BENGAL CHEMICAL AND PHARMACEUTICAL WORKS LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) A

THE BENGAL CHEMICAL ANDPHARMACEUTICAL WORKS LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1980

ACT No. 58 OF 1980

12thDecember, 1980

An Act to provide for the acquisition and transfer, in the publicinterest, of the undertakings of the Bengal Chemical and Pharmaceutical WorksLimited, for matters connected therewith or incidental thereto.

WHEREAS the Bengal Chemical andPharmaceutical Works Limited were engaged in the production and distribution ofarticles specified in the First Schedule to the Industries (Development andRegulation) Act, 1951(65 of 1951), namely, chemicals (other than fertilizers),drugs, pharmaceuticals and other products, which areessential to the needs of the general public;

AND WHEREAS the CentralGovernment, being of opinion, after an investigation into the affairs of thecompany, that the affairs of the company have been managed in a manner highlydetrimental to the public interest, had authorised, under section 18A of theIndustries (Development and Regulation) Act, 1951(65 of 1951), a body ofpersons to take over the management of the Company;

AND WHEREAS for the purpose ofreconstructing and rehabilitating the undertakings owned by the Company so asto subserve the interests of the general public by the augmentation ofproduction and distribution of different varieties of chemicals (other thanfertilizers), drugs, pharmaceuticals and other products which are essential tothe needs of the general public and to secure the continued supply thereof, itis necessary to acquire the undertakings of the Company;

BE it enacted by Parliament inthe Thirty–fifth Year of the Republicof India as follows: –

CHAPTER I

PRELIMINARY

1.Short title and commencement: This Act may be called theBengal Chemical and Pharmaceutical Works Limited (Acquisition and Transfer ofUndertaking) Act 1980

(2) It shall come into forcesuch date ¹ as the Central Government may,by notification, appoint.

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1. 15-12-1980 – VideNotification No.S.O.962 (E), dated 12.12.1980, Government of India, Exty.,PFII, section 3 (ii), P.1882.

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

(a) "appointedday" means the date of commencement of this Act,

(b) "Commissioner"means the commissioner of Payments appointed under section 16;

(c) "Company" meansthe Bengal Chemical and Pharmaceutical Works Limited, being a company asdefined in the Companies, Act, 1956(1 of 1956), and having its registeredoffice at 6, Ganesh Chunder Avenue, Calcutta–700 013;

(d) "existingGovernment company" means a Government company which is carrying onbusiness on the appointed day.

(e) "newGovernment company" means a Government company formed and registered on orafter the appointed day;

(f) "notification"means a notification published in the Official Gazette;

(g) "prescribed"means prescribed by rules made under this Act;

(h) "specifieddate", means such date as the Central Government may, for the purpose ofany of the provisions of this Act, by notification, specify, and different datesmay specified for different provisions of this Act.

(i) wordsand expressions under herein and not defined, but defined in the Companies Act,1956(1 of 1956), shall have the meanings, respectively, assigned to them inthat Act.

CHAPTER II

ACQUISITION AND TRANSFER OF THE UNDERTAKING OF THE COMPANY

3.Transfer to, and vesting in, theCentral Government of the undertaking of the Company: On the appointed day, theundertaking of the Company and the right, title and interest of the Company inrelation to that undertaking shall, by virtue of this Act, stand transferredto, and shall vest in, the Central Government.

4.General effect of vesting: (1) The undertaking of theCompany shall be deemed to include all assets, rights, lease–holds,powers, authorities and privileges, and all property, movable and immovable,including land, buildings, offices, factories, workshops, stores, instruments,plants, machinery and equipment, installations, laboratories, office furniture,stationery and equipment, vehicles, patents, trade marks, cash balance, cash onhand, reserve funds, investments, books, book debts, and all other rights, andinterests in, or arising out of, such property as were immediately before theappointed day in the ownership, possession, power or control of the Companywhether within or outside India, and all books of account, registers and allother documents of whatever nature relating thereto,

(2) All properties and assetsas aforesaid which have vested in the Central Government under section 3 shall,by force of such vesting, be freed and discharged from any trust, obligation,mortgage, charge, lien and all other incumbrances affecting them, and anyattachment, injunction, decree or order of any court, or other authorityrestricting the use of such properties or assets in any manner or appointingany receiver in respect of the whole or any part of such properties or assetsshall be deemed to have been withdrawn.

