation  which had been embodied in the  legislation itself,  such take-over of the management must be held to be for  a limited period and the observations of this Court  in Raman  lal, must be construed in the context of the facts of the  said case and will have no application to the facts and circumstances of the present case.  According to the learned Solicitor  General, the legislature on being satisfied about the   financial  instability  of   the  mills  and   further substantial  sum  of  money required to be pumped  into  the mills  for  running  of the same, so that  large  number  of employees  will  not  be  kept out  of  employment,  it  was necessary in the public interest to take over the management immediately, inasmuch as the process of nationalisation will take  sometime,  the  conclusion is  irresistible  that  the so-called  taking over was for a limited period and not  for ad  infinitum,  and  is intended to over-come  a  particular crisis.   That being the position, the High Court  committed error  in  recording a finding that the taking over  of  the

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management was not for a limited period.

     Mr.   Nariman,  the learned senior counsel,  appearing for  one of the mills, on the other hand contended that  the expression  pending  nationalisation,  by  no  stretch  of imagination can be held to be a definite period and this has been  answered  directly  in the case of  The  Indore  Malwa United  Mills Ltd.  and Ors.  Vs.  Union of India and  Ors., Indian  Law Reports(Delhi) 1974(1) Page 311, as well as  the High  Court of Andhra Pradesh in Full Bench decision of The Governing  Body  of the Rangaraya Medical College,  Kakinada and  Anr.   vs.  The Govt.  of Andhra Pradesh and Anr.,  AIR 1977,  Andhra  Pradesh, Page 420, following the decision  of this  Court in Raman lal, 1969(1) S.C.R., 42.  According  to Mr.   Nariman,  there is intrinsic evidence in the  impugned Act  itself  that  the so-called taking-over was not  for  a limited period, as is apparent from examining Sections 3(3), 3(4),  3(6),  Section 6, Section 8 and Section 11(1) of  the Act.   The Counsel further urged that the Act is in  essence one  for  acquisition and not for taking over of  management for  a limited period and consequently, the challenge on the ground  of Article 14 and 19 will get attracted, as the  law does not come within the purview of Article 31A(1)(b) of the Constitution.    Article   31A  was    introduced   by   the Constitution  (First  Amendment)Act,  1951 to  validate  the acquisition  of  Zamindari  and the abolition  of  Permanent Settlement  without  interference from Courts.  The  further amendment of the Constitution was made by (Fourth Amendment) Act  of  1955  with the object that items  of  agrarian  and social  welfare  legislation, which affect  the  proprietary rights, should be kept out of the purview of Articles 14, 19 and  31.   Clause (b) of Article 31A(1) provides for  taking over  the management of any property, movable or  immovable, agricultural  or  non-agricultural  for   a  limited  period without  being  obliged to justify its action in a Court  of law,  with  reference  to Article 14 or 19.   The  necessary conditions  for application of sub-clause (b), therefore are that  the  taking  over in question must be  for  a  limited period, as distinguished from any indefinite period and such taking  over  must  be either in the public interest  or  in order to secure the proper management of the property, which of  course require to be objectively established.  That  the facts  and  circumstances leading to the taking over of  the management  of the sick mills undoubtedly indicated that the same  was  in  the public interest, but  the  only  question remains to be answered is whether it can be said to be for a limited  period.   In Ramanlals case, 1969 (1) S.C.R.,  42, the  provisions of Bombay Tenancy and Agricultural Lands Act was under consideration before this Court.  The said Act had been  amended  by Bombay Act 13 of 1956, which  confers  the power on the State Government to take over the management of any  land  on the ground that full and efficient use of  the land  had not been made for the purposes of agriculture  and under  the Act, it was contemplated that the land taken over could  be  returned  to  the   land  holder  under   certain contingencies.  This Court considering the provisions of the Act  and  the rules made thereunder, came to the  conclusion that even though there may be a possibility of return of the land  to  the original owner but that does not  satisfy  the requirement  of Article 31A(1)(b), as the taking-over of the management  was  not for a limited period.  The  Court  held that  the scheme of the Act ought to have shown the limit of the  period for which the management is being taken over and consequently,  the protection of Article 31A(1)(b) cannot be invoked  as  the limit for the period of management had  not

