SHRI AMBALAL M. SHAH AND ANOTHER versus HATHISINGH MANUFACTURING CO., LTD.

38.C.R. SUPREME COURT REPORTS

~ ~~, i. • Act cannot legitimately be pressed into service for the purpose of construing the relevant provisions of the Act ; even so, incidentally it may be permis~ sible to observe that the construction of r. 4(2) which we are inclined to adopt is consistent with the respondent's case that s.2 (1 )(b)(i) includes agricultural produce utilised by the appellant for ':! its own business.

In the result the appeal fails and is dismissed with costs.

Appeal dismissed.

SHRI AMBALAL M. SHAH AND ANOTHER v.

HATRISINGH MANUFACTURING CO., LTD. (K. N. WANCHOO, K. c. DAS GUPTA, J.C. SHAH and RAGHUBAR DAYAL, JJ.)

Industrial Untkrtaking-lnvestigation into its affairs by Central Government-Takinq over of manoqement by officer appoin· ted by Government on the basis of report--Legality-lndust1·ies (Development and Regulation) Act. 1961 (66 of 1961), ss. 16, 18 A(I)(b).

Being of the opinion that 1lhere had been a• substantial fall in the volume of production in respect of cotton textiles manufactured in the respondent company, an industrial under-taking, for which having regard to the economic CQnditions • prevailing there was no justification; the Central Government ,\ made an order under s.15 of the Industries (Development and Regulation) Act, 195 l, appointing committee of three persons for the purpose of making full and complete investigation into the circumstances of the case. After the committee madeits report, the Central Government being of the opinion thereupon that the company was being managed in manner highly detrimental to public interest, made an order under s. 18 of the Act authorising the first appellant to take over the management of the whole· of ~-~he·· said undertaking. The respondents challenged the - legality of the order on the ground, inter alia, that on the proper construction of s,18 the Central Government hac' the right to make the order under that section on the ground

1981 ThtiD-i TeaC<u, Ltd. •• Crmihiia':i.~lrM ~'. Aur~ral' Jniiome .. tax, Wes!B<ngal Gajerzitloagadkar J.

A"!11Jat 21.

19il ShrFAlfi66l~l M.Shah · •• lfa!lti.,ng/i · M~urt.g au., f;f&

L[1]as Gupta .1.

172 StJPREME COURT REPORTS

that the compam· wa; being managed in manner highly dttrimcntal to public interest <Jnly \vhcrc the inYcstigation 1nade under s.15 \Va'\ initL\ted on the basis of the op'tdun as mentioned in s. IS{b), "·herc.1~ in the present case, the investigation ordered by the Central Go\·crnmcnt \vas initiate·d on the formation of an opinion as mentioned in cl. (a)(i) of s. l 5.

Held, that the order passed by the Central Government under s.18 was valid and that the words used bv the legislature ins. 181\ (l)(b) "in respect of which au investiga-tion has been made under s. 15,. could not be cut down by the restricting phrase ''based on an opinion that the industrial undrrtaking is being n1anaged in manner highly dctrin1cntal to fl1c scheduled industry concerned or to public interest." Section l8A (l)(b) empo\\ers the Central Government to authorise person to take over the management of an industrial undertaking if the one con<li!ion of an investigation made under s. 15 had Leen fulfilled irrespective of on what opinion that investigation , ... as iuitiateU, an<l the further rondition is fulfilled that the Central Government was of opinion that such undtrcaking \vas being managtd -in manner highly detrimental to the scheduled industry concerned or to public interest.

CIVIL APPELLATE ,TURI8DICTION: Civil Appeal No. 285 of 1961.

Appeal from th<' judgment all(! order dated December 6, 1960, of the Gujra• High Court in Special Civil Applicatioll No. 434 of HJGO.

