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BRENTFORD ELECTRIC (INDIA) LIMITED (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT 1987
36 of 1987
15th September, 1987
STATEMENT OF OBJECTS AND REASONS The Brentford Electric (India) Limited, Calcutta, (BEIL), established in 1964, has been in existence for about 23 years and has been engaged in the manufacture of regulators of up to 5000 KVA, rectifiers, special transformers, distribution transformers, etc. The products of the company are of high quality and are required for defence establishments, State Electricity Boards and atomic energy establishments. The company is at present employing about 200 persons. 2. BEIL started incurring losses from 1975 and ran into serious Financial difficulties in 1976. The management of the company was taken over by the Central Government under
section 18AA of the Industries (Development and Regulation) Act, 1961and Andrew Yule and Company Limited, a Government company, was appointed as the 'authorised person'for managing its affairs. The period of take over of the management of BEIL was extended from time to time and is presently stands extended up to the 25th November, 1987. At the time of take over, the accumulated losses of BEIL were Rs, 90.37 lacs and its liabilities to third parties aggregated to Rs. 87.33 lacs. However, the sales turnover of the company has improved considerably in the post-take-over period and it has been able to turn the corner by 1979-80, thus establishing that its operations are technically and cominercially viable During the years 1979-80, 1980-81, 1981-82and 19g5-86,the company earned profits. During the years 1982-83 and 1984-S5, the undertaking incurred losses mainly due to labour problems and lock-out. 3. Considering the fact that the company had heavy losses on ths date if to take over, it is evident that it would never be able to service iis old liabilities, though its current operations, without the drag of the pre-take-over liabilities, are viable (sic). The company cannot at the same time be run for an in definite: period under the provisions ofthe Industries (Development and Regulation) Act, 1951. 4. Studies made to determine the future set up of the Company revealed that the undertakings of the Company should be nationalised in order to consolidate the gains of management and ensure uniterrupted supply of critical items required by defence establishments, etc. In view of the importance and high demand of the products manufactured by the company and the loss of employment to about 200 persons if the company were to be closed down, it is cosidered necessary to take over the undertakings of the company. 5. The Bill seeks to achieve the aforesaid object. A part from providing for the acquisition and transfer of the undertaking of the company, the Bill provides for the payment of an amount for such acquisition, vesting of the undertaings of the company in then Andrew Yulem a Governmnet company, appointment of a Commissioner of Payment for the purpose of disbursing the amount payable to the company and for other incidental and consequential matters. -Gaz. Of Ind. 14-8-1987, Pt. II , S. 2, Ext, p. 15 (No. 33).
An Act to provide for the acquisition and transfer of the undertakings of the Brentford Electric (India) Limited, with a view to securing the proper management of such undertakings so as to subserve the interests of the general public by ensuring the continued manufacture and production of electrical equipments which are essential to the needs of the economy of the country and for matters connected therewith or incidental thereto. WHEREAS the Brentford Electric (India) Limited had been engaged in the manufacture and production of articles mentioned in the First Schedule to the Industries (Development and Regulationary Act, 1950, namely, electrical equipments; AND WHEREAS the management of the undertakings of the Brentford Electric (India) Limited was taken over by the Central Government under Section 18AA of the Industries (Development and Regulation) Act, 1951. AND WHEREAS it is necessary to acquire the undertakings of the Brentford Electric (India) Limited to ensure that the interests of the general public are served by the continuance by the undertakings of the company of the manufacture and production of the aforesaid articles, which are essential to the needs of the economy of the country. BE it enacted by Parliament in the Thirty-eight Year of the Republic of India as follows:
CHAPTER 01: PRELIMINARY
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This act may be called the Brentford Electric (India) Limited (Acquisition and Transfer of Undertakings) Act 1987.
(2) The provisions of sections 26-andSection 27-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, 1986.
SECTION 02: DEFINITIONS
- In this act, unless the context otherwise requires.
(a) "Andrew Yule" means the Andrew Yule and Company Limited, Calcutta, a company formed and registered under the Companies Act, 1956-.
(b) "appointed day" means the 1st day of April, 1986.
(c)"Commissioner" means the Commissioner of Payment appointed under section 14-.
(d)"Company" means the Brentford Electric (India) Limited a company within the meaning of the Companies Act, 1956-, and having its registered office at 8, Clive Row Calcutta in the state of west Bengal.
(e) "notification" means a notification published in the Official Gazette.
(f) "prescribed" means prescribed by rules made under this act.
(g) "specified date" in relation to any provisions of this act, means such date as the Central Government may, by notification specify for the purpose of that provision and dates may be specified for different provisions of this Act.
(h) words and expressions used herein and not defined but defined by the Companies Act, 1956-, shall have the meanings respectively assigned to them in that Act.
CHAPTER 02: ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE COMPANY
SECTION 03: TRANSFER TO, AND VESTING IN, THE CENTRAL GOVERNMENT OF THE UNDEWRTAKINGS OF THE COMPANY
On the appointed day, the undertakings of the Company, and the right, title and interest of the Company in relation to its undertakings, shall, by virtue of this Act, stand transferred to and vest in the Central Government.
SECTION 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 property, moveable and immoveable including lands, buildings, workshops stores, instruments, machinery and equiment cