{"id":174658,"date":"2004-04-05T00:00:00","date_gmt":"2004-04-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/national-textile-corpn-ltd-ors-vs-ms-haribox-swalram-ors-on-5-april-2004"},"modified":"2015-01-25T00:37:00","modified_gmt":"2015-01-24T19:07:00","slug":"national-textile-corpn-ltd-ors-vs-ms-haribox-swalram-ors-on-5-april-2004","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/national-textile-corpn-ltd-ors-vs-ms-haribox-swalram-ors-on-5-april-2004","title":{"rendered":"National Textile Corpn. Ltd. & Ors vs M\/S Haribox Swalram & Ors on 5 April, 2004"},"content":{"rendered":"
Supreme Court of India<\/div>\n
National Textile Corpn. Ltd. & Ors vs M\/S Haribox Swalram & Ors on 5 April, 2004<\/div>\n
Author: G Mathur<\/div>\n
Bench: S. Rajendra Babu, G.P. Mathur.<\/div>\n
           CASE NO.:\nAppeal (civil)  3142-43 of 2002\n\nPETITIONER:\nNational Textile Corpn. Ltd. & Ors.\n\nRESPONDENT:\nM\/s Haribox Swalram & Ors.\n\nDATE OF JUDGMENT: 05\/04\/2004\n\nBENCH:\nS. Rajendra Babu & G.P. Mathur.\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
(With CA No.3144 of 2002)<\/p>\n
G.P. MATHUR,J.\n<\/p>\n
\tThese appeals by special leave have been preferred against the
\njudgment and order dated 4.8.2000 of a Division Bench of Calcutta High
\nCourt, whereby the appeal  preferred by respondent nos. 1 and 2 was
\nallowed,  the order dated 11.4.1997 of the learned single Judge dismissing
\nthe writ petition was set aside and the writ petition was disposed of with
\ncertain directions.\n<\/p>\n
2.\tThe respondent nos. 2 and 3 filed the writ petition praying that a writ
\nof mandamus be issued  commanding the appellant herein to produce the
\nentire records relating to the withholding of delivery of goods pursuant to
\nthe contracts mentioned in Annexure-A to the writ petition and also to
\ndeliver the goods mentioned in Annexure-A upon adjustment of advance
\npayment made by them.  A further prayer was made that the  appellants
\nherein be directed to take a final decision as envisaged in the letter dated
\n24.10.1989 (Annexure A to the writ petition) and an injunction be issued
\nrestraining the appellants from transferring, dealing with or disposing of
\ngoods pursuant to the contracts mentioned in Annexure-A in any manner
\nwithout keeping the goods which are to be supplied to writ petitioner no.1.\n<\/p>\n
3.\tThe case set up in the writ petition is as follows. The writ petitioners
\nhad been purchasing various quantities of cloth from Finlay Mills Limited
\nand Gold Mohur Mills Limited, both situate in Bombay.  The petitioners
\nentered into contracts specified in Annexure-A to the writ petition and made
\nadvance payment against the same.  The concerned mills supplied and
\ndelivered the goods to the petitioners from time to time but a substantial part
\nof the contract remained unexecuted.  By the letter dated 26.9.1993 the mills
\nwere requested to take necessary steps for immediate delivery of the goods,
\nin respect whereof payment had already been made.  The mills vide their
\nletter dated 29.9.1993 intimated that deliveries could not be effected as the
\nbanking transaction and accounts of the mills had been frozen, but assured
\nthat arrangements were being made to deliver the goods as early as possible.
