LexZIPPERS KARAMCHARI UNION versus UNION OF INDIA AND ORS.
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ZIPPERS KARAMC,HARI UNION v. UNION OF INDIA AND ORS. SEPTEMBER 3, 1998 [S.C. AGRAWAL, S.P. KURDUKAR AND. S. RAJENDRA BABU, JJ.) Indusflies (Development and Regulation) Act, 1951: Section 29-B(2B), Schedule I Item 38(3 ). Notification dated 30.5.1986-Provided de-rese1Vation of integrated plants of manufacture of zip fasteners (metallic and non-metal- lic rVa/idity-Held : Notification not violative of provisions of Act and A1t. 14-Notification also not illegal or irrational or arbitra1y or dis- criminatory--Constitution of India, 1950. A1t. 14. The Central Government vide Notification date 30.5.1986 granted permission to respondent No. 3 to set up integrated plants for manufac- turing zip fasteners (metallic and JJ.on- metallic) with hundred per cent own capital investment with no export obligation. The petitioners filed a writ petition before this Court for c1uashing the said permission granted to respondent No. 3 and also to set aside the · aforesaid Notification and for a declaration that the new Industrial Policy of 1991 was in violation of Industries (Development and Regulation) Act, 1951. On behalf of the petitioners it was contended that under Section 29-B(2B) of the Act, zip fasteners (metallic and non- metallic) industry was reserved as a small-scale industry under Item 38 of Schedule I of the Act and the de-reservation by the said Notification was ultra vires Section 29-8(28) of the Act, and that the said Notification was arbitrary, irrational and discriminatory. Dismissing the petition, this Court (Per Kurdukar, J., for himself, and Agrawal, J.) A B c D E F G HELD: 1.1. From the preamble of the Notification dated 30.5.1986, H 379 380 SUPREME COURT REPORTS [1998) SUPP.1 S.C.R. A it is quite clear that in view of the recommendations made by the Advisory Committee constituted under Section 29-B(2B) of the Industries (Develop- ment and Regulation) Act, 1951 the Government of India de-reserved the integrated plant manufacturing all components. The concept of integrated plant is well known in the business circle to mean that all components B needed for the end product are manufactured under one roof. [385-D] c 1.2. What has been de-reserved is an integrated plant. It is taken out from the purview of small-scale industry. This change was made on the basis of the recommendation of the Advisory Committee constituted under Section 29-B(2B) of the Act. [385-G-H] 1.3. The Government of India accepted the report of a study team and with a view to have ljUality zip fasteners (metallic and non-metallic) and in order .. to compete with the world market and also to generate employment in the field of readymade garments and leather industry, it thought fit to de- reserve and integrated plant manufacturing fasteners. D The object seems to be that all components of zip fasteners if manufac- tured in an integrated plant, the same will have a quality control which will compete with the world market in that behalf. Therefore, in the circumstances, the Notification dated 30.5.1986 is neither illegal, irration- al, arbitrary nor discriminatory and does not violate either Article 14 of E the Constitution or any provisions of the Act. [387-D-E] State of Bihar v. K.Jipalu Shankm; [1987] 3 SCR 1, referred to. (Per Rajendra Babu, J., concurring) : F In matters of trade and commerce or economic policy, the wisdom of the Government must be respected and courts cannot lightly interfere with the same unless such policy is contrary to the provisions of the Constitution or any law or such policy itself is wholly arbitrary. In the present case, the two categories of articles considered in the Notification dated 30.5.1986 are 'zip fasteners' manufactured by small-scale industries G and 'zip fasteners' manufactured by large-scale industries in integrated units. In order to improve the quality of 'zip fasteners' produced, the Advisory committee opined that 'zip fasteners' must be allowed to be manufactured by integrated units which would certainly fall \\ithin the category oflarge-scale industries as the investment has to be heavy in such H cases. Articles manufactured by one industry adopting one process can be .. '!'> < ZIPPERS KARAMCHARI UNION v. U.O.I. [S.P. KURDUKAR, J.] 381 commercially different from the goods manufactured by other industrial units. Such categorisation of goods depending upon the process adopted is well known in fiscal statutes and is not unknown co
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