H. N. Sanyal, Additional Solicitor.General of India, R. H. Dhebar and 'J'. M. Sen, for the appella,nts.

M. Nanawti, 8. N. Andley, Rameshwar

Nrith and P. L. Vohrn, for the respondents.

l!l61. August 21. Th!' .Judgment of the Court wa.s delivered by

DAH Ge PTA, J .-This •1ppeal by special lca.v.e raises qucAtion of the <·orrect intt>rpretation of some words in s. l 8A( l )( b) of the Industries (Development and Rcgnlrttion) Act, 1!)51. Tho Central Government made an onler under s. 15 of -111-· that Aet appointing committee of three . persons · for the purpose of·making full and complete inv.csti'

3 S.C.R. SUP~EME COURT REPORTS •' .

g111tion intp the oircumRtances o(thi;i .c11se as it was of opinion that there had been or was likely to-be-11 substantial fall in the volume of production .in res· pect of cotton textiles manufactured in the industrial undertaking known as Hathisingh Manufacturing Company Ltd., Ahmedabad, for which having regard to the economic conditions prevailing there was no justification. After the committee made its report the Central Government being of opinion thereupon that this industrial undertaking was being managed in manner highly detrimental to public interest made an order under s.ISA of the Act authorising Ambalal Shah (the first appellant before us) to take over the management of the whole of the said undertaking.

Against this order the industrial undertaking and its proprietor-who are the two respondents before us-filed petition in the Gujarat High Court under Art. 226 of the Constitution praying for issue of writs directing the authorised controller and the Union of India not to take over the man111ge-ment on the basis of the order under s.18A. The ' main ground on which the application was bas!)d was that on proper construction of s.ISA {l)(b) the Central Government has the right to ,make an order thereunder only where the investigation made under s. 15 was initiated on the basis of the opinion as mentioned in. s.15(b)-that the industrial under. taking is being managed in manner highly , detrimental to the.scheduled industry concerned· or , to public interest. It was also urged that in fact the committee appointed to investigate had r10t directed its investigation into the question whether the industrial undertaking was being managed in the manner· mentioned above. The other grounds mentioned in the petition which were howev!')r abandoned at the time of the hearing included one that ~he alleged opinion formed by the Government ~......_as mentioned in the order under s.18A w~s in the ~~iience of an;y rq;iterial _for tl\e same in the report

-·-Shri Aiiil>QlsL M. 'Sl+sh . : ·v, Hstli>.ir;gh Alrmufac1flr·ing Co.; 'IJ_d. pas ~uptaJ.

S,,_i Aoibolol M.$114k v: H1llli .... gh Manufacturing Co., Lid. DOI G•~la J.

of tb,e investigating committee and therefore WM arbitrary, capricious and malafidc.

On bahalf of the Government and the autho-

rised controller it was urged that the question which one of the five opinions mentioned in s.15 formed the basis of the investigation under that section was wholly immaterial. The allegation that the investigating committee hall not directed it.a investigation into tho question whether the under-taking was being managed in manner highly detrimental to the scheduled industry concl'rnerl or to public interest was also denied.

The High Court however came to the conclu-

sion that on correct construction of s. ISA (l)(b) it was necessary before any order could be made thereunder that the investigation should have been initiated on the basis of the opinion mentioned in s.15(b) of the Act. It also accepted the petitioners' contention that no investigation had in fact been held into the question, whether the undertaking was being managed in manner highly detrimental to public interest. Accordingly it made an order "setting aside the order of the Central Government dated 28th July, 1960, and directing the respon-dentll not to interfere with or take over the management of the undertaking of the first petitioner, namely "Hathisingh Mills" by virtue of or in pursuance of the said order''. It is against this decision that the present appeal is directed.

The principal question in appeal is whether the High Court is right in its view as regards the construction of section ISA. The relevant portion of s.ISA(l) runs thus :-

"If the Central Government is of opinion

that-

( b) an industrial undertaking in respect of which an investigation has been made ,..... _, \mder •· 15 (whether or not an;r directioiw

(ii) there has been or is likely to bea marked deterioration in the quality of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or · undertakings, as the case may be, which could have been or can be avoided; or ·

(iii) there has been or is likely to be rise in the price of any article or class of articles relatable to .that industry or manufactured or produced in the indus-.trial \!ndertakin¥3.>r undertakin$S as t4.e

1i61 SMi .lltiibalal M. Shah ... v. HathiMingh Manuf@turing Co., Ltd. Das GUpta J. .