\nThe management of the mills was taken over by the Central Government on
\n18.10.1993 under Textile Undertakings (Taking Over of Management)
\nOrdinance, 1983 which was subsequently replaced by Textile Undertakings
\n(Taking Over of Management) Act, 1993 on 25.12.1993.  The Central
\nGovernment constituted National Textile Corporation (South Maharashtra)
\nLimited for the purpose of managing the textile undertakings which in turn
\nas  additional custodian took over the management of the two textile
\nundertakings.  The writ petitioners, thereafter approached the appellants for
\nrelease of the goods and one bale of contractual specification was delivered
\nbut 12 bales were detained by the Excise Authorities,  as a consequence
\nwhereof the same were not delivered. The National Textile Corporation
\n(South Maharashtra) vide their letter dated 15.3.1984 requested the Officer
\non Special Duty of taken over mills including Gold Mohur Mills  and Gold
\nMohur Mills to furnish particulars in prescribed proforma to enable it to take
\nup the matter with the Central Government for taking action under section
\n11(1) of the Act for the purpose of cancelling or varying any contract or
\nagreement entered prior to pre-take over period which action had to be taken
\non or before 14.4.1984.  After giving a reasonable opportunity of hearing to
\nthe parties concerned. the textile mills called upon the writ petitioners to
\nverify the pre-take over  contracts and joint meetings took place for the said
\npurpose  and the matter was referred back to the Officer on Special Duty.
\nThe writ petitioners then vide their letter dated 13.10.1984 requested the
\nChairman-cum-Managing Director of National Textile Corporation (South
\nMaharashtra) Ltd. to deliver the balance quantity of cloth in terms of the
\npending contracts and to adjust all sums of money which had been paid by
\nway of advance.  The appellants sent a reply on 7.11.1994 stating that (1) all
\nthe outstanding contracts had been cancelled on the date of take over as they
\nwere not binding upon them; (2) the deposits that were made with the
\nerstwhile management were not  specifically marked towards any of invoice
\nof packed  material and as such could not be adjusted against any future
\ndelivery and the writ petitioners will have to claim this amount from the
\nerstwhile management since the custodian is prohibited from discharging
\nany liability pertaining to pre-take over period; and (3) there were no
\ninvoices against which payments were received from the petitioners prior to
\ntake over and as such the question of effecting delivery of paid stocks did
\nnot arise.  The writ petitioners made several representations and they were
\ninformed by the letter dated 4.10.1989 that the matter relating to delivery of
\ncloth in pursuance of pre-take over contracts was under active consideration.
\nHowever, no delivery was effected.  The writ petition was thereafter filed in
\nDecember, 1989 seeking the reliefs  mentioned in the earlier part of the
\njudgment.\n<\/p>\n
4.\tThe writ petition was contested on behalf of the appellants herein and
\nthe Principal Officer of National Textile Corporation (South Maharashtra)
\nLtd. filed a detailed counter-affidavit.  Certain  pleas  taken in para 3 of the
\ncounter affidavit have an important bearing and therefore the same is being
\nreproduced below:\n<\/p>\n
“Para3.\tAt the outset I state as follows :-\n<\/p>\n
a)\tThe writ petition being directed to obtain specific
\nperformance of the disputed contracts and further
\nclaiming a decree for the same which can and should be
\nobtained by filing a regular suit, further the same being
\nconcerned with very many  disputed questions of facts,
\nthis application to by pass the said usual procedure of suit
\nis not maintainable and ought to be dismissed on that
\nground.\n<\/p>\n
b)\tThe contract in question admittedly having been entered
\ninto at Bombay, with companies situate at Bombay,
\nrelating to goods to be delivered from Bombay and the
\npayment in respect thereof were required to be made at
\nBombay and some part whereof having in fact been paid
\nat Bombay, the entirety of the cause of action being the
\nsubject matter of the writ petition had arisen, if at all,
\nwithin the jurisdiction of the Bombay High Court.\n<\/p>\n
Accordingly the instant writ petition seeking to enforce
\nsuch cause of action which has arisen wholly outside the
\nsaid jurisdiction is not enforceable at the High Court at
\nCalcutta, neither the High Court of Calcutta has
\njurisdiction over the same.   Hence, the application is
\nmisconceived and not maintainable.\n<\/p>\n
c)\tAdmittedly, the cause of action contained in the writ
\npetition having arisen in 1983 when the Take Over Act
\ncame into force and sought to be enforced in 1989 after
\nexpiry of long six years, is clearly belated.   The
\napplicant being also guilty of latches no relief should be
\ngranted in a writ petition which only helps the vigilant
\nbut not the ident.   Besides, the application is also barred
\nby the law of limitation and ought liable to be rejected.”\n<\/p>\n
\tIt was further pleaded that on the appointed date no goods
\nmanufactured, earmarked and ready for delivery as claimed by the writ
\npetitioners were lying and as such there was no question of delivery of any
\nremaining goods under any alleged contract.  Whatever goods were
\ndelivered to the writ petitioners, the same had been earmarked for them as
\ninvoices in respect whereof had already been issued for which payments had
\nbeen received earlier and title in respect whereof had already  passed on to
\nthe writ petitioners.  Similar procedure had been adopted in respect of many
\nothers and cloth was delivered to them which were lying manufactured in
\ntheir account.  However, there was no liability to deliver any further goods.
