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PETITIONER: KAMLA PRASAD KHETAN

       Vs.

RESPONDENT: THE UNION of INDIA(and connected petitions)

DATE OF JUDGMENT: 01/05/1957

BENCH: DAS, S.K. BENCH: DAS, S.K. DAS, SUDHI RANJAN (CJ) IMAM, SYED JAFFER MENON, P. GOVINDA SARKAR, A.K.

CITATION:  1957 AIR  676            1957 SCR 1052

ACT: Industrial undertaking, control of-Central Government taking over  management by notified order--Amendment of such  order by another-Validity-Like Conditions’ Meaning  of-Appointment Of  Controller-Bona  fides-The Industries  (Development  and Regulation)  Act (LXV of 1951), as amended by Amending  Act, 26 of 1953, ss. 18A, 15, 16-General Clauses Act (X of 1879), S. 21.

HEADNOTE: By a notified order dated November s, 1955, the Government of   India  took over the management of certain Sugar  Mills under s.  18A(i)(b)  of  the  Industries  (Development   and Regulation)  Act,  1951,  for one year and vested  it  in  a Controller.  This was preceded by an investigation under  s. 15  of  the  Act and the Central  Government  had  materials before it to be of the opinion that the management was being conducted in a manner highly detrimental to the  undertaking and to public interest.  On November 7, 1956, this order was amended extending the Controller’s management for a  further period  of  two years.  It was contended on  behalf  of  the petitioners that the requirement of s. 18A(i)(b) of the  Act not  having  been satisfied before the  amending  order  was made, the amendment was invalid and that, in any event,  the appointment of the same person as the authorised  Controller was not bona fide. Held, per S. R. Das C.J., jafer Imam, S. K. Das and  Govinda Menon  JJ.that  s. 18A of the  Industries  (Development  and Regulation)  Act, 1951, read with ss. 15 and 16 of  the  Act and  properly  construed,  leaves  no  doubt  that  the  two conditions  mentioned  in cl. (b) of sub-s. (i) of  s.  18A, relating to investigation and mismanagement, must relate  to a period when the management of the undertaking was  legally vested in its owner and once they are found to exist and the management  is taken over by the Government, the  conditions continue  to exist by their very nature till the  management goes  back to the owner; therefore, the amending order  also fulfilled the same conditions subject to which the  original order was made.

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When  a  notified order under the section is  sought  to  be amended  by the application Of S. 21 of the General  Clauses Act,  ’like conditions’ mentioned in the latter section,  to which  such order of amendment must be subject, are the  two conditions  relating  to  investigation  and   mismanagement mentioned ins. 18A(i)(b) of the Industries (Development  and Regulation) Act. 1053 Strawboard  Manufacturing Co. v. Gutta Mill  Workers’  Union (1953) S.C.R. 439, held inapplicable. The appointment of a suitable person as the Controller rests entirely   with  the  Central  Government  and   unless   an appointment can be shown to have been made for any  ulterior purpose  contrary to what the Statute has in view, its  bona fides is not open to question. Consequently,  in  the  instant  case,  both  the   original notification and its amendment were valid in law. Per  Sarkar  J.’Like conditions’ mentioned in S. 21  of  the General  Clauses  Act,  when  applied  to  s.  18A  of   the Industries (Development and Regulation) Act, cannot mean the two  conditions mentioned in cl. (b) of sub-s. (1)  of  that section  on the fulfillment of which the Central  Government has  the  right to issue a notification, but must  mean  the condition  mentioned in sub-s. (2) of that section,  subject to  which  alone the right to issue a  notification  can  be exercised, namely, that a notified order cannot have  effect for  more  than five years and, consequently,  the  amending order  in  question which satisfied that condition  must  be valid in law.

JUDGMENT: ORIGINAL JURISDICTION: Petition No. 54 of 1955. Petition  under Article 32 of the Constitution of India  for the enforcement of fundamental rights.    Purshottam Tricumdas, S. N. Andley, Rameshwar Nath, J. B. Dadachanji and P. L. Vohra, for the petitioner. , C.   K.  Daphtary,  Solicitor-General of  India,  Porus  A-. Mehta and R. H. Dhebar, for the respondent. M.   L. Misra, Advocate-General, U.P., and C.P. Lal, for the Intervener. 1957.   May 1. The Judgment of S. R. Das C. J., Jafer  Imam, S.  K. Das and Govinda Menon JJ. was delivered by S. K.  Das J. Sarkar J. delivered a separate judgment. S.   K. DAS J.On November 8, 1955, the Ministry of  Commerce and  Industry,  Government of India,  published  a  notified order,   in  exercise  of  the  powers  conferred  on   that Government by section 18A of the Industries (Development and Regulation)  Act, 1951, hereinafter referred to as the  Act, authorising  one Shri Kedar Nath Khetan of Padrauna,  called the 1054 authorised  Controller, to take over the management  of  the Ishwari  Khetan  Sugar  Mills  Ltd.,  Lakshmiganj,   Deoria, subject  to  certain conditions.  The  order  as  originally passed and published was to have effect for a period of  one year only, commencing on the date of its publication in  the official  gazette.   On  November  7,  1956,  there  was  an amendment  of  that order.  The amendment was  published  in notification  No.  338-A of even date and stated  in  effect that in stead and place of the words ’one year’ occurring in the order, the words 1 two years’ shall be substituted. Petitioner No. 1 before us is one Kamlaprasad.  Khetan,  who states that lie is a Director and shareholder of the  second

