Judgment

MUKHERJEA, J. :- This appeal by special leave from a judgment and order of the Delhi High Court arises out of a petition under Articles 226 and 227 of the Constitution of India made by Keshav Mills Company Limited (hereinafter referred to as the Company) and Navin Chandra Chandulal Parekh who is a share-holder and a Director of the Company challenging the validity of an order dated 24 November 1970 passed by the Government of India under Sec. 18A of the Industries (Development and Regulation) Act, 1951 (65 of 1951) (hereinafter referred to as the Act) by which the Gujarat State Textile Corporation Ltd. has been appointed the authorised controller of the Company for a period of five years. The Delhi High Court dismissed the writ petition after hearing the parties and hence this appeal. The facts and circumstances leading to the filing of the petition are briefly stated as follows.

2. The Company is the owner of Cotton textile mill at Petlad known as Keshav Mills. The Company was established in 1934 and, as far as one can judge from the facts and figures cited in the petition, the Company made flourishing business between the years 1935 and 1965. Indeed, if the appellants figures are to be believed, - and there is no reason to disbelieve them, each holder of the 250 ordinary shares of the Company seems to have received Rupees 33,685/- in course of a period of 30 years between 1935 and 1964/65 as profit on an initial investment of Rupees 1,000/- only. On top of this the Company s capital block was increased from Rupees 10.62 lakhs in 1935 to Rupees 78,38,900/- at the end of the year 1964/65. All these profits, however, went to a close group of people, since 80 per cent of the share capital belongs to petitioner Parekh, his family members, relations and friends and only 20 per cent share-capital is in the hands of the members of the public. The Company, however, fell on evil days after the year 1964/65 and the textile mill of the Company was one of the 12 sick textile mills in Gujarat which had to be closed down during 1966 and 1968. We are not here directly concerned with the various causes which were responsible for this sudden reversal of the fortunes of this Company. Suffice it to say that on 31 May 1969 the Government of India passed an order appointing a committee for investigating into the affairs of the Company under the provisions of Section 15 of the Act. We shall hereafter refer to this Committee as the Investigating Committee. The material portion of the order dated 31 May 1969 is reproduced as hereunder :-

"S.O./15IDRA/69 :- Whereas the Central Government is of the opinion that there has been, or is likely to be substantial fall in the volume of production in respect of cotton textiles manufactured in the industrial undertaking known as the Petlad Keshav Mills Co. Ltd., Petlad (Gujarat) for which, having regard to the economic conditions prevailing there is no justification.

Now, therefore in exercise of the powers conferred by Section 15 of the Industries (Development and Regulation) Act 1951 (65 of 1951), the Central Government hereby appoints, for the purpose of making full and complete investigation into the circumstances of the case, a body of persons consisting of :

(1) Shri I .C. Shah (General Manager, Ambica Group of Mills, Ahmedabad) ...... Chairman

(2) Shri M. C. Mirchandani Director (Technical) National Textile Corporation ...... Member

(3) Shri J. P. Singh Director (Finance) National Textile Corporation ...... Member

(4) Shri M. Sivagnanam, Industries Commissioner, Government of Gujarat, Ahmedabad ...... Member

(5) Shri V. A Mahajan, Senior Accounts Officer, Office of the Regional Director, Company Law Board, Bombay ...... Member

(6) Shri Y. L. N. Achar, Inspecting Officer, Office of the Textile Commissioner Bombay ...... Member"

In this connection it may be relevant to set out some extracts from the communication that was sent out on 11 June 1969 by the Government of India to the various members of t