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ESSO (ACQUISITION OF UNDERTAKINGS IN INDIA) ACT

Ministry of Law and Justice

Act nº 4 of 1974


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Schedules
  • Act nº 4 of 1974

Preamble

ESSO (ACQUISITION OF UNDERTAKINGS IN INDIA) Act, 1974

[Act, No. 4 of 1974]

[13th March, 1974]

PREAMBLE

An Act to provide for the acquisition and transfer of the right, title and interest of Esso Eastern Inc. in relation to its undertakings in India with a view to ensuring co-ordinated distribution and utilisation of petroleum products distributed and marketed in India by Esso Eastern Inc. and for matters connected therewith or incidental thereto.

Whereas Esso Eastern Inc. a foreign company, in carrying on, in India, the business of distributing and marketing petroleum products manufactured by Esso Standard Refining Company of India Limited and Lube India Limited, and has, for that purpose, established places of business at Bombay and other places in India;

And whereas it is expedient in the public interest that the undertakings, in India, of Esso Eastern Inc. should be acquired in order to ensure that the ownership and control of the petroleum products distributed and marketed in India by the said company are vested in the State and thereby so distributed as best to subserve the common good;

Be it enacted by Parliament in the Twenty-fifth Year of the Republic of India as follows :--

Chapter I

Section 1. Short title

This Act may be called the Esso (Acquisition of Undertakings in India) Act, 1974.

Section 2. Definitions

In this Act, unless the context otherwise requires,--

(a) "appointed day" means the date of commencement of this Act;

(b) "Esso" means Esso Eastern Inc., a foreign company within the meaning of section 591 of the Companies Act, 1956, incorporated under the laws of the State of Delaware in the United States of America, and having its principal office at 2401 South Gessnen City of Housten, State of Texas, in the United States of America;

(c) "Esso Standard" means Esso Standard Refining Company of India Limited, being a company as defined in the Companies Act 1956, and having its registered office at Administration Building, Mahul, Bombay 400074;

(d) "Government company" means a company as defined in section 617 of the Companies Act, 1956;

(e) "Lube India" means Lube India Limited, being a company as defined in the Companies Act, 1956, and having its registered office at Administration Building, Corridor Road, Mahul, Bombay 400074;

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

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

Chapter II

Section 3. Transfer and vesting in the Central Government of the undertakings of Esso in India

On the appointed day, the right, title and interest of Esso, in relation to its undertakings in India, shall stand transferred to, and shall vest in, the Central Government.

Section 4. General effect of vesting

(1) The undertakings referred to in Section 3 shall be deemed, save as otherwise provided in sub-section (2), to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments and all other rights and interests in, or arising out of, such property as were, immediately before the appointed day, in the ownership, possession, power or control of Esso, in relation to its undertakings in India, and all books of account, registers, records and all other documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of Esso in relation to its undertakings in India.

(2) The undertakings referred to in sub-section (1) shall not include the following, namely:--

(a) any share held by Esso in the equity capital of Esso Standard or Lube India;

(b) any trade mark, and any right of Esso to use any trade mark in India, specified in the First Schedule;

(c) all patents and designs registered in India in the name of Esso.

(3) Unless otherwise expressly provided by this Act, all deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature in relation to the undertakings of Esso in India, subsisting or having effect immediately before the appointed day, and to which Esso is a party or which are in favour of Esso shall be of as full force and effect against or in favour of the Central Government and may be enforced or acted upon as fully and effectually as if in the place of Esso the Central Government had been a party thereto or as if they had been issued in favour of the Central Government.

(4) If, on the appointed day, any suit, appeal or other proceeding of whatever nature, in relation to the undertakings of Esso in India, which have been transferred to and vested in the Central Government under section 3, is pending by or against Esso, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertakings of Esso or of anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the Central Government, or, where any undertaking is directed under section 7 to vest in any Government company,1[by or against the concerned Government company].

1. Substituted for words "against the concerned Government company" by Repealing and Amending Act (38 of 1978), Section 3 IInd Schedule (26-11-78).


Section 5. Central Government to be lessee or tenant under certain circumstances

(1) Where any property is held in India by Esso under any lease or under any right of tenancy the Central Government shall, on and from the appointed day, be deemed to have become the lessee or tenant, as the case may be, in respect of such property as if the lease or tenancy in relation to such property had been granted to the Central Government, and thereupon all the rights under such lease or tenancy shall be deemed to have been transferred to and vested in the Central Government.

(2) On the expiry of the term of any lease or tenancy referred to in sub-section (1), such lease or tenancy shall, if so desired by the Central Government be renewed on the same terms and conditions on which the lease or tenancy was held by Esso immediately before the appointed day.

