The Union Of India v. The Sakseria Cotton Mills Ltd.

Tulzapurkar, J.:— This is a Judges Summons dated January 12, 1972 taken out by the applicants (The Union of India) seeking permission or leave of this Court to make or cause to be made investigations into the possibility of re-starting the industrial undertaking of respondent No. 1 (The Sakseria Cotton Mills Ltd. (in liquidation)) in the interest of general public and particularly in the interest of production of cotton textiles, under s. 15A of the Industries (Development and Regulation) Act, 1951 as amended by the Amending Act No. 72 of 1971.

2. The facts giving rise to the application by way of the Judges Summons may be stated: The Sakseria Cotton Mills Ltd., (hereinafter referred to as respondent No. 1 Company), a public limited Company incorporated under the Indian Companies Act VII of 1913, used to run textile mills situate at Delisle Road, Parel, Bombay. It ceased production and actually stopped its business since about October 18, 1967. On a creditor's petition, being Company Petition No. 139 of 1967 filed on December 7, 1967 respondent No. 1 Company was ordered to be wound up by this Court on March 12, 1969 and the Official Liquidator (respondent No. 2) was appointed Liquidator thereof with necessary powers under the Companies Act, 1956 to take charge of the assets of the Company and to conduct its affairs in course of winding up and to distribute its assets in accordance with the provisions of the Companies Act. However, it appears that on September 14, 1962 respondent No. 1 Company had executed two Debenture Trust Deeds—one in favour of Gobindram Sakseria Charity Trust to secure the advance of Rs. 39 lacs and interest thereon (respondents Nos. 4, 5 and 6 being the trustees thereof) and the other in favour of the Trustees of Hashimara Industries Ltd. (respondents Nos. 7, 8 and 9 being the trustees thereof) to secure the advance of Rs. 45 lacs and interest thereon; the second debenture deed was subject to the first debenture deed and by the second debenture trust deed the properties of the Mills belonging to the Company including the lands, buildings and machinery and plant were conveyed to the trustees of the second debenture trust deed. It further appears that pursuant to power contained in that behalf in the second debenture trust on defaults being committed in payment of certain installments, the trustees (respondents Nos. 7, 8 and 9) on October 7, 1967 appointed one Sumat Prasad as a private Receiver to take possession of the Mills and its assets and to exercise the power of sale and to recover the amount due under the second debenture trust deed and accordingly respondent No. 3 took possession of the Mills on October 17, 1967 and on the very next day i.e on October 18, 1967 the Management retrenched all the workers of the Mills and the Mills ceased to function on and from that date and remained entirely closed ever since. Since the secured creditors did not join in the winding up proceedings, and the private Receiver was in possession and control of the Mills and its assets, this Court while passing winding up order and appointing the Official Liquidator as the Liquidator of the Company gave specific directions that,

“this winding up order will not in any way prejudicially affect the rights of the secured creditors nor will the appointment of the Official Liquidator displace the private Receiver, who, however, will have no power to run the mill but will enjoy all powers for the purpose of realising the security by sale thereof for the benefit of secured creditors”.

3. After respondent No. 1 Company was ordered to be wound up as aforesaid, the State of Maharashtra in or about March 1968 started negotiations with respondent No. 3 (private Receiver) and the Official Liquidator (respondent No. 2) for taking over the said Mills for being run on leave and licence basis as part of the Unemployment Relief Scheme. But the negotiations ultimately failed in April 1970, inasmuch as, the State of Maharashtra withdrew its offer on the ground that the workers were unwilling that the management should receive yearly licence fee of Rs. 8 lacs as demanded. Thereafter on June 2, 1970 the Central Government passed an order under s. 15(a)(i) of the Industries (Development and Regulation) Act, 1951 appointing a Committee of Investigators for making a full and complete investigation into the circumstances resulting in the fall in the production of the textile goods manufactured by the Company. Respondent No. 3 the private Receiver appointed by respondents Nos. 7, 8 and 9 (being the Trustees of the second debenture trust deed) filed a petition in this Court, being Misc. Petition No. 4 of 1971 challenging the said order passed by the Central Government on June 2, 1970. It appears that the Committee of Investigators had submitted its report to the Union of India on or about January 5, 1971 and the said report was also challenged by respondent No. 3 in the said writ petition. Mr. Justice Chandrachud who ultimately heard the writ petition by his judgment and order passed on October 9, 1971 set aside the order dated June 2, 1970 and the Central Government was directed not to take any steps in pursuance of the said order or in pursuance of the said report submitted by the Committee of Inspectors on the ground that the order under s. 15 of the said Act could not have been made in June 1970 when the Mills had been closed and remained closed since October 1967. Thereafter the Industries (Development and Regulation) Amendment Ordinance No. XX of 1971 was promulgated on November 1, 1971 and by that Ordinance inter alia two new sections being ss. 15A and 18FA were introduced in the said Act of 1951. Under the former new section (s. 15A) power to investigate into the affairs of a company in liquidation for certain purpose and upon fulfilment of certain conditions was conferred upon the Central Government while under the latter new section (s. 18FA) power to appoint authorised persons to take over management or control of industrial undertakings in respect of which an investigation has been made under s. 15A on fulfilment of certain conditions was conferrred upon the Central Government. On December 24, 1971 the amending Act, being Act No. 72 of 1971, was passed by the Parliament incorporating substantially the provisions of the Ordinance in the original Act of 1951 and the amending Act was deemed to have come into force on November 1, 1971. According to the applicants (The Union of India) after the promulgation of the aforesaid Ordinance and the coming into force of the said new sections, the Central Government formed an opinion that it was necessary in the interest of general public and in particular in the interest of production of cotton textiles to investigate the possibility of re-starting the industrial undertaking of respondent No. 1 Company and in pursuance of that opinion so formed the applicants have taken out the present Judges Summons on January 12, 1972 under s. 15A of the said Act seeking permission of the Court to make or cause to be made an investigation into such possibility by such person or body of persons as the applicants may appoint for the purpose. The application for the grant of necessary permission under s. 15A of the said Act has been resisted by respondent No. 3 who is the private Receiver of the Mills appointed by the trustees of the second debenture trust deed as also by respondents Nos. 7, 8 and 9, who are the trustees of the second debenture trust deed on 3 and 4 grounds. In the first place it has been contended that s. 15A of the said Act is not applicable to the industrial undertaking of respondent No. 1 Company and as such the application is misconceived and no permission as sought should be granted. Secondly, it has been urged that even if it be held that s. 15A is applicable to the present case, the condition precedent as mentioned in the section, namely formation of requisite opinion on relevant materials has not been fulfilled and as such permission sought cannot be granted. Thirdly, it was contended that the alleged formation of opinion was contrary to the principles of natural justice, inasmuch as, no opportunity of being heard was given to respondent No. 3 or the trustees of the second debenture trust deed and as such the requisite opinion even if formed could not be acted upon. Fourthly, the vires of ss. 15A and 18 FA was challenged under art. 14 and art. 19(1)(f) & (g) of the Constitution. Lastly, it was contended that the application seeking permission under s. 15A has been made mala fide with ulterior motive of dispossessing respondent No. 3 of the assets which were in his hands and the same has been made at the behest of the State Government. We may state that respondent No. 2 who is the Official Liquidator has submitted to the orders of the Court and so far as respondents Nos. 4, 5 and 6, who are the trustees of the first debenture trust deed, are concerned, it has been pointed out on their behalf that as the present application is merely for leave to make investigation into the possibility of re-starting the Mills of respondent No. 1 Company and as after investigation it may be found that it is not possible to re-start the Mills or otherwise, they have no objection to this Court granting the permission sought, of course, without prejudice to their rights to challenge the relevant provisions of the Act of 1951 and its amendments as being invalid and void as and when occasion arises. In other words, respondent No. 2 and respondents Nos. 4, 5 and 6 have not opposed the application. We shall, therefore, deal with four or five objections that have been raised by the private Receiver and the trustees of the second debenture trust deed to the grant of permission as sought by the applicants under s. 15A of the Act. But before we do so it would be desirable to set out the material provisions of the amending act.

