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PETITIONER: MINERVA MILLS LTD. & ORS. ETC. ETC.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT09/09/1986

BENCH: DUTT, M.M. (J) BENCH: DUTT, M.M. (J) REDDY, O. CHINNAPPA (J)

CITATION:  1986 AIR 2030            1986 SCR  (3) 718  1986 SCC  (4) 222        JT 1986   375  1986 SCALE  (2)381  CITATOR INFO :  RF         1986 SC2082  (10)  RF         1988 SC 782  (26,55)  F          1989 SC1331  (5)

ACT:      Industrial (Development  and Regulation)  Act 1951, ss. 15 and  18A-Non-supply of Report of Investigation Committee- Whether failure  of natural  justice-Take over of management of  undertaking--Grant   of  loan   by  government   to  the undertaking-Whether sufficient  to say  that order  of ’take over’ has no basis.      Sick Textile  Undertakings (Nationalisation) Act, 1974- Validity of.      Constitution of  India, Articles  14, 19, 31A and 31C’- Challenge that basic or essential feature of Constitution is damaged or destroyed-When can be raised.      Administrative Law-Natural  justice-Failure  of-Whether arises in  non-supply of  copy  of  Investigation  Committee Report under  s.s 15 Industrial (Development and Regulation) Act.

HEADNOTE:      The   petitioner,    Minerva   Mills   Ltd.-a   textile undertaking had  been running at a loss and had to be closed down. The  Central Government  ordered an investigation into the affairs  of the  petitioner-company under  s. 15  of the Industries (Development  & Regulation) Act 1931. Thereafter, the State  Government of  Mysore sanctioned the guarantee to enable the  petitioner-company to raise a loan of Rs.20 lacs from the  State Bank  of India.  After the investigation was made, the Central Government passed an order under s. 18A of the IDR Act taking over the management of the undertaking of the Company on the ground that the Central Government was of opinion that  the undertaking  was being managed in a manner highly detrimental  to public  interest. During the pendency of the management of the undertaking by the National Textile Corporation, the Sick Textile Undertakings ordinance of 1974 was promulgated,  and it  was replaced  later on by the Sick Textile Undertakings (Nationalisation) Act 1974. 719      The petitioners  including the  company  unsuccessfully

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challenged before  the High  Court under Art. 227, the order dated October  18, 1371,  passed by  the Central  Government under s.  18A of the Industrial (Development and Regulation) Act as also the Nationalisation Act. Their appeals were also summarily dismissed by the Division Bench of the High Court. R      The petitioner.  Minerva Mills  Ltd. and  some  of  its creditors challenged  before the Supreme Court under Art. 32 of the  Constitution, the legality of the aforesaid order as also   the   constitutional   validity   of   Sick   Textile Undertakings (Nationalisation) Act 1974.      Dismissing the writ petitions, ^      HELD: 1.1  The investigation  that was made under s. 15 of the  Industrial (Development  and Regulation) Act and the consequent findings  of the Government on the basis of which the management  of the  undertaking of the Company was taken over  under  s.  18A  of  the  Industrial  (Development  and Regulation) Act, was that the affairs of the under taking of the  Company   were  being   managed  in   a  manner  highly detrimental to  public interest.  The undertaking  had  been running at  a loss  and had  to be closed down on January 2, 1970. This  miserable condition  of the undertaking might be due to the mismanagement of its affairs. [723E-F]      1.2 The  Government might have thought of assisting the Company to  raise a loan of Rs.20 lacs, but that fact or the fact that  such proposal for assistance was made for special reasons as  provided in  the second  proviso to  s. 4 of the Mysore State  Aid to Industries Act, 1953 is not, sufficient to uphold  the contention  of the petitioners that there was no basis or foundation for the order under s. 18A. [723F-G]      1.3 The legislature had decided that the undertaking of the Company  was a sick textile undertaking by including the same in the First Schedule to the Nationalisation Act. There can be  no doubt  that the  legislative judgment  should  be looked upon with respect and it requires very strong grounds to set  it at  naught. In  the instant  case,  there  is  no existence of any such ground. [724B-C]      2. The  petitioner-company was  given a  hearing by the Investigation  Committee   and,  therefore,   it  got  ample opportunities to  make representations  against the proposed take-over. It  is difficult to lay down that non-supply of a copy of the report of investigation under s. 15 of the 720 Industrial (Development  and  Regulation)  Act  will  always occasion  a   failure  of  natural  justice.  Whether  in  a particular case there has been failure of natural justice or not will depend on the facts and circumstances of that case. [725A-B]      In the  instant case  also, the petitioners were not in the least prejudiced for the non-supply to them of a copy of the report.  Moreover, they  never asked  for a  copy of the report. They  did not  also move  against the order under s. 18A  before  the  undertaking  was  nationalised  under  the Nationalisation Act.  It shows that the petitioners were not aggrieved by  the said order under s. 18A for they could not be as  they had  not  the  required  minimum  resources  for running the mill. [725F-H]      3.1 The  Nationalisation Act  has been  enacted to give effect to  the policy  of the  State  towards  securing  the principles specified  in  clause  (b)  of  Art.  39  of  the Constitution. Indeed  a declaration  in that regard has been made in s. 39 of the Nationalisation Act. [728C-D]      3.2 The  Nationalisation Act gives effect to the policy of the  State towards  securing the ownership and control of

