JUDGMENT N. D. Ojha, J. - An identical question arises for consideration in these three writ petitions and as such they are being decided by a common order. 2. The niauagrmeut of Laximi Ratan Cotton Mills Ltd. and Atherton West and Co. Ltd. - two companies incorporated under the Companies Act, 1956, was taken over by the Central Government by the Laxmi Ratan and Atherton West Cotton Mills (Takingover of Management) Act, 1976 (No. 98 of 1976) (hereinafter referred to as the Act). The Central Government in exercise of the power conferred on it by Section 4 (1) of the Act appointed the National Textile Corporation as the Custodian of the two undertakings. The National Textile Corporation in its turn acting under S. 4 i3) of the Act appointed the National Textile Corporation (U. P.) Ltd. as the additional custodian of these undertakings. Sub-sequently an industrial dispute in respect of Laxmi Ratan Cotton Mills was referred by the State Government under S. 4-K of the U. P. Industrial Disputes Act to the Industrial Tribunal (III), Kanpur. Two industrial disputes were similarly referred by the State Government in respect of Atherton West and Co. Ltd. to the Labour Court (V.). Kanpur. In each of the three cases it preliminary objection was raised on behalf of the National Textile Corporation (U. P.) Ltd. that the references were invalid iti snuich as the management of two mills had been taken over by the Central Government and the State Coven uncut was not competent to make the references inasmuch as these industries were, on account of their inanagement being taken over by the Central Government. "Carried on by or under the authority of the Central Government" within the meaning of Section 2 (1) (i) of the U. P. Industrial Disputes Act. This preliminary objection was overruled both by the Industrial Tribunal (III), Kanpur. auid the Labour Court (V), Kanpur. It is these orders which are sought to be quashed in these writ petitions. 3. "Carried on by or under the authority of the Central Government" within the meaning of Section 2 (1) (i) of the U. P. Industrial Disputes Act. This preliminary objection was overruled both by the Industrial Tribunal (III), Kanpur. auid the Labour Court (V), Kanpur. It is these orders which are sought to be quashed in these writ petitions. 3. The only submission which has been made before its by counsel for the petitioners in these three cases is that in view of the management of the two mills being taken over by the Central Government in accordance with the provisions of the Act these two mills were industries "carried on by or under the authority of the Central Government "within the meaning of Section 2 (1) (i) of the U. P. Industrial Disputes Act and consequently in view of Section 2 (a) (i) read with Section 2 (k) of the Industrial Disputes Act, 1947, it was the Central Government alone which could have made the references. The short question which, therefore. arises for consideration is whether it is right to say that on account of their management being taken over by the Central Government under the Act the two mills can be said to be "industries carried on by or under the authority of the Central Government." In support of his submission counsel for the petitioners placed before its various provisions of the Act laying down that the management of the undertakings of the two companies vested in the Central Government as also laying down various consequences of such vesting. Considerable emphasis was placed on Section 4 (7) which runs as follows : "Subject to the other provisions of this Act and the control of the Central Government the Custodian shall be entitled, notwithstanding anything contained in the Companies Act. 1956 to exercise all the powers to dispose of airy Board of Directors of the two companies including the power to dispose of any properties or assets of the two companies) whether such powers are derived from the Companies Act, 1956, or from the memorandum and Articles of Association of the concerned company or from any other source." Emphasis was also placed on S. 8 of the Act which places certain restrictions on the powers of the share-holders of the two companies. Our attention was also invited to certain observations made in Carlsbad Mineral Water Mfg. Co. Our attention was also invited to certain observations made in Carlsbad Mineral Water Mfg. Co. Ltd. v. P. K. Sarkar, ( AIR 1952 Cal 6 ). Bharat Glass Works v. State of West Bengal, AIR 1957 Cal 347 . Abdul Rehaman vs. Mrs. E. Paul (AIR 1963 Rom 237) and Heavy Engineering Mazdoor Union v. State of Bihar ( AIR 1970 SC 82 : 1970 Lab IC 212). These decisions were also relied on in Civil Misc. Writ Pettr. No. 204 of 1969 (All) The Workmen v. Labour Court connected with three other writ petitions, decided by this Court on 10th March, 1970, where a similar question came up for consideration consequent upon the management of an industrial undertaking being taken over by an Authorised Controller appointed by the Central Government. After considering the decisions referred to above it was held : "The Central Government can only authorise an agent or a servant to carry on an industry when it sets up an industry itself or acquires an industry set up by another or when it authorises an agent or a servant to set up an industry or to takeover or acquire an industry set up by another. Normally it is the owner who provides the capital and the machinery and who is entitled to the profits and is liable for the losses who can be said to be carrying on the industry. The Manager who is to look after the functioning of the industry who normally has no direct interest in the profits or losses does not carry on the industry or the business. Regulation or control, partial or complete, of the industry or business by the Central Government will not alter this position." It was further pointed out that both ruder the Defence of India Rules and the Industries (Development and Regulation) Act the Authorised Controller is appointed to takeover the management of an under-- taking and not so in the instant cases too. Here also the two mills themselves have not been taken over by the Central Government under the Act but it is only management of the two mills which has been. taken over. 4. Having given our anxious consideration to the submissions made by counsel for the petitioners we find ourselves in respectful agreement with the decision of this Court in Civil Misc. Writ Petn. taken over. 4. Having given our anxious consideration to the submissions made by counsel for the petitioners we find ourselves in respectful agreement with the decision of this Court in Civil Misc. Writ Petn. No. 2011 of 1969 (Supra) and for this reason we find it unnecessary to refer to the various observations made in the aforesaid cases referred to its by counsel for the petitioners. 