National Textile Corporation (UP) Ltd. v. Swadeshi Cotton Mills Co. Ltd
1987-07-06
K.C.AGARWAL, R.K.GULATI
body1987
DigiLaw.ai
JUDGMENT K.C. Agarwal, J. - This is an appeal under O. 43, R. 1 (r) of the Civil P.C. filed by the National Textile Corporation (U.P.) Limited (in short referred to as the Corporation) against rejection of the application for injunction filed under O. 39, Rr. 1 and 2 of the Civil P.C. 2. Suit Mo. 104 of 1987 was filed by the Corporation against the Swadeshi Cotton Mills, Kanpur, (hereinafter referred to as the Company) and other co-landlords arrayed as defendants Nos. 2 to 10 for declaration of title and injunction restraining dispossession. 3. The Corporation claimed that the property, being premises No. 16/81, Civil Lines, Kanpur (Shrubbery) had vested under the Swadeshi Cotton Mills Co. Limited (Acquisition and Transfer of Undertakings) Act, 1986 (Act No. 30 of 1986) and by virtue of the vesting of the aforesaid property under S. 3 of the said Act, the Corporation was entitled to retain its possession and the defendants could not dispossess it or its employees living in the quarters belonging to the Corporation. 4. In para. 32 of the plaint the plaintiff claimed that the Corporation by virtue of the provisions of Act 30 of 1986 had become owner of twenty-five per cent in premises No. 16/81, Civil Lines, Kanpur (Shrubbery) and had acquired tenancy rights over the entire premises. 5. The injunction application was contested by the Company as well as by other defendants. The Company claimed that the Corporation had no right, title or interest over premises No. 16/81, Civil Lines, Kanpur and as such no injunction could be granted. The Company claimed that premises No. 16/81 Civil Lines, Kanpur, was its independent property and not of the textiles undertaking which had been acquired and transferred to the Corporation and as such the allegation of ownership and title of the Corporation was utterly misconceived, illegal, unsustainable and incorrect. It repudiated the claim of the Corporation that one-fourth share in premises No. 16/81 Civil Lines, Kanpur, was purchased out of the funds of the Textile Undertaking which was acquired under the Ordinance and thereafter by the Act. The Company asserted that the initial payment to purchase one fourth share was made by the Company, defendant No. 1, and not by the Undertaking.
The Company asserted that the initial payment to purchase one fourth share was made by the Company, defendant No. 1, and not by the Undertaking. In that connection the Defendant Company relied on a finding of the Delhi High Court given in Writ Petition No. 408 of 1978, Swadeshi Cotton Mills Company Limited v. Union of India and others which was filed before the Delhi High Court. The finding relied upon is extracted below : "On the existing material, it is not possible to hold that bungalow No. 1, bungalow No. 2, the office block adjacent to bungalow No. 1 and the property known as Shrubbery from part of the complex of the Kanpur undertaking even though it could not be denied that part of the property was being utilised by the Company to coordinate the activities of the various industrial undertakings and as a guest house to provide accommodation to the Director and the Officers of the various undertakings when they happen to be in Kanpur. It is no doubt true that the Authorised person would have to make arrangements to coordinate the activities of the various industrial undertaking. In view, however, of the fact that the aforesaid property has not been exclusively used for any or all the industrial undertakings and not only housed the registered office of the Company but was being used generally to look after the affairs of the Company, it is not possible to hold that these properties would go with the industrial undertakings. The problem of coordination of the activities of the industrial undertakings is essentially a problem of the Authorised person and not of the Company. Any attempt to apportion a part of bungalow No. 1 or the office block adjacent to it is likely to create practical difficulties. It would, therefore, be reasonable and proper to hold that these properties are outside the scope of the impugned order." On the findings given, the Delhi High Court allowed the writ petition in part laying down : "The petition succeeds in part, the challenge to the validity of the impugned order fails and to that extent the petition is dismissed.
It would, therefore, be reasonable and proper to hold that these properties are outside the scope of the impugned order." On the findings given, the Delhi High Court allowed the writ petition in part laying down : "The petition succeeds in part, the challenge to the validity of the impugned order fails and to that extent the petition is dismissed. The petition succeeds in so far as it seeks to protect from the impugned order the corporate entity of the company, the corporate entity of the subsidiary and its assets, the holding of the Company in Polytex and the assets and property of the Company which are not referable to any of the industrial undertakings. The respondents are hereby restrained from in any manner interfering with corporate entity, the assets and property which are outside the impugned order. The respondents would release from its control and custody and/or deliver possession of any assets or property of the company, which are not referable to the industrial undertakings in terms of the observations made in paras. 46 and 47, within a period of three months from today. In the peculiar circumstances, parties would bear their respective costs." 6. The defendant Company also asserted that neither did the Corporation have a prima facie case nor balance of convenience and as such the application for injunction was liable to be rejected. It further asserted that the possession of the Corporation was illegal and as such no injunction could be given to it. On behalf of other defendants arrayed as defendants Nos. 2 to 10 separate objections were filed claiming that the Corporation did not have any case for injunction. The defendants Nos. 4 to 7 in their objection claimed that the Corporation possession was illegal and unauthorised. The objection filed on behalf of the Corporation and other defendants reiterating the stand taken in the main application for injunction were repeated by the Corporation. It was denied that premises No. 16/81 Civil Lines, Kanpur (Shrubbery) was an independent property of Defendant No. 1, Company, and that the Company in its own independent right was the owner of one-fourth share of the entire property as per decree of the Supreme Court in Civil Appeal No. 1242 of 1977. 7.
