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HINDUSTAN TRACTORS LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1978
STATEMENT OF OBJECTS AND REASONS ACT 13 OF 1978 Hindustan Tractors Limited, Vadodara, was a private company wholly owned by its nominees. For various reasons including mismanagement the Company began to show steady decline in production and incurred heavy losses, facing imminent closure. After investigation into the affairs of this Company, the management of its undertakings was taken over by the Central Government on the 12th March, 1973, under the Industries (Development and Regulation) Act, 1951, and was entrusted to the Gujarat Agro-Industries Corporation being the Authorised Controller. The period of the management will expire on the 11th March, 1979. The Company is engaged in the manufacture of agricultural tractors. After the take over of the management of the undertakings of the Company, The production in the Company, which had come to a standstill in November, 1972, has progressively improved. The net losses have come down from the level of Rs. 80 lakhs for the year ending March, 1973 to Rs.9 lakhs for the year ending March, 1977 and during 1977-78 they expect to achieve a nominal net profit of Rs.1 lakh. After careful consideration of the whole matter and with a view to improving the technical and economic viability of the undertakings, the Central Government have decided to acquire the undertakings of the Company and vest them in the State Government of Gujarat. 2. At the time of take over of the management of the undertakings of the Company, it was clear that it was not possible for the Company to meet all its past dues. Accordingly, the Central Government issued an order on the 26th April, 1973, under section 18FB of the Industries (Development and Regulation) Act, 1951, suspending the operation of all the contracts, agreements, settlements, etc., in force immediately before the take over and also payment of the liabilities as on the date of the take over excepting those relating to banks and financial institutions. The period of this order, which cannot exceed five years in aggregate, expires on the 25th April, 1978. Immediate action is, therefore, required to be taken to acquire the undertakings of the Company by legislation. It has, therefore, been decided to introduce a Bill in the current session of Parliament. The Bill seeks to acquire the undertakings of Hindustan Tractors Limited.-Gaz. of Ind., 8-3-1978, Pt. II, S. 2 Ext., p. 132.
STATEMENT OF OBJECTS AND REASONS AMENDING ACT 50 OF 1980 The Government of India assumed the management of Hindustan Tractors Limited. Vishwamitri. Baroda in March, 1973, under the Industries (Development and Regulation) Act, 1951, and appointed gujarat Agro Industries Corporation as its Authorised Controller for a period of five years. The undertakings of the Company were acquired by the Central Government with effect from the 1st April, 1978, on the enactment of the Hindustan Tractors Limited (Acquisition and Transfer of Undertakings) Act, 1978. The undertakings were vested on the same date in the State Government of Gujarat and new company in the name of Gujarat Tractor Corporation Ltd. has also been formed to carry on the activity. 2. Section 5of the Act specifies the manner in which the liabilities of the Hindustan Tractors Limited prior to the taking over of the management of the Company and after the taking over of the management of the Company should be taken Care of. According to this section liabilities arising in respect inter alia of secured loans advanced by a bank to the Company before the date of take over shall be enforceable against the Company. According to Part B of the Schedule to the Act, secured loans relating to the pre-take over management period fall within Category-111 priority and the intention of the Act was that the secured loans advanced by banks to the Company before the take over of the Company should be met from out of the amount payable to the Company for the transfer to, and vesting in, the Central Government of the undertakings of the Company under S. 8 of the Act. It was envisaged that the secured loans advanced by the State Bank of India to the Company before the take over of the Company would qualify for payment under Category-111 of Part B of the Schedule and this consideration was taken into account in determining the amount which has been specified in section 8as the amount payable to the Company. On further examination, it has been discovered that in view of the accounting treatment given in the books of the State Bank of India by reasons of the adjustment of the loans given by the Bank after the take over against the secured loans given by the Bank to the Company before the take over, all the amounts due to the State Bank have to be treated as post-take over loans. The post-take over loans which were advanced by the State Bank of India to the extent they were utilised for meeting the pre-take over secured loans advanced by the Bank to the Company should be entitled to the same treatment to which the pre-take over-secured loans which were so defrayed would have been entitled. The amendments proposed in the Bill are for the purpose of securing this position.-Gaz. of Ind., 11-6-1980, Pt. II, Section II, Ext., p. 394.