5. Reliance was also placed by counsel for the petitioners on the decision of it Division Bench of the Bombay High Court In D.P. Kelkar v. Ambadas (AIR 1971 Rom 124 : 1971 Lab IC 429). This decision carne after the decision of Civil Misc. Writ Petn. No. 204 of 1969 D/- 10-3-1970 All Supra) and naturally it could not be considered in that case. The facts in brief of this case were that the India United Mills Ltd. (No. 1 Mill) of Bombay was taken under the management of an Authorised Controller under S. 18-A of the Industries (Development and Regulation) Act, 1951. The question which came up for consideration was whether the aforesaid mills fell within cl (iv) of S. 32 of the Payment of Bonus Act which referred to "employees employed by an establishment engaged in any industry carried on by or under the authority of any depart anent of the Central Government or a State Government or a local authority." The argument which was addressed was that on account of an Authorised Controller having been appointed of the mills under the Industries (Development and Regulation) Act, 1951, the mills was an "Industry carried one by or under the authority of any department of the Central Government". The submission was accepted In para. 43 of the judgment, it was held : "It is clear upon these provisions that the management and control is completely taken away from the directors and substantially from the share-holders and the effective rnanagernent through the authorised controller substituted. The submission was accepted In para. 43 of the judgment, it was held : "It is clear upon these provisions that the management and control is completely taken away from the directors and substantially from the share-holders and the effective rnanagernent through the authorised controller substituted. It is impossible not to hold in a case like this that the industrial undertaking is being carried on under the authority of the Central Government." The decision of the Supreme Court in the case of Heavy Engineering Mazdoor Union (1970 Lab IC 212) (SC) (Supra) was elistingmmished by holding that on account of an Authorised Controller being appointed under S. 18-A of the Industries (Development and Regulation) Act "not only the powers of the directors are taken away and the powers of the share-holders severely curbed, but the authorised controller is substituted as a director and is in the real mauagennent and the control and the memorandum and articles of association of the company are either abrogated or modified to a very substantial measure." It was urged by counsel for the petitioner that similar is the situation in the instant cases also in view of Section 4 (7) and Section 9 of the Act referred to above. In our opinion the factors pointed out in D. P. Kelkar's case (supra) do not alter the legal position as euuuciated by the Supreme Court in the case of Heavy Engineering Mlazdour Union (supra) and the decisions of this Count in Civil Misc. Writ Petri. No. 204 of 1969 referred to above. In Hindustan Aeronautics Ltd. v. Workmen ( AIR 1975 SC 1737 ):(1975 Lab IC 1218) it was held (at p. 1220 of Lab IC) : "Mr. Desai made a futile and unsubstantial attempt to distinguish the case of Heavy Engineering Mazdoor Union ( AIR 1970 SC 82 : 1970 Lab IC 212) on the ground that that was the case of a Government Company carrying on an industry where private Sector Undertakings were also operating. It was not an industry, as in the instant case, which the Government alone was entitled to carry on to the exclusion of the private operators. The distinction so made is of no consequence and does not affect the ratio of the case in the least. It was not an industry, as in the instant case, which the Government alone was entitled to carry on to the exclusion of the private operators. The distinction so made is of no consequence and does not affect the ratio of the case in the least. We may also add that by amendments made in the definition of "appropriate Government" in Section 2 (a) (i) from time to time certain statutory corporations were incorporated in the definition to make the Central Government an appropriate Government in relation to the industry carried on by them. But no public company even if the shares were exclusively owned by the Government was attempted to be roped in the said definition." The distinction between an industry being taken over and the management of the industry being taken over is vital and cannot he lost sight of. The preamble of the Act inter alia states. An Act to provide for the taking over, in the public interest, of the management of the undertakings of certain companies, pending nationalisation of such undertakings, with a view to ensuring the supply of certain varieties of cloth needed by the weaker sections of the community as also by the Defence Department and for matter connected therewith or incidental thereto. Till the two mills were nationalised their ownership could not vest in the Central Government. In such matters the acid test is whether the companies have been divested of their proprietary rights. From the preamble of the Act itself it is apparent that the two mills had closed down. It was in the public interest considered necessary to restart them and for this purpose their management was taken over. The State has in such circumstances power of external control. Such temporary assumption of external control of the management of the mills, however, does not and cannot deprive the owner of the mills of his proprietary rights. Such temporary external control is meant for prodding a better management. The Central Government after injecting life and blood in an ill-managed undertaking and making it a viable undertaking shall be bound, unless it chooses to nationalise it, to return its management to its owner. The temporary external control of the management of the mills does not deprive the companies of their corporate character nor their right to property in the mill. The temporary external control of the management of the mills does not deprive the companies of their corporate character nor their right to property in the mill. Really speaking the source of authority of the companies incorporated wider the Companies Act to run the mill is derived front the memorandum and articles of association and the source of authority continues even after its management being taken over by the Central Government subject of course to such modifications as may be contained in the provisions authorising the taking over. In the instant cases too the Memorandum and Articles of Association of the mills or the provisions of the Companies Act have not been abrogated altogether. What has been done under the provisions referred to above is that the power of the directors has been vested in the custodian and to a certain extent the powers of the share-holders have been curtailed. Section 8 (2) itself provides : "Subject to the provisions contained in sub-section (1), and to the other provisions contained in this Act and subject to such other exceptions. restrictions and limitations, if any, as the Central Government may, by notification, specify in this behalf, the Companies Act, 1956, shall continue to apply to the two companies in the same manner as it applied thereto before the appointed day." This being the position it cannot be said that the industry in respect of the two stills on account of their management being taken over under the Act is carried on by or under the authority of the Central Government. Since this is the view which has been taken in the orders which have been challenged in these three writ petitions we find no merit in any of these petitions. 6. In the result each of the three writ petitions fails and is dismissed with costs and the interim orders passed therein are vacated.