4. As stated earlier, the present application has been made by the Union of India for granting permission to them to investigate into the affairs of respondent No. 1 Company in liquidation under s. 15A of the Act. Section 15A which has come into force from November 1, 1971 runs as follows:

“15A. Power to investigate into the affairs of a company in liquidation.— (1) Where a Company, owning an industrial undertaking, is being wound up by or under the supervision of the High Court, and the business of such company is not being continued, the Central Government may, if it is of opinion that it is necessary, in the interests of the general public and, in particular, in the interests of production, supply or distribution of articles or class of articles relatable to the concerned scheduled industry, to investigate into the possibility of running or re-starting the industrial undertaking, make an application to the High Court praying for permission to make, or cause to be made, an investigation into such possibility by such person or body of persons as that Government may appoint for the purpose.

(2) Where an application is made by the Central Government under sub-section (1), the High Court shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or in any other law for the time being in force, grant the permission prayed for.”

5. It may be stated that after the investigation contemplated by s. 15A of the Act is carried out and if as a result of such investigation the Central Government forms an opinion that there are possibilities of restarting the industrial undertaking in question, then, under s. 18FA power has been conferred upon the Central Government to appoint authorised persons to take over the management of the said undertaking after obtaining the permission of the High Court in that behalf. The material part of 18FA runs as follows:

“18FA. Power of Central Government to authorise, with the permission of the High Court, persons to take over management or control of industrial undertakings.— (1) If the Central Government is of opinion that there are possibilities of running or re-starting an industrial undertaking, in relation to which an investigation has been made under section 15A, and that such industrial undertaking should be run or re-started, as the case may be, for maintaining or increasing the production, supply or distribution of articles or class of articles relatable to the scheduled industry, needed by the general public, that Government may make an application to the High Court praying for permission to appoint any person or body of persons to take over the management of the industrial undertaking or to exercise in respect of the whole or any part of the industrial undertaking such functions of control as may be specified in the application.

(2) Where an application is made under sub-section (1), the High Court shall make an order empowering the Central Government to authorise any person or body of persons (hereinafter referred to as the ‘authorised person’) to take over the management of the industrial undertaking or to exercise functions of control in relation to the whole or any part of the industrial undertaking (hereinafter referred to as the ‘concerned part’) for a period not exceeding five years:

Provided that if the Central Government is of opinion that it is expedient in the interest of the general public that the authorised person should continue to manage the industrial undertaking, or continue to exercise functions of control in relation to the concerned part, as the case may be, after the expiry of the period of five years aforesaid, it may make an application to the High Court for the continuance of such management or functions of control, for such period, not exceeding two years at a time, as may be specified in the application and thereupon the High Court may make an order permitting the authorised person to continue to manage the industrial undertaking or to exercise functions of control in relation to the concerned part:

Provided further that the total period of such continuance (after the expiry of the initial period of five years) shall not, in any case, be permitted to exceed ten years.

(3) Where an order has been made by the High Court under sub-section (2), the High Court shall direct the Official Liquidator or any other person having, for the time being, charge of the management or control of the industrial undertaking whether by or under the orders of any Court, or any contract or instrument or otherwise, to make over the management of such undertaking or the concerned part, as the case may be, to the authorised person and thereupon the authorised person shall be deemed to be the Official Liquidator in respect of the industrial undertaking or the concerned part, as the case may be….”

6. Sub-section (6) enables the authorised person to raise any loan on such terms and conditions and subject to such limitations as may be prescribed for the purpose of running the industrial undertaking and further enables him for that purpose to create a floating charge on the current assets of the industrial undertaking; sub-s. (10) provides that the proceedings in the winding up of the company shall be stayed during the period the undertaking remains under the management and control of authorised person and in computing the period of limitation for the enforcement of any right, privilege, obligation or liability in relation to such undertaking, the period during which such proceedings remained stayed shall be excluded. The next material provision is to be found in s. 29D which gives priority to all debts incurred by the authorised person over all other debts, whether secured or unsecured, incurred before the management of such industrial undertaking has been taken over. Section 20D runs as follows:

“29D. Debts incurred by the authorised person to have priority.— Every debt arising out of any loan obtained by the authorised person for carrying on the management of, or exercising functions of control in relation to, an industrial undertaking or part thereof, the management of which has been taken over under section 18A or section 18AA or section 18FA,—

(a) shall have priority over all other debts, whether secured or unsecured, incurred before the management of such industrial undertaking was taken over;

(b) shall be a preferential debt within the meaning of section 530 of the Companies Act, 1956 (1 of 1956),

and such debts shall rank equally among themselves and be paid in full out of the assets of the industrial undertaking unless such assets are insufficient to meet them, in which case they shall abate in equal proportions.”