(3) Every mortgagee of anyproperty which has vested under this Act, in the Central Government and everyperson holding any charge, lien or other interest in, or in relation to, anysuch property, shall give within such time and in such manner as may beprescribed, an intimation to the Commissioner of suchmortgage, charge, lien or other interest.

(4) For the removal of doubts,it is hereby declared that the mortgagee of any property referred to in sub–section(3) or any other person holding any charge, lien or other interest in, or inrelation to, any such property shall be entitled to claim, in accordance withhis rights and interests, payment of the mortgage money or other dues in wholeor in part, out of the amounts specified in sections 8 and also out of theamount determined under section 9, but no such mortgage, charge, lien or other interestshall be enforceable against any property which has vested in the CentralGovernment.

(5) Any licence or otherinstrument granted to the Company in relation to any undertaking which hasvested in the Central Government under section 3 at any time before theappointed day and in force immediately before the day shall continue to be inforce on and after such day in accordance with its tenor in relation to, andfor the purposes of the such undertaking, and, on and from the date of vestingof such undertaking under section 6, in an existing Government company, orunder section 7, in a new Government company, the existing, or new, Governmentcompany, as the case may be, shall be deemed to be substituted in such licenceor other instrument as if such licence or other instrument had been granted tosuch existing, or new, Government Company shall hold it for the remainder ofthe period for which the Company would have held it under the terms thereof.

(6) If, on the appointed day,any suit, appeal or other proceeding of whatever nature in relation to anyproperty or asset which has vested in the Central Government under section 3,instituted or preferred by or against the Company is pending, the same shallnot abate, be discontinued or be, in any way, prejudicially affected by reasonof the transfer of the undertakings of the Company or of anything contained inthis Act, but the suit, appeal or other proceeding may be continued, prosecutedor enforced by or against the Central Government or where the undertakings ofthe Company are directed, under section 6, to vest in an existing Governmentcompany or become transferred by virtue of the provisions of section 7 to a newGovernment company, by or against such Government company.

5.Central Government or existing,or new, Government company, not to liable for certain prior liabilities: (1) Every liability of theCompany in respect of any period prior to the 1st day of April, 1979, shall bethe liability of the Company and shall be enforceable against it and not againstthe Central Government, or where the undertakings of the Company are directed,under section 6, to vest in an existing Government Company, or becometransferred by virtue of the provisions of section 7, to a new Governmentcompany, against such Government company.

(2) Any liability incurred by,or arising against, the Company on or after the 1st day of April, 1979,including the liability to repay loans advanced to the Company by the CentralGovernment on or after that day, together with the interest due thereon, shallbe liability; –

(a) Where the undertakings ofthe Company are directed, under section 6, to vest in an existing Governmentcompany, of that existing Government company; or

(b) wherethe undertakings of the Company become transferred by virtue of the provisionsof section 7, to a new Government company, of that new Government Company; or

and shall be discharged by suchGovernment company as and when the discharge of such liability becomes due.

(3) For the removal of doubts,it is hereby declared that –

(a) save as otherwise expresslyprovided in this Act, no liability of Company in relation to its undertakingsin respect of any period prior to the 1st of April, 1979, shall be enforceableagainst the Central Government, or, where the undertakings of the Company aredirected, under section 6, vest in an existing, or become transferred by virtueof the provisions of section 7, to a new, Government company, against suchGovernment company;

(b) no award, decree or orderof any court, tribunal or other authority in relation to the undertakings ofthe Company, passed on or after the appointed day, in respect of any matter,claim or dispute, which arose before the 1st day of April, 1979, shall beenforceable against the Central Government, or where the undertakings of theCompany are directed, under section 6, to vest in an existing GovernmentCompany, or become transferred, by virtue of the provisions of section 7, to anew Government company, against such Government company;

(c) no liability incurred bythe Company before the 1st day of April, 1979, for the contravention of anyprovision of law for the time being in force, shall be enforceable against theCentral Government, or, where the undertakings of the Company are directed,under section 6, to vest in an existing, Government company, or becometransferred, by virtue of the provisions of section 7, to a new Governmentcompany, against such Government company.

6.Power of Central Governmentto direct vesting of the undertakings of Company in an existing GovernmentCompany: (1) Notwithstanding anythingcontained in sections 3 and 4, and subject to the provisions of section 7, theCentral Government may, if it is satisfied that an existing Government companyis willing to comply, or has complied, with such terms and conditions as thatGovernment may think fit to impose, direct, by notification, that theundertakings of the Company, and the right, title and interest of the Companyin relation to its undertakings which have vested in the Central governmentunder section 3, shall, instead of continuing to vest in the CentralGovernment, vest in that existing Government company either on the date ofpublication of the notification or on such earlier or later date (not being adate earlier than the appointed day) as may be specified in the notification.

(2) Where the right, title andinterest of the Company in relation to its undertakings vest, under sub–section(1), in an existing Government company, that Government company shall, on andfrom the date of such vesting be deemed to have become, and until the transferof the undertakings by virtue of the provisions of section 7, to a newGovernment company, be deemed to be, the owner in relation to such undertakingand the rights and liabilities of the Central Government in relation to suchundertakings shall, on and from the date of such vesting, be deemed to havebecome, and until the date of such transfer, be deemed to be, the rights andliabilities, respectively, of that existing government company.

7.Transfer of undertakings ofCompany from an existing Government company to a new government company: (1) Notwithstanding anythingcontained in section 3 and 4, where the undertakings of the Company have beendirected, under sub–section (1) of section 6, to vest in an existingGovernment company, the Central Government may, if it is satisfied that a newGovernment company is willing to comply, or has complied, with such terms andconditions as that Government may think fit to impose, declare, by notification,that the undertakings of the Company be transferred to that new Governmentcompany; and on the issue of such declaration, the right, title and interest ofthe Company in relation to its undertakings, which had been directed under sub–section(1) of section 6 to vest in an existing Government company, shall, instead ofcontinuing to vest in that existing Government company, vest in that newGovernment company with effect from the date on which such declaration is made.

(2) Where the right, title andinterest of the existing Government company in relation to the undertakings ofthe Company vest under sub–section (1) in a new Government company, thatnew Government company shall, on and from the date of such vesting, be deemedto have become the owner in relation to such undertakings and the rights andliabilities of the existing Government company in relation to such undertakingsshall, on and from the date, of such vesting, be deemed to have become therights and liabilities, respectively, of that new Government company.

CHAPTER III

PAYMENT OF AMOUNTS

8.Payment of amount: For the transfer to, andvesting, in, the Central Government, under section 3, of the undertakings ofthe Company and the right, title and interest of the Company in relation to itsundertakings, there shall be paid by the Central Government to the Company, incash and in the manner specified in Chapter VI, an amount of rupees fivehundred and two lakhs and four thousand.

9.Payment of further amounts: (1) For the deprivation of theCompany of the management of its undertakings, there shall be given to thecompany by the Central Government an amount calculated at the rte of twothousand rupees per month for the period commencing on the date on which themanagement of the undertakings of the Company was taken over by the personsauthorised by the Central Government under section 18A of the Industries(Development and Regulation) Act, 1951(65 of 1951), and ending on the appointedday.

(2) The amount specified insection 8, and the amount determined under sub–section (1), shall carrysimple interest at the rate of four percent per annum for the periodcommencing on the appointed day and ending on the date on which payment of suchamount is made by the Central Government to the Commissioner.

(3) The amount determined inaccordance with the provisions of sub–section (1) and (2) shall be paidby the Central Government to the Company in addition to the amount specified insection 8.

(4) For the removal of doubts,it is hereby declared that the liabilities of the Company, in relation to itsundertakings which have vested in the Central Government under section 3, shallbe discharged from the amount referred to in section 8, and also from theamount determined under sub–section (1) in accordance with the rightsand interests of the creditors of the Company.

CHAPTER IV

MANAGEMENT, ETC, OF THE UNDERTAKINGS OF THE COMPANY

10.Management, etc., of theundertakings of the Company: The general superintendence, direction, control and management ofthe affairs and business of the undertakings of the Company, the right, titleand interest in relation to which have vested in the Central Government undersection 3, shall, –

(a) Where a direction has beengiven by the Central Government under sub–section (1) of section 6, veston and from the date specified in such direction, in the existing Governmentcompany specified therein; or

(b) wherea declaration has been made under sub–section (1) of section 7, vest, onand from the date of such declaration, in the new Government company specifiedtherein; or

(c) Where no direction referredto in clause (a) or declaration under clause (b) has been given or made, vest,on and from the appointed day, in one or more Custodians appointed by theCentral Government under sub–section (2),

and thereupon the existing, ornew, Government company so specified or the Custodian or Custodians soappointed, as the case may be, shall be entitled to exercise, to the exclusionof all other persons, all such powers and do all such things as the Company isauthorised to exercise and do in relation to the undertakings owned by it.

