Skip to content


Bombay Dyeing and Mfg. Co. Ltd. Vs. Bombay Environmental Action Group and ors. - Court Judgment

SooperKanoon Citation
SubjectSICA;Environment
CourtSupreme Court of India
Decided On
Case NumberCivil Appeal Nos. 1519 of 2006 [Special Leave Petition (Civil) No. 23040 of 2005], 1528 of 2006 [Ari
Judge
Reported inAIR2006SC1489; 2006(3)BomCR260; (2006)4CompLJ4(SC); JT2006(3)SC235; 2006(3)SCALE1; (2006)3SCC434; [2006]67SCL107(SC)
ActsSick Industrial Companies (Special Provisions) Act, 1985 - Sections 16 and 32(1); ;Sick Industrial Companies (Special Provisions) Act, 1974; ;Sick Industrial Companies (Special Provisions) (Amendment) Act, 1994; ;Industrial Disputes Act, 1947; ;Maharashtra Regional and Town Planning Act, 1966 - Sections 2(27), 14, 17, 22, 26(2), 28(2), 37, 37(1AA), 44, 45, 159 and 159(2); ;Environment Protection Act; ;Bombay Town Planning Act, 1954; ;Bombay Town Planning Act, 1915; ;Visva-Bharati Act, 1951; ;Sick Textile Undertakings (Nationalisation) Act, 1974 - Sections 3(1); ;Sick Textile Undertakings (Nationalisation) (Amendment) Act, 1995; ;Bombay Industrial Relations Act; ;Development Control Rules (DCR), 1967 - Sections 58(1); ;Code of Civil Procedure (CPC) - Order 21, Rules 89, 90, 9
AppellantBombay Dyeing and Mfg. Co. Ltd.
RespondentBombay Environmental Action Group and ors.
Advocates: Ravi M. Kadam, Adv. Gen.,; Soli J. Sorabjee,; Ram Jethmalani
DispositionAppeal allowed
Cases ReferredCommonwealth of Australia v. Queen
Prior historyFrom the Final Judgment and Order dated 17.10.2005 of the Bombay High Court in PIL Writ Petition No. 482/2005
Books referredCraies on Statute Law, Seventh Edition, page 141; Francis Bennion's Statutory Interpretation; G.P. Singh's Principles of Statutory Interpretation, Ninth edition, page 258]; Halsbury's Laws of England (Fourth Edition) Volume 44(1) (Reissue); The Interpreta
Excerpt:
constitution - development control regulation - validity of - public interest litigation was filed by the defendants questioning the validity of development control regulation no. 58 (dcr 58) framed by the state and sale of surplus land occupied by cotton mills - high court allowed the petition and held that sale of surplus lands was contrary to the bifr scheme and previous apex court's order - hence, present appeal - held, dcr 58 was framed with a view to deal with the situation arising out of closure and unavailability of various cotton textile mills and was valid in law - dcr 58 applied to closed mills but sub-regulation of dcr 58 did not apply to sick industries which had not been referred to bifr - proposed development plan was in conformity with bifr scheme and apex court's order -.....order of this court dated 11.5.2005244. the order of this court dated 11th may, 2005 reads as under:so far as transactions relating to seven mills belonging to the national textile corporation are concerned, including sale of jupiter mills, it is not in dispute that transactions have reached a final stage. the purchasers of jupiter mills have already paid rs 16 crores and a sum of rs 376 crores would pass hands if the transaction is completed. if the transactions in respect of the mills are not allowed to be completed, the scheme framed by bifr would come to a standstill resulting in accrual of interest payable by the national textile corporation to the financial institutions besides other hardships which may be caused to various other persons including the workers.we, therefore, having.....
Judgment:
ORDER

OF THIS COURT DATED 11.5.2005

244. The order of this Court dated 11th May, 2005 reads as under:

So far as transactions relating to seven mills belonging to the National Textile Corporation are concerned, including sale of Jupiter Mills, it is not in dispute that transactions have reached a final stage. The purchasers of Jupiter Mills have already paid Rs 16 crores and a sum of Rs 376 crores would pass hands if the transaction is completed. If the transactions in respect of the mills are not allowed to be completed, the scheme framed by BIFR would come to a standstill resulting in accrual of interest payable by the National Textile Corporation to the financial institutions besides other hardships which may be caused to various other persons including the workers.

