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SMITH, STAINSTREET AND COMPANY LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT

Ministry of Law and Justice

Act nº 41 of 1977


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Schedules
  • Act nº 41 of 1977

Preamble

THE SMITH, STANISTREET AND COMPANY LIMITED

(ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1977

[Act, No. 41 OF 1977]

[17th December, 1977.]

PREAMBLE

An Act to provide for, in the public interest, the acquisition and transfer of the right, title and interest of the undertakings of Messrs.Smith, Stanistreet and Company Limited, Calcutta and for matters connected therewith or incidental thereto.

WHEREAS MESSRS. Smith, stanistreet and Company Limited, Calcutta were engaged in the manufacture and distribution of pharmaceuticals and chemicals which are essential to meet the needs of the public;AND WHEREAS the management of the undertakings of the Company was in a manner highly detrimental to the public interest and had suffered heavy losses;

AND WHEREAS the management of the Company was taken over by the Central Government under section 18A of the Industries (Development and Regulation) Act, 1951 (65 of 1951.);

AND WHEREAS for the purpose of reconstructing and rehabilitating the undertakings of the Company so as to subserve the interest of the general public by the augmentation and distribution of the defence varieties of essential pharmaceuticals and chemicals produced by the said Company, and to ensure the continued supply thereof, it is necessary to acquire the right, title and interest of the undertakings of Messrs.Smith, Stanistreet and Company Limited, Calcutta;

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

Chapter I

Section 1. Short title and commencement

(1) This Act may be called the Smith, Stanistreet and Company Limited (Acquisition and Transfer of Undertakings) Act, 1977.

(2) It shall be deemed to have come into force on the 1st day of October, 1977.

Section 2. Definitions

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

(a) "appointed day" means the 1st day of October, 1977;

(b) "Company" means the Smith, Stanistreet and Any law corresponding Limited, being a company as defined in the Companies Act, 1956 (1 of 1956.) and having its registered office at 18, Convent Road, Calcutta-700014;

(c) "Commissioner" means the Commissioner of Payments appointment under section 14;

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

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

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

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

Chapter II

Section 3. Transfer to and vesting in 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, be transferred to, and shall vest in, the Central Government.

Section 4. General effect of vesting

(1) The undertakings of the Company shall be deemed to include all assets, rights, lease-holds, powers, authorities and privileges, and local property, movable and immovable, including lands, buildings, workshops, stores, instruments, machinery and equipment, cash balances, cash on hand, reserve funds, investments, book debts and 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.

(2) All properties 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 it, and any attachment, injunction or decree or order of any court restricting the use of such property in any manner or appointing any receiver in respect of the whole or any part of such property shall be deemed to have been withdrawn.

(3) Every mortgage 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, an intimation to the Commissioner of such mortgage, charge, lien or other interest.

(4) For the removal of doubts, it is hereby declared that the mortgage of any property referred to in sub-section (3) 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 amount specified in section 7, and also out of the monies determined under section 8, but, no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the Central Government.

(5) If on the appointed day, any suit, appeal or other proceeding by or against the Company, of whatever nature in relation to any property which has vested in the Central Government, under section 3, 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 Company.

Section 5. Central Government or Government company not to be liable for prior liabilities

(1) Every liability 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, where the undertakings of the Company are directed, under section 6, to vest in a Government company, against that Government company.

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

(a) save as otherwise expressly provided in this Act, no liability 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, where the undertakings of the Company are directed, under section 6, to vest in a Government company, against that Government company;

(b) no award, decree or order of any court, tribunal or other authority in relation to the undertakings of the Company, passed after the appointed day, in respect of any matter, claim or dispute which arose before that day, shall be enforceable against the Central Government, or, where the undertakings of the Company are directed, under section 6, 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, where the undertakings of the Company are directed, under section 6, to vest in a Government company, against that Government company.

Section 6. Power of Central Government to direct vesting of the undertakings of the Company in a Government company

(1) Notwithstanding anything contained in sections 3 and 4, 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 undertakings of the Company and the right, title and interest of the Company in relation to its undertakings which have vested in that Government under section 3, shall, instead of continuing to vest in that 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 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 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 Government company.

Chapter III

Section 7. 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, and amount of three crores and seventy-four thousand rupees.

Section 8. 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 ten thousand rupees per annum for the period commencing on the date on which the management of the undertakings of the Company was taken over by the Central Government and ending on the appointed day.

(2) The amount specified in section 7 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 the payment of the amount is made by the Central Government to the Commissioner.

(3) The amount 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 7.

(3) For the removal of doubts, it is hereby declared that the liabilities of the Company in relation to its undertakings which have vested in the Central Government under section 3, shall be discharged from the amount referred to in section 7, and also from the amounts determined under sub-sections (1) and (2), in accordance with the rights and interests of the creditors of the Company.

Chapter IV

Section 9. Management, etc., of the undertakings of the Company

(1) 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 in the Central Government under section 3, shall, --

(a) where a direction has been issued by the Central Government under sub-section (1) of section 6, vest in the Government company specified in such direction; or(b) where no such direction has been issued by the Central Government, vest in one or more Custodians appointed by the Central Government under sub-section (2),and thereupon the Government company so specified or the Custodian so appointed, as the case may be, 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 Central 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 issued by it under sub-section (1) of section 6.

Section 10. Duty of persons in charge of management of the undertakings of the Company to deliver all assets, etc.

(1) On the vesting of the management of the undertakings of the Company in a Government company or on the appointment of a Custodian, all persons in charge of the management of the undertakings of the Company immediately before such vesting or appointment, shall be bound to deliver to the Government company or the Custodian, as the case may be, all assets, books of account, registers or other documents in their custody relating to the undertakings of the Company.

(2) The Central Government may issue such directions as it may deem desirable in the circumstances of the case to the Government company or the Custodian as to its or his powers and duties and the Government company or Custodian may also, if it or he so desires, apply to the Central Government at any time for instruction as to the manner in which the management of the undertakings of the Company shall be conducted by it or in relation to any other matter arising in the course of such management.

(3) The Custodian shall receive from the funds of the undertakings of the Company such remuneration as the Central Government may fix and shall hold office during the pleasure of the Government.