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been  indicated.  Having examined the ratio of the aforesaid decision  to  the case in hand, we are not in a position  to hold  that  the taken over of the management in the  present case  was  not  for  a  limited period  .   The  Act  itself stipulates  that  the management of the mill is being  taken over  pending  nationalisation of the mill,  therefore,  the decision  to  nationalise the mills had already been  taken. But  as  the  process  of   nationalisation  would  take   a considerable  period and it was thought absolutely necessary in  the  public interest to take over the management of  the mills  immediately,  the  Parliament   passed  the  impugned legislation.  In our considered opinion the context in which the observations have been made by this Court in Raman lals case,  referred  to supra, will have no application  to  the case in hand and it must be construed that the management of the  property in the present case by virtue of the ordinance and  the Act was for a limited period, the period being till the  process  of nationalisation is finalised.  It is to  be noticed that Sita Ram Mills, which was also one of the mills in  category  III and had been put in Group II by  the  Task Force,  whose  management  had  been taken  over  under  the provisions   of  Textile  Undertakings   (Taking   over   of Management)  Act, 1983 had approached the High Court and the High Court had upheld the action of taking over but had held that  the  surplus lands appurtenant to the mills would  not vest under sub-section (2) of Section 3 of the Act, but this Court  had reversed the said decision and had held that  the surplus lands appurtenant to the mill did form a part of the assets  in  relation to the textile undertaking  within  the meaning  of  Section 3(2) of the Act and the said  land  was held  for the benefit of, and utilised for the textile  mill in  question.   Before  this  Court, it  is  true  that  the question  of  applicability  of Article  31A(1)(b)  had  not cropped  up for consideration, but yet certain  observations of  this Court in the aforesaid case would be appropriate to be quoted:-

     There can be no doubt that the legislative intent and object  of the impugned Act was to secure the  socialisation of  such  surplus  lands  with a view to  sustain  the  sick textile undertakings so that they could be properly utilised by the Government for social good i.e.  in resuscitating the dying  textile undertakings.  Hence, a paradoxical situation should  have  been avoided by adding a narrow  and  pedantic construction  of a provision like sub- section(2) of Section 3  of the Act which provides for the consequences that ensue upon the taking over in public interest of the management of a textile undertaking under sub-section(1) thereof as a step towards  nationalisation  of  such undertakings,  which  was clearly  against  the  national interest.  In  dealing  with similar  legislation, this Court has always, adopted a broad and liberal approach.

     What  has been observed above, while interpreting sub- section (2) of Section 3, should be borne in mind also while interpreting  the expression for a limited period used  in Article  31A(1)(b)  and in our view the construction to  the aforesaid  expression  made  by  Delhi  High  Court  in  its Judgment  in The Indore Malwa United Mills Ltd.  & Ors.  Vs. Union  of India and Ors., I.L.R.(Delhi) 1974(1) 311, as well as the Bombay High Court in the impugned judgment, cannot be accepted.   The Delhi High Court has no doubt in The  Indore Malwa  United  Mills case, considered the applicability  of Article  31A(1)(b)  and  held  that   taking  over  of   the management, pending nationalisation cannot be held to be for

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a  limited  period, since there is no question of  returning the  property  to the old management, but we are  unable  to accept  this  view of Delhi High Court and we hold that  the views  expressed  therein  are not correct in  law.   Having regard  to  the  conditions of these mills at  the  time  of taking  over  of  the management and having  regard  to  the decision  of  the  Union Cabinet on the basis  of  data  and materials  to  nationalise the mills falling under  category III  and  the ultimate policy decision of the Government  to achieve  the process of nationalisation in two stages, first by  taking  over the management of the textile  undertakings and  thereafter,  enact suitable legislation to  nationalise the  same,  the  ultimate legislation for  taking  over  the management of the mills passed by the Parliament, cannot but be  held  to  be  a law, providing for taking  over  of  the management  for  a limited period in public interest and  as such  the  said  law  comes within the  purview  of  Article 31A(1)(b) of the Constitution.  Once it is held that the law is  one  attracting Article 31A(1)(b) of  the  Constitution, then  the validity of the said law cannot be assailed on the ground   of  violation  of  Articles  14  and  19   of   the Constitution.   But  since  elaborate   arguments  had  been advanced, we would also examine the other questions posed by us.