7. At the outset we may state that apart from challenging the vires of s. 15A under which the present application has been made, respondents Nos. 3 and 7 to 9 have also challenged the vires of ss. 18FA and 29D and during the course of argument counsel for these respondents desired to make their submissions in that behalf. We did not permit counsel to go into the question of vires of ss. 18FA and 29D, inasmuch as, in our opinion, the occasion for challenging the vires of those sections has not arisen at this stage. It is true that all the three sections viz. ss. 15A, 18FA and 29D form part of one scheme. But even so, the present application has been made by the applicants merely for leave or permission to make investigations into the possibility of re-starting the industrial undertaking of respondent No. 1 Company in the interest of the general public and particularly in the interest of production of cotton textiles and it is possible that after investigations are carried out it may be found that it is not so possible to restart the undertaking, in which event no further application as contemplated by s. 18FA would at all be made by the applicants to this Court. In view of such eventuality being there, it would not be proper nor advisable for us at this stage to go into the question of vires of ss. 18FA and 29D of the amending Act. We have, therefore, confined our attention only to such objections that were raised by respondents Nos. 3 and 7 to 9 to the grant of requisite permission sought by the applicants under s. 15 A of the Act. We may also mention that it was pointed out to us that the Proclamation of Emergency was issued on December 3, 1971 and that the same is still in operation and as such respondents Nos. 3 and 7 to 9 were not entitled to challenge any of the provisions of the amending act as being violative of art. 19 of the Constitution. Counsel for respondents Nos. 3 and 7 to 9 also fairly conceded this position and accordingly the contention that s. 15A is violative of art. 14 of the Act need be considered by us.

8. According to the applicants, the present case squarely falls within the provision of s. 15A of the Act and as such the applicants are entitled to get the necessary permission or leave to make or cause to be made investigation into the possibility of re-starting the industrial undertaking of respondent No. 1 Company. Mr. Nariman, the learned Additional Solicitor General, appearing for the applicants pointed out that the Sakseria Mills Ltd. used to run textile mills at Parel, Bombay and as such owned an industrial undertaking that was engaged in production of cotton textiles and as such is a schedule industry falling within the first schedule of the Act; secondly the said Company owning such scheduled industrial undertaking is being wound up by and under the direction of this Court after passing of the winding up order on March 12, 1969; thirdly, admittedly the business of the said Company has been stopped and is not being continued since October 18, 1967 and therefore all the initial requirements of s. 15 A are satisfied with regard to respondent No. 1 Company. He has further pointed out that in the affidavit in support declared on December 23, 1971 it has been averred that after the promulgation of the Ordiance No. XX of 1971 and the coming into force of s. 15A, the Central Government formed an opinion that it was necessary in the interest of the general public and in particular in the interest of production of cotton textiles to investigate the possibility of re-starting the undertaking of respondent No. 1 Company and after such opinion was formed the present application seeking permission of this Court to make investigations into such possibility has been made and, according to him, when all the requirements of s. 15A and the condition precedent mentioned in the section have been satisfied, it is obligatory upon this Court to grant the necessary permission sought, for, under sub-s. (2) of s. 15A it has been provided that where an application has been made by the Central Government under sub-s. (1), the High Court shall, notwithstanding anything contained in the Companies Act, 1956, or in any other law for the time being in force, grant the permission prayed for. He, therefore, urged that unless the Court found that any of the requirements of sub-s. (1) of s. 15A had not been satisfied or the condition precedent mentioned therein has not been fulfilled or that s. 15A was violative of art. 14 as contended by respondents Nos. 3 and 7 to 9, this Court should grant the permission sought by the applicants.

9. Counsel for respondents Nos. 3 and 7 to 9 contended that on a proper construction s. 15A will not apply to respondent No. 1 Company, inasmuch as, the business of the Company had stopped since October 18, 1967 and s. 15A on true construction is intended to be applied to a Company whose business has ceased in the immediate past, that is to say, whose business has ceased within a short time prior to formation of opinion contemplated by the section. In this behalf counsel relied upon the opening words of s. 15A, namely ‘Where a company, owning an industrial undertaking, is being wound up by or under the supervision of the High Court and the business of such company is not being continued’. It was urged that the phrase ‘the business of such company is not being continued’ suggested that unless the business of a company was discontinued in the immediate past, the section would be inapplicable. Reliance was also placed upon the expression ‘industrial undertaking’ which occurs in the section and which has been defined in s. 3(d). The definition runs thus:

“‘industrial undertaking’ means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government;”

and the expression ‘carried on’ occurring in the definition was relied upon. Having regard to the definition of ‘industrial undertaking’ as occurring in s. 3(d) and in view of the phrase ‘the business of such company is not being continued’ occurring in s. 15A, it was urged that the section was intended to apply to a company whose business has ceased to continue in the immediate past and the section would not apply to a company whose business has been closed for the last over 3 or 4 years and, therefore, the permission sought could not be granted by this Court. We are unable to accept this contention of counsel urged on behalf of respondents Nos. 3 and 7 to 9 for more than one reason. In the first place, by the very language employed in s. 15A it is clear that the section is applicable to a company which is being wound up by or under the supervision of the High Court, which means, ordinarily it would be a Company whose business would come to a stop if not earlier at least by reason of winding up order that would be passed by the High Court and such winding up order could, in a conceivable case, be passed many years prior to making of an application by the Central Government under the section or prior to formation of opinion by the Central Government. Further the language clearly indicates that it must be a company which is not merely being wound up but a company whose business ‘is not being continued’ and there is nothing in the section nor in any other provision of the Act to suggest that the expression ‘is not being continued’ should be confined to a case of a company whose business has been stopped or is not being continued since the immediate past. In Stroud's Judicial Dictionary (Fourth Ed.) the expression ‘Being’ is explained thus at p. 267 of Vol. I:

“Being.—‘Being’, as used in a sense similar to that of the ablative absolute, has sometimes been translated as, ‘having been’; but it properly denotes a state or condition existent at the time when the conclusion of law or fact has to be ascertained.”

