IMPORTANT POINT
Sections 9(2), 10(2), 12(1) and 26 of Maharashtra Act No. XLVI of 1996 are constitutionally valid.

JUDGMENT

J.S. Verma, J.-This appeal by special leave is against the judgment of the Bombay High Court dismissing a writ petition filed by the appellant to challenge the validity of Sections 9(2), 10(2), 12(1) and 26 of the Central India Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986 (Maharashtra Act No. XLVI of 1986).

2. The Empress Mills, Nagpur, a textile undertaking, has been nationalised by the Central India Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986 (for short "the Act"). The constitutional validity of Sections 9(2), 10(2), 12(1) and 26 of the Act was questioned in a writ petition filed by the appellant claiming to be a representative union of the workmen employed in the Empress Mills on the ground that these provisions violate Articles 14, 19(1)(c) and 21 of the Constitution. The Bombay High Court has rejected the challenge.

3. The Empress Mills, Nagpur consists of five textile units and a paper division. It was the first venture of Jamsethji Tata, a pioneer in the field of industry. The background in which it was nationalised as mentioned in the Statement of Objects and Reasons accompanying the Bill is as under :

"The Central India Spinning, Weaving and Manufacturing Company Limited was established at Nagpur as far back as 1874 and was engaged in the production and manufacture of yarn, cloth and paper through its industrial undertaking "The Empress Mills", Nagpur. It has installed capacity of 1,10,500 spindles and 2,140 looms and a paper manufacturing unit, capable of manufacturing 2,0000 tonnes of paper per annum. The performance of the company till 1984 showed that it was earning profits and gainfully employed more than 6,000 workers. Its working results showed losses during 1984 and it was also anticipated that the operation of the undertaking would result in huge loss in 1985. In 1985, the Industrial Development Bank of India (IDBI) initiated the efforts, at the request of the company, to rehabilitate the undertaking. The Industrial Development Bank of India studied viability thereof and concluded that its operations could be made viable. A rehabilitation package, consisting of reliefs from institutions, banks and State Government was also prepared. The Industrial Development Bank of India, in fact sanctioned the loan of Rs. 3 crores in March 1986, but the management did not avail of this facility because it felt that on account of further deterioration in condition of working of the mills, additional assistance was required. While the Industrial Development Bank of India and some other banks were prepared to consider revised package, the response of the management was not positive. Attempts were made to persuade the management to resume normal operations, by availing of concessions. It, however, did not resile from its attitude and declared lock-out on 3rd May, 1986. As its earlier application for closure of the unit was rejected by the Government under Section 25-O of the Industrial Disputes Act, 1947 on the ground that its operations are viable, the company and its creditors took recourse to voluntary and compulsory winding up of the company. Though the creditors withdrew the petition for winding up, the company persisted in its course for voluntary winding up.

2. The company had filed, the petition No. 183 of 1986 for voluntary winding up under the Companies Act, 1956 in the Bombay High Court, on the ground that on account of continuous losses, the company was unable to run and manage the industrial undertaking further. The Bombay High Court, passed an order on 14th May, 1986 in the said petition, appointing provisional liquidator. The liquidator has been in possession of the properties of the industrial undertaking.

3. The undertaking had sizeable facilities to manufacture substantial production of yarn, cloth and paper. Its closure would have resu