METAL CORPORATION OF INDIA (ACQUISITION OF UNDERTAKING) ACT 1965
THE METAL CORPORATION OF INDIA (ACQUISITION OF UNDERTAKING)ACT, 1965
ACT No. 44 OF 1965
An Act to provide for the acquisition of the undertaking of theMetal Corporation of India Limited for the purpose of enabling the Central Governmentin the public interest to exploit, to the fullest extent possible, zinc andlead deposits in and around the Zawar area in the State of Rajasthan and toutilise those minerals in such manner as to subserve the common good.
BE it enacted by Parliament inthe Sixteenth Year of the Republicof India as follows: –
1.Short title and commencement: (1) This Act may be called theMetal Corporation of India(Acquisition of Undertaking) Act, 1965.
(2) It shall be deemed to havecome into force on the 22nd day of October, 1965.
2.Definitions: In this Act, unless the context otherwise requires,-
(a) "administrator"means an administrator appointed under section 13;
(b) "company" or"the Metal Corporation of India" means the Metal Corporation of IndiaLimited, being a company as defined in the Companies Act, 1956(1 of 1956),having its registered office at Calcutta;
(c) "Tribunal" meansthe Tribunal constituted under section 11;
(d) wordsand expressions used but not defined in this Act and defined in the CompaniesAct, 1956(1 of 1956), shall have the meanings respectively assigned to them inthat Act.
ACQUISITION OF THE UNDERTAKING OF THE METAL CORPORATION OF INDIA
3.Undertaking of company to vest in CentralGovernment: On thecommencement of this Act, the undertaking of the company shall, by virtue ofthis Act, be transferred to, and, vest in, the Central Government.
4.General effect of testingunder section 3: (1) Theundertaking of the company 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 zinc or leadores, concentrates and metals, in process or in stock or in transit, cashbalances, cash on hand, reserve fund, investments and book debts and all otherrights and interests arising out of such property as were immediately beforethe commencement of this Act in the ownership, registers, maps, plans,sections, drawings, records of survey and all other documents of whatevernature relating thereto, and shall also be deemed to include all borrowings,liabilities and obligations of whatever kind then subsisting of the company inrelation to the undertaking.
(2) All property vesting in theCentral Government under sub–section (1) shall, by force of suchvesting, be freed and discharged from any trusts, obligations, mortgages,charges, liens and other encumbrances affecting it, and any attachment,injunction or any decree or order of a court restricting the use of suchproperty in any manner shall be deemed to have been withdrawn.
(3) Subject to the otherprovisions contained in this Act, all contracts and working arrangements whichare subsisting immediately before the commencement of this Act and affectingthe company shall, in so far as they relate to the undertaking of the company,cease to have effect or be enforceable against the company or any person whowas surety or had guaranteed the performance thereof and shall be of as fullforce and effect against or in favour of the Central Government and enforceableas fully and effectually as if instead of the company the Central Governmenthad been named therein or had been a party thereto.
(4) Subject to the otherprovisions contained in this Act, any proceeding or cause of action pending orexisting immediately before the commencement of this Act by or against thecompany in relation to its undertaking may, as from such commencement, becontinued and enforced by or against the Central Government as it might havebeen enforced by or against the company if this Act had not been passed, andshall cease to be enforceable by or against the company, its surety orguarantor.
5.Provisions respectingofficers an employee of the company:(1) Every officer or other employee of the company(except a director or any managerial personnel specified in section 197A of theCompanies Act, 1956(1 of 1956), or any other person entitled to manage thewhole or a substantial part of the business of the company under a specialagreement) in the employment of the company immediately before the commencementof this Act shall, in so far as such employee is employed in connection withthe affairs of the undertaking of the company, become as from suchcommencement, an officer or other employee, as the case may be, of the CentralGovernment and shall hold his office by the same tenure, at the sameremuneration and upon the same terms and conditions and with the same rightsand privileges as to pension and gratuity and other matters as he would haveheld under the company if this Act had not been passed and shall continue to doso unless and until his employment in the Central Government is terminated oruntil his remuneration, terms and conditions are duly altered by the CentralGovernment:
Provided that if the alterationso made is not acceptable to any such officer or employee, his employment maybe terminated by the Central Government on payment to him by the CentralGovernment of compensation equivalent to three months’ remuneration in the caseof permanent employees and one month’s remuneration in the case of otheremployees:
Provided further that nothingcontained in this section shall apply to any officer or other employee who has, by notice in writing given to the CentralGovernment within thirty days next following the commencement of this Act,intimated his intention of not becoming an officer or other employee of theCentral Government.
(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 company shall not entitle any such officer or employee toany compensation under that Act or other law, and no such claim shall beentertained by any court, tribunal or other authority.
