ALCOCK ASHDOWN COMPANY LIMITED (ACQUISITION OF UNDERTAKINGS) ACT 1973

THE ALCOCK ASHDOWN COMPANY LIMITED (ACQUISITION OF UNDERTAKINGS)ACT, 1973

ACT No. 56 OF 1973

14thDecember, 1973

An Act to provide for the acquisition of the undertakings of theAlcock Ashdown Company Limited for the purpose of ensuring rational and co-ordinateddevelopment and production of goods essential to the needs of the country ingeneral, and defence department in particular and for matters connectedtherewith or incidental thereto.

WHEREAS Alcock Ashdown CompanyLimited were engaged in boat building, ship repairs and the production ofmarine diesel engines, and were also engaged in the production of goods whichare essential to the needs of the country, such as, light and heavystructurals, transmission line towers, railway points and crossings, grey ironcastings and also other goods needed by the maritime and other industries.

AND WHEREAS as a result ofheavy losses suffered by the company, an order has been made by the High Courtat Bombay forthe winding up of the company;

AND WHEREAS there has been acomplete closure of the work of the undertakings owned by the company fromafter January, 1971;

AND WHEREAS it is urgentlynecessary to bring the undertakings owned by the company into operation so thatthe interests of the country in general, and the defence department inparticular, may not be adversely affected by reason of the stoppage ofproduction and supply of goods produced by the company;

BE it enacted by Parliament inthe Twenty–fourth Year of the Republicof India as follows: –

1.Short title: This Act may be called theAlcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973.

2.Definitions: In this Act, unless the context otherwise requires,–

(a) "appointedday" means the date on which this Act comes into force;

(b) "companymeans the Alcock Ashdown Company Limited, being a company as defined in theCompanies Act, 1956, (1 of 1956) and having its registered office in the Stateof Maharashtra;

(c) "Court" means theHigh Court at Bombay;

¹ [(ca)"notification" means a notification published in the OfficialGazette;

 

(cb)"undertakings of the company" means –

(i) theindustrial unit owned by the company and located at Bhavnagarin the State of Gujarat (hereinafter referredto as the Bhavnagarunit); and

(ii) the industrial unit ownedby the company and located at Bombay in theState of Maharashtra (hereinafter referred toas the Bombayunit);]

(d) wordsand expressions used herein and not defined but defined in the Companies Act,1956, (1 of 1956) have the meanings respectively assigned to them in that Act.

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1. Clauses (ca) and (cb)inserted by the Alcock Ashdown Company Limited (Acquisition of Undertakings)Amendment Act, 1988 (38 of 1988) Section 2.

3.Undertakings of the company to vest in theCentral Government: On and from the appointed day, the undertakings of the companyshall, by virtue of this Act, be transferred to, and shall vest in, the CentralGovernment.

4.General effect of vesting: (1) The undertakings of thecompany shall be deemed to include all assets, rights, powers, authorities andprivileges and all property, movable and immovable, cash balances, reservefunds, investments and all other 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 company, ¹ [in relation to the undertakings] whether within or outsideIndia, and all books of account, registers and all other documents of whatevernature relating thereto.

² [Explanation: For the avoidance of doubts, it is herebydeclared that the expression "undertakings of the company" does notinclude–

(a) anydebts due to the company; and

(b) anyamounts recoverable by the company from its shareholders or directors.]

(2) All property included asaforesaid in the undertakings which have vested in the Central Government undersection 3 shall, by force of such vesting, be freed and discharged, from anytrusts, obligations, mortgages, charges, liens and other incumbrances affectingit, and any attachment, injunction or any decree or order of any courtrestricting the use of such property in any manner shall be deemed to have beenwithdrawn.

(3) If, on the appointed day,any suit, appeal or other proceeding of whatever nature in relation to anybusiness of the undertakings of the company is pending by or against thecompany, the same shall not abate, be discontinued or be, in any way,prejudicially affected by reason of the transfer of the undertakings of thecompany or of anything contained in this Act but the suit, appeal or otherproceeding may be continued, prosecuted and enforced by or against the company.

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1. Inserted by the AlcockAshdown Company Limited (Acquisition of Undertakings) Amendment Act, 1974 (33 of1974), Section 2 (i).

2. Inserted by the AlcockAshdown Company Limited (Acquisition of Undertakings) Amendment Act, 1974 (33of 1974), Section 2 (ii).

5.Duty to deliver possession ofthe undertakings and documents relating thereto: (1) Notwithstanding any decree, judgment or order ofany court or anything contained in any other law for the time being in force,the Receiver, Official Liquidator of the company or any other person, in whosepossession or custody or under whose control the undertakings of the company orany part thereof may be, shall deliver possession of the undertakings of thecompany or such part thereof as may be in his possession, custody or control tothe Central Government forthwith.

(2) The Receiver, OfficialLiquidator or any other person who has, on the appointed day, in his possessionor under his custody or control any books, documents or other papers relatingto the undertakings of the company which have vested, under section 3, in theCentral Government, shall be liable to account for the said books, document orother papers to the Central Government or to such person as the CentralGovernment may specify in this behalf.