IQdl

Slwi ..,,a/al &t:SA.h v. n .ih4,U.,h ~latiUf.Wrin1 Co.; Lid. Dai Gupta J.

17G SUPRE!llE COURT·REPORTS [1962]' · ca'Be may ·be, for which there is no.justi-'flcation ; or · ·

(iv) it is necessary lo take any such

action as is 11rovidcd in this Chapter for the purpose of conserving any resourOM of national importanc0 which are utilized in the industry or, the industria 1 unrlor-tak ing or 11ndcrt;i.kil1gs, as the case may be;~· .

(b) any induRtri&I undertaking is being

managed in manner highly detrimental to the scl1eduled industry concerned or to public interest, the Central Government may make or cause t<J be made full and complete investigation into the circumstances-. ,of the case by such person or body of persons as it may appoint for the purpose."

It may b~ mentioned here t11at s.15( b) as it

orginally stood was amended· il1 Hl:j[j and it was after the amendment that the words as mc1itio11ed ·above appear. Reference may also be made in passing to s.IG under which once an .investigation under s.15 _has been commenced or completed the Central Government if it considers desirable; (llay issue directions to the industrial undertaking or u1\dertakings concerned in several matters. Socti6n 17 of the original Act was repealed in l9ii3 by Act 26 of 1953. The same amending Act introduced into this Act two new chapters-Chapter IIIA and Chapt~r IIIB of which s.18A in Chapter IIIA makes provisions as set out above for an order by tho Central Government authorising any person or body of persons to take over the management of.the whole or any part of tho under-taking.

These provisions of s.18A it m'\y be mentioned

tako the place ·of tho pro;visions that previously appeared in s.17 (1). That section, now repealed, had empowered tho Central Government to authorise any perMa, .or develo:p~ent :Council or a.n;r other

_,,_ ....

3 S.C.R. SUPREl\iE COURT REPORTS

body <Jf persons to :take over:the roanagement of an. undertaking or to exerc.ise with .. reepect thereto .such functions of control as might bQ provided by the order, in one class of cases only-viz., where after direction had been issued in pursuance of s. 16 the Central Government was of opinion that tha directions had not been complied with and that the industrial undertaking in respect of which directions had been issued was being managed in manner highly detrimental to the scheduled industry con-cerne<j or to public interest. The present sJSA . empowers the Government to authorise any person or persons to take over the management or to e:x:cercise such functious of control as may be specified, in two classes of cases. The first of these classes is mentioned in cl. (a} of s.ISA(l), viz., where the Central Government·· is of opinion that dh·ections issued in pursuance ofs.16 have not been complied with by an industrial . undertaking. The S!lcond class with which we are here directly con-cerned is mentio11ed in cL (b )-viz., where the Central Government is.· of the opinion that an industrial undertaking in respect of which an in-vestigation has been made under s.15 is being managed in manner highly detrimental to the scheduled industry concerned or to public iriterest-irrespective of whether any directions had bei:;n issued in pursuance of s.16 or not. What is notice-able in the wording of this clause is that while an investigation under s.15 may ·be initiated in respect of an industrial undertaking where the Contra,! Government is of any of the five opinions mentioned in s.15(a)(i), 15(a)(ii), 15(a)(iii), l5(a)(iv) and s.15(b), s;I8A(l)(b) does not refer to any of these opinions. Inde!ld, it . does not refer at all to the question of the initiation of tbe investigation and mentions only the making of the investigation under s.15. Read without the addition of anything more, the language of s.18 (I) (b) empowers the Central Government to authorise .a person or persons to take oyerthe manag<w.ie~t (;)fa,n ,in~ustrial ~gertakin¥

-~-Sltri~al 111~$/iah v. Halhja;.,h Man'4,f~/llwillfl CtJ.,LCd. Das '"Gupta J.

111111 --M:Sl.a>.·

--s 11ri Adalbl . M:Sl.a>.· v. Ilalhi4ingh M~ttri11q Ci •• Lkl. ---. Da' Gnpti:.i J.