Section 6. Removal of doubts

(1) For the removal of doubts, it is hereby declared that the provisions of sections 3, 4 and 5 shall apply to the extent to which any property appertains to the business carried on by Esso in India; and to the rights and powers acquired, and to debts, liabilities and obligations incurred and to contracts, agreements and other instruments made, by Esso in India, and to legal proceedings relating to those matters pending in any court or tribunal in India.

(2) If any question arises as to whether any property appertains, on the appointed day, to any business of Esso in India, or whether any rights, powers liabilities or obligations were acquired or incurred or any contract, agreement or other instrument was made by Esso for the purposes of its business in India or whether any documents relate to those purposes, the question shall be referred to the Central Government which shall, after giving an opportunity of being heard to the persons Interested in the matter, decide it in such manner as it may think fit.

Section 7. Power of Central Government to direct vesting of the undertakings of Esso in a Government company

(1) Notwithstanding anything contained in sections 3, 4 and 5, the Central 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 right, title and interest and the liabilities of Esso in relation to any undertaking in India shall, instead of continuing to vest in the Central 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 of Esso in relation to its undertakings in India 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, tenant or lessee, as the case may be, 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 right and liabilities, respectively, of the Government company.

(3) The provisions of sub-section (2) of section 5 shall apply to a lease or tenancy, which vests in a Government company, as they apply to a lease or tenancy vested in the Central Government and reference therein to the "Central Government" shall be construed as a reference to the Government company.

Section 8. Payment of amount

(1) For the transfer and vesting in the Central Government, under sections 3 and 4, of the right, title and interest of Esso in relation to its undertakings in India, and for the vesting in the Central Government, under section 5, of the rights specified therein, there shall be paid by the Central Government to Esso an amount of rupees two croresand fifty-nine lakhs in such instalments and in such manner as is specified in the Second Schedule.

(2) The amount specified in sub-section (1), shall carry interest, free of income-tax, at the rate of six and a half per cent. per annum from the appointed day till the date of payment in the manner specified in the Second Schedule.

Chapter III

Section 9. Transfer of service of existing employees of Esso

(1) Every whole time officer or other employee of Esso who was, immediately before the appointed day, employed by Esso in connection with its undertakings in India, and every whole-time officer or other employee of Esso who was immediately before the appointed day, temporarily holding any assignment outside India, shall, on the appointed day, temporarily holding any assignment outside India, shall, on the appointed day, become an officer or other employee, as the case may be of the Central Government or, as the case may be the Government company in which the right, title and interest of Esso in relation to its undertakings in India have vested under this Act and shall hold office or service under the Central Government or the Government company, as the case may be, on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so unless and until his employment under the Central Government or the Government company, as the case may be, is duly terminated or until his remuneration and conditions of service are duly altered by the Central Government or the Government company, as the case may be.

(2) If any question arises as to whether any person was a whole-time officer or other employee or as to whether any officer or other employee was employed wholly or mainly in connection with the undertakings of Esso in India immediately before the appointed day, or whether any whole-time officer or other employee of Esso was temporarily holding any assignment outside India, the question shall be referred, within a period of two years from the appointed day and not thereafter, to the Central Government which shall, after giving an opportunity of being heard to the person concerned in the matter, decide it in such manner as it thinks fit and such decision shall be final.

(3) Notwithstanding anything contained in the Industrial Disputes Act, 1947, the Payment of Gratuity Act, 1972, or in any other law for the time being in force, the transfer of the services of any officer or other employee under sub-section (1) shall not entitle any such officer or other employee to any compensation or gratuity under those Acts or such other law, and no such claim shall be entertained by any court, tribunal or other authority.

Section 10. Provident, superannuation, welfare Fund, etc.

(1) Where a provident, superannuation, welfare or other fund has been established by Esso for the benefit of the persons employed by it in connection with its undertakings in India, the moneys relatable to the employees, whose services are transferred by or under this Act to the Central Government or a Government company, shall, out of the moneys standing, on the appointed day, to the credit of such provident, superannuation, welfare or other fund, stand transferred to and vest in the Central Government or the Government company, as the case may be, free from any trust that may have been constituted by Esso in respect thereof.

(2) The moneys which stand transferred, under sub-section (1) to the Central Government or a Government company shall be dealt with by the Central Government or that company, as the case may be, in such manner as may be prescribed.

(3) The Government company in which the undertakings of Esso in India are directed to be vested shall, as soon as may be after the date of vesting, constitute, in respect of the moneys and other assets which are transferred to and vested in it under this section, one or more trusts having objects as similar to the objects of the existing trusts as in the circumstances may be practicable, so, however, that the rights and interests of the beneficiaries of the trust referred to in sub-section (1) are not, in any way, prejudiced or diminished.

(4) Where all the moneys and other assets belonging to an existing trust are transferred to and vested in the Central Government or a Government company under this section, the trustees of such trust shall, as from the date of such vesting, stand discharged from the trust except as respects things done or omitted to be done before the date of such vesting.

Chapter IV