CENTRAL
INDIA SPINNING, WEAVING AND MANUFACTURING COMPANY LIMITED, THE EMPRESS MILLS,
NAGPUR (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT, 1986 CENTRAL INDIA SPINNING,
WEAVING AND MANUFACTURING COMPANY LIMITED, THE EMPRESS MILLS, NAGPUR
(ACQUISITION AND TRANSFER OF UNDERTAKING) ACT, 1986 [ Act No. 46 of 1986] [26th December, 1986] An Act to provide for
acquisition and transfer of undertaking of the Central India Spinning, Weaving
and Manufacturing Company Limited, with a view to securing the proper
management of such undertaking so as to sub-serve the interest of the general
public by ensuring the continued manufacture, production and distribution of
textile and paper products which are essential to the needs of the economy of
the country and for matters connected therewith or incidental thereto. WHEREAS, the Central India Spinning, Weaving and Manufacturing
Company Limited, being an existing company as defined in clause (ii) of
sub-section (1) of section 3 of the Companies Act, 1956, had been engaged in
the manufacture and production of yarn, cloth and paper through its undertaking
which was composite textile mill and paper manufacturing unit, styled as the
Central India Spinning, Weaving and Manufacturing Company Limited, "The
Empress Mills", Nagpur; AND WHEREAS, in Petition No. 183 of 1986 filed by the Company for
voluntary winding up, the High Court of Bombay had made an order for
appointment of the Provisional Liquidator and the proceedings for its
liquidation were pending; AND WHEREAS, the company had declared lock-out throwing about more
than 6,000 workers out of employment and the undertaking has not been
functioning since 3rd May, 1986; AND WHEREAS, it was expedient to acquire the undertaking of the
said company to ensure that the interest of the general public and of the
employees of the undertaking were served by the continuance, by the undertaking
of the said company, of the manufacture, production and distribution of textile
and paper products which are essential to the needs of the country and to
provide for matters connected therewith or incidental thereto; AND WHEREAS, such acquisition is for giving effect to the policy
of the State towards securing the principle specified in clause (b) of article
39 of the Constitution; AND WHEREAS, both Houses of the State Legislature were not in
session; AND WHEREAS, the Governor of Maharashtra was satisfied that
circumstances existed which rendered it necessary for him to take immediate
action to make a law for the purposes aforesaid; and, therefore, promulgated
the Central India Spinning, Weaving and Manufacturing Company Limited, the Empress
Mills, Nagpur (Acquisition and Transfer of Undertaking) Ordinance, 1986, on the
3rd October, 1986; AND WHEREAS, it is expedient to replace the said Ordinance by an
Act of the State Legislature; It is hereby enacted in the Thirty-seventh Year
of the Republic of India as follows :- NOTES The Central India Spinning, Weaving and Manufacturing Co. Ltd.,
was established in Nagpur in 1874, a Company producing and manufacturing yarn,
cloth and paper, known as "Empress Mills". Its installed capacity was
1,10,500 spindles, having 2140 looms, with a paper unit manufacturing, 2200
tons paper annually. This unit employed nearly 6600 workers and earning profit
till 1984. But since 1985, the unit began to operate at loss. At the behest of
the Company, I.D.B.I. took initiative to rehabilitate the undertaking. A
viability report prepared by the I.D.B.I. made a rehabilitation package (i.e..
reliefs from the banks, institutions and the State Government). I.D.B.I.,
though sanctioned the loan of Rs. 3 crores in March, 1986, the Company did not
avail of the facility, anticipating further deterioration in the condition of
the running of the Mill. Again I.D.B.I. shown willingness to revise the loan
amount, the Company (owned by Tatas) did not give positive response. Inspite of
various attempts, the management did not resile from its original attitude and
declared lock-out on 3rd May, 1986. Its earlier application for the closure of
mill was rejected by the Government under sec. 25-0 of Industrial Disputes Act,
1947. But the Company and its creditors (creditors later withdraw) resorted to
voluntary and compulsory winding. After filing the Petition in the Bombay High Court, the High
Court, passed an order on 14th May, 1986 and appointed Provisional Liquidator. In the Statement of Objects and Reasons, the following points for
the take over have been given ? (i) A sizeable production capacity was going waste due to closure
of the unit which would have been loss to the national wealth. (ii) A largest industrial unit in the backward section like
Vidarbha. The economy is linked up with the continuance of the undertaking. (iii) Closure would have adverse consequences on the large section
of the population and on the economy of the region. (iv) That the interest of the general public and the employees and
the needs of the country are served by the continuance of the company. Therefore, it was decided by the State Government to acquire the
company, of the manufacture, in accordance with the policy of the State towards
securing the principle specified in clause (b) of article 39 of the
Constitution of India.- Statement of Objects and Reasons. M.G.G., Part IV, dt.