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the material  resources  of  the  community,  which  are  so distributed as  best to  subserve the  common good.  In  the circumstances, as  the Nationalisation  Act comes  under the protective umbrella  of Article 31C, the petitioners are not entitled to challenge the constitutional validity thereof on the ground of violation of the provisions of Arts. 14 and 19 of the Constitution. [728G-H]      4. Only  constitutional amendments  made  on  or  after April 24, 1973 by which Acts or Regulations were included in the Ninth Schedule can be challenged on the ground that they damage the  basic or  essential features of the Constitution or its  basic  structure.  But  if  any  of  such  Acts  and Regulations is  saved by Art. 31A or by Art. 31C as it stood prior to  the amendment  of the  Constitution by  the Forty- second Amendment,  such challenge  on the  ground  that  the constitutional amendment  damages  or  destroy  a  basic  or essential feature of the Constitution or its basic structure as reflected  in Art.  14 or  Art. 19,  will become  otiose. [728A-C]      5. Under  s. 4(1)  of the Nationalisation Act, the sick textile  under   taking  shall  be  deemed  to  include  all properties,  movable   and   immovable,   including   lands, buildings, workshops,  stores,  etc.,  in  the  owner  ship, possession, power  or control  of  the  owner  of  the  sick textile under  taking. The  question whether the vacant land has been  in use,  is not,  relevant for  the purpose  of s. 4(1). In view of the said provision, it is 721 difficult to  accept the  contention of the petitioners that the vacant land is not a part of the undertaking. [732 D-E]      In the  instant case, the whole of the said 17.52 acres of land  including 4.37 acres thereof. is situate within the mill compound. The Court cannot accept the contention of the petitioners that  as the land is Lying vacant since the take over it does not form part of the undertaking. [732 C-D]

JUDGMENT:      ORIGINAL JURISDICTION:  Writ Petition  Nos. 356-361  of 1977      Under Article 32 of the Constitution of India.      R.F. Nariman,  J. Peres,  Mrs. A.K.  Verma  and  S.  I. Thakur for the Petitioners.      B. Datta, Additional Solicitor General, T.V.S.N. Chari, Ms. V.  Grover, Ms.  Sunita Mudigarda  and W. Quadri for the Respondents.      The Judgment of the Court was delivered by      DUTT, J.  In these  Writ Petitions  under Article 32 of the Constitution  of India  the petitioners,  including  the petitioner Minerva  Mills Ltd.  and some  of its  creditors, have challenged  the legality of the order dated October 19, 1971 passed under section 18A of the Industries (Development and Regulation)  Act, 1951 (for short ’IDR Act’) taking over the management of the textile undertaking of the petitioner, Minerva Mills  Ltd., and  the constitutional validity of the Sick Textile  Undertakings (Nationalisation)  Act, 1974 (for short ’Nationalisation Act’).      On August  20, 1970, the Central Government appointed a Committee section  15 of  the IDR  Act to  make a  full  and complete investigation  of the  affairs of the Minerva Mills Ltd., hereinafter  referred to  as ’the  Company’. After the investigation was  made the  Central Government  by an order dated October  19, 1971,  authorised  the  National  Textile Corporation to  take over  the management of the undertaking