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petitioner,  which  is the Ishwari Khetan Sugar  Mills  Ltd. The  Union of India was and is the only respondent.   By  an order  dated October 1, 1956, this Court permitted the  said authorised  Controller  to intervene, with the  result  that both  the Union of India and the authorised Controller  have been  heard in opposition to the petition.  The  substantial case of the petitioners is that the order referred to  above dated  November  8,  1955,  and  the  amending  order  dated November  7,  1956, are invalid in law and  bad  on  certain other grounds to be stated presently, and it is not open  to the  Central  Government to interfere with  the  fundamental right  of the petitioners to hold and manage their  property on the strength of the said invalid orders; the  petitioners therefore  pray  for  the  issue  of  appropriate  writs  or directions to quash those orders. Short  and simple as the case of the petitioners appears  to be at first sight, it is necessary to refer to a  background of  certain antecedent facts for a proper understanding  and appreciation  of the issues involved in the present  dispute between  the parties.  The Ishwari Khetan Sugar Mills  Ltd., is  a  public limited Company, in which four branches  of  a family  known  as the Khetan family held a large  number  of shares and only about one-fourth of the shares were held  by outsiders.   The Company was managed by a firm  of  Managing Agents,  subject  to  supervision by  the  Directors.   Four members of the Khetan family 1055 constituted  the Managing Agency firm, of which  Kedar  Nath Khetan  (later appointed as the authorised  Controller)  was one and Onkarmal Khetan (now deceased), father of petitioner Kamlaprasad  Khetan,  was  another.   The  Managing   Agents managed  two Mills, known as the Ishwari Khetan Sugar  Mills Ltd.,  Lakshmiganj,  and the Maheshwari Khetan  Sugar  Mills Ltd.,  Ramkola,  District Deoria.  We are concerned  in  the present  case with the Ishwari Khetan Sugar Mills Ltd.   The Managing  Agents were also partners in the firm of  managing agents of certain other companies, namely, Morarji Gokul Das Spinning  and  Weaving Mills, Bombay,  and  Laxmidevi  Sugar Mills Ltd., Deoria.  In the affidavit in opposition filed on behalf  of the authorised Controller, it is stated that  the Khetan  family was in the beginning a mere  trading  family, but " due to the initiative, business acumen and imagination of  Rai  Bahadur Kedar Nath  Khetan,  various  manufacturing concerns  including several sugar factories grew up " ;  and it  was  under his direction that the other members  of  the family, including Onkarmal Khetan, were put in charge of the day-today  routine  administration of one  business  or  the other.   There  was  a  provision  in  the  Managing  Agency agreement  under which every member of the firm of  Managing Agents  was  authorised to exercise all the  powers  of  the Managing  Agents.  According to the case of  the  authorised Controller,  trouble  arose  between  the  members  of   the different branches of the family of Managing Agents sometime in  1950-51 when it came to light that Onkarmal  Khetan  had surreptitiously  withdrawn  large  sums of  money  from  the accounts  of the various businesses in which the members  of the  Khetan family were interested as Managing  Agents,  and this led to certain suits being instituted against  Onkarmal Khetan.   The  latter, in his turn, retaliated  by  bringing suits for the appointment of a Receiver, or for  restraining the  holding of a general meeting of one of the  mills,  and instituting  certain  other preceedings stated to be  of  an obstructive  nature and calculated to create an  impasse  in the working of the mills, 1056

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The  petitioners  on  the contrary  alleged  that  when  the balance  sheet of the Ishwari Khetan Sugar Mills  Ltd.,  for the  financial year 1950-51 was published in June  1952,  it was  discovered  that some of the  Directors  including  the authorised Controller had utilised the funds of the  Company for  their  personal  gain and  had  committed  breaches  of certain provisions of the Indian Companies Act.  This led to Suit  No. 4 of 1952 brought by the petitioners against  some of  the Directors, including the authorised Controller,  for an  order  of  permanent  injunction  restraining  the  said Directors  from  exercising  any  powers  as  Directors   of petitioner  No. 2 and also for a declaration that  a  notice calling  the twenty-fourth ordinary general meeting  of  the Company to be held on July 9, 1952, was illegal and invalid. In  that  suit,  an ex-parte order of  injunction  was  made against the Directors concerned on July 8, 1952.  That order was,   however,  subsequently  vacated  as   being   without jurisdiction and a fresh order was made on June 3, 1953.  In the affidavit filed on behalf of the authorised  Controller, it  has  been stated that on legal advice  obtained  by  the defendants  of  that suit to the effect  that  the  ex-parte order  of  injunction  dated  July  8,  1952,  was   without jurisdiction, the twenty-fourth ordinary general meeting  of the  Company was held on July 9, 1952, and the  shareholders unanimously  passed a resolution in that  meeting  approving and  adopting the Directors’ report and the audited  balance sheet  of  the  Company as on October 9,  1951.   The  fresh temporary order of injunction which was passed by the  Civil Judge,  Deoria, on June 3, 1953, was confirmed by  the  High Court  of Allahabad by its order dated September  14,  1953. Feeling  that the order of stay would  completely  dislocate the  affairs  of the Company,  the  shareholders  themselves called  an extraordinary general meeting which was  held  on November  9,  1953,  and  at  that  meeting  the  authorised Controller  and  certain other persons  were  re-elected  as Directors  of the Company, subject to the condition that  if the  Court  decided  in Suit No. 4 of  1952  that  the  said Directors  had  not ceased to be Directors,  the  resolution would be ineffectual to that extent.  There 1057 were  several proceedings in the High Court of Allahabad  In connection  with Suit No. 4 of 1952, and in one of them  the High Court was moved for an expeditious hearing of the suit, and   such  a  direction  was  made  by  the   High   Court. Unfortunately, however, for reasons which need not be stated here, Suit No. 4 of 1952 is still awaiting trial and on July 31,  1956, petitioner No. 1 obtained an ex-parte order  from the said High Court adjourning the hearing of the suit.  The case  of the anthorised Controller is that petitioner No.  1 having realised that he is not supported by the majority  of shareholders  and cannot, therefore, legally  represent  the Company,  is delaying the hearing of Suit No. 4 of  1952  on one ground or another. While  all this legal tussle, with allegations  and  counter allegations  made by the parties, was going on in the  arena of the Courts of law, certain other events happened to which a  reference must now be made.  The petitioners allege  that the authorised Controller, finding that the majority of  the shareholders  and  Directors  were  not  in  favour  of  his managing  the  Ishwari Khetan ,Sugar Mills  Ltd.  moved  the Ministry  of Food, through his grandson Durga Prasad  Khetan and  another gentle man. related to him, for passing  orders under  ss.  15 and 17 of the Act.  On November  8,  1952,  a communication  was  received from the Ministry of  Food  and Agriculture, Government of India, wherein was stated:-