We, therefore, having regard to the facts and circumstances of this case as also the law operating in the field, are of the opinion that interest of justice would be subserved if the National Textile Corporation is permitted to complete the transactions in terms of the scheme framed by BIFR but the same shall be subject to the condition that in the event, the writ petition ultimately succeeds, the vacant land available from other mills, if necessary, shall be offered by way of adjustment.

In the said order, it was recorded:

Mr Parasaran and Mr Rohatgi, learned Senior Counsel appearing on behalf of the National Textile Corporation would contend that keeping in view the fact that in respect of seven mills, negotiations have been entered into, they should be allowed to be sold off and in the event, the writ petition succeeds, the order of the Court can be complied with by adjusting vacant land belonging to the other mills.

Mr Iqbal Chagla, learned Senior Counsel appearing on behalf of the writ petitioner respondents, on the other hand, would urge that the undertaking directed to be given by the National Textile Corporation is commensurate with the suggestion given by Mr Parasaran before this Court.

245. So far as order of this Court dated 11.05.2005 is concerned, again the validity or otherwise of the BIFR scheme and/or implementation thereof was not in question. An order of this Court, it is well-known, must be construed having regard to the text and context in which the same was passed. For the said purpose, the orders of this Court were required to be read in their entirety. A judgment, it is well settled, cannot be read as a statute. [See Sarat Chandra Mishra and Ors. v. State of Orissa and Ors. : (2006)IILLJ99SC and State of Karnataka and Ors. v. C. Lalitha : (2006)IILLJ93SC ]. Construction of a judgment, it is well settled, should be made in the light of the factual matrix involved therein. What is more important is to see the issues involved therein and the context wherein the observations were made. Any observation made in a judgment, it is trite, should not be read in isolation and out of context.

246. While passing the order dated 11.05.2005, this Court merely not d the terms of the BIFR scheme. It did not issue any direction to the effect that the sale of the mill land should be effected strictly in terms thereof or in a particular manner. The BIFR scheme evidently was referred to as this Court noticed that even statutory authorities constituted under a Parliamentary Act found it necessary to direct sale of the mill lands in public interest. While considering a writ petition on an environmental issue, the focus of the court should have been confined thereto. It was in our considered opinion impermissible for the High Court to examine the BIFR scheme as if the environmental issues were considered therein.

247. The BIFR exercises its jurisdiction under a statute; the objects whereof are distinct and different from a town planning scheme. The BIFR is not a town planner. It is not a development authority. It has nothing to do with the town planning or development scheme or maintenance of ecological balance. The BIFR was concerned only with the manner in which sick industrial undertaking should be made to revive. Before passing the said order, it was required to hear all concerned, namely, the management, the workmen, the financial institutions, banks etc. as also the operating agencies. It did so.

248. BIFR appointed IDBI as an operating agency. The authorities were concerned with obtaining maximum amount by way of sale of mill lands. It was in any event not concerned with the interpretation and/or applicability of the provisions of the MRTP Act or the Regulation framed thereunder. BIFR was not concerned with the interpretation of DCR 58 and, thus, only because this Court in its aforementioned orders dated 27.09.2002 and 11.05.2005 had referred thereto, the same would not mean that thereby any direction was issued either directly or indirectly that the sale of the lands pertaining to cotton textile mills must strictly be conducted in accordance with the said scheme. This Court merely asked the authorities to effect sale of mill land upon following the scheme framed by BIFR and in accordance with the procedure laid down therefore. This Court in its order dated 11.5.2005 categorically observed that if the transactions in respect of mills are not allowed to be completed, the scheme framed by the BIFR would come to a standstill resulting in accrual of liability of a huge amount by way of interest payable by NTC to the financial institutions besides other hardships which may be caused to various other persons including the workers. The scheme framed by the BIFR, therefore, was taken to be a relevant factor only for the purpose of determining the issues involved in the appeal which arose out of an interim order. It was only in that situation mention was made to the scheme framed by the BIFR and not for any other purpose. This Court, as would appear from the submissions made by the counsel for the parties therein merely intended to give effect to the consensus arrived at the bar that an undertaking by the NTC to the effect that the order of this High Court would be complied with by way of adjustment of lands from other mills would subserve the interest of justice. The validity or otherwise of the transaction of sales of seven mills of NTC were, thus, not open to a further determination by the High Court.

