Minerva Mills Limited and Others v. Union of India and Others

 

Minerva Mills Limited and Others v. Union of India and Others [AIR 1980 SC 1789]

 

Date of Judgement – The judgement for the first issue was given on 9^th September, 1986. The judgement on the second and third issues were judged on 31^st July, 1980

 

Supreme Court Bench – The first issue was judged by O. Chinnappa Reddy and M.M. Dutta. The second and third issues were judged by V.Y. Chandrachud, A.C. Gupta, N.L. Untawalia, P.N. Bhagwati and P.S. Kaisalam.

 

Petitioners – Minerva Mills and some of its creditors were represented by Nani Palkhivala as their legal representative.

 

Respondents – The Union was represented by L.N. Sinha with an additional solicitor general K.K. Venugopal as its legal representatives.

 

Facts

The Minerva Mills Limited was a Textile Company situated in the city of Bangalore (now called Bengaluru). The Central Government was of the opinion that Minerva Mills had a fall in the volume of their production or is going to have such a fall. For this the Government on 20^th August, 1970, had appointed a committee under Section 15 of the Industries (Development and Regulation) Act of 1951 to make a thorough investigation of the activities of the Mills. The Committee had sent its report regarding the affairs of the Mills to the Central Government in the month of January of 1971. On the basis of the given report the Government on 19^th October, 1971 passed an order under the Section 18A of the Industries (Development and Regulation) Act. The order entitled and empowered the National Textile Corporation Limited, to take the charge of the management of the Minerva Mills on the basis that its activities are being managed which would turn out to be highly damaging to the public interest. This operation was taken charge of by the Central Government following the laws mentioned under the Sick Textile Undertakings (Nationalisation) Act of 1974. The petitioners challenged such order before the High Court but the High Court rejected their petition. Hence the petitioners went ahead with filing a Writ Petition under the Article 32 of the Indian Constitution, 1950 before the Supreme Court of India. The Petitioners claimed that the copy of the investigation done on their Company was not provided to them which according to them resulted in a situation of prejudice.

 

The petitioner challenged the constitutional Validity of the following

●      Sections 5(b), 19(3), 21, 25 and 27 (read with the 2^nd Schedule of the Indian Constitution) of the Sick Textile Undertakings (Nationalisation) Act of 1974.

●      Order passed by the Central Government on 19^th October, 1971.

●      39^th Amendment Act of 1975 of the Constitution that introduced the Sick Textile Undertakings (Nationalisation) Act as the 105^th Entry in the Ninth Schedule of the Indian Constitution.

●      Amendment of Article 31C and amendment of Article 368 of the Indian Constitution under the 42^nd Amendment Act, 1976.

●      The pre-eminence of the Directive Principles of State Policy over the Fundamental Rights provided by the Indian Constitution.

 

Issues Raised

●      Whether the order given by the Central Government for the change of Management and the certain sections of the Sick Textile Undertakings (Nationalisation) Act of 1974 were unconstitutional?

●      Whether amending Article 31C and Article 368 of the Indian Constitution under Sections 4 and 55 respectively of the 42^nd Amendment Act, are unconstitutional?

●      Whether the Directive Principles of State Policy should be given primacy over the Fundamental Rights mentioned in the constitution of India?

 

Contentions

●      The amending powers of the Parliament under the Article 368 of the Indian Constitution are to be limited as otherwise the Parliament will become the controller of the Constitution.

●      It is among the obligatory powers of the States to put up laws in regards with the Directive Principles of State Policy but it should not infringe the Fundamental Rights provided by the Constitution.

●      Under Section 55 of the 42^nd Amendment, the courts would lose its authority over reviewing the Amendments passed by the Parliament of India. Such restrictions on the regulatory powers of the Courts may harm the stability between the Parliament and Judiciary.

●      There was a need to establish a stabilized relationship between the Directive Principles of State Policy and Fundamental Rights for the better welfare of the citizens under its jurisdiction.

 

Rationale

The Company approached the court after almost seven years had passed from the date of the order passed on19^th October, 1971. The Government with the thinking of assisting Minerva Company to raise the loan, made the order to transfer its Management. But the fact that this order was passed in consideration with the special provisions provided under the Section 4 of the Mysore State Aid to Industries Act, 1959 is not enough to maintain the contention of the petitioners against the order made.

