Ranganath Misra, J. - (1.) This application under Art. 32 of the Constitution is by two petitioners - petitioner No. 1, a private company and the other a Director thereof. The petitioners have challenged the vires of the Sick Textile Undertakings (Nationalisation) Act, 1974 (57 of 1974) and have asked for a direction to the respondents to restore the Mills to the petitioners in the same condition as it was on 31-10-1971 when it was initially taken over.
(2.) Petitioners have alleged that the spinning mills previously belonged to one S. R. Narasimhachari and three others. Mahalingam Chettiar, husband of the second petitioner, purchased the said Mills in 1965. He was not at all acquainted with the working of spinning mills and soon found that the affairs of the mills were far from satisfactory and realised that he had acquired a nonviable asset. In December 1967, Mahalingam issued, notice of closure to be effective from 3-1-1968, but as a fact, by a subsequent notice dated December 22,1967, the Mill was closed down with immediate effect. According to the petitioners the Mill had ceased to be a "textile undertaking" by January 1968; the workmen by numerous claim petitions in the Labour Court of Madurai pressed for their various demands; they took possession of the Mills and even obstructed Mahalingam's entry into the premises. At one stage during that period Mahalingam had applied for a loan of Rs. 10 lakhs from the Government of India with the hope of restarting the Mills after replacement of the machinery but that did not work out. The establishment had thus closed down and according to the petitioners the textile undertaking had completely the textile undertaking had completely disappeared by 1969, and the Act did not apply to it. Again, the 1974 Act was ultra vires the Constitution.
(3.) The Sick Textile Undertakings (Taking Over of Management) Ordinance 9 of 1972 became operative from 31-10-1972. Item 41 of the First Schedule to the Ordinance mentioned petitioner No. 1 as one of the textile undertakings whose management was to be taken over and possession was, therefore, taken by respondent No. 2 in terms of the provisions of S. 4(1) thereof. The Ordinance was replaced by Act 72 of 1972 which received Presidential assent on 23-12-1972 but was deemed to be in force from 31-10-1972. The petitioners had challenged the validity of the Act by filing a writ petition before the High Court of Madras but during the pendency of the writ petition the Sick Textile Undertakings (Nationalisation) Ordinance, 12 of 1974, came into force from 1-4-1974, and petitioner No. 1 featured as Item 96 in the Schedule to the Ordinance. The pending writ petition, therefore, became infructuous and the petitioners filed a fresh writ petition challenging the validity of the Ordinance of 1974. The Ordinance was duly replaced by the Nationalisation Act 57 of 1974. During the pendency of the writ petition emergency was proclaimed and the writ petition was permitted to be withdrawn in December 1976, with liberty to approach the Court again. That is how the present application has been filed.;