{"id":60157,"date":"1986-09-26T00:00:00","date_gmt":"1986-09-25T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/panipat-woollen-general-mills-vs-union-of-india-others-on-26-september-1986"},"modified":"2017-05-18T03:21:23","modified_gmt":"2017-05-17T21:51:23","slug":"panipat-woollen-general-mills-vs-union-of-india-others-on-26-september-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/panipat-woollen-general-mills-vs-union-of-india-others-on-26-september-1986","title":{"rendered":"Panipat Woollen &amp; General Mills &#8230; vs Union Of India &amp; Others on 26 September, 1986"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Panipat Woollen &amp; General Mills &#8230; vs Union Of India &amp; Others on 26 September, 1986<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1986 AIR 2082, \t\t  1986 SCR  (3) 937<\/div>\n<div class=\"doc_author\">Author: M Dutt<\/div>\n<div class=\"doc_bench\">Bench: Dutt, M.M. (J)<\/div>\n<pre>           PETITIONER:\nPANIPAT WOOLLEN &amp; GENERAL MILLS CO. LTD.&amp; ANOTHER\n\n\tVs.\n\nRESPONDENT:\nUNION OF INDIA &amp; OTHERS\n\nDATE OF JUDGMENT26\/09\/1986\n\nBENCH:\nDUTT, M.M. (J)\nBENCH:\nDUTT, M.M. (J)\nREDDY, O. CHINNAPPA (J)\n\nCITATION:\n 1986 AIR 2082\t\t  1986 SCR  (3) 937\n 1986 SCC  (4) 368\t  JT 1986   573\n 1986 SCALE  (2)536\n CITATOR INFO :\n F\t    1989 SC1331\t (5)\n\n\nACT:\n     Sick Textile  Undertakings (Taking\t over of Management)\nAct, 1972, ss. 2(a), 2(d) and 4(1)-Management of undertaking\ntaken over  by Central\tGovernment-Undertaking specified  in\nFirst Schedule\tas a  'sick  -\ttextile\t undertaking-Whether\nopportunity of\thearing should\tbe given to the owner before\nsuch 'taking over'.\n     Sick Textile  Undertakings (Nationalisation)  Act, 1974\nConstitutional\tvalidity   of-Art.  31,\t 31C  &amp;\t 39  (b)  of\nConstitution of India.\n\n\n\nHEADNOTE:\n     A provisional  liquidator was  appointed in  respect of\ntwo textile  undertakings of  the  petitioner-company  since\nthey had  gone into  huge loss and had to be closed sometime\nin May\t1972. As the textile undertakings of the petitioner-\ncompany were  'sick textile undertakings' within the meaning\nof  sub-clause\t (i)  of   s.  2(d)  of\t the  Sick  Textiles\nUndertakings  (Taking-over  of\tManagement)  Act  1972\t(for\nshort, Take  over Act)\tand have  also been specified in the\nFirst Schedule\tto the\tTake-over Act,\tthey vested  in\t the\nCentral Government  as 'sick textile undertakings' by virtue\nof s. 4(1) of the Take-over Act.\n     The petitioner-company  challenged before\tthe  Supreme\nCourt the taking over of the management of the aforesaid two\ntextile\t mills\t under\tthe   Take-over\t Act  and  also\t the\nconstitutional validity\t of the\t Take-over Act\tand the Sick\nTextile\t Undertakings  (Nationalisation)  Act  1974  on\t the\ngrounds (a)  that the  Company should  have  been  given  an\nopportunity of\tbeing heard  before the\t management  of\t its\nundertakings was  taken over as 'sick textiles undertakings'\nand if such an opportunity had been given, the company could\nhave shown that its undertakings were not sick undertakings;\n(b) that the legislature, having itself decided the question\nwhether an  undertaking is  sick textile  undertaking or not\nwithout\t giving\t  any  opportunity  to\tthe  owner  of\tsuch\nundertaking to\tmake a representation, has damaged the basic\nstructure of the Constitution\n938\n     namely separation of power between the legislature, the\nexecutive and  the judicially; and (c) that the Nationalisa-\ntion Act  is consititutionally\tinvalid\t on  the  ground  of\ninadequacy of compensation.