(2) The Central may appoint oneor more individuals or a Government company as the Custodian or Custodians ofthe undertakings of the Company in relation to which no direction has been madeby it under sub–section (1) of section 6 or no declaration has been madeby its under sub–section (1) of section 7.

(3) The Custodian or Custodiansso appointed shall receive from the funds of the undertakings of the Companysuch remuneration as the Central Government may fix and hold office during thepleasure of the Central Government.

11.Duty of persons in charge ofmanagement of undertakings of the Company to deliver all assets, etc.: (1) On the vesting of the managementof the undertakings of the Company in the existing, or new, Government company,or on the appointment of a Custodian or Custodians, all persons in charge ofthe management of the undertakings of the Company immediately before suchvesting or appointment shall be bound to deliver to such Government company, orCustodian or Custodians, as the case be, all assets, books of account,registers and other documents in their custody relating to the undertakings ofsuch Company.

(2) The Central Government mayissue such directions as it may deem desirable in the circumstances of the caseto the existing, or new, Government company or the Custodian or Custodians asto the powers and duties of such Government company, or Custodian or Custodiansand such Government company, or Custodian or Custodians may also, if it isconsidered necessary so to do, apply to the Central Government at any time forinstructions as to the manner in which the management of the undertakings ofthe Company shall be conducted or in relation to any other matter arising inthe course of such management.

(3) Any person who has, on theappointed day, in his possession or under his control any books, documents orother papers relating to the undertakings of the Company, which have vested inthe Central Government or in any existing, or new, Government company and whichbelong to the Company or would have so belonged, if the undertakings of theCompany had not vested in the Central Government or the existing, or new,Government company, shall be liable to account for the said books, documentsand other papers to the Central Government or the existing, or new, Governmentcompany, as the case may be, and shall deliver them up to the CentralGovernment or the existing , or new, Government or to such person or body ofpersons as the Central Government or the Government company may specify in thisbehalf.

(4) The Central Government orthe existing, or new, Government company may take orcause to be taken all necessary steps for securing possession of theundertakings of the Company which have vested in the Central Government or theexisting, or new, Government company under this Act.

(5) The Company shall, withinsuch period as the Central Government may allow in this behalf, furnish to thatGovernment a complete inventory of all their properties and assets, as on theappointed day, pertaining to the undertakings which have vested in the CentralGovernment under section 3, and, for this purpose, the Central Government orthe existing, or new Government company shall afford to the Company allreasonable facilities.

12.Accountsto be rendered by the Company or any other person: (1) Where, in pursuance of any decree, order orinjunction of any court or otherwise–

(a) theauthorised persons were, after the date on which the management of theundertakings of the Company was taken over by them under section 18A of theIndustries (Development and Regulation) Act, 1951(65 of 1951) and before theappointed day; or

(b) theCentral Government or the existing, or new, Government company, as the case maybe, is, on or after the appointed day,

Prevented from taking over themanagement of any part of the undertakings of the Company, the Company, or anyother person in possession, custody or control of such part, shall, in relationto the period commencing on the date of such taking over and ending on the dateon which such part was or is handed over to the authorised persons or, as thecase may be, the Central Government or the existing, or new, Government company,render, within a period of sixty days from the appointed day or where such partwas so handed over after the appointed day, within a period of sixty days fromthe date of such handing over, accounts with regard to the–

(i) assetsand stores of the undertakings or any part thereof, acquired, utilised or soldduring the said period; and

(ii) incomederived by the Company or any other person from the undertaking or any partthereof during the said period;

to the Central Government or theexisting, or new, Government company, as the case may be.

(2) If, on examination of theaccounts referred to in sub–section (1), any income or other monies isor are found to have been derived by the Company or any other persons from suchundertakings or any part thereof during the period referred to in that sub–section,or any other monies are found to be payable to the Company, such income orother monies shall be recoverable by the Central Government or the existing, ornew, Government company from the Company or such other person, as the case maybe, and from the amount payable under this Act to the Company and the debt dueto the Central Government or the existing, or new, Government company, as thecase may be, on this account shall rank as an unsecured debt.