     So far as the second question is concerned, the entire emphasis   of   the   arguments   advanced  on   behalf   of t\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 \024\024\024 \024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024\024 Mills  persuaded         the High Court  and the  High Court in fact came to the conclusion in  paragraph 125  of the impugned judgment that the provisions of the Act read  with  its objects and reasons and the preamble  go  to show  that in the context of things the term mismanagement has been used in the impugned Act not as indicating mere bad or  incompetent  or  poor  management as  contended  by  the

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learned   counsel  for  the  Union   of  India   but   meant mismanagement  having  an  element of fraud  or  dishonesty. Thereafter  the High Court examined different affidavits and materials  and  came to the conclusion that the question  of management of the mills had no where been discussed or dealt with either directly or indirectly and that the existence of bad  financial  condition  was in fact a  general  phenomena during  the said period amongst the Textile Mills in  Bombay and  the same by itself anything more could not have been an indication  of bad/inadequate management.  In paragraph  180 of  the  impugned  judgment  the  High  Court  came  to  the conclusion  that the Government, therefore, could not  have, for  taking over the management of the said Mills, relied on the  said  CATS  for classifying the petitioners  Mills  as mills  whose  financial  condition  was   bad  due  to  mis- management.   In paragraph 203 of the impugned judgment  the learned Judges came to the ultimate conclusion :

     In  our  view,  therefore,   all  the   circumstances mentioned  above  by  the learned counsel for the  Union  of India  do not bring out either directly or inferentially any mis-management on the part of the petitioner company, but on the  contrary  the fact that the said circumstances  existed even in case of some of CAT I and CAT II Mills show that the Government  could not have considered the said circumstances for  concluding  that  the   said  Petitioners  Mills  were mismanaged   or  their  financial   condition   was   wholly unsatisfactory by reason of such mismanagement.

     The  learned Judges then held that there was no  nexus between  the main object or purpose of the Act to take  over the management of only those Mills whose financial condition before  strike  was  wholly   unsatisfactory  by  reason  of mis-management.,  and as such, the rights of the Mills under Article  14  of the Constitution has been violated.  At  the outset  it  may  be  stated that the  High  Court  committed serious  error in recording a finding that the preamble  and other  provisions of the Act go to show that in the  context of  things  the term mis-management has been used to  mean mis-  management  having an element of fraud or  dishonesty. We  have examined the impugned Act carefully and we fail  to understand  that  how  the  High   Court  could  come  to  a conclusion  that  the expression mis-management  has  been used to indicate an element of fraud and dis-honesty whereas in  fact neither the provisions of the Act nor the object or preamble have indicated any such intention.  While examining a  particular statute for finding out the legislative intent it  is  the attitude of judges in arriving at a solution  by striking  a  balance  between the letter and spirit  of  the statute  without  acknowledging  that they have in  any  way supplement  the  statute would be the proper criteria.   The duty  of  judges  is to expound and not to  legislate  is  a fundamental  rule.   There  is no doubt a marginal  area  in which  the courts mould or creatively interpret  legislation and  they  are  thus finishers, refiners  and  polishers  of legislation which comes to them in a state requiring varying degrees  of further processing.  (see:  Corocraft Ltd.   vs. Pan American Airways Inc.  (1968) 3 WLR 714, p.732, State of Haryana  vs.  Sampuran Singh  1975 (2) SCC 810).  But by no stretch  of imagination a Judge is entitled to add something more  than what is there in the Statute by way of a supposed intention  of the legislature.  It is, therefore, a cardinal principle  of construction of statute that the true or legal meaning  of  an  enactment  is derived  by  considering  the meaning  of the words used in the enactment in the light  of

