LexDOBURG LAGER BREWERIES PVT. LTD. versus DHARIWAL BOTTLE TRADING CO. & ANR
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, 841 A DOBURG LAGER BRl!lll!RIES wr. LTD. v. D11AR1WAL BO'ITLE TRADING <Xl. & ANR. MARCH 14, 1986 B [E.S. VENKATARAMIAH AND M.P. THAKKAR, JJ.] Bombay Relief Undertakings (Special Provisions) Act, 1958, sa. 3 and 4 - Declaring an industrial undertaking as a "relief undertaking" - Whether grant of loan under the Act is a condition precedent - Whether s. 3 is controlled by the Preamble to the Act. . C The appellant, a private limited company, canfing on business in a backward area of the State, had employed about 200 workmen. It had borrowed about Rs. 52.30 lakhs from the State Industrial and Investment Corporation of Maharashtra Limited (SICOM). It ran into financial difficulties as a D result of which winding up proceedings ware counenced against it by a creditor, respondent No. l in the year 1982. Taking into consideration the financial position of the appellant- company and the consequences that were likely to ensue if the industry was to be closed, the State issued a notification under section 3 and sub-clause (iv) of clause (a) of sub- E section (1) of section 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958 declaring it as a relief undertaking and directing that any right, privilege, obligation or liability accrued or incurred by the appellant- company (except those mentioned in the Notification) before it was declared a . relief undertaking and any remedy for the F enforcement thereof became suspended and all proceedings relative thereto pending before any court, tribunal, officer or authority came to be stayed automatically. Consequently, the Company Judge of the High Court stayed the proceedings in the winding up petition. The Division Bench also confirmed the order of the Company Judge in appeal. The State Government G also issued subsequent notifications on May 9, 1984, May 10, 1985 and November 8, 1985 for t~e same purpose and pursuant to the resolution of SICOM dated February 17, 1984 another loan of Rs.15 lakhs was advanced to the appellant-company by the State Government through SIC<!!. H A B c D 842 SUPREME COURT REPORTS (1986] l S.C,R. Respondent No.l then filed a writ petition in July 1984 in the High Court challenging the aforesaid Notifications. The learned Single Judge allowed the writ petition and quashed the Notifications on the ground that in order to invoke the powers under section 3(1) of the Act, the condition precedent was that the State Government 1111St have provided under the Act, loan guarantee and other financial assistance to the under- taking as a measure preventing unemployment relief as per the Preamble of the Act and since it had not been established that Rs.52.30 lakhs had been lent by SICOM under the Act as a measure of preventing unemployment or employment relief, the Notification dated November 10, 1983 was ultra vires the Act and that the advance of Rs.15 lakhs by the State Government before May 9, 1984 did not cure the defect. The appellant- company filed an appeal against the order of the learned Single Judge and the same was dismissed by the Division llP.nch in limine. Allowing the appeal, HELD: l, The decision of the High Court that unless loan is advanced by the State Government under the Act no declaration can be made under section 3 of the Act is wholly erroneous. It is not warranted by the provisions of the E statute. The case is remanded to the High Court to consider the other contentions of the parties. (854 A; 853 H] F G H 2, The whole object of the Act is to subserve the public interest and in particular to prevent unemployment or to grant unemployment relief, Section 3 of the Act which is a self-contained one refers to the industrial undertakings in respect of which a declaration may be made under it. It is not controlled by the Preamble to the Act. An induatrial undertaking · which may be declared as a relief undertaking under sec. 3 may be of two kinds. It may be an industrial undertaking started, acquired or otherwise taken over by the State Government and carried on or proposed to be carried on by the State Government or under its authority. It may also be an industrial undertaking to which any loan, guarantee or other financial assistance has been provided by the State Government. There should be a declaration that an industrial undertaking of either kind should be conducted to serve as a mea&ure of preventing unemployment or an unemplo
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