10. In other words, it is clear that the phrase “the business of such company is not being continued” must be interpreted to mean the company whose business is non-existent at a time when the requisite opinion contemplated by the section is formed by the Central Government and if at such time the business is not continued or has stopped, the case would fall within that phrase. Apart from that, there is yet one more indication in the section which runs counter to the contention urged by counsel for respondents Nos. 3 and 7 to 9. The section contemplates an investigation into the possibility of re-starting the industrial undertaking, which must mean that the undertaking must be one which has been closed and which needs restarting and not necessarily an undertaking which is kept closed in the immediate past. It is true that reliance was placed by counsel upon the definition of ‘industrial undertaking’ given in s. 3(d) and the definition shows that it means an undertaking pertaining to scheduled industry carried on in one or more factories. But this definition cannot be allowed to be imported in s. 15A while giving proper meaning to the expression ‘industrial undertaking’ occurring therein. The entire s. 3 of the Act, which defines several concepts including the concept of industrial undertaking is qualified by the opening words of the section, namely “In this Act, unless the context otherwise requires,” and, therefore, unless the context otherwise requires the expression wherever it occurs in the Act should be understood in the sense it has been defined in s. 3(d) but the context of s. 15A clearly suggests that the expression ‘industrial undertaking’ cannot be understood in the same sense in which the expression has been defined in s. 3(d), for, in terms the section is made applicable to a company which owns an undertaking and which company is being wound up and whose business is not being continued. It is thus clear that in the context of s. 15A the expression ‘industrial undertaking’ occurring therein cannot be given the same meaning which has been given to that expression by the definition clause. In support of our view, reference may be made to a decision of the Supreme Court reported in V.F & G. Insurance Go. v. Fraser & Ross . [1960] A.I.R S.C 971., where in spite of the expression ‘insurer’ having been defined in the definition clause in a particular way, having regard to the context of particular sections, namely s. 2D and s. 33 of the Insurance Act, 1938, the expression ‘insurer’ in those sections was held to include an intending insurer or quondam insurer. In our view, therefore, there is nothing in the language of s. 15A which warrants an inference that it is intended to apply to a company whose business has stopped in the immediate past. On the other hand, as stated earlier, the phrase “and the business of such company is not being continued” and the expression “re-starting” occurring in that section in the context of a company which is being wound up under the direction of the High Court clearly suggests that the section would be applicable even to a company whose business has stopped even for some years prior to formation of requisite opinion by the Central Government. Besides, it may be stated that in the present case, the Company had stopped its business since October 18, 1967 and even thereafter on admitted facts the State of Maharashtra was exploring a possibility of taking over the said Mills on leave and licence basis for running the same under the Unemployment Relief Scheme and that such negotiations were continued till as late as April 1970 when those negotiations failed. In other words, even respondent No. 3 with whom the said negotiations were carried on was also of the opinion in April 1970 that the undertaking was in such condition that it could be run by the State of Maharashtra on leave and licence basis, if terms had been finally agreed upon. In our view, therefore, there is nothing in the language of the section nor in any other provision of the Act to suggest that s. 15A would be applicable only to such company whose business has stopped in the recent past as suggested by counsel for respondents Nos. 3 and 7 to 9. It seems to us clear that all the three initial requirements of s. 15A, namely that the Company in question owns a scheduled undertaking, that the Company is being wound up by or under the supervision of the High Court and that the Company is one whose business is not being continued, are satisfied in the present case and as such the application under s. 15A concerning respondent No. 1 Company would be maintainable.

11. It was next contended on behalf of respondents Nos. 3 and 7 to 9 that the condition precedent as mentioned in s. 15A was not fulfilled and as such the permission sought should not be granted by this Court. It was pointed out that the condition precedent has been expressed in the following words in the section:

“…the Central Government may, if it is of opinion that it is necessary, in the interests of the general public and, in particular, in the interests of production, supply or distribution of articles or class of articles relatable to the concerned scheduled industry, to investigate into the possibility of running or re-starting the industrial undertaking, make an application to the High Court….”

12. It was urged that the power to investigate into the affairs of a company in liquidation was conditioned upon the formation of requisite opinion and the opinion must be as to the necessity of conducting an investigation into the possibility of re-starting the undertaking in the interest of the general public and in particular in the interests of production, supply or distribution of concerned articles and what was urged was that it was not shown that the requisite opinion was formed on relevant materials or on materials having reasonable nexus on the basis of which any reasonable body of persons could come to a conclusion that it was in the interest of general public and in particular in the interest of production of cotton textiles that the investigation into the possibility of re-starting the undertaking was necessary and, therefore, the condition precedent had not been fulfilled. Clearly the contention raised pertains to factual aspect of the matter and it would, therefore, be necessary to consider whether the materials on the basis of which the requisite opinion was formed have been disclosed by the applicants and whether the materials so disclosed could be said to be relevant materials on which a reasonable body of persons could form the requisite opinion or not. On behalf of the applicants an affidavit in rejoinder dated February 19, 1972 of Shri H.K Bansal, Deputy Secretary to Government of India, Ministry of Foreign Trade, has been filed and in para. 6 thereof the entire material on the basis of which the requisite opinion was formed by the Central Government has been set out. In sub-paras. (a), (b) and (c) of para. 6 the general aspects touching the position of cotton, the cotton textile industry generally and cotton textile industry in the State of Maharashtra in particular, such as its importance in the economy of the country, recent deterioration in its productive efficiency, problems created by closure of large number of textile units etc. that were kept in view as a background have been set out and in sub-paras, (d), (e), (f) and (h) the matters or aspects particularly touching respondent Company No. 1 that were taken into account have been set out. Sub-paras, (d), (e), (f) and (h) of para. 6 clearly show that the following factors were taken into consideration: (a) that the Mill has a composite unit with 1154 looms and 81,036 spindles and is also equipped with a wet processing house; (b) that since the closure of the Mills from October 1967 there was huge loss of production of cotton textiles; (c) that if the production in the Mills could be re-started, having regard to its production capacity at its optimum level which was very high, such resumption would substantially increase the production, supply and distribution of cloth, an article needed by the general public and help reduce the shortfall in production; (d) that as a result of the closure of the Mills 4000 workers had been thrown out of employment increasing the acute problem of unemployment in the country and affording employment to such workers by re-starting the Mills would be in the interest of general public; (e) the Mill being export-oriented has substantial potential of earning foreign exchange; (f) that the written down value of the assets of the Mill was Rs. 58.91 lacs as on April 8, 1967 while the market value may be much more; (g) that due to resistence offered by the Receiver in 1970 the plant and machinery could not be inspected by the members of the Committee appointed under order dated June 2, 1970 but the immediate prior technical survey carried out by the survey team of the Textile Commissioner's Office in July 1966 in respect of the Mills showed that the machinery was by and large found to be reasonably satisfactory. It has been stated that after taking into consideration the aforesaid facts including, in particular, the interest of general public which included unemployment of about 4000 workers and the interest of production, supply and distribution of cotton textiles, the deponent Shri B.D Kumar, Joint Secretary and the Hon'ble Minister concerned formed the opinion that it was necessary to investigate into the possibility of restarting the said Mills. It was pointed out by counsel for respondents Nos. 3 and 7 to 9 that the latest condition of the machinery at the time when the opinion was formed in December 1970, whether it was satisfactory or had become rusted, had not been taken into consideration. But, in our view, for that respondent No. 3 himself who offered resistence was responsible. Item (g) above shows that the immediate prior technical survey carried out by the survey team of the Textile Commissioner's Office in 1966 showed that the machinery was by and large reasonably satisfactory in July 1966. Besides, since the negotiations were carried on by the State of Maharashtra to take over the Mills on leave and licence basis under the Unemployment Relief Scheme with respondent No. 3 till as late as April 1970 that fact clearly shows that the condition of the machinery was considered to be satisfactory for running the same till then. Having regard to these materials that have been put on record by the applicants in their affidavit in rejoinder, it will be difficult to accept the contention that the requisite opinion was formed on materials which had no nexus or on materials which were utterly irrelevant. On the contrary, the materials disclosed were not only relevant but more than sufficient for any reasonable body of persons to form the requisite opinion.

13. It was next contended that the aforesaid requisite opinion was formed by the Central Government in contravention of the principles of natural justice, inasmuch as, no opportunity of being heard was given to respondent No. 3 or respondents Nos. 7 to 9 and as such the said opinion got vitiated and could not be acted upon by the applicants. In our view, there is no substance in this contention. In the first place, it is clear from s. 15A that it contemplates an opinion to be subjectively formed by the Central Government about the necessity to investigate into the possibility of restarting the industrial undertaking in the interest of general public and in particular in the interest of production, supply and distribution of concerned articles. Secondly, there is nothing in the section which makes it incumbent upon the Central Government to grant hearing of any kind to respondent No. 3 or any other person before forming an opinion or taking action under s. 15A. Further the purpose for which the opinion is to be formed is quite clear, inasmuch as, action taken under that provision merely results in an investigation being made with the permission of this Court into the possibility of restarting the undertaking. It is thus clear that no adverse civil consequence flowed affecting any vested right of any person like respondent No. 3 or respondents Nos. 7 to 9 and as such, in our view, there would be no question of following principles of natural justice or giving a hearing to persons like respondents Nos. 3 and 7 to 9 before formation of opinion by the Central Government. Mr. Desai for respondents Nos. 7 to 9 faintly referred to the provisions of s. 18(1) of the Act under which power has been conferred upon person or body of persons appointed to make any investigation under s. 15A to call for assistance from any person or persons possessing special knowledge of any matter relating to the investigation during the course of investigation and pointed out that persons like respondent No. 3 or respondents Nos. 7 to 9 may be called upon to render assistance to the person or body of persons so appointed. But that, in our view, does not amount to visiting any adverse civil consequence upon persons like respondent No. 3 or respondents Nos. 7 to 9. In our view, therefore, since the purpose for which the investigation is to be undertaken under s. 15A is very clear, namely to ascertain whether a particular undertaking could be restarted or not no adverse civil consequences are involved and as such there is no question of the opinion getting vitiated on account of no opportunity of hearing being afforded to any person or persons like respondent No. 3 and respondents Nos. 7 to 9. It is clear that the subjective opinion formed by the Central Government in the present case is such as could be acted upon and after fulfilling the condition precedent it is open to the Central Government to make an application under s. 15A.

14. We will next deal with the challenge to the provisions of s. 15A on the ground that the said provisions are violative of art. 14 of the Constitution. The challenge to the provisions of s. 15A under art. 14 was made in a three-fold manner. In the first place it was contended that while dealing with companies falling within the purview of s. 15A, that is to say, the companies owning scheduled industrial undertakings and which are being wound up by or under the supervision of the High Court and whose businesses are not being continued, s. 15A gives an absolute, unguided and unfettered power or discretion to the Central Government to pick and choose any particular company or its undertaking and no guidelines have been given or indicated by following which power or discretion could be exercised and therefore the provision suffers from the vice of excessive delegation and as such is violative of art. 14. In other words, within the class or group of companies dealt with by the section the Central Government could practice discrimination. It was pointed out in this context that there is no provision for all appeal against the opinion formed by the Central Government under the section. The second leg of the argument to support challenge to the vires of the section under art. 14 was that if the provisions of s. 15 and the provisions of s. 15A of the Act, under both of which power to make investigation has been conferred upon the Central Government, are compared, it would appear that the ultimate object of both the investigations is to take over the management of an undertaking, and even so there is discrimination in between the two investigations, inasmuch as, for the investigation under s. 15 certain procedure has been prescribed by framing rules which provide for hearing to be given to the Management but no such procedure has been prescribed by any rules for the investigation to be undertaken under s. 15A and, therefore, the investigation contemplated under s. 15A has been discriminated and treated differently and as such s. 15A is repugnant to art. 14. The third leg of the argument to support the challenge to the vires of s. 15A under art. 14 was that for taking over the management of an undertaking of a company which was being wound up and whose business is not being continued, two different procedures—one under the general law and the other under s. 15A and s. 18FA of the Act—were available to the Central Government and the latter procedure under s. 15A and s. 18FA of the Act was positively disadvantageous and prejudicial to the creditors of the company and since it was open to the Central Government at its sweet will to pick and choose any one of the two procedures that were available to it, discrimination was bound to result and hence the provisions of the Act, particularly s. 15A is violative of art. 14.

