Government vested equity shares & properties under Swadeshi Cotton Mills Act, confirming National Textile Corporation ownership.

The court held that the equity shares in Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Limited, along with immovable properties in Kanpur, vested in the Central Government under the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986. The court emphasized the broad language of the Act, stating that all assets, rights, and interests related to textile undertakings, including shares and immovable properties, were transferred to the Central Government. The court dismissed the petition and confirmed the National Textile Corporation as the rightful owner of the disputed shares.

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Issues Involved
1. Whether equity shares in Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Limited, held by Swadeshi Cotton Mills, vest in the Central Government under Section 3 of the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986.
2. Whether immovable properties, namely, Bungalow No. 1 and the Administrative Block, Civil Lines, Kanpur, have also vested in the Government.
3. Application of the rules of construction of contemporanea expositio.
4. Relevance and admissibility of certain documents for interpretation.
5. Privilege under Article 74(2) of the Constitution concerning the production of documents.

Issue-wise Detailed Analysis

1. Vesting of Equity Shares in the Central Government

The primary issue was whether the equity shares in Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Limited, held by Swadeshi Cotton Mills, vest in the Central Government under Section 3 of the Act. The court held that these shares did vest in the Central Government. The judgment emphasized that Section 3 of the Act states that "every textile undertaking and the right, title, and interest of the company in relation to every such textile undertaking shall stand transferred to and shall vest in the Central Government." Section 4 further expands this by stating that the textile undertakings include all assets, rights, leaseholds, powers, authorities, privileges, and all property, movable and immovable, including investments and book debts pertaining to the textile undertakings. The expressions "pertaining to" and "in relation to" were interpreted broadly to include the shares in question.

2. Vesting of Immovable Properties

The court also addressed whether immovable properties, namely, Bungalow No. 1 and the Administrative Block, Civil Lines, Kanpur, vested in the Government. The court concluded that these properties did vest in the Central Government under the expansive language of Sections 3 and 4 of the Act. The judgment noted that the language used in these sections was broad enough to include such immovable properties.

3. Application of Contemporanea Expositio

Shri Nariman argued that applying the rules of construction of contemporanea expositio would show that the shares did not vest in the Central Government. However, the court rejected this argument, stating that contemporanea expositio applies primarily to the construction of ambiguous language in old statutes and is not applicable to modern statutes. The court emphasized that the language of Sections 3 and 4 was clear and unambiguous.

4. Relevance and Admissibility of Documents for Interpretation

There was a request for the production of certain documents to establish that the shares were never intended to be taken over and were not considered part of the textile undertaking. The court held that these documents were not relevant for the purpose of interpreting Sections 3 and 4 of the Act. It was noted that the language of the Act was clear and did not require external aids for interpretation. The court reiterated that the intention of Parliament must be gathered from the words used in the statute itself.

5. Privilege under Article 74(2) of the Constitution

The court addressed the issue of whether the documents sought for production were privileged under Article 74(2) of the Constitution. The court held that these documents were part of the preparation leading to the advice tendered to the President and were therefore privileged. The court cited previous decisions, including S.P. Gupta v. Union of India, to support the view that documents related to the advice tendered to the President are protected from disclosure.

Conclusion

The court concluded that the 10,00,000 shares in Swadeshi Polytex Limited and 17,18,344 shares in Swadeshi Mining and Manufacturing Company Limited, held by Swadeshi Cotton Mills, vested in the Central Government under Sections 3 and 4 of the Act. Additionally, the immovable properties, namely, Bungalow No. 1 and the Administrative Block, Civil Lines, Kanpur, also vested in the Central Government. The court dismissed the writ petition and various special leave petitions, directing that the 17th annual general meeting be held in accordance with law, recognizing NTC as the rightful owner of the disputed shares.

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