\n     Dismissing the petition,\n^\n     HELD 1.1  In the  First Schedule  to the Take-over Act,\nthe undertakings  of the company have been specified as sick\ntextile undertakings.  In other\t words, the  Legislature has\nitself decided\tthe undertakings  of the  Company to be sick\ntextile undertakings.  Indeed, in the First Schedule all the\nsick textile  undertakings have\t been specified. Thus, it is\napparent that  the  Legislature\t has  not  left\t it  to\t the\nExecutive to decide whether a particular textile undertaking\nis a sick textile undertaking or not. If under the Take-over\nAct the\t question whether  a textile  undertaking is  a sick\ntextile undertaking  or not  had been directed to be decided\nby the\texecutive authorities, the owner of such undertaking\ncould claim  an opportunity  of being  heard.  But  when  an\nundertaking has\t been specified in the First Schedule to the\nTake-over Act as a sick textile undertaking, the question of\ngiving an  opportunity to  the owner of the undertaking does\nnot at all arise. [942C-F]\n     1.2 In  including the  sick textile undertakings in the\nFirst Schedule,\t the Legislature  has not acted arbitrarily,\nfor it\thas also  laid down  the criteria  or tests for such\ninclusion. If any undertaking which has been so specified in\nthe First  Schedule does not satisfy the tests under s. 2(d)\nof the\tTake-over Act,\tthe  owner  of\tit  is\tentitled  to\nchallenge such\tinclusion or  take-over in  a court  of law,\nalthough such  challenge has  to  be  founded  on  a  strong\nground. Thus,  there is no finality or conclusiveness in the\nlegislative  determination  of\tan  undertaking\t as  a\tsick\ntextile undertaking.  Such determination is neither judicial\nnor quasi  judicial. Therefore,\t the question of damaging or\naltering the  basic structure  of the  Constitution  namely,\nseparation of  powers among  the Legislature,  the Executive\nand the\t Judiciary, does  not at  all  arise.  So  also\t the\nquestion of the validity of the constitutional amendments by\nwhich the  Take-over Act  and the  Nationalisation Act\thave\nbeen included  in the  Ninth Schedule  on the ground that by\nsuch amendments\t the basic  structure of the Constitution is\ndamaged, as contended on behalf of the petitioners, does not\narise. [943F-H; 944A-B]\n     2. The  Nationalisation Act  gives effect to the policy\nof the\tState towards  securing the ownership and control of\nthe  material  resources  of  the  community  which  are  so\ndistributed as best to subserve the common\n939\ngood, as  contained in\tArt. 39(b)  of the  Constitution. It\nfalls within  the provision  of Art. 31C of the Constitution\nbefore it  was amended\tby  the\t Constitution  (Forty-Second\nAmendment) Act, 1976. Even assuming that the Nationalisation\nAct violates  the provision  of Art. 31, no challenge to its\nvalidity can be made on that ground. [944E-G]\n     <a href=\"\/doc\/1939993\/\">Minerva Mills  Ltd. &amp;  Ors. v.  Union of  India &amp; Ors.,\nWrit Petition  Nos.<\/a> 356-361 of 1977, decided on September 9,\n1986, relied upon.\n     In the  instant case,  the compensation  that has\tbeen\nawarded to  the Company\t is neither inadequate nor illusory.\nIt is  not in  dispute that the paid-up share capital of the\nCompany was  Rs.60 lakhs  and it  paid dividend from 1965 to\n1970. It  will\tnot  be\t unreasonable  to  presume  that  in\nspecifying the compensation, the Legislature has taken these\nfacts into  consideration. There  is, therefore no substance\nin the\tcontention of  the petitioners that the compensation\nspecified in  First Schedule  to the  Nationalisation Act in\nrespect of  the undertakings  of the  Company  is  illusory.