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of the  Company. The petitioners did not challenge the order to take  over the management before any court of law. During the pendency  of the  management of  the undertaking  by the National Textile  Coporation, the  Sick Textile Undertakings ordinance of 1974 was promulgated and it was replaced by the Nationalisation Act. Section 3(1) of the Nationalisation Act provides that  on the  appointed  day,  every  sick  textile undertak- 722 ing and  the right,  title and  interest  of  the  owner  in relation to  every such sick textile undertaking shall stand transferred to,  and shall  vest absolutely  in, the Central Government. ’Sick  textile undertaking’  has been defined in section 2(j)  of the  Nationalisation Act  as meaning, inter alia,  a   textile  undertaking,   specified  in  the  First Schedule, the  management of which has, before the appointed day, been taken over by the Central Government under the IDR Act.  The  textile  undertaking  of  the  Company  has  been specified in the First Schedule of the Nationalisation Act. So, in view of the said definition read with section 3(1) of the  Act,   the  undertaking   had  vested  in  the  Central Government.      It has  been urged by Mr. R.F. Nariman, learned Counsel appearing on  behalf of  the petitioners,  that there was no justification  for   taking  over   the  management  of  the undertaking of the Company under section 18A of the IDR Act. In support  of the  said contention, the learned Counsel has drawn our  attention to  certain facts  which will be stated presently. It appears that the Company had been running at a loss during  the years  from 1956  to 1965. The condition of the mill  further deteriorated  on account  of recession  in 1965 coupled  with labour  problems, and that continued till 1970. On  January 2,  1970, the mill had to be closed. It is the case  of the  petitioners that by dint of serious effort on the  part of  the  management  and  labour,  an  amicable agreement  was   arrived  at  between  them,  and  a  phased programme for  resumption of  production in three stages was drawn up  by the  management. The  then State  Government of Mysore was requested to sanction the guarantee of a loan for Rs.20 lacs.  By an order dated April 24, 1971 the Government sanctioned the  guarantee to  enable the  Company to raise a loan of Rs.20 lacs from the State Bank of India. In the said order it was inter alia stated follows:           "The  Government  have  carefully  considered  the           various factors  leading to  the present  state of           affairs  of   the  Mills   and  also  the  various           recommendations   made    by   the   Investigation           Committee constituted  by the  Government of India           to go into the affairs of this Mills and have come           to  the   conclusion  that  the  Mills  should  be           assisted to  raise finances  required for  working           the Mills. "      The said order was passed after the investigation under section 15  of the  IDR Act.  A few  months  thereafter,  on October 19, 1971, the order under section 18A of the IDR Act was passed  taking over the management of the undertaking of the Company on the ground that the 723 Central Government  was of  opinion that the undertaking was being managed  in a  manner  highly  detrimental  to  public interest.      It is  strenuously urged  on behalf  of the petitioners that the  order under section 18A dated October 19, 1971 was passed without  any application of mind, regard being had to the earlier  order dated  April  24,  1971  sanctioning  the

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guarantee of  a loan.  It is  submitted that  there  was  no foundation for  the finding  of the  Central Government that the undertaking of the Company was being managed in a manner highly detrimental  to public interest, for, if that was the condition of management, the Government could not sanction a guarantee for  incurring  a  loan  of  Rs.20  lacs.  It  is, accordingly, contended  that the order under section 18A was illegal and invalid. It is submitted that on this ground the nationalisation of  the undertaking of the Company should be held to  have no  basis whatsoever, for, the Nationalisation Act has  been made  applicable to  the  undertaking  of  the Company in  view of  section 2(j) of the Nationalisation Act defining ’Sick textile undertaking’.      We  are   unable  to   accept  the  contention  of  the petitioners that  the order under section 18A of the IDR Act was illegal.  It is  true that the Government sanctioned the guarantee of  a loan for Rs.20 lacs on the recommendation of the Director of Industries and Commerce of the Government of Mysore.  But,  at  the  same  time,  we  cannot  ignore  the investigation that  was made under section 15 of the IDR Act and the consequent finding of the Government on the basis of which the  management of  the undertaking of the Company was taken over  under section  18A of  the IDR Act, namely, that the affairs  of the  undertaking of  the Company  were being managed in  a manner  highly detrimental to public interest. It has  been already  found that  the undertaking  had  been running at  a loss and had to be dosed down January 2, 1970. This miserable  condition of the undertaking might be due to the mismanagement  of its affiars. The Government might have thought of  assisting the  Company to  raise a loan of Rs.20 lacs, but  that fact  or the  fact that  such  proposal  for assistance was  made for  special reasons as provided in the second proviso  to section  4 of  the Mysore  State  Aid  to Industries Act,  1959 is  not, in our opinion, sufficient to uphold the  contention of  the petitioners that there was no basis or foundation for the order under section 18A.      Moreover, it  does not appear that the petitioners were aggrieved by  the order  under section  18A inasmuch  as the same was  not challenged  in any court of law. There is some force in the contention made 724 by the  learned Additional  Soliciter General that after the lapse of several years from the date of the take-over of the management of the undertaking, the petitioners should not be allowed to challenge the validity of the order under section 18A. Apart  from this  technical objection,  the Legislature had decided  that the  undertaking of the Company was a sick textile undertaking  by including  the  same  in  the  First Schedule to  the Nationalisation  Act. There can be no doubt that the  legislative judgment  should be  looked upon  with respect and  it requires  very strong  grounds to  set it at naught. In  our opinion,  there is  no existence of any such ground.      The next  ground of  attack of  the petitioners  to the validity of  the order  under section  18A is  that  it  was vitiated as there was no direction by the Central Government under section  16 of  the IDR Act. Section 16 authorises the Central Government  to issue  directions to  the  industrial undertaking concerned  for certain purposes as are mentioned in clauses  (a) to  (d) of section 16 after an investigation under section  15 is  made and  the  Central  Government  is satisfied that  action under  section 16 is desirable. It is apparent from  section 16  that it  is not obligatory on the Central Government to issue directions for all or any of the purposes as  mentioned in  the said  section. One of the two