 

The viewpoint of the petitioners that the Section 16 of the Industries (Development and Regulation) Act required the Central Government to issue the instructions to the Industrial Undertakings concerned, after running an enquiry on the said Company was rejected by the Court on the basis that the issuance of the directions was non-obligatory on the part of the Government. The claim for prejudice suffered by the petitioners was not valid as the petitioners did not ask for the copy for the investigation report. Also the petitioners were given many opportunities to represent their views against the order made by the Central Government but the petitioners failed.

 

The basic structure of the Constitution of India cannot be damaged by an amendment made in the  provisions of the Constitution. While referring to the Kesavananda Bharati v. State of Kerala [AIR 1973 SC1461], the court laid stress on the fact that only Constitutional Amendments which are enacted on or after April 24, 1973, by which regulations or sections or acts were included in the 9th Schedule can be challenged. However, if such kind of challenges are within the safeguard of Article 31A and Article 31C of the Constitution (as it was before the 42^nd Amendment Act), it cannot be sustained.

 

The Section 39 of the Sick Textile Undertakings (Nationalisation) Act said that it gave validation to the policies of the State in implementing the principles given under Article 39 clause b of the Constitution. The petitioners did not attempt to argue or to counter this statement of purpose. Also the Act was under the umbrella of  Article 31C of the Constitution. Hence the petitioners were held to not be entitled to question the Constitutional validity of the Act on the basis that it violated the guidelines mentioned under the Article 14 and Article 19 of the Indian Constitution.

 

Section 4 of the 42^nd Amendment Act of 1976 of the Indian Constitution, replaced the part, ‘the principles specified in clause (b) or clause (c) of the Article 39’ of the Constitution of India with the part that said ‘all or any of the principles laid down in Part IV’ of the Constitution. Therefore this Amendment gave Parliamentary authority to any law or regulation that had to pass, to satisfy the objectives laid down in the Directive Principles of State Policy, notwithstanding the fact that it would violate Article 13 read with Article 14 and Article 19 of the Constitution. Section 55 of the 42^nd Amendment Act of 1976 of the Indian Constitution, brought in sub clause (4) and sub clause (5) under Article 368 of the Constitution of India that granted the Parliament of India unlimited powers for amending the Constitution. A restricted amount of power is one of the primary or basic characteristics of the Constitution and hence the restrictions on those powers cannot be injured or ended. Also the right to revoke or do away, same restrictions should be considered unconstitutional as otherwise the meaning of the Article 13 of the Constitution will cease to exist.

 

The petitioners put forward their query that whether the case of Keshavananda Bharati, allowed the Parliament to advance Amendments where the Directive Principles of State Policy are given primacy over the Fundamental Rights provided by the Constitution. If Article 14 and Article 19 are a segment of the basic structure of the Indian Constitution, then those Articles cannot be amended. The Directive Principles of State Policy are important for the security and interest of the public. But undermining the Fundamental guarantees of the Part III of the Indian Constitution would be equivalent to ruining the basic structure of the Constitution.

 

The Constitution of India has kept up a balance between Fundamental Freedoms and the Directive Principles of State Policy. Hence giving complete to any one of them would disrupt the stability and consensus that was pursued by the founders of our Constitution. The Preamble of the Constitution has very clearly fabricated the strings of such balance. On one side it portrays the ideal of India being a Socialist State that would secure Social Justice to the people under its jurisdiction. On another side The Preamble entitles each and every person of India with Freedoms of worship, thought, belief, faith. It has also provided the rights to maintain Fraternity, Dignity and Equality in availing various opportunities. It also provides us with equal status and Right to keep up a basic Human Dignity. The Preamble offers its citizens to give him or her the chance and freedom to pursue the model of himself or herself.