15. We may mention that the learned Additional Solicitor General apart from contending that the aforesaid three-fold argument raised in support of the challenge to the vires of s. 15A had no substance in it, relied upon art. 31A(1)(b) of the Constitution for urging that the vires of s. 15A or for the matter of that even s. 18FA under art. 14 could not be gone into, for, according to him, the said provisions were protected by art. 31A(1)(b). The relevant provision of art. 31A on which reliance has been placed runs as follows:

“31A. (1) Notwithstanding anything contained in article 13, no law providing for—

(b) the taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property,…

shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31:”

16. It was urged on behalf of the applicants that the provisions of s. 15A and s. 18FA were meant for taking over the management of an industrial undertaking of a company falling within s. 15A for a limited period in the public interest and as such the said provisions were protected under the aforesaid provision of the Constitution and the same could not be challenged on the ground that these were inconsistent with or took away or abridged any rights conferred by art. 14. On the other hand, counsel for respondents Nos. 3 and 7 to 9 pointed out that in order that protection under art. 31A(1)(b) should be available, it was necessary that the law claiming such protection must provide for taking over the management by the State and the expression ‘State’ has been defined under art. 12 of the Constitution under which the State included the Government and Parliament of India and all local or other authorities within the territory of India or under the control of the Government of India and in this particular case the management of the undertaking of respondent No. 1 Company was being taken over under the provisions of s. 15A and s. 18FA not by the State or other authority but by the person or body of persons who were designated as “authorised persons” under the Act and that authorised persons could not be said to be “other authority” as contemplated by art. 12. The learned Additional Solicitor General rejoined by saying that the authorised persons who were to take over the management under s. 18FA will have to be regarded as falling within the expression “other authority” occurring in art. 12. On the question as to whether the authorised person contemplated by s. 18FA of the Act would be “other authority” within the meaning of that expression as used in art. 12, reliance was placed by counsel on both sides on a couple of authorities, which supported each one's rival contentions e.g Electricity Board, Rajasthan v. Mohan Lal . [1967] A.I.R S.C 1857. and Pramodrai Shamaldas v. L.I Corp. . 1968 71 Bom. L.R 286. The question not being free from doubt we do not propose to deal with or decide it and, in our view, it is really unnecessary to decide that question as, on merits, for reasons we shall presently indicate, we find no substance in any of the arguments raised to support the challenge to the vires of s. 15A under art. 14 of the Constitution.

17. On the point whether within the group or class of Companies falling under s. 15A any absolute, unguided and unfettered power or discretion to pick and choose any particular undertaking has been conferred on the Central Government without providing any guidelines by reference to which such power or discretion should be exercised, it is not possible to accept the argument urged by counsel for respondents Nos. 3 and 7 to 9. In the first place, the preamble to the Act indicates legislative policy by reference to which the several provisions of the Act have to be understood and put into operation. The preamble to the Act is as follows: “An Act to provide for the development and regulation of certain industries”. This is followed by the declaration as to expediency of control by the Union of India over such industries as are specified in the First Schedule under s. 2 of the Act. It is obvious that by reason of such declaration contained in s. 2 of the Act the particular topic of legislation is transferred exclusively to the legislative field of the Union Legislature i.e Parliament. The aforesaid preamble clearly shows that the enactment was placed on the Statute Book with the object of providing for the development and regulation of scheduled industries at the hands of the Union of India and the provisions of s. 15A will have to be understood, interpreted, worked and put into force for the purpose of carrying out the object of the Act as indicated in the preamble. The preamble, therefore, clearly indicates the legislative policy and the objects to carry out which the provisions of the Act including s. 15A will have to be resorted to. Further, in our view, far from conferring absolute, unguided and unfettered power on the Central Government to investigate into the affairs of the Company in liquidation under s. 15A, s. 15A itself contains sufficient guidelines as to in respect of which particular industrial undertaking or undertakings of which particular Companies in liquidation, the Central Government should make an application to this Court praying for permission to make an investigation into the possibility of restarting such an undertaking and the guidelines are to be found in the following words which occur in the section:

“….if it is of opinion that it is necessary, in the interests of the general public and, in particular, in the interests of production, supply or distribution of articles or class of articles relatable to the concerned scheduled industry, to investigate into the possibility of running or restarting the industrial undertaking,….”

18. These words clearly indicate that the power conferred by the section is conditioned by the formation of opinion as to the necessity of investigating into the possibility of re-starting particular industrial undertaking in the interest of general public and in particular in the interests of production, supply or distribution of the concerned articles manufactured by the undertaking. In other words, unless the requisite opinion is formed by the Central Government that it is necessary in the interest of general public and in particular in the interest of production, supply or distribution of concerned articles to investigate into such possibility of restarting any particular industrial undertaking, no application as contemplated by s. 15A could be made by the Central Government to this Court. Even if the undertaking happens to be a scheduled undertaking falling in the First Schedule, having regard to its magnitude and capacity or having regard to the glut that may be obtaining in the market in the articles manufactured by it, the Central Government may form the opinion that it will not be in the interest of general public and in particular in the interests of production of the articles concerned to restart such undertaking. The aforesaid words which occur in s. 15A, therefore, clearly provide sufficient guidelines by reference to which the Central Government can decide as to in respect of which industrial undertaking of which particular Company falling under the section an application seeking permission to investigate into the possibility of restarting the same should be made. In our view, the power or discretion for selecting particular undertakings of particular Companies falling within the section cannot be regarded as absolute, unguided or unfettered as contended by counsel for respondents Nos. 3 and 7 to 9. The preamble of the Act together with particular provision occurring in s. 15A discussed above, in our view, affords sufficient guidelines by reference to which the Central Government can make its selection from among the class or group dealt with by the section. It is true that once the initial requirements of s. 15A are satisfied and the condition precedent mentioned therein is fulfilled and an application is made by the Central Government to this Court under sub-s. (2), this Court is under an obligation to grant permission prayed for, notwithstanding anything contained in the Companies Act or in any other law for the time being in force. But this aspect of the matter has nothing to do with the question as to whether absolute, unguided or unfettered power or discretion has been conferred upon the Central Government to pick and choose without providing any guideline under s. 15A in that behalf. As stated earlier, the preamble together with the relevant provision contained in s. 15A itself clearly provides sufficient guidelines by reference to which the Central Government can select any particular undertaking of particular Company which is being wound up and whose business is not being continued.