(3) If no account is renderedby the Company or such other person in respect of the undertakings or any partthereof within the period referred to in sub–section (1) or if theCentral Government or the existing, or new, Government Company, as the case maybe, has any reason to believe that the account rendered by the Company or suchother person is incorrect or false in any material particular, the CentralGovernment or the existing, or new, Government company, as the case may be, mayrefer the matter to the Commissioner and thereupon the Commissioner shalldetermine the income derived by the Company or such other person from suchundertakings or any part thereof during the period referred to in sub–section(1) and take steps to recover the said income or other monies from the Companyor such other person and from the amount payable to the Company under this Act,as if the debt due to the Central Government or the existing, or new,Government company, as the case may be, on this Account were an unsecured debt.

(4) No mortgage, charge, lienor other incumbrance in relation to the undertakings of the Company or any partthereof shall be binding on the Central Government or the existing, or new,Government company, as the case may be, if such mortgage, charge, lien or otherincumbrance was created, at any time during the period in which the authorisedpersons were and the Central Government or the existing, or new, GovernmentCompany, as the case may be, is prevented, by any decree, order or injunctionof any court or otherwise, from taking over the management of such undertakingsor any part thereof.

13.Accountsand audit: The Custodian or Custodians ofthe undertakings of the Company shall maintain an account of the undertakingsof the Company in such form and manner and under such conditions as may beprescribed and the provisions of the Companies Act, 1956(1 of 1956), shallapply to the audit of the account so maintained as they apply to the audit ofthe accounts of a company.

CHAPTER V

PROVISIONS RELATING TO EMPLOYEES OF THE COMPANY

14.Employmentof certain employees to continue: (1) Every person who has been, immediately before the appointedday, employed in any undertaking of the Company shall become, –

(a) onand from the appointed day, an employee of the Central Government, and

(b) Where the undertakings ofthe Company are directed, under sub–section (1) of section 6, to vest inan existing, Government company, or are transferred by virtue of the provisionsof section 7, to a new Government company, an employee of such Governmentcompany on and from the date of such vesting or transfer.

and shall hold office orservice under the Central Government or the existing, or new, Governmentcompany, as the case may be, with the same rights and privileges as to pension,gratuity and other matters as would have been admissible to him if there hadbeen no such vesting and shall continue to do so unless and until hisemployment under the Central Government or the existing, or new, governmentcompany, as the case may be, is duly terminated or until his remuneration andother conditions of service are duly altered by the Central Government or theexisting, or new, Government company, as the case may be.’

(2) Notwithstanding anythingcontained in the Industrial Disputes Act, 1947(14 of 1947), or in any other lawfor the time being in force, the transfer of the services of any officer orother person employed in the undertaking of the Company to the CentralGovernment or the existing, or new, Government company, as the case may be,shall not entitle such officer or other employee to any compensation under thisAct or under any other law for the time being in force and no such claim shallbe entertained by any court, tribunal or other authority.

15.Provident fund and other funds: (1) Where the Company hasestablished a provident fund, superannuation fund, welfare fund or other fundfor the benefit of the persons employed in any of the undertakings of theCompany, the monies relatable to the employees, whose services have becometransferred by or under this Act to the Central Government or an existing, or anew, Government company, as the case may be, shall, out of the monies standing,on the appointed day, to the credit of such provident fund, superannuation,welfare or other fund, stand transferred to , and shall vest in, the CentralGovernment or the existing, or new, Government company, as the case may be.

(2) The monies which standtransferred under sub–section (1) to the Central Government or theexisting, or new, Government company, as the case maybe, shall be dealt with by that Government or that company in such manner asmay be prescribed.

CHAPTER VI

COMMISSIONER OF PAYMENTS

16.Appointmentof Commissioner of Payments: (1) The Central Government shall, for the purpose of disbursingthe amounts payable under sections 8 and 9, by notification, appoint aCommissioner of Payments.

(2) The Central Government mayappoint such other persons as it may think fit to assist the Commissioner andthereupon the Commissioner may authorise one or more of such persons also toexercise all or any of the powers exercisable by him under this Act anddifferent persons may be authorised to exercise different powers.

(3) Any person authorised bythe Commissioner to exercise any of the powers exercisable by the Commissionermay exercise those powers in the same manner and with the same effect as ifthey have been conferred on that person directly by this Act and not by way ofauthorisation.

(4) The salaries and allowancesof the Commissioner and other persons appointed under this Section shall bedefrayed out of the Consolidated Fund of India.

17.Paymentby Central Government to the Commissioner: (1) The Central Government shall, within thirtydays from the specified ¹ date,pay in cash to the Commissioner, for payment to each of the Company, –

(a) anamount equal to the amount specified in section 8, and

(b) anamount equal to the amounts payable to the Company under section 9.