October 9, 1986, p. 234. (1)
This Act may be called the
Central India Spinning, Weaving and Manufacturing Company Limited, the Empress
Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986. (2)
It shall be deemed to have
come into force on the 3rd October, 1986. In this Act unless the context otherwise requires,- (a)
"appointed day"
means the date of commencement of this Act; (b)
"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 or under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1980; (iv)
any other bank, being a
scheduled bank as defined in clause (e) of section 2 of the Reserve Bank of
India Act, 1934; (c)
"Commissioner"
means the Commissioner of Payment appointed under section 14; (d)
"Corporation"
means the Maharashtra State Textile Corporation, a Government company registered
under the Companies Act, 1956; (e)
"Institution"
means ? (i)
The General Insurance
Corporation formed under section 9 of the General Insurance Business
(Nationalisation) Act, 1972, (ii)
The Industrial Credit and
Investment Corporation of India, a Company being an existing Company as defined
in clause (ii) of section 3 of the Companies Act, 1956, (iii)
The Industrial Development
Bank of India established under section 3 of the Industrial Development Bank of
India Act, 1964, (iv)
The Industrial Finance
Corporation of India established under section 3 of the Industrial Finance
Corporation of India Act, 1948, (v)
The Industrial
Re-construction Bank of India established under section 3 of the Industrial
Reconstruction Bank of India Act, 1984, (vi)
The Life Insurance
Corporation of India established under section 3 of the Life Insurance
Corporation Act, 1956, (vii)
The Maharashtra State
Finance Corporation established under section 3 of the State Financial
Corporations Act, 1951, (viii)
The State Industrial and
Investment Corporation of Maharashtra a Company registered under the Companies
Act, 1956, or (ix)
The Unit Trust of India
established under section 3 of the Unit Trust of India Act, 1963; (f)
"new Government
company" means a Government company (including a subsidiary Government
company) formed and registered under the Companies Act, 1956, in which the
undertaking is directed to vest under subsection (1) of section 6; (g)
"prescribed"
means prescribed by rules made under this Act; (h)
"proprietors"
means the Central India Spinning, Weaving and Manufacturing Company Limited, an
existing company as defined in clause (ii) of sub-section (1) of section 3 of
the Companies Act, 1956 with registered office at Army and Navy Building, 148,
Mahatma Gandhi Road, Fort, Bombay-400 023, and includes the liquidator appointed
in Petition No. 183 of 1986 in the Bombay High Court; (i)
"Schedule" means
the Schedule appended to this Act; (j)
"specified
date", in relation to a provision of this Act, means such date as the
State Government may, by notification in the Official Gazette, specify for the
purposes of that provision, and different dates may be specified for different
provisions of this Act; (k)
"undertaking"
means the industrial undertaking known as "the Central India Spinning,
Weaving and Manufacturing Company Limited, 'the Empress Mills', Nagpur" (l)
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. (1)
On the appointed day, the
undertaking and the right, title and interest of the proprietors in relation to
the undertakings, shall, by virtue of this Act, stand transferred to and vest
absolutely in, the State Government. (2)
The undertaking which
stands vested in the State Government by virtue of sub-section (1) shall,
immediately after it has so vested, stand transferred to, and vested in, the
Corporation. (1)
The undertaking shall be
deemed to include all assets, rights, lease-holds, powers, authorities and
privileges, and all property, moveable and immoveable, 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
proprietors, 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 State Government under section 3 shall, by
force of such vesting, be freed and such 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 or other
authority restricting the use of such properties in any manner shall be deemed
to have been withdrawn. (3)
Every mortgagee of any
property which has vested under this Act in the State 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 interest, 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 amounts referred to in section 8, but no such mortgage, charge, lien
or other interest shall be enforceable against any such property which has
vested in the State Government, the Corporation or new Government company. (5)
Any licence or other instrument
granted to the proprietors in relation to the undertaking which has vested in
the State Government under section 3, at any time before the appointed day and
in force immediately before that 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 3 in the Corporation, or under section 6 in the new
Government company, the Corporation, 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 the Corporation, or new
Government company, and that the Corporation, or the new Government company,
shall hold it for the remainder of the period for which the proprietors would
have held it under the terms thereof. (1)
Every liability of the
proprietors in relation to the undertaking in respect of any period prior to
the appointed day, shall be the liability of the proprietors and shall be
enforceable against them and not against the State Government or against the