It was denied that premises No. 16/81 Civil Lines, Kanpur (Shrubbery) was an independent property of Defendant No. 1, Company, and that the Company in its own independent right was the owner of one-fourth share of the entire property as per decree of the Supreme Court in Civil Appeal No. 1242 of 1977. 7. On the materials produced the trial Court found that the plaintiff corporation neither had a prima facie case nor balance of convenience in its favour and as such rejected the injunction application. The Corporation has come to this Court by means of the present appeal challenging the judgment and order of the Court below. 8. Sri Ramaswamy, the learned Additional Solicitor General of India, who appeared on behalf of the appellant Corporation argued the appeal at great length and submitted that the judgment of the Court below was perverse on merits and that there was no proper exercise of discretion on its part, therefore the same was liable to be set aside. 9. Sri S.N. Kackar and Sri Sudhir Chand who appeared for the defendants supported the judgment by submitting, inter alia, that no other view was possible to be taken in the injunction application than the one which has been taken by the Court below. 10. For appreciating the points urged a brief history to the facts on the basis of which the appellant Corporation claimed itself that Shrubbery vested in it would require to be stated. 11. We may mention, the immediate cause of action for filing of the suit by the Corporation was the decree obtained by the defendant company and other respondent Nos. 2 to 10 from the Supreme Court in Writ No. 1242 of 1977. The decree was passed by the Supreme Court on 17-12-1985. There the Supreme Court said: "We nominate the Court of the learned District Judge, Kanpur as the executing Court for the purpose of executing the decree made by this Court in C. A. No. 1242/77. The payment of all amounts envisaged by this appeal in that appeal shall be made into said executing Court within 3 weeks from today. No further time will be allowed. We also direct that the arrears of all rent payable by the Swadeshi Cotton Mills Co. Ltd. will be deposited by them in the said executing Court within 4 weeks from today.
No further time will be allowed. We also direct that the arrears of all rent payable by the Swadeshi Cotton Mills Co. Ltd. will be deposited by them in the said executing Court within 4 weeks from today. We clarity further that delivery of possession contemplated by our decree in favour of the other parties thereto shall be delivery of vacant possession and any person or persons occupying any part or portion of the property shall be liable to summary eviction by the execution Court. CMP 19901/86 is allowed. CMP No. 20137 is also disposed of." 12. The necessary facts about the disputes leading to this decree would be dealt with in the next para, and concluding part of this judgment. 13. This decree was challenged by the Corporation that it had been obtained by the defendants fraudulently and collusively. The allegations of fraud made against the defendants by the Corporation were that although Act No. 30 of 1986 had come into force and under S. 4(6) of the aforesaid Act, the Corporation was a necessary party, but the defendants having not impleaded it were guilty of suppression of relevant facts and as such the decree of the Supreme Court was not executable. 14. In 1969 an application under S. 3 of U.P. (Temporary Control of Rent and Eviction) Act, 1947 (U.P. Act No. 3 of 1947) since repealed was filed by the landlords for eviction of the tenant, Swadeshi Cotton Mills Company Limited on the ground of personal requirement. On 20-7-1971 the District Magistrate/Rent Control and Eviction Officer, Kanpur rejected the application. 15. On 6-7-1972 the Commissioner, Allahabad Division, Allahabad, allowed the revision filed by the landlord. Therefore the application under S. 3 stood allowed. The revision filed by the tenant Swadeshi Cotton Mills under S. 7-F against the order of the Commissioner was rejected by the State Government. Thus the permission granted became final. 16. On 15-7-1972 U.P. Act No. 3 of 1947 was repealed and replaced by U.P. Act No. 13 of 1972. On 29-5-1973 and 4-7-1973 the Company purchased twenty-five per cent share in the premises by the registered sale deeds. The Sale deeds were in the name of the Company defendant No. 1. The company paid Rs. 63,000/- and Rs. 50,000/- by means of two cheques. The consideration was paid by two cheques. 17.
On 29-5-1973 and 4-7-1973 the Company purchased twenty-five per cent share in the premises by the registered sale deeds. The Sale deeds were in the name of the Company defendant No. 1. The company paid Rs. 63,000/- and Rs. 50,000/- by means of two cheques. The consideration was paid by two cheques. 17. After the permission granted under S. 3 of Act No. 3 of 1947 became final, the landlords applied to the Prescribed Authority under Act No. 13 of 1972 for release of the premises No. 16/81 Civil Lines, Kanpur. The Prescribed Authority rejected the application. The Prescribed Authority did not pass any order of eviction on the ground that since the defendant company had become a co-owner till shares are demarcated by the civil Court, the eviction order could not be given effect to. 18. The landlords filed Writ Petition No. 394 of 1976 against the order of the Prescribed Authority dated 29-11-1975. The High Court 'allowed the writ petition and directed the Prescribed Authority to decide the case on merits. The High Court held that if the tenant Company had acquired one- fourth share, the Prescribed Authority could order its eviction from the specified portion of the said house. 19. Against this order of the High Court SLP was filed in the Supreme Court which was numbered as 1242 of 1977. During the pendency of this SLP the State Government passed an. order under S. 18-AA of the Industries Development and Regulation Act, 1951 (Central Act 65 of 1951) taking over the management of the six Textile Undertakings of the Swadeshi Cotton Mills Company Limited. These six Textiles Undertakings were as under: - 1. The Swadeshi Cotton Mills, Kanpur. 2. The Swadeshi Cotton Mills. Pondicherry. 3. The Swadeshi Cotton Mills, Naini. 4. The Swadeshi Cotton Mills, Maunath Bhanjan. 5. The Udaipur Cotton Mills, Udaipur. b.The Rae Bareili Textiles Mills, Rai Bareli. 20. Being aggrieved by the said taking over order Swadeshi Cotton Mills, respondent No. 1, along with its Managing Director, Dr. Raja Ram Jaipuria, filed a Writ Petition in the High Court of Delhi against the Government and the Corporation (being Writ Petition No. 408 of 1979) challenging the validity and legality of the take-over order and prayed for its quashing.