249. The High Court furthermore appeared to have committed a manifest error in reading down para 5 of the affidavit of Shri Deodutt B. Pandit. It has been contended before us that the proposed modification by IDBI as has been referred to therein was not in respect of the five NTC mills, including Jupiter Textile Mill proposed to be sold but was as regards shifting of the activities of Finlay Mills to Digvijay Textile Mills and that of Gold Mohur Mills to Sitaram Mills. The proposed modification by the IDBI had nothing to do with sale of five mill lands and, thus, no attempt was made by NTC to get the order of the BIFR modified in regard thereto as opined by the High Court. In any view of the matter, the BIFR scheme did not postulate that the surrender of lands to MCGM and MHADA should be out of the lands of each individual mill itself and not out of the lands of some other mills. The BIFR had no occasion to say so nor could it do so having regard to the provisions contained in DCR 58. The writ petitioner-respondents have nowhere denied or disputed that the seven mills which were put up for sale were unviable ones. The lands pertaining to the mills were found to be surplus. For the purpose of giving effect to the scheme framed by the BIFR, indisputably an Asset Sale Committee was constituted to discharge the functions of overseeing the sale of surplus assets of the said mills. It is furthermore not in dispute that an Integrated Development Scheme was framed by NTC with the assistance of the architects which was submitted to MCGM and the same was duly approved. Sanction of sale of two mills out of seven mills was not granted evidently in view of the pendency of the writ petition. The BIFR scheme or the said Integrated Development Scheme framed by NTC was not in question in the writ petition. Even when the interlocutory application was being heard, no submission was made as regard violation of the BIFR scheme or the aforementioned order dated 27.09.2002. Before this Court as also the High Court the question which arose was as to whether sufficient lands were available in the event the writ petition was to be allowed.

BIFR SCHEME

250. The order of the BIFR dated 25.07.2002 passed in Case No. 536 of 1992 clearly shows that after hearing the concerned parties it has been noticed that the Government of Maharashtra although had not given clearance to sell the surplus lands of all the 13 mills in Mumbai and 5 mills outside Mumbai, as has been done in other states, agreed that with a view to compensate therefore MCGM would give additional Floor Space Index (FSI) and MHADA would give Transfer Development Rights which would not enable the NTCMNL to earn full consideration for the land. It further appears that the Government of Maharashtra had not been asked to make assessment regarding sacrifice, if any, made by them in this behalf or any benefit which would accrue to them with the sale so that the Board could consider such a sacrifice/benefit in line with the sacrifices made with others and if the final stand is not conveyed by the Government, the Board would decide to confirm winding up of the company which would be detrimental to all who made sacrifices, wherefor some power was granted. It had further been noticed therein that the Government of Maharashtra by a letter dated 30.03.2002 i.e. after the 2001 Regulation came into force, although expressed its inability to give exemption from payment of stamp duty, categorically stated that necessary permission would be given by the competent authority strictly as per DCR 58 which also shows that DCR 58 of 1991 was not directed to be taken recourse to. The Board had further noticed the submissions of the GOI-MOT (promoters) as contained in their letter dated 08.05.2002, inter alia, to the following effect:

iii) Appointment of Monitoring Committee to oversee implementation of the package would not only run contrary to the provisions of SICA but would also result in duplication of authority and control. BIFR may direct State Government to exclude NTC package from the purview of such a committee.

251. It directed constitution of another committee, namely, Assets Sale Committee (ASC) for bringing in transparency in the sale of assets. Para 21 of the said order runs thus:

21. Since the GOM had indicated in regard to sale of land that the necessary permission in this regard would be given by competent authority strictly as per the provisions of Regulation 58 of the Development Control Regulation (DCR) the promoters (GOI-MOT) should ensure that in the event of any shortfall of funds, which would be utilized for rehabilitation of other NTC units, would be brought in by them for rehabilitation of NTCMNL.

