AIR 1988 SUPREME COURT 1353 ::1988 (2) SCC 587 ::(1988) 2 JT 227 (SC) ::1988 2 JT 227

Supreme Court Of India

Hon'ble Judge(s): Sabyasachi Mukharji, G. L. Oza , JJ

(A) Swadeshi Cotton Mills Co. Ltd. (Acquisition and Transfer of Undertakings) Act (30 of 1986) , S.3, S.4— Public purpose - Takeover of Mill - Acquisition of shares of other companies held by Mill - Shares so acquired charged with liability of Mill - Acquisition of shares cannot be said to be not for public purpose. Constitution of India , Art.141, Art.39— By an order made by the Central Government under S.18-AA(1)(a), Industries (Development and Regulation) Act, 1951 the management of the six undertakings of Swadeshi Cotton Mills, namely (i) Swadeshi Cotton Mills, Kanpur; (ii) Swadeshi Cotton Mills, Pondicherry; (iii) Swadeshi Cotton Mills, Naini; (iv) Swadeshi Cotton Mills, Maunath Bhanjan; (v) Udaipur Cotton Mills, Udaipur and (vi) Rae Bareli Textile Mills, Rae Bareli, was taken over for a period of five years. By the judgment of the Supreme Court in M/s. Doypack Systems Pvt. Ltd. v. Union of India, (AIR 1988 SC 782) it was held that 10,00,000 shares in Swadeshi Polytex Ltd. and 17,18, 344 shares in Swadeshi Mining and Manufacturing Company Ltd. held by the Swadeshi Cotton Mills vested in the Central Govt. and N.T.C. under Ss,3, 4 of the Act. The acquisition of shares was challenged on ground that it was not for public purpose and that no compensation was paid for such acquisition. It was pleaded that the Act was to ensure continuance of th....