SUPREME COURT B.EPORTS · (1962)

or to exercise specified functions of control in respect of that undertaking, if the one condition of an investigation made under s.15 has been fuJ. filled irrespective of on what opinion that investiga-t.ion was initiated and the further condition is fnfilllcd that the Ci:ntral Government is of opinion that such undertaking is being managed in manner highly detrimental t') the scheduled industry con-eernc<l or to public interest.

'I'hc contention made on behalf of the respon-dents hcfore ns which found favour with the Jligh Court is tlmt when the legislature used the words "an investigation has heen made under s.lG" it meant. "an im·estigation has been made under s.l!i ha.~ed on an opinion of the Central Go,·ernment that the industrial undertaking is being managed in manner highly detrimental t-0 the scheduled industry concerned or to public interest." ·we should have thought that if the legislature wanted to express such an intention it would not have hesita t cd to use the additional words mentioned abov<'-It was urged, however, on behalf of the respondents that these further words, i·iz., "baccd on an opinion of the Central Government that the industrial undertaking is being managed in manner highly detrimental t-0 the scheduled industry concerned or to public interest" arc implicit in cl.(b) of s. l8A. In his kngthy address to convince us of the eorrectncss of this contention the learned counsel advanced in substance only two arguments. The first is tl11t it is only where tho im·estigation under s.15 is hitiatcd on an opinion mentioned in s.15(b)-that th~ industrial undertaking is being managed in manner highly detrimental to the scheduled industry concerned or to public int<Jrost-that the report of the investigation can furnish the government with materials on which any opinion can be formed that an industrial undcrta1.ing is being mana"cd in manner highly detrimental to the sched~led industry concerned or to public interest. For this &ritlmen~ we can find no b~is. lt appears t~·us that where the investigation has been initiated, in r~$pect of an industrial undertaking, on an opinion that there has been or is likely to be fall in the volume of production for which having regard to the economic conditions there is no justification s.15(a)(i) or an opinion that there has been or is likely to be marked deterioration in the quality of any article which could have been or can be avoided s.15(a)(ii); or an opinion that there has been or is likely to be rise in the price of any article for which there is no justification s.15(a)(iii); or an opinion that it is necessary to take action for the purpose of conserving any re-sources of national importance s.15 (a)(iv), the investigation in order to be complete must also consider the quality of the management of the undertaking just as it would so consider the quality of management where the investigation is initiated on an opinion that the industrial undertaking i<i being managed in manner highly detrimental to the scheduled industry concerned or to public interest. For, even when the investigation has been initiated on the Government's forming any of the opinions mentioned in the four sub-clauses of cl. (a) of s.15, the investigator has necessarily to examine three matters : ( 1) whether the opinion formed by the Government is correct; secondly, what are the causes of this state of things, viz., the unjustifiable fall in the volume of production or the deterioration in the quality of the article or the rise in the price of the articles or the necessity of an action for the purpose of conserving the resourc-es ; and thirdly how this state of things, if it exists, can be remedied. In considering the second of these matters, viz., the cause of this state of things the inyestigator must examine how far and in what manner the quality of management is responsible for it. He may come to the conclusion that the management is in no way responsible and that some other cause lies at the root of the difficulty. Ile may hold on tfl.e other hand, th11t · the

.1«61. ·-Skriiln.halal M. Sliah v. Halhinngh Mooujacturing Co., ltd, Das Gupta .l.

Shri i!rt!>alal M.Shah v. Hathitingl• MClrijacluring Co., Ud. Daa Gupt-0 J.

