- (1.) In these winding up petitions by the creditors, objections have been filed by the creditor-petitioners challenging the validity of the Rajasthan Relief Undertakings (Special Provisions) Act, 1961 (for short 'the Act') and consequently, the notification issued by the State Government under the provisions of Ss.3 and 4 of the Act. The first notification was issued on April 8, 1985 and subsequently the term was further extended by one year by the notification dt. 14-2-86. By the notification, issued under S.4 all pending proceedings in any court have been stayed. Reply to the objections have been filed by the non-petitioner-Company refuting the case pleaded by the creditor-petitioner. The creditor petitioners' case is that the Act is covered under the entries 43, 44 and 95 of the List I Union List in the VII Schedule, whereas the case of the non-petitioner company is that the Act is covered under entries 23 and 33(a) of List III of the 7th Schedule i.e. Concurrent List.
(2.) In order to appreciate the controversy, it would be proper to reproduce the relevant entries, reference of which has been made by the learned counsel for the parties. Entries 43, 44 and 95 of List I are as under with comment thereunder in the shorter Constitution of India (VIII) edition by P.D. Basu :- "43. Incorporation, regulation and winding up of the trading corporations, including banking, insurance and any financial corporations but not including co-operative societies. 1. Incorporation, regulation and winding up of trading corporations - An Act which regulates the affairs of a company by laying down certain special rules for its management and administration is fully covered by this item. It would also include legislation providing for the amalgamation of companies, but not the regulation of their functions. 2. Read with entry 95 of List I, this present Entry empowers Parliament to define the jurisdiction of Courts (other than the Supreme Court) relating to the subject-matters coming under the present entry e.g. banking companies. 44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities. Scope of Entries 43-44 of List I. The scope of these two entries is limited to the 'incorporation, regulation and winding up' of certain classes of corporations. They do not imply that any law relating to a Corporation would come under either of these two Entries, even though the 'pith and substance' of such law relates to some other relevant Entry. Thus, (i) if a law regulates the 'business' of a corporation, it would not fall under the present Entries but may fall under some other Entry, according to the nature of the business. For instance, if the business be supply of electricity, it would come under entry 38 of List III. (ii) If a corporation is established for the establishment and organisation, of 'industries' in industrial areas, the law would be governed by entry 24 of List II, unless entry 52 of List I is attracted by a Parliamentary declaration. 95. Jurisdiction and powers of all Courts, except the Supreme Court, with respect to any of the matters in this; Admiralty jurisdiction. Entry 95 of List I and entry 65 of List II - The effect of these entries to that while legislating with regard to matters in their respective lists the two legislatures are competent to make provisions in the several Acts enacted by them, concerning the jurisdiction and powers of the Courts in regard to the subject-matter of the Acts, because otherwise the legislation may not be quite complete or effective. These entries are wide enough to empower the two Legislatures to legislate negatively as well as affirmatively with regard to the jurisdiction of the Courts in regard to the matters within their respective legislature ambits. They can bar the jurisdiction of the Courts in regard to those matters and they can also confer special jurisdiction on certain Courts. (See further under entry 3, List II). Acts coming under this Entry-Ss. 45A-B of the Banking Companies Act, 1949."
(3.) Entries 23 and 33 of the List III of the Concurrent List are as under :- 23. Social Security and social insurance; employment and unemployment. 33. Trade and commerce in, and the production, supply and distribution of :- (a) The products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the Public interest, and imported goods of the same kind as such products; (b) Foodstuffs, including edible oilseeds and oils; (c) Cattle fodder, including oilcakes and other concentrates; (d) Raw cotton, whether ginned or unginned, and cotton seed; and (e) Raw Jute.;