G.N.RAY, J. - (1.) THIS Rule was issued on theapplication made by Motipur Sugar Factory Limited, a public limited Company within meaning of Companies Act, 1956 having its registered office at Motipur in Bihar and one Hajee Adam Hajee Abdul Rahim and Yacub. Hajee Ibrahim were Directors and Shareholders of the said. Company. The petitioner No. 2, Hajee Adam Hajee Abdut Rahim having died during the pendency ofthis writ petition his name has been ex -punged from the category off the petitioner.
(2.) IN this Rule, the order dated 3rd November, 1980 issued by the Joint Secretary, Ministry of Industry (Department of Industrial Development) passed in exercise of the powers conferred by Clause (a) of Sub -section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951 authorising the Bihar State Sugar Corporation Limited. Patna to take over the management of the whole of the said Industrial Undertaking, namely, M/s. Motipur - Sugar Factory Limited, Motipur, District Muzaffarpur, Bihar 'for a period of two years commencing from the date of the publication of the said order in the official gazette and the subsequent extension of the period of management have been challenged by the petitioners. It has been contended by the petitioners that in or about June, 1977, the Bihar State Legislature promulgated the Bihar Sugar Undertaking (Acquisition) Act. 1976 under which certain Sugar Factories mentioned in the Schedule to the said Act Vested in the Government of Bihar and/or Bihar State Sugar Corporation Limited. In the said schedule, the petitioner Companywas not, included but subsequently by a Notification issued in October, 1978, thename of the petitioner Company was included in the schedule. By such inclusion, the Motipur Factory was purported to be taken over by the Bihar Government. The petitioners challenged the vires, legality and validity of the said Bihar Sugar Undertaking (Acquisition) Act, 1976 in this Court under Article 226 of the Constitution of India whereupon a Rule being Civil Rule No. 7845 (W) of 1978 was issued. The said Rule was made absolute and the Act was held as ultra vires and void. It is further contended that the petitioners Nos. 2 and 3 who were Shareholders and Directors of the said Company received a copy of the order dated 3rd November, 1980 under. Clause (a) of Sub -section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951 in Calcutta where according to the petitioners, is also a Sales office for the products of the Motipur Sugar Factory, The petitioners have contended that the petitioners thereafter tried to procure a copy of the Gazette Notification of the said order 'of the' Central Government, but the petitioners were informed on 14th Nov., 1980 that only Gazette up to 20th October,1980 were available. It appears from the order passed under Section 18AA of the said Act that the Central Government was satisfied that the persons in charge of the said Undertaking, had by diversion of funds, brought about a situation which was likely to affect the production of sugar produced by the said undertaking, namely, Motipur Sugar Factory. It is contended by the petitioners that no notice of any kind was ever served on the petitioners regarding the passing of the said order prior to the passing thereof arid the petitioners came to know about the said order only when a copy was forwarded to the petitioners Nos.2 and 3 at Calcutta. The petitioners have further contended that sometime on 4th November, 1980, some persons claiming to be employees of the Bihar State Sugar Corporation Limited had come to the factory of the petitioner No. 1 at Motipur with large police force and had taken possession of the entire factory and also the books and papers relating to the factory. They had also taken possession of the quarters attached to the factory excepting one Bungalow which was being occupied by the petitioner Yacub Hajee Ibrahim for about 20 years. It is contended that the said Bungalow contains valuable furniture and fixtures and other articles belonging to the said petitioner and not to the Company. In respect of the said Bungalow, the said officers of the Bihar State Sugar Corporation Ltd. put their seal so that the petitioner Yacub Hajee Ibrahim was unable to enter or use the same. The petitioners have also contended that on 10th Nov., 1980 without giving any opportunity to the petitioners, one Mr. A. K. Sinha had assumed charge of the said undertaking as General Manager. On 15th November, 1980 the petitioner received another order dated 11th November, 1980 issued by the respondent No. 4 claiming to be an authorised person under the said Industries (Development and Regulation) Act. It was stated in the said order that the petitioners Nos. 2 and 3 had ceased to remain as directors of the said company under Section 18B of the said Act. A copy of the said order has been annexed to the writ petition being marked Annexure 'D'. The petitioners have contended that neither the petitionersnor any of the persons of the said Undertaking had brought about any situation likely to affect the Sugar Factory either by encumbrancing , the assets of the, saidUndertaking or by diversion of funds orotherwise. It is contended that the CentralGovernment issued the said order withoutany application of mind and without anyconsideration of relevant materials and noopportunity was given to the petitioners toplace the relevant materials. It is also contended that the Central Government was under an obligation to consider whether the conditions laid down in Section 18AA were satisfied and it was also obligatory to give an opportunity to the petitioners to make effective representation in regard to the matters concerning the exercise of powers under Section 18AA. It is further contended by the petitioners that the petitioner company has a branch office