19. It was, however, contended by Mr. Desai appearing for respondents Nos. 7 to 9 that guidance afforded by the relevant provision occurring in s. 15A itself which we have discussed above, should be regarded as very vague and insufficient to enable the Central Government to make selection. We are unable to accept the submission of Mr. Desai as we feel that specific and clear guidance has been afforded to the Central Government by reason of particular relevant provision that is to be found in the section itself. In this context we may refer to a decision of the Supreme Court in Inder Singh v. The State of Rajasthan . [1957] A.I.R S.C 510.. In that case the provision of s. 15 of Rajasthan (Protection of Tenants) Ordinance No. 9 of 1949, which authorised the Government to exempt any person or class of persons from the operation of the Act was challenged on the ground that the section did not lay down the principles on which exemption could be granted and that the decision of the matter was left to the unfettered and uncanalised discretion of the Government and that therefore the section was repugnant to art. 14 and the Supreme Court took the view that though that particular section did not itself indicate the grounds on which exemption could be granted, the preamble to the Ordinance set out with sufficient clearness the policy of the Legislature; and as that governed s. 15 of the Ordinance, the decision of the Government thereunder could not be said to be unguided. The preamble to the Ordinance ran as follows:

“Whereas with a view to putting a check on the growing tendency of landholders to eject or dispossess tenants from their holdings, and in the wider national interests of increasing the production of food grains, it is expedient to make provisions for the protection of tenants in Rajasthan from ejectment or dispossession from their holdings.”

20. It will appear clear that the preamble on which the Court relied in that case was in fact widely worded than the particular relevant clause occurring in s. 15a of the instant act and even then, the Supreme Court held that the aforesaid preamble to the Ordinance set out with sufficient clearness the policy of the Legislature which governed the actions of the Government in granting exemptions under s. 15 of the Ordinance, and as such the decision of the Government under s. 15 of the Ordinance could not be said to be unguided. In the present case apart from the preamble to the Act of 1951, the particular relevant clause occurring in s. 15A, to which we have referred to above, clearly affords more than sufficient guidance to the Central Government in making selection while resorting to s. 15A. It is, therefore, not possible to accept the contention that guidance afforded by particular relevant clause occurring in s. 15A is vague or insufficient. It is true that the section nowhere provides for any appeal against the opinion formed by the Central Government. In the first place, as has been indicated by us earlier, it is the subjective opinion that is required to be formed by the Central Government before resorting to s. 15A and secondly, providing for an appeal may be one of the ways of providing a check on unguided or unfettered power, but that is not the only way in which the exercise of power could be guided or checked. As stated above, the object of the enactment as indicated in the preamble and the particular relevant clause occurring in s. 15A itself clearly provide more than sufficient guidance to the Central Government by reference to which it can make its selection of an undertaking of a particular Company in liquidation before making an application to the Court thereunder. The first leg of argument raising challenge to s. 15A under art. 14 must, therefore, fail.

21. Mr. Desai for respondents Nos. 7 to 9 further urged that in between the two investigations that were contemplated under s. 15 and s. 15A of the Act, though the ultimate purpose of both the investigations was the same, namely to take over the management of the industrial undertaking of a particular Company discrimination was bound to result, inasmuch as for the investigation to be undertaken under s. 15 certain procedure was prescribed by framing rules, whereas for the investigation under s. 15A no procedure and no rules had been framed and as such the investigation contemplated under s. 15A has been discriminated against and, therefore, the provisions of s. 15A are violative of art. 14. The argument, in our view, merely requires to be stated to be rejected, for the simple reason that before invoking equality clause under art. 14, it must be shown that the two things or two matters are similarly situated or similarly circumstanced and are given unequal treatment and if s. 15 and s. 15A are carefully scrutinised, it will appear clear that the two investigations contemplated by the aforesaid two provisions can in no sense be said to be investigations of same character. In the first place, under s. 15 the investigation contemplated is in respect of scheduled undertaking which is a running concern while s. 15A is applicable to an undertaking of a Company which is being wound up and whose business is not being continued or has stopped. Secondly and this is important, the nature, scope and purpose of the investigation contemplated under s. 15 are entirely different from the nature, scope and purpose of investigation contemplated under s. 15A; whereas the purpose of carrying out the investigation under s. 15A is a fact finding one, namely to investigate into the possibility of ascertaining whether a particular industrial undertaking covered by that section is capable of being restarted or not, the purposes for which the investigation is undertaken under s. 15 have been indicated in sub-cls. (i) to (iv) of cl. (a) and cl. (b) of s. 15 and those purposes, if scrutinised, would clearly appear to be different than the purpose of the investigation contemplated under s. 15A. Thirdly, the opinion which is required to be formed by the Central Government under s. 15 is of entirely different character than the opinion that is required to be formed by the Central Government while resorting to s. 15A of the Act. It will thus be clear that the two investigations contemplated by the two sections viz. s. 15 and S. 15A respectively can in no sense be said to be investigations of the same character or similarly circumstanced. In fact, the two are intended to cater to two entirely different situations and even the ultimate taking over of the management would be for different purposes depending upon whether the investigation is carried out under one or the other provision. In this view of the matter, there will be no question of s. 15A violating art. 14 on the ground suggested.

22. The last leg of the argument was that the Central Government has two procedures available to it to take over the management of companies which have gone into liquidation; one under the general law and the other under s. 15A and s. 18FA of the Act and that the procedure under s. 15A and s. 18FA was clearly more harmful and prejudicial to the creditors of the Company like respondents Nos. 7 to 9 and it was urged that since it was left to the sweet will of the Central Government to choose one or the other of the two procedures, the discrimination was bound to result. Relying on certain sections of the companies act dealing with powers of the Official Liquidator it was pointed out that ordinarily whenever a company went into liquidation and the Official Liquidator was appointed, the Government could apply to the Liquidator for taking over the management of the undertaking on leave and licence basis on certain terms including payment of yearly or monthly licence fees that were usually fixed by the High Court and it was further pointed out that usually the High Court on fixing the terms permitted the Government to take over the management of the Mills for certain period and the amount of licence fee was available to the Liquidator in winding up proceedings. But on the other hand, if s. 15A and s. 18FA were resorted to by the Central Government for taking over the management of the undertaking of the Company in liquidation, then, there is no provision in the Act directing the Government to pay any licence fee for running the Mills; not only that but if loans were raised by the authorised persons appointed to run the undertaking, such debts have been given priority over all secured and unsecured creditors of the Company under s. 29D of the Act. It was, therefore, urged that out of these two procedures, the one under the Act was more prejudicial to the creditors of the Company and it was left to the sweet will of the Central Government as to which of the procedures it should adopt for taking over the management of the undertaking and, therefore, discrimination was bound to result. In support reliance was placed upon the Supreme Court's decision in N.I Caterers v. State of Punjab . [1967] A.I.R S.C 1581.. In our view, the contention is without any substance. In the first place, there is no general law nor any particular law including the Companies Act under which any procedure for making an application by the Government to Court for taking over the management of the Company in liquidation is provided for. What actually happens is that like any other private citizen who can apply to the Court for taking over the management of the undertaking of a Company in liquidation the Government also can make such application to the Court and obtain the management of the undertaking on terms that may be fixed by the Court. In other words, it is a matter of private contract which either citizen or Government enters into with the Official Liquidator through the intervention of the Court on the basis of which the management of the undertaking of a Company in liquidation is taken over. This is far from saying that two sets of procedures, one under the general law and the other under the Act are available to the Government for taking over the management. That being the correct position, it is difficult to accept the contention urged by counsel for respondents Nos. 7 to 9. In our view, therefore, the challenge to the vires of the provisions of s. 15A of the Act under art. 14 must fail.

