JUDGMENT

K. Venkataswami, J.-The appellant, formerly a shareholder and Managing Director of the Nagaland Forest Products Limited (hereinafter called the "Company"), challenged the vires of Nagaland Forest Products Ltd. (Acquisition of Shares) Ordinance, 1981 and Nagaland Forest Products Ltd. (Acquisition of Shares) Act, 1982, which replaced the Ordinance (hereinafter called the "State Act"), contending inter alia that the said legislations were ultra vires the powers of Nagaland State Legislature in view of Section 20 of the Industries (Development & Regulation) Act, 1951 (hereinafter called the "Central Act").

2. Pursuant to a contract entered into between late Shri Ram Gopal Saharia, father of the appellant and the Government of Nagaland dated 24.4.1972 to establish a plywood factory in the territory of Nagaland on the terms and conditions stipulated therein, the Company was incorporated. The authorised share capital of the Company was Rs. 50,00,000/- divided into (i) 20,000/- (6% cumulative redeemable) preference shares of Rs. 100/- each (ii) 15,000/- G class equity shares of Rs. 100/- each and (iii) 15,000/- S class equity shares of Rs. 100/- each. G and S class equity sh