TMI Blog1972 (12) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... years. The Delhi High Court dismissed the writ petition after hearing the parties and hence this appeal. The facts and circumstances leading to the filing of the petition are briefly stated as follows. The Company is the owner of a cotton textile mill at Petlad known as Keshav Mills. The Company was established in 1934 and, as far as one can judge from the facts and figures cited in the petition, the Company made flourishing business between the years 1935 and 1965. Indeed, if the appellants' figures are to be believed,-and there is no reason to disbelieve them, each holder of the 250 ordinary shares of the Company seems to have received ₹ 33,685 in course of a period of 30 years between 1935 and 1964-65 as profit on an initial investment of ₹ 1,000 only. On top of this the Company's capital block was increased from ₹ 10.62 lakhs in 1935 to ₹ 78,38,900 at the end of the year 1964-65. All these profits, however, went to a close group of people, since 80 per cent of the share capital belongs to petitioner Parekh, his family members, relations and friends and only 20 per cent share-capital is in the hands of the members of the public. The Company, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r by the Government of India detailing the point of reference to the Investigating Committee was to the following effect Subject:-Appointment of Investigation Committee for Petlad Keshav Mills Co. Ltd. Petlad (Gujarat) under the Industries (Development and Regulation) Act, 1951. Sir, I am directed to enclose a copy of order dated 31st May, 1969, issued under Section 15 of the Industries (Development and Regulation) Act, 1951, setting up' a committee to enquire into the affairs of Petlad Keshav Mills Co. Ltd., Petlad, Gujarat for your information and necessary action. The investigation should also be directed to the following specific points :- (a) Reasons for the present state of affairs. (b) Deficiencies, if any, in the existing machinery. (c) Immediate requirements, under separate heads of accounts, of working capital if any. (d) Requirement of long-term capital for modernisation/rehabilitation. (e) financial result of :- (i) Immediate working without further investment on capital account. (ii) Working after further investment on capital account. (f) Suggestion regarding source of funds required under (e) and (d) and secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the keys of the Company's premises to R. C. Bhatt under protest. On 15 December 1970 the Company filed a writ petition before the High, Court of Delhi under Articles 226 and 227 of the Constitution, of India praying for appropriate reliefs . Though several grounds were taken in the writ petition, the- main contention of the appellants before the Delhi High Court was that it was not competent for the Government of India to proceed under Sec. 18A against the Company without supplying- beforehand a _copy of the report of the Investigating Committee to the Company. The appellants complained that though the Investigating Committee had submitted a report to the Government of India in January, 1970 the Government did not furnish the management of the Company with the contents of the report. According to the appellants the Government should not only have supplied a copy of the report to the Company but should also have given a hearing to the Company before finally deciding upon taking over the Company's undertaking under Sec.. 18A of the Act. This contention was pressed on behalf of the appellants in spite of the fact that an opportunity had been given by the Investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation, give the Management and the employees of the undertaking or undertakings in respect of which the investigation is ordered, reasonable opportunity of being heard including opportunity to adduce any evidence. The only question that we have to decide now is whether after the undertaking has already been given such an opportunity at the time of investigation it is entitled to have a copy of the report and to make, if necessary, further representation about that report before a final decision is made by the Government about taking action under Sec. 18A of the Act. Our decision on this question will depend on our answers to the following questions :- (i) Is it necessary at all to observe the rules of natural justice before enforcing a decision under Sec. 18A of the Act ? (ii) What are the rules of natural justice in such a case ? (iii) (a) In the facts and circumstances of the present case have the rules to be observed once during the investigation under Sec. 15 and then again after the investigation is complete and action on the report of the Investigating Committee taken under Sec. 18A ? (b) Was it necessary to furnish a copy of the Investigating Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that question we shall keep in mind the observations of Tucker L. J. set out just now and examine the nature and scope of the inquiry that had been carried out by the Investigating Committee set up by the Government, the scope and purpose of the Act and rules under which the Investigating Committee was supposed to act, the matter that was being investigated by the Committee and finally the opportunity that was afforded to the appellants for presenting their case before the Investigating Committee. The Act was passed to provide for development and regulation of important industries the activities of which, according to the Statement of Objects and Reasons of the Bill which resulted in the Act affect the country as a whole and the development of which must be governed by economic factors of all-India import . For achieving this Purpose the Act confers certain powers on Government to secure the planning of future development on sound and balanced lines by the licensing of all new undertakings and also by making rules for the registration of existing undertakings, for regulating the production and development of the industries and also, in certain cases, by taking over the contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the industrial undertaking and, finally, for controlling the price or regulating the distribution of any article or class of articles which have been the subject matter of the investigation. In certain cases, however, such indirect control may not be enough and Government may interfere and take up the direct management or control of industrial undertakings. Sec. 18A details the circumstances when the Government may impose such control by authorising a person or body of persons to take over the management of the whole or any part of the undertaking. Before, the