180 SUP.Rlµff. COUi:tT REPORTS [1962J

nmnagcmont.is solely responsihle ; or he may hold that while other causes also . pJay th<lir part the defect in tho qualit.y of' managcnwnt is also in part rcspon,iblr. Indeed, \re find it difficult to under. stand how an im·csti~ator having cmlmrked on an invcstigatioi1 ordered by the Government in respect of an industrial undertaking on the basis of one or more of the opinions mentioned in s.15 (a) can avoid an inquiry into the q11ality ·of the manage-ment of the industrial undertaking. It is said that the t18C of the words "for which h:winl! regard to the l'conomic conditions prevailing there is no justifi<·ation" in cl. (a)(i) imlir.'ltc and circumscribe the scnpe of the enqniry and that the im·•·Rtigator wo11hl only try to aseertain whether or not the ecm1omic conditions arc such that do nr do not justify the fall in the volume of production and then to HCC', where neceswu\", how these C'COJ10111ic conditions can be altered. ;ro say so is however to miss the entire sd1cmc of th~' legislation prv· viding for the investigation and for action following the ;;amc. Clearly, tho purpose of this legislation is to enable tho Central Government to take ~uitablc aetion to remedy the undesirable Htate of things mentioned in the different dauBCH of s. Iii. Tu order that Go,·ernment ma.r ha\'e proper material:; to know \\'hat action i;; ne<:essary ti}(' legi,Jaturc em-power<·<! th•• GovernrnC'nt to make or <'ans" to be made ·'a foll and complete im·estigation". fn s.18, it Plllpowered the person or body of persons appointc•l to make investigation to choose one or more persons possessing speciq} knowledge to assist in the investigation and further vested thn investigating committe<' with all the powers of the Civil Court under the Code of Civil Procedure for the purpos<> of taking . evid<nee on oath and for enforcing the att<'ndance of witneSF<'s and compelling the production compelling the production of do('U· mentR and of tho tho and le~iela.tiun material would be ~bjects. material would be ~bjects. ~bjects. The whole pm pc•e unkss pc•e the of tho tho and le~iela.tiun material would be ~bjects. le~iela.tiun material would be ~bjects. would be ~bjects. frustrated The unkss pc•e the the

Procedure for the purpos<> of taking . evid<nee on oath and for enforcing the att<'ndance of witneSF<'s and compelling the production compelling the production of do('U· mentR and of tho tho and le~iela.tiun material would be ~bjects. frustrated The whole pm pc•e unkss pc•e the -investiga.tion 0 could be "full and ~o~plete." NQ

3 S.C.R. 8UPREME COURT REPORl'S

im'estigation which has not examined the quality of managAment of the industrial undertaking ('OUld he said to be full or complete.

It was next co~tendcd that the use of the

words "circumstances of the ·case" shows that th(j" investigation had to be made only into the matter in respect of which the government has formed an opinion and not into anything else. Assuming that it is so and that the investigator has primarily to conduct his investigation . where the investigation has been .initiated on the basis of an opinion as regards fall in production, into questions as regards such fall ; and similarly, where the investigation has been initiated on an opinion as regards the deterioration in quality, into the question of such deterioration, that does not alter the fact that the investigator would have to . try tg ascertain the causes of the fall in production or the deterioration in quality and this part of the investigation \vould necessarily include an investigation into the quality of the management.

Learned Counsel contended that if an investi-

gation made on the .basis of one or more of the opinions mentioned in cl. (a) of s.15 was sufficient to furnish the materials on which the Government could form an opinion whether at not an indtlstrial undertaking was. being managed in· manner highly detrimental to the scheduled industry concerned or to public interest, cL (b) would be wholly un-necessary. With this we are unable to agree. There may be many cases where there may be .information justifying the formation of opinion that the indus' trial .undertaking was being managed in manner highly detrimental to the scheduled industry concerned or to public interest, even though there are no materials for an opinion that there has been or is likely to be an unjustifiable fall in production or an avoidable deterioration in quality or an un-jµijtifiab!e riso in prices or .. the .necessity of taking action for the purpose of· conserving resources '"as

shri):fi<balot M. Shdh . v . .. ' lfat.hMtiuh Maiit(faetUYing Co.; ·Ltrl. Das Gupta ;i.

SAr i ..00 I .I M. Shah v. Tlal1'i6iN}h M-.J~ Co.,. Ltd. Du Gupfa J.

i82 Sui>REME COURT REPORTS [1962J

mentioned in the four tiUb-clauseti of cl. (a) of 8. 15.