252. It is, therefore, evident that the Board had all along in its mind the modified regulations only. Yet again it is evident that for the purpose of valuation only they had referred to DCR 58 which also goes to show that they had only in mind the 2001 Regulations and not the 1991 Regulations. From what we have noticed hereinbefore, it is evident that the High Court was not correct in holding that the sale of mill lands was contrary to the scheme framed by the BIFR. Even otherwise it is preposterous to suggest that having regard to its statutory function. BIFR would issue any direction which would be to a great extent defective of the purpose for which the schemes were made. We have noticed hereinbefore the anxiety expressed by the BIFR to have/ save more funds for NTC.

253. Our attention has also been drawn to the fact that there is nothing to show that the BIFR scheme provided that the lands were to be surrendered to MCGM and MHADA from each of the mills and not out of the land of some other mill. The High Court, therefore, committed an error of records. Even otherwise, the scheme should have been read in the light of the factual matrix obtaining therein as also the extant regulation.

254. It is furthermore not in dispute that sale of the lands was approved by ASC. One of the directors of the BIFR, again indisputably, was a member of the said Committee. Once approval of ASC was obtained, the sales were to be treated as confirmed. The order of this Court dated 11.05.2005 had, thus, been given effect to.

255. It is furthermore not in dispute that conveyance deeds had duly been executed and registered between the parties. It is also not in dispute that additional lands for open space were available from the two mills which had not been the subject-matter of sale. The purchasers yet again indisputably had created third party interest. They had also created financial liabilities by taking loans from banks/financial institutions.

256. The writ petitioners in the writ proceedings, we have noticed hereinbefore, at no point of time questioned the sale of surplus land by NTC. In fact, challenge to such sale even could not be permitted by the High Court. Even assuming that the NTC failed and/ or neglected to comply with the directions contained in the scheme framed by the BIFR and, consequently, the orders of this Court, the persons aggrieved thereby could have gone back to BIFR.

257. It is not in dispute that NTC was a sick company. As a sick company, it might not have in a position to reopen any close mill at all. Reference to BIFR in terms of Section 16 of the Act evidently was made for the aforementioned purpose. If the schemes sanctioned by BIFR are given effect to, at least some of the NTC mills indisputably would be revived. SICA, we have noticed hereinbefore, is a special statute. It was enacted by the Parliament only with a view to meet the contingencies contemplated therein. The validity or otherwise of the reference made by NTC to BIFR is not in question. The writ petitioners did not question the validity of the statutory schemes. No material has been brought before us to show even the workmen were in any way aggrieved thereby. Had they been so, they could have preferred an appeal before the BIFR. Even there does not exist any material to show that at any point of time they had approached the High Court in judicial review. The workmen were parties in the proceedings before BIFR. Presumably BIFR made the said schemes after hearing of parties concerned including the workmen.

258. It is not in dispute that the writ petitioners merely filed an affidavit on 12th July, 2005 before the High Court alleging that the sale of surplus land by NTC was in violation of this Court's order and/ or the scheme framed by the BIFR. If the prayer in the writ petition had not been amended, we fail to understand as to on what premise the High Court proceeded to consider the question as regards the alleged violation of the order of this Court, as also the BIFR Scheme by NTC for the purpose of setting aside the sale. In a collateral proceeding, the High Court, in our opinion, could not issue any direction which would not only be contrary to a statutory scheme but of the purport and object for which SICA was enacted. Furthermore, it was none of the concern of the writ petitioners Respondents as to how BIFR calculated the financial viability by way of sale of surplus land by NTC. It was equally impermissible for the High Court to consider as to whether despite their being a provision for multi-mill aggregation in terms of DCR 2001, the same had been taken into consideration under BIFR Scheme or not. We have noticed hereinbefore that for the purpose of considering the validity or otherwise of the sale in terms of BIFR Scheme itself, ASC was appointed wherein a member of the BIFR was also represented. We are, therefore, of the firm opinion that the judgment of the High Court in this behalf is not correct.

