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NATIONAL COMPANY LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1980

Ministry of Law and Justice

Act nº 42 of 1980


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Schedules
  • Act nº 42 of 1980

Preamble

THE NATIONAL COMPANY LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1980

[Act, No. 42 of 1980]

[19th July, 1980]

PREAMBLE

An Act to provide for the acquisition and transfer of the undertakings of Messrs. National Company Limited with a view to securing the proper management of such undertakings so as to subserve the interests of the general public by ensuring the continued manufacture, production and distribution of articles made of jute, which are essential to the needs of the economy of the country and for matters connected therewith or incidental thereto.

WHEREAS Messrs. National Company Limited had been engaged in the manufacture and production of articles mentioned in the First Schedule to the Industries (Development and Regulation) Act, 1951, namely, textiles made wholly or in part of jute;

AND WHEREAS the management of the undertakings of Messrs. National Company Limited was taken over by the Central Government under section 18AA of the Industries (Development and Regulation) Act, 1951;

AND WHEREAS it is necessary to acquire the undertakings of Messrs. National Company Limited to ensure that the interests of the general public are served by the continuance by the undertakings of the Company, of the manufacture, production and distribution of the aforesaid articles, which are essential to the needs of the economy of the country;

BE it enacted by Parliament in the Thirty-first Year of the Republic of India as follows :--

Chapter I

Section 1. Short title and commencement

(1) This Act may be called the National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980.

(2) The provisions of sections 29 and 30 shall come into force at once and the remaining provisions of this Act shall be deemed to have come into force on the 27th day of April, 1980.

Section 2. Definitions

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

(a) "appointed day" means the 27th day of April, 1980.

(b) "Commissioner" means the Commissioner of Payments appointed under section 15;

(c) "Company" means Messrs. National Company Limited, a company within the meaning of the Companies Act, 1956, and having its registered office at 18A, Brabourne Road Calcutta-700001, in the State of West Bengal;

(d) "existing Government company" means a Government company which is carrying on business on the appointed day;

(e) "new Government company" means a Government company formed and registered on or after the appointed day;

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

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

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

(i) words and expressions used herein and not defined but defined in the Companies Act, 1956, 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 transferred to, and 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, leaseholds, powers, authorities and privileges, and all property, movable and immovable, including lands, buildings, workshops, stores, instruments, machinery and equipment, cash balances, cash on hand, reserve funds investments, 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 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 incumbrances affecting them, and any attachment, injunction, decree or order of any Court or other authority restricting the use of such properties in any manner or appointing any receiver in respect of the whole or any part of such properties shall be deemed to have been withdrawn.

(3) 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, 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 mortgagee 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 amounts specified in section 8 and also out of the amounts 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.

(5) Any licence or other instrument granted to the Company in relation to any undertaking which has vested in the Central Government under section 3 at any time before the appointed day and in force immediately before the appointed day shall continue to be in force on and after such day in accordance with its tenor in relation to and for the purposes of such undertaking, and on and from the date of vesting of such undertaking, under section 5, in an existing Government company, or under section 6, in a new Government company, the existing, or new, Government company, as the case may be, shall be deemed to be substituted in such licence or other instrument as if such licence or other instrument had been granted to such existing, or new, Government company and such existing, or new, Government company shall hold it for the remainder of the period for which the Company would have held it under the terms thereof.

(6) If, on the appointed day, any suit, appeal or other proceeding, of whatever nature, in relation to any property which has vested in the Central Government under section 3, 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 where the undertakings of the Company are directed under section 5, to vest in an existing Government company or become transferred by virtue of the provisions of section 6 to a new Government company, by or against such Government company.