\nThe respondents had not received any advance payment as alleged by the
\nwrit petitioners.  It was further pleaded that the respondents under the
\nprovisions of the Act were not liable to deliver any further goods under any
\nalleged contract for the pre-take over period in respect whereof no title had
\npassed on to the writ petitioners.  It was specifically denied that other
\ndealers, similarly situate, had been delivered any goods in respect of pre-take
\nover contracts and a uniform principle was adopted in this regard.  No
\ninvoices had been raised in respect of any alleged balance goods of a pre-
\ntake over period. It was also pleaded that the payments, if any, alleged to
\nhave been made by the writ petitioners were in fact made to the erstwhile
\ncompany and the writ petitioners were at liberty to recover the same from
\nthem but the respondents were not liable to pay back any amount or to
\ndeliver any goods.  It was also asserted that the respondents had been
\ndischarged of every liability of any kind for the pre-take over period.  The
\nother allegations made in the writ petitions were also denied.\n<\/p>\n
5.\tAfter exchange of affidavits the hearing of the writ petition
\ncommenced before a learned Single Judge on 14.6.1990 and finally
\njudgment was reserved on 5.12.1990.  However, after considerable period of
\ntime the writ petition was released by the learned Single Judge.  Thereafter
\nsometime in 1995 the writ petitioners made a prayer to file a supplementary
\naffidavit for the purpose of  bringing on record a letter dated 24.10.1989
\nallegedly written by the Chairman-cum-Managing Director, National Textile
\nCorporation which was addressed to the Joint Secretary, Ministry of Textile,
\nGovernment of India.  The prayer was strongly opposed on behalf of the
\nappellants herein.  The learned Single Judge by his order dated 17.1.1995
\ngranted permission for filing of a supplementary affidavit  and affidavit-in-
\nopposition, if any.  Thereafter, the writ petitioners filed an affidavit annexing
\ntherewith a copy of a letter dated 24.10.1989 purported to have been written
\nby Mr. Sundaram Chairman-cum-Managing Director, National Textile
\nCorporation to Shri Saptharishi, Joint Secretary, Ministry of Textile,
\nGovernment of India.  The letter makes a reference to the representation
\nmade by the writ petitioners and two other firms regarding delivery of cotton
\nfabrics by Finlay Mills and Gold Mohur Mills against pre-take over
\ncontracts.  It states that the matter had been examined at their end and the
\nposition of contract balance as per the party and the contract balance as per
\nthe mills was as detailed in Annexure-A enclosed to the letter.  It is further
\nmentioned therein that the position could not be certified as absolutely
\ncorrect as most of the original records and documents were in possession of
\nCBI. It goes on to say that after taking over of the  management, all the
\ncontracts for  supply had not been subsequently cancelled and\/or varied by
\nthe Additional Custodian at any time. If the request was to be considered, all
\nparties similarly situated will have to be treated on the same footing and
\naccordingly deliveries to the extent of Rs.101.72 lakhs  will have to be
\neffected to 224 parties of eight taken-over textile  mills without receiving
\nany demand.  At the end of the letter it is stated that though the party had
\nraised a dispute  promptly  the question whether a parties’ claim had to be
\nacceded to now after a lapse of six years  raised a point of proprietary and
\nalso  loss of Rs. 40.70 lakhs to NTC.  In the concluding portion of  the letter
\nit is mentioned that although the party had raised a fairly arguable case, the
\nbest course of action would be to obtain a judicial pronouncement in the
\nmatter so as to avoid any possible future objection from audit or from
\npropriety angle.  In the Annexure to the letter  the credit balance of the writ
\npetitioners as on 18.10.89 was shown as Rs.10,47,145.33 as against Finlay
\nMills  and Rs.21,89,056.26 as against Gold Mohur Mills.