(2) A deposit account shall beopened by the Central Government in favour of the Commissioner in the PublicAccount of India and every amount paid under this Act to the Commissioner shallbe deposited by him to the credit of the said deposit account and the saiddeposit account shall be operated by the Commissioner.

(3) Interest accruing on theamount standing to the credit of the deposit account referred to in sub–section(2) shall ensure to the benefit of the Company.

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1. 15.1.1981 – VideNotification No.S.O.26 (E) dated 14.1.1981, Government of India, Exty., PT.II, Section 3 (ii), P.60.

18.Certain powers of CentralGovernment or existing, or new, Government company: (1) The Central Government or the existing, or new,Government company, as the case may be, shall be entitled to receive up to thespecified date, to the exclusion of all other persons, any money due to theCompany, in relation to its undertakings which have vested in the CentralGovernment or the existing, or new, Government company, as the case may be, andrealised after the appointed day notwithstanding that the realisation pertainsto a period prior to the appointed day.

(2) The Central Government, orthe existing, or new, Government company, as the case may be, may make a claimto the Commissioner with regard to every payment made by it after the appointedday for discharging any liability of the Company in relation to any periodprior to the 1st day of April, 1979; and every such claim shall have priority,in accordance with the priorities attaching, under this Act, to the matter inrelation to which such liability has been discharged by the Central Governmentor the existing, or new, Government company, as the case may be.

(3) Save as otherwise providedin this Act, the liabilities of the Company in respect of any transaction priorto the 1st day of April, 1979, which have not been discharged on or before thespecified ¹ date shall be the liabilities of the company.

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1. 31.3.1979 – VideNotification No.S.O.130 (E), dated 26.2.1981

19.Claimsto be made to the Commissioner: Every person having a claim against the Company shall prefer suchclaim before the Commissioner within thirty days from the specified ¹ date :

Provided that if theCommissioner is satisfied that the claimant was prevented by sufficient causefrom preferring the claim within the said period of thirty days, he mayentertain the claim within a further period of thirty days and not thereafter.

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1. 1.2.1981 – Vide Notification No.S.O.26 (E),dated 14.1.1981.

20.Priorityof claims: The claims arising out of thematters specified in the Schedule shall have priorities in accordance with thefollowing principles: –

(a) Category I shall haveprecedence over all other categories and Category II shall have precedence overCategory III, and so on;

(b) the claims specified ineach of the categories shall rank equally and be paid in full, but, if theamount is insufficient to meet such claims in full, they shall abate in equalproportions and be paid accordingly; and

(c) thequestion of discharging any liability with regard to a matter specified in alower category shall arise only if a surplus is left after meeting all theliabilities specified in the immediately higher category.

21.Examinationof claims: (1) On receipt of the claimsmade under section 19, the Commissioner shall arrange the claims in the orderof priorities specified in the Schedule and examine the same in accordance withsuch order of priorities.

(2) If, on examination of theclaims, the Commissioner is of opinion that the amount paid to him under thisAct is not sufficient to meet the liabilities specified in any lower category,he shall not be required to examine the claims in respect of such lowercategory.

22.Admissionor rejection of claims: (1) After examining the claims with reference to the prioritiesset out in the Schedule, the Commissioner shall fix a certain date on or beforewhich every claimant shall file the proof of his claim, failing which he shallbe excluded from the benefit of the disbursements made by the Commissioner.

(2) Not less than fourteendays’ notice of the date so fixed shall be given by advertisement in such issueof any daily newspaper in the English language and in such issue of dailynewspaper in such regional language as the Commissioner may consider suitable,and every such notice shall call upon the claimant to file the proof of hisclaim with the Commissioner within the period specified in the advertisement.

(3) Every claimant who fails tofile the proof of his claim within the period specified by the Commissionershall be excluded from the disbursement made by the Commissioner.

(4) The commissioner shall,after such investigation as may, in his opinion, be necessary and after givingthe concerned company an opportunity of refuting the claim and after giving theclaimant a reasonable opportunity of being heard, admit or reject by order inwriting the claim in whole or in part.

