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HINDUSTAN TRACTORS LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT

Ministry of Law and Justice

Act nº 13 of 1978


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Schedules
  • Act nº 13 of 1978

Preamble

THE HINDUSTAN TRACTORS LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1978

[Act, No. 13 of 1978]

[31st March, 1978]

PREAMBLE

An Act to provide for the acquisition and transfer of the undertakings of Hindustan Tractors Limited, Vishwamitri, Vadodara, for the purpose of ensuring the continuity of production of goods which are vital to meet the needs of the general public and for matters connected therewith or incidental thereto.

WHEREAS Hindustan Tractors Limited, Vishwamitri, Vadodara, are engaged in the manufacture and distribution of tractors which are vital to meet the needs of the general public;

AND whereas the management of the undertakings of Hindustan Tractors Limited was conducted in a manner highly detrimental to the public interest and had suffered heavy losses;

AND whereas the management of the undertakings of Hindustan Tractors Limited was taken over by the Central Government under section 18A of the Industries (Development and Regulation) Act, 1951;

AND whereas it is necessary to acquire the undertakings of Hindustan Tractors Limited to ensure the continuance of the production of goods which are vital to meet the needs of the general public.

BE it enacted by Parliament in the Twenty-ninth Year of the Republic of India as follows :

Chapter I

Section 1. Short title and commencement

(1) This Act may be called the Hindustan Tractors Limited (Acquisition and Transfer of Undertakings) Act, 1978.

(2) It shall into force on the 1st day of April, 1978.

Section 2. Definition

In this Act, unless the context otherwise requires,

(a) "appointed day" means the 1st day of April, 1978;

(b) "Authorised Controller" means the Gujarat Agro Industries Corporation Limited, Ahmedabad, which took over the management of the undertakings of the Company by virtue of the Order of the Government of India in the Ministry of Industrial Development No. S.O. 137 (E)/18A/INDRA/73, dated the 12th March, 1973, made under clause (b) of sub-section (1) of section 18 A of the Industries (Development and Regulation) Act, 1951;

(c) 'bank' means

(i) The State Bank of India constituted under the State Bank of India Act, 1955;

(ii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959;

(iii) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970;

(iv) any other bank, being a scheduled bank as defined in clause (e) of section 2 of the Reserve Bank of India Act, 1934;

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

(e) "Company" means Hindustan Tractors Limited, being a company as defined in the Companies Act, 1956, and having its registered office at Vishwamitri, Vadodara;

(f) "Custodian" means the Custodian appointed under sub-section (3) of section 10 to take over, a carry on, the management of the undertakings of the Company;

(g) "date of taking over" means, the date on which the management of the undertakings of the Company was taken over by the Authorised Controller;

(h) "Government company" has the meaning assigned to it by section 617 of the Companies Act, 1956;

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

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

(k) "specified date" means such date as the Central Government may, for the purpose of any provision of this Act, by notification, specify and different dates may be specified for different provisions of this Act;

(l) "State Government" means the State Government of Gujarat;

(m) words and expressions used herein and not defined but defined in the Companies Act, 1956, shall have the meanings, respectively, assigned to them in that Act.

Chapter II

Section 3. Transfer to and vesting in the Central Government of the undertakings of the company

On the appointed day, the undertakings of the Company, and the right, title and interest of the Company in relation to its undertakings, shall, by virtue of this Act, stand transfered to, and shall vest in the Central Government.

Section 4. General effect of vesting

(1) The undertakings of the Company referred to in section 3 shall be deemed to include all assets, rights, lease-holds, powers, authorities and privileges, and all property, movable and immovable, including lands, buildings, workshops, stores, instruments, machinery and equipment, bank balances, cash balances, cash on hand, reserve funds, investments and book debts and all other rights and interests in, or arising out of, such property as were immediately before the appointed day in the ownership, possession, power or control of the Company, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto and shall be deemed to include the liabilities and obligations specified in sub-section (2) of section 5.