It was also urged that it would be unfair to

expect the management, whcr6 the investigation has been initiated on the formation of an opinion aH mentioned in cl. 15( a), to lead any evidence aH regards tho quality of its management and so there is risk of the investigator being misled. We ca.n ace no reason however for any management to have any doubt on the question that investigation would be directed among other things to the question of quality of management. 'Ve believe that one of tho first things that any manago~ont would do when an investigation is initiated on the basis of any such opinion would be to. try to show how efficient it was and how in spite of the high quali~y of its management the misdeeds of labour or the unsympathetic attitude of Government or the diffi-culties of trail-sport or some other cause beyond thei.r control was !·esponsihle for the undcsirao)e state of thingR into which the inve~tigation was being held.

The argument that except where the investi-

gation has been initiated on the basis of an opinion mentioned ins. 15(b) thC'rc would be no mawrial for the Government to form an opinion that the industrial undertaking was being managed in a. manner highly detrimental to the scheduled industry concerned or to public intoreot, therefore fails.

Equally unwnablc is the second argument

advanced bv tho learned cmmsel that absurd results would follo;v if the words "investigation has beon made under section 15" arc held to include investi-gation8 based on any of the opinions mentioned in s.15(a). Asked to mention what the absurd results would he the learned counsel could only say that an order under s. 18A( l )(b) would be unfair in such cases, as the owner of an industrial undertaking would have no notice thatthe quality of manage· ment was ·being inve1ti&a.t-0d. That will be, Mys

3 S.d.R. SUPR1l1ME COURT R:liIPOR'.rS

the learned counsel, condemning person unheard. This argument is really based on the assumption that when the investigation has been initiated on the basis of any of the opinions mentioned in cl. (a), the quality of the management will not be investi-gated. As we have stated earlier, there is no .basis for this assumption.

We have therefore come to the conclusion that the plain words used by the legislature "in respect of which an investigation has been made under section 15" cannot be cut down by the restricting phrase "based on an opinion that the industrial undertaking is being managed in manner highly detrimental to the scheduled industry concerned or to public interest." We must therefore hold that the construction placed by the High Court oh these words in s.lSA(l)(b) is not correct.

This brings us to the consideration of ·the other question raised, viz., whether in fact the investigation bad been held into the question whether the industrial undertaking was being managed in manner highly detrimental to· the scheduled industry concerned or to public interest. On this question the High Court came to coi1clusion adverse to the appellants. It is not clear how the respondents though abandoning the ground that Government had no material before it for forming the opinion that the undertaking was being n:ianaged in manner highly detrimental to the scheduled industry concemed or to public interest, could still urge that no investigation had been actually held into the question whether the industrial under-taking was being managed in ma~mer highly detrimental to the scheduled industry concerned or to public interest. The question whether investi-gation had in fact been held or not into the question whether the industrial undertaking was being managed in a.· manner highly detrimental to the selwd11led industry concerned or to public interest, would be relevant only to show that the Government

;1961 S~ri-4mbal;,l /If; S/Jah •V. ll<!t.iiaingh .Af """"l!<W•ing Ctt.·, '!i;_tq,.·, DaaGuptaJ,

i~z Shr; A'no&.IW M. Sltdh v. ll~h JI~'"" CA., -I.JAi. l>a• Gltf'li: J.

acted without any material before it or aeted malu fide. If the allegation of' mllfo fide or the allegation that thoro was n<r material before thn Government for forming its opinion is ;ibandoned, the question whether an invcetigatiou had in fact been held into the question whether the iudu~tria.l undertaking was heing managed in mannrr highly detrimental t() the Bchcdulod imlustrv concl'rncd or to public interest, hccomt'A irrcle\•ant·:

