METAL CORPORATION (NATIONALISATION AND MISCELLANEOUS PROVISIONS) ACT 1976

THE METAL CORPORATION (NATIONALISATION AND MISCELLANEOUSPROVISIONS) ACT, 1976

ACT No. 100 OF 1976

7thSeptember, 1976

An Act to provide for the taking over of the management of theundertakings of the Metal Corporation, after such undertaking is deemed to havebeen transferred to, and re-vested in, the said Corporation, and for thesubsequent acquisition of the undertaking of the Metal Corporation for thepurpose of enabling the Central Government, in the public interest, to exploitto the fullest extent possible, the zinc and lead deposits in and around Zawararea in the State of Rajasthan and to utilise those minerals in such manner asto subserve the common good, and for matters connected therewith or incidentalthereto

BE it enacted by Parliament inthe Twenty–seventh Year of the Republic of Indiaas follows: –

CHAPTER I

PRELIMINARY

1.Short title and commencement:(1) This Act may be called theMetal Corporation (Nationalisation and Miscellaneous Provisions) Act, 1976

(2) Sections 20 and 21 shallcome into force at once and the other provisions of this Act shall be deemed tohave come into force on the 22nd day of October, 1965.

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

(a) "appointed day"means the 2nd day of August, 1976;

(b) "commencement of thisAct" means the 22nd day of October, 1965;

(c) "MetalCorporation" means the Metal Corporation of India Limited, a companywithin the meaning of the Companies Act, 1956(1 of 1956), and having itsregistered office at Calcutta;

(d) "Mineral ConcessionRules" means the Mineral Concession Rules, for the time being in force,made by the Central Government under the Mines and Minerals (Regulation andDevelopment) Act, 1957(65 of 1957);

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

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

(g) words and expressions usedin this Act and not defined but defined in the Companies Act, 1956(1 of 1956),have the meanings respectively assigned to them in that Act.

3.Undertaking – meaning of: For the purposes of this Act,the undertaking of the Metal Corporation shall be deemed to include all assets,rights, leaseholds (including mining leases, if any), powers, authorities andprivileges and all property, movable and immovable, including lands, buildings,works, mines, workshops, projects, smelters, refineries, stores, instruments,machinery, locomotives, automobiles and other vehicles, mined or extracted zincor lead ores, concentrates and metals, in process or in stock or in transit,cash balances, cash in hand, reserve fund, investments and book debts and allother rights and interests in, or arising out of, such property as wereimmediately before the date of commencement of this Act in the ownership,possession, power or control of the Municipal Council, whether within orwithout India, and all books of account, registers, maps, sections, drawings,records of survey and all other documents of whatever nature relating thereto;and shall also be deemed to include all borrowings, liabilities and obligationsof whatever kind of the Municipal Council in relation to its undertaking.

CHAPTER II

TAKING OVER OF MANAGEMENT OF THE UNDERTAKING OF THE METALCORPORATION

4.Taking over of management ofundertaking of the Metal Corporation: (1) On the commencement of this Act, the MetalCorporation of India (Acquisition of Undertaking) Act, 1966(36 of 1966), shallstand repealed, and on such repeal, the undertaking of the Metal Corporation,which had been transferred to, and vested in, the Central Government by virtueof the provisions of section 3 of the Act so repealed, and the undertaking ofthe Metal Corporation together with all its properties, assets, liabilities andobligations specified in sub–section (1) of section 4 of that Act andsuch other properties, assets, liabilities and obligations, acquired orincurred, for the purposes of its undertaking, after the 22nd day of October,1965, which stood, by virtue of the provisions of section 12 of the said Act, transferredto, and vested in, the Government company formed in pursuance of the provisionsof section 12 of the Act aforesaid shall, by virtue of the provisions of thisAct, be deemed to have been retransferred to, and re–vested in, theMetal Corporation, and, immediately thereafter, the management of theundertaking of the Metal Corporation shall be deemed to have been transferredto, and vested in, the Central Government.

(2) Any contract, whetherexpress or implied, or other arrangement, in so far as it relates to themanagement of the business and affairs of the undertaking of the MetalCorporation, and in force immediately before the commencement of this Act,shall be deemed to have terminated on such commencement.

(3) All persons in charge ofthe management, including persons holding offices as directors, managers or inany other managerial capacity specified in section 197A of the Companies Act,1956(1 of 1956), of the Metal Corporation immediately before the commencementof this Act, shall be deemed to have vacated their offices as such on suchcommencement.