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grounds  for   taking  over   management  of  an  industrial undertaking, as  contained in  clause (a) of section 18A, is that the  industrial undertaking  has failed  to comply with the directions  given under section 1.6. The other ground is that,  as  contained  in  clause  (b)  of  section  18A,  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 undertaking in pursuance of  section   16)  is  being  managed  in  a  manner  highly detrimental to the scheduled industry concerned or to public interest. In  the  instant  case,  the  undertaking  of  the Company had  been taken over under clause (b) of section 18A on the  ground that  it was being managed in a manner highly detrimental to  public interest.  There  is,  therefore,  no substance  in   the  contention   made  on   behalf  of  the petitioners that  the impugned  order under  section 18A was vitiated as  no direction under section 16 was issued by the Central Government.      It is  urged on  behalf of  the petitioners that as the Company was  not supplied  with a  copy  of  the  report  of investigation before  the impugned  order under  section 18A was passed,  the respondents acted illegally in violation of the principles of natural justice, and the impugned order is liable to  be struck  down on  that ground.  In our opinion, there is no substance in this contention. The Company was 725 given  a   hearing  by   the  Investigation  Committee  and, therefore,   it    got   ample    opportunities   to    make representations  against   the  proposed  take-over.  It  is difficult to  lay down  that non-supply  of a  copy  of  the report of investigation under section 15 of the IDR Act will always occasion  a failure  of natural justice. Whether in a particular case there has been failure of natural justice or not will depend on the facts and circumstances of that case. As has been laid down by this Court in Keshav Mills Co. Ltd. v. Union  of India,  [1973] 1  SCR 380 that in certain cases where, unless  the report  is  given,  the  party  concerned cannot make  any effective  representation about  the action that Government  takes or  proposes to  take on the basis of that report,  the non-supply  of the  report may  invoke the application of  the rules  of natural justice. In that case, it was  contented by  the appellants  that they  should have been given  further hearing  by the  Government before  they took the final decision to take over their undertaking under section 18A  of the  IDR Act  and that,  in any  event, they should have  been supplied  with a copy of the report of the Investigation Committee.  One of  the grounds  that  weighed with this  Court for rejecting the contention was that since the appellants  had received  a fair  treatment and also all reasonable opportunities  to make  out their own case before the Government  they should  not  be  allowed  to  make  any grievance of  the fact  that they  were not  given a  formal notice calling upon them to show cause why their undertaking should not be taken over or that they had not been furnished with a  copy of the report. In the instant case also, as has been already  noticed, the  Company was  given a  reasonable opportunity of  being heard  by the  Investigation Committee during the investigation under section 15 of the IDR Act. In our  opinion,   the  petitioners   were  not  in  the  least prejudiced for  the non-supply  to them  of a  copy  of  the report. The  view we  take, finds  support from  some  other facts stated hereafter.      It does  not appear that the petitioners ever asked for a copy  of the  report. They  did not  also move against the order  under   section  18A   before  the   undertaking  was