\n[944G-H; 945A]\n\n\n\nJUDGMENT:\n<\/pre>\n<p>     ORIGINAL JURISDICTION:  Writ Petition  (Civil) No. 1129<br \/>\nof 1977<br \/>\n     Under Article 32 of the Constitution of India.<br \/>\n     M . R. Sharma and Dalveer Bhandari for the Petitioner.<br \/>\n     B.Datta Additional Solicitor General, Ms. A.Subhashini,<br \/>\nA.K. Goel, T.V.S.N. Chari, R.K. Jain, Dr. N.M. Ghatate, D.N.<br \/>\nMishra and H.S. Parihar for the Respondents.\n<\/p>\n<p>     The Judgment of the Court was delivered by<br \/>\n     DUTT, J.  In this writ petition the petitioner, Panipat<br \/>\nWoollen &amp; General Mills Co. Ltd., hereinafter referred to as<br \/>\n&#8216;the  Company&#8217;,\t has  challenged  the  taking  over  of\t the<br \/>\nmanagement of  its two\ttextile mills under the Sick Textile<br \/>\nUndertakings (Taking  over of  Management)  Act,  1972\t(for<br \/>\nshort &#8216;Take-over  Act&#8217;) and also the constitutional validity<br \/>\nof the\tTake-over Act  and  the\t Sick  Textile\tUndertakings<br \/>\n(Nationalisation) Act,\t1974 (for short &#8216;the Nationalisation<br \/>\nAct&#8217;).\n<\/p>\n<p>     It appears\t that the  Company had\tfalled on  evil days<br \/>\nresulting in  initiation of  liquidation proceedings against<br \/>\nthe Company and the<br \/>\n<span class=\"hidden_text\">940<\/span><br \/>\nappointment of\ta provisional  liquidator. The\tmills of the<br \/>\nCompany\t were\tclosed\tsometime   in  May,   1972.  On\t the<br \/>\napplication by\tthe Industrial Finance Corporation of India,<br \/>\nthe Punjab  &amp; Haryana  High  Court  directed  the  Board  of<br \/>\nDirectors of  the Company to hand over possession of the two<br \/>\nmills to  the Corporation  to which the Company was indebted<br \/>\nfor a  huge sum\t of money. The Corporation was also directed<br \/>\nby the\tHigh Court  to lease  out the  mills, and it appears<br \/>\nthat Padmashree\t Textile Industries  Ltd.  was\tgranted\t the<br \/>\nlease of the mills, that is to say, the textile undertakings<br \/>\nof the Company.\n<\/p>\n<p>     At this stage, it may be mentioned that the lessee, the<br \/>\nsaid Padmashree\t Textile Industries  Ltd., also filed a writ<br \/>\npetition before\t this Court,  inter  alia,  challenging\t the<br \/>\nTake-over  Act\t and  the  Nationalisation  Act.  That\twrit<br \/>\npetition has  since been  disposed of  by  this\t Court\tupon<br \/>\nsettlement between the parties.\n<\/p>\n<p>     Section 4(1)  of the  Take-over Act provides that on or<br \/>\nbefore the appointed day, the management of the sick textile<br \/>\nundertakings specified\tin the\tFirst Schedule shall vest in<br \/>\nthe Central  Government. Under\tSection 2(a) &#8220;appointed day&#8221;<br \/>\nmeans 31st  day of October, 1972. Section 2(d) defines &#8220;sick<br \/>\ntextile undertaking&#8221; as follows:\n<\/p>\n<p>     &#8220;S. 2(d).\t&#8220;sick textile undertaking&#8221; means the textile<br \/>\nundertaking which  falls within one or more of the following<br \/>\ncategories, namely:-\n<\/p>\n<blockquote><p>\t       (i) which is owned by a textile company which<br \/>\n\t  is being  wound up,  whether voluntarily  or by or<br \/>\n\t  under the  supervision of any Court, or in respect<br \/>\n\t  of  which   a\t provisional   liquidator  has\tbeen<br \/>\n\t  appointed by a Court,\n<\/p><\/blockquote>\n<blockquote><p>\t       (ii) which  had remained\t closed for a period<br \/>\n\t  of not  less than  three months immediately before<br \/>\n\t  the appointed\t day and  the closure  of  which  is<br \/>\n\t  prejudicial  to  the\ttextile\t industry,  and\t the<br \/>\n\t  condition of\tthe undertaking is such that it may,<br \/>\n\t  with\treasonable  inputs,  be\t re-started  in\t the<br \/>\n\t  interests of the general