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:-
SECTION 01: 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 02: 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 18A 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.
SECTION 03: 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 shall vest in the Central Government.
SECTION 04: 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 05: 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.
SECTION 06: VESTING OF THE UNDERTAKINGS OF THE COMPANY IN THE STATE GOVERNMENT OF GUJARAT
(1) Notwithstanding anything contained in sections 3-and4-, 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 section 5-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 07: 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-and6-, 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 undertakings shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively, of the Government company.
SECTION 08: 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 09: 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.
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.
SECTION 11: DUTY TO DELIVER POSSESSION OF PROPERTY ACQUIRED AND DOCUMENTS RELATING THERETO
(1) On the vesting of the management of the undertakings of the Company in the State
Government under section 6, every person in whose possession or custody or under whose control any property referred to in sub-section (1) of section 4-may be, shall deliver the property to the State Government forthwith.
(2) Any person. Who on the appointed day has in his possession or under his control any books, documents or other papers relating to the undertakings of the Company which has vested in the State Government under section 6-and which belong to the Company, or, would have so belonged if the undertakings of the Company had not vested in the State Government, shall be liable to account for the said books, documents or other papers to the State Government and shall deliver them up to the State Government.
(3) The State Government may take or cause to be taken, all necessary steps for securing possession of all properties which have vested in that Government under this Act.
(4) The Central Government may issue such directions as it may deem desirable in the circumstances of the case to the State Government as to its powers and duties and the State Government may also, if it so desires, apply to the Central Government at any time for instructions 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.
(5) On the vesting of the management of the undertakings of the Company in a Government company or in the Custodian, the provisions of sub-sections (1) to (4) shall apply to, or in relation to, the Government company or the Custodian as the case may be, as they apply to, or in relation to, the State Government, subject to the modification that the references to the State Government shall be construed as references to the Government company or the Custodian, as the case may be.
SECTION 12: ACCOUNTS TO BE RENDERED BY THE COMPANY OR ANY OTHER PERSON
(1) Where, in pursuance of any decree, order or injunction of any court or otherwise,-
(a) the Authorised Controller was, after the date of taking over and before the appointed day; and (b) the Central Government, the State Government, or the Government company, as the case may be, is on or after the appointed day, prevented from taking over the management of any part of the undertakings of the Company, the Company, or any other person in possession, custody or control of such part, shall, within sixty days from the appointed day, render accounts to the State Government or the Government company in relation to the period commencing on the date of taking over and ending on the date on which such part was or is handed over to the Authorised Controller or, as the case may be, the Central Government, the State Government, or the Government company, with regard to the-
(i) assets and stores of the undertakings or any part thereof, acquired, utilised or sold during the said period; and
(ii) income derived by the Company or any other person from the undertakings or any part thereof during the said period.'
(2) If, on examination of the accounts referred in sub-section (1), any income or other moneys is or are found to have been derived by the Company or any other person from such undertakings or any part thereof during the period referred to in that sub-section or any other moneys are found to be payable, such income or other moneys shall be recoverable by the Central Government, the State Government or the Government company from the Company or such other person, as the case may be, and from the amount payable under this Act to the Company and the debt due to the Central Government, the State Government or the Government company on this account shall rank as an unsecured debt.
(3) If no account is rendered by the Company or such other person in respect of the undertakings or any part thereof within the period referred to in sub-section (1) or if the Central Government, the State Government or the Government company, as the case may be, has any reason to believe that the account rendered by the Company or such other person is incorrect or false in any material particular, the Central Government, the State Government or the Government company may refer the matter to the Commissioner and thereupon the Commissioner shall determine the income derived by the Company or such other person from such undertakings or any part thereof during the period referred to in sub-section (1) and take steps to recover the said income or other moneys from the Company or such other person and from the amount payable to the Company under this Act as if the debt due to the Central Government, the State Government or the
Government company on this account were an unsecured debt.
(4) No mortgage, charge, lien or other encumbrance in relation to the undertakings of the
Company or any part thereof shall be binding on the Central Government, the State Government or the Government company, if such mortgage charge, lien or other encumbrance was created, at any time during the period in which the Authorised Controller was, and the Central Government, the State Government or the Government company, as the case may be, is, prevented, by any decree, order or injunction of any court or otherwise, from taking over the management of the undertakings or any part thereof.