Being aggrieved by the said taking over order Swadeshi Cotton Mills, respondent No. 1, along with its Managing Director, Dr. Raja Ram Jaipuria, filed a Writ Petition in the High Court of Delhi against the Government and the Corporation (being Writ Petition No. 408 of 1979) challenging the validity and legality of the take-over order and prayed for its quashing. The respondent No. 1 gave a list of the assets of the Company and contended that since the management of the six Textile Undertakings had been taken over by the Central Government the excluded assets mentioned in the aforesaid writ petition were not covered by take-over order dated 13-4-1978. Since none of the six Textile Undertakings was entitled to the said excluded assets those had not been taken over under the orders passed by the Central Government under S. 18-AA. Amongst the excluded items one of them was the premises No. 16/81 Civil Lines, Kanpur, in dispute. This was described as below: "Bungalow No. 3 also known as Shrubbery' being inter alia, the residence of the Secretary of the second petitioner." 21. The Delhi High Court held that the order passed by the Central Government taking over the management of the six Textile ' Units of the Company was valid. The High Court, however, found that the excluded assets were not referable to any one of the six Textile Undertakings and were the properties of the defendant Company and not of the Textile Undertakings. On the findings mentioned above the Delhi High Court allowed the writ petition filed by the respondent Company partly. The relevant portion of the judgment of the Delhi High Court excluding premises No. 16/81 Civil Lines, Kanpur, from the order passed under S. 18-A A and its operative portion are quoted f below.
On the findings mentioned above the Delhi High Court allowed the writ petition filed by the respondent Company partly. The relevant portion of the judgment of the Delhi High Court excluding premises No. 16/81 Civil Lines, Kanpur, from the order passed under S. 18-A A and its operative portion are quoted f below. "On the existing material, it is not possible to hold that Bungalow No. 1, Bungalow No. 2 the office block adjacent to Bungalow No. 1 and the property known as 'Shrubbery' form part of the complex of the Kanpur undertaking even though it could not be denied that pan of the property was being utilised by the Company to co-ordinate the activities of the various industrial undertakings and as a guest house to provide accommodation to the Directors and the officers of the various undertakings when they happen to be in Kanpur," xxx xxx xxx It is not possible to hold that these properties would go with the industrial undertakings. The problem of coordination of the activities of the industrial undertakings is essentially a problem of the Authorised person and not of the Company. Any attempt to a portion a part of the Bungalow No. 1 or the office block it adjacent to it is likely to create practical difficulties. It would, therefore, be reasonable and proper to hold that these properties are outside the scope of the impugned order. In the result, the petition succeeds in part the challenge to the validity of the impugned B order fails and to that extent the petition is dismissed. xxx xxx xxx The respondents are hereby restrained from in any manner interfering with the corporate entity, the assets and property which as outside the impugned order The respondent would release from its control and custody and/or deliver possession of any assets a property of the Company, which are not referable to the industrial undertakings in terms of the observations made in paras. 46 and 47, within a period of three months from today. In the peculiar circumstances, parties would bear their respective costs." 22. From the above decision of the Delhi High Court it was clear that Shrubbery was not referable to any of the industrial undertakings and as such was not covered by the order under S. 18-AA of the IDRA. 23.
In the peculiar circumstances, parties would bear their respective costs." 22. From the above decision of the Delhi High Court it was clear that Shrubbery was not referable to any of the industrial undertakings and as such was not covered by the order under S. 18-AA of the IDRA. 23. Three separate appeals were preferred against the judgment of the Delhi High Court in the Supreme Court. All the three appeals were disposed of by a common judgment. The Supreme Court came to the conclusion that the order passed under S. 18-AA of the I.D.R. Act was illegal and ultra vires inasmuch as it violated the principles of natural justice but refrained from setting aside that order in view of the undertaking given by the Solicitor-General that post decision hearing would he given to the Company. The order of the Supreme Court is quoted below: "But we refrain from doing so, because the learned Solicitor-General in all fairness, has both orally and in his written submissions dated August 28, 1979 committed himself to the position that under S. 18-F, the Central Government in exercise of its curial functions, is bound to give the affected owner of the undertaking taken over, a "full and effective hearing on all aspects touching the validity and/or correctness of the order and/or action of take-over", within a reasonable time after the take over. The learned Solicitor has assured the Court that such a hearing will be afforded to the appellant Company if it approaches the Central Government for cancellation of the impugned order." 24. The operative portion of the appeal filed by the Company is given in para. 93 of the judgment which is reported in Swadeshi Cotton Mills v. Union of India, AIR 1981 SC 818 . The relevant portion of paragraph 93 is extracted below : "In view of this commitment/or concession fairly made by the learned Solicitor-General, we refrain from quashing the impugned order, and allowing Civil Appeal 1629 of 1979 send the case back to the Central Government." 25. So far as the appeals filed by the Central Government and the National Textile Corporation are concerned, the Supreme Court disposed them of by saying as under : "In view of the above decision, no separate order is necessary in Civil Appeals 1957 and 2087 of 1979. All the three appeals are disposed of accordingly with no order as to costs.
All the three appeals are disposed of accordingly with no order as to costs. Since the appeals have been disposed of on the first and foremost point canvassed before us, in the manner indicated above, it is not necessary to burden this judgment with a discussion of the other points argued by the counsel for the parties." 26. What is important to be noted at this juncture is that the Supreme Court did not set aside the judgment of the Delhi High Court which related to the excluded assets. In pursuance of the direction of the Supreme Court, the Central Government on 9th of March, 1981 appointed a Committee of three officers to give a hearing to the respondent No. 1. The Committee gave its decision that the take over could not be sustained. 27. As for eighteen months the Central Government took no decision on the report of the Committee, but suddenly one day order to the expiry of five years period specified in the said take over order dated 13th April, 1978 purported to continue the same up to 13-7-1983 the respondent No. 1 filed writ petition No. 4910 of 1983 under Article 32 of the Constitution before the Supreme Court challenging the extension dated 11-4-1983. While the said writ petition was pending the Hon'ble Commerce Minister passed an order dated 26th Nov., 1983 rejecting the findings and order of the Committee. He held that the take over was justified. In that view of the matter the take over order was extended and was continued from time to time and ultimately up to 19-4-1986. 28. On 19-4-1986, the President of India issued an Ordinance, being Ordinance No. 5 of 1986 called the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986 (hereinafter referred to as the Ordinance), by which the six Textile Undertakings mentioned in S. 21k) of the said Ordinance were acquired retrospectively with effect from 1-4-1985. This date was fixed as the appointed day for acquisition by the said Ordinance. For the transfer and acquisition of the six Textile Undertakings a-sum of Rs. 24,32,00,000 was Fixed as compensation. This Ordinance was replaced by the Act of Parliament, being Act No. 30 of 1986. The said Act repealed the Ordinance. 29.
