State acquisition of an industrial undertaking is valid when transfer of management is merely incidental and not barred by central law.

A State acquisition statute is not invalid merely because an industrial undertaking was already under Central Government management, where the transfer of management follows only as an incident of a valid acquisition. The Court held that the Indore Textiles acquisition law was enacted to secure continuity of production in the public interest, and that section 20 of the Industries (Development and Regulation) Act, 1951 did not bar a State Legislature from acquiring the undertaking under a different legislative entry. The challenge based on prior Central management and the timing of the Ordinance therefore failed, and the acquisition Act was upheld as valid.

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Issues: Whether the acquisition and transfer of the industrial undertaking under the Indore Textiles Limited (Upkaram Ka Arjan Aur Antaran) Adhiniyam, 1986 was invalid because the management of the undertaking had already been taken over under the Industries (Development and Regulation) Act, 1951, and whether such transfer of management was barred by section 20 of that Act.

Analysis: The acquisition legislation was enacted not merely to secure management, but to ensure continuity of production in the public interest and to subserve the general welfare. The vesting of management in the State Government was treated as an incident of acquisition, not as a prohibited independent takeover of management. Section 20 of the Industries (Development and Regulation) Act, 1951 did not prevent a State Legislature, acting under a different legislative entry, from bringing about acquisition of an undertaking even though consequential transfer of management followed. The fact that the Central Government's management was about to expire and the Ordinance was issued one day earlier did not affect validity.

Conclusion: The acquisition Act was upheld as valid, and the challenge based on prior Central Government management and section 20 of the Industries (Development and Regulation) Act, 1951 failed.

Ratio Decidendi: A State acquisition statute is not invalid merely because it results in the transfer of management of an industrial undertaking already under Central Government management, so long as the transfer of management is only incidental to a valid acquisition and is not prohibited by the governing central statute.

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