EFFECT OF SUCH SALES ON AUCTION PURCHASERS

259. NTC issued advertisements in several newspapers for sale of five mills, viz., Jupiter Textile Mill, Mumbai Textile Mill, Apollo Textile Mill, Kohinoor Mill No. 3 and Elphinstone Spinning and Weaving Mills. Some of the Appellants herein pursuant to or in furtherance of the said advertisements submitted their tenders. It is, furthermore, not in dispute that out of the five mills sold full payments have been received by National Textile Corporation from the purchasers of four mills, viz., Jupiter Textile Mill, Mumbai Textile Mill, Apollo Textile Mill and Kohinoor Mill No. 3. As regards the fifth mill, viz., Elphinstone Spinning and Weaving Mills, full payment is yet to be received.

260. It is, however, not in dispute that the processes of auction sales are complete and the applicants are bonafide purchasers in duly concluded sales. Bona fide purchasers in an auction sale for certain purposes are treated differently. A distinction has all along been made between a decree holder who came in to purchase under his own decree and a bona fide purchaser who came in and got at the sale in execution of a decree to which he was not a party. In a case where the third party is a bona fide auction purchaser, even if decree is set aside, his interest in an auction sale is saved [See Zain-ul-Abdin Khan v. Muhammad Asghar Ali Khan 15 IA 12. The said decision has been affirmed by this Court in Gurjoginder Singh v. Jaswant Kaur (Smt.) and Anr. : [1994]1SCR794 .

261. In Janak Raj v. Gurdial Singh and Anr. : [1967]2SCR77 , this Court confirmed a sale in favour of the Appellant therein who was a stranger to the suit being the auction purchaser of the judgment-debtor's immovable property in execution of an ex parte money decree in terms of Order XXI Rule 92 of the Code of Civil Procedure. Despite the fact that ordinarily a sale can be set aside only in terms of Rules 89, 90 and 91 of Order XXI of Code of Civil Procedure, it was opined that the court is bound to confirm the sale and direct grant of a certificate vesting the title in the purchaser as from the date of sale when no application in term of Rule 92 was made or when such application was made and disallowed.

262. In Padanathil Ruqmini Amma v. P.K. Abdulla : [1996]1SCR651 , this Court upon making a distinction between the decree-holder auction purchaser himself and a third party bona fide purchaser in an auction sale, observed:

.The ratio behind this distinction between a sale to a decree-holder and a sale to a stranger is that the court, as a matter of policy, will protect honest outsider purchasers at sales held in the execution of its decrees, although the sales may be subsequently set aside, when such purchasers are not parties to the suit. But for such protection, the properties which are sold in court auctions would not fetch a proper price and the decree- holder himself would suffer. The same consideration does not apply when the decree-holder is himself the purchaser and the decree in his favour is set aside. He is a party to the litigation and is very much aware of the vicissitudes of litigation and needs no protection.

263. We are not oblivious of the fact that the decisions referred to hereinbefore have no direct application in the instant case as the sale of NTC mill lands were not effected in execution of decrees passed by a competent court of law, but, we have referred thereto only to highlight that having regard to the principles analogous to the ratio laid down in the aforementioned decisions the court should make an end our to safeguard the interest of the bona fide purchasers unless and until there exists any statutory interdict.

264. It is, thus, absolutely clear that the purchasers of the cotton textile mills of the NTC cannot be made to suffer for no fault on their part and, thus, the High Court committed a manifest error in that behalf.

DELAY AND LACHES

265. Each one of the learned Cousel appearing on behalf of the Appellants had advanced lengthy submissions in regard to the irretrievable injuries caused to their respective clients by reason of delay and laches on the part of the writ petitioners in filing the writ petition. We may notice that the writ petitioners although raised objections when DCR 58 was proposed to be made in the year 1990 but no such objection was raised when the State proposed to amend the same in 2000.

266. The writ petitioners filed a writ petition before the Bombay High Court questioning the validity of DCR 58 which was dismissed. They did not prefer any appeal thereagainst. Some of the mill owners, as noticed hereinbefore, submitted their scheme as also applications for grant of sanction of their layout plans much before the clarificatory order dated 28.3.2003 was issued by the State. Requisite statutory sanctions had been obtained in most of the cases.