Corporation or, where the undertaking is directed under section 6 to vest in a
new Government company. (2)
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, shall be enforceable against the State Government or the Corporation,
or, where the undertaking is directed under section 6 to vest in any other new
Government company, against such new Government company; (b)
no award, decree or order
of any Court, tribunal or other authority in relation to the undertaking passed
on or after the appointed day, in respect of any matter, claim or dispute,
which arose before that day, shall be enforceable against the State Government
or the Corporation or, where the undertaking is directed under section 6 to
vest in any other new Government company, against such new Government company; (c)
no liability incurred by
the proprietors before the appointed day, for the contravention of any
provision of any law for the time being in force, shall be enforceable against
the State Government or the Corporation, or, where the undertaking is directed
under section 6 to vest in any other new Government company, against such new
Government company; (d)
notwithstanding anything
contained in sub-sections (1) and (2) of section 12 or any other provisions of
this Act, or any other law for the time being in force or any contract,
agreement, settlement, award or decree or order of any Court, tribunal or other
authority, no liability towards claims of whatever nature of any employee
against the proprietors in respect of his employment in the undertaking for the
period prior to the appointed day shall be enforceable against the State
Government or the Corporation, or where the undertaking is directed under
section 6 to vest in any other new Government company, against such new
Government company. (1)
Notwithstanding anything
contained in sections 3 and 4, where the undertaking vests, under sub-section
(2) of section 3, in the Corporation, the State Government may, subject to such
terms and conditions as it may think fit to impose, direct, by notification in
the Official Gazette, that the undertaking and the right, title and interest of
the proprietors in relation to the undertaking which had vested in the State
Government and which on its transfer vest in the Corporation, under section 3,
shall instead of continuing to vest in the Corporation, vest in a new
Government company with effect from the date specified in the notification. (2)
Where the right, title and
interest of the proprietors in relation to their undertaking vest, under
sub-section (1), in the new Government company, such Government company shall,
on and from the date of such vesting, be deemed to have become the owner in relation
to such undertaking, and all the rights and liabilities of the State Government
and the Corporation in relation to the undertaking shall on and from the date
of such vesting, be deemed to have become the rights and liabilities of such
Government company. For the transfer to, and vesting in, the State Government under
section 3, of the undertaking and the right, title and interest of the
proprietors in relation to the undertaking, there shall be paid by the State
Government to the proprietors, in cash, and in the manner specified in Chapter
VI, an amount of rupees six crores and ten lakhs: Provided that, where any liability of the proprietors specified in
the Schedule is discharged by the State Government or the Corporation according
to the order of the priorities mentioned in the Schedule, the amount to be paid
to the proprietors under this section shall stand reduced to that extent. (1)
The amount payable in
accordance with the provisions of section 7 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 State
Government to the Commissioner. (2)
The amount representing
interest calculated at the rate specified in sub-section (1) shall be given by
the State Government to the proprietors in addition to the amount specified in
section 7. (3)
For the removal of doubts,
it is hereby declared that the liabilities of the proprietors in relation to
their undertaking which has vested in the State Government or the Corporation
under section 3 shall be discharged from the amounts specified in section 7 and
also from the amounts specified in subsection (1) in accordance with the rights
and interests of the creditors of the proprietors. (1)
The general
superintendence, direction, control and management of the affairs and business
of the undertaking, the right, title and interest in relation to which have
vested in the State Government under sub-section (1) of section 3, shall ? (a)
by virtue of the
provisions of sub-section (2) of section 3, vest in the Corporation or in such
person and to such extent or limitations as the Corporation may by order in
writing, specify; or (b)
where a direction has been
issued by the State Government under sub-section (1) of section 6, vest in the
new Government company or in such person and to such extent or limitations as
the new Government company may, by order in writing, specify; and thereupon the Corporation or
the new Government company or, as the case may be, such persons shall be
entitled to exercise, to the exclusion of all other persons, all such power and
do all such things as the proprietors were authorised to exercise and do in
relation to their undertaking. (2)
Notwithstanding anything
contained in sub-section (1) or any other law for the time being in force, it
shall be lawful for the Corporation or the new Government company to reorganise