This date was fixed as the appointed day for acquisition by the said Ordinance. For the transfer and acquisition of the six Textile Undertakings a-sum of Rs. 24,32,00,000 was Fixed as compensation. This Ordinance was replaced by the Act of Parliament, being Act No. 30 of 1986. The said Act repealed the Ordinance. 29. The preamble of the Act declares that it has been enacted to provide for the acquisition and transfer of six Textile Undertakings of the respondent Company which were taken over by the Government under S. 18-AA of the I.D.R. Act with a view to secure the proper management of such undertaking so as to subserve the interest of the general public. The second recital of the preamble is as under : "And whereas the management of the said Textile Undertakings was taken over by the Central Government under S. 18-AA of the Industries (Development and Regulation) Act, 1951." 30. S. 2-K defines textile undertakings by giving their names. The details of these six undertakings have already been given by us in this judgment. 31. S. 3 deals with transfer and vesting of the textile undertakings. S. 4 provides for general effect of vesting. Sub-s. (6) of S. 4 on which reliance has been placed on behalf of the appellant is as under : "(6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any property which has vested in the Central Government, under S. 3, instituted or preferred by or against the Company is pending, the same shall not abate, be discontinued or be, in any way, prejudicial affected by reason of the transfer of the textile undertakings or of anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced by or against the National Textile Corporation." 32. S. 9 provides for payment of amount for the deprivation of the Company of the management of the textile undertakings. 33. S. 24 of the Act deals with overriding effect. It reads as under : "The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any Court, tribunal or other authority." 34.
It reads as under : "The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any Court, tribunal or other authority." 34. Before we deal with Act 30 of 1986 and its implications on the facts of the present case, we wish to decide the effect of the Full Bench judgment of the Delhi High Court 1 briefly. Relevant history and extract of that case has already been discussed above. 35. Elaborate arguments were advanced before us by the learned counsel for the parties on the Full Bench decision of the Delhi High Court and that of the Supreme Court given in the appeal preferred against that judgment. On behalf of the respondents, the contention was that Delhi High Court has conclusively determined that Shrubbery No. 16/81 did not belong to the textile undertaking, Kanpur and that was not taken over under S. 18-AA The fact that such a decision had been given by the Delhi High Court could not be and was not dispute could not be and was not disputed by the learned counsel appearing for the Corporation but what was, however, argued by the learned Additional Solicitor-General was that since that judgment was reverted by the Supreme Court, it did not exist. 36. In support of his argument, learned It Additional Solicitor General referred to the last paragraph of the decision which said' the appeals are allowed." He submitted that the irresistible conclusion that the Court must accept that the two appeals filed by tie National Textile Corporation and Union of India stood allowed and the judgment of the Delhi High Court to the extent it accepted the writ petition of the Swadeshi Cotton Mi Ltd. stood rejected. We find it difficult: accept this submission. Out of the three appeals filed, the Supreme Court dealt wilt, the merits of the appeal filed by S waded' Cotton Mill Company and allowed the sand by directing the Central Government to a hearing to the Company. On the malts going back to the Central Government tin' decision of the Delhi High Court relating to excluded assets was before it.
On the malts going back to the Central Government tin' decision of the Delhi High Court relating to excluded assets was before it. The Commerce Minister extended the take over order passed under S. 18-AA on 13-4-1978 by finding : ".......... the circumstances fully justified action under S. 18-AA(l)(a) of the D.R. Act, accordingly, the Government, after taking into account all the relevant submissions made in past hearing hereby confirmed the order dated 13-1-1978." 37. The Government of India, therefore, issued fresh orders under S. 18-AA extending the life of the initial order passed on 13-4-1978. This order had been interpreted by the Delhi High Court and the writ petition filed before it was partly allowed. The Supreme Court has since not reversed the Delhi High Court judgment setting aside its finding on the excluded assets, the same became final. Nor did the Commerce Minister arrive at any fresh finding for taking over any of the excluded properties. He confirmed the take over order dated 13-4-1978 which was interpreted by the Delhi High Court as not covering the properties found by it. 38. The Central Government did not object to the manner in which its appeal was decided. It did not apply for the revival of its appeal by agitating that Delhi High Court erred in holding that excluded assets were not covered by take over under S. 18-AA. The judgment of the Delhi High Court on this aspect of the case is binding on the Central Government and the Corporation. 39. After this judgment was reserved, the Corporation filed a certified copy of the decree of the Supreme Court for showing that the decision of the High Court in Writ Petition No. 408 of 1978 was set aside. The appellants case is not advanced by this decree. The judgment of the High Court upholding the take over order was reversed by the Supreme Court in the appeal of M/s. Swadeshi Cotton Mills, hence it had to mention that the judgment of the High Court was set aside. It does not mean that the judgment was set aside in its entirety. A decree has to be in conformity with the judgment. 40. On behalf of the appellant, the learned counsel argued that the Delhi High Court judgment could not be of any assistance to the altered position after coming into force of the Act 30 of 1986.