We are satisfied however tl1at the High Court was wrong in it;i view that it, was not established that invp,stiga.tion had in fact hecu held into this question. We find that the assertion in the petition uncle!" Art. 226 that the inve8tigatiou had not been directed "towards any alleged mis-management· of the mills:' was denied in the affidavit sworn on behalf of the Union of India. When thereafter on October IO, 1960, affidavit;; in rcjoinrler filed on behalf of the petitioners affirmed that "no question was put which would suggest that the committee wl!'s !?Ve8tigatin~ ~to any mismanagemen.t of the mills, an affidavit of Mr. Thomae de Sa, who was member of the invest.igating committee was filed on behalf of tho Union of. India. This affidavit made the categorical assertion that the "committee investigated not only into the question relating to the fall in the volume of production iu respect of cotton textiles manufactttred in the said industrial undertaking but also made full and complete in\'C'Rtigation into the cjrcumstnnees of the working of the saicl'--industrial unclcrtak:ng including the management th"ercof and. as to whether tho said imdertaking was being managed in mannnr detri-mental to tho indus.fi-y concerned or to public interest." The High Court has thought it fit. to reject this testimony of !\fr. De Sn. for reasons which·appear to us to be Wholly insufficient. It appears that dur-ing the hearing the Ad.vo~ate.Gericral asked fortune to file an sffidavit preferably of Mr. P.H. Bhl}ta who 'was tli.e non-o11icial member of the e11tn. mittce of i.ilvostigation but nltimatOly filed tho

3 s.c.R. . SUPREME COURT REPORTS

affidavit of Mr. De Sa and not the affidavit of Mr. Bhuta. ThP High Court seems to think that as Mr. Bhuta was an independent member of the investigation committee while Mr. De Sa was in thA servjce of the Government Mr. De Sa's statement is open to suspicion. In our view such suspicion of high public officials i~ . J10t ordinarily ju$tifietf. M.r. De Saw.as as niuch member. of the in\'.e$t,igatiµg committee as Mr. Bhuta .. a1Jd so noJess · 9om1mte.9Ji than Mr. B!mt11 to testify~as.regards the iuat((Jrjri iss11e. We do :not think it right to .suspect. his ho_n(Jsty merely because he is an officer of .the UPion of India. The learned judges of the Jiigh Court appear_ also to have lost sight of the fact th(lt tb~ questionnaire whieh annexed as annexure X tp the affidavit of the second respondent Rajendl'll. Pro~ad Manek Lal itself includes number of· questions which show unmistakably that the quality" of mana,ge-ment was being enquired in~o .. ··. · · · · ··· .-~.:

.. ··. ··. · · · · ··· circumstance which a."ppears. to ... have weighed with the High Court is that the repo!'t of the committee which as the learned.judges rightly say would be the best evidence to show "that· there was in fact an investigation into the question of the management of the said undertaking" was not produced by the Union of India when called upon to do so by Mr. Nanavati on behalf of the pititioners. It is proper to mention that it does not appl)ar that the learned judges themselves directed or desired the Advocate-General to produce the report for their inspection. It further appears that no written application for the production of tho clocu. ment was made on behalf of the petitioners. It does not seem to us to be fair to draw an inference against the Union of India merely beca11se an informal request by the petitioners' advocate was not acceded to. In view of what happened in the court below we asked the appellants' counsel whether he was prepared to produce the report before us. The learned counsel readily produced the report and after examining the relevant portion

. shi-• Amb<Ztoz M.Slt.ah. ¥· Hatliiaingb Manuj~inv Og,,_f!d. /,)•! a.iijji • . J.

lltJ --

isti SUPREMJ<j OOURT REPOR'rS

whero the report deals with the question of manage-ment, wa read it out in Court so that the reepo11-dents' counsel could know the exact situation. This portion of the report sa}'l! :-"that the management is in the hands of young and inexperienced person ............ ; and the committee is of the opinion that the .present manage.r is in~apable of handliuR the aff'all'S of t.he mills ............ ; the present man11,ging agents are incapable of investing any further ............ ". The fact that tho report does contain Mlch an opinion iB sufficient to show that &n invel!tigation was actually held into the question of the quality of the management as affirmed by Mr. De Sa. The High Court's view therefore that no investigation was held into the question of ~he management of the undertaking was wroni.

We have therefore comn to th1• cour!usio11 that tho respondents were not entitled tc1 any writ <lirecting these appellants not to gi\'e effect to thu Government's order under s.18A(l)(b). We thoro-fore allow the appeal, set aside the order of the High Court directing the issue of the writ and order that the application umkr Art. 226 of the Constitu-tion be dismissed. The appellants will get their costs both here and below.

ppwl allou-cd.