- (1.) THESE two appeals, one preferred by Ludlow Jute Company Limited (hereinafter referred to as 'ludlow') and the other by the union of India and another, are directed against the judgment of a learned single judge of this Court. By the said judgement, the learned Judge made the Rule nisi obtained by the respondent no. 1 apeejay (P) Limited (hereinafter referred to as 'apeejay') on its application under Article 226 of the constitution absolute.
(2.) THE appellant Ludlow is company incorporated under the law of massachusetts, in the United States of america. The appellant has its Jute mills in India. On June 8, 1977, Ludlow entered into an agreement with Apeejay. By the said agreement Ludlow agreed to sell and Apeejay agreed to purchase the assets of Ludlow at a price of U. S. 2,176,000. 00 on certain terms and conditions. Some of the terms relevant for these appeals are set out below : "9. Conditions precedent to purchaser's obligations : All obligations for the Purchaser arising from this Agreement are subject to the fulfilment of each of the following conditions. 9. 4. Governmental Approval : approval satisfactory to the Purchaser and its Counsel of the consummation of the transactions contemplated by this Agreement shall have been obtained from the government of India pursuant to the provisions of the Foreign Exchange Regulation Act of 1973 and any other applicable laws, rules or regulations of India and such approval shall be and remain in full force and effect at all relevant times. 10. 4. Government Approval : approval satisfactory to Seller and its Counsel of the consummation of the transactions contemplated by this Agreement and their remittance of the proceeds thereof to the United States shall have been obtained from the Government of India pursuant to the provisions of the Foreign exchange Act of 1973 and any other applicable laws, rules or regulations of India, and such approval shall be and remain in full force and effect at all relevant times. "
(3.) IT appears that Ludlow had made an application to the Government of india praying for permission to transfer its assets to Apeejay in terms of the agreement, but the Government of India by Us order dated November 23, 1977 refused to give its approval to the proposed transaction. The said order of the government of India was accepted by ludlow, but Apeejay felt aggrieved and moved this Court under Article by 226 of the Constitution against the said order. It was alleged by Apeejay that neither it nor its representative was ever heard by the Central Government, and that no opportunity was given to it to explain or represent its case. It was contended that the disapproval of the agreement by the Central Government was vitiated as the Central Government acted in violation of the principles of natural justice. Further, it was contended that the Central Government acted without jurisdiction in not assigning any reason for the disapproval. It was prayed that a writ in the nature of mandamus should be issued directing the Central Government not to give effect to the impugned order dated June 8, 1977. It was also prayed that a writ in the nature of certiorari should be issued for the purpose of quashing the impugned order. On the said application, a Rule Nisi was issued.;