public,\n<\/p><\/blockquote>\n<blockquote><p>\t       (iii) which  has been leased to Government or<br \/>\n\t  any other  person or\tthe management\tof which has<br \/>\n\t  been taken  over by Government or any other person<br \/>\n\t  under any leave or licence granted by any Receiver<br \/>\n\t  or Liquidator\t by or\tunder the orders of, or with<br \/>\n\t  the approval of, any Court,<br \/>\n<span class=\"hidden_text\">941<\/span>\n<\/p><\/blockquote>\n<blockquote><p>\t       (iv) the\t management of\twhich was authorised<br \/>\n\t  by the  Central Government,  by a  notified  order<br \/>\n\t  made under  section 18A,  or in  pursuance  of  an<br \/>\n\t  order made  by the  High Court under section 18FA,<br \/>\n\t  of the  Industries  (Development  and\t Regulation)<br \/>\n\t  Act, 1951, to be taken over by a person or body of<br \/>\n\t  persons, but\tsuch management\t could not  be taken<br \/>\n\t  over by such person or body of persons, before the<br \/>\n\t  appointed day,\n<\/p><\/blockquote>\n<blockquote><p>\t       (v) the\tmanagement  of\twhich  ought  to  be<br \/>\n\t  [according to\t the report made after investigation<br \/>\n\t  by any  person or  body of persons appointed after<br \/>\n\t  the 1st  day of January, 1970, under section 15 or<br \/>\n\t  section 15A  of the  Industries  (Development\t and<br \/>\n\t  Regulation) Act,  1951] taken\t over under  section<br \/>\n\t  18A of  that Act,  but in  relation  to  which  no<br \/>\n\t  notified order  authorising any  person or body of<br \/>\n\t  persons  to  take  over  the\tmanagement  of\tsuch<br \/>\n\t  undertaking was made before the appointed day,\n<\/p><\/blockquote>\n<blockquote><p>\t       (vi) in respect of which an investigation was<br \/>\n\t  caused to  be made,  before the  appointed day, by<br \/>\n\t  the Central Government under section 15 or section<br \/>\n\t  15A of the Industries (Development and Regulation)<br \/>\n\t  Act, 1951,  and the  report of  such investigation<br \/>\n\t  was not  received by the Central Government before<br \/>\n\t  the appointed day;\n<\/p><\/blockquote>\n<blockquote><p>\t  and includes\tany  textile  undertaking  which  is<br \/>\n\t  deemed, under\t sub-section (2) of section 4, to be<br \/>\n\t  a sick textile undertaking;&#8221;<\/p><\/blockquote>\n<p>     In view  of  sub-clause  (i)  of  section\t2(d),  as  a<br \/>\nprovisional liquidator\twas  appointed\tin  respect  of\t the<br \/>\ntextile undertakings  of the Company, they were sick textile<br \/>\nundertakings. Moreover, the sick textile undertakings of the<br \/>\nCompany have  been specified  in the  First Schedule  to the<br \/>\nTake-over Act and by virtue of section 4(1) of the Take-over<br \/>\nAct, the  undertakings of  the Company\thave vested  in\t the<br \/>\nCentral Government as sick textile undertakings.\n<\/p>\n<p>     It is  vehemently urged  by Mr. Sharma, learned Counsel<br \/>\nappearing on behalf of the petitioners, that before actually<br \/>\ntaking possession  of the  undertakings of  the Company, the<br \/>\nCompany should\thave been  given  an  opportunity  of  being<br \/>\nheard. It is submitted that if such an<br \/>\n<span class=\"hidden_text\">942<\/span><br \/>\nopportunity had\t been given,  the Company  could have  shown<br \/>\nthat its  undertakings were  not sick  undertakings. Counsel<br \/>\nsubmits that  the intention  of the Legislature to give such<br \/>\nan  opportunity\t  of  being   heard  is\t apparent  from\t the<br \/>\nprovisions of  clauses (iv), (v) and (vi) of section 2(d) of<br \/>\nthe Take-over Act which relate to the taking over of manage-<br \/>\nment of an undertaking under the Industries (Development and<br \/>\nRegulation) Act,  1951. In  support of\tthis contention, the<br \/>\nlearned Counsel\t has placed reliance upon three decisions of<br \/>\nthis Court in <a href=\"\/doc\/639803\/\">A. K. Kraipak &amp; Ors. v. Union of India &amp; Ors.,<\/a><br \/>\n[1970] 1 SCR 457, <a href=\"\/doc\/1766147\/\">Maneka Gandhi v. Union of  India,<\/a> [1978] 2<br \/>\nSCR 621,  and <a href=\"\/doc\/936707\/\">Smt.  