MINERVA MILLS LTD. & ORS. ETC. ETC. versus UNION OF INDIA & ORS.

Citation: [1986] 3 S.C.R. 718 · Decided: 09-09-1986 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Dismissed

Judgment (excerpt)

A 
MINERVA MILLS LTD. & ORS. ETC. ETC. 
v. 
B 
UNION OF INDIA & ORS. 
SEPTEMBER 9, 1986 
[O. CHINNAPPA REDDY .AND MURARI Me>HON DUTT, JJ.] 
~ 
Industrial (Development and Regulation) Act 1951, ss. 15 and 
C 
!BA-Non-supply of Report of Investigation Committee-Whether fai-
lure of natural justice-Take over of management of undertaking-Grant 
of loan by government to the undertaking-Whether sufficient to say that 
order of'takeover' has no basis. 
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F 
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·Sick Textile Undertakings (Nationalisation) Act, 1974-Validity of. 
Constitution of India, Articles 14, 19, 31A and 3/C-Challenge 
that basic or essential feature of Constitution is damaged or destroyed-
When can be raised. 
Administrative Law-Natural justice-Failure of-Whether arises 
in non-supply of copy of Investigation Committee Repori under s. ! 5 
· . ....._ 
Industrial (Development and Regulation) Act. 
The petitioner, Minerva Mills Ltd.-a textile undertaking iiad been 
running at a 1°"8 and bad to be closed down. The Central Government 
ordered an investigation into the affairs of the petitioner-company under 
s. 15 of the Industries (Development & Regulation) Act 1931. Thereafter, ~ 
the State Gove'rnment of Mysore sanctioned the guarantee to enable the 
petitioner-company to raise a loan of Rs.20 lacs from the State Bank of 
India. After the investigation was made, the Central Government passed 
an order under s. 18Aofthe IDR Act taking over the management of the 
undertaking of the Company on the ground that the Central Government 
was of opinioo that the undertaking was being managed in a manner 
highly detrimental to public interest. During the pendency of the man-
agement of the 1111dertaking by the National Textile Corporation, the Sick 
Textile Undertakings Ordinance of 1974 was promulgated, and it was 
replaced later on by the Sick Textile Undertakings (Nationalisation) Act 
1974. 
718 
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d 
MINERVA MILLS v. U.O.l. 
719 
The petitioners including the company unsuccessfully challenged 
before the High Court under Art. 227, the order dated October 18, 1971, 
passed by the Central Government under s. 18A of the Industrial (De· 
velopment and Regulation) Act as also the Nationalisation Act. Their 
appeals were also summarily dismissed by the Division Bench of the High 
Court. 
The petitioner, Minerva Mills Ltd. and some of its creditors cha I· 
Ienged before the Supreme Court under Art. 32 of the Constitution, the 
legality of the aforesaid order as also the constitutional validity of Sick 
Textile Undertakings (Nationalisation) Act 1974. 
Dismissing the writ petitions, 
HELD: 1.1 The investigation that was made under s. 15 of the 
Industrial (Development and Regulation) Act and the consequent find-
ings of the Government on the basis of which the management of the 
undertaking of the Company was taken over under s. ISA of the Indus!· 
rial (Development and Regulation) Act, was that the affairs of the under-
taking of the Company were being managed in a manner highly detri-
mental to public interest. The undertaking had been running' at a loss and 
had to be closed down on January 2, 1970. This miserable condition of the 
undertaking might be due to the mismanagement of its affairs. [723E-F] 
1.2 The Government might have thought of assisting the Company 
to raise a loan of Rs.20 lacs, but that fact or the fact that such proposal 
for assistance was made for special reasons as provided in the second 
proviso to s. 4 of the Mysore State Aid to Industries Act, 1959 is not, 
sufficient to uphold the contention of the petitioners that there was no 
basis or foundation fortheorderunders. 18A. [7BF-G] 
l.3 The legislature had decided that the undertaking of the Com· 
pany was a sick textile undertaking by including the same in the First 
Schedule to the Nationalisation Act. There can be no doubt that the 
legislative judgment should be looked upon with respect and it requires 
very strong grounds to set it at naught. Jn the instant case, there is no 
existence of any such ground. [724B-C I 
2. The petitioner-company was given a hearing by the Investiga-
tion Committee and, therefore, it got ample opportunities to make re-
presentations against the proposed take-over. It is difficult to lay down 
that non-supply of a copy of the report of investigation under s. 15 of the 
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B 
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B 
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720 
SUPREME COURT REPORTS 
11986] 3 S.C.R. 
Industrial (Development and Regulation) Act will always occasion a 
failure of n

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