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any  discernible  purpose  or object which  comprehends  the mischief  and its remedy to which the enactment is directed. Applying   the  aforesaid  principle  we  really   fail   to understand as to how the learned judges of Bombay High Court could  come  to  a conclusion that  the  mismanagement  must necessarily  mean an element of fraud or dishonesty.  Courts are  not  entitled to usurp legislative function  under  the disguise of interpretation and they must avoid the danger of determining  the  meaning of a provision based on their  own preconceived notions of ideological structure or scheme into which  the  provision to be interpreted is  somehow  fitted. Caution  is  all  the  more  necessary  in  dealing  with  a legislation  enacted  to  give effect to policies  that  are subject  to bitter public and parliamentary controversy  for in  controversial  matters there is room for differences  of opinion  as  to what is expedient, what is just and what  is morally  justifiable;   it  is the Parliaments  opinion  in these  matters that is paramount.  (see;  Duport Steels Ltd. vs.   Sirs,  (1980) 1 All ER 529 at 541.  When the  question arises as to the meaning of a certain provision in a Statute it  is not only legitimate but proper to read that provision in its context.  The context means;  the statute as a whole, the  previous state of law, other statutes in pari  materia, the  general  scope of the statute and the mischief that  it was  intended  to remedy.  An Act consists of a  long  title which  precedes  the preamble and the said long title  is  a part  of  an Act itself and is admissible as an aid  to  its construction.  It has been held in several cases that a long title  along with preamble or even in its absence is a  good guide  regarding  the  object, scope or purpose of  the  Act whereas the preamble being only an abbreviation for purposes of  reference  is  not a useful aid  to  construction.   The preamble  of  an Act, no doubt can also be read  along  with other  provisions of the Act to find out the meaning of  the words  in  enacting  provisions to decide whether  they  are clear  or ambiguous but the preamble in itself not being  an enacting  provision  is not of the same weight as an aid  to construction  of a Section of the Act as are other  relevant enacting  words  to  be  found elsewhere in  the  Act.   The utility  of  the preamble diminishes on a conclusion  as  to clarity  of enacting provisions.  It is therefore said  that the  preamble  is  not to influence  the  meaning  otherwise ascribable  to  the  enacting  parts   unless  there  is   a compelling  reason  for  it.  If in an Act the  preamble  is general  or brief statement of the main purpose, it may well be  of little value.  Mudholkar, J.  had observed in Burakar Coal  Co.  Ltd.  vs.  Union of India - AIR 1961 SC 954,  It is one of the cardinal principles of construction that where the  language  of  an  Act is clear, the  preamble  must  be disregarded though, where the object meaning of an enactment is  not  clear the preamble may be resorted to  explain  it. Again  where  very general language is used in an  enactment which,  it  is  clear  must be intended to  have  a  limited application,  the  preamble may be used to indicate to  what particular  instances,  the enactment is intended to  apply. We cannot, therefore, start with the preamble for construing the  provisions  of an Act, though we could be justified  in resorting  to it nay we will be required to do so if we find that  the language used by Parliament is ambiguous or is too general  though in point of fact Parliament intended that it should  have  a limited application.  In Coal Bearing  Areas (Acquisition  and  Development)  Act   1957  the  Court  was construing  a Notification issued under Section 4(1) of  the said Act and as in the present case the preamble of that Act was  to  the  effect  An Act to establish in  the  economic

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interest  of  India  greater public control  over  the  coal mining  industry  and its development by providing  for  the acquisition  by  the  State of unworked land  containing  or likely  to contain coal deposits or of right in or over such land,  for the extinguishment or modification of such rights accruing  by  virtue  of  any agreement,  lease  license  or otherwise,  and for matters connected therewith.  Repelling an  argument advanced on behalf of the Mine owners that  the Act  intended  to apply only to virgin land and not  on  the land  which  are  being worked or were worked  in  the  past because  of  the  use of the words unworked  land  in  the preamble,  this Court held that the language of the enacting provisions  was  clear and therefore not controlled  by  the preamble.   (see;  Burrakur Coal Co.  Vs.  Union of India AIR  1961 SC 954 at p.  957).  This being the position,  and the  Textile Undertakings Taking Over of the Management Act, 1983,  being an Act providing for taking over in the  public interest  of  the Management of Textile Undertakings of  the Companies   specified   in  the   First   Schedule   pending nationalisation  of  such  undertakings   and  for   matters connected  therewith  or incidental thereto as  is  apparent from  the long title, use of the expression mis-management of  the affairs in the preamble will not control the purpose of  the Act, namely, the public interest and the  Parliament having  decided  to take over the management of the  Textile Mills  which were in serious financial crisis, in the public interest  it  was  not  open  for the Court  to  come  to  a conclusion  by  taking  recourse  to the  use  of  the  word mis-management in the preamble to hold that the Parliament intended  only to take those Mills whose financial condition was  deplorable on account of mismanagement and not in  case of  those  mills  where  the   financial  condition  may  be deplorable but not on account of mis-management.

