- (1.) An identical question arises for consideration in these three writ petitions and as such they are being decided by a common order.
(2.) The management of Laxmi Ratan Cotton Mills Ltd. and Atherton West and Co. Ltd. two companies incorporated under the Companies Act, 1956, was taken over by the Central Government by the Laxmi Ratan and Atherton West Cotton Mills (Takingover of Management) Act, 1976 (No. 98 of 1976) (hereinafter referred to as the Act). The Central Government in exercise of the power conferred on it by Section 4 (1) of the Act appointed the National Textile Corporation as the Custodian of the two undertakings. The National Textile Corporation in its turn acting under S. 4 (3) of the Act appointed the National Textile Corporation (U. P.) Ltd. as the additional custodian of these undertakings. Subsequently an industrial dispute in respect of Laxmi Ratan Cotton Mills was referred by the State Government under S. 4-K of the U. P. Industrial Disputes Act to the Industrial Tribunal (III), Kanpur. Two industrial disputes were similarly referred by the State Government in respect of Atherton West and Co. Ltd. to the Labour Court (V) Kanpur. In each of the three cases a preliminary objection was raised on behalf of the National Textile Corporation (U. P.) Ltd. that the references were invalid inasmuch as the management of two mills had been taken over by the Central Government and the State Government was not competent to make the references inasmuch as these industries were, on account of their management being taken over by the Central Government, "Carried on by or under the authority of the Central Government" within the meaning of S. 2 (1) (i) of the U. P. Industrial Disputes Act. This preliminary objection was overruled both by the Industrial Tribunal (III), Kanpur, and the Labour Court (V), Kanpur. It is these orders which are sought to be quashed in these writ petitions.
(3.) The only submission which has been made before us by counsel for the petitioners in these three cases is that in view of the management of the two mills being taken over by the Central Government in accordance with the provisions of the Act these two mills were industries "carried on by or under the authority of the Central Government "within the meaning of S. 2 (1) (i) of the U. P. Industrial Disputes Act and consequently in view of S. 2 (a) (i) read with S. 2 (k) of the Industrial Disputes Act, 1947 , it was the Central Government alone which could have made the references. The short question which, therefore, arises for consideration is whether it is right to say that on account of their management being taken over by the Central Government under the Act the two mills can be said to be "industries carried on by or under the authority of the Central Government." In support of his submission counsel for the petitioners placed before us various provisions of the Act laying down that the management of the undertakings of the two companies vested in the Central Government as also laying down various consequences of such vesting. Considerable emphasis was placed on S. 4 (7) which runs as follows : "Subject to the other provisions of this Act and the control of the Central Government the Custodian shall be entitled, not withstanding anything contained in the Companies Act, 1956 to exercise all the powers to dispose of any Board of Directors of the two companies (including the power to dispose of any properties or assets of the two companies) whether such powers are derived from the Companies Act, 1956, or from the memorandum and Articles of Association of the concerned company or from any other source." Emphasis was also placed on S. 8 of the Act which places certain restrictions on the powers of the share-holders of the two companies. Our attention was also invited to certain observations made in Carlsbad Mineral Water Mfg. Co. Ltd. V/s. P. K. Sarkar, 1952 AIR(Cal) 6, Bharat Glass Works V/s. State of West Bengal, 1957 AIR(Cal) 347, Abdul Rehaman V/s. Mrs. E. Paul, 1963 AIR(Bom) 267 and Heavy Engineering Mazdoor Union V/s. State of Bihar, 1970 AIR(SC) 82 These decisions were also relied on in Civil Misc. Writ Petn. No. 204 of 1969 (All) The Workmen V/s. Labour Court connected with three other writ petitions, decided by this Court on 10th March, 1970, where a similar question came up for consideration consequent upon the management of an industrial undertaking being takenover by an Authorised Controller appointed by the Central Government. After considering the decisions referred to above it was held : "The Central Government can only authorise an agent or a servant to carry on an industry when it sets up an industry itself or acquires an industry set up by another or when it authorises an agent or a servant to set up an industry or to take over or acquire an industry set up by another. Normally it is the owner who provides the capital and the machinery and who is entitled to the profits and is liable for the losses who can be said to be carrying on the industry. The Manager who is to look after the functioning of the industry who normally has no direct interest in the profits or losses does not carry on the industry or the business. Regulation or control, partial or complete, of the industry or business by the Central Government will not alter this position." It was further pointed out that both under the Defence of India Rules and the Industries (Development and Regulation) Act the Authorised Controller is appointed to takeover the management of an undertaking and not so in the instant cases too. Here also the two mills themselves have not been takenover by the Central Government under the Act but it is only management of the two mills which has been takenover.;