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BRAITHWAITE AND COMPANY (INDIA) LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1976
96 of 1976
5th September,1976
Messrs Braithwaite and Company (India) Limited were engaged in the manufacture and
production of railway wagons, structural and other commodities which were vital to the
needs of the country. The Company began to show steady decline in production from
1968 onwards and incurred heavy losses which resulted in closure of some of the works
of the Company. After an investigation into the affairs of the Company, the management
of its undertakings was taken over by the Central Government under
section 18A of the Industries (Development and Regulation) Act, 1951, in March, 1971.
Since early action was necessary to reduce the interest charges on loans and for
restructuring of the capital of the Company, the undertakings of the Company were
acquired by the Braithwaite and Company (India) Limited (Acquisition tend Transfer of
Undertakings) Ordinance, 1976). The Bill seeks to replace the said Ordinance. - Gaz. of
Ind., 20-8-1976, Pt.ll,S.2,Ext..p.l215.
An Act to provide for the acquisition and transfer of the undertakings of Messrs.
Braithwaite and Company (India) Limited for the purpose of ensuring the continuity of
production of goods which are vital to the needs of the country, and for matters
connected therewith or incidental thereto WHEREAS Messrs Braithwaite and Company
(India) Limited was engaged in the manufacture and production of railway wagons,
structural Heel works for bridges and heavy workshop buildings, pressed steel tanks,
cranes, road rollers, jute carding machines, roll formers, power sweepers, grey iron
castings and steel forgings and also in the machining of intricate components of' large
sizes; AND WHEREAS as a result of heavy losses suffered by the Company, there had
been a closure of certain works owned by the Company; AND WHEREAS for the
purpose of speedily bringing the closed works of the Company into operation, the
management of the undertakings of the Company was taken over by the Central
Government, for a limited period underSECTION 18A of the Industries (Development and Regulation) Act, 1951;AND
WHEREAS it if necessary to acquire the undertakings of the Company to ensure the
continuance of the production of goods which are vital to the needs of the country; BE it
enacted by Parliament in the Twenty-seventh Year of the Republic of India as follows:-
CHAPTER 01 PRELIMINARY
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called The Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Act, 1976.
(2) The provisions of sections 28-and29-shall come into force at once and the remaining provisions of this Act shall be deemed to have come into force on the 1st day of April, 1975,
SECTION 02: DEFINITION
In this Act, unless the context otherwise requires,-
(a) "appointed day" means the 1st day of April, 1975;
(b) "Company" mean the Braithwaite and Company (India) Limited being a company as defined in the Companies Act, 1956-, and having its registered office at 5, Hide Road, Calcutta-700043;
(c) "Commissioner" means the Commissioner of Payments appointed under section 14-;
(d) "0rdinance"means the Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Ordinance, 1976;
(e) "notification" means a notification published in the Official Gazette;
(f) "prescribed" means prescribed by rules made under this Act;
(g) "specified date" means such date of the Central Government may, for the purposes of any provision of the Act, by notification, specify and different dates may be specified for different provisions of this Act;
(h) 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.
CHAPTER 2 ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE COMPANY
SECTION 03: ACQUISITION AND TRANSFER OF UNDERTAKINGS OF THE COMPANY
On the appointed day, the undertaking of the Company, and the right, title and interest of the Company in relation to its undertakings, shall by virtue of Ms Act, be transferred to, and shall vest in, the Central Government.
SECTION 04: GENERAL EFFECT OF VESTING
(1) The undertakings of the Company shall be deemed to include all assets, rights, lease-holds, powers, authorities and privileges, and all properly, .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 all other documents of whatever nature relating thereto.'
(2) All properties as aforesaid which have vested in the Central Government under section 3-shall, by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property in any manner or appointing any receiver in respect of the whole or any part of such property shall be deemed to have been withdrawn.
(3) Every 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 if hereby declared that the mortgagee of any property referred to in sub-section (2) 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 mortgage money or other dues, in whole or in part, out of the amounts specified in section 7-, and also out of the monies determined under section 8-, but no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the Central Government.
(5) If, on the appointed day, any suit, appeal or other proceeding 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 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 6-, to vest in a Government company, against that Government company.
SECTION 05: CENTRAL GOVERNMENT OR THE GOVERNMENT COMPANY NOT TO BE LIABLE FOR PRIOR LIABILITIES
(1) Every liability of the Company in respect of any period prior to the appointed day, shall be the liability of the Company and shall be enforceable against it and not against the Central Government, or, where the undertakings are directed, under section 6-, to vest in a Government company, against that Government company.
(2) For the removal of doubts, it is hereby declared that,-
(a) save as otherwise expressly provided in this section or in any other provision of this Act, no liability of the Company in respect of any period prior to the appointed day, shall be enforceable against the Central Government, or, where the undertakings of the Company are directed under section 6-to vest in a Government company, against that Government company;
(b) no award, decree or order of any court, tribunal or other authority in relation to the undertakings of the Company, passed after the appointed day, in respect of any matter, claim or dispute which arose before that day, shall be enforceable against the Central Government, or where the undertakings of the Company are directed under section 6-to vest in a Government company, against that Government company;
(c) no liability incurred by the Company before the appointed day, for the contravention of any provision of law for the time being in force, shall be enforceable against the Central Government or, where the undertakings of the Company are directed under section 6-, to vest in a Government company, against that Government company.
SECTION 06: POWER OF CENTRAL GOVERNMENT TO DIRECT VETTING OF THE UNDERTAKINGS OF THE COMPANY IN A GOVERNMENT COMPANY
(1) Notwithstanding anything contained in sections 3-and4-, the Central Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose, direct, by notification, that the undertakings of the Company, and the right, title and interest of the Company in relation to its undertakings, which have vested in the Central Government under section 3-, shall, instead of continuing to vest in the Central Government, vest in the Government company either on the date of the notification or in such earlier or later date (not being a date earlier than the appointed day) as may be specified in the notification.
(2) Where the right, title and interest of the Company in relation to its undertakings, vest in a Government company under sub-section ( 1 ), the Government company shall, on and from the date of such vesting, be deemed to have become the owner in relation to such undertakings, and all the rights and liabilities of the Central Government in relation to such undertakings shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively of the Government company.
CHAPTER 03 PAYMENT OF AMOUNTS
SECTION 07: 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 sixteen crores and twenty-five lakhs.
SECTION 08: 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 on which the management of the undertakings of the Company was taken over by the Central Government and ending on the appointed day.
(2) In consideration of the retrospective operation of the provisions of sections 3-,4-and5-, there shall also be given, in cash, by the Central Government to the Company, an amount equal to an amount calculated at the ratio of rupees Fifty thousand per annum for the period commencing on the appointed day and ending on the date of promulgation of the Ordinance.
(3) The amount specified in section 7-and the amounts determined under sub-sections (1) and (2) shall carry simple interest at the rate of four per cent. per annum for the period commencing on the date of promulgation of the Ordinance and ending on the date on which payment of such amounts is made by the Central Government to the Commissioner.
(4) The amounts determined in accordance with the provisions of sub-sections ( 1), (2) and (3) shall be given by the Central Government to the Company in addition to the amount specified in section 7-.
(5) For the removal of doubts, it is hereby declared that the liabilities of the Company, in relation to its undertakings which have vested in the Central Government under section 3-, shall be discharged from the amounts referred to in section 7-, and also from the amounts determined under sub-sections (1), (2) and (3), in accordance with the rights and interests of the creditors of the Company.
SECTION 10: DUTY OF PERSONS IN CHARGE OF MANAGEMENT OF THE UNDERTAKINGS OF THE COMPANY TO DELIVER ALL ASSETS ETC
(1) On the vesting of the management of the undertakings of the Company in a Government company or on the appointment of a Custodian all persons in charge of the management of the undertakings of the Company immediately before such vesting or appointment, shall be bound to deliver to the Government company or the Custodian, as the case may be, all assets, books of account, registers or other documents in their custody relating to the undertakings of such Company.
(2) The Central Government may issue such directions as it may deem desirable in the circumstances of the case to the Government company or the Custodian as to its or his powers and duties, and the Government company or Custodian may also, if it or he so desires, apply to the Central Government at any time for instructions as to the manner in which the management of the undertakings of the Company shall be conducted by it or him or in relation to any other matter arising in the course of such management.
(3) The Custodian shall receive from the funds of the undertakings of the Company such remuneration as the Central Government may fix and shall hold office during the pleasure of the Central Government.
SECTION 11: ACCOUNT AND AUDIT
The Custodian 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 account so maintained as they apply to the audit of the accounts of a company.
CHAPTER 05 PROVISIONS RELATING TO THE EMPLOYEES
OF THE COMPANY
SECTION 12: EMPLOYMENT OF CERTAIN EMPLOYEES TO CONTINUE
(1) Every person who is a workman within the meaning of the Industrial Disputes Act, 1947-, and has been, immediately before the appointed day, employed in any undertaking of the Company shall become, on and from the appointed day, an employee of the Central 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 Central 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 Central Government or the Government company, as the case may be, is duly terminated or until his remuneration and other conditions of service are duly altered by the Central Government or the Government company, as the case may be.
(2) Every person who is not a workman within the meaning of the Industries Disputes Act, 1947-, and who has been, immediately before the appointed day, employed in any undertaking of the Company shall become, as from the appointed day, an employee of the Central Government or the Government company, and shall hold office or service therein by the same tenure, at the same remuneration and upon the same terms and condition- and with the same rights and privileges as to pension and gratuity and other matters as would have been admissible to him if the undertakings of the Company had not been transferred to, and vested in, the Central Government or the Government company, and shall continue to do so unless and until his employment in the Central Government or the Government company is duly terminated or until his remuneration, terms and conditions of employment are duly altered by the Central Government or the Government company, as the case may be.