 

The objectives set to be reached in Part IV of the Indian Constitution are to be attained with the purity of means and not at the price of the Fundamental Freedoms. The achieving process and the Freedoms had to be in accordance with each other. In relation to the kind of laws defined in the Article 31C, the Section 4 of the 42^nd Amendment Act, overrides the Article 14 and Article 19 of the Constitution. The result of such an Amendment is that if any statute or law infringes the provisions of Article 13 read with Articles 14 and 19 of the Constitution,  while seeking to achieve the objectives laid down in Part IV of the Constitution then such law shall not be questioned in regards to its validity. The viewpoint that not every law falls under the jurisdiction of Article 31C, cannot be entertained as an excuse to revoke the Fundamental Rights issued under Article 14 and Article 19. No doubt, in the fact that there are certain laws which do not fall under the ambit of the Article 31C but such laws are not small in number.

 

Article 38 of the Indian Constitution mentions that the State shall work towards the promotion of the security and well being of its people by providing protection and security as it would provide to a Social Order in which the qualities of Political Justice, Social Justice and Economic Justice should contribute towards the institution of National Life. There are two things that need to be taken into consideration, the first one being the fact that the Article 31C has a broader implication but yet the Article does not validates the fact. The Second thing is that Article 31C infers that the laws that aim to give validation to it cannot be in contradiction to the ideals of the Indian Constitution. Hence there is no requirement at all to make an Amendment to the basic structure of the Constitution to attain this.

 

The main objective to introduce this Article is to escape with the similar laws like this Article which cannot face up Article 14 and Article 19 of the Constitution. It should be understood that Articles 14 and 19 are not just some impulsive or desirable Rights but part of the Fundamental and Natural Human Rights. These Human Rights made their first appearance in the Universal Declaration of Human Rights of 1948. If the Legislative bodies are permitted to have unrestricted power to make or pass restrictions of unreasonable nature, on such Rights then the very soul of the Constitution of India will be hampered. The 42^nd Amendment’s Section 4 discovered an easy way to bypass Article 32 clause 4 by totally removing the protection provided by the provisions of Article 14 and Article 19 in regards with the large categories of law, so that there would be no objection or complaining in relation to which some redressal can be pursued under the ambit of Article 32.

 

The authority to take away the safeguards provided by the Article 14 would mean the authority to do discrimination in matters even without a valid foundation for such differentiation. Moreover the mentioned Article allows reasonable classification in matters where the well being has to be ensured and the Article 19 shows the reasonable restrictions that can be put on for ensuring a fair and just society which is the only purpose of the Directive Principles of State Policy. Hence, the Amendment made for the Article was to validate that the recognition of the Directive Principles of State Policy should reach to such an extent where even the infringement of the Fundamental Rights was not to be complained about in the Court.

 

The Court in its judgement held the Section 4 and Section 55 of the 42^nd Amendment Act, amending the Article 31C and Article 368 respectively, to be unconstitutional. Also the Writ petition challenging the Constitutional validity of certain sections of the Sick Textile Undertakings (Nationalisation) Act, 1974, was dismissed.

 

Defects in the Law

Article 32 of the Indian Constitution is for redressing the complaints regarding the laws or statutes and amendments causing the infringement of the Fundamental Rights provided by the Constitution to every citizen of India. But the Article should not give too much authority and power and also should not provide unrestrained Right to adjudicate every matter or issue raised before it. Certain limitations need to provide to the Courts including the Supreme Court while judging matters like issues questioning the hypothetical situations.

 

Inference

A stabilized equation had to be made between the Fundamental Rights and the Directive Principles of State Policy so as to make sure that both of them co-existed without damaging or infringing the laws of each other. The balancing part between them was considered to be an important part of the Basic Structure of the Indian Constitution. The Minerva Mills case confirmed the validity of the importance of Part III of the Indian Constitution. Also the case went to describe Article 14, Article 19 and Article 21 as the ‘Golden Triangle’ of the Constitution of India. Apart from all this the decisions made in the Minerva Case paved a new era where the Supreme Court became even more important. The Supreme Court departed from the earlier norms where the Supreme Court’s powers were not implemented with the qualities of judicial independence for which the powers were even restricted during the times of National Emergencies. The Minerva case helped the Judiciary to move out of its earlier identity known as the ‘committed Judiciary’. The case helped the Supreme Court to uphold its sanctity with regard to the Constitution of India.

 

Author – Supran Roy, Adamas University (School of Law and Justice).