\n6      An affidavit in reply was  filed to the aforesaid supplementary affidavit
\nand it was submitted that the writ petitioners were put to strict proof of the
\nletter dated 24.10.1989 as the same was alleged to have been given to them
\nby Mr. Sundaram without disclosing the reason for doing so. The letter was
\na confidential internal communication and there was no occasion for Mr.
\nSundaram to hand over a copy of the same to the writ petitioners especially
\nwhen he (Mr Sundaram) had left employment of National Textile
\nCorporation  (South Maharahstra) Ltd. in December, 1992.  The letter was at
\nbest comment or opinion of Mr. Sundaram and was contrary to the opinion
\nof the Attorney-General to the effect that the alleged contracts were not
\ngenuine.  A copy of the opinion of the Attorney-General was also annexed.
\nIt was also pleaded that the Government of India had not accepted   the
\nalleged claim of the writ petitioners and had in fact launched prosecution
\nagainst the Principal Officer of respondent no.4 for giving delivery of  stocks
\nto several parties after the date of taking over.  It was further pleaded that the
\nletter cannot be taken as an admission of the alleged claim of the writ
\npetitioners under any circumstances.\n<\/p>\n
7.\tThe learned Single Judge held that the contract sought to be relied
\nupon by the writ petitioners was doubtful as it did not signify the assent of
\nthe concerned mills.  Whether sale contracts were made in the manner
\nindicated and were acted upon by the mills concerned was a question of fact
\nwhich had to be established by evidence.  There was no evidence on record
\nof the case  to establish the contract.  Similarly no attempt had been made by
\nthe writ petitioners to establish independently that a sum in excess of Rs. 40
\nlakhs was lying to the credit of the concerned mills.  In fact there was no
\nassertion to that effect  in the writ petition and no particulars of such
\nadvance had been furnished. It was also held that the respondents in the writ
\npetition  were not in  picture at the time the invoices, which had been relied
\nupon, were prepared and it was the management which was in control of the
\nconcerned mills before the take over period and therefore in such
\ncircumstances it was obligatory on the part of the writ petitioners to prove
\nthe facts  but no attempt  to that effect had been made except relying upon
\nthe letter of the concerned mills of September, 1983.  The learned Single
\nJudge also held that he had directed the writ petitioners to produce the
\noriginal of the pending contracts but they failed to comply with the said
\ndirection.  They merely handed over a zerox copy of the contract of sale of
\ncotton cloth which only contained the  signature of the buyer and not of the
\nseller.  This zerox copy produced  was of a printed  proforma wherein the
\nwords “The Gold Mohur” had been typed before the printed words “Mills
\nLtd.”  Even this document did not  make any mention of any payment
\nhaving been  made by way of advance nor it mentioned that any credit
\nbalance lying with the mills should be appropriated towards the contract.