the functioning of the different units and offices of the undertaking and the
employees employed therein and thereby restructure such units and offices with
such strength of employees as the Corporation or such new Government company
deems fit. (1)
On the vesting of the
management of the undertaking in the Corporation or the new Government company
all persons in charge of the management of the undertaking immediately before
such vesting, including the liquidator appointed by the Court shall be bound to
deliver to the Corporation, or new Government company, as the case may be, all
assets, books of account, registers and other documents in their possession or
custody or under their control, relating to the undertaking. (2)
The State Government may
issue such directions as it may deem desirable in the circumstances of the case
to the Corporation or new Government company, and such Corporation or new
Government company may also, if it is considered necessary so to do, apply to
the State Government at any time for instructions as to the manner in which the
management of the undertaking shall be conducted or in relation to any other
matter arising in the course of such management. (1)
Any person who has on the
appointed day, in his possession or custody or under his control, any assets,
books, documents or other papers relating to the undertaking, which have vested
in the State Government or in the Corporation, or in the new Government company
under this Act, shall be liable to account for the said assets, books,
documents and other papers to the State Government or the Corporation, or the
new Government company, as the case may be, and shall deliver them to the State
Government, or the Corporation or the new Government company or to such person
or persons as the State Government or the Corporation or the new Government
company may specify in this behalf. (2)
The State Government or
the Corporation or the new Government company aforesaid may take, or cause to
be taken, all necessary steps for securing possession of the undertaking which
has vested in the State Government or the Corporation or the new Government
company, under this Act. (3)
The proprietors shall,
within such period as the State Government may allow in this behalf, furnish to
that Government a complete inventory of all its properties and assets, as on
the appointed day, pertaining to the undertaking which has vested in the State
Government under sub-section (1) of section 3 and in the Corporation, by virtue
of the provisions of sub-section (2) of that section, or the new Government
company and, for this purpose the State Government or the Corporation or the
new Government company shall afford to the proprietors all reasonable
facilities. (1)
Where services of a person
who is a workman within the meaning of the Industrial Disputes Act, 1947, and
who has been, immediately before the appointed day, employed in the
undertaking, are, in the opinion of the Corporation necessary having regard to
the requirements of the units restructured as result of reorganisation of the
undertaking, he shall become, from the date of his appointment by the
Corporation, an employee of the Corporation and shall hold office or service in
the Corporation with the same rights and privileges as to pension, gratuity and
other matters as would have been admissible to him if the rights in relation to
the undertaking had not been transferred to, and vested in, the Corporation and
continue to do so unless and until his employment in such Corporation is duly
terminated or until his remuneration and terms and conditions of employment are
duly altered by the Corporation. (2)
Where services of a person
who is not a workman within the meaning of the Industrial Disputes, Act, 1947,
and who has been, immediately before the appointed day, employed in the
undertaking, are, in the opinion of the Corporation necessary having regard to
the requirements of the units or offices of the Corporation restructured as a
result of reorganisation of the undertaking, he shall become, from the date of
his appointment by the Corporation, an employee of the Corporation and shall
hold office or service in Corporation on such terms and conditions of
employment as may be determined by the Corporation. (3)
(a) the services of every
person employed by the proprietor before the appointed day shall stand
terminated ? (i)
on the designated date if
such person is not employed before that date by the Corporation under
sub-section (1) or (2), and (ii)
on the date of his
appointment if such person is employed before the designated date by the
Corporation under sub-section (1) or (2). (b) A person whose services stand
terminated under sub clause (i) of clause (a) shall not be entitled to claim
employment in the Corporation as of right. (4)
(a) Every person whose
services stand terminated under sub-clause (i) of clause (a) of sub-section (3)
shall be entitled to ? (i)
payment of gratuity and of
compensation for retrenchment or closure in accordance with the provisions of
the Payment of Gratuity Act, 1972 and the Industrial Disputes Act, 1974 if he
is a workman within the meaning of the latter Act, and (ii)
payment of gratuity if he
is not such a workman : Provided that, no person whose services are terminated
on his superannuation on or before the designated date, shall be entitled to
payment of compensation for retrenchment. (b) Notwithstanding anything
contained in Chapter VI and notwithstanding that the liability for payment of