Indira Nehru  Gandhi v. Shri Raj Narain,<\/a><br \/>\n[1976] 2 SCR 347.\n<\/p>\n<p>     In\t our   opinion,\t none  of  the\tabove  decisions  is<br \/>\napplicable to  the facts  and circumstances  of the  instant<br \/>\ncase. In  the First  Schedule  to  the\tTake-over  Act,\t the<br \/>\nundertakings of\t the Company  have been\t specified  as\tsick<br \/>\ntextile undertakings.  In other\t words, the  Legislature has<br \/>\nitself decided\tthe undertakings  of the  Company to be sick<br \/>\ntextile undertakings.  Indeed, in the First Schedule all the<br \/>\nsick textile  undertakings have\t been specified. Thus, it is<br \/>\napparent that  the  Legislature\t has  not  left\t it  to\t the<br \/>\nExecutive to decide whether a particular textile undertaking<br \/>\nis a sick textile undertaking or not. If under the Take-over<br \/>\nAct the\t question whether  a textile  undertaking is  a sick<br \/>\ntextile undertaking  or not  had been directed to be decided<br \/>\nby the\texecutive authorities, the owner of such undertaking<br \/>\ncould claim an opportunity of being heard.   But   when\t  an<br \/>\nundertaking has\t been specified in the First Schedule to the<br \/>\nTake-over Act as a sick textile undertaking, the question of<br \/>\ngiving an  opportunity to  the owner of the undertaking does<br \/>\nnot at all arise.   We are  unable to  accept the contention<br \/>\nof the\tpetitioners that  sub clauses  (iv), (v) and (vi) of<br \/>\nsection 2(d)  indicate that  principles of  natural  justice<br \/>\nshould be complied with. The provisions of these sub clauses<br \/>\nare some  of the  categories under  any\t one  of  which\t the<br \/>\nundertaking may\t fall and,  in that  case, it will be a sick<br \/>\ntextile undertaking.  There is,\t therefore, no\tsubstance in<br \/>\nthe contention\tmade on\t behalf of  the petitioners that the<br \/>\nCompany should have been given an opportunity of being heard<br \/>\nbefore the  management of its undertakings was taken over as<br \/>\nsick textile undertakings.\n<\/p>\n<p>     It is  next  urged\t by  the  learned  Counsel  for\t the<br \/>\npetitioners that  the Legislature  having itself decided the<br \/>\nquestion  whether   an\tunder\ttaking\tis  a  sick  textile<br \/>\nundertaking or\tnot without  giving any\t opportunity to\t the<br \/>\nowner of  such undertaking  to make  a\trepresentation,\t has<br \/>\ndamaged the  basic structure  of the  Constitution of India,<br \/>\nnamely,<br \/>\n<span class=\"hidden_text\">943<\/span><br \/>\nseparation of  power between  the Legislature, the Executive<br \/>\nand the\t Judiciary. Our\t attention has\tbeen  drawn  to\t the<br \/>\nobservations made  by Sikri,  CJ, in  <a href=\"\/doc\/257876\/\">Kesavananda Bharati v.<br \/>\nState of  Kerala,<\/a> [1973]  2 Supp. SCR 1, and that of Mathew,<br \/>\nJ, in  Smt. lndira <a href=\"\/doc\/936707\/\">Nehru Gandhi v. Shri Raj Narain,<\/a> [1976] 2<br \/>\nSCR 347\t at  page  503\tto  the\t effect,  inter\t alia,\tthat<br \/>\nseparation of  powers among  the Legislature,  the Executive<br \/>\nand the\t Judiciary, is\tone of\tthe basic  structures of the<br \/>\nConstitution. It is, accordingly, submitted on behalf of the<br \/>\npetitioners  that  the\tdoctrine  of  separation  of  powers<br \/>\nimplies that the Legislature should define civil or criminal<br \/>\nwrong or  a default  and create\t an  independent  machinery,<br \/>\njudicial or  quasi-judicial, to\t determine the\tliability of<br \/>\nthe status of an individual. Further, the Legislature itself<br \/>\ncannot give  a judgment and, in any case, if such a judgment<br \/>\nis given  by the Legislature, it must act in accordance with<br \/>\nthe principles of natural justice.