It does not mean that the judgment was set aside in its entirety. A decree has to be in conformity with the judgment. 40. On behalf of the appellant, the learned counsel argued that the Delhi High Court judgment could not be of any assistance to the altered position after coming into force of the Act 30 of 1986. Even otherwise, the effect of the notification under. S. 18-AA of the I.D.R. Act was the one mentioned in S. 18-B thereof and it did not travel beyond that. S. 18-B does not speak of vesting any assets. Consequently, the learned Additional Solicitor General submitted that the judgment in Civil Misc. Writ No. 408 of 1978 could not be of any avail to defendant No. 1 after Act 30 of 1986. 41. Coming to Act No. 30 of 1986, we find that it is clear on a plain reading of S. 2(k) of the Act that the right, title and interest of the undertaking stood transferred to and vested in the Central Government in the first instance and immediately thereafter in the National Textile Corporation. The textile undertakings which are transferred to and vested in the National Textile Corporation are deemed to include "all assets, rights, lease holds, powers, authorities and privileges and all property move able and immovable, including lands, buildings, workshops, stores, instruments, machinery and equipment, cash balances, cash on hand, reserves funds, investments and book debts pertaining to the textile undertakings and all rights and interests in or arising out of such property as were immediately before the appointed day in the ownership, possession, power or control of the Querist in relation to the said undertakings." 42. What is material to be noted is that the properties, move able and immovable, which are deemed to be included in the textile undertakings transferred to and vested in the National Textile Corporation thus are only properties pertaining to the textile undertakings. Therefore what is transferred to and vested in the National Textile Corporation, is each of the six textile undertakings specified in S. 2(k) together with all property, move able and immovable, pertaining to such textile undertakings. 43. Counsel for the Corporation urged that Act No. 30 of 1986 is to be interpreted liberally so as to give effect to the object which the Parliament had in view while enacting it.
43. Counsel for the Corporation urged that Act No. 30 of 1986 is to be interpreted liberally so as to give effect to the object which the Parliament had in view while enacting it. According to him all right, title and interest of the Company have been acquired and, therefore, what is pertaining to could not be confined to the property move able and immovable of the textile undertakings alone. We do not find merit in this submission. It is only the textile undertakings and properties pertaining to them which are sought to be acquired and Shrubbery treated as distinct and separate property of respondent No. 1, it is not possible to agree that how they could be treated as pertaining to any one of the six textile undertakings taken over under Act 30 of 1986. 44. Learned Counsel for the appellant relied on two decisions of the Supreme Court-reported in National Textile Corporation Limited v. Sita Ram Mills Limited, AIR 1986 SC 1234 and Minerva Mills Limited v. Union of India, AIR 1986 SC 2030 , in support of his proposition that in a matter of acquisition construction which would subserve and carry out purpose and object of Act should be adopted. 45. For this proposition the first case of Sita Ram Mills Limited has been cited. It was relied upon also for the interpretation of S. 3(2) of the present Act. S. 3(2) of the Act before the Supreme Court was differently worded than what it is in the Act in hand. 46. S, 3(2) of that Act covers all properties and rights of every description in relation to the textile undertaking which were in the ownership, possession and control of the Company, whereas S. 3(1) of Act 30 of 1986 does not acquire all the assets, rights, properties, etc. in relation to the Company at all. It only acquires all the rights, title and interest of the Company in relation to the textile undertakings mentioned above. 47. The above is a potential ground for distinguishing Sita Ram Mills case ( AIR 1986 SC 1234 ) and holding that the law laid down therein is not applicable to the facts of the present case. 48.
It only acquires all the rights, title and interest of the Company in relation to the textile undertakings mentioned above. 47. The above is a potential ground for distinguishing Sita Ram Mills case ( AIR 1986 SC 1234 ) and holding that the law laid down therein is not applicable to the facts of the present case. 48. In Minerva Mills Limited v. Union of India ( AIR 1986 SC 2030 ) (supra) the controversy was whether land involved in that case which did not form part of the undertaking vested in the Government on the interpretation of S. 4(1) of the Sick Textile Undertakings (Nationalisation) Act the Supreme Court found that for applying the aforesaid Act it was immaterial that land was not in use of the undertaking. 49. The decision of the Supreme Court of both of these cases turned on their own facts and the legislation's which were interpreted in them. Those cases do not assist us in deciding the controversy involved in the present appeal. They relate to the same compound in which the Mills were situated. It is an independent property, part of which was used as a guest house. This property was never shown in the balance-sheet and the Profits Account of the Textile Undertaking, Kanpur. Furthermore the Full Bench of the Delhi High Court takes the view that Shrubbery was no part of the industrial undertaking. 50. On the basis of sub-s. (1) of S. 9 it was argued by the learned counsel for the respondent No. that the same Textile, Undertakings of which the management was taken over by the Central Government under the order dated 13-4-1978 which are sought to be acquired under Act 30 of 1986. 51. in the present appeal which is directed Out against the rejection of the injunction application, we are not required to say more than what we have stated above. Ours is a jurisdiction of a limited nature. Only tentatively while judging the question of prima facie case that we have gone into this controversy. 52. In Arjun Singh v. Mohinder Kumar, AIR 1964 SC 993 the Supreme Court lays down the rule which has to be applied while interpreting interlocutory orders. "They do not, in that sense, decide in any manner the merits of the controversy in issue in the suit and do not of course, put an end to it even in part.
52. In Arjun Singh v. Mohinder Kumar, AIR 1964 SC 993 the Supreme Court lays down the rule which has to be applied while interpreting interlocutory orders. "They do not, in that sense, decide in any manner the merits of the controversy in issue in the suit and do not of course, put an end to it even in part. Such orders are certainly capable of being altered or varied by subsequent applications for the same relief, though normally only on proof of new facts or new situations which subsequently emerge As they do not impugn upon the legal rights of parties to the litigation the principle of res judicata does not apply to the findings on which these orders are based, though if applications were made for relief on the same basis after the same has once been disposed of, the Court would be justified in rejecting the same as an abuse of the process of the Court." The learned Additional Solicitor General urged that if the arguable point arises, the Court dealing with the same is obliged to grant an injunction. What is required to be seen is that there is a serious question to be tried. It is not part of the Courts function at that stage to deal with the injunction application to decide difficult questions of law which call for detailed arguments and consideration. These are the matters to be dealt with at the trial. In Fellowes v. Fisher, (1975) 2 Ail ER 829. Lord Denning MR, held: "Nevertheless, the need for immediate decision is such that the Court has to make an estimate of the relative strength of each party's case. If the plaintiff makes out a prima facie case, the Court may grant an in junction. If it is a weak case, or is met by a strong defence, the Court may refuse an injunction. Some times it means that the Court virtually decides the case at that stage. At other times it gives the parties such good guidance that the case is settled. At any rate, in 99 cases out of 100, the matter goes no further. 53. However, the submission of respondents counsel was that the claim of the appellant was frivolous and vexatious and was not even settable. Therefore, the Court below was right in rejecting the injunction application. 54.
