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ASSIGNMENT

Minerva mills case(history, summary and case analysis)

Submitted By:

Name: Sahil Bainsla

Enrolment No: 1901108

Programme: B.A.LLB (H)

Section: - B

Submitted To:

Dr. Pradeep Kumar

Department of Law
DR. B.R. AMBEDKAR NATIONAL LAW UNIVERSITY

Rai, Sonepat, Haryana

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Acknowledgement

I take this opportunity to express a deep sense of gratitude to Dr B.R. Ambedkar National Law
University for providing me with this excellent opportunity to make this project.

I extend my sincere thanks to everybody who helped with the completion of this project. I am
greatly obliged to our teacher for Constitutional Law- I, Prof. Pradeep Kumar for his exemplary
guidance, monitoring and constant encouragement throughout the course of this project. The
blessing, help and guidance given by him from time to time shall carry us a long way in the
journey of life on which we are about to embark.

Further, I would like to thank my vice-chancellor Prof. (Dr.) Viney Kapoor Mehra who gave me
the golden opportunity to do this wonderful assignment on historical background on Minerva
mill case.

Finally, I would like to thank my family and friends for their support.
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INTRODUCTION

The “Basic Structure” doctrine is the judge-made doctrine whereby certain features of the
Constitution of India are beyond the limit of the powers of amendment of the Parliament of
India. No part of the Constitution may be so amended by Article 368 so as to “alter the basic
structure” of the Constitution. Or in a context in which, any constitutional amendment that
violates the ‘basic structure’ of the Constitution would be invalid. Neither the Doctrine of Basic
Structure nor the basic features of the Constitution have been explicitly mentioned in the
constitution of India.

The phrase “Basic Structure” was introduced for the first time by M.K. Nambiar and other
counsels while arguing for the petitioners in the Golaknath v. State of Punjab case, but it was
only in 1973 that the concept surfaced in the text of the apex court’s verdict. The doctrine of the
basic structure of the Constitution owes its evolution in the ratio of the majority judgment of the
Supreme Court in the landmark case Keshvanand Bharti v. State of Kerala.

In the aftermath of the enunciation of the doctrine of basic structure of the Constitution by the
Supreme Court in the case of Keshavanandha Bharti v. State of Kerala, this case involved a
further analysis of the basic structure of the constitution in the context of the limitations to the
amending powers of the parliament and the balance between fundamental rights and directive
principles of the state policy.

The following are the facts of the case:

1. Petitioner No. 1 which is a limited company owned a textile undertaking called Minerva Mills
situated in the State of Karnataka. This undertaking was nationalized and taken over by the
Central Government under the provisions of the Sick Textile Undertakings (Nationalisation)
Act, 1974, Petitioners 2 to 6 are shareholders of Petitioner No. 1, some of whom are also
unsecured creditors and some secured creditors.

2. Respondent 1 is the Union of India. Respondent 2 is the National Textile Corporation Limited
in which the textile undertaking of Minerva Mills comes to be vested under Section 3(2) of the
Nationalisation Act of 1974. Respondent 3 is a subsidiary of the 2nd respondent.

3. On August 20, 1970, the Central Government appointed a Committee under Section 15 of the
Industries (Development and Regulation) Act, 1951 to make a full and complete investigation of
the affairs of the Minerva Mills Ltd., as it was of the opinion that there had been or was likely to
be a substantial fall in the volume of production. The said Committee submitted its report to the
Central Government in January 1971, on the basis of which the Central Government passed an
order dated October 19, 1971, under Section 18A of the Act of 1951, authorizing Respondent 2
to take over the management of the Minerva Mills Ltd. on the ground that its affairs were being
managed in a manner highly detrimental to public interest.
4. By these petitions, the petitioners challenge the constitutionality of Sections 4 and 55 of the
Constitution (42nd Amendment) Act, 1976 and it is this contention alone with which they
propose to deal in these petitions.
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Background

The Parliament in order to serve general public interest came up with a noble solution by
reconstructing bad assets of companies having importance to the general public. Therefore, in
accordance with the achievement of the said solution the Parliament enacted The sick textile
undertakings (taking over of management) Act, 1974 [Act no. 57 of 1974] on December 24,
1974.

The preamble to the act contained the following words……. “An Act to provide for the
acquisition and transfer of the sick textile undertakings, and the right, title and interest of the
owners in respect of the sick textile undertakings, specified in the First Schedule with a view to
re-organizing and rehabilitating such sick textile undertakings so as to subserve the interests of
the general public by the augmentation of the production and distribution, at fair prices, of
different varieties of cloth and yarn, and for matters connected therewith or incidental thereto”.
Therefore, the said act aimed at providing general public commodities at fair prices and to
recover sick textile undertaking so that general masses won’t suffer.

Minerva Mills was a textile industry in the State of Karnataka engaged in the mass production of
silk clothes and provided market to the general public. The Central Govt. was suspicious that
company fulfilled the criteria to be classified as a sick industry. Therefore, the Central Govt. in
1970 appointed a committee u/s 15 of the Industries (Development and Regulation) Act, 1951
for making a full detailed report analyzing the affairs of Minerva Mills. Relying on the
Committee’s report, on October 19, 1971 the Central govt. empowered National Textile
Corporation Limited (a body under the 1951 act) to take over the management of Minerva Mills
u/s 18A of the 1951 act.
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Earlier through 39th Constitutional (Amendment) Act, 1975 the Parliament inserted
Nationalization Act, 1974 into Ninth Schedule which means that any challenge on the said act
was outside the purview of judicial review. Now, the petitioner was not able to challenge this
aspect of 39th amendment since this remedy was barred by 42 nd Amendment. The Parliament
after suffering massive defeat in Indira Nehru Gandhi v. Shri Raj Narain[1]in order to make its
power and authority supreme passed 42nd amendment (as discussed earlier in Indira Nehru
Gandhi summary) to bar any challenge on constitutional amendments in courts of law.[2]

Therefore, the main issue before the court was to check the constitutionality of 42 nd
Constitutional (Amendment) Act

Conclusion

The significant achivement Minerva Mills is that the hon’ble Supreme court the thread to its
existence to its existence and laid down two pertinent observations in unambiguous terms.
Firstly, it reiterated that the judiciary is an integral and indispensable part of the basic structure
doctrine. Secondly, Fundamental Rights and Directive Principles of State Policy are on equal
footing. By the first observation, it is clear that the Court’s jurisdiction cannot be simply
curtailed to make Article 32 redundant. The second observation makes it abundantly clear that
the fundamental rights cannot stand abrogated under the guise of Directive Principles of State
Policy. This decision has far-reaching consequences. The Government could make laws, and
under the guise of Directive Principles of State Policy, they could not be amenable to judicial
review. Hence, people will have to experience the resulting implications, which would have
resulted in the fundamental rights merely being written words on a paper, having no

value.