\n<\/p>\n<p>     The  above\t submissions  of  the  petitioners,  in\t our<br \/>\nopinion, are  misconceived. There  can be  no doubt  that in<br \/>\nrespect of  each sick  textile undertaking,  a Take-over Act<br \/>\nand a Nationalisation Act could be passed and, in that case,<br \/>\na large\t number of  enactments would  come into existence to<br \/>\nthe inconvenience  of all  concerned. In order to avoid such<br \/>\ncumbersome course  and for  the\t sake  of  convenience,\t the<br \/>\nLegislature has\t mentioned in the First Schedule in both the<br \/>\nTake-over Act  and the\tNationalisation Act the names of all<br \/>\nsick textile  undertakings  in\tthe  country.  By  including<br \/>\ncertain textile\t undertakings as sick textile E undertakings<br \/>\nin the\tFirst Schedule to the Take-over Act, the Legislature<br \/>\nhas not\t made any  judicial or quasi-judicial determination,<br \/>\nnor has\t the Legislature given any judgment, as contended on<br \/>\nbehalf\tof  the\t petitioners,  although\t such  inclusion  is<br \/>\nsometimes loosely  expressed as\t &#8216;legislative judgment&#8217;.  In<br \/>\nsection 2(d), the Legislature has laid down the criteria for<br \/>\na sick\tundertaking. The sick textile undertakings have been<br \/>\nspecified in  the First\t Schedule on  the basis of the tests<br \/>\nlaid down  in section  2(d). In\t including the\tsick textile<br \/>\nundertakings in\t the First Schedule, the Legislature has not<br \/>\nacted arbitrarily,  for, it  has also laid down the criteria<br \/>\nor tests  for such  inclusion. If  any undertaking which has<br \/>\nbeen so specified in the First Schedule does not satisfy the<br \/>\ntests under  section 2(d) of the Take-over Act, the owner of<br \/>\nit is entitled to t challenge such inclusion or take-over in<br \/>\na court of law, although such challenge has to be founded-on<br \/>\na  strong   ground.  Thus,   there   is\t  no   finality\t  or<br \/>\nconclusiveness in  the legislative determination of an under<br \/>\ntaking as  a sick textile undertaking. Such determination is<br \/>\nneither judicial nor quasi-judicial. Therefore, the question<br \/>\nof  damaging   or  altering   the  basic  structure  of\t the<br \/>\nConstitution, namely, separation of<br \/>\n<span class=\"hidden_text\">944<\/span><br \/>\npowers\tamong\tthe  Legislature,   the\t Executive  and\t the<br \/>\nJudiciary, does\t not at\t all arise.  So also the question of<br \/>\nthe validity  of the  constitutional amendments by which the<br \/>\nTake-over Act and the Nationalisation Act have been included<br \/>\nin the\tNinth Schedule on the ground that by such amendments<br \/>\nthe basic  structure of\t the  Constitution  is\tdamaged,  as<br \/>\ncontended on  behalf of the petitioners, does not arise. The<br \/>\ncontentions are misconceived and are rejected.\n<\/p>\n<p>     As a  last resort,\t the petitioners have challenged the<br \/>\nvalidity  of  the  Nationalisation  Act\t on  the  ground  of<br \/>\ninadequacy   of\t   compensation.   The\t Company   had\t two<br \/>\nundertakings,  namely,\tPanipat\t Woollen  Mills\t and  Kharar<br \/>\nTextile Mills.\tIn the third column of the First Schedule to<br \/>\nthe Nationalisation  Act, a  sum of  Rs. 6,40,000  has\tbeen<br \/>\nspecified for  the Panipat  Woollen Mills  and a  sum of Rs.