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"The Government of India consider that if on account of  the failure   of   the  parties  concerned  to   compose   their differences and inability to take timely and proper steps to arrange  for normal working of the mills, the mills are  not able to start work in time during the 1952-53 season, or are unable to work at all, it will result in a substantial  fall in the production of sugar without due justification.   Such a  result  will lead to the conclusion that  the  mills  are being managed in a manner likely to damage the interests  of a  substantial  body of consumers besides cane  growers  and mill workers." The communication concluded with the statement that, in  the circumstances stated above, the Government of India would be constrained to order an investigation 136 1058 into  the  matter  and,  if  necessary,  to  undertake   the management  of the said mills.  It may be stated  hers  that the communication was in respect of both the Ishwari Khetain Sugar Mills Ltd. and the Maheshwari Khetan Sugar Mills Ltd. On  December 18, 1952, the Central Government  did  actually pass  an  order under sub-s. (4) of s. 3  of  the  Essential Supplies  (Temporary  Powers)  Act, 1946,  under  which  the authorised  Controller  was empowered  to  exercise  certain functions of control in respect of the Ishwari Khetan  Sugar Mills Ltd., the functions of control being stated in  detail in  notification No. S.R.O. 2073 of even date.  On  December 23,  1952,  Onkarmal  filed a writ petition  to  this  Court against  the aforesaid order of the Central  Government  and asked for an interim direction staying the operation of  the order.   This Court gave a direction expediting the  hearing of  the petition, and further directed that the accounts  of the   petitioner  Company  be  audited  periodically  by   a Government  or private auditor at the instance of  Onkarmal. The  writ  petition itself could not, however, be  heard  in time  and  was later dismissed on May 14,  1954,  as  having become  infructuous in the meantime.  On July 30, 1953,  the Central Government passed an order under s. 15 of the Act in respect of several mills, including the Ishwari Khetan Sugar Mills   Ltd.   Under  that  order  the  Central   Government appointed  three independent persons for making a  full  and complete investigation into the circumstances of each of the industrial  undertakings  referred  to  therein.   Then,  on November  14,  1953, the Central Government  made  an  order under s. 18A of the Act, by which the authorised  Controller was  appointed  to take over the management of  the  Ishwari Khetan Sugar Mills Ltd.  It may be stated here that the  Act was  amended in 1953 by Act 26 of 1953.  By that  amendment, s. 17 was omitted and a new chapter, viz., Chapter IIIA, was inserted.  This new chapter contained s. 18A under which the Central Government passed its order dated November 14, 1953. The  order stated that it shall have effect for a period  of one year.  In December 1953 came the decision of this  Court in Dwarkadas Shrinivas of 1059 Bombay  v.  The Sholapur Spinning & Weaving  Co.  Ltd.  That decision pronounced oil Art. 31(2) of the Constitution  with reference  to  the  validity of the  Sholapur  Spinning  and Weaving Company (Emergency Provisions) Ordinance 11 of  1950 and  Act XXVIII of 1950.  As a result, presumably,  of  that decision, on May 21, 1954, the Central Government  cancelled all   appointments  of  authorised  Controllers  under   the provisions  of  the  Act,  and  on  such  cancellation   the management of the industrial undertaking vested again in the owner  of the undertaking.  The case of the  petitioners  is

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that in spite of the cancellation the authorised  Controller continued  to  remain in possession of the  undertaking  in, question.   On July 16, 1954, the Central  Government  again passed  an order under sub-s. (4) of s. 3 of  the  Essential Supplies (Temporary Powers) Act, 1946, thereby again  giving the  authorised Controller certain functions of  control  in respect of the Ishwari Khetan Sugar Mills Ltd.  On September 19, 1954, there was another investigation under s. 15 of the Act  by  a  panel of officers and it  is  stated  that  they recommended that the Central Government should take over the management  of  the Mills for a period of three  years.   On January  31,  1955,  the present petitioners  filed  a  writ petition in this Court in respect of the order passed by the Central  Government  on  July 16, 1954.  This  is  the  writ petition  which,  after necessary amendments, is  now  under consideration   before  us,  the  amendments   having   been necessitated  by reason of certain subsequent  notifications made   by   the  Central   Government.    These   subsequent notifications are-(1) the notifications made on November  8, 1955, by which the earlier order made on July 16, 1954,  was cancelled  and a fresh order made under s. 18A of  the  Act; and (2) the amending order dated November 7, 1956-to both of which  a reference has been made in the first  paragraph  of this judgment.  By reason of these subsequent notifications, the  order  dated July 16, 1954, no longer exists,  and  the writ  petition  which was originally directed  against  that order stands in need of amendment. (1)  [1954] S.C.R. 674. 1060 The petitioners have prayed for an amendment of the original writ petition and also for permission to urge fresh  grounds to  challenge the validity of the two notified  orders,  one dated  November  8, 1955, and the other  dated  November  7, 1956.   By an order of the Judge-in-Chambers dated  February 18,  1957,  the  petition  for  amendment  and  for   urging additional  grounds was directed to be heard along with  the main petition under Art. 32.  But before that date, i.e., on November   5,1956,   when  the  stay  application   of   the petitioners was heard, the following direction was given by this Court- "  The  hearing  of the main petition under Art.  32  to  be expedited........................................ it will be open to the petitioners to challenge that the appointment of R. B. Kedar Nath Khetan, if again made, is also bad." In  view  of the aforesaid directions, we have  treated  the main petition under Art. 32 as a petition against the latest orders  passed  by  the Central  Government  appointing  the authorised  Controller  to take over the management  of  the undertaking,  and we have also permitted the petitioners  to urge fresh grounds in support of their petition. Having  indicated in the preceding paragraphs the  necessary background against which the dispute between the parties has to  be considered, we proceed now to a consideration of  the grounds  on which the petitioners challenge the validity  of the orders dated November 8, 1955, and November 7, 1956.  It is  necessary  to clear the ground by stating  at  the  very outset  that  learned counsel for the  petitioners  has  not challenged the validity of s. 18A of the Act under which the impugned  orders  were made.  We have  already  stated  that Chapter IIIA of the Act was inserted by the Amending Act  26 of 1953.  Article 31B of the Constitution was enacted by the Constitution (First Amendment Act, 1951, which states, inter alia, that none of the Acts and Regulations specified in the Ninth  Schedule nor any of the provisions thereof  shall  be deemed  to  be  void, or ever to have become  void,  on  the

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ground that such Act, Regulation or provision is 1061 inconsistent  with,  or takes away or abridges  any  of  the rights  conferred by, any provisions of this  Part  (meaning Part III) of the Constitution.  The Ninth Schedule was added to  by the Constitution (Fourth Amendment) Act, 1955.   Item No. 19 of the Ninth Schedule is now Chapter IIIA of the  Act as  inserted by the Industries (Development and  Regulation) Amendment  Act, 1953.  Learned Counsel for  the  petitioners has  frankly  conceded  that  in  view  of  these   amending provisions,  he  is not now in a position to  challenge  the validity of s. 18A of the Act. Therefore,  the principal question for our consideration  is the validity of the impugned orders made under that section. Learned  counsel  for the petitioners has attacked  the  two orders on the following grounds: (1)the order of November 8, 1955, is not a lawful order,  as it does not fulfill one of the essential requirements of  s. 18A of the Act under which it purports to have been made; (2)even assuming that the order was a good order when it was made,  s. 18A of the Act does not authorise an extension  of the period during which the order is to remain in force,  in the  manner in which the extension was made on  November  7, 1956,  and  such extension did not comply with  one  of  the essential requirements of s. 21 of the General Clauses  Act, (No.  X of 1897); and (3)in  any event, the order is not a bonafide order in  that the  Central  Government appointed the very person  who  was mismanaging the undertaking, who was one of the parties to a pending dispute, and against whom an order of injunction had been passed by a Court of competent jurisdiction. These  three grounds we now propose to examine in the  order in which we have set them out. (1)We  must  first read s. 18A of the Act so far  as  it  is relevant for our purpose.  The section states    If the Central Government is of opinion that (a)................. (b)an   industrial  undertaking  in  respect  of  which   an investigation has been made under section 15 (whether or not any directions have been issued to the 1062 undertaking in pursuance of section 16, is being managed  in a  manner  highly  detrimental to,  the  scheduled  industry concerned or to public interest, the Central Government may, by notified order,  authorise any person or body of  persons to take over the management of the whole or any part of  the undertaking  or to exercise in respect of the whole  or  any part of the undertaking such functions of control as may be specified in the order. (2)Any  notified  order issued under sub-section  (1)  shall have effect for such period not exceeding five years as  may be specified in the order.  Provided  that the Central Government, if it is of  opinion that it is expedient in public interest so to do, may direct that  any such notified order shall continue to have  effect after  the expiry of the period of five years aforesaid  for such further period as may be specified in the direction and where any such direction is issued, a copy thereof shall  be laid, as soon as may be, before both Houses of Parliament." The  argument before us is that for the application  of  cl. (b) of sub-s. (1) of s. 18A, the two essential  requirements are-(1) an investigation under s. 15 of the Act and (ii) the opinion  of  the  Central  Government  that  the  industrial undertaking is being managed in a manner highly  detrimental to  the scheduled industry concerned or lo public  interest.