(4) Notwithstanding anythingcontained in any other law for the time being in force, no person in respect ofwhom any contract of management or other arrangement is terminated by reason ofthe provisions of sub–section (2) or whose ceases to hold office byreason of the provisions contained in sub–section (3), shall be entitledto claim any compensation for the premature termination of the contract ofmanagement or other arrangement or for the loss of office, as the case may be.

5.Appointment of Administratorto take over the management of the undertaking: (1) The Central Government may, as soon as it isconvenient administratively so to do, appoint, with effect from such earlier orlater date (not being a date earlier than the commencement of this Act), anyperson or body of persons (including a Government company, whether in existenceat the commencement of this Act or incorporated thereafter) as theAdministrator of the undertaking of the Metal Corporation and the Administratorso appointed shall carry on the management of such undertaking for and onbehalf of the Central Government.

(2) On the appointment of theAdministrator under sub–section (1), the management of the undertakingof the Metal Corporation shall vest in such Administrator and all persons incharge of the management of such undertaking immediately before suchappointment shall cease to be in charge of such management and shall be boundto deliver to the Administrator all assets, books of account, registers andother documents in their custody relating to the undertaking of the MetalCorporation.

(3) The Central Government mayissue such directions (including instructions as to initiating, defending orcontinuing any legal proceedings before any court, tribunal or other authority)to the Administrator as to his powers and duties as the Central Government maydeem desirable and the Administrator may also apply to the Central Governmentat any time for instructions as to the manner in which the management of theundertaking of the Metal Corporation, or in relation to any other matterarising in the course of such management, shall be conducted.

(4) Where any property, themanagement of which has vested in the Central Government under section 4, is inthe possession, custody or control of any person, such person shall deliver theproperty to the Central Government forthwith.

(5) Any person who, at thecommencement of this Act, has in his possession or under his control any books,papers or other documents relating to the undertaking of the Metal Corporationshall be liable to account for such books, papers and other documents to theAdministrator and shall deliver them up to the Administrator or to such personas may be authorised by the Central Government or the Administrator in thisbehalf.

(6) The Market Committee shall,within such period as the Central Government may allow in this behalf, furnishto that Government a complete inventory of all the properties and assets(including particulars of book debts and investments and belongings) of theMarket Committee at the commencement of this Act, all liabilities andobligations of the Market Committee subsisting at such commencement and also ofall agreements entered into by the Market Committee and in force on suchcommencement, including agreements, whether express or implied, relating toleave, pension, gratuity and other terms of service of any officer or otheremployee of the Market Committee under which, by virtue of the provisions ofthis Act, the Central Government has, or will have, or may have, liabilities,and for this purpose, the Central Government shall afford the Market Committeeall reasonable facilities.

(7) The Administrator shallhold office during the pleasure of the Central Government and shall receive,from the funds of the undertaking of the Metal Corporation such remuneration asmay be fixed by the Central Government.

6.Application of Act 1 of 1956:(1) Notwithstanding anythingcontained in the Companies Act 1956, or in the memorandum or articles ofassociation of the Market Committee, so long as the management of theundertaking of the Metal Corporation remains vested in the Central Government,-–

(a) it shall not be lawful forthe shareholders of the Market Committee or any other person to nominate orappoint any person to be a director of the Market Committee;

(b) no resolution passed at anymeeting of the shareholders of the Market Committee on or after thecommencement of this Act shall be given effect to unless approved by theCentral Government;

(c) no proceeding for thewinding up of the Market Committee or for the appointment of liquidator orreceiver in respect of the undertaking thereof shall lie in any court exceptwith the consent of the Central Government.

(2) Subject to the provisionscontained in sub–section (1), and to the other provisions contained inthis Act and subject to such other exceptions, restrictions and limitations, ifany, as the Central Government may, by notification, specify in this behalf,the Companies Act, 1956(1 of 1956), shall continue to apply to the MetalCorporation in the same manner as it applied thereto before the date ofcommencement of this Act.

CHAPTER III

ACQUISITION OF THE UNDERTAKING OF THE METAL CORPORATION

7.Vesting of the undertaking ofthe Metal Corporation in the Central Government: (1) On the appointed day, the undertaking of theMetal Corporation, and the right, title and interest of the Market Committee inrelation to its undertaking, shall stand transferred to, and shall vestabsolutely in, the Central Government.

(2) Subject to the otherprovisions contained in this Act, all property included in the undertaking ofthe Metal Corporation which has vested in the Central Government under sub–section(1) shall, by force of such vesting, be freed and discharged from any trusts,obligations, mortgages, charges, liens and other incumbrances affecting it, andany attachment, injunction or any decree or order of a court, tribunal or otherauthority restricting the use of such property in any manner shall be deemed tohave been withdrawn.