<br \/>\n12,89,000 has been specified for the Kharar Textile Mills by<br \/>\nway  of\t compensation  for  the\t acquisition  of  these\t two<br \/>\nundertakings. It  is the  contention of the petitioners that<br \/>\nthe amounts  of compensation,  which have been specified for<br \/>\nthe acquisition\t of these  two undertakings, are inadequate.<br \/>\nWe are\tafraid, as  on the  date the Nationalisation Act had<br \/>\ncome into  force, Article  31 of  the Constitution  was\t not<br \/>\nrepealed, the  validity of the Nationalisation Act cannot be<br \/>\nchallenged on  the ground  of inadequacy of compensation. <a href=\"\/doc\/1939993\/\">In<br \/>\nMinerva Mills  Ltd. &amp;  Ors. v.\tUnion of  India &amp; Ors., Writ<br \/>\nPetition Nos.<\/a> 356-361 of 1977, decided on September 9, 1986,<br \/>\nit has\tbeen already held by us that the Nationalisation Act<br \/>\ngives effect to the policy of the State towards securing the<br \/>\nownership and  control of  the\tmaterial  resources  of\t the<br \/>\ncommunity which\t are so\t distributed as best to subserve the<br \/>\ncommon\tgood,\tas  contained\tin  Article   39(b)  of\t the<br \/>\nConstitution. In  the circumstances, the Nationalisation Act<br \/>\nfalls  within\tthe  provision\t of  Article   31C  of\t the<br \/>\nConstitution before  it\t was  amended  by  the\tConstitution<br \/>\n(Forty-Second Amendment)  Act, 1976.  Even assuming that the<br \/>\nNationalisation Act violates the provision of Article 31, no<br \/>\nchallenge to  its validity can be made on that ground. Apart<br \/>\nfrom that, we are of the view that the compensation that has<br \/>\nbeen awarded  to  the  Company\tis  neither  inadequate\t nor<br \/>\nillusory as  contended on  behalf of  the petitioners. It is<br \/>\nnot in dispute that the paid-up share capital of the Company<br \/>\nwas Rs.60 lakhs and it paid dividend up to 1965. Thereafter,<br \/>\nthe Company  did not  pay any dividend from 1965 to 1970. It<br \/>\nwill not  be unreasonable  to presume that in specifying the<br \/>\ncompensation, the  Legislature has  taken these\t facts\tinto<br \/>\nconsideration. There  is, therefore,  no  substance  in\t the<br \/>\ncontention  of\t the  petitioners   that  the\tcompensation<br \/>\nspecified in  First Schedule  to the  Nationalisation Act in<br \/>\nrespect of the undertakings of<br \/>\n<span class=\"hidden_text\">945<\/span><br \/>\nthe Company  is illusory.  The contention  is  rejected.  No<br \/>\nother point has been urged on behalf of the petitioners.\n<\/p>\n<p>     For  the\treasons\t aforesaid,  the  writ\tpetition  is<br \/>\ndismissed and  the rule\t nisi  is  discharged.\tThere  will,<br \/>\nhowever, be no order as to costs.\n<\/p>\n<pre>M.L.A.\t\t\t\t\t Petition dismissed.\n<span class=\"hidden_text\">946<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Panipat Woollen &amp; General Mills &#8230; vs Union Of India &amp; Others on 26 September, 1986 Equivalent citations: 1986 AIR 2082, 1986 SCR (3) 937 Author: M Dutt Bench: Dutt, M.M. (J) PETITIONER: PANIPAT WOOLLEN &amp; GENERAL MILLS CO. LTD.&amp; ANOTHER Vs. RESPONDENT: UNION OF INDIA &amp; OTHERS DATE OF JUDGMENT26\/09\/1986 [&hellip;]<\/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-60157","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Panipat Woollen &amp; General Mills ... vs Union Of India &amp; Others on 26 September, 1986 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/panipat-woollen-general-mills-vs-union-of-india-others-on-26-september-1986\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Panipat Woollen &amp; 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