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Learned counsel for the petitioners has conceded that before the  order  dated November 8, 1955, was made, there  was  an investigation  under  s.  15 of the Act in  respect  of  the industrial   undertaking   in  question,   and   the   first requirement  was  thus  fulfilled.   Learned  counsel   has, however, very strongly submitted that the second requirement was   not  fulfilled  in  the  present  case,  because   the authorised   Controller  himself  was  in  charge   of   the undertaking  from December 18, 1952, till November  8,  1955 (when  the  impugned order was made) with a small  break  of less  than  two months only between the two dates,  May  21, 1954, when all appointments under the Act were cancelled and July  16,  1954,  when a fresh  order  under  the  Essential Supplies (Temporary Powers) Act, 1946 was made, and 1063 even during this short period the case of the petitioners is that  the  authorised Controller  continued  in  possession. Founding himself on these circumstances learned counsel  for the   petitioners  contends  that  it  was  rationally   and logically  impossible  for the Central Government to  be  of opinion that the industrial undertaking was being managed in a  manner highly detrimental to the public interest,  before the impugned order was made. We  are unable to accept this argument as correct.  We  have already  referred  to the legal tussle which  was  going  on between  the  parties with regard to the management  of  the industrial undertaking in question.  The Central  Government very  rightly pointed out in their letter dated November  8, 1952, that the result of the differences between the parties was  likely to be a stoppage of the mill and a fall  in  the production  of  sugar with consequential  detriment  to  the interests  of the industry concernedand the interests  of  a substantial  body  of  consumers,  cane  growers  and   mill workers.   In  view  of the  litigation  which  was  pending between the parties, the likelihood of the dangers at  which the Central Government hinted in 1952 must have continued to exist,  as  long  as  the  management  was  not  fully   and completely  taken  over by the  authorised  Controller.   In December 1952, the order passed under the Essential Supplies (Temporary  Powers) Act, 1946 merely gave some functions  of control  to the authorised Controller; it did not  vest  the management  in  him.  This  distinction  between  exercising certain functions of control, however, drastic the functions may  be,  on an order made under sub-s. (4) of s. 3  of  the Essential  Supplies  (Temporary Powers) Act and  the  taking over of the management of the whole of an undertaking on  an order  under s. 18A of the Act is a real  distinction  which must  be borne in mind, as it has a bearing on the  argument advanced  before  us.   Sub-section  (4)  of  s.  3  of  the Essential Supplies (Temporary Powers) Act, 1946,  authorises the Controller to exercise, with respect to the whole or any part of the undertaking, such functions of control as may be provided  by the order; s. 18A of the Act is in wider  terms and empowers the 1064 Central  Government  to  authorise any  person  or  body  of persons to take over the management of the whole or any part of the undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be  specified in the order.  Section 18B of the  Act  states the effect of a notified order under s. 18A; in sub-s.  (1), cls.  (a)  to (e), is stated the effect of taking  over  the management,  and  in  sub. s. (3) is stated  the  effect  of merely  giving functions of control a distinction  which  is clearly drawn in the section itself.  It is not difficult to

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conceive  that  in a particular industrial  undertaking  the mere  giving of some functions of control may not be  enough to  meet  the  situation  which has arisen  and  it  may  be necessary for the Central Government to pass an order taking over the management of the whole of the undertaking.  In the case  under  our consideration, in December,  1952,  certain functions   of  control  were  vested  in   the   authorised Controller,  but  the management of  the  whole  undertaking was,not  taken over.  This continued till  an  investigation was  ordered under s. 15 of the Acton July 30, 1953.   Then, on November 14, 1953, the authorised Controller was directed to  take over the management of the whole of the  industrial undertaking.   This order was however cancelled on  May  21, 1954,  and  under  s.  18F of the Act,  the  effect  of  the cancellation  was to vest the management of the  undertaking again in its owner the expression I owner’ meaning, under s. 3  (f) of the Act, the person who, or the  authority  which, has the ultimate control over the affairs of the undertaking and,  where  the said affairs are entrusted  to  a  manager, managing director or managing agent, such manager,  managing director or managing agent.  Therefore, the legal effect  of the cancellation on May 21, 1954, was to vest the management of the Ishwari Khetan Sugar Mills Ltd., in the Directors and Managing Agents who were quarreling amongst themselves.   On behalf  of  the petitioners, it has been  pointed  out  that Kedar  Nath  Khetan, the  erstwhile  authorised  Controller, continued   to  remain  in  possession  in  spite   of   the cancellation order.  In an affidavit filed on behalf of  the Central Government, it 1065 is  stated  that after the cancellation  order,  Kedar  Nath Khetan,  the erstwhile authorised Controller,  informed  the Government of India that he was continuing in management  in a  capacity other than that of authorised  Controller.   The affidavit  filed  on  behalf of  the  authorised  Controller states,   however,  that  between  the  time   the   Central Government  directed  him  to hand over  possession  to  the Directors  and the time when he was again appointed on  July 16,  1954,  the management of the Company  remained  in  the hands of the Directors who were in possession of the  under- taking.   It is not necessary for us to pronounce  on  these disputed facts.  It is abundantly clear from the  affidavits filed  that peace amongst the Directors or in the family  of the  Managing Agents had not been restored by the  time  the cancellation order was made on May 21, 1954.  Suit No. 4  of 1952  was still pending, and the tussle between the  parties was going on.  This was the position when another order  was made  under the Essential Supplies (Temporary  Powers)  Act, 1946.,  on  July 16, 1954.  This was followed  by  a  second investigation  under  s. 15 of the Act in  September,  1954. Petitioner No. I was still pursuing what he conceived to  be his legal remedy by filing a writ application in respect  of the  order  dated July 16, 1954, in this Court and  also  in other proceedings arising out of Suit No. 4 of 1952, in  the High  Court  of  Allahabad.   In  these  circumstances,  the Central Government made the impugned order dated November 8, 1955.   Having regard to the circumstances just  stated,  it is,  we think, idle to contend that the  Central  Government had no materials before it for arriving at the opinion  that the  industrial  undertaking was being managed in  a  manner highly   detrimental  to  public  interest.    The   Central Government  might reasonably have felt that the order  dated July  16,  1954, which vested certain functions  of  control only,  was  not  enough to meet the  situation  and  a  more drastic  step was necessary.  It is worthy of note  that  in