At any rate, in 99 cases out of 100, the matter goes no further. 53. However, the submission of respondents counsel was that the claim of the appellant was frivolous and vexatious and was not even settable. Therefore, the Court below was right in rejecting the injunction application. 54. It is undisputed that the decision and question of prima facie case is the essential prelude to grant the interlocutory relief. In order to grant injunction it was said in American Cynamide v. Ethicon, (1975) 1 All ER 504 : "................The Court no doubt must be satisfied that the claim is not frivolous or vexatious. In other words, there is a serious question to be tried." 55. This controversy came up for consideration before the Supreme Court in United Commercial Bank v. Bans. of India AIR 1981 SC 1426 . The Supreme Court said : "No injunction could be granted under 0.39, Rr. 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case meaning thereby that there w as a bona fide contention between the parties on a serious question to be decided. The question that was necessary also is whether in the facts and circumstances of the case, there is a prima facie case and if so, as between whom." 56. If we were to apply the principles and lav/to the grant of injunction in the instant case, we find that the Court below was right in finding that the Corporation failed to establish that a prima facie case existed in its favour and that the injunction application was entitled to be allowed. Our definite opinion on the materials scrutinised and the arguments made by the parties is that there is no overwhelming balance in the Corporation's favour, or any other overriding ground, for granting an injunction, Consequently, the injunction application was rightly rejected. Outcome of issues before us is doubtful and in this background it would not be possible to grant injunction, whatever greater injustice would be done, by allowing the injunction application. 57. Any expression of opinion on the applicability of Act 30 of 1986 in this appeal goes without saying would not be binding on the parties in the suit. 58. To whatever worth it may be at this place, we wish to refer to paras. 3(1) and ;m) of the counter-affidavit filed by the Company respondent No. 1.
57. Any expression of opinion on the applicability of Act 30 of 1986 in this appeal goes without saying would not be binding on the parties in the suit. 58. To whatever worth it may be at this place, we wish to refer to paras. 3(1) and ;m) of the counter-affidavit filed by the Company respondent No. 1. Clause (1) is quoted below: - "That the six textile undertakings of the Company have since been nationalised, the excluded assets were consciously left out of the sweep of Nationalisation Act viz. Swadeshi Cotton Mills Company Ltd. (Acquisition and Transfer of Undertakings) Act, 1986 and the Company is. therefore, in possession thereof and enjoying their usufruct also." 59. The relevant portion of para, 3(m) is extracted below: - "The deponent has learnt that after deliberations and the action, a conscious decision was taken not to take over these assets, including Shrubbery within sweep of the Ordinance and the Act. The deponent has also learnt that while determining the amount payable under S. 8 of the Act, the value of the aforesaid properties (Excluded assets) was not taken into consideration and no amount was provided for the same in the amount determined under S. 8 of the Act." 60. These paragraphs have been denied by K.D. Dwivedi on behalf of the appellant in the rejoinder affidavit. On the basis of legal advice, he has alleged that compensation has been determined by the Central Government for the Gubbery and, therefore, the allegations of the respondent Company were wrong. 61. How could an affidavit be filed on this factual controversy by having resort to legal advice. It is the Central Government which alone could reply it. Much of the litigation between the appellant and the respondent Company got settled. 62. Having thus disposed of the aforesaid points, the only controversy that remains to be examined is whether the decree of the Supreme Court obtained in Civil Appeal No. 1242 of 1977 is executable as against the Corporation. The appellant has given two grounds for the decree not being executable. The first is that is was fraudulent and collusive and secondly, that the appellant Corporation having not been impleaded as a party, the decree is in executable and not binding on it. 63.
The appellant has given two grounds for the decree not being executable. The first is that is was fraudulent and collusive and secondly, that the appellant Corporation having not been impleaded as a party, the decree is in executable and not binding on it. 63. We have already mentioned in the beginning that against the judgment of the High Court given under S. 21 read with S. 43(2)(rr) that the aforesaid appeal had been filed by the respondent Swadeshi Cotton Mills before the Supreme Court. In this appeal, the contention of the appellant was that since it had become a co-owner by having purchased one-fourth share in premises no. 15/81 Civil Lines, Kanpur, it could not be evicted without a partition of the same. In this appeal, an application was filed by all the parties having an interest in premises No. 16/81 Civil Lines, Kanpur for amicable settlement and distribution of the properties in accordance with their shares. The respondent, Swadeshi Cotton Mill Company Limited desired that the portion of the property which included the main building along with the land appurtenant to it be allotted to it. The Supreme Court on 12-9-1984 directed the District Judge, Kanpur, to take the proceedings of determining the shares and a working plan for a division. Pursuant to the aforesaid judgment of the Supreme Court, the District Judge on 26-7-1985 determined the shares and prepared the working plan for division of the properties by metes and bounds. M/s. Swadeshi Cotton Mills was allotted the building as well as the land appurtenant to it. The District Judge determined the cost of excess property to be allotted to the Swadeshi Cotton Mills as Rs. 6,70,508/-. On the matter going before the Supreme Court, objections were preferred and also a change was suggested to the allotment of land to M/s. Swadeshi Cotton . Mills Ltd. The change was accepted. The Supreme Court passed the following order on Dec. 17, 1985, the relevant portion of which is extracted below: - "Accordingly, the appeal is decreed in terms of the Report dated July 26,1985, as amended by the change set forth in the statement mentioned above.