6.Directors and managing agentsnot entitled to compensation: Notwithstanding anything contained in any law for the time beingin force, no director or managerial personnel specified in section 197A of theCompanies Act, 1956(1 of 1956), or other person entitled to manage the whole ora substantial part of the business and affairs of the company under a specialagreement shall be entitled to any compensation against the company or theCentral Government for the loss of office or for the premature termination ofany contract of management entered into by him with the company.
7.Duty to deliver possession ofproperty acquired and documents relating thereto: (1) Where any property has vested in the CentralGovernment under section 3, every person in whose possession or custody orunder whose control the property may be, shall deliver the property to theCentral Government forthwith.
(2) Any person who, on thecommencement of this Act, has in his possession or under his control any books,documents or other papers relating to the company which has vested in theCentral Government under this Act and which belong to the company or would haveso belonged if the undertaking of the company had not been acquired shall beliable to account for the said books, documents and papers to the Central Governmentand shall deliver them up to the Central Government or to such person as theCentral Government may specify in this behalf.
(3) The Central Government maytake all necessary steps for securing possession of all properties which havetested in that Government under section 3.
8.Duty to furnish particulars: The company shall, withinthirty days from the commencement of this Act or within such further period asthe Central Government may allow in this behalf, furnish to that Government acomplete inventory of all the properties and assets (including particulars ofbook debts and investments and belongings) of the company at the commencementof this Act, all liabilities and obligations of the company subsisting at suchcommencement and also of all agreements entered into by the company and inforce on such commencement including agreements, whether express or implied,relating to leave, pension, gratuity and other terms of service of any officeror other employee of the company under which, by virtue of this Act, theCentral Government has, or will have, or may have, liabilities except suchagreements as that Government may exclude from the operation of this section,and for this purpose, the Central Government shall afford the company allreasonable facilities.
9.Right of Government todisclaim certain agreements: (1) Where it appears to the Central Government that the making ofany agreement under which the company has or will have or may have liabilitieswas not reasonably necessary for the purposes of the activities of the companyor has not been entered into in good faith, the Central Government may, withinone year from the commencement of this Act, apply to the Tribunal for relieffrom the agreement and the Tribunal, if satisfied after making such inquiry inthe matter as it thinks fit that the agreement was not reasonably necessary forthe purposes of the activities of the company or has not been entered into ingood faith, may make an order cancelling or varying the agreement on such termsas it may think fit to impose and the agreement shall thereupon have effectaccordingly.
(2) All the parties to theagreement which is sought to be cancelled or varied under this section shall bemade parties to the proceeding.
10.Compensation for acquisitionof undertaking: (1) TheCentral Government shall pay compensation to the company for the acquisition ofthe undertaking of the company and such compensation shall be determined inaccordance with the principles specified in the Schedule and in the manner hereinafterset out, that is to say, –
(a) wherethe amount of compensation can be fixed by agreement, it shall be determined inaccordance with such agreement;
(b) whereno such agreement can be reached, the Central Government shall refer the matterto the Tribunal within a period of three months from the date on which theCentral Government and the company fail to reach an agreement regarding theamount of compensation.
(2) Notwithstanding thatseparate valuations are calculated under the principles specified in theSchedule in respect of the several matters referred to therein, the amount ofcompensation to be given shall be deemed to be a single compensation to begiven for the undertaking as a whole.
(3) The amount of compensationdetermined in accordance with the foregoing provisions shall be paid to thecompany in cash within a period of six months from the date of such determination :
Provided that if compensationis not paid within the period aforesaid, the Central Government shall payinterest on the amount of compensation at the rate of four percent perannum from the date of expiry of the said period.
11.Constitutionof Tribunal: (1) TheCentral Government may for the purposes of this Act constitute a Tribunal whichshall consist of a single person who is, or has been, or is qualified to be, aJudge of a High Court or of the Supreme Court.
(2) The Tribunal may choose oneor more persons possessing special knowledge of any matter relating to any caseunder inquiry to assist the Tribunal in determining any question which has tobe decided by it under this Act.
(3) The Tribunal shall have thepowers of a civil court while trying a suit under the Code of Civil Procedure,1908(5 of 1908), in respect of the following matters, namely: –
(a) summoningand enforcing the attendance of any person and examining him on oath;
(b) requiringthe discovery and production of documents or other material objects producibleas evidence;
(c) receivingevidence on affidavits;
(d) issuingcommissions for the examination of witness or documents.
(4) The Tribunal shall havepower to regulate its own procedure and decide all matters within itscompetence, and may review any of its decisions in the event of there being amistake on the face of the record or correct any arithmetical or clerical errortherein but subject thereto, the decision of the Tribunal on any matter withinits jurisdiction shall be final and conclusive.