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the  affidavit filed on behalf of the Central Government  it is  stated  that the affairs of the  industrial  undertaking were investigated a second 137 1066 time under s. 15 of the Act in September 1954, and the panel of  officers  who held that investigation  recommended  that Government should take over the management of the industrial undertaking  for a period a of three years.  It is  on  that recommendation  that  the  Central  Government  passed   the impugned order on November 8, 1955.  We are unable to accept the argument of learned counsel for the petitioners that one of the essential requirements of cl. (b) of sub-s. (1) of s. 18A  of  the Act was not fulfilled before  the  order  dated November 8, 1955, was made. Learned counsel for the petitioners has drawn our  attention to those statements in the affidavit filed on behalf of  the Central  Government  which referred to  the  improvement  in management,  after  the undertaking was taken  over  by  the authorised Controller.  In that affidavit, it is stated : " I say that by virtue of the order issued by the Government of India under s. 3(4) of the Essential Supplies  (Temporary -Powers)  Act, 1946, the Government of India had taken  over only the supervisory control and the said Kedar Nath  Khetan had only powers to issue directions to the management.   The management was with the old management and the Government of India   or  the  authorised  Controller  had  no   effective functioning  in the management as the authorised  Controller could not manage the undertaking.  I say that in view of the continued litigation referred to in detail in the  affidavit of the intervener dated 25th October, 1956, it was  apparent that  the mill was being managed in a manner  highly  detri- mental  to the interests of the undertaking and that it  was necessary  to pass the order under s. 18A of the  Industries (Development and Regulation) Act, 1951. 1 say that after the management  was  taken over by Shri Kedar Nath  Khetan,  the Government  has  reason to believe that the  management  has improved and has saved further deterioration." In another part of the same affidavit, it is stated that the mill earned a profit during 1953-54 and in 1954-55 also  the mill was likely to make a net profit of 1067 Rs.  84,321.  We see nothing in these statements from  which it can be inferred that the recorded opinion of the  Central Government  in  the order dated November 8, 1955,  that  the industrial undertaking was being managed in a manner  highly detrimental  to public interest contained a  palpably  false statement.  The crux of the matter was the dispute inter  se amongst  the Directors and the Managing Agents,  leading  to protracted and harassing litigation, some of which was still pending;  that  was the real cause of the  trouble,  and  we think  that the Central Government had enough materials  for its opinion that the industrial undertaking in question  was being  managed  in  a manner highly  detrimental  to  public interest. (2)We  now turn to the amending order of November  7,  1956. The amending order is in these terms : "  In  the  said order in sub-clause (ii) of  clause  I  and clause  2  for the words ’one year’, the  words  two  years’ shall be substituted." Section 21 of the General Clauses Act states: " Where, by any Central Act or Regulation, a power to  issue notifications, orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the like  manner and subject to the like sanction and conditions (if any), to

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add  to, amend, vary or rescind any  notifications,  orders, rules or bye-laws so issued." The argument of learned counsel for the petitioners is  that neither  s. 18A of the Act nor s. 21 of the General  Clauses Act save the amending order of November 7, 1956.  There  has been  some argument before us with regard to the proviso  to sub-s.  (2)  of s. 18A of the Act, which we have  quoted  in extensor in an earlier part of this judgment.  That proviso, it  is  contended by learned counsel  for  the  petitioners, refers only to an order which is initially made for a period of  five years, or, alternatively, which comes to an end  on the expiry of a period of five years.  According to him, the proviso  empowers  the Central Government  to  continue  the order after the expiry of a period of 1068 five  years for such further period as may be  specified  in the direction given by the Central Government, and the  only safeguard  is  that a copy of the direction is  to  be  laid before both Houses of Parliament.  The  argument of  learned Counsel  for  the  petitioners proceeds to  state  that  the proviso  has  no application in the present case  where  the original  order was made for a period of one year  only  and the amending order merely continued it for another year.  In the  view which we have taken of the substantive  provisions of sub-s. (1) of s. 18A of the Act and s. 21 of the  General Clauses  Act,  we  do not think it  necessary  to  make  any pronouncement  with regard to the true scope and  effect  of the  aforesaid proviso.  In our opinion, the amending  order is  protected  under s. 21 of the General Clauses  Act  read with sub-sec. (1) of s. 18A of the Act. Section 21 of the General Clauses Act says, inter alia, that the power to issue an order under any Central Act includes a power  to  amend the order; but this power is subject  to  a very  important  qualification  and  the  qualification   is contained  in the words ’exercisable in the like manner  and subject  to  the  like sanction and  conditions  (if  any)’. There  is no dispute before us that the amending  order  was made  in the same manner as the original order, that is,  by means of a notified order.  As no sanction is necessary  for an  order  under  s. 18A, the only  question  before  us  is whether the amending order complied with the like conditions under  which the original order was made.  We  have  already stated  what are the two essential requirements of an  order under  cl.  (b)  of sub-s (1) of s. 18A  of  the  Act.   The argument  of  learned counsel for the  petitioners  is  that those  two  essential  conditions must  be  fulfilled  again before  any  amendment of the order can be  made;  this,  he ureas,  is  the  true scope and  effect  of  the  expression ’subject to the like conditions (if any)’ occurring in s. 21 of the General Clauses Act. We  agree with learned counsel for the petitioners that  the power to amend, which is included in the power 1069 to  make  the order, is exercisable in the like  manner  and subject  to  the like sanction and conditions  (if  any)  as govern  the making of the original order; this is stated  by the  section  itself.   It  becomes  necessary  however,  to understand clearly the true nature of the conditions’; which have to be fulfilled before an order under el. (b) of sub-s. (1) of s. 18A of the Act can be made.  Once the true  nature of those conditions is appreciated, there is in our  opinion little  difficulty left in the application of s. 21  of  the General Clauses Act.  Now, the first condition in cl. (b) of sub-s.  (1)  of  s. 18A of the Act is  that  the  industrial undertaking must be one in respect of which an investigation