Section 5. Power of Central Government to direct vesting of the undertakings of the Company in an existing Government company

(1) Notwithstanding anything contained in sections 3 and 4, and subject to the provisions of section 6, the Central Government may, if it is satisfied that an existing 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 the Central Government under section 3, shall, instead of continuing to vest in the Central Government, vest in that existing Government company either on the date of publication 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, under sub-section (1), in an existing Government company that Government company shall, on and from the date of such vesting be deemed to have become, and until the transfer of the undertakings by virtue of the provisions of section 6, to a new Government company, be deemed to be, the owner in relation to such undertakings and 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, and until the date of such transfer, be deemed to be, the rights and liabilities, respectively, of that existing Government company.

Section 6. Transfer of undertakings of the Company from an existing Government company to a new Government company

(1) Notwithstanding anything contained in sections 3 and 4, where the undertakings of the Company have been directed, under sub-section (1) of section 5, to vest in an existing Government company, the Central Government may, if it is satisfied that a new Government company is willing to comply, or has complied with such terms and conditions as that Government may think fit to impose, declare, by notification, that the undertakings of the Company be transferred to that new Government company; and on the issue of such declaration, the right, title and interest of the Company in relation to its undertakings, which had been directed under sub-section (1) of section 5 to vest in an existing Government company, shall, instead of continuing to vest in that existing Government company vest in that new Government company with effect from the date on which such declaration is made.

(2) Where the right, title and interest of the existing Government company in relation to the undertakings of the Company vest under sub-section (1) in a new Government company, that new Government company shall, on and from the date of such vesting, be deemed to have become the owner in relation to such undertakings and the rights and liabilities of the existing Government company 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 that new Government company.

Section 7. Company to be liable for certain 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 vest in an existing, or a new, Government company, against such 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 vest in an existing, or a new, Government company, against such 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 vest in an existing, or a new, Government company, against such 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 vest in an existing, or a new, Government company, against such Government company.

Chapter III

Section 8. Payment of amount

(1) 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 such undertakings, there shall be given be the Central Government to the Company in cash and in the manner specified in Chapter VI, an amount of rupees ten crores and four lakhs.

(2) For the (sic)oval of doubts, it is hereby declared that the liabilities of the Company, in relation to its undertakings, shall be met, in accordance with the rights and interests of the creditors of the Company, from the amount due to the Company under sub-section (1).

Section 9. Payment of further amount

(1) For the deprivation of the Company of the management of the undertakings owned by it, there shall be given, by the Central Government, to the Company, in addition to the amount specified in section 8, an amount computed 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 in pursuance of the order made by the Central Government under section 18AA of the Industries (Development and Regulation) Act, 1951, and ending on the appointed day.

(2) The amount specified in section 8, and the amount computed in accordance with the provisions of 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 amount 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 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 general superintendence, direction, control and management of the affairs and business of the undertakings owned by 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 made by the Central Government under sub-section (1) of section 5, vest, on and from the date, specified in such direction, in the existing Government company specified therein; or

(b) where a declaration has been made under sub-section (1) of section 6, vest, on and from the date of such declaration, in the new Government company specified therein; or

(c) where no direction referred to in clause (a) or declaration referred to in clause (b) has been made, vest, on and from the appointed day, in one or more Custodians appointed by the Central Government under sub-section (2).

and thereupon the existing, or new, Government company or the Custodian or Custodians so appointed, as the case may be, shall be entitled to exercise, to the exclusion of all other persons, all such powers and do all such things as the company is authorised to exercise and do in relation to the undertakings owned by it.

(2) The Central Government may appoint one or more individuals or a Government company as the Custodian or Custodians of the undertakings of the Company in relation to which no direction has been made by it under sub-section (1) of section 5 or no declaration has been made by it under sub-section (1) of section 6, and the Custodian or Custodians so appointed shall receive, from the funds of the undertakings, such remuneration as may be specified by the Central Government.

(3) The Custodian or Custodians of the undertakings of the Company shall maintain an account of the undertakings of the Company in such form and manner and under such conditions as may be prescribed, and the provisions of the Companies Act, 1956, shall apply to the audit of the accounts so maintained as they apply to the audit of the accounts of a company.