DOYPACK SYSTEMS PVT. LTD. ETC. versus UNION OF INDIA & ORS., ETC.

DOYPACK SYSTEMS PVT. LTD. ETC. versus UNION OF INDIA & ORS., ETC.

Shares in Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Ltd. purchased from textile undertaking funds and held for the benefit of textile undertakings are deemed to vest in the Central Government under Sections 3 and 4 of the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986. The statutory language is interpreted to give effect to the constitutional directive principles, and the vesting provisions encompass both equity shares and immovable property. Compensation provisions (Sections 7 and 8) do not restrict or control the scope of vesting under Sections 3 and 4.

Parties
Applicant: Doypack Systems Pvt. Ltd.; Respondent: Union of India; Respondent: Swadeshi Mining and Manufacturing Company Ltd.; Respondent: National Textile Corporation (NTC); Applicant: Naresh Kumar Barti; Applicant: Mukesh Bhasin; Applicant: Bari Prasad Aggarwal; Applicant: Mukesh Jasmani
Jurisdiction
India
Judgment Date
12 February 1988
Procedural Posture
Civil Appeals, Special Leave Petitions, Transferred Cases, Writ Petitions / Final Decision
Outcome
Allowed in part, dismissed in part
Legal Topics
Statutory Interpretation, Acquisition and Transfer of Undertakings, Vesting of Shares, Vesting of Immovable Property, Shareholder Rights, Compensation for Acquisition
Constitutional Law Company Law Property Law Administrative Law Statutory Interpretation Acquisition and Transfer of Undertakings Vesting of Shares Vesting of Immovable Property +2 more

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Parties

Doypack Systems Pvt. Ltd.

Applicant

Union of India

Respondent

Swadeshi Mining and Manufacturing Company Ltd.

Respondent

National Textile Corporation (NTC)

Respondent

Naresh Kumar Barti

Applicant

Mukesh Bhasin

Applicant

Bari Prasad Aggarwal

Applicant

Mukesh Jasmani

Applicant

Procedural Posture

Civil Appeals, Special Leave Petitions, Transferred Cases, Writ Petitions / Final Decision

Legal Issues

  1. 1 Whether equity shares in Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Ltd. held by Swadeshi Cotton Mills vested in the Central Government under Section 3 of the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986.
  2. 2 Whether immovable properties, namely, Bungalow No. 1 and Administrative Block, Civil Lines, Kanpur, also vested in the government under the said section.
  3. 3 Scope and interpretation of vesting provisions under Sections 3 and 4 of the Act.

Ratio Decidendi

Shares in Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Ltd. purchased from textile undertaking funds and held for the benefit of textile undertakings are deemed to vest in the Central Government under Sections 3 and 4 of the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986. The statutory language is interpreted to give effect to the constitutional directive principles, and the vesting provisions encompass both equity shares and immovable property. Compensation provisions (Sections 7 and 8) do not restrict or control the scope of vesting under Sections 3 and 4.

Court Disposition

Allowed in part, dismissed in part

Orders

  • 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 vest in the Central Government under sections 3 and 4 of the Act.
  • Immovable properties Bungalow No. 1 and Administrative Block, Civil Lines, Kanpur, also vested in NTC.