(3) The Central Government maytake, or cause to be taken, all necessary steps for securing possession of theundertakings which have vested in it under section 3.

6.Duty to furnish particulars: (1) The company shall, withinsuch period as the Central Government may allow in this behalf, furnish to thatGovernment a complete inventory of all the properties and assets of thecompany, as on the appointed day, pertaining to the undertakings which havevested in the Central Government under section 3.

(2) So much of the obligationof the company under sub–section (1) as relates to the properties andassets of the company in the possession, custody or control of the Receivershall be discharged by him and so much of that obligation as relates to theproperties and assets in the possession, custody or control of the OfficialLiquidator shall be discharged by the Official Liquidator.

7.Payment of amount: (1) The Central Governmentshall deposit, in cash, in Court, to the credit of the company, an amount equalto the sum of rupees one crore for the transfer to, and vesting in, the CentralGovernment, under section 3, of the undertakings of the company.

(2) For the avoidance ofdoubts, it is hereby declared that the liabilities of the company in relationto the undertakings which have vested in the Central Government under section 3, shall be met from the amount referred to in sub–section(1).

(3) In meeting the liabilitiesof the company in relation to the undertakings which have vested in the CentralGovernment under section 3, the Court shall distribute the amount referred toin sub–section (1) amongst the creditors of the company, whether securedor unsecured, in accordance with their rights and interests, and if there isany surplus left after such distribution, amongst the contributories of thecompany in accordance with the rights and interests of such contributories.

8.Management and administrationof the undertakings: The undertakings, which have vested in the Central Governmentunder section 3, shall be managed on behalf of the Central Government by suchperson or body of persons (including one or more Government companies, whetherin existence at the commencement of this Act or incorporated thereafter) as maybe nominated by the Central Government in this behalf, and such person or bodyof persons shall carry on the management in accordance with such regulations asmay be made by the Central Government in this behalf.

¹ [8A.Vesting of theBhavnagar unit in the State Government: (1) Notwithstanding anythingcontained in sections 3 and 4, the Central Government shall direct bynotification that all assets, rights, powers, authorities and privileges andall property, movable and immovable, cash balances, reserve funds, investmentsand all other rights and interests in, or arising out of, such property of theBhavnagar unit which have vested in the Central Government under section 3,shall, instead of continuing to vest in the Central Government, vest in theState Government of Gujarat (hereinafter referred to as the State Government),either on the date of publication of the notification or on such later date asmay be specified in the notification.

(2) Where the assets, rights,powers, authorities and privileges and all property, movable and immovable,cash balances, reserve funds, investments and all other rights and interestsin, or arising out of, such property of the Bhavnagar unit vest, under sub–section(1), in the State Government, that Government shall, on and from the date ofsuch vesting, be deemed to have become the owner of such unit and the rightsand liabilities of the Central Government in relation to that unit shall, onand from the date of such vesting, be deemed to have become the rights andliabilities of the State Government.

8B.Vesting of Bombay unit inGovernment company: (1) Notwithstanding anything contained in sections 3 and 4, theCentral Government shall direct by notification that all assets, rights,powers, authorities and privileges and all property, movable and immovable,cash balances, reserve funds, investments and all other rights and interestsin, or arising out of, such property of the Bombay unit which have vested inthe Central Government under section 3, shall, instead of continuing to vest inthe Central Government, vest in the Mazagon Dock Limited, a Government companyhaving its registered office in the State of Maharashtra (hereinafter referredto as the Government company), either on the date of publication of thenotification or on such later date as may be specified in the notification.

(2) Where the assets, rights,powers, authorities and privileges and all property, movable and immovable,cash balances, reserve funds, investments and all other rights and interestsin, or arising out of, such property of the Bombay unit vest, under sub–section(1), in the Government company, that company shall, on and from the date of suchvesting, be deemed to have become the owner of such unit and the rights andliabilities of the Central Government in relation to that unit shall, on andfrom the date of such vesting, be deemed to have become the rights andliabilities of the Government company.

8C.Employment of certainemployees to continue when Bhavnagar unit vests under section 8A: (1) Where the assets, rights,powers, authorities and privileges and all property, movable and immovable,cash balances, reserve funds, investments and all other rights and interestsin, or arising out of, such property of the Bhavnagar unit vest, under section8A in the State Government, every person who has been, immediately before thedate of such vesting, employed in that unit shall become, on and from the dateof such vesting, an employee of the State Government, and shall hold office orservice under that State Government with the same rights and privileges and topension, gratuity and other matters as would have been admissible to him ifthere had been no such vesting and shall continue to do so unless and until hisemployment under the State Government is duly terminated or until hisremuneration and other conditions of service are duly altered by the StateGovernment.

(2) Notwithstanding anything containedin the Industrial Disputes Act, 1947 (14 of 1947.) or in any other law for thetime being in force, the transfer of the services of any officer or otherperson employed in the Bhavnagar unit to the State Government, shall notentitle such officer or other employee to any compensation under this Act orunder any other law for the time being in force and no such claim shall beentertained by any court, tribunal or other authority.