Government assumes such management or control, the Government must be of the opinion that the undertaking concerned has failed to comply with the directions issued under Sec. 16 of the Act or that the industrial undertaking regarding which there has been an investigation under Sec. 15 is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest . In the instant case, the Government of India came to hold the opinion that there was a substantial fall in the volume of production in respect of the Company's production of cotton textiles for which Government apparently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d authority to treat the report as if it was also made under Sec. 15 (b) of the Act. In the case of Shri Ambalal M. Shah and Anr. v. Hathisingh Manufacturing Co., Ltd. ([1962] 3 S. C. R. 171) the Central Government made an order under Sec. 15 of the Act by which a committee of three persons was appointed for the purpose of making a full and complete investigation into the circumstances of the case. Before appointing this committee the Government came to hold the opinion that there had been a substantial fall in the volume of production in respect of cotton textiles manufactured by Hathisingh Manufacturing Co., Ltd. for which, having regard to the economic conditions prevailing at that time there was according to Government no justification. After the com- mittee had submitted its report the Central Government held the opinion that the company was being managed in a manner highly detrimental to public interest and made an order under Sec. 18A of the Act authorising Ambalal M. Shah to take over the management of the whole of the undertaking of that company. The legality of the order was challenged on the ground that the order under Sec. 18A could have been made only after the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company's application to the Gujarat State Textile Cooperation Ltd. for financial help. It appears clearly from this letter that though according to Parikh some progress had been made in the matter of securing assistance from the Gujarat State Textile Corporation Ltd. the Corporation ultimately failed to come to the succor of the company. Parikh requested Government not to appoint an authorised controller and further prayed that the Government of India should ask the State Government and the Gujarat State Textile Corporation Ltd. to give a financial guarantee to the Company. Two things appear quite clearly from that letter; first, that the appellants required a minimum sum of ₹ 20 lakh is as immediate aid and, secondly, that the Company in spite of various approaches had not succeeded in securing the same. Only a few days before this letter had been addressed, Parikh, it appears, had an interview with the Minister of Foreign Trade on 26 August 1970 when the Minister gave him, as a special case, four weeks' time with effect from 26 August 1970 to obtain the necessary financial guarantee from the State or the Gujarat State Textile Corporation without which the Company h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d were in fact negotiating with Government for such help as might enable them to reopen the mill and to avoid a take-over of their undertaking by the Government. Having regard to these features it is impossible for us to accept the contention that the appellants did not get any reasonable opportunity to make out a case against the take-over of their undertaking or that the Government has not treated the appellants fairly. There is not the slightest justification in this case for the complaint that there has been any denial of natural justice-. We must, however, deal with the specific point raised by the appellants that they should have been given further hearing by the Government before they took the final decision of taking over their undertaking under Sec. 18A of the Act and that, in any event, they should have been supplied with a copy of the report of the Investigating Committee. In our opinion, since the appellants have received a fair treatment and also all reasonable opportunities to make out their own case before Government they cannot be allowed to make any grievance of the fact that they were not given a formal notice calling upon them to show cause why their undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then went up to the House of Lords who allowed the appeal and upheld the closing order. Viscount Haldane L.C., in his judgment held that though the decision of the Board must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice it does not follow that the procedure of every such tribunal must be the same. In the absence of a declaration to the contrary, the Board was intended by Parliament to follow the procedure which is its own and is necessary if the administration is to be capable of doing its work efficiently. AR that was necessary for the Board was to act in good faith and to listen fairly to both sides. (Emphasis is ours). As to the contention that the report of the inspector should have been disclosed, his Lordship observed :- It might or might not have been useful to disclose this report, but I do not think that the Board was bound to do so, any more than it would have been bound to disclose all the minutes made on the papers in the office before a decision was come to . Lord Moulton in his judgment observed that since the appeal provided by the legislature is an appeal to an administrative department of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as against the publication of the reports, the Committee recommended that the right course is to publish the inspectors' reports . The Committee also recommended that the parties concerned should have an opportunity if they so desired to propose corrections of facts stated in the reports. It may be mentioned, however that these recommendations of the Committee were not accepted by the British Government. In our opinion it is not possible to lay down any general principle on the question as to whether the report of an investigating body or of an inspector appointed by an administrative authority should be made available to the persons concerned in any given case before the authority takes a decision upon that report. The answer to this question also must always depend on the facts and circumstances of the case. It is not at all unlikely that there may be certain cases where unless the report is given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report. Whether the report should be furnished or not must therefore depend in every individual case on the merits of that case. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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