MANAGEMENT AND ADMINISTRATION OF THE UNDERTAKING
12.Formation of Governmentcompany for management of undertaking: For the efficient management and administration ofthe undertaking of the company vested in the Central Government by virtue ofthis Act, that Government may form a Government company in accordance with theprovisions of the Companies Act, 1956(1 of 1956) and on the formation of suchcompany, the undertaking together with all its properties, assets, liabilitiesand obligations specified in sub–section (1) of section 4 and such otherproperties, assets, liabilities and obligations as may hereafter be acquired orincurred for the purposes of the undertaking shall, by virtue of this Act,stand transferred to, and vest in, that Government company
13.Appointmentof administrators: (1) Pending the formation of the Government company referred toin section 12, the Central Government may appoint one, or more than one,administrator for the efficient management and administration of theundertaking.
(2) Such administrator oradministrators shall, in the management and administration of the undertaking,act in accordance with such directions, if any, as may be issued by the CentralGovernment in this behalf.
14.Penalties: (1) Any person who–
(a) having in his possession,custody or control any property forming part of the undertaking of the company,wrongfully withholds such property from the Central Government or wilfullyapplies it to purposes other than those expressed in or authorised by this Act;or
(b) wrongfullyobtains possession of any property forming part of the undertaking of thecompany which has vested in the Central Government under this Act; or
(c) wilfully withholds or failsto furnish to the Central Government or any person specified by that Governmentas required by sub–section (2) of section 7 any document which may be inhis possession, custody or control; or
(d) wilfullyfails to furnish any particulars required under section 8; or
(e) whenrequired to furnish any such particular, furnishes any particulars which arefalse and which he either knows or believes to be false or does not believe tobe true,
shall be punishable withimprisonment for a term which may extend to two years, or with fine, or withboth:
Provided that the court tryingany offence under clause (a) or clause (b) of this sub–section may, atthe time of convicting the accused person, order him to deliver up or refundwithin a time to be fixed by the court any property wrongfully withheld orwilfully misapplied or wrongfully obtained.
(2) No court shall takecognizance of an offence punishable under this section except with the previoussanction of the Central Government or of an officer authorised by thatGovernment in this behalf.
15.Protectionof action taken under this Act: No suit, prosecution or other legal proceeding shall lie againstthe Central Government or an administrator or an officer or other employeeserving in connection with the affairs of the undertaking for anything which isin good faith done or intended to be done under this Act.
16.Powerto make rules: (1) TheCentral Government may, by notification in the Official Gazette, make rules tocarry out the purposes of this Act.
(2) Every rule made by theCentral Government under this Act shall be laid as soon as may be after it is madebefore each House of Parliament while it is in session for a total period ofthirty days which may be comprised in one session or in two successivesessions, and if, before the expiry of the session in which it is so laid orthe session immediately following both Houses agree in making any modificationin the rule or both Houses agree that the rule should not be made, the ruleshall thereafter have effect only in such modified form or be of no effect, asthe case may be; so however that any such modification or annulment shall bewithout prejudice to the validity of anything previously done under that rule.
17.Repealand saving: (1) TheMetal Corporation of India (Acquisition of Undertaking) Ordinance, 1965(6), ishereby repealed.
(2) Notwithstanding suchrepeal, anything done or any action taken under the said Ordinance shall bedeemed to have been done or taken under this Act.
PRINCIPLES FOR DETERMINING COMPENSATION FOR ACQUISITION OF THEUNDERTAKING
Paragraph I: Thecompensation to be paid by the Central Government to the company in respect ofthe acquisition of the undertaking thereof shall be an amount equal to the sumtotal of the value of the properties and assets of the company on the date ofcommencement of this Act calculated in accordance with the provisions ofparagraph II less the sum total of the liabilities and obligations of thecompany as on the said date calculated in accordance with the provisions ofparagraph III.
Paragraph II: (a) Themarket value of any land or buildings;
(b) theactual cost incurred by the company in acquiring any plant, machinery or otherequipment which has not been worked or used and is in good working conditionand the written–down value (determined in accordance with the provisionsof the Income–tax Act, 1961(43 of 1961)) of the other plant, machineryor equipment;
(c) themarket value of any shares, securities or other investments held by thecompany;
(d) the total amount of thepremiums paid by the company in respect of all leasehold properties reduced inthe case of each such premium by an amount which bears to such premium the sameproportion as the expired term of the lease in respect of which such premiumshall have been paid bears to the total term of the lease;
(e) theamount of debts due to the company, whether secured or unsecured, to the extentto which they are reasonably considered to be recoverable;
(f) theamount of cash held by the company, whether in deposit with a bank orotherwise;
(g) thevalue of all tangible assets and properties other than those falling within anyof the preceding clauses.
Paragraph III: The totalamount of liabilities and obligations incurred by the company in connectionwith the formation, management and administration of the undertaking andsubsisting immediately before the commencement of this Act.