B. K. Mukherjea, J. - (1.) This is a petition under Art. 32 of the Constitution presented by one Seth Shanti Sarup, a partner of the firm of Messrs, Lallamal Hardeodas Cotton Spinning Mills Company, Hathras praying for appropriate writs to set aside and quash two orders, one dated 21-10-1952, made by respondent 1, the Government of India, under S. 3(4), Essential Supplies (Temporary Powers) Act of 1946, and the other an earlier one passed by the second respondent on the 21-7-1949, under S. 3(f), U. P. Industrial Disputes Act, 1947. There is a further prayer for consequential relief in the shape of restoration of possession of the properties from which the petitioner and his co-partners are alleged to have been dispossessed in pursuance of the impugned orders and recovery of damages for the loss sustained in consequence thereof.
(2.) To appreciate the contentions that have been raised before us it would be necessary to narrate briefly the material facts in chronological order. The partnership firm known as Lallamal Hardeodas Cotton Spinning Mills Company, of which the petitioner is a partner, was started some time in the year 1921 at Hathras within the State of U. P. and it carried on, since then, the business of production and supply of cotton yarn. The partners numbering 16 in all were members of the same family and the capital supplied by them amounted to about 24 lakhs of rupees. The business was a fairly profitable one since its inception; but in 1944 differences arose between the partners and one of them named Raghunath Pershad instituted a suit, being suit No. 67 of 1944, for dissolution of the partnership, in the Court of the Civil Judge, Agra. That suit was dismissed on the preliminary ground that it was not maintainable by reason of there being an arbitration clause in the partnership agreement. Against this judgment an appeal was taken to the High Court at Allahabad and this appeal, being Appeal No. 121 of 1952, is still pending hearing. During the pendency of the suit and the appeal Receivers were appointed by the trial Judge and at a late stage by the High Court also who worked the mills under the directions of the Court and the business did vield some profits up to the year 1948. In February, 1949, the Receiver reported that the mills could thenceforth be run only at a loss and thereupon on 19-3-1949, the Court ordered the mills to be closed. It appears that on 23-4-1949, a letter was received by the Court from the Deputy Secretary, Labour Department of the, U. P. Government wherein the Government expressed their desire of taking over these mills and running the same themselves under the Industrial Disputes Act. This fact was recorded by the Court in its order dated 2-6-1949, and the learned Judge expressed his opinion that although Government was entitled to take over the mills if they so desired, yet as the parties raised objections to Government management the Government should keep in view the objections of the parties before they made any final decision in the matter. On 21-7-1949, the Government of U. P. which figures as respondents 2 in the petition, passed an order purporting to be made under S. 3 (f), U. P. Industrial Disputes Act, 1947 by which they appointed respondent 3 one of the partners of the firm, as "authorised controller" of the undertaking apparently in terms of the provision of that sub-section. The order directed the said respondent to take over possession of the mills to the exclusion of the other partners, the Receiver and the managers and run the undertaking himself subject to the general supervision of the District Magistrate, Aligarh. He was allowed a pay of Rs. 1,000 per month and a commission of 12 annas per cent. on the sale of goods produced and was given the the power to dispose of the funds and assets, both movable and immovable. It may be mentioned here that this order of appointment was assented to by 9 out of the remaining 15 partners and the consenting partners admittedly owned between themselves more than 50 per cent. of the share capital. The respondent 3 took possession of the mills on the strength of this order and carried on the undertaking for about a year which resulted in loss. In July 1950 the petitioner instituted a suit in the court of the Subordinate Judge at Aligarh praying for a declaration that the order of the U. P. Government mentioned above was illegal and ultra vires and not warranted by the provisions of the U. P. Industrial Disputes Act. There were prayers also for injunction and damages against the U. P. Government and respondent 3. Soon after this suit was filed the U. P. Legislature passed an amending Act, being Act No. 23 of 1950, by which the provision of S. 3(c). Industria1 Disputes Act was amended by addition of cl. (cc) and two other sections to wit Ss. 3-A and 3.B, were added. Section 3-A lays down: "Where the trade or business of an public utility service or any subsidiary undertaking has closed or is likely to be closed, the State Government, may, on the application of more than one-half of the total number of partners and owning between them more than fifty per cent share therein, by order, published in the Gazette, authorise any person to carry on the trade or business, for the period, in the manner and to the extent provided in the 'order." Under this section very wide powers could be given to the person thus appointed and although he is to act as an agent of the service or undertaking, he is practically exempted from all obligations and responsibilities normally attaching to an agent. Section 3-B further provides that where on the date immediately preceding the date of the amended Act, any person was, in pursuance of an order made under S. 3(f), exercising control over any such undertaking, he shall notwithstanding anything in the said clause or S. 3-A, be deemed from the commencement of the said Act to have been a person vandly authorised under and in accordance with S. 3.A. The Petitioner asserts, and not without reason, that the amending Act was passed only to regularise the appointment of respondent 3 as authorised controller of the undertaking with retrospective effect from the date when the order of appointment was passed.
(3.) In 1951 the petitioner filed in the High Court of Allahabad a petition under Art. 226 of the Constitution praying for appropriate writs to quash the order of the U. P. Government mentioned above. During the pendency of this proceeding the Union of India (Ministry of commerce and industry) passed an order purporting to be made under S. 3(4). Essential Supplies (Temporary Powers) Act of 1946 by which the Central Government appointed the same person, namely respondent 3, as an authorised Controller under the provisions of that section and directed him to run the said undertaking on the same remuneration as before to the exclusion of all the other partners. managers, agents and Receivers, and respondent 3, was further authorised to dispose of the funds of the undertaking and to transfer properties, both movable and immovable, in such way as he considered proper. The petitioner's case is that not only the undertaking has not earned any profits under the management of respondent who is in exclusive possession of the mills and all the properties under the orders of respondents 1 and 2, but all the liquid assets of the firm have been dissipated altogether and huge debts have been incurred for which an order for attachment and sale of the mills has already been passed by the Hathras court. After the passing of the above order the Central Government was impleaded as respondent to the writ petition pending before the Allahabad High Court and a prayer was added for quashing of that order also. The U. P. Government it my be noted, gave an undertaking that if the order made by the Central Government was quashed, they would not claim possession of the mills.;