Back
HIGH COURT OF CALCUTTA
B. C. Mitra
THE METAL CORPORATION OF INDIA LTD. - Appellant
Versus
UNION OF INDIA (UOI) - Respondent
Matter 551 Of 1968
Decided On : APRIL 01, 1969
The Supreme Court of India ruled on a petition challenging the Metal Corporation of India (Acquisition of Undertaking) Act, 1966, which acquired the petitioner's undertaking. The Court held that the Act was not violative of Article 31(2) of the Constitution, which protects against deprivation of property without compensation. The Court found that the Act specified principles for determining compensation and that the principles were not irrelevant to the determination of compensation. The Court also held that the Act was not arbitrary or illusory and that the compensation provided was not inadequate. The Court further held that the petition was barred by res judicata, as the petitioner had previously filed a petition under Article 32 of the Constitution challenging the validity of the Act, which was dismissed by the Supreme Court. The Court also rejected the petitioner's contention that the Act violated Article 14 of the Constitution, which prohibits discrimination, as this issue was not raised in the petition before the Supreme Court.
Fact of the Case:
The petitioner, Metal Corporation of India (MCI), challenged the Metal Corporation of India (Acquisition of Undertaking) Act, 1966, which acquired MCI's undertaking. MCI argued that the Act violated Article 31(2) of the Constitution, which protects against deprivation of property without compensation. MCI also argued that the Act violated Article 14 of the Constitution, which prohibits discrimination.
Finding of the Court:
The Court held that the Act was not violative of Article 31(2) of the Constitution. The Court found that the Act specified principles for determining compensation and that the principles were not irrelevant to the determination of compensation. The Court also held that the Act was not arbitrary or illusory and that the compensation provided was not inadequate. The Court further held that the petition was barred by res judicata, as MCI had previously filed a petition under Article 32 of the Constitution challenging the validity of the Act, which was dismissed by the Supreme Court. The Court also rejected MCI's contention that the Act violated Article 14 of the Constitution, as this issue was not raised in the petition before the Supreme Court.
Issues: 1. Whether the Metal Corporation of India (Acquisition of Undertaking) Act, 1966, violated Article 31(2) of the Constitution, which protects against deprivation of property without compensation? 2. Whether the Act violated Article 14 of the Constitution, which prohibits discrimination? 3. Whether the petition was barred by res judicata?
Ratio Decidendi: 1. The Court held that the Act was not violative of Article 31(2) of the Constitution. The Court found that the Act specified principles for determining compensation and that the principles were not irrelevant to the determination of compensation. The Court also held that the Act was not arbitrary or illusory and that the compensation provided was not inadequate. 2. The Court rejected MCI's contention that the Act violated Article 14 of the Constitution, as this issue was not raised in the petition before the Supreme Court. 3. The Court held that the petition was barred by res judicata, as MCI had previously filed a petition under Article 32 of the Constitution challenging the validity of the Act, which was dismissed by the Supreme Court.
Final Decision: The Court dismissed the petition.
( 1 ) THIS is an application for appropriate Writs and Orders directing the Union of India (respondent No. 1) not to give effect to the Metal Corporation of India (Acquisition of Undertaking) Act, 1966, and for orders striking down, cancelling and declaring void the said Act and also for orders prohibiting the Union of India from enforcing and/or giving effect to the Metal Corporation of India (Acquisition of Undertaking) Ordinance, 1965. There is also a prayer for an injunction restraining the Union of India from selling, charging and dealing with the petitioner's undertaking and also the petitioner's properties both movable and immovable including lead and zinc ore and lead and zinc metals and silver smelter of the petitioner.
( 2 ) IN 1944 the petitioner No. 1 (hereinafter referred to as the company) was Incorporated as a public company under the Indian Companies Act, 1913. The company initially commenced its business in 1944 with a share capital of Rs. 35 lacs. The authorised capital of the company at present is Rs. 5 crores divided into 7000, 5 per cent tax free cumulative preference shares of Rupees 100/- each; 1,93,000, 6 per cent tax free redeemable cumulative preference shares of Rs, 100/- each and 30,00,000 ordinary shares of Rs. 10/- each. The paid-up share capital of the company is Rupees 2,46,64,2357 -. The petitioner No. 2 is a share-holder of the company and is at present a Director. The petitioner No. 2 claims to make this application for self and for the benefit of all the share-holders of the company.
( 3 ) THE company obtained the lease of 20 Sq. miles of the mining land at Zawar in Rajasthan from the Government of Rajasthan for a term of 20 years with options for two further terms of like period and commenced prospecting. A Geological survey of the area was made and survey reports were prepared. The company had a lead smelter at Tundoo near Dhanbad and started smelting of lead and silver metals. Subsequently the company also installed a zinc smelter at Udaipur, Rajasthan.
( 4 ) ON October 22, 1965, the President of India promulgated an Ordinance namely the Metal Corporation of India (Acquisition of Undertaking) Ordinance, being Ordinance No. 6 of 1965, for the purpose of acquiring the entire undertaking of the company. Pursuant to this Ordinance the Central Government took over possession, control and administration of the assets and undertaking of the company on October 23, 1965. This was followed by a writ petition by the company in the Punjab High Court on October 26, 1965, in which the company challenged the vires of the ordinance on various grounds. In the meantime, the Parliament passed an Act namely the Metal Corporation of India (Acquisition of Undertaking) Act being Act No. 44 of 1965, on the same terms and conditions as contained in Ordinance No. 6 of 1965. Thereupon the company filed another writ petition in the Punjab High Court for a declaration that the Act was ultra vires the Constitution. The Punjab High Court by a judgment dated March 14, 1966, held that the impugned Ordinance and the Act violated Article 31 (2) of the Constitution and could not therefore be enforced against the company. Thereafter the Union of India preferred an appeal from the judgment, and order of the Punjab High Court to the Supreme Court and this appeal was dismissed with costs by the Supreme Court on September 5, 1966. The judgment of the Supreme Court was followed by another Ordinance on September 13, 1966 namely the Metal Corporation of India (Acquisition of Undertaking) Ordinance, being Ordinance No. 10 of 1966, for the purpose of acquiring the undertaking of the company. During all these proceedings the Government of India remained in possession of the company's assets and undertaking. An Act was passed by Parliament namely the Metal Corporation of India (Acquisition of Undertaking) Act, 1966, being Act No. 36 of 1966, incorporating the terms of the said Ordinance No. 10 of 1966, and this Act
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