(2) All property as 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 encumbrances affecting them, and any attachment, injunction, decree or order of any Court, Tribunal, officer or other authority restricting the use of such property in any manner shall be deemed to have been withdrawn.

(3) Where any licence or other instrument in relation to the undertakings of the Company had been granted at any time before the appointed day, to the Company by the Central Government, a State Government or any other authority, the Central Government, the State Government of Gujarat or, as the case may be, the Government company in which the right, title and interest of the Company in relation to its undertakings have vested under section 7, shall on and from the appointed day, be deemed to be substituted in such licence or other instrument in place of the Company referred to therein as if such licence or other instrument had been granted to it and shall hold such licence or the undertakings or any part thereof specified in such other instrument for the remainder of the period for which the Company would have held such licence or undertakings or any part thereof under such other instrument.

(4) Every mortgagee of any property which has vested under this Act in the Central Government and every person holding any charge, lien or other interest in, or in relation to, any such property, shall give, within such time and in such manner as may be prescribed, in intimation to the Commissioner of such mortgage, charge, lien or other interest.

(5) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in sub-section (4) or any other person holding any charge, lien or other interest in, or in relation to, any such property shall be entitled to claim, in accordance with his rights and interests, payment of the mortgage money or other dues, in whole or in part out of the amounts specified in section 8, and also out of the monies determined under section 9, but no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the Central Government.

(6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any matter specified in sub-section (2) of section 5 in respect of the undertakings of the Company instituted or preferred by or against the Company is pending, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertakings of the Company or of anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced by or against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, that Government company.

Section 5. Company to be liable for certain prior liabilities

(1) Every liability, other than the liability specified in sub-section (2), of the Company in respect of any period prior to the appointed day, shall be the liability of the Company and shall be enforceable against it and not against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company.

(2) Any liability arising in respect of-

(a) loans advanced by the Central Government or the State Government, or both, to the Company (together with interest due thereon), on or after the date of taking over;

(b) loans advanced by a bank to the Company (together with interest due thereon), on or after the date of taking over;1[but excluding loans advanced, on or after such date, by a bank to the Company to the extent such loans have been utilised by the Company for the re-payment of, or the payment of interest on, secured loans advanced to the Company by a bank at any time before such date.]

(c) loans advanced by the Industrial Reconstruction Corporation of India Limited to the Company (together with interest due therein) on or after the date of taking over;

(d) wages, salaries and other dues of employees of the Company and the dues on account of any deduction made from wages and salaries and other dues of employees, relating to any period commencing on and from the date of taking over;

(e) any debt incurred by the Company during any period commencing on and from the date of taking over, not being a debt falling under clause (a), clause (b), clause (c) or clause (d) or specified in Category I of the Schedule,

shall, on and from the appointed day, be the liability of the Central Government, or the State Government, or the Government company aforesaid and shall be discharged by the Central Government or the State Government or the Government company aforesaid as and when repayment of such loans becomes due or as and when such wages, salaries and other dues and debt become due and payable.

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

(a) save as otherwise expressly provided in this section or in any other provision of this Act, no liability, including any liability arising out of any guarantee given by the State Government in respect of any loan or advance given to the Company but not including the liability specified in sub-section (2), of the Company in relation to its undertakings in respect of any period prior to the appointed day, shall be enforceable against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company;

(b) no award, decree or order of any Court, Tribunal, officer or other authority in relation to the undertakings of the Company, passed after the appointed day, in respect of any matter, claim or dispute, not being a matter, claim or dispute, in relation to any matter referred to in sub-section (2), which arose before that day, shall be enforceable against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company;

(c) no liability incurred by the Company before the appointed day, for the contravention of any provision of law for the time being in force, shall be enforceable against the Central Government, or the State Government, or where the undertakings of the Company are directed under section 7, to vest in a Government company, against that Government company.