267. Plans were also sanctioned pursuant whereto and in furtherance whereof some of the Appellants had not only entered into development agreements with third parties; in some cases they demolished the structures, carried on excavations, raised constructions; in some cases construction activities are complete and flats had been sold, the purchasers whereof in turn incurred huge financial liabilities. In almost all the cases, the workers had been paid a large sum of money which may not be possible to be recovered. Loans and other financial assistances had been obtained from banks and other financial institutions by the auction purchasers - appellants for the said purpose. In some cases, the development agreements have been fully acted upon.

268. Some of the mills, as noticed hereinbefore, were closed but not referred to BIFR. One mill, viz., Bombay Dyeing and Manufacturing Company Limited wanted to modernize its plants and machines. Ruby Mills Limited had a scheme of shifting-cum-modernization. Schemes were submitted by them in terms of the extant regulations. The same had been approved by the State.

269. Although the State issued the clarificatory notification as far back on 28.3.2003, no step had been taken by the writ petitioners to question the validity thereof within the reasonable time. The writ petition was filed on 18.2.2005. Even on 21.3.2005, the writ petitioners filed an affidavit and in paragraph 27 thereof it was categorically averred that the BIFR Scheme had no bearing on the validity of the rule. Although, permission for multi-mill aggregation was granted on 27.10.2004, the validity or legality thereof had not been questioned in the writ petition. Yet again on 19.4.2005, another affidavit was affirmed on behalf of the writ petitioners wherein it was averred that the scheme framed by the BIFR was irrelevant for the purpose of its decision. An application for amending the writ petition was filed only on 7.7.2005 wherein a contention as regard the interpretative effect of the clarification was raised. Only in the third affidavit dated 12.7.2005, the writ petitioners raised the question in regard to the correctness or otherwise of BIFR Scheme for the first time only whereupon an interim order was passed on 1.4.2005 by the High Court.

270. On 11th May, 2005, this Court set aside the interim order passed by the High Court whereafter an advertisement was issued by NTC. Tender documents were published in newspapers and put on website on 21.6.2005 The last date for submission of the bid was 27.7.2005. On 12.7.2005, the writ petitioners had put an affidavit that such sale was permissible. The bid was accepted on 13.8.2005 whereafter ASC approved the sale. After the writ petition was heard and the judgment was reserved on 14.9.2005, the writ petitioners only in their written submissions filed on 15.9.2005, raised a contention that the sales were contrary to BIFR Scheme as also orders of this Court. The purchasers on different dates in October/ November purchased lands of the textile mills and took possession after the deeds of conveyances were executed in their favour. The purchasers indisputably borrowed a huge amount from banks/ financial institutions and they are required to pay interest on the said borrowed sums.

271. Delay and laches on the part of the writ petitioners indisputably has a role to play in the matter of grant of reliefs in a writ petition. This Court in a large number of decisions has categorically laid down that where by reason of delay and/ or laches on the part of the writ petitioners the parties altered their positions and/ or third parties interests have been created, public interest litigations may be summarily dismissed. Delay although may not be the sole ground for dismissing a public interest litigation in some cases and, thus, each case must be considered having regard to the facts and circumstances obtaining therein, the underlying equitable principles cannot be ignored. As regards applicability of the said principles, public interest litigations are no exceptions. We have here to before noticed the scope and object of public interest litigation. Delay of such a nature in some cases is considered to be of vital importance. [See Chairman & MD, BPL Ltd. v. S.P. Gururaja and Ors. : AIR2003SC4536 ].

272. In Narmada Bachao Andolan v. Union of India : AIR2000SC3751 , this Court held:

Any delay in the execution of the project means overrun in costs and the decision to undertake a project, if challenged after its execution has commenced should be thrown out at the very threshold on the ground of laches if the petitioner had the knowledge of such a decision and could have approached the court at that time. Just because a petition is termed as a PIL does not mean that ordinary principles applicable to litigation will not apply. Laches is one of them.

273. In R. & M. Trust v. Koramangala Residents Vigilance Group : AIR2005SC894 , this Court laid down the law in the following terms:.sacrosanct jurisdiction of public interest litigation should be invoked very sparingly and in favour of the vigilant litigant and not for the persons who invoke this jurisdiction for the sake of publicity or for the purposes of serving their private ends.