23. Lastly, it was contended that the present application has been made mala fide by the Union of India at the behest of the State Government and with ulterior motive of dispossessing respondent No. 3 of his control over the security. Two or three facts were pressed into service to support this plea. It was pointed out that the winding up order was passed by this Court on March 12, 1969 and the Official Liquidator was appointed and this Court had specifically directed that the appointment of Official Liquidator will not displace the private Receiver who, however, will have no power to run the Mills but will enjoy all the powers for the purpose of realising the security by sale thereof for the benefit of secured creditors. In other words, it was pointed out that physical control of respondent No. 3 over the security covered by the second debenture trust deed was not affected by the appointment of Official Liquidator.

24. Secondly it has been pointed out that an attempt was made by the State Government after the Company had gone into liquidation to run the said Mills on the leave and licence basis under the Unemployment Relief Scheme but those negotiations failed in April 1970 when the Government of Maharashtra withdrew its own offer on the ground that the workers were unwilling that the management should receive annual licence fee of Rs. 8 lacs. It has been further pointed out that no sooner negotiations failed in April 1970 the Central Government issued its order on June 2, 1970 under s. 15(a)(i) of the Act appointing a Committee of Inspectors to undertake an investigation to ascertain whether there has been or is likely to be a substantial fall in the volume of production of cotton textiles manufactured by the Mills without any justification and that order was struck down by this Court on October 9, 1971 at the instance of respondent No. 3 and that thereafter the present application has been made by the Central Government at the behest of the State Government. On these facts it was urged that for extraneous reasons such as to dispossess respondent No. 3 of his control over the security under the second debenture trust deed and at the behest of the State of Maharashtra the present application is made and as such the same is mala fide. Counsel urged that in substance the present application is an attempt to get round the winding up order passed by this Court and sale of the security by the private Receiver and because the negotiations carried on by the State Government failed and because the Central Government's order under s. 15(a)(i) was struck down by this Court, the present application was moved on behalf of the Union of India. In our view, there is no substance in this plea of mala fides raised on behalf of respondents Nos. 3 and 7 to 9. There is no question of any attempt being made by the Central Government to get round this Court's winding up order or to prevent the sale of security by the private Receiver. In the first place, the relevant direction given by this Court while passing the winding up order, on which reliance has been placed by respondent No. 3, does not empower the private Receiver to run the Mills but all that the direction does is that it safeguards all powers of his in the matter of realising the security by sale for the benefit of the secured creditors; secondly, though the private Receiver's control over the security had been safeguarded by this Court while passing the winding up order, no attempt seems to have been made by the private Receiver to have the security realised so far and nothing prevented him from realising the security by sale and as such it cannot be said that the present attempt is to get round the winding up order. It is true that the negotiations carried on by the State of Maharashtra for taking over the Mills for running the same on leave and licence basis failed in April 1970 because no settlement on the point of licence fee payable by the State Government was arrived at. But it is clear on record that even that offer had been made by the State Government only with a view to see that the unemployment of 4000 workers was relieved against, inasmuch as, admittedly management of the Mill was sought to be taken over by the State Government as a part of Unemployment Relief Scheme. Similarly, though the order passed by the Central Government on June 2, 1970 appointing a Committee of Inspectors to undertake an investigation under s. 15(a)(i) was struck down by this Court on October 9, 1971, that was not on merits but on the ground that on a proper interpretation of the section action under s. 15(a)(i) could not be taken in respect of Mills which had closed its business in October 1967. The language of s. 15(a)(i) clearly warranted that view. It was also doubtful as to whether an order under s. 15(a)(i) could be made in respect of a company which was being wound up and, therefore, with a view to remove all doubts an Ordinance No. XX of 1971 was passed inserting new s. 15A which was expressly made applicable to a company which was being wound up and the affidavit in rejoinder filed on behalf of the applicants clearly shows that it was after passing of the Ordinance and the coming into force of new s. 15A that the Central Government applied its mind to the formation of opinion as required by s. 15A and after requisite opinion was formed the present application has been preferred. As discussed earlier, the opinion required to be formed under s. 15(a)(i) is entirely different from the opinion that is required to be formed by the Central Government under s. 15A of the Act and purposes of the two investigations contemplated by the two provisions are different. Therefore, it will be difficult to say that because the Central Government failed in its attempt to sustain its order passed under s. 15(a)(i), it has oblique motive in resorting to s. 15A. Further, once it is accepted that the Central Government had relevant materials before it, that upon such material it formed the requisite opinion and that the purpose of the investigation to be undertaken is the one specified in the section, then the plea that action is being taken for some extraneous or ulterior motive must fall to the ground. As we have already come to the conclusion that the initial requirements of s. 15A have been satisfied in the present case and even the condition precedent mentioned in s. 15A has been fulfilled, it was perfectly open to the Central Government to make an application under that section and the application cannot be regarded as having been motivated by any mala fide intention or extraneous considerations.

25. In the result, all the objections raised by respondents Nos. 3 and 7 to 9 fail and the permission sought must be granted. Summons is, therefore, made absolute in terms of prayer (a) We also direct that respondents Nos. 3 and 7 to 9 should afford all facilities to the person or body of persons that will be appointed by the applicants in their work of carrying out the investigation contemplated by s. 15A.

26. Respondents Nos. 3 and 7 to 9 will pay the costs of the Summons to the applicants; costs quantified at Rs. 750.

27. Mr. Desai applies for stay of the operation of our order. We do not think that blanket stay as asked for should be granted. We direct that the Central Government can proceed to appoint a person or body of persons to investigate into the affairs of the undertaking of respondent No. 1 Company. We, however, further direct that commencement of the investigation at the hands of that person or body of persons is stayed for a period of eight days.

28. Summons made absolute.