(3) Where under the terms ofany contract of service or otherwise, any person, whose services becometransferred to the State Government by reason of the provisions of this Act, isentitled to any arrears of salary or wages or any payments for any leave notavailed of or any other payment, not being payment by way of gratuity orpension, such person may enforce his claim against the Central Government, butnot against the State Government.

8D.Transfer of provident fundand other fund when undertakings vest under section 8A: (1) Where a provident fund,superannuation fund, welfare fund or any other fund has been established forthe benefit of the persons employed in the Bhavnagar unit, the monies relatableto the officers or other employees, whose services have become transferred byor under this Act to the State Government shall stand transferred to, and vestin, the State Government.

(2) The monies which standtransferred under sub–section (1) to the State Government shall be dealtwith by that Government for the benefit of the officers and employees sotransferred in such manner as the State Government may decide from time totime.

8E.Saving of contracts, etc: All contracts, deeds, bonds,agreements and other instruments of whatever nature to which the CentralGovernment is a party in relation to the Bhavnagar unit vested in the StateGovernment under section 8A subsisting or having effect immediately before thatdate of vesting of the said unit in the State Government shall, as from thatday, be of full force and effect against, or in favour of the State Governmentand may be enforced fully and effectually, as if, instead of the CentralGovernment, the State Government had been a party thereto.

8F.Power to removedifficulties: (1) Ifany difficulty arises in giving effect to the provisions of sections 8A, 8B,8C, 8D and 8F, the Central Government may, by order published in the OfficialGazette, not inconsistent with the provisions of this Act, remove thedifficulty:

Provided that no such ordershall be made after the expiry of a period of two years from the coming intoforce of the Alcock Ashdown Company Limited (Acquisition of Undertakings)Amendment Act, 1988.

(2) Everyorder made under sub–section (1) shall be laid before each House ofParliament.]

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1. Sections 8A, 8B, 8C, 8D, 8Eand 8F inserted by the Alcock Ashdown Company Limited (Acquisition ofUndertakings) Amendment Act, 1988 (38 of 1988) Section 3.

9.Penalties: (1) Any person who–

(a) havingin his possession, custody or control any property forming part of theundertakings of the company, wrongfully withholds such property from theCentral Government; or

(b) wrongfullyobtains possession of any property forming part of the undertakings of thecompany which have vested in the Central Government under this Act; or

(c) wilfully withholds or failsto furnish to the Central Government as required by sub–section (2) ofsection 5 any document which may be in his possession, custody or control; or

(d) wilfullyfails to furnish an inventory as required under section 6; or

(e) whenrequired to furnish such inventory, furnishes any particulars therein which arefalse and which he either knows orbelieves to be false or does not believe to be true,

shall be punishable withimprisonment for a term which may extend to two years, or with fine, or with both:

Provided that the court tryingany offence under clause (a) or clause (b) or clause (c) of this sub–sectionmay, at the time of convicting the accused person, order him to deliver up orrefund within a time to be fixed by the court any property wrongfully withheldor wrongfully obtained or any document wilfully withheld or not furnished.

(2) No court shall takecognizance of any offence punishable under this section except with theprevious sanction of the Central Government or of an officer authorised by thatGovernment in this behalf.

10.Offencesby companies: (1)Where an offence under this Act has been committed by a company, every personwho at the time the offence was committed was in charge of, and was responsibleto, the company for the conduct of the business of the company as well as thecompany, shall be deemed to be guilty of the offence and shall be liable to beproceeded against and punished accordingly:

Provided that nothing containedin this sub–section shall render any such person liable to anypunishment, if he proves that the offence was committed without his knowledgeor that he had exercised all due diligence to prevent the commission of suchoffence.

(2) Notwithstanding anythingcontained in sub–section (1), where any offence under this Act has beencommitted by a company and it is proved that the offence has been committedwith the consent or connivance of, or is attributable to any neglect on thepart of, any director, manager, secretary or other officer of the company, suchdirector, manager, secretary or other officer shall be deemed to be guilty ofthat offence and shall be liable to be proceeded against and punishedaccordingly.

Explanation: For thepurposes of this section, –

(a) "company"means any body corporate and includes a firm or other association ofindividuals; and

(b) "director"in relation to a firm, means a partner in the firm.

11.Protectionof action taken in good faith: No suit, prosecution or other legal proceeding shall lie againstthe Central Government or an officer or other employee serving in connectionwith the affairs of the undertakings of the company for anything which is ingood faith done or intended to be done under this Act.

12.Powerto make regulations: (1) The Central Government may, by notification in the OfficialGazette, make regulations with regard to the matters specified in section 8.

(2) Every regulation made bythe Central Government under this Act shall be laid, as soon as may be after itis made, before each House of Parliament, while it is in session, for a totalperiod of thirty days which may be comprised in one session or in two or moresuccessive sessions, and if, before the expiry of the session immediatelyfollowing the session or the successive sessions aforesaid, both Houses agreein making any modification in the regulation or both Houses agree that theregulation should not be made, the regulation shall thereafter have effect onlyin such modified form or be of no effect, as the case may be; so, however, thatany such modification or annulment shall be without prejudice to the validityof anything previously done under that regulation.