gratuity and compensation for retrenchment or closure under clause (a) is that
of the proprietors such liability shall be discharged by the State Government
or the Corporation, according to the order of priorities mentioned in the
Schedule and on discharge of such liability by the State Government or the
Corporation the proprietors shall stand discharged to the extent of the
liability so discharged. (5)
Where ? (a)
the services of any person
employed before the appointed day in the undertaking are terminated ? (i)
under the terms of any
contract or service or otherwise, or (ii)
under sub-section (3), and (b)
such person is entitled to
any arrears of salary or wages or any payment for any leave not availed of or
other payment not being payment by way of gratuity or compensation for
retrenchment, such person may, except to the extent such liability of payment
has been discharged by the State Government or the Corporation under the
proviso to section 7, enforce his claim against the proprietors of the
undertaking but not against the State Government or the Corporation : Provided that, notwithstanding
anything contained in the Industrial Disputes Act, 1947, the Payment of Wages
Act, 1936, and the Payment of Gratuity Act, 1972,- (a)
the State Government or
the Corporation shall not be liable, - (i)
to any person who has
become an employee of the Corporation under sub-section (1) for payment of
gratuity or any arrears of wages, or (ii)
to any person whose
services stand terminated under sub-clause (i) of clause (a) of sub-section (3)
for payment of gratuity or any arrears of wages or compensation for
retrenchment or closure, for the period commencing from the day on which the
undertaking was closed and ending on the day on which such person becomes an
employee of the Corporation or, as the case may be, on which his services stand
terminated irrespective of whether such closure was in accordance with the
provisions of the Industrial Disputes Act, 1947 or not; (b)
the termination of
services of a person under sub clause (ii) of clause (a) of sub-section (3) on
his becoming an employee of the Corporation under sub-section (1) shall not
entitle such person to payment of any gratuity. Explanation.--In this Chapter ? (a)
the expression
"Corporation" includes "new Government company"; and (b)
the expression
"designated date" means such date as the State Government may, by
notification in the Official Gazette, designate. (1)
Where the proprietors have
established a provident fund, superannuation fund, welfare fund or any other
fund for the benefit of the persons employed in the undertaking, the monies
relatable to the officers or other employees, whose services have been
continued on appointment to the Corporation shall, out of the monies standing
on the appointed day to the credit of such provident fund, superannuation fund,
welfare fund or other fund, stand transferred to, and vested in, the
Corporation. (2)
The monies which stand
transferred under sub-section (1) to the Corporation shall be dealt with by the
Corporation in such manner as may be prescribed. (1)
The State Government
shall, for the purpose of disbursing the amounts payable under sections 7 and 8
to the proprietors, by notification in the Official Gazette, appoint a
Commissioner of Payments. (2)
The State Government may
appoint such other persons as it may think fit to assist the Commissioner and
thereupon the Commissioner may authorise one or more of such persons also to
exercise all or any of the powers exercisable by him under this Act and
different persons may be authorised to exercise different powers. (3)
Any person authorised by
the Commissioner to exercise any of the powers exercisable by the Commissioner may
exercise those powers in the same manner and with the same effect as if they
have been conferred on that person directly by this Act and not by way of
authorisation. (4)
The salaries and
allowances of the Commissioner and other persons appointed under this section
shall be defrayed out of the Consolidated Fund of the State. (1)
The State Government
shall, within thirty days from the specified date pay in cash to the
Commissioner for Payment to the proprietors, - (a)
an amount equal to the
amount specified in section 7, after deducting there from any amount paid under
clause (b) of sub-section (4) of section 12; and (b)
an amount equal to the
amount payable to the proprietors under section 8. (2)
A deposit account shall be
opened by the State Government in favour of the Commissioner in the Public
Account of the State, and every amount paid under this Act to the Commissioner
shall be deposited by him to the credit of the said deposit account and the
said deposit account shall be operated by the Commissioner. (3)
Records shall be
maintained by the Commissioner in respect of the undertaking in relation to
which payment has been made to him under this Act. (4)
The interest accruing on
the amount standing to the credit of the deposit account referred to in
sub-section (2) shall accrue to the benefit of the proprietors. (1)
The State Government or
the Corporation or, where a direction has been issued by the State Government
under sub-section (1) of section 6, the new Government company, as the case may
be, shall be entitled to receive up to the specified date, to the exclusion of
all other persons, any money due to the proprietors, in relation to their
undertaking which has vested in the State Government, or the Corporation or in
