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2014 Supreme(Bom) 506
In the High Court of Bombay at Nagpur
B.R. GAVAI & A.S. CHANDURKAR, JJ.
M/s. Shivraj Fine Art Litho Works & Others
Versus
The State of Maharashtra, through Secretary, Department of Industry and Energy & Others
Writ Petition Nos. 1455 of 1999 & 1457 of 1999
Decided On : 26-02-2014
Advocate Appeared:
For the Petitioners:S.V. Manohar, Senior Advocate with A.A. Naik, Advocate.
For the Respondents:R1 & R3 & R9A, B.H. Dangre, I/c Government Pleader, R2, U.R. Tanna, Advocate.
The Court held that an Act is entitled to protection under Article 31C of the Constitution if it has a nexus with any of the principles enumerated in Article 39(b) and (c) of the Constitution. The Court also held that an Act is not violative of Article 14 of the Constitution if it provides for the payment of compensation, even if the compensation is not at the market value of the properties.
Headnote:
The Shivraj Fine Art Litho Works (Acquisition and Transfer of Undertaking) Act, 1984 (the Act) was challenged on the grounds that it violated Articles 14, 19, and 31C of the Indian Constitution. The petitioners argued that the Act was not entitled to protection under Article 31C because it did not have a nexus with any of the principles enumerated in Article 39(b) and (c) of the Constitution. The petitioners also contended that the Act was violative of Article 14 because it provided for the acquisition of their properties without payment of adequate compensation.
Fact of the Case:
The petitioners, who were partners in a lithographic printing business, challenged the validity of the Shivraj Fine Art Litho Works (Acquisition and Transfer of Undertaking) Act, 1984 (the Act). The Act was enacted to acquire the petitioners' undertaking, which had been closed down due to bickerings among the partners, and to ensure the continuance of the undertaking and the employment of its workers. The petitioners contended that the Act was not entitled to protection under Article 31C of the Constitution because it did not have a nexus with any of the principles enumerated in Article 39(b) and (c) of the Constitution. They also contended that the Act was violative of Article 14 because it provided for the acquisition of their properties without payment of adequate compensation.
Finding of the Court:
The Court held that the Act was entitled to protection under Article 31C of the Constitution because it had a nexus with the principles enumerated in Article 39(b) of the Constitution. The Court also held that the Act was not violative of Article 14 because it provided for the payment of compensation, albeit not at the market value of the properties.
Issues: 1. Whether the Act was entitled to protection under Article 31C of the Constitution. 2. Whether the Act was violative of Article 14 of the Constitution.
Ratio Decidendi: 1. The Court held that the Act was entitled to protection under Article 31C of the Constitution because it had a nexus with the principles enumerated in Article 39(b) of the Constitution. The Court observed that the Act was enacted to ensure the continuance of the undertaking and the employment of its workers, which were legitimate objectives under Article 39(b). 2. The Court held that the Act was not violative of Article 14 because it provided for the payment of compensation, albeit not at the market value of the properties. The Court observed that the compensation provided under the Act was not illusory and that the petitioners had not suffered any deprivation of their property without due process of law.
Final Decision: The Court upheld the validity of the Act, except for sub-section (1) of Section 4 and sub-section (1) of Section 5, which were held to be unconstitutional.
1. By these petitions, the petitioners have approached this Court challenging validity of the Shivraj Fine Art Litho Works (Acquisition and Transfer of Undertaking) Act, 1984 (hereinafter referred to as “the Act”) being unconstitutional. The petitioners have, in the alternative, prayed for striking down Sections 3, 4, 5, 7, 8, 12, 16, 18, 19, 20 and 24 of the Act.
2. The facts giving rise to the present petitions, in brief, are as under :
The petitioner M/s. Shivraj Fine Art Litho Works, which is a partnership firm, was constituted originally by eight partners. Since dispute arose between the partners, the partnership firm came to be dissolved in January 1974. A suit for dissolution of partnership and for accounts was filed in 1974 being Special Civil Suit No.9/1974, which is pending before the competent Civil Court. In the said suit, Receivers came to be appointed from time to time in respect of properties of the partnership firm. The partnership firm owns several properties. One of the properties was Industrial Unit, known as M/s. Shivraj Fine Art Litho Works, which is situated near Cotton Market, Nagpur (hereinafter referred to as the “industrial undertaking”). The said industrial undertaking was engaged in the business of lithography and printing and employed about 500 workers.
3. Apart from the said property, the petitioners also owned several other properties which, according to petitioners, had no connection with the industrial undertaking, which are as under :
(a) Dhanwatey Chambers – a non business building situated on Malviya Road, Sitabuldi, Nagpur,
(b) Dhanwatey Chamber Annexe, situated just behind the Dhanwatey Chambers,
(c) Two Ghat Road buildings, one behind the other with vast open land situated in the vicinity of Cotton Market, Nagpur,
(d) An old House situated at Khandoba Galli in Sanichara, Nagpur.
It is the contention of the petitioners that the above properties were never used for the purpose of industrial undertaking.
4. An order came to be passed by the Central Government under Section 18-AA(1)(b) of the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as “the IDR Act”) on 23/8/1980, thereby authorising the Development Corporation of Vidarbha Ltd. (hereinafter referred to as “DCVL”) to take over management of the industrial undertaking belonging to the petitioners. Being aggrieved thereby, the petitioners filed Writ Petition No.2741/1980. The said writ petition was allowed by the Division Bench of this Court vide judgment and order dated 28/4/1982, as a consequence of which the order issued under Section 18-AA of the IDR Act came to be quashed. The same came to be challenged by the DCVL by filing Special Leave Petition No. 5160/1983 before the Apex Court. However, during pendency of the special leave petition, the original period of take over as provided under order dated 23/8/1980 came to an end on 22/8/1984 and as such, the special leave petition came to be dismissed on 4/2/1992 as infructuous.
5. On 11/8/1984, the State Government issued Ordinance No.V titled as “Shivraj Fine Art Litho Works (Acquisition and Transfer of Undertaking) Ordinance. On 21/12/1984, the said Ordinance was translated into Maharashtra Act No.36 of 1984. On 7/5/1984, by Amending Act of 1994, Section 6-A came to be inserted in the parent Act.
6. Another fact, which is required to be taken into consideration, is that in the civil suit that is pending before the Civil Court, the petitioners had filed civil application seeking direction to the respondents not to hand over non-business properties of the partnership firm to the DCVL. The learned Civil Judge passed an order holding that the Central Government and DCVL were entitled to take possession and control of the property belonging to the industrial undertaking as well as the Godowns at Ghat Road along with adjacent open plot. However, the learned Civil Judge held that the Central Government and DCVL were not entitled