\nThe learned Judge further held that the respondents had disowned their
\nobligation to deliver the goods in November, 1984 but the writ petition was
\nfiled after more than five years and even if the period of limitation was taken
\nto be that of a civil suit, the writ petition was barred by limitation.  The
\nlearned Judge then considered in detail the effect of   sub-section (7) of
\nsection 3, and sections 6 and 11 and other provisions of the Act and held that
\nall contracts relating to the management of the business and all contracts
\nrelating to the management of the  affairs of the Textile Undertaking stood
\nterminated on the appointed day and consequently the Central Government
\nor the Custodian were neither obliged to discharge the contractual
\nobligations by effecting deliveries, nor they were obliged to give any
\nadjustments of the advances said to have been made.  Regarding the letter
\ndated 24.10.1989 it was held that the letter itself mentions that the facts
\nstated therein could not be verified as most of the original records and
\ndocuments had been seized and were lying in possession of CBI.  That apart,
\nthe object of the letter was not to admit any liability or obligation but an
\nopinion was expressed that the best course of action was  to obtain a judicial
\npronouncement in the matter.  Finally, the learned Single Judge held that the
\nentire cause of action accrued in Bombay and therefore the High Court of
\nCalcutta had no jurisdiction to entertain the writ petition. On these findings
\nthe writ petition was dismissed.\n<\/p>\n
8.\tFeeling aggrieved by the judgment and order of the learned Single
\nJudge  the writ petitioners preferred an appeal before the Division Bench of
\nthe Calcutta High Court.  The Division Bench held that Calcutta High Court
\nhad the jurisdiction to hear the matter as part of cause  of action accrued
\nthere.  On merits it was held that  ordinarily a writ of mandamus cannot be
\nissued for  specific performance of a contract yet there is no absolute bar in
\ndoing so.  The Bench went on to hold that whether in fact there existed any
\ncontract or not would be a question of fact and having regard to the fact that
\nthe State has a statutory duty to perform the contract the appeal was disposed
\nof with the following direction:\n<\/p>\n
\t“In a situation of this nature, we are of the opinion
\nthat interest of justice would be subserved if the present
\nincumbent of the post of Chairman-cum-Managing
\nDirector gives an  opportunity of hearing to the
\npetitioners and try to sort out the differences before the
\nparties across the table.  We do not intend to go into the
\nmerit of the matter so as to arrive at a finding one way or
\nthe other as to whether the existence of contract had been
\nproved or not but by  moulding the reliefs, we are of the
\nopinion that even if it be found that it is not possible for
\nthe respondent no.2 to supply the goods to the petitioners,
\nwe have no doubt in our mind that in the event it is found
\nthat a sum of Rs.40 lakhs is lying in its hand, steps
\nshould be taken for its refund as expeditiously as possible
\nand upon payment of interest @ Rs.12% p.a.”\n<\/p>\n
9.\tShri Kirit N. Raval, learned Solicitor General appearing for the
\nappellants, has strenuously urged that no part of cause of action had accrued
\nin Calcutta as the Textile Mills were situate in Bombay and supply was to be
\nmade ex-factory at Bombay and the alleged payment by the writ petitioners
\nwas also made at the said place.  It has thus been urged that it is not a case
\nwhere even a part of cause of action may have accrued in the State of West
\nBengal which could enable the Calcutta High Court to entertain the writ
\npetition and to grant any relief to the writ petitioners.  Shri G.C.Bharuka,
\nlearned senior counsel appearing for the respondents herein (writ petitioners)
\nhas submitted that the writ petitioners were carrying on  business at Calcutta,
\nthe letters  were sent by them from Calcutta and replies to the same had also
\nbeen received by them at Calcutta and therefore part of cause of action had
\naccrued in the State of West Bengal and consequently the view taken by the
\nDivision Bench of the High Court that it had jurisdiction to entertain the writ
\npetition was perfectly correctly.\n<\/p>\n
10.\tUnder Clause (2) of Article 226 of the Constitution, the High Court is
\nempowered to issue writs, orders or directions to any Government, authority
\nor person exercising jurisdiction in relation to the territories within which the
\ncause of action, wholly or in part, arises for the exercise of such power,
\nnotwithstanding that the seat of such Government or authority or the
\nresidence of such person is not within those territories.    Cause of action as
\nunderstood in the civil proceedings means every fact which, if traversed, it
\nwould be necessary for the plaintiff to prove in order to support his right to a
\njudgment of the Court.   To put it in a different way, it is bundle of facts
\nwhich taken with law applicable to them, gives the plaintiff a right to relief
\nagainst the defendant.  In Union of India v. Adani Exports Ltd. AIR<\/a> 2002 SC
\n126 in the context of clause (2) of Article 226 of the Constitution, it has been
\nexplained that each and every fact pleaded in the writ petition does not ipso
\nfacto lead to the conclusion that those facts give rise to a cause of action
\nwithin the Court’s territorial jurisdiction unless those facts pleaded are such
\nwhich have a nexus or relevance with the lis that is involved in the case.