Explanation: For theremoval of doubts, it is hereby declared that the mortgagee of any propertyincluded in the undertaking of the Metal Corporation, or any other personholding any charge, lien or other interest in, or in relation to, any suchproperty, shall be entitled to claim, in accordance with his rights andinterests, payment of the mortgage money or other dues, in whole or in part,from the Central Government but no such mortgage, charge, lien or otherinterest shall be enforceable against any property which has vested in theCentral Government.

(3)Subject to the otherprovisions contained in this Act, all contracts and working arrangements whichare subsisting immediately before the appointed day and affecting the MarketCommittee shall, in so far as they relate to the undertaking of the MetalCorporation, cease to have effect or be enforceable against the MarketCommittee or any person who was surety or had guaranteed the performancethereof and shall be of as full force and effect against or in favour of theCentral Government and enforceable as fully and effectually as if, instead ofthe Market Committee, the Central Government had been named therein or had beena party thereto.

(4) Subject to the otherprovisions contained in this Act, any proceeding or cause of action pending orexisting immediately before the appointed day by or against the MarketCommittee or the Central Government or the Government company referred to insection 12 of the Metal Corporation of India (Acquisition of Undertakings) Act,1966(36 of 1956), in relation to the undertaking of the Metal Corporation may,as from that day, be continued and enforced by or against the CentralGovernment or the Government company referred to in section 9, as it might havebeen enforced by or against the Market Committee, the Central Government or theGovernment company, as the case may be, if this Act had not been enacted, andshall cease to be enforceable by or against the Market Committee, its surety orguarantor.

8.Central Government to be thelessee of the State Government: (1) Where the right of the Metal Corporation under any mininglease granted, or deemed to have been granted to it by any State Government orany other person, vest in the Central Government under section 7, the CentralGovernment shall, on and from the date of such vesting, be deemed to havebecome the lessee of such State Government or such other person, as the casemay be, in relation to such mine, as if a mining lease in respect of such minehad been granted to the Central Government, and the period of such lease shallbe the entire period for which such lease could have been granted by the StateGovernment or such other person under the Mineral Concession Rules, and,thereupon all the rights under such mining lease, including surface,underground and other rights granted to the lessee shall be deemed to have beentransferred to, and vested in, the Central Government.

(2) On the expiry of the termof any lease referred to in sub–section (1), such lease shall, if sodesired by the Central Government, be renewed by the State Government or otherperson on the same terms and conditions on which such lease was heldimmediately before the appointed day by the Market Committee, for the maximumperiod for which such lease could be renewed under the Mineral ConcessionRules.

9.Power of Central Governmentto direct vesting of the undertaking of the Metal Corporation in a Governmentcompany: (1) Notwithstanding anythingcontained in section 7, the Central Government may, if it is satisfied that aGovernment company is willing to comply, or has complied, with such terms andconditions as that Government may think fit to impose, direct, by any order inwriting, that the undertaking of the Metal Corporation and the right, title andinterest of the Metal Corporation in relation to such undertaking shall,instead of continuing to vest in the Central Government, vest in the Governmentcompany either on the date of publication of the direction or on such earlieror later date (not being a date earlier than the appointed day, as may bespecified in the direction.

(2) Where the right, title andinterest of the Market Committee in relation to its undertaking vest in aGovernment company under sub–section (1), the Government company shall,on and from the date of such vesting, be deemed to have become the lessee inrelation to the mines of which the Market Committee was the lessee as if amining lease in respect of such mines had been granted to the Governmentcompany, and the period of such lease shall be the entire period for which suchlease could have been granted under the Mineral Concession Rules; and all therights and liabilities of the Central Government in relation to such minesshall, on and from the date of such vesting, be deemed to have become therights and liabilities, respectively, of the Government company.

(3) The provisions of sub–section(2) of section 8 shall apply to a lease which vests in a Government company asthey apply to a lease which has vested in the Central Government and anyreference therein to the Central Government shall be construed as a referenceto the Government company.

(4) Any reference hereafter inthis Act to the Government company shall be construed as a reference to theGovernment company which is appointed as the Administrator under sub–section(1) of section 5, or, as the case may be, the Government company referred to inthe direction made under sub–section (1).

CHAPTER IV

PAYMENT OF AMOUNTS

10.Payment of amount fordeprivation of management: For the deprivation of the Market Committee of the management ofits undertaking, there shall be given, in cash, to the Market Committee by theCentral Government, an amount, calculated at the rate of rupees eleven lakhsand thirty–nine thousand per annum, for the period commencing on the22nd day of October, 1965, and ending on the appointed day.