(5) The Commissioner shall havethe power to regulate his own procedure in all matters arising out of thedischarge of his functions including the place or places at which he may holdhis sittings and shall, for the purpose of making any investigation under thisAct, have the same powers as are vested in a civil court under the Code ofCivil Procedure, 1908(5 of 1908), while trying a suit, in respect of thefollowing matters, namely: –

(a) thesummoning and enforcing the attendance of any witness and examining him onoath;

(b) thediscovery and production of any document or other material object producible asevidence;

(c) thereception of evidence on affidavits;

(d) theissuing of any commission for the examination of witnesses.

(6) Any investigation beforethe Commissioner shall be deemed to be a judicial proceeding within the meaningof sections 193 and 228 of the Indian Penal Code (45 of 1860) and theCommissioner shall be deemed to be a civil court for the purposes of section195 and Chapter XXVI of the Code of Criminal Procedure, 1973(2 of 1974).

(7) A claimant who isdissatisfied with the decision of the Commissioner may prefer an appeal againstthe decision to the principal civil Court of original jurisdiction within thelocal limits of whose jurisdiction the registered office of the concernedcompany is situated:

Provided that where a personwho is a Judge of a High Court is appointed to be the Commissioner, the appeal,shall lie to the High Court at Calcuttaand such appeal shall be heard and disposed of by not less than two Judges ofthat High Court.

23.Disbursementof money by Commissioner to claimants: After admitting a claim under this Act, the amountdue in respect of such claim shall be paid by the Commissioner to the person orpersons to whom such amount is due, and on such payment, the liability of theCompany in respect of such claim shall stand discharged.

24.Disbursementof amounts to the Company and possession of certain machinery, equipment, etc.: (1) If, out of the monies paidto him in relation to the undertakings of the Company, there is a balance leftafter meeting the liabilities in accordance with the priorities specified inthe Schedule, the Commissioner shall disburse such balance to the company.

(2) Where any machinery,equipment or other property has vested under this Act in the Central Governmentor the existing, or new, Government company, as the case may be, but suchmachinery, equipment or other property does not belong to the Company, it shallbe lawful for the Central Government or the existing, or new, Governmentcompany, as the case may be, to continue to possess such machinery or equipmentand other property on the same terms and conditions under which they werepossessed by the Company immediately before the appointed day.

25.Undisbursed or unclaimedamount to be deposited to the general revenue account: Any money paid to theCommissioner which remains undisbursed or unclaimed on the date immediatelypreceding the date on which the office of the Commissioner is finally wound up,shall be transferred by the Commissioner, to the general revenue account of theCentral Government; but a claim to any money so transferred may be preferred tothe Central Government by the person entitled to such payment and shall bedealt with as if such transfer had not been made, and the order, if any, forthe payment of the claim being treated as an order for the refund of therevenue.

CHAPTER VII

MISCELLANEOUS

26.Act to have overridingeffect: The provisions of this Actshall have effect notwithstanding anything inconsistent therewith contained inany other law for the time being in force or in any instrument having effect byvirtue of any law, other than this Act, or in any decree or order of any court,tribunal or other authority.

27.Contracts to cease to haveeffect unless ratified by the Central Government or the Government company orexisting, or new, Government company: Every contract entered into by the Company inrelation to its undertaking, for any service, sale or supply, and in forceimmediately before the appointed day, shall, on and from the expiry of onehundred and eighty days from that day, cease to have effect unless suchcontract is, before the expiry of the said period, ratified, in writing, by theCentral Government or, as the case may be, the existing, or new, Governmentcompany, and in ratifying such contract, the Central Government or as the casemay be, the existing, or new, Government company may make such alteration ormodification therein as it may think fit:

Provided that the CentralGovernment or, as the case may be, the existing, or new, Government companyshall not omit to ratify a contract and shall not make any alteration ormodification therein–

(a) unless it is satisfied thatsuch contract is unduly onerous, or has been entered into in bad faith, or isdetrimental to the interest of the Central Government or, as the case may be,such Government company; and

(b) exceptafter giving the parties to the contract a reasonable opportunity of beingheard and except after recording in writing its reasons for refusal to ratifythe contract or for making any alteration or modification therein.