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nationalised under  the Nationalisation  Act. It is the case of the  petitioners that they did not challenge the impugned order  under  section  18A  because  the  take-over  of  the management of  the undertaking  was for  a limited period of five years  and the petitioners were hopeful that they would get back the undertaking after the expiry of the said period as provided  in sub-section  (2) of  section 18A  of the IDR Act. It shows that the petitioners were not aggrieved by the said order  under section 18A, for they could not be as they had not the required minimum resources for running the mill. It is 726 stated in  the counter affidavit of the respondents that the financial  position  of  the  Company  was  adverse  in  all respects.  The  accumulated  losses  as  on  31.12.1969  was Rs.35.46 lakhs which did not include arrears of depreciation amounting to  Rs.44.06 lakhs.  The working  capital and  net wealth assumed  negative  values.  The  outstanding  secured loans amounted  to Rs.170.20  lakhs and  unsecured loans  to Rs.14.60  lakhs.   There  were   defaults  in   payment   of instalments  and   interest.  It   is  further  stated  that according to  the Investigation  Committee, the  reasons for this state of affairs was low capital base, heavy borrowings and  consequent  interest  burden  and  paucity  of  working capital.      In this connection, it may be pointed out that sometime in June 1975, after the nationalisation of the undertakings, the petitioners  including the  Company filed  separate writ petitions under  Article 226 of the Constitution in the High Court of  Karnataka challenging  the order dated October 19, 1971 under  section  18A  of  the  IDR  Act,  and  also  the constitutional validity  of  the  Nationalisaiion  Act.  All these Writ  Petitions were  dismissed by  a  learned  Single Judge of  the Karnataka  High Court  on July  8,  1976.  The appeals preferred  by some  of the petitioners including the Company were  also summarily dismissed by the Division Bench of the  said High  Court. By  an order dated March 25, 1977, the Division  Bench also dismissed applications for leave to appeal to  this Court  under Article 133 of the Constitution of India.  We are afraid, in view of the aforesaid facts the petitioners are not entitled to challenge the impugned order under section 18A.      We may now consider the challenge of the petitioners to the constitutional  validity of  the Nationalisation Act. It is  contended   on  behalf   of  the  petitioners  that  the provisions of sections 5(1), 19(3), 2 1 read with the Second Schedule, 25  and 27  impose restrictions on the exercise by the   petitioners   of   their   fundamental   right;   such restrictions  being   arbitrary  and   excessive   are   not reasonable within  the meaning  of  Article  19(6)  and  are violative of  Articles 14  and 19(1)(g) of the Constitution. It is  submitted that the Nationalisation Act containing the said provisions alters or damages the basic structure of the Constitution as  reflected in  Articles 14  and  19  of  the Constitution. Further,  it  is  submitted  that  though  the Nationalisation Act  has been included in the Ninth Schedule to the  Constitution, yet,  in view  of the decision of this Court in Waman Rao v. Union of India, [1981] 2 SCR l, as the inclusion has been made after April 24, 1973, such challenge can be made.      We  fail  to  understand  how  the  provisions  of  the Nationalisation 727 Act  can   alter  or  damage  the  basic  structure  of  the Constitution. The basic structure of the Constitution can be

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altered or  damaged by an amendment of the provisions of the Constitution. The  decision in Waman Rao’s case (supra) does not at  all support  the contention  of the  petitioners. In that case. it has been observed as follows:           "In Keshvananda  Bharati  ([1973]  Suppl.  SCR  1)           decided on  April 24,  1973 it  was  held  by  the           majority that Parliament has no power to amend the           Constitution so  as to damage or destroy its basic           or essential  features or  its basic structure. We           hold that all amendments to the Constitution which           were made  before April  24, 1973 and by which the           9th Schedule  to the Constitution was amended from           time to  time by the inclusion of various Acts and           Regulations therein, are valid and constitutional.           Amendment to  the Constitution  made on  or  after           April 24,  1973 by  which the  9th Schedule to the           Constitution was  amended from time to time by the           inclusion of various Acts and Regulations therein,           are open  to challenge on the ground that they, or           any one or more of them are beyond the constituent           power of  the Parliament  since  they  damage  the           basic or essential features of the Constitution or           its basic  structure. We do not pronounce upon the           validity   of   such   subsequent   constitutional           amendments  except   to  say   that  if   any  Act           Regulation included  in  the  9th  Schedule  by  a           Constitutional amendment  made on  or after  April           24, 1973  is saved  by Article  31A, or by Article           31C as it stood prior to its amendment by the 42nd           Amendment, the  challenge to  the validity  of the           relevant Constitutional  Amendment by  which  that           Act or  Regulation is  put in the 9th Schedule, on           the ground  that the Amendment damages or destroys           a basic  or essential  feature of the Constitution           or its  basic structure  as reflected  in Articles           14, 19 or 31, will become otiose.                (3) Article  31C of  the Constitution,  as it           stood prior  to its  amendment by section 4 of the           Constitution (42nd Amendment), Act, 1976, is valid           to the  extent to  which its constitutionality was           upheld in  Keshvananda Bharati. Article 31C, as it           stood prior  to the  Constitution (42nd Amendment)           Act does  not damage any of the basic or essential           features  of   the  Constitution   or  its   basic           structure." 728      It is  apparent from  the above  observation that  only constitutional amendments made on or after April 24, 1973 by which  Acts  or  Regulations  were  included  in  the  Ninth Schedule can  be challenged  on the  ground that they damage the basic  or essential  features of the Constitution or its basic structure.  But if any of such Acts and Regulations is saved by  Article 31A or by Article 31C as it stood prior to the  amendment  of  the  Constitution  by  the  Forty-Second Amendment.  such   challenge  on   the   ground   that   the constitutional amendment  damages or  destroys  a  basic  or essential feature of the Constitution or its basic structure as reflected  in Article  14  or  Article  19,  will  become otiose.      The Nationalisation Act has been enacted to give effect to the  policy of  the State towards securing the principles specified in  clause (b)  of Article 39 of the Constitution. Indeed, a  declaration in  that  regard  has  been  made  in section 39 of the Nationalisation Act. It was, however, open to the  petitioners to  challenge this  declaration, for, in