     Mr.   R.F.Nariman, learned senior counsel had strongly relied  upon the decision of this Court in Madras Race  Club case    1996 (2) Supreme Court Cases, 226,  whereunder  the Court  struck  down  the  provisions  of  Madras  Race  Club (Acquisition  and Transfer of Undertakings) Act, 1986, on  a conclusion that the declaration made in the Act that the Act was  made to implement Article 39 (b) & (c) was a mere cloak and  there  was  no nexus between the Act  and  the  objects contained  in  Article 39 (b) & (c), and as such the Act  is arbitrary.   But a reading of the aforesaid case would  make it  clear  that  the facts and features of  that  case  were completely  different  from  the facts and features  of  the present  case.  In the Madras case the objects and  reasons, as  indicated in the Act, was that the acquisition is for  a public  purpose  but in fact there was no material  to  show that any inquiry or investigation had been held by the State Government  in  the affairs of the Club and the  Court  held that  no  public purpose is being served by the  acquisition and  transfer  of  the  undertaking  of  the  Club  by   the Government.  But in the case in hand, as has been noticed by this Court in Sitaram Mills Case, the Government had before it  several viability surveys made by different  authorities like,  Ahmedabad  Textile Industries  Research  Association, Textile  Commissioner Office, SR Batliboi and Company and an independent  survey  by the IDBI itself.  These surveys  had been  directed  in  ascertaining whether  companies  textile undertaking was a techno economically viable unit or not and whether  it  was desirable to provide the company  with  the working capital.  The Government in the Ministry of Commerce had constituted a Task Force to look into the affairs of the

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Category  III  strike affected mills.  On the basis  of  all these informations it was decided as a matter of policy that it  was desirable to achieve the process of nationalisation, initially  by  taking over the management of the  mills  and thereafter  by enacting suitable legislation to  nationalise the  same.  The objects and reasons of the Act unequivocally indicated  that the basic decision of nationalisation having been  taken  a  genuine apprehension having  arisen  in  the Governments   mind  that  unless   the  management  of  the concerned  undertakings  was taken over on immediate  basis, there  might be large scale flittering away of assets  which would  be  detrimental  to the public interest and  it  thus became  urgently  necessary for Government to take over  the management  of the undertakings in the public interest.   In this state of affairs, we have no doubt in our mind that the decision  in Madras Race Club case will have no  application to the case in hand.

     In  our considered opinion the impugned Act read as  a whole  unequivocally  indicates  that   the  Parliament  was satisfied  that  the management of the Textile  Undertakings specified in the First Schedule should be taken over pending nationalisation  of such undertakings, and therefore, passed the impugned Act in public interest.

     So  far  as third question is concerned, we  think  it appropriate  to discuss the same alongwith Fifth question as they  are inter-linked.  In the case in hand the High  Court appears  to have examined in detail the functioning of  each of  these  three mills which had filed Writ Petition  before it,  for  ascertaining whether the financial  conditions  of those  mills  had deteriorated because of the strike  or  on account  of  mis-  management and on scrutiny  of  different materials  came to hold that the Union Government has failed to  establish the case of mis-management which in turn would mean a case of fraud and dishonesty on the part of those who were  in management of the mills.  We have already indicated that  the  legislature  nowhere   expressed  that  fraud  or dishonesty  on  the part of those who were in management  of the  mills  had  brought the mills to  the  acute  financial crisis.   That  apart,  when  an Act has been  made  by  the Parliament  as the Parliament thought the taking over of the management   of   the  13   Textile  Mills   pending   their nationalisation  would be in the public interest, it was not open for a Court in exercise of its power of judicial review to  have  in  depth  examination   of  different  facts  and circumstances  and record a conclusion, as has been done  in the  case  in  hand by the High Court concerned.  It  is  of course  true,  as  held by this Court in the case  of  Indra Sawhney  vs.   Union of India and Others  (2000) 1  Supreme Court  Cases 168, that the legislative declaration of  facts are  not  beyond  judicial scrutiny  in  the  constitutional context  of Articles 14 and 16.  In Keshwanand Bhartis case this  Court had also observed that the Courts could lift the veil  and  examine  the position inspite  of  a  legislative declaration.   In Indra Sawhneys case (supra) the Court was examining  whether the Appropriate Authorities have  rightly determined the persons to be included in the creamy layer or whether such determination has been arbitrarily made.  These principles  will have no application to a legislation of the present nature where the Parliament itself had already taken a  decision  to  nationalise  the Textile  Mills  which  had undergone  severe financial crisis and such mills could  not be  re-started without pumping in large amount of money from the  public  exchequer  and, therefore, the  legislation  in