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has  been  made under s. 15 of the Act.  Section  15  is  in these terms: Where the Central Government is of the opinion that- (a)  in  respect  of any scheduled  industry  or  industrial undertaking or undertakings- (i)  there has been, or is likely to be, a substantial  fall in  the  volume of production in respect of any  article  or class of articles relatable to that industry or manufactured or  produced in the industrial undertaking or  undertakings, as the case may be, for which, having regard to the economic conditions prevailing, there is no justification; or (ii) there   has  been,  or  is  likely  to  be,  a   marked deterioration  in  the quality of any article  or  class  of articles  relatable  to  that industry  or  manufactured  or produced  in the industrial undertaking or undertakings,  as the case may be, which could have been or can be avoided; or (iii)     there  has been or is likely to be a rise  in  the price of any article or class of articles relatable to  that industry  or  manufactured  or produced  in  the  industrial undertaking  or undertakings, as the case may be, for  which there is no justification; or (iv) it is necessary to take any such action as is  provided in this Chapter for the purpose of conserving any  resources of national importance which are utilised in the industry or the  industrial undertaking or under. takings, as  the  case may be; or 1070 (b)  any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest;  the Central Government may make or cause to  be made a full and  complete  investigation into the circumstances  of  the case by such person or body of persons as it may appoint for the purpose." The order for investigation in this case was made under  cl. (b) of s. 15, and that clause again uses the expression that the  ’industrial  undertaking is being managed in  a  manner highly  detrimental to the industry concerned or  to  public interest  ’the  same expression which occurs in cl.  (b)  of sub-s.  (1)  of s. 18A of the Act.  Section 16  of  the  Act states,  inter alia, that if, after making or causing to  be made  any investigation under s. 15, the Central  Government is satisfied that action under the section is desirable,  it may  then issue certain directions which are stated  in  the section.   It  may,  however, be that in a  given  case  the management is so detrimental to the industry concerned or to public  interest  that mere directions under s. 16  are  not enough; in that event, the Central Government may take  over the  management by an order passed under cl. (b)  of  sub-s. (1) of s. 18A of the Act.  There may even be a case where in spite of the directions, no sufficient improvement has taken place  and  an order under sub-s. (1) of s. 18A of  the  Act becomes  necessary.   That is why in cl. (b) of  sub-s.  (1) occurs  the  expression whether or not any  directions  have been issued to the undertaking in pursuance of section  16.’ The  reason  why the same expression is being managed  in  a manner highly detrimental etc.’ occurs both in cl. (b) of s. 15  and cl. (b) of sub-s. (1) of s. 18A of the Act is  this: an investigation is ordered when the conditions mentioned in s.  15 are fulfilled, one of the conditions being  that  the industrial  undertaking is being managed in a manner  highly detrimental to the scheduled industry concerned or to public interest.  On such an investigation being made, the  Central Government   may  issue  directions  under  s.   16;   those directions may or may not improve the situation.  If they do

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not improve the 1071 situation,  or if the mere giving of directions under s.  16 is  not  considered sufficient to meet  the  situation,  the Central  Government may pass an order under s. 18A; but  one of  the requisite conditions is that the Central  Government must he of opinion that the industrial undertaking is  still being  managed  in  a.  manner  highly  detrimental  to  the scheduled  industry  concerned or to  public  interest.   If these ss. 15, 16 and 18A, are read together, as they must be read, then it becomes at once clear that the condition as to the  management  of the industrial undertaking in  a  manner highly detrimental to the scheduled industry concerned or to public  interest relates in its true scope and effect  to  a period when the management of the industrial undertaking  is in  the hands of its owner; that is, to a period before  the management  of the whole or any part of the  undertaking  is taken  over.   Similarly,  with regard to  the  exercise  of functions  of control, which also is contemplated by s.  18A of  the Act, the condition again relates to a period  before the  functions of control are taken over.  It would, in  our opinion,  be illogical and against the terms of ss.  15,  16 and  18A  of  the  Act to hold  that  the  condition  as  to mismanagement  (using  the  word  ’mismanagement’  for   the purpose   of  brevity  and  convenience,  for  the   correct expression,   namely,   ’management  in  a   manner   highly detrimental to the scheduled industry concerned or to public interest’)  can  apply after the management has  been  taken over  and  during  the  period  of  its  management  by  the authorised  Controller.  The contention of  learned  counsel for  the petitioners is that whenever an amendment is  made, the  test of mismanagement must again be fulfilled.  Let  us examine  the full implications of this argument.  If,  after the  management  is taken over,  the  authorised  Controller becomes seriously ill or dies in a few days when the  period of  the  order has not expired, the Central  Government  may find  it  necessary to appoint another person and  for  that purpose  make  an  amendment.  If the  argument  of  learned counsel  for the petitioners is correct, then  no  amendment can be made unless the test of mismanagement is again 1072 fulfilled;  but  how can such a test be fulfilled  when  the management  was  in the hands of the  authorised  Controller till  he died, the authorised Controller being more or  less in the position of an agent of the Central Government ?  The argument  of learned counsel for the petitioners, pushed  to its logical extreme, will thus result in an absurdity and no amendment will ever be possible. Learned  counsel  for the authorised Controller has  on  the contrary contended that the two conditions laid down in  el. (b)  of  sub-s. (1) of s. 18A of the Act are not  static  in nature  and once they are fulfilled, they continue  to  have effect   thereafter  whatever  may  have  happened  in   the meantime.   The  argument  proceed  to  state  that  if   an investigation under s. 15 of the Act had once been made  and if  at  some previous stage the industrial  undertaking  was mismanaged,   the   two  conditions  continue   to   operate irrespective  of whether the undertaking vests in the  owner again  for a time, and an amendment may be made at any  time and even a fresh order can be made without the necessity  of a fresh investigation and a fresh mismanagement. We consider that both these are extreme views.  On a  proper construction  of ss. 15, 16 and 18A of the Act, the  correct view  appears to be what we have stated earlier, namely  the two  conditions, one as to an investigation under s. 15  and

