Purposive interpretation of textile takeover law treats surplus mill lands as assets linked to the undertaking and vested in government.

Surplus lands appurtenant to a textile mill were held to fall within "assets in relation to the textile undertaking" under the Textile Undertakings (Taking Over of Management) Act, 1983. The Court applied a purposive construction, reading the phrase in the context of the Act's object of preserving and rehabilitating sick textile undertakings in public interest. Because the lands had historically formed part of the mill estate, were never truly severed by title or capital structure, and were used to support the business through mortgage, development, and sale for finance, they were treated as capital assets of the undertaking rather than a separate real estate business. The surplus lands vested in the Central Government.

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Issues: Whether the surplus lands appurtenant to the textile mill formed part of the assets "in relation to the textile undertaking" under section 3(2) of the Textile Undertakings (Taking Over of Management) Act, 1983.

Analysis: The expression "assets in relation to the textile undertaking" was construed in the context of the Act as a whole, which vested the management of the textile undertaking in the Central Government pending nationalisation. The surplus lands were historically acquired as part of the mill estate, were never segregated by a transfer of title or capital structure, and were used to support the textile business by way of mortgage, development, and sale to raise finance for the mill's liabilities and working capital. The so-called real estate activity was not found to be a separate and independent business, but a mode of utilising capital assets of the textile undertaking. A purposive construction was adopted to effectuate the legislative object of preserving and rehabilitating sick textile undertakings in public interest.

Conclusion: The surplus lands were assets in relation to the textile undertaking and vested in the Central Government under section 3(2) of the Act.

Final Conclusion: The judgment under appeal was reversed and the writ petition was dismissed, with the consequence that the Central Government's taking over extended to the surplus lands appurtenant to the mill.

Ratio Decidendi: Under a statute taking over the management of a textile undertaking, assets historically held for the benefit of the mill and used to sustain or finance its operations remain assets "in relation to the textile undertaking" unless they are shown to have been truly severed into an independent business.

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