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question was passed to take over the management of the mills immediately  as  such take over was in the public  interest. The  argument  advanced  on  behalf of  the  mills  and  the microscopic  examination of datas by the Court for  arriving at a conclusion as to the alleged violation of Article 14 of the  Constitution  is not permissible and will not  override the  legislative intent behind taking over of management  of the  mills in the larger public interest.  The conclusion of the  High  Court  on the basis of the IDBI  Viability  Study Report,  the  Task  Force Report, approval  of  the  Central Government  to  the posting of a Managing Director  and  the sanction  of loan by the financial institution by no stretch of  imagination  could  out-weigh   the  conclusion  of  the legislature  that  the  Act is intended to provide  for  the taking over of the management of the Textile Undertakings of the  Companies  specified  in the  First  Schedule,  pending nationalisation  in  the public interest.  We are unable  to agree  with the arguments advanced on behalf of the  counsel appearing  for the respondents that by picking up the  three mills  who  had approached the High Court and clubbing  them together  with  other  mills  in   the  Fist  Schedule   the Government did not have germane considerations before it, in fact  it is not the Executive Government but the  Parliament itself  had  chosen  to take over the management of  the  13 mills included in the First Schedule to the impugned Act and for  that  purpose the impugned legislation was enacted  and the management of the mills could be taken over by operation of law.  As has been indicated in the judgment of this Court in  the case of National Textile Corpn.  Ltd.  vs.   Sitaram Mills Ltd.  and others.   1986 (Suppl.) Supreme Court Cases 117,  that  the  Textile Mills and the Textile  Industry  in India has played an important role in the growth of national economy.   Its importance in the industrial field is because of  the fact that it produces an essential commodity and the export  of  such commodity helps in building up the  foreign exchange reserve of the country, simultaneously the industry gives  employment  to  a  large number of  persons.   It  is because of this consideration the Government has always been conscious  that  it is necessary to preserve such mills  and assist  them  by  granting  necessary  financial  loans  and advances  from  public financial institutions so that  mills will  not  be close down but in the year 1983 because of  an indefinite   strike   the  financial   condition   was   not satisfactory  on account of lack of proper management.  This Court  had  indicated that as the overall  economic  factors applicable  to  all  Textile  Mills in  Grater  Bombay  were broadly  and  generally  comparable the worker  position  of mills in question was attributable to mis- management.  This Court had also taken note of the fact that the Government of India  was  required to evolve a scheme to put  the  Textile Industries  on  its  rail and therefore  after  getting  the matter investigated by committee and after recommending that IDBI  and  Nationalised Bank should finance and put  through expeditiously,  the  re-habilitation  programme  and  having accepted  the  categorisation made in the meeting called  by the  Reserve  Bank of India on October 29, 1982, and  having realised  that none of the 13 mills in Category III could be expected  to  survive  on a sound  basis  without  financial assistance  from the Government controlled Institutions  and Nationalised  Banks  and  thereafter  obtaining  a  detailed Viability Report from the IDBI and the Task Force, which was constituted  by  the  Ministry of  Commerce  the  Government decided  that the Mills in question should be re-habilitated by  injecting  public funds but since the management of  the mills  has  been defective, in as much as had there been  no