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the  other as to mismanagement, relate to a period when  the management  of the industrial undertaking is legally  vested in its owner, and s. 18A must be read, with reference to the two  conditions stated in el. (b) of sub-s. (1),  as  though the words ’while the undertaking is vested in its owner’ are present in the clause.  If, as in this case, the  management is once taken over by an order under s. 18A but the order is later cancelled and the management again vests in the owner, the  two conditions must be fulfilled again before an  order under  el.  (b) of sub-s. (1) of s. 18A of the  Act  can  be made.   That  is  what happened in the  present  case.   The management  was  taken over on November 14,  1953,  but  the order  was  cancelled on May 21, 1954,  and  the  management vested in the owner.  An 1073 investigation  under  s.  15 of the Act was  again  made  in September, 1954, and the Central Government, being satisfied that  the  industrial undertaking was  being  mismanaged  in spite  of the order under the Essential Supplies  (Temporary Powers) Act made on July 16, 1954, passed the impugned order on  November  8,  1955.  So far as  the  amending  order  of November  7, 1956, was concerned, the like conditions  still continued  to exist and there was no necessity for  a  fresh investigation  etc.,  because the management had  not  since November  8,  1955, vested in the owner, and by  their  very nature the conditions continued to exist till the management went  into the hands of the owner again.  Having  regard  to the true nature of the conditions laid down in s. 18A of the Act, there was no violation of s. 21 of the General  Clauses Act when the amendment was made on November 7, 1956, and, in our   opinion,   the  requirements  of  s.   21   had   been substantially  complied with.  The power to amend  which  is included  in  the  power to make  the  order  was  exercised subject  to like conditions within the meaning of s.  21  of the General Clauses Act, the conditions being an  investiga- tion  under  s.  15 of the Act and management  in  a  manner highly  detrimental  to  public  interest,  both  of   which necessarily related to the period when the management of the industrial undertaking was legally vested in its owner;  and both  had  been fulfilled and continued to be  so  fulfilled when the amendment was made.  It is to be remembered that s. 21   of  the  General  Clauses  Act  embodies  a   rule   of construction,  and  that  rule must have  reference  to  the context  and  subject-matter of the  particular  statute  to which  it is being applied; for example, s. 18A of  the  Act does not prescribe any conditions for the cancellation of an order made under that section, but s. 18F does and the power of cancellation referred to in s. 21 of the General  Clauses Act  must have reference to s. 18F.  Similarly, an order  of amendment made becomes an order under s. 18A and is  subject to  all  the  conditions mentioned  therein,  including  the condition mentioned in sub-s. (2). A  reference  was made in this connection to a  decision  of this Court in Strawboard Manufacturing Co. v. Gutta 138 1074 Mill Workers’ Union (1).  In that case, the State Government of  Uttar Pradesh had referred an industrial dispute to  the Labour Commissioner on February 18, 1950, and directed  that the award should be submitted not later than April 5,  1950. The  award, however, was made on April 13, and on  April  26 the  Governor issued a notification extending the  time  for making the award up to April 30, 1950.  It was held by  this Court that the State Government had no authority whatever to extend  the time and the adjudicator became functus  officio

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on  the  expiry of the time fixed in the original  order  of reference  and  the award was, therefore, one  made  without jurisdiction and a nullity.  It was further held that s.  14 of  the  U. P. General Clauses Act did not in  terms  or  by necessary  implication give any such power of  extension  of time  to the State Government.  It was argued on  behalf  of the  State Government in that case that the order  of  April 26, 1950, could be supported with reference to s. 21 of  the U.  P.  General Clauses Act.  But this  Court  rejected  the argument   and  held  that  the  power  of   amendment   and modification conferred by s. 21 of the U. P. General Clauses Act  could  not  be exercised so as  to  have  retrospective operation.   We  do  not think that the  principle  of  that decision  has any application in the present case.   But  as already stated by us, the provision in s. 21 of, the General Clauses Act embodies a rule of construction, and the implied power of amendment therein embodied must be determined  with reference   to  the  context  and  subject-matter   of   the provisions  of the principal statute.  In the present  case, that  rule  of  construction applies, but it  does  so  with reference to the context and subject-matter of ss. 15, 16 and 18A of the Act. (3)  We  now turn to the third and last question  which  has been   agitated   before  us.   Learned  counsel   for   the petitioners  has contended that the impugned orders are  not bona  fide  orders.  He has submitted  that  the  authorised Controller  was one of the parties to the dispute which  led to so much protracted litigation. (1)  [1953] S.C.R. 439. 1075 He  has  pointed out that there was an order  of  injunction against  him.   He  has  also  referred  to  certain   other circumstances  arising  out  of  other  activities  of   the authorised  Controller  and relating to  income-tax  demands against   him.   He  has  submitted  that   the   authorised Controller ceased to be a Director by reason of breaches  of certain provisions of the Indian Companies Act committed  by him.   These submissions have been very seriously  contested in   the  affidavit  filed  on  behalf  of  the   authorised Controller.   On  the  materials before us,  it  is  neither possible nor desirable that we should make any pronouncement with  regard  to these disputed questions of  fact.   It  is sufficient to state that the selection of a suitable  person to  be  the  authorised Controller rests  with  the  Central Government   and  it  may  be  presumed  that  the   Central Government  knows best the needs of the particular  industry and of its own subjects and the suitability of the person to be appointed as authorised Controller.  Having regard to the facts  and  circumstances to which we have  already  made  a reference,  it cannot be said that the appointment of  Kedar Nath Khetan as the authorised Controller in this  particular case was made for some ulterior purpose, that is, a  purpose other  than the purpose of achieving the objects  for  which the  impugned order was passed.  The primary concern of  the Central Government was to see that the mills were managed in a  manner which was not detrimental to public interest,  and having regard to the experience of Kedar Nath Khetan in  the industry in question, it was open to the Central  Government to select him as the most suitable person to be appointed as the  authorised  Controller, notwithstanding that he  was  a party  to the dispute.  The test to be applied in  cases  of this  nature,  where  lack  of good  faith  in  the  Central Government  is  pleaded,  is not whether a  better  or  more independent  man  was or might be available; nor is  it  the duty  of  the  Court to subject the selection  made  by  the