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Keshvananda Bhartiv.  State of  Kerala, [1973] Suppl. SCR 1, this Court  by a  majority struck  down the  second part  of Article  31C  of  the  Constitution,  namely,  "and  no  law containing a  declaration that  it is  for giving  effect to such policy, shall be called in question in any court on the ground that  it does  not give  effect to  such policy."  No contention has,  however, been  advanced before us on behalf of the  petitioners that  the Nationalisation  Act does  not give effect  to the policy of the State towards securing the principles  specified   in  clause  (b)  of  Article  39  of Constitution. The  reason why  no such  contention has  been made  is   obvious   in   view   of   the   objectives   the Nationalisation Act  seeks to achieve. It cannot be gainsaid that textile industries constitute material resources of the community and  any setback  or fall  in  the  production  of textile goods  will have  adverse  effect  on  the  national economy and  also cause hardship to the people. It is with a view to  re-organising and  rehabilitating the  sick textile undertakings so as to subserve the in terests of the general public  by   the  augmentation   of   the   production   and distribution, at  fair prices,  of  different  varieties  of cloth and  yarn, and  for  matters  connected  therewith  or incidental thereto,  as stated  in the  preamble,  that  the Nationalisation Act has been enacted. We have considered the different provisions  of the  Nationalisation  Act  and  are satisfied that  it gives  effect to  the policy of the State towards securing  the ownership  and control of the material resources of the community, which are so distributed as best to subserve  the common  good. In  the circumstances, as the Nationalisation Act  comes under  the protective umbrella of Article 31C,  the petitioners  are not entitled to challenge the  constitutional   validity  thereof  on  the  ground  of violation of  the provisions  of Articles  14 and  19 of the Constitution. 729      The  learned  counsel  for  the  petitioners,  however, submits that  in spite  of the fact that the Nationalisation Act has been included in the Ninth Schedule, the petitioners are entitled to challenge the constitutional validity of the provisions  of  the  Nationalisation  Act  as  violative  of Articles 14  and 19 of the Constitution. It has been already noticed that  the Nationalisation  Act fall  squarely within the ambit  of Article  31C and,  consequently, none  of  its provisions can  be challenged  on the ground of violation of Article 14  or Article 19 of the Constitution. Much reliance has, however,  been placed  by the petitioners on a majority decision of  this Court  in Bhim  Singhji v. Union of India. AIR 1981  SC 234.  In that  case, the question that has been considered relates  to whether  the Urban  Land (Ceiling and Regulation) Act,  1976 furthers  the Directive Principles of State Policy  in clauses  (b) and  (c) of  Article 39 of the Constitution. It has been held by the majority consisting of Chandrachud C.J.,  P.N. Bhagwati  J. (as  he then  was)  and Krishan Iyer J. that the said Act implements or achieves the purposes of  clauses (b)  and (c) of Article 39 and is valid except that  section 27(1)  of the  said Act in so far as it imposes  a   restriction  on   transfer  of   any  urban  or urbanisable land  with a  building or a portion only of such building which  is within  the ceiling  area, is invalid. It has been  observed by  Chandrachud C.J., with whom Bhagwati, J.  concurs,   that  fuller   reasons  will   follow  later. Subsequently, a  judgment has  been delivered by Chandrachud C.J., for himself and Bhagwati J. (AIR 1985 SC 1650) wherein it has been inter alia observed as follows:           "We have  gone through  Krishna Iyer  J’s judgment