Mills Ltd. The change was accepted. The Supreme Court passed the following order on Dec. 17, 1985, the relevant portion of which is extracted below: - "Accordingly, the appeal is decreed in terms of the Report dated July 26,1985, as amended by the change set forth in the statement mentioned above. The parties will make ; payment of the sums mentioned in the amended scheme of division in accordance with its terms within three months from today, and will be entitled to vacant possession of the land allotted to them in accordance with the amended scheme within two months of such payment. The appeal is disposed of accordingly." 64. A final decree was passed on 26-2-1986 according to the changes made by the Supreme Court. Under the changed decree, Swadeshi Cotton Mills was required to pay Rs. 3,12,782/-. The relevant portion of this , decree is extracted below: - "(2) M/s. Swadeshi Cotton Mills : Property allotted : Land = 29,72,600 Main building. = 3,42,800 Portico = 10,340 = 33,26,740 Share of property = 30,13.958 Cost of excess property being allotted = 3,12,782." 65. On 4-8-1986, the Supreme Court nominated the District Judge, Kanpur as executing Court and giving direction to it to hand over possession of the portions specified f in the decree. The order is quoted below: - "We nominate the Court of the learned District Judge, Kanpur, as the executing Court for the purpose of executing the decree made by this Court in Civil Appeal No. 1242 of 1977. The payment of all amounts envisaged by the decree in that appeal shall be made into the said executing Court within three weeks from today. No further time will be allowed. We also direct that the arrears of rent payable by the Swadeshi Cotton Mills Co. Ltd. will be deposited by them in the said executing Court within four weeks from today. We clarify that the delivery of possession contemplated by the decree in favour of the different parties thereto shall be delivery of vacant possession and any person or persons over any part or portion of the property shall be liable to summary eviction by the executing Court. C.M.P. No. 1991 of 86 is allowed. C.M.P. No. 20187 of 86 is also disposed of." 66.
C.M.P. No. 1991 of 86 is allowed. C.M.P. No. 20187 of 86 is also disposed of." 66. The Corporation objected to the execution of decree passed by the Supreme Court in Civil Appeal No. 1242 of 1977 by filing an objection before the District Judge. The District Judge instead of deciding the same gave one month's time to the appellant to obtain the stay order. It was thereafter that the appellant moved the application before the Supreme Court saying that the decree was erroneous having been passed behind the appellant Corporation on the basis of a compromise collusively and fraudulently obtained by the parties thereto. The application was resisted by the respondents . of the appeal before the Supreme Court. It may be stated here that by that time, Smt. Rachna Seth who had purchased the interest of Shiv Prasad, respondent, under a registered sale deed, was also impleaded as a party on her application before the Supreme Court by order dated 17-7-1986. The application of the Corporation for setting aside the decree was rejected by the Supreme Court by the following order dated 22-1-1988: - Upon hearing counsel the Court made the following order: - "We have heard learned counsel for the parties and we do not consider it necessary to interfere in the proceeding. It is open to the applicant, National Textile Corporation Limited (U.P.) to establish its title in an independent proceeding and it will be open to the Court entertaining such proceeding to pass such orders as it considers appropriate in the interest of justice. With these observations, the application is rejected." 67. Sri S. N. Kacker urged that by the order dated 21-1-1987 the Supreme Court held that partition of lots amongst various owners was a closed chapter and the appellant Corporation, therefore, is not entitled to stop the execution of the Supreme Court decree. In this connection he also urged that regarding three-fourth divided lots of co-sharers other than Swadeshi Cotton Mills, respondent No. 1 the appellant could get no relief. 68. From a perusal of the various orders of the Supreme Court which have been mentioned above, even though respondent No. 1 purchased one-fourth undivided share in the property, it desired to get the whole of the main bungalow and the appurtenant land. The Supreme Court awarded excess property over and above its one-fourth share of the value of Rs. 3,12,782/-.
From a perusal of the various orders of the Supreme Court which have been mentioned above, even though respondent No. 1 purchased one-fourth undivided share in the property, it desired to get the whole of the main bungalow and the appurtenant land. The Supreme Court awarded excess property over and above its one-fourth share of the value of Rs. 3,12,782/-. The respondent company paid this amount awarded under the decree. The other transferees and co-sharers have also paid and received the money adjustment under Supreme Court decree. Third party interest were created and the name of respondent No. 8 was mutated under the decree of the Supreme Court. It is in this background that we have to consider whether the Court below was wrong in holding that the balance of convenience lay in rejecting the injunction application. 69. As a general rule, for determining whether to grant a temporary injunction or a restraining order, it is necessary for the Court to weigh the equities and balance, the relative position of the parties with respect to convenience, hardship and injury. So on an application for temporary injunction, the Court in the exercise of its discretionary power, will consider what is commonly described as the balance of convenience, that is to say, it would consider whether the greater injury would be done by granting the injunction than would result from the refusal thereof. It is settled that temporary injunction would usually be denied in a doubtful case where granting of it would cause greater detriment to the defendant. In the instant case, we agree with the Court below that greater injury would be caused to the respondents by allowing the injunction than by refusing the same to plaintiff Corporation. 70. Admittedly, some of the employees of the Corporation are residing in the various quarters which are the subject matter of the present appeal. A major portion of the land is lying vacant. Over that portion, we have mentioned that the appellant has no right. As late as in 1979, the appellant had been given three months time by the Delhi High Court to vacate the premises. They did not do so even after the judgment of the Supreme Court. They are sticking to possession to which they are not entitled to at all. They did not obey the Court. 71. It would have handed over possession immediately after the Supreme Court judgment.
