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1986 Supreme(Kar) 185

Karnataka High Court
M/s.Balaji Vegetable Products (P) Ltd.Bangalore - Appellant
Versus
Union of India - Respondent
Decided On : 04-24-86

The petitioner was entitled to have the change in ownership of the industrial unit endorsed in the licence, as it had ultimate control over the affairs of the unit and had possession of the unit.

Headnote:

INDUSTRIAL LICENCE - OWNERSHIP TRANSFER - INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951, RULES 1952 - The court allowed the petition, directing the transfer of the industrial licence in favor of the petitioner, subject to the result of the pending suit for specific performance. The petitioner was also permitted to file an application for the prescribed quota of imported oil, and the second respondent was directed to decide the same within four months. The court's order was subject to the result of the pending civil suit and did not prevent the parties from seeking other interim orders.

Fact of the Case:

The petitioner sought a writ of mandamus to amend the Industrial Licence and supply the prescribed quota of imported oil for the manufacture of Vanaspati at the manufacturing unit. The petitioner claimed to have taken over the industrial unit and sought to substitute its name in the licence.

Finding of the Court:

The court found that the petitioner was entitled to have the change in ownership of the industrial unit endorsed in the licence, subject to the result of the pending suit for specific performance. The petitioner was also entitled to the supply of the prescribed quota of imported oil, with the second respondent directed to decide the same within four months.

Issues: 1. Whether any part of the cause of action arose within the jurisdiction of the Court. 2. Whether the petitioner is entitled to have its name substituted in the licence. 3. Whether the petitioner is entitled to the prescribed quota of imported oil.

Ratio Decidendi: The petitioner was entitled to have the change in ownership of the industrial unit endorsed in the licence, as it had ultimate control over the affairs of the unit and had possession of the unit. The court's order was subject to the result of the pending suit for specific performance.

Final Decision: The court allowed the petition, directing the transfer of the industrial licence in favor of the petitioner, subject to the result of the pending suit for specific performance. The petitioner was also permitted to file an application for the prescribed quota of imported oil, and the second respondent was directed to decide the same within four months. The court's order was subject to the result of the pending civil suit and did not prevent the parties from seeking other interim orders.

K. A. SWAMI, J.

( 1 ) IN this petition under Art. 226 of the constitution, the petitioner has sought for the following reliefs :-"a) Issue a writ of mandamus and/or any other appropriate writ, order or direction as the case may be, directing the 1st respondent to amend the Industrial Licence No. L/no. 28 (2) N-12/70 Dt/-14-12-1970 for the manufacture of 50 tonnes of Vanaspati per day by entering the name of the petitioner as owner of the said manufacture plant forthwith or within such time as this Hon'ble Court might deem fit and to return the same to the petitioner; b) Issue appropriate writ, order or direction as the case may he directing the 2nd respondent to, supply the prescribed quota of Imported oil required for the manufacture of Vanaspati at the manufacturing unit at Sitapur, Uttar Pradesh, run by the petitioner company due from 30th Jan. 1976 up to date and also to direct him to allot the prescribed quota hereafter and also to allot the prescribed quota of coal and other raw materials required for the operation of the plant. c) Pass such other orders just and expedient in the circumstances of the case including the award of Costs".

( 2 ) THE petitioner came to he incorporated as a Company under the provisions of the Indian Companies Act on 17-1-1976 A Certificate of registration is produced by the petitioner as per Annexure-D. One Mr. R. N. Agarwal, Managing Director of Sri Balaji Textile Mills Private Limited. Bangalore entered into an agreement with the third respondent to purchase the Industrial undertaking known as "narain Vegetable Products" situate at Sitapur. Uttar Pradesh owned by the third respondent. on 17-12-1975 for a sum of Rs. 50 lakhs and paid a sum of Rs. 2,01,000/- through a cheque. A receipt to that effect was executed by the third respondent. A copy of the same is produced as Annexure-A. The possession of the Industrial Unit in question, according to the case of the petitioner, was handed over on 3-1-1976 as per Annexure-B. Further case of the petitioner is that an agreement for sale dt. 8-1-1976, produced as Annexure-C was also executed by Sri. R. N. Agarwal as Managing Director of Sri Balaji Textile Mills Private Limited, and by Sri N. K. Seth as the director of the third respondent on behalf of the third respondent; that the petitioner was put in possession of the assets mentioned in the schedule to the agreement, and from that time it has been exclusively managing and running the industrial unit; that on 28-1-1976 an application was sent to the second respondent informing him that the petitioner has taken over M/s. Narain Vegetable Products. Sitapur and starting production of vanaspati from 30-1-1976 in the name and title of M/s. Balaji Vegetable Products, Pvt. , Ltd. , Sitapur and shall be selling the product, under the brand name of "suhagin". Thereafter, the petitioner sought for substituting its name in the licence as per R. 19a of the Registration and Licencing of Industrial Undertakings Rules 1952 (hereinafter referred to as the Rules) and also sought for allotment of imported oil for the production of Vanaspati Oil. As the name of the petitioner was not substituted on the ground that it was being opposed to by the third respondent, the petitioner has approached this Court for the aforesaid reliefs.

( 3 ) THE respondents have resisted the petition. They inter alia contend that no part of the cause of action has arisen within the jurisdiction of this Court that the petitioner has not become the owner of the industrial undertaking; that the petitioner has filed a suit bearing O. S. 91/81 in the Court of Civil Judge, Sitapur for specific performance; that the suit is also being resisted by the third respondent and that the petitioner has not complied with all the terms of the agreement for sale.

( 4 ) IN the statement of objections filed by the third respondent on 16-3-1977, the agreement for sale produced as Annexure-C is not disputed. Regarding, the letter dt. 3-1-1976 produced as Annexure-








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