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         closely and find that there is nothing that we can           usefully add to it."      In other  words the  learned Chief Justice and Bhagwati J. have adopted the reasons given by Krishna Iyer J.      The learned  Counsel for  the petitioners has drawn our attention to  the fact  that none of the Judges constituting the majority, including Krishna Iyer J. has given any reason for striking down the provision of section 27(1) of the said Act. It  is  submitted  that  the  majority  judgment  is  a precedent for  the proposition  that even  though a  statute comes within the purview of Article 31C of the Constitution, yet its  validity can  be challenged  on the  ground of  its violation of  Article 14  or Article 19 of the Constitution. It is  contended that  in view  of Bhim  Singhji’s case,  we cannot take  any view  other  than  the  view  that  such  a challenge can be made 730      In support of the above contention, the learned Counsel for the petitioners has placed reliance upon the decision of the Court  of Ap  peal in Harper and others v. National Coal Board, [1974]  2 ALL  ER 441.  In that  case, the  Court  of Appeal had  to consider the propriety of the judgment of the learned Trial  Judge, who based his decision on the speeches in the  House of  Lords in Central Asbestos Co. Ltd v. Dodd. [1972] 2 ALL ER 1135. In Dodd’s case the House of Lords by a majority of  3 to  2 affirmed  the majority  decision of the Court of  Appeal that  time did not begin to run against the plaintiff under  section 1(3)  of the  Limitation Act,  1963 until he  discovered that  he  had  a  worthwhile  cause  of action. Of the three Judges, who constituted the majority of the House  of Lords,  two took  the same  view of the law as that taken by the majority of the Court of Appeal, while the third took  another view  of the  law  which.  in  substance accorded with  that of  minority of the House, that is, that time began  to  run  under  section  1(3)  as  soon  as  the plaintiff knew  of the  facts on which his action was based. The question  that had  to be  considered by  the  Court  of Appeal was  whether it  was bound  by the  reasoning in  the speeches of  the House  of Lords  in Dodd’s  case.  In  that contention, Lord Denning MR observed as follows:           "How then do we stand on the law? We have listened           to a  most helpful  discussion by  counsel for the           proposed plaintiffs  on the doctrine of precedent.           One thing  is clear.  We can only accept a line of           reasoning which  supports the  actual decision  of           the House  of Lords.  By  no  possibility  can  we           accept any reasoning which would show the decision           itself to  be wrong.  The  second  proposition  is           that, if  we can  discover the  reasoning on which           the majority  based their decision, then we should           accept  that   as  binding   on  us.   The   third           proposition  is  that,  if  we  can  discover  the           reasoning  on   which  the   minority  base  their           decision, we  should reject  it. It  must be wrong           be-cause it  led them  to the  wrong  result.  The           fourth proposition  is that  if we cannot discover           the reasoning  on which  the majority  based their           decision we  are not  bound by  it. We are free to           adopt any  reasoning which  appears to  us  to  be           correct,  so   long  as  it  supports  the  actual           decision of the House."      We fail  to understand  how the  above observation lend any sup port to the contention of the petitioners. The Court of Appeal  was considering  the same point as was before the House of Lords in Dodd’s