at Bombay which is in charge of a Manager. For several years, the said Bombay office does not carry on any business in sugar but carries on other business. The petitioners contend that the respondents have no right either to take possession of the said Bombay office or remove any of the employees therein. The petitioners are also contending that the petitioner company has also an agricultural farm in which sugar cane and other agricultural products are grown. It is contended that the Manager purported to have been appointed under the said Industries (Regulation and Development) Act is not entitled to take possession of the sugar cane farm which does not form any part of the Industrial Undertaking but the respondents have wrongly purported to take possession of the said farm also. It has been also contended by the petitioners that there are various litigations pending between the petitioner company and the State of Bihar and/or its officers relating to the proceedings under the Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act and also relating to Sugar Control Orders. It is contended that as the entire records are now in possession of the respondent No. 6 the petitioners are not able to give details of such suits and litigations but some of such suits and litigations have been mentioned being based on memory in a list being Annexure 'E' to the writ petition. The petitioners have contended that as the respondents have assumed control of the said Sugar Factory in terms of the impugned orders and consequential orders passed thereafter, the said respondents should also take appropriate steps in the pending suits and litigations in different Courts so that the Motipur Sugar Factory Ltd. does not suffer any toss and prejudice for want of appropriate action tothe pending litigations. The petitioners have also contended that even assuming forargument's sake, that the taking over of possession under Section 18AA of the industries (Development and Regulation) Act. 1951 was legal and justified, such takingover of possession was for a limited period and after the expiry of the said period further extension of such management cannot be made without giving the petitioner company and/or its Directors all reasonable opportunities of being heard. As such extension has been purported to be made without deciding the necessity of such extension of management after giving reasonable opportunity of being heard to the petitioner company and/or its Directors and/or Principal Officers, the purported extention after the expiry of two years period from the date of initial taking over of management under Section 18AA must, in any event, be held to be illegal and void and the respondents should be directed to forthwith hand over possession of the said factory to the petitioners with all documents and papers in their custody. The petitioners have also contended that during the management, the respondents have not been taking appropriate steps for running the said factory properly and the plants and machineries are also not being maintained or repaired properly. The respondents are incurring heavy losses due to insufficient and improper management thereby seriously prejudicing the petitioner company because in any event, the petitioner company is likely to face the heavy liabilities incurred by the respondents relating to the said factory during its management.
(3.) A preliminary objection has been seriously urged by the learned Counsel appearing for the respondents about the maintainability of the instant writ petition before this Court It has been contended by the learned Counsel for the respondents that no part of the cause of action had arisen within the jurisdiction of this Court. Accordingly the writ petition is not maintainable before this Court. Mr. Bose, the learned Counsel appearing for the Union of India and the Officers of the Ministry of Industry, Department of Industrial Development of Government of India, has seriously contended that the decision of taking over management under the provisions of Industries (Development and Regulation) Act, 1951 had been taken by the Ministry of Industry, Department of Industrial Development at Delhi and in thematter of taking such decision no part of or the cause of action arose within the jurisdiction of this Court. The Motipur Sugar Factory is situated in Bihar and the registered office of the Company is also in Bihar. The management of the said Factory in Bihar has been taken over in terms of the order passed by the Central Government under Section 18AA of the said Act. Such management has been entrusted to the Bihar State Sugar Corporation Limited, the head office of which is situated at Patna in Bihar. The officers of the Bihar State Sugar Corporation Limited who have been entrusted to manage the affairs of the said Motipur Sugar Factory and/or the said Company are also residents of Bihar. The publication of the said order under Section 18AA has been made in the Gazette of India which is published from New Delhi. In the aforesaid circumstances, by no stretch of imagination it can be held that any part of the cause of action has arisen within the jurisdiction of this Court. Mr. Bose has contended, whether the order has been properly passed or not or whether the management is being unproperly or not cannot be investigated by this Court because this Court inherently lacks the jurisdiction to go into such questions. If the petitioners choose to make proper application before the appropriate Court having jurisdiction in the matter, such Court may take into consideration the contentions to be raised by the petitioners. Mr. Bose has, therefore, submitted that it will be futile exercise on the part of this Court to consider the respective contentions of the parties on merit and to come to a decision on merits.;