11.Payment of amount foracquisition of the undertaking: For the transfer to, and vesting in, the Central Government, undersection 7, of the right, title and interest of the Metal Corporation inrelation to its undertaking, there shall be given, in cash, by the CentralGovernment to the Metal Corporation, an amount of rupees one crore and ninety–eightlakhs.

12.Time of payment: (1) The amount determined undersection 10, and the amount payable under section 11, shall be given by theCentral Government to the Metal Corporation before the expiry of a period ofthree months from the appointed day (hereafter referred to as the specifiedperiod).

(2) The amount referred to insub–section (1) shall, if not paid before the expiry of the specifiedperiod, carry simple interest at the rate of four percent per annum, forthe period commencing on the date of expiry of the specified period and endingon the date on which payment of such amount is made by the Central Governmentto the Municipal Council.

Provided that no interest shallrun from the date on which the amount is tendered to the Metal Corporation ifthe amount so tendered is not accepted by it.

CHAPTER V

MANAGEMENT, ETC., OF THE UNDERTAKING OF THE METAL CORPORATION

13.Management, etc., of theundertaking: Thegeneral superintendence, direction, control and management of the affairs andbusiness of the undertaking of the Metal Corporation, the right, title andinterest in relation to which have vested in the Central Government undersection 7, shall vest in the Government company specified in the direction madeunder sub–section (1) of section 9, and, thereupon the Governmentcompany shall be entitled to exercise all such powers and do all such things asthe Metal Corporation is authorised to exercise and do in relation to itsundertaking.

CHAPTER VI

PROVISIONS RELATING TO EMPLOYEES OF THE METAL CORPORATION

14.Provisions relating toemployees: (1) Everyofficer or other employee of the Metal Corporation (except a director or anymanagerial personnel specified in section 197A of the Companies Act, 1956, orany other person entitled to manage the whole or a substantial part of thebusiness of the Metal Corporation under a special agreement) in the employmentof the Metal Corporation immediately before the commencement of this Act shall,in so far as such employee is employed in connection with the affairs of theundertaking of the Metal Corporation, become, as from such commencement, anofficer or other employee, as the case may be, of the Central Government or theGovernment company and shall hold office by the same tenure and at the sameremuneration and upon the same terms and conditions and with the same rightsand privileges as to pension, gratuity and other matters as he would have heldunder the Metal Corporation if this Act had not been enacted and shall continueto do so until his employment under the Central Government or the Governmentcompany is duly terminated or until his remuneration, terms and conditions areduly altered by the Central Government or the Government company:

Provided that if the alterationso made is not acceptable to any such officer or other employee, his employmentshall be terminated by the Central Government or the Government company onpayment of an amount equivalent to –

(a) three months’ remuneration,in the case of permanent employees, and

(b) one month’s remuneration,in the case of other employees:

Provided further that nothingin this section shall apply to any officer or other employee who has, withinthirty days next following the commencement of this Act, by notice in writingto the Central Government or the Government company, as the case may be,intimated his intention of not becoming an officer or other employee of theCentral Government or the Government company.

(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 employee of the Metal Corporation to the Central Government or theGovernment company shall not entitle such officer or other employee to any compensationunder that Act or other law, and no such claim shall be entertained by anycourt, tribunal or other authorities.

15.Provident and other funds: (1) Where the Metal Corporationhas established a provident, superannuation, welfare or other fund for thebenefit of the persons employed in its undertaking, the monies relatable to theofficers or other employees whose services have become transferred by or underthis Act to the Central Government or the Government company, shall, out of themonies standing on the appointed day, to the credit of such provident,superannuation, welfare or other fund, stand transferred to, and vested in, theCentral Government or the Government company, as the case may be.

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

CHAPTER VII

MISCELLANEOUS

16.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.

17.Contracts in bad faith maybe cancelled or varied: (1) If the Central Government is satisfied after such inquiry asit may think fit that any contract or agreement entered into at any time withinthree years immediately preceding the commencement of this Act between theMetal Corporation or the managing agents of Metal Corporation and any otherperson, in so far as such contract or agreement related to the undertaking ofthe Metal Corporation, has been entered into in bad faith or is detrimental tothe interests of the undertaking of the Metal Corporation, it may make an ordercancelling (either unconditionally or subject to such conditions as it maythink fit to impose) or varying the contract or agreement, and thereafter thecontract or agreement shall have effect accordingly:

Provided that no such contractor agreement shall be cancelled or varied except after giving to the parties tothe contract or agreement a reasonable opportunity of being heard.

(2) Any person aggrieved by anorder made under sub–section (1) may make an application to the HighCourt at Delhifor the variation or reversal of such order and thereupon such court mayconfirm, modify or reverse such order.