It was further stated:

There is no doubt that delay is a very important factor while exercising extraordinary jurisdiction under Article 226 of the Constitution. We cannot disturb a third party interest created on account of delay. Even otherwise also why should the Court come to the rescue of a person who is not vigilant in his rights.

In State of Maharashtra v. Digambar : AIR1995SC1991 , this Court held:.where the High Court grants relief to a citizen or to any person under Article 226 of the Constitution against any person including the State without considering his blameworthy conduct, such as laches, or undue delay, acquiescence or waiver, the relief so granted becomes unsustainable even if the relief was granted in respect of alleged deprivation of his legal right by the state.

274. However, we do not intend to lay down a law that delay or laches alone should be the sole ground for throwing out a public interest litigation irrespective of the merit of the matter or the stage thereof. Keeping in view the magnitude of public interest, the court may consider the desirability to relax the rigours of the accepted norms. We do not accept the explanation in this regard sought to be offered by the writ petitioners. We have no doubt in our mind that the writ petitioners are guilty of serious delay and laches on their part.

275. M/s. Lohia Machines (supra), whereupon the High Court placed strong reliance, was not a case where a third party interest was created. Therein, the validity of Rule 19-A of the Income Tax Rules, 1962 was in question. It may be true that therein the validity of the rule was challenged after 19 years but the plea of dismissing the writ petition on the ground of delay was negatived holding that the challenge in regard to the constitutionality of the said rule was otherwise well-founded. It was not a case where during the interregnum, the parties altered their position and third party interest was created. It is in that situation this Court observed that if a rule made by a rule making authority is found to be outside the scope of its power, it is void and it is not at all relevant that its validity has not been questioned for a long period of time; if a rule is void it remains void whether it has been acquiesced in or not. The High Court in this case did not declare DCR 58 to be ultra vires the Constitution or the provisions of the MRTP Act.

276. In Proprietary Articles Trade Association v. AG of Canada (1931) AC 310, the validity of the rule was in question. The decision of the Privy Council in Attorney General of the Commonwealth of Australia v. Queen 95 CLR 529 is to the same effect. In this case, the delay is enormous. Most of the Appellants and, particularly, those who are purchasers have been suffered considerable financial loss and embarrassment. It had calamitous consequence to the entrepreneurs who are required to pay lakhs and lakhs of rupees by way of interest to the banks and other financial institutions per day. The bona fide of the purchasers of NTC Mill lands had never been in question in the sense that as the writ petitioners at no point of time questioned the validity or otherwise of the sale of the lands by filing any application for amendment of the writ petition, and as noticed hereinbefore, only during arguments such a contention was raised. The High Court, in our considered opinion, thus, committed a manifest error in acting thereupon. Before us, we may notice, a statement has been made across the bar that keeping in view the orders passed by this Court dated 11th May, 2005, the sale of NTC mills is seriously not in question.

277. As we have considered the matter on merits, evidently, we are not dismissing the writ petition on the ground of delay and laches alone but we have taken the same as one of the factors in determining the questions raised before us.

CONFLICTING STAND OF WORKMEN

278. The workers are vertically divided. Whereas Rashtriya Mill Mazdoor Sangh (RMMS) sides with the mill owners, Girni Kamgar Sangharsh Committee (GKSS) sides with the writ petitioners. They contradict each other not only from their own stand point vis--vis the point of view of the workers, but also as regards the interpretation and constitutionality of DCR 58. RMMS complains that the High Court did not consider its principal submissions at all which were placed before it by way of written submissions, but merely considered only those which were raised by way of further written submissions. According to them, RMMS

is the only representative and approved trade union under the Bombay Industrial Relations Act for Greater Bombay. According to them, closure of the cotton mills affected 2,00,000 workers and because of the strike the mills defaulted in making payment of wages, provident funds dues, gratuity, etc. to the workers causing great hardship to them. It played an active role in the revival / rehabilitation of the NTC mills and other sick mills by representing the workers' cause before BIFR. It also agrees with the reasons put forward by the appellants as regards the validity of DCR 58 of 2001. It highlights the policy/ objectives thereof in great details. It also states:

(i) RMMS has entered into VRS Agreement with the management of several mills.

(ii) Nearly 10,000 workers of the NTC mills and more than 25,000 workers of private mills, aggregating in all more than 35,000 workers stand to benefit by the VRS Schemes.