They did not do so even after the judgment of the Supreme Court. They are sticking to possession to which they are not entitled to at all. They did not obey the Court. 71. It would have handed over possession immediately after the Supreme Court judgment. Such an attitude is not expected of a Corporation as it was adopted in the instant case. There is force in the argument suggested on behalf of the respondents that if person seeks equitable relief of obtaining temporary injunction, he must come with clean hands. A wrong conduct of the plaintiff in the particular matter or transaction with respect to which he seeks injunctive relief precludes him from obtaining such relief. In our view, the appellant is not entitled to temporary' injunction. To do so, would enable it to escape from performing its duties. 72. Another aspect of the matter which precludes us from interfering in this appeal is to grant an injunction or not to do so is discretionary. Since in this case, the discretion has been exercised by the court below on relevant considerations, we would not find the present as a case fit for interference by us. The submission of the appellants counsel that the discretion was exercised arbitrarily capriciously and thus injustice has been caused to the appellant, does not appeal to us. Ordinarily, in appeal, the appellate court will not interfere with the exercise of discretion by the trial court and substitute its own discretion unless the lower court has acted arbitrarily or perversely or capriciously, or in disregard of legal principles. In the instant case, nothing could be shown to us to lead to the conclusion that the rejection of the injunction application was arbitrary. 73. Another feature of the matter which , needs mention is that dealing with an appeal, this Court has a limited jurisdiction to perform. The m ere possibility of appellate court coming to a different conclusion on the same facts and evidence will not justify interference. (See Wazir Sunder Singh v. Mst. Farida Khanam, AIR 1920 PC 132 ). 74.
73. Another feature of the matter which , needs mention is that dealing with an appeal, this Court has a limited jurisdiction to perform. The m ere possibility of appellate court coming to a different conclusion on the same facts and evidence will not justify interference. (See Wazir Sunder Singh v. Mst. Farida Khanam, AIR 1920 PC 132 ). 74. In Hadmor Productions Ltd. v. Hamilton, (1982) 2 WLR 322, Lord Diplock held "It is think appropriate to remind your Lordships of the limited function of an appellate court in an appeal of this kind, An interlocutory injunction is a discretionary relief and the discretion whether or not to grant it is vested in the High Court Judge, by whom the application for it is heard. Upon an appeal from the Judges grant or refusal of an interlocutory injunction the function of an appellate court, whether it be the Court of Appeal or your Lordships House, is not to exercise an independent discretion of its own. It must defer to the Judges exercise of his discretion and must not interfere with it . merely upon the ground that the members of the appellate court would have exercised the discretion differently." 75. Lord Diplock repeated the same observation in Garden Cottage Foods Ltd. v. Milk Marketing Board (1983) 3 WLR 143 . which reads as under : "Every argument including the balance of convenience would seem to fall in favour of maintaining the status quo until determination of the action, which is the normal purpose for which interlocutory injunction are granted. ..............This course of action is in line with what the European Court Justice thought appropriate.....cannot avoid the conclusion that the Court of Appeals order makes for better justice and see nothing wrong with it in law." 76. We are also of the opinion that the court below correctly held that no irreparable injury, was to be suffered by the appellant Corporation by the rejection of the injunction application. We have stated above that the appellant had no right, title or interest in the property in question. The right of its predecessor-in-interest is that of which respondent No. 1 had extinguished long time back when the application under S. 3 of 1947 wallowed. Its right even one-fourth as an owner in place of the respondent No. 1 is not that type of injury which could not be compensated by money.
The right of its predecessor-in-interest is that of which respondent No. 1 had extinguished long time back when the application under S. 3 of 1947 wallowed. Its right even one-fourth as an owner in place of the respondent No. 1 is not that type of injury which could not be compensated by money. There was, therefore no necessity of affording immediate protection to its alleged right or interest only in a case of un-compensable disadvantage as said by the Supreme Court (sic) in Fellowes v. Fishers (supra) that question of granting of interim injunction could arise. 77. It is worthy of note that the appeal No. 1242 of 1977 was pending in the Supreme Court for the last about ten years and it is only after the same was disposed of that an application for setting aside the compromise decree was made by appellant. It is difficult to believe that the appellant did not know about this litigation earlier to the date or time mentioned by it in its application. Even if that is assumed to be correct, it will not be in the interest of justice to allow injunction in the instant case. 78. In Firm Ishardas v. Parkash Chand, AIR 1969 SC 938 where an application was filed under O. 39, Rr. 1 and 2 for grant of temporary injunction by a plaintiff who was liable to be ejected in execution of a valid order, the Supreme Court held that such a person had no case for grant of injunction as he would not suffer an injury required to be established by O. 39, R. 2 of the Civil P.C. This decision does support the contention of the respondents. Order 39, R. 2 did not apply. 79. After the judgment was reserved, the counsel for the appellant gave written argument giving the grounds on which the balance of convenience lay in its favour. We have considered each one of them and are of the opinion that balance lies in rejecting the application. 80.
Order 39, R. 2 did not apply. 79. After the judgment was reserved, the counsel for the appellant gave written argument giving the grounds on which the balance of convenience lay in its favour. We have considered each one of them and are of the opinion that balance lies in rejecting the application. 80. For the last several years the appellant is in unauthorised possession of the property, it should vacate the same and permit the decree of the Supreme Court to be executed which provides that the delivery of possession contemplated by the decree in favour of the different parties thereto shall be delivery of vacant possession and any person or persons over any part or portion of the property shall be liable to summary eviction by the executing court. 81. Even if we would have taken different view on prima facie, we would have not issued injunction as doing so will do more mischief and work greater injury than the wrong which it is asked to redress. Injunction will bear on the defendants, some of whom, are the owners heavily, having succeeded in obtaining permission that their need was bona fide in 1972. Some other defendants have purchased lands for making constructions for their residences. Having paid money, they are justified in saying that injunction, if granted, would cause a huge loss to them. 82. Against defendant No. 1 also the appellant has no balance in its favour. Justice is in favour of respondent company. The appellant has lost the previous battle and now is making a frustrated attempt to get over its effect. This is not the law that he who files a suit must get the injunction merely on its asking. Moreover, the appellants damages by refusal is not one which cannot be repaired, recovered or retrieved. Also we have found that the right asserted by the appellant is very doubtful. The power to grant injunction should be exercised sparingly with utmost care and caution. 83. Although we have said above as the appellant should not interfere by assuming to itself function of a trial court, However, we have ourselves examined every pros and one of the matter as a original court also but find no ground to allow the injunction. 84. In the result, the appeal fails and is dismissed with costs to respondents Nos. 1 to 10.
84. In the result, the appeal fails and is dismissed with costs to respondents Nos. 1 to 10. The interim stay order dated 11-3-1987 extended from time to time stands vacated.