(3) 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 undertaking of the Company to the .Central 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.
(4) Where, under the terms of any contract of service or otherwise, any person, whose services become transferred to the Central Government or the Government company by reason of the provisions of this Act is entitled to any arrears of salary or wages or any payments for any leave not availed of or any other payment, not being payment by way of gratuity or pension, such person may enforce his claim against the Company, but not against the Central Government or the Government company.
SECTION 13: PROVIDENT AND OTHER FUNDS
(1) Where the Company has established a provident, superannuation, welfare Or other fund for the benefit of the persons employed in any of the undertakings of the Company, the monies relatable to the officers or other employees, whose services have become transferred by or under this Act to the Central Government or the Government company, shall, out of the monies standing, on the appointed day, to the credit of such provident, superannuation, welfare or other fund, stand transferred to, and shall vest in, the Central Government or the Government company, as the case may be.
(2) The monies which stand transferred under sub-section (1) to the Central Government or the Government, company, as the case may be, shall be dealt with by that Government or the Government company in such manner as may be prescribed.
CHAPTER 6 COMMISSIONER OF PAYMENTS
SECTION 14: APPOINTMENT OF COMMISSIONER OF PAYMENTS
(1) The Central Government shall, for the purpose of disbursing the amounts payable to the Company under sections 7-and8-, 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 15: PAYMENT BY THE CENTRAL GOVERNMENT TO THE COMMISSIONER
(1) The Central Government shall, within thirty days' from the specified date, pay, in cash, to the Commissioner, for payment to the Company-
(a) an amount equal to the amount specified in section 7-, and
(b) an amount equal to the amount payable to the Company under section 8-.
(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 the said deposit account shall be operated by the Commissioner.
(3) The interest accruing on the amount standing to the credit of the deposit account referred to in sub-section
SECTION 16: CERTAIN POWERS OF THE CENTRAL GOVERNMENT OR GOVERNMENT COMPANY
(1) The Central 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 Government company, realised after the appointed day notwithstanding that the realisation pertains to period prior to the appointed day.
(2) The Central 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 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 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 17: 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 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 with in a further period of thirty days and not thereafter.
SECTION 18: 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 will have precedence over all other categories and Category II will have precedence over Category III, and so on;
(b) the claims specified in each of the categories, except Category VI, 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 VI 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 19: EXAMINATION OF CLAIMS
(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 if 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 20: 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 certain 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 a daily newspaper in English language and in one issue of such daily newspaper in the regional 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 time specified in the advertisement.
(3) Every claimant who fails to file the proof of his claim within the time 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 Company an opportunity of refuting the claim and after giving the claimant a reasonable opportunity of being heard, in writing, admit or reject 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 will hold his sittings and shall, for the purpose of making an investigation under this Act, have the same powers as are vested in a 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:
(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-and228 of the Indian Penal Code-and the Commissioner shall be deemed to be a civil court for the purposes of section 345-andChapter 26 of the Code of Criminal Procedure, 1973-.
(7) A claimant who is dissatisfied with the decision of the Commissioner, may prefer an appeal against the decision to the principal civil court of original jurisdiction within (he local limits of whose jurisdiction the registered office of the Company is situated: Provided that where a person who is a Judge of a High Court is appointed to be the Commissioner, the appeal shall lie to the High Court at Calcutta, and such appeal shall be heard and disposed of by not less than two Judges of that High Court.
SECTION 21: DISBURSEMENT OF MONEY BY THE COMMISSIONER TO CLAIMANTS
After admitting a claim under this Act, the amount due in respect of such claim shall be paid by the Commissioner to the person or persons to whom such sums are due, and, on such payment, the liability of the Company in respect of such claim shall stand discharged.
SECTION 22: DISBURSEMENT OF AMOUNTS TO THE COMPANY
(1) If, out of the monies paid to him in relation to the undertakings of the Company, there is a balance left after meeting the liabilities as specified in the Schedule, the Commissioner shall disburse such balance to the Company.
(2) Where the possession of any machinery, equipment or other property, has vested in the Central Government or a Government company under this Act, but such machinery, equipment or other property does not belong to the Company, it shall be lawful for the Central Government or the 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 Company immediately before the 1st day of April, 1975.
SECTION 23: UNDISBURSED OR UNCLAIMED AMOUNT TO BE DEPOSITED TO THE GENERAL REVENUE ACCOUNT
Any money paid to the Commissioner which remains undisbursed or unclaimed for a period of three years from the last day on which the disbursement was made, shall be transferred by the Commissioner to the general revenue account of the Central Government, but a claim to any money so transferred may be preferred to the Central Government by the person entitled to such payment and shall be dealt with as if such transfer had not been made, the order, if any, for payment of the claim being treated as an order for the refund of the revenue.
CHAPTER 7 MISCELLANEOUS
SECTION 24: ACT TO HAVE OVERRIDING EFFECT
The provisions of this Act shall have effect notwithstanding anything in consistent 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,
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