\nFacts which have no bearing with the lis or dispute involved in the case, do
\nnot give rise to a cause of action so as to confer territorial jurisdiction on the
\nCourt concerned.   A similar question was examined in State of Rajasthan v.
\nM\/s Swaika Properties AIR<\/a> 1985 SC 1289.   Here certain properties
\nbelonging to a company which had its registered office in Calcutta were
\nsought to be acquired in Jaipur and a notice under Section 52 of the
\nRajasthan Urban Improvement Act was served upon the company at
\nCalcutta.   The question which arose for consideration was whether the
\nservice of notice at the head office of the company at Calcutta could give
\nrise to a cause of action within the State of West Bengal to enable the
\nCalcutta High Court to exercise jurisdiction in a matter where challenge to
\nacquisition proceedings conducted in Jaipur was made.   It was held that the
\nentire cause of action culminating in the acquisition of the land under
\nSection 152 of the Rajasthan Act arose within the territorial jurisdiction of
\nthe Rajasthan High Court and it was not necessary for the company to plead
\nthe service of notice upon them at Calcutta for grant of appropriate writ,
\norder or direction under Article 226 of the Constitution for quashing the
\nnotice issued by the Rajasthan Government under Section 52 of the Act.   It
\nwas thus held that Calcutta High Court had no jurisdiction to entertain the
\nwrit petition.\n<\/p>\n
11.\tThe question of jurisdiction was considered in considerable detail in
\nOil and Natural Gas Commission v. Utpal Kumar Basu<\/a> 1994 (4) SCC 711
\nand it was held that merely because the writ petitioner submitted the tender
\nand made representations from Calcutta in response to an advertisement
\ninviting tenders which were to be considered at New Delhi and the work was
\nto be performed in Hazira (Gujarat) and also received replies to the fax
\nmessages at Calcutta, could not constitute facts forming an integral part of
\ncause of action.   It was further held that the High Court could not assume
\njurisdiction on the ground that the writ petitioner resides in or carries on
\nbusiness from a registered office in the State of West Bengal.\n<\/p>\n
12.\tIn the present case, the textile mills are situate in Bombay and the
\nsupply of cloth was to be made by them ex-factory at Bombay.   According
\nto the writ petitioners, the money was paid to the mills at Bombay.   The
\nlearned Single Judge after a detailed discussion of the matter held that the
\nCalcutta High Court had no jurisdiction to entertain the writ petition.   The
\nDivision Bench has reversed this finding on the ground that concluded
\ncontract had come into existence which could be cancelled only after giving
\nan opportunity of hearing and consequently the question of revocation of the
\ncontract at its Calcutta address would constitute a cause of action.   In our
\nopinion, the view taken by the Division Bench is wholly erroneous in law.
\nIt was nowhere pleaded in the writ petition that the appellant herein had
\ninitiated any action under Section 11 of the Act by issuing any notice to the
\nwrit petitioner for cancellation of the contract.   In fact, it is stated in para 18
\nof the petition that the Central Government did not follow the procedure
\nprescribed in Section 11 for cancellation of contract.   Regarding the
\njurisdiction of the Calcutta High Court, the relevant statement was made in
\npara 73 of the writ petition wherein it was stated as under :
\n“73.\t  Your petitioner carries on business and maintains all
\naccounts at the aforesaid place of business within the
\njurisdiction.    Your petitioner states that by reason of the
\naforesaid, your petitioners have suffered loss and damage at its
\nsaid place of business within the jurisdiction.   All notices and
\ncorrespondences referred to herein-above addressed to your
\npetitioner has been received by your petitioner at your
\npetitioner’s place of business within the jurisdiction.   In the
\ncircumstances this Hon’ble Court has the jurisdiction to
\nentertain the present application.”\n<\/p>\n
\tAs discussed earlier, the mere fact that the writ petitioner carries on
\nbusiness at Calcutta or that the reply to the correspondence made by it was
\nreceived at Calcutta is not an integral part of the cause of action and,
\ntherefore, the Calcutta High Court had no jurisdiction to entertain the writ
\npetition and the view to the contrary taken by the Division Bench cannot be
\nsustained.   In view of the above finding, the writ petition is liable to be
\ndismissed.  However, in order to avoid any further harassment to the parties
\nand to put an end to the litigation, we would examine the matter on merits as
\nwell.\n<\/p>\n
13.\tChapter II of the Textile Undertakings (Taking over of Management)
\nAct, 1983 deals with Taking Over Of The Management Of Certain Textile
\nUndertakings.  Sub-section (1) of Section 3 lays down that on and from the
\nappointed day, the management of all the textile undertakings shall vest in
\nthe Central Government.   Sub-section (7) of Section 3 is important and it
\nreads as under :\n<\/p>\n
Section 3 (7):      For the removal of doubts, it is hereby
\ndeclared that any liability incurred by a textile company in
\nrelation to the textile undertaking before the appointed day shall
\nbe enforceable against the concerned textile company and not
\nagainst the Central Government or the Custodian.\n<\/p>\n
\tThis provision is very clear and says in no uncertain terms that any
\nliability incurred by a textile company in relation to the textile undertaking
\nshall not be enforceable against the Central Government or the custodian.