the new Government company, and realised after the appointed day,
notwithstanding that the realisation pertains to a period prior to the
appointed day. (2)
The State Government or
the Corporation or the new Government company, as the case may be, may make a
claim to the Commissioner with regard to every payment made by it after the
appointed day, not being payment made under the proviso to section 7, for
discharging any liability of the proprietors, in relation to any period prior
to the appointed day, and every such claim shall have priority, in accordance
with the priorities attaching, under this Act, to the matter in relation to
which such liability has been discharged by the State Government, or the
Corporation or the new Government company. (3)
Save as otherwise provided
in this Act, the liabilities of the proprietors in respect of any period prior
to the appointed day, shall be the liabilities of the proprietors. Every person having a claim other than the claim relating to
gratuity or compensation for retrenchment or closure against the proprietors
with regard to any of the matters specified in the Schedule pertaining to the
undertaking, shall prefer such claim before the Commissioner within thirty days
from the specified date : Provided that, if the Commissioner is satisfied that the claimant
was prevented by sufficient cause from preferring the claim within the said
period of thirty days, he may entertain the claim within a further period of
thirty days but not thereafter. The claims arising out of the matters specified in the Schedule
shall have priorities in accordance with the following principles, namely :- (a)
category I shall have
precedence over all other categories and category II shall have precedence over
categories III and IV; and category III shall have precedence over category IV; (b)
the claims arising out of
matters specified in each category except category III shall rank equally and
be paid in full, but if the amount is insufficient to meet such claims in full,
they shall abate in equal proportions and be paid accordingly; (c)
the liabilities specified
in category III shall be discharged in the manner agreed to by the State
Government of one part with the banks and institutions of other part subject to
the priorities specified in this section, in accordance with the terms of the
secured loans and the priority inter se of such loans; and (d)
the question of payment of
a liability with regard to a matter specified in a lower category shall arise
only is a surplus if left after meeting all the liabilities specified in the
immediately higher category. (1)
On receipt of the claims
made under section 17, the Commissioner shall arrange the claims in the order
of priorities specified in the Schedule and examine the same in accordance with
such order of priorities. (2)
If, on examination of the
claims, the Commissioner is of opinion that the amount paid to him under this
Act, is not sufficient to meet the liabilities specified in any lower category,
he shall not be required to examine the claims in respect of such lower
category. (1)
After examining the claims
with reference to the priorities set out in the Schedule, the Commissioner
shall fix a date on or before which every claimant shall file the proof of his
claim or be excluded from the benefit of the disbursement made by the Commissioner. (2)
Not less than fourteen
days' notice of the date so fixed shall be given by advertisement in one issue
of such daily newspaper in the English language, and one issue of such daily
newspaper in the Marathi language as the Commissioner may consider suitable,
and every such notice shall call upon the claimant to file the proof of his
claim with the Commissioner within the period specified in the advertisement. (3)
Every claimant, who fails
to file the proof of his claim within the period specified by the Commissioner
shall be excluded from the disbursements made by the Commissioner. (4)
The Commissioner shall,
after such investigation as may, in his opinion, be necessary and after giving
the proprietors an opportunity of refuting the claims and after giving the
claimant a reasonable opportunity of being heard, admit or reject, by order in
writing, the claim in whole or in part. (5)
The Commissioner shall
have the power to regulate his own procedure in all matters arising out of the
discharge of his functions, including the place or places at which he may hold
his sittings and shall, for the purpose of making an investigation under this
Act, have the same powers as are vested in Civil Court under the Code of Civil
Procedure, 1908, while trying a suit, in respect of the following matters,
namely:- (a)
the summoning and
enforcing the attendance of any witness and examining him on oath; (b)
the discovery and
production of any document or other material object producible as evidence; (c)
the reception of evidence
on affidavits; and (d)
the issuing of any
commission for the examination of witnesses. (6)
Any investigation before
the Commissioner shall be deemed to be a judicial proceeding within the meaning
of sections 193 and 228 of the Indian Penal Code, and the Commissioner shall be
deemed to be a Civil Court for the purposes of section 195 and Chapter XXVI of
the Code of Criminal Procedure, 1973. (7)
A claimant, who is
dissatisfied with the decision of the Commissioner, may prefer an appeal
against such decision to the principal Civil Court of original jurisdiction
within the local limits of whose jurisdiction the registered office of the