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731 case. The question was whether the Court of Appeal was bound to adopt  the same  reasoning as  in Dodd’s  case and it was held that  since there  was no  discernible ratio  decidendi common to the speeches in the House of Lords in Dodd’s case, the Court  of Appeal was not bound by the reasoning in those speeches and  was free to adopt any reasoning which appeared to the  Court to  be correct  provided that it supported the actual decision  of the  House. In  the instant case, we are not considering  the question of the constitutional validity of section  27(1) of Urban Land (Ceiling and Regulation) Act and, therefore,  it is  quite  irrelevant  for  our  purpose whether any  reason  was  given  by  the  majority  in  Bhim Singhji’s case (supra) or not.      In view  of our  decision that  the Nationalisation Act comes within the purview of Article 31C of the Constitution, we do  not think  we are  called upon to adjudicate upon the contention of the petitioners that some of the provisions of the Nationalisation  Act are violative of Articles 14 and 19 of the Constitution.      The only  contention of the petitioners that remains to be considered  is that  the respondents have illegally taken over possession of the vacant land belonging to the Company. It is  the case of the petitioners that out of the land, the mill premises comprises 34.78 acres and the rest of the land measuring 17.52  acres was  and is vacant land. It is not in dispute that  the said 17.52 acres of land is situate within the  mill  compound  and  except  4.37  acres  thereof,  the remaining 13.57 acres of land including the said 4.37 acres, is unrelated  to and unconnected with the undertaking of the Company and,  accordingly, it  did not  vest in  the Central Government under the Nationalisation Act. It is also pointed out on  behalf of  the petitioners  that the vacant land has not been  utilised by  the National  Textile Corporation for any purpose  of the  undertaking. It  is urged  that as  the vacant land was illegally and wrongfully taken possession of by the  National Textile  Corporation, although the same had not vested  in the  Central Government,  the same  should be released and  given back to the Company. In any event, it is submitted on  behalf of  the petitioners  that possession of the said  4.37 acres of land which does not form part of the compact block  of the  vacant  land  measuring  13.57  acres should be delivered back to the petitioners.      The respondents  in their  affidavit in opposition have denied and  disputed the  contention of the petitioners that the said 17.52 acres or the said 4.37 acres of land does not form part of the sick textile under- 732 taking. It  is the  case of  the respondents that except the land measuring  4 acres  14 Gunthas (stated to be equivalent to 4.37  acres) the rest of the land forms one compact block in  which   the  buildings,   office  and  quarters  of  the undertaking  are  situate.  Further  it  is  said  that  the National Textile Corporation has a programme for locating an institution to  train the  technical personnel  and to build quarters as  a welfare  measure  and,  necessarily,  such  a complex must  have vacant  land to  implement the  expansion programme. Accordingly,  it is  contended by the respondents that even  the vacant land measuring 4 acres 14 Gunthas form an integral part of the textile undertaking.      It has  already been noticed that the whole of the said 17.52 acres of land including 4.37 acres thereof, is situate within the  mill compound.  We  are  unable  to  accept  the contention of  the petitioners  that as  the land  is  lying vacant since  the take  over, it  does not  form part of the

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undertaking. Under  section 4(1) of the Nationalisation Act, the sick  textile undertaking shall be deemed to include all properties,  movable   and   immovable,   including   lands, buildings,  workshops,   stores,  etc.   in  the  ownership, possession, power  or control  of  the  owner  of  the  sick textile undertaking.  In view  of the  said provision, it is difficult to  accept the  contention of the petitioners that the vacant  land is not a part of the undertaking. It may be that the  said 17.52 acres of land or the said portion of it measuring 4.37  acres has  not been put to any use, but that will not entitle the petitioners to claim that possession of the   land should  be delivered  back to  the Company.  The question whether the vacant land has been in use, is not, in our opinion,  relevant for  the purpose  of section 4(1). It is, therefore,  difficult for us to accept the contention of the petitioners  that the  vacant land  is unrelated  to and unconnected with the textile undertaking.      The learned  counsel for  the  petitioners  has  placed reliance upon  an observation  of  this  Court  in  National Textile Corporation  Ltd. and  others etc.  v. Sitaram Mills Ltd. and  others, AIR  1986 SC  1234. The  question that was involved in  that case  was  whether  surplus  land  in  the precinct of  the taken-over  undertaking  was  an  asset  in relation to  the undertaking.  It was  observed "The test is whether it  was held  for the  benefit of, and utilised for, the textile  mill". Relying  upon this  observation,  it  is contended by the learned counsel for the petitioners that as the vacant  land, in the instant case, has not been utilised for the  undertaking, it is not an asset of the undertaking. We do not think that in Sitaram Mills case this Court really meant to  lay down  a proposition that in order that a piece of land  to be  considered  as  the  asset  of  the  textile undertaking, it must be held for the benefit of and utilised for 733 the undertaking  in question. Can it be said that a piece of land which  is held  for the benefit of but not utilised for the textile  undertaking, as  in the instant case, is not an asset  of  the  undertaking?  The  answer  must  be  in  the negative. In Sitaram Mills case that observation was made in the context  of facts of that case, namely, that the surplus land was  held for  the benefit of and also utilised for the textile undertaking.      We do  not think  that the said observation in the case of Sitaram  Mills case is of any help to the petitioners. We hold that  the whole  of the  said 17.52 acres of land forms part of  the textile  undertaking of  the Company.  No other point has been urged in these writ petitions.      For the reasons aforesaid, all these writ petitions are dismissed. There will however. be no order for costs. M.L.A.                                  Petitions dismissed. 734