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Central  Government  to  another  and  independent  test  of propriety  and  suitability,  for the Court  has  really  no materials  for  such  a test.  The test  to  be  applied  is whether the 1076 appointment was made for some ulterior purpose, some purpose other  than  the object for which the law, under  which  the impugned  order  is  made, was enacted.  In  our  view,  the petitioners have  completely failed to satisfy that test  in the present case. For the reasons given above, we hold that the order made  on November  8, 1955, and the amending order dated November  7, 1956,  are both valid in law, and the petitioners  have  not made out any case of a violation of their fundamental right. In  conclusion,  it  may be stated that  on  behalf  of  the authorised Controller a preliminary objection was also taken that petitioner No. 1 was not legally competent to represent petitioner  No. 2. Having regard to our decision on  merits, it   is  unnecessary  to  say  anything  more   about   this preliminary  objection.  It was stated at the Bar that  this preliminary  objection has also been taken in Suit No. 4  of 1952.  As that suit is still pending, we have thought it fit to  refrain from expressing any opinion on  the  preliminary objection. The  result is that there is no merit in the petition  which is  dismissed  with costs in favour of the  respondent,  the Union  of India.  The authorised Controller, who  intervened at his own risk, must bear his own costs. SARKAR  J.-I have had the privilege of reading the  judgment just  delivered by my brother S. K. Das.  I regret  that  on one  of the questions that arise in this matter I have  come to  entertain a different opinion.  In this judgment I  will say a few words on that question only.  With the rest of the judgment  of S.K. Das J. I am in entire agreement.   He  has dealt  with  the  facts very fully and therefore  I  do  not propose to state them myself The  Central  Government had by an  order-published  in  the Official  Gazette of November 8, 1955, and made in  exercise of  the  power  conferred  by  s.  18A  of  the   Industries (Development   &  Regulation)  Act,  1951  (LXV  of   1951), authorised  Kedar  Nath  Khetan  who  has  been  allowed  to intervene in these proceedings to take 1077 over  the management of Ishwari Khetan Sugar Mills  Limited, an  industrial  concern  then  in  the  management  of   its directors.   The order provided that it was to  have  effect for  a  period  of one year commencing on the  date  of  its publication  in  the Official Gazette.  By another  2  order made  on November 7, 1956, the Central  Government  directed that  in the order of November 8, 1955, for the  words  ,one year"  the  words I two years’ should be  substituted.   The effect of this latter order was that Kedar Nath Khetain  was to  be  in management of the Mills up to November  7,  1957. The question is whether the order of November 7, 1956 was  a valid  order.  The latter order is only an amendment of  the earlier order.  Had the Central Government then any power so to amend? Section 18A does not expressly confer any power to amend  an order  once it is made under it.  Section 21 of the  General Clauses  Act,  however, provides that a power  of  amendment shall  exist  in certain circumstances.  The  only  question therefore  is  whether  s. 21 of  the  General  Clauses  Act justifies the amendment made in this case.  Section 21 is in these terms:     "Where,  by any (Central Act) or Regulation, a power  to

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(issue   notifications),  orders,  rules  or   bye-laws   is conferred  then that power includes a power, exercisable  in the  like  manner  and  subject to  the  like  sanction  and conditions  (if any), to add to, amend, vary or rescind  any (notifications) orders, rules or bye-laws so (issued).  " Under  this section a Notification or an Order  once  issued can  be amended only "in the like manner and subject to  the like sanction and conditions (if any) ". This means that the power of amendment can be exercised only in the same  manner and subject to the same sanction and conditions, if any were imposed,  in  which  the power to make the  order  could  be exercised under the main Act.  Was the order of November  7, 1956,  then made in the same manner and subject to the  same sanction and conditions under which an order under s. 18A of the main Act could be made ? Under  s. 18A the power to authorise a person to  take  over the management of an undertaking can be 1078 exercised only by a notified order, that is to say an  order notified in the Official Gazette.  This is the manner of the exercise of the power.  The amending Order had been made  in the  same manner.  This requirement of s. 21 of the  General Clauses Act, therefore, was fulfilled in this case.  Section 18A does not provide for any sanction being obtained  before the  exercise  of the power conferred by it.   The  amending Order, therefore, did not need any sanction, and no question of  satisfying  any requirement as to any  sanction  arises. The  difficulty  has  arisen  as  to  the  last  requirement specified  in  s. 21, namely, that indicated  by  the  words ’subject  to like conditions’.  Section 18A of the main  Act so  far  as  relevant for the present purpose  is  in  these terms: " If the Central Government is of opinion that............ (a).................................... (b)  an  industrial  undertaking  in  respect  of  which  an investigation has been made under s. 15 is being managed  in a  manner  highly  detrimental  to  the  scheduled  industry concerned or to public interest, the Central Government may, by  a notified order, authorise any person or  to take  over the management of  the undertaking Learned  counsel for the petitioner formulated his  argument in  this way.  He said that the right to exercise the  power conferred  by  s. 18A arises only on  two  conditions  being fulfilled,  namely,  (a)  the  existence  of  an  industrial undertaking  in respect of which an investigation  had  been made  under s. 15, and (b) the Central Government  being  of opinion  that  such  an undertaking is being  managed  in  a manner  highly  detrimental  to the industry  or  to  public interest.   It  was  said  that  in  this  case  the  second condition  was not present when the order for  amendment  of the  earlier order was made and therefore it is invalid.   I agree  that  the second condition was not present  when  the amending  order was made.  The reason is this.  Section  18A contemplates the taking over of management of an undertaking by  a person authorised by the Government.   It,  therefore, contemplates a state of 1079 affairs in which the management is not in such a person.  It follows  that it contemplates management in a manner  highly detrimental  to the industry or public interest by a  person other  than that appointed by the Government under the  Act. In  this case at the 2 date of the amendment the  management was in the person appointed by the Government by its earlier order  of November 7, 1955, and, therefore,  the  Government could  not  at the date of the amending order have  been  of

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opinion that the management was by a person other than  that appointed  by it and such management was in a manner  highly detrimental to the industry or to public interest. In  my view, however, when s. 21 of the General Clauses  Act makes  the  power to amend exercisable subject to  the  like conditions as in the main Act, it does not contemplate those conditions upon the fulfillment of which the right to  issue the  order arises under the main Act.  If this were so,  the power of amendment conferred by s. 21 would have been wholly redundant  and  unnecessary.   If the  conditions  upon  the fulfillment  of which the right to exercise the power  arose under  the main Act existed, then the Government could  have instead of amending the order made a fresh order under s. 14 of  the General Clauses Act, if  necessary,  rescinding  the earlier order.  Therefore, it seems to me that the provision in  s.  21  of the General Clauses Act  that  the  power  of amendment  shall be exercisable subject to  like  conditions does not refer to conditions upon the existence of Which the right  to exercise the power arises under the main Act.   In my  view  the  conditions  referred to  in  s.  21  are  the conditions to which the order issued under the main Act must be  made  subject.  Thus, in this case sub-s. 2  of  s.  18A provides  that "any notified order issued under  sub-section (1)  shall  have effect for such period not  exceeding  five years as may be specified in the order".  The effect of this sub-section  is  that the order made under s.  18A  must  be subject  to the condition that it cannot have effect  for  a longer period than 5 years.  When, therefore, an order  once made under s. 18A is sought to be amended with the 1080 aid  derived  from  s. 21 of the General  Clauses  Act,  the amendment must observe the condition laid down in sub-s. (2) of  s. 18A.  Such amendment is subject to the conditions  in the main Act.  The amendment cannot,  therefore,  extend the operation  of  the  order beyond the period  of  five  years mentioned in the main Act. In the present case the amending order of November 7,  1956, complied with this condition and, therefore, it was properly made  in  compliance  with the provisions of s.  21  of  the General  Clauses  Act.   For this reason,  in  my  view  the argument of the learned Counsel for the petitioner that  the amending order was invalid must fail. I, therefore, agree with the order proposed by S. K. Das J.                          Petition dismissed. 1081