proprietors is situated : Provided that, where a person who
is a Judge of a High Court is appointed to be the Commissioner, such appeal
shall lie to the High Court of Bombay and such appeal shall be heard and
disposed of by not less than two Judges of that High Court. After admitting a claim under this Act, the amount due in respect
of such claim shall be credited by the Commissioner to the relevant fund or be
paid to the person or persons to whom such amount is due, and on such credit or
payment, the liability of the proprietors in respect of such claim shall stand
discharged. If, out of the monies paid to him in relation to the undertaking,
there is a balance left after meeting the liabilities as specified in the
Schedule, the Commissioner shall disburse such balance to the proprietors. Where the possession of any machinery, equipment or other property
has vested in the State Government, or Corporation, or new Government company
under this Act, but such machinery, equipment or other property does not belong
to the proprietors, it shall be lawful for the State Government or the
Corporation or such Government company to continue to possess such machinery or
equipment or other property on the same terms and conditions under which they
were possessed by the proprietors immediately before the appointed day. Any money paid to the Commissioner which remains undisbursed or unclaimed
on the date immediately preceding the date on which the office of the
Commissioner is finally wound up, shall be transferred by the Commissioner
before his office is finally wound up, to the general revenue account of the
State Government; but a claim to any money so transferred may be preferred to
the State Government by the person entitled to such payment and shall be dealt
with as if such transfer had not been made, and the order, if any, for payment
of the claim, being treated as an order for the refund of revenue. (1)
Where any liability of the
proprietors arising out of any item specified in category I of the Schedule is
not discharged fully by the Commissioner out of the amount paid under this Act,
the Commissioner shall intimate in writing to the State Government the extent
of the liability which remains undischarged and that liability shall be assumed
by the State Government. (2)
The State Government may,
by order, direct the Corporation to take over any liability assumed by the
Government under sub-section (1) and on receipt of such direction, it shall be
the duty of the Corporation to discharge such liability. The provisions of this Act shall have effect notwithstanding
anything inconsistent therewith contained in any other law for the time being
in force or in any instrument having effect by virtue of any law, other than
this Act or in any decree or order of any Court, tribunal or other authority. Every contract entered into by the proprietors in relation to
their undertaking, which has vested in the State Government under section 3,
for any service, sale or supply, and in force immediately before the appointed
day, shall on and from the expiry of one hundred and eighty days from the
appointed day, cease to have effect unless such contract is, before the expiry
of that period, ratified, in writing by the State Government, or the
Corporation, or new Government company, in which such undertaking has been
vested under this Act, and in ratifying such contract, the State Government, or
the Corporation, or the new Government company, as the case may be, may make
such alteration or modification therein as it may think fit : Provided that, the State Government, or the Corporation, or the
new Government company shall not omit to ratify a contract and shall not make
any alteration or modification in a contract,- (a)
unless it is satisfied
that such contract is unduly onerous, or has been entered into in bad faith, or
is detrimental to the interest of the State Government, or the Corporation or
the new Government company; and (b)
except after giving the
parties to the contract a reasonable opportunity of being heard and except
after recording in writing its reasons for refusal to ratify the contract or
for making any alteration or modification therein. No suit, prosecution or other legal proceeding shall lie against
the State Government, or the Corporation, or the new Government company or any
officer or other employee of that Government, or the Corporation or the new
Government company, or other person authorised by the State Government or the
Corporation, or the new Government company for anything, including any damage
caused or likely to be caused by anything, which is in good faith done or
intended to be done under this Act. (1)
The State Government may,
by notification in the Official Gazette, direct that all or any of the powers
exercisable by it under this Act, other than the powers conferred by this
section, section 33 and section 34, may also be exercised by such person or persons
as may be specified in the notification. (2)
Whenever any delegation of
power is made under subsection (1), the persons to whom such power has been
delegated shall act under the direction, control and supervision of the State
Government. Any person who,- (a)
having in his possession,
custody or control any property forming part of the undertaking wrongfully
withholds such property from the State Government or the Corporation or the new
Government company or any person or body of persons specified by the State
Government, Corporation or, as the case may be, new Government company, in this