28.Penalties: Any person who–

(a) having in his possession,custody or control any property forming part of any undertaking of the Company,wrongfully withholds, such property from the Central Government or the existing,or new, Government company; as the case may be, or any person or body ofpersons authorised by that Government or existing, or new, Government company;or

(b) wrongfully obtainspossession of or retains, any property forming part of any undertaking of theCompany; or wilfully withholds or fails to furnish to the Central Governmentor, as the case may be, the existing or new, Government company or any personor body of persons authorised by that Government or Government company, anydocument relating to such undertakings which may be in his possession, custodyor control or fails to deliver to the Central Government or as the case may be,the existing, or new, Government company, or any person or body of personsauthorised by that Government or existing, or new, Government company, anyassets, books of account, registers or other documents in his possession custodyor control, relating to the undertakings of the Company; or

(c) wrongfully removes ordestroys any property forming part of any undertaking of the Company; orprefers any claims under this Act which he knows or has reasonable cause tobelieve to be false or grossly inaccurate.

shall be punishable withimprisonment for a term which may extend to two years, or with fine which mayextend to ten thousand rupees, or with both.

29.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 wasresponsible to, the company for the conduct of the business of the company, aswell as the company, shall be deemed to be guilty of the offence and shall beliable to be proceeded 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 thepurpose 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.

30.Protectionof action taken in good faith: No suit, prosecution or other legal proceeding shall lie againstthe Central Government or any officer of that Government or the Custodian ofthe undertakings of the Company or the existing, or new, Government Company orany officer or other person authorised by that Government or existing, or new,Government company for anything which is in good faith done or intended to bedone under this Act.

31.Delegation of powers: (1) The Central Governmentmay, by notification direct that all or any of the powers exercisable by itunder this Act, other than the powers conferred by this Section, or section 32,or section 33, may also be exercised by such person or person as may bespecified in the notification.

(2) Whenever any delegation ofpower is made under sub–section (1), the person to whom such power hasbeen delegated shall act under the direction, control and supervision of theCentral Government.

32.Powerto make rules: (1) TheCentral Government may, by notification, make rules for carrying out theprovisions of his Act.

(2) In particular, and withoutprejudice to the generality of the foregoing power, such rules may provide forall or any of the following matters, namely: –

(a) thetime within which, and the manner in which, an intimation referred to in sub–section(3) of section 4 shall be given;

(b) theform and the manner in which, and the conditions under which, the Custodian orCustodians shall maintain accounts as required by section 13;

(c) themanner in which monies in any provident fund or other fund referred to insection 15 shall be dealt with;

(d) anyother matter which is required to be, or may be, prescribed.

(3) Every rule made by theCentral Government under this Act shall be laid, as soon as may be after it ismade, before each House of Parliament while it is in session, for atotal period of thirty days which may be comprised in one session or in two ormore successive sessions and if, before the expiry of the sessionimmediately following the session or the successive sessions aforesaid, bothHouses agree in making any modification in the rule or both Houses agree that therule should not be made, the rule shall thereafter have effect only in suchmodified form or be of no effect, as the case may be;, so however, that anysuch modification or annulment shall be without prejudice to the validity ofanything previously done under that rule.

33.Powerto remove difficulties: If any difficulty arises in giving effect to the provisions ofthis Act the Central Government may by order, not inconsistent with theprovisions of this Act, remove the difficulty:

Provided that no such ordershall be made after the expiry of a period of two years from the appointed day.

THE SCHEDULE

[Seesections 20, 21, 22 and 24]

ORDER OF PRIORITIES FOR THE DISCHARGE OF LIABILITIES OF THECOMPANY

Category I

(a) Wages, salaries and otherdues of the employees of the Company for the post–take–overperiod as well as arrears in relation to wages, salaries, provident fund andother dues of the employees for the pre–take–over period.

Part B: Post–take–over period

Category II

(a) Loans advanced by theCentral Government and interest due thereon.

(b) Loans,,advanced by banks and financial institutions, guaranteed by the CentralGovernment and interest due thereon.

Category III

(a) Credit availed of forpurposes of trade or manufacturing operations.

(b) Any other dues.

Category IV

(a) Revenue, taxes, cesses,rates or other dues to the Central Government or a State Government.

(b) Sales tax, rates and taxes,contributions to be made to the Employees’ State Insurance Fund and additionaldearness allowance payable to employees.

Category V

Principal amount of the securedloans advanced by banks and financial institutions and interest due thereon upto and including December 15, 1977, that is to say, the date on which thenotified order under section 18A of the Industries (Development and Regulation)Act, 1951(65 of 1951), was published in the Official Gazette.

Category VI

Revenue, taxes, cesses, rate or any other dues payable to a localauthority or State Electricity Board.

Category VII

Amounts due by way of intereston secured loans referred to in category V after December 15, 1977.

Category VIII

(a) Any other credit availed offor purposes of trade or manufacturing operations.

(b) Any other dues.