1. Inserted and deemed always to have been so inserted by Act 50 of 1980, Section 2.


Section 6. Vesting of the undertakings of the Company in the State Government of Gujarat

(1) Notwithstanding anything contained in sections 3 and 4, the Central Government shall, as soon as may be, after the commencement of this Act, direct, by notification, that the undertakings of the Company, and the right, title and interest of the Company in relation to its undertakings, which have vested in the Central Government under section 3 and such of the liabilities of the Company as are specified in sub-section (2) of section 5, shall, instead of continuing to vest in the Central Government, vest in the State Government of Gujarat either on the date of the notification or on such earlier or later date (not being a date earlier than the appointed day) as may be specified in the notification.

(2) Where the right, title and interest of the Company in relation to its undertakings and the liabilities of the Company specified in sub-section (2) of sections vest in the State Government under sub-section (1), the State Government shall, on and from the date of such vesting, be deemed to have become the owner in relation to such undertakings and all the rights and liabilities of the Central Government in relation to such undertakings shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively, of the State Government.

Section 7. Power of State Government to direct vesting of the undertakings of the Company in a Government Company

(1) Notwithstanding anything contained in sections 3, 4 and 6, the State Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose, direct, by notification, that the undertakings of the Company, and the right, title and interest of the Company in relation to its undertakings and such of the liabilities of the Company as are specified in sub-section (2) of section 5, which have vested in the Central Government under section 3 and thereafter in the State Government under section 6 shall, instead of continuing to vest in the State Government, vest in the Government company either on the date of the notification or on such earlier or later date (not being a date earlier than the appointed day) as may be specified in the notification.

(2) Where the right, title and interest, and the liabilities specified in sub-section (2) of section 5, of the Company in relation to its undertakings vest in a Government company under sub-section (1), the Government company shall, on and from the date of such vesting, be deemed to have become the owner in relation to such undertakings, and all the rights and liabilities of the Central Government or the State Government in relation to such underkings shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively, of the Government company.

Chapter III

Section 8. Payment of amount

For the transfer to, and vesting in, the Central Government, under section 3, of the undertakings of the Company and the right, title and interest of the Company in relation to its undertakings, there shall be given by the Central Government to the Company, in cash, and in the manner specified in Chapter VI, an amount of rupees one hundred and fifty lakhs.

Section 9. Payment of further amount

(1) For the deprivation of the Company of the management of its undertakings, there shall be given to the Company by the Central Government an amount calculated at the rate of rupees fifty thousand per annum for the period commencing on the date of taking over and ending on the appointed day.

(2) The amount specified in section 8 and the amount determined under sub-section (1) shall carry simple interest at the rate of four per cent per annum for the period commencing on the appointed day and ending on the date on which payment of such amounts is made by the Central Government to the Commissioner.

(3) The amounts determined in accordance with the provisions of sub-sections (1) and (2) shall be given by the Central Government to the Company in addition to the amount specified in section 8.

Chapter IV

Section 10. Management, etc. of the undertakings of the Company

(1) The State Government in which the undertakings of the Company and the right, title and interest of the Company in relation to its undertakings vested under section 6 shall be entitled to exercise all such powers and do all such things as the Company is authorised to exercise and do in relation to its undertakings.

(2) The general superintendence, direction, control and management of the affairs and business of the undertakings of the Company, the right, title and interest in relation to which have vested under section 3 in the Central Government and, under section 6, in the State Government shall,

(a) where a direction has been made by the State Government under sub-section (1) of section 7, vest in the Government company specified in such direction; or

(b) where no such direction has been made by the State Government, vest in one or more Custodians appointed under sub-section (3),

and thereupon the Government company so specified or the Custodian so appointed shall be entitled to exercise all such powers and do all such things as the Company is authorised to exercise and do in relation to its undertakings.

(3) The State Government may appoint one or more individuals or a Government company as the Custodian of the undertakings of the Company in relation to which no direction has been made by it under sub-section (1) of section 7.