18.Protection of action takenin good faith: (1) Nosuit, prosecution or other legal proceeding shall lie against the CentralGovernment or any officer of that Government or the Administrator or theGovernment company or any officer or other person authorised by that Governmentor Government company for anything which is in good faith done or intended tobe done under this Act.

(2) No suit or other legalproceeding shall lie against the Central Government or any of its officers orother employees or the Government company or any officer or other personauthorised by that company for any damage caused or likely to be caused byanything which is in good faith done or intended to be done under this Act.

19.Delegation of powers: (1) The Central Government may,by notification, direct that all or any of the powers exercisable by it underthis Act, other than the power conferred by section 22, may also be exercisedby such person or persons, as may be specified in the notification.

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

20.Penalties: Any person who, –

(a) having in his possession,custody or control any property forming part of any undertaking of the MetalCorporation, wrongfully withholds such property from the Central Government orGovernment company; or

(b) wrongfully obtainspossession of, or retains, any property forming part of the undertaking of theMetal Corporation or wilfully withholds or fails to furnish to the CentralGovernment or the Government company or any person or body of persons specifiedby that Government or Government company, any document relating in suchundertaking which may be in his possession, custody or control or fails todeliver to the Central Government or the Government company or any person orbody of persons specified by that Government or Government company, any assets,books of accounts, registers or other documents in his possession, custody orcontrol, relating to the undertaking of the Metal Corporation; or

(c) wrongfully removes ordestroys any property forming part of any undertaking of the Metal Corporationor prefers any claim 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.

21.Offences by companies: (1) Where an offence under thisAct has been committed by a company, every person who, at the time the offencewas committed, was in charge of, and was responsible to, the company for theconduct of the business of the company, as well as the company, shall be deemedto be guilty of the offence and shall be liable to be proceeded against andpunished 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" meansany body corporate and includes a firm or other association of individuals;

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

22.Power to make rules: (1) The Central Government may,by notification, make rules for carrying out the provisions of this 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) the manner in which themonies in any provident or other fund referred to in sub–section (2) ofsection 15 shall be dealt with;

(b) any other matter which isrequired 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 a total periodof 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 rule or both Houses agree that the ruleshould not be made, the rule shall thereafter have effect only in such modifiedform or be of no effect, as the case may be; so, however, that any suchmodification or annulment shall be without prejudice to the validity ofanything previously done under that rule.

23.Power to removedifficulties: If any difficultyarises in giving effect to the provisions of this Act, the Central Governmentmay, by order, 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 date on whichthis Act receives the assent of the President.

24.Abolition of Tribunal, etc: (1) On the commencement of thisAct, the Tribunal constituted under sub–section (1) of section 11 of theMetal Corporation of India (Acquisition of Undertaking) Act, 1966, shall bestand abolished and every proceeding pending before it, every order made by itand every appeal or application against any such order, shall stand abated,and, on such abatement, the Central Government shall take charge of all recordsof proceedings, applications, memoranda, registers and other documentsmaintained by, or in connection with any proceeding before, the Tribunal.

(2) On the commencement of thisAct, –

(a) every suit, appeal or otherproceeding of whatever nature in relation to the affairs or business of theundertaking of the Metal Corporation instituted before such commencement, andpending on such commencement shall not abate, be discontinued or be, in anyway, prejudicially affected by reason of anything contained in this Act, butthe suit, appeal or other proceeding may be continued, prosecuted and enforcedby or against the Metal Corporation and not against the Central Government orthe Government company;

(b) every suit, appeal or otherproceeding of whatever nature instituted after such commencement but before theappointed day, in relation to the affairs or business of the undertaking of theMetal Corporation, and pending on the appointed day, shall not abate, bediscontinued or, in any way, be prejudicially affected by reason of anythingcontained in this Act, but such suit, appeal or other proceeding may becontinued, prosecuted and enforced by or against the Central Government or theGovernment company.

(3) Anything done, any actiontaken or any contract entered into by the Central Government, Administrator orthe Government company at any time during the period commencing on the 22nd dayof October, 1965, and ending on the appointed day shall be deemed to have beendone, taken or entered into by the Central Government or, as the case may be,the Government company in the due course of management of the undertaking ofthe Metal Corporation.

25.Repeal of Ordinance andsaving: (1) The Metal Corporation(Nationalisation and Miscellaneous Provisions) Ordinance, 1976 is herebyrepealed.

(2) Notwithstanding suchrepeal, anything done or any action taken under the said Ordinance shall bedeemed to have been done or taken under the corresponding provisions of thisAct.

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