\nThe effect of this provision was examined in Rashtriya Mill Mazdoor Sangh
\nv. National Textile Corporation (South Maharashtra) Ltd.<\/a> 1996 (1) SCC 313
\nwhere the question of payment of gratuity of a workman who left the
\nemployment just a few months before “the appointed day” came up for
\nconsideration.   It was held that the language of sub-section (7)  of Section 3
\nis clear and unambiguous inasmuch as in the said provision it has been
\ndeclared that any liability incurred by the textile company in relation to the
\ntextile undertaking before the appointed day shall be enforceable against the
\ntextile company concerned and not against the Central Government or the
\nCustodian.   It was also held that the words “any liability” in sub-section (7)
\nof Section 3 are of wide amplitude to cover every liability that was incurred
\nby the textile company in relation to the textile undertaking before the
\nappointed day. The Court thus rejected the contention that sub-section (7) of
\nSection 3 must be so construed as to exclude its applicability in respect of
\nliability for payment of gratuity under the Payment of Gratuity Act.   The
\nCourt also examined the provisions of the Textile Undertakings
\n(Nationalisation) Ordinance, 1995 (Ordinance No.6 of 1995) which was later
\non replaced by the Textile Undertakings (Nationalisation) Act, 1995) and
\nheld as under :\n<\/p>\n
\t“The provisions of Ordinance 6 of 1995 also show that
\nthe liabilities for the period prior to the take-over of the
\nmanagement are to be discharged from the amount payable to
\nthe owner of the textile undertaking for the acquisition of the
\nundertaking and not by the NTC.   It is, therefore, not possible
\nto uphold the contention urged on behalf of the appellant that
\nNTC is liable in respect of the gratuity amount payable under
\nthe Payment of Gratuity Act to Respondent 2.”\n<\/p>\n
14.\tThe legal position is, therefore, absolutely clear that any liability
\nincurred by a textile company in relation to the textile undertaking before the
\nappointed day cannot be enforced against the Central Government or the
\nCustodian.   According to the case set up by the writ petitioners, money was
\npaid by them to the two textile mills before the appointed day but they had
\nfailed to supply the cloth.  Assuming the aforesaid position to be correct,
\nafter receipt of money, the textile mills having incurred a liability, were under
\nan obligation  to supply the cloth to the writ petitioners.   On the facts
\npleaded, the liability had been incurred by the textile company and
\nconsequently it could not be enforced against the Central Government or the
\nCustodian.   We are thus unable to accept the view taken by the Division
\nBench of the High Court that it was not a liability of the textile company.\n<\/p>\n
15.\tIn paras 7 and 9 of the counter affidavit filed by the appellants before
\nthe High Court, the correctness of Annexure A was specifically denied.   In
\nparas 15 and 16 it was categorically pleaded that on the appointed day no
\ngoods manufactured and earmarked for the writ petitioners were lying in the
\nmills.   In paras 21, 22, 24 and 27 receipt of payment allegedly made by the
\npetitioners was also denied.   The appellants herein having specifically denied
\nreceipt of any payment or existence of any manufactured and earmarked
\ncloth for the writ petitioners on the appointed day, no relief could have been
\ngranted to the writ petitioners in proceedings under Article 226 of the
\nConstitution.   The writ petition raised highly disputed questions of fact
\nwhich, as rightly observed by the learned Single Judge, could be proved by
\nleading evidence in a properly constituted suit and was not a matter to be
\ninvestigated in a writ petition.\n<\/p>\n
16.\tThe appellants herein had also disputed the correctness of the letter