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mis-management  the  mills would not be found themselves  in the  conditions  in which they were even before the  general strike.  As the matter of policy it was desirable to achieve the process of nationalisation in two stages (1) taking over of the management and (2) thereafter suitable legislation to nantionalise  the same and the taking over of management was with  a  view to implement the decision of  nationalisation. We  have  refrained  from  going into  the  details  of  the financial  position of different mills which filed the  Writ Petition  in  Bombay High Court in as much as the  financial condition  was  such that it could not have revived  without pumping  in  of large scale of money either  from  financial institutions or from the IDBI.  The fact that in some of the Reports  indicating  viability of the mills on  large  scale money  being  pumped  in  would not in any  way  affect  the ultimate conclusion of the Parliament in providing for a law to  take  over  in  the public interest  the  management  of Textile Undertakings of the Companies specified in the First Schedule,  as the danger of pumping in of large sum from the public  exchequer without taking over the management of  the mills  would  not have been a prudent action.  As  has  been stated  earlier,  and as is apparent from the long title  of the  Act itself, that the decision to nationalise the  mills had  already been taken, but pending nationalisation the  13 mills  in  question  including  the   mills  of  the   three petitioners  who  filed Writ Petition Bombay High Court  the management  was  taken over by the impugned  legislation  as otherwise  there  was imminent danger to the finance  to  be pumped  in to the for its revival and revival was  necessary to  provide employment to the large number of mill  workers. In  the aforesaid premises, we have no hesitation to come to a  conclusion  on the materials on record the  Parliamentary action  in  legislating  the  law and  taking  over  of  the management  of  all  the  13 mills  included  in  the  First Schedule  to the Act cannot be held to be discriminatory nor the High Court was justified in recording a conclusion about the  true  intention of the legislation that it is only  the mis-managed    mills   whose     financial   condition   had deteriorated,  the management of those to be taken over  and not  others.   On the other hand the sharp deterioration  in the  financial  position lead to an irresistible  conclusion that  it was because of mis- management and nothing else and that  is why in the preamble of the Act the legislature have indicated  that  the  affairs of  the  Textile  Undertakings specified in the First Schedule on account of mis-management have become wholly unsatisfactory.  In other words while the Act of taking over of the management of the mills was in the public  interest,  the inference of mis-management  was  the inference  of  the Parliament duly arrived at from the  fact that  the financial condition of the mills had become wholly unsatisfactory  even before the commencement in January 1982 and  such  financial  condition   has  further  deteriorated thereafter.  This inference of the Parliament is not subject to a mathematical judicial scrutiny and the way in which the High  Court  has  gone into this question  in  the  impugned judgment  is  certainly  not within the para meters  of  the power  of High Court under Article 226 of the  Constitution. In  our view the High Court was wholly in error in  striking down  the taking over of the three petitioners mills  before it   on   a  supposed  violation  of  Article  14   of   the Constitution.

     So  far as the fifth question is concerned, though  it is  no doubt true that the Court would be justified to  some extent  in examining the materials for finding out the  true

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legislative  intent,  engrafted in a Statute, but  the  same would  be done only, when the Statute itself is ambiguous or a  particular meaning given to a particular provision of the Statute,  it  would make the Statute unworkable or the  very purpose  of enacting the Statute would get frustrated.   But by  no stretch of imagination, it would be open for a  Court to  expand even the language used in the preamble to extract the  meaning  of  the  Statute or to  find  out  the  latent intention  of  the legislature in enacting the Statute.   As has  been  stated earlier, in the case in hand,  the  Taking over  of  Management Statute of 1983, had been engrafted  in the  public interest as the legislature found that there  is imperative  need  to  take  over of the  management  of  the companies until the process of nationalisation is finalised. This  is apparent from the long title of the Act itself  and the  preamble also indicates that to make the mills  viable, it  would be necessary for the public financial institutions to invest very large sum of money, so that the mills will be rehabilitated  and  the  interest of the  workmen,  employed therein  would be protected.  The preamble further indicates that the process of acquisition would take a longer time and to  enable  the  Central Government to invest large  sum  of money,  it was necessary in the public interest to take over the  management of the undertakings.  Thus, the taking  over of  the management of the mills was in the public  interest, the  said public interest being to rehabilitate the mills by pumping  in,  huge  sums  of public  money  to  protect  the interest of the workers in the mills.  The High Court in the impugned  judgment, however gave a restricted meaning to the purpose   of   the  act  by  interpreting   the   expression Mismanagement  used in the first preamble to connote fraud and  dis-honesty,  and in our considered opinion,  the  High Court  was  wholly unjustified in going behind the  apparent legislative  intention as already stated and in coming to  a conclusion which cannot be sustained 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.

     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 Bomay vs.  The Sholapur Spinning & Weaving Co. Ltd.   and  Ors.   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.

     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  had  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 vs.  State of Madhya Pradesh and Ors., 1970(1) S.C.R., 156.   In the aforesaid case, the Court was considering  the

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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 or 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  the  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

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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.

     In  view  of our conclusions, as aforesaid, we do  not propose  to examine the contention of the learned  Solicitor General,  with regard to the applicability of Article 31C of the  Constitution,  which  he had raised in  course  of  his arguments.  In the premises, these appeals are allowed.  The impugned  judgment of the Bombay High Court is set aside and the  writ  petitions,  filed  before the  High  Court  stand dismissed.

     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 & 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 there 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  proper for the High Court now to consider the same, 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 be produced by the parties.  Be it  stated that  until  a decision is given by the High Court  on  this score,  by  virtue of operation of law all the assets  would stand  vested  and such vesting would be subject to a  final decision  of  the  High  Court in 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.

     ...............................................J.                                 (G.B.  PATTANAIK)