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--------------- Print Magazine --------------
 
  May 2016
 
  April 2016
 
 
 
 
PERMAMENT IMPRINT LEADING CASES
Taking over of management of the undertaking of Minerva Mills after conducting enquiry under section 18A of the Industries (Development and Regulation) Act, 1951

Minerva Mills Ltd. v. Union of India

Facts: On the writ petition under Article 32 of the Constitution of India the petitioners including Minerva Mills Ltd. and some creditors challenged the legality of order for taking over the management of textile undertaking of petitions. The writ petition had also included the validity of Sick Textile Undertakings (Nationalisation) Act, 1974.

A Central Government appointed Committee made a full and complete investigation of the affairs of the Minerva Mills Ltd. and after investigation the Central Government authorized National Textile Corporation to take over the management of the undertaking of the company.

Issues: (1) Whether there was justification for taking over the management of the undertaking of the company under section 18A of the Industries (Development and Regulation) Act, 1951?

(2) Whether there was foundation for the finding of the Central Government that where the undertaking of the company was being managed in a manner highly detrimental to public interest, the Government could not sanction a guarantee in such issues?

Decision: It was held that where the management of a textile undertaking which was being run in loss and had to be closed down was taken over by the Central Government after conducting enquiry on the ground that the affairs of the undertaking were being managed in a manner highly detrimental to public interest, the decision to take over the management would not be open to challenge on the ground that prior to taking over of the management, the State Government had given financial assistance to the undertaking especially when the decision to take over the management was not challenged before any court of law.

It was further held that Industries (Development and Regulation) Act, 1956 could not be said to damage the basic structure of the Constitution.

 
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