\nallegedly written by Mr. V. Sundaram, Chairman-cum-Managing Director of
\nNTC to the Joint Secretary, Ministry of Textiles, Government of India on
\n24.10.1989.   It is noteworthy that though the letter is of October 1989 but the
\nsame was filed along with the supplementary affidavit on 27.1.1995 i.e. more
\nthan 5 years after filing of the writ petition which had been filed in
\nDecember, 1989.   Mr. Sundaram had left the employment in 1992.   As the
\nletter shows, it was an internal correspondence between the Chairman of
\nNational Textile Corporation and Joint Secretary, Ministry of Textiles,
\nGovernment of India.   The letter does not show that its copy was sent to
\nanyone else much less to the writ petitioners.  In para 4 of the supplementary
\naffidavit filed by Mahender Kumar Goenka, it was stated that on his request
\nMr. Sundaram was kind enough to hand over a copy of the said letter dated
\n24.10.1989 to the petitioner.  It is extremely difficult to believe that though
\nMr. Sundaram left the employment in 1992, but he was keeping a copy of the
\nsaid letter with him and handed over the same to Shri Goenka in 1995.   Shri
\nSundaram, who  was an IAS Officer holding a very responsible post of
\nChairman-cum-Managing Director of National Textile Corporation, is not
\nexpected to keep private copies of official documents nor to hand over the
\nsame to a private party.  We are, therefore of the opinion that the view taken
\nby the learned Single Judge that the said document is of extremely suspicious
\ncharacter and could not be taken into consideration is perfectly correct.\n<\/p>\n
17.\tWe are also in agreement with  the view taken by the learned Single
\nJudge that the writ petition which was filed in December 1989 was highly
\nbelated as the claim of the writ petitioners had been categorically refuted by
\nthe letter dated 7.11.1990 by the Director Finance on behalf of National
\nTextile Corporation (South Maharashtra). The petition was therefore liable to
\nbe rejected on this ground alone.   That apart, the prayer made in the writ
\npetition is for issuance of a writ of mandamus directing the appellant herein
\nto supply the goods (cloth). It is well settled that in order that a mandamus be
\nissued to compel the authorities to do something, it must be  shown that there
\nis a statute which imposes a legal duty and the aggrieved party has a legal
\nright under the Statute to enforce its performance.  The present is a case of
\npure and simple business contract. The writ petitioners have no statutory right
\nnor any statutory duty is cast upon the appellants whose performance may be
\nlegally enforced.  No writ of mandamus can, therefore, be issued as prayed
\nby the writ petitioners.\n<\/p>\n
18.\tFor the reasons mentioned above, we are of the opinion that the writ
\npetition filed by the respondent herein was wholly devoid of merit and the
\nsame was rightly dismissed by the learned Single Judge of the High Court.
\nThe appeal is accordingly allowed.   The judgment and order of the Division
\nBench of the Calcutta High Court dated 4.8.2000 is set aside and that of the
\nlearned Single Judge restored.  The appellant will be entitled to their cost
\nhere as well as in the High Court.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India National Textile Corpn. Ltd. & Ors vs M\/S Haribox Swalram & Ors on 5 April, 2004 Author: G Mathur Bench: S. Rajendra Babu, G.P. Mathur. CASE NO.: Appeal (civil) 3142-43 of 2002 PETITIONER: National Textile Corpn. Ltd. & Ors. RESPONDENT: M\/s Haribox Swalram & Ors. DATE OF JUDGMENT: 05\/04\/2004 BENCH: S. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-174658","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nNational Textile Corpn. 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