SECTION 13: ACCOUNTS
The Custodian shall maintain accounts of the undertakings of the Company in accordance with the provisions of the Companies Act, 1956-
SECTION 14: EMPLOYMENT OF CERTAIN EMPLOYEES TO CONTINUE
(1) Every person who has been, immediately before the appointed day, employed in any of the undertakings of the Company shall become, on and from the appointed day or such later date, as the case may be, an employee of the State Government or, as the case may be, of the Government company in which the right, title and interest of the Company in relation to its undertakings, have vested under this Act, and shall hold office or service under the State Government, or the Government company, as the case may be, with the same rights and privileges as 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 State Government, or
(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947-, or in any other law for the time being in force, the transfer of the services of any officer or other person employed in any of the undertakings of the Company to the State Government, or the Government company, shall not entitle such officer or other employee to any compensation under this Act or under any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority.
(3) Where, under the terms of any contract of service or otherwise, any person, whose services become transferred to the State Government, or the Government company, by reason of the provisions of this Act, is entitled to any arrears of salary or wages or any payment for any leave not availed of or any other payment, not being payment by way of gratuity or pension, such person may, except to the extent of such liability which has been taken over by the Central Government or the State Government or the Government company under sub-section (2) of section 5-, enforce his claim against the Company by which he was employed immediately before such transfer but not against the Central Government, or the State Government, or the Government company.
SECTION 15: PROVIDENT FUND AND OTHER FUNDS
Where moneys representing provident fund, superannuation fund, welfare fund or other fund for the benefit of the persons employed in any of the undertakings of the Company have vested in an authority established under any law for the time being in force, such moneys shall continue to vest in such authority for the benefit of the said persons.
SECTION 16: APPOINTMENT OF COMMISSIONER OF PAYMENTS
(1) The Central Government shall, for the purpose of disbursing the amounts payable to the Company under sections 8-and9-, by notification, appoint a Commissioner of Payments.
(2) The Central 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 India.
SECTION 17: PAYMENT BY THE CENTRAL GOVERNMENT TO THE COMMISSIONER
(1) The Central Government shall, within thirty days from the specified date2, pay, in cash, to the Commissioner, for payment to the Company-
(a) an amount equal to the amount specified in section 8, and
(b) an amount equal to the amount payable to the Company under section 9-.
(2) A deposit account shall be opened by the Central Government in favour of the Commissioner, in the Public Account of India, and every amount paid under this Act to the Commissioner shall be deposited by him to the credit of the said deposit account and thereafter the said deposit account shall be operated by the Commissioner.
(3) The interest accruing on the amounts standing to the credit of the deposit account referred to in sub-section (2) shall ensure to the benefit of the Company.
SECTION 18: CERTAIN POWERS OF THE CENTRAL GOVERNMENT OR STATE GOVERNMENT OR GOVERNMENT COMPANY
(1) The Central Government, or the State Government, or the 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 Company, in relation to its undertakings which have vested in the Central Government, or the State Government, or the Government company, realised after the appointed day notwithstanding that the realisation pertains to a period prior to the appointed day.
(2) The Central Government, or the State Government, or the 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 for discharging any liability of the Company, not being any liability specified in sub-section (2) of section 5-, 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 Central Government, or the State Government, or the Government company.
(3) Save as otherwise provided in this Act, the liabilities of the Company in respect of any transaction prior to the appointed day, which have not been discharged on or before the specified date, shall be the liabilities of the Company.
SECTION 19: CLAIMS TO BE MADE TO THE COMMISSIONER
Every person having a claim against the Company shall prefer such claim before the Commissioner within thirty days from the specified date3: 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 and not thereafter.
SECTION 20: PRIORITY OF CLAIMS
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 Category III, and so on;
(b) the claims specified in each of the categories, 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, 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 discharging any liability with regard to a matter specified in a lower category shall arise only if a surplus is left after meeting all the liabilities specified in the immediately higher category.
SECTION 21: EXAMINATION OF CLAIMS
(1) On receipt of the claims made under section 19-, 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.
SECTION 22: ADMISSION OR REJECTION OF CLAIMS
(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 failing which he will be excluded from the benefit of the disbursement made by the Commissioner.
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