behalf; or (b)
wrongfully obtains
possession of, or retains, any property forming part of the undertaking; or (c)
wilfully withholds or
fails to furnish to the State Government, or the Corporation, or the new
Government company, as the case may be, or any person or body of persons
specified by that Government, or the Corporation or the new Government company,
any document relating to the undertaking, which may be in his possession,
custody or control; or (d)
fails to deliver to the
State Government, or the Corporation, or the new Government company, as the
case may be, or to any person or body of persons specified by that Government,
or the Corporation, or the new Government company, any assets, books of
account, registers or other documents in his possession, custody or control
relating to the undertaking; or (e)
wrongfully removes or
destroys any property forming part of the undertaking; or (f)
wrongfully prefers any
claim under this Act which he knows or has reasonable cause to believe to be
false or grossly inaccurate, shall, on conviction, be
punished with imprisonment for a term which may extend to two years, or with
fine which may extend to ten thousand rupees, or with both. (1)
Where an offence under
this Act has been committed by a company, every person, who, at the time when
the offence was committed, was in charge of, and was responsible to, the
company, for the conduct of the business of the company, as well as the
company, shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly : Provided that, nothing contained
in this sub-section shall render any such person liable to any punishment, if
he proves that the offence was committed without his knowledge or that he had
exercised all due diligence to prevent the commission of such offence. (2)
Notwithstanding anything
contained in sub-section (1) where any offence under this Act has been
committed by a company and it is proved that the offence has been committed
with the consent or connivance of, or is attributable to any neglect on the
part of, any director, manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall be deemed to be guilty of
the offence and shall be liable to be proceeded against and punished
accordingly. Explanation. - For the purposes of this section,- (a)
"company" means
any body corporate, and includes a firm or other association of individuals;
and (b)
"director", in
relation to a firm, means a partner in the firm. No proceeding for the winding up of the company, the right, title
and interest in relation to the undertaking owned by which, have vested in the
State Government or the Corporation or the new Government company under this
Act shall lie or be proceeded with in any Court except with the consent of the
State Government. (1)
The State Government may,
by notification in the Official Gazette, make rules for carrying out the
provisions of this Act. (2)
In particular, and without
prejudice to the generality of the foregoing power, such rules may provide for
all or any of the following matters, namely :- (a)
the time within which, and
the manner in which, an intimation referred to in sub-section (3) of section 4
shall be given to the Commissioner; (b)
the manner in which the
monies in any provident fund or other fund under section 13 shall be dealt
with; (c)
any other matter which is
required to be, or may be. prescribed. (3)
Every rule made by the
State Government under this Act shall be laid, as soon as may be, after it is
made, before each House of the State Legislature, while it is in session, for a
total period of thirty days which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree
in making any modification in the rule or both Houses agree that the rule
should not be made, then on publication of such decision in the Official
Gazette, the rule shall have effect only in such modified form or be of no
effect, as the case may be, so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously
done under that rule. If any difficulty arises in giving effect to the provisions of
this Act, the State Government may, by order, not inconsistent with the
provisions of this Act, remove the difficulty : Provided that, no such order shall be made after the expiry of the
period of two years, from the date of commencement of this Act. (1)
The Central India
Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking) Ordinance, 1986, is hereby repealed. (2)
Notwithstanding such
repeal, anything done or any action taken (including any rule made, or
notification issued or any appointment made or direction issued) under the said
Ordinance shall be deemed to have been done, taken, issued or made, as the case
may be, under the corresponding provisions of this Act. FIRST SCHEDULE [See sections 2(h), 17, 18, 19, 20(1) and 22] Order of Priorities for
the Discharge of Liabilities of the Proprietors Category I All dues including gratuity of employees in the undertaking;
arrears relating to contributions towards Provident Fund and contributions
under the Employees' State Insurance Act, 1948, payable by the proprietors.
Category II Arrears of excise duty, sales-tax, dues relating to electricity
and dues of a local authority. Category III Secured creditors including banks and institutions. Category IV (i) Sundry creditors.' (ii) Other liabilities.
Preamble
- CENTRAL INDIA SPINNING, WEAVING AND MANUFACTURING COMPANY LIMITED, THE
EMPRESS MILLS, NAGPUR (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT, 1986PREAMBLE