(iii) As on date, the NTC mills have discharged their entire liabilities under the VRS Schemes by making payment to the extent of 398.76 crores payable to these workers.

(iv) The Maharashtra State Textile Corporation has also cleared the outstanding dues of its workers to the extent of Rs. 22 crores. As regards the private mills, out of the total amount due to the workers under VRS Schemes amounting to 808.75 crores, approximately a sum of 631.05 crores has been paid.

(v) However, approximately Rs. 373 crores remain outstanding to be paid to approximately 20,000 workers which payments are directly linked to the development of the lands by the mill owners.

It further argues that if the judgment of the High Court is implemented, it would cause irretrievable injury and extreme prejudice to the workers.

279. Mr. Colin Gonsalves, learned Cousel appearing on behalf of GKSS, on the other hand, not only laid emphasis on the so-called defaults of the mill owners but had gone to the extent of urging that the workers' dues have not been paid substantively. He further contended that revival scheme has not been given effect to and the amount required to be spent therefore had in fact not been spent. It has further been contended that no guidelines had at all been framed for the Monitoring Committee by the State for overseeing the disbursement of funds. According to it, in the case of Mafatlal center although the scheme was sanctioned in 2001, no payment has been made despite the fact that the company received a sum of Rs. 16 crores from the sale of the built up areas of Mafatlal center at Parel. The workers' dues being to the extent of 93 crores, the same are in excess of the legal dues of the workers and only a paltry sum had been paid to them whereas the dues of the banks had been cleared.

280. In these appeals, we are not concerned with the said issues. We may, however, place on record that according to Mr. Sorabjee the statement of Mr. Colin Gonsalves that nothing had been paid to the workers is baseless and irresponsible. It was contended that the Union represented by Mr. Gonsalves impleaded itself in the writ petition filed by it before the High Court against the MCGM as regard non-disposal of layout plan, etc. wherein they categorically stated that it would have no objection to the development of their property subject to realization of the cheques given in favour of the workers. It is stated that the cheques had been fully realized and the workers have enjoyed the benefit of payment.

281. We have pointed out these factors only for the purpose of showing that this litigation was treated to be a platform for even championing the cause of the workers although neither the High Court nor this Court is concerned therewith.

282. In terms of the Regulations, the entire amount is to be deposited in the funds specially created therfor. It is the Committee appointed by the State alone which can spend the amount. The priority as regard disbursal of such amount has categorically been laid down in the regulation itself. If the fund created is not being expended for the purposes mentioned therein, a separate cause of action will arise therefore. It is, thus, not necessary for us to delve deep into the said contentions. Guidelines for the Committee are also not necessary to be laid down. In any event, we are not called upon nor is it necessary to make any attempt in that regard. However, if any occasion arises for any of the parties in this behalf, the aggrieved party indisputably would be at liberty to agitate the same before appropriate forums

CONCLUSION

283. The upshot of our aforementioned discussions is:

(i) The Public Interest Litigation was maintainable.

(ii) DCR 58 is valid in law. DCR 58(1) applies also to closed mills but Sub-regulation (6) of DCR 58 does not apply to sick industries which have not been referred to BIFR.

(iii) The clarification made by the State is neither ultra vires Section 37 of the MRTP Act nor is violative of the constitutional provisions.

(iv) DCR 58, as inserted in 2001 and as clarified in 2003, is not contrary to the principles governing environmental aspects including the principles of sustainable and planned development vis--vis Article 21 of the Constitution of India.

(v) Judicial review of DCR 58 was permissible in law.

(vi) Sale of NTC mills was not contrary to the BIFR Scheme as also the orders passed by this Court.

(vii) Although, delay and laches play an important role, as we have considered the merit of the matter, the writ petition filed by the Respondent Nos. 1 and 2 is not being dismissed on that ground alone.

(viii) It is not necessary for us to go into the question as to whether worker's dues have been paid and also as to whether the committee had been applying the fund in terms of DCR 58 or not. However, all such contentions shall remain open.

284. For the reasons aforementioned, these appeals are allowed, the impugned judgment of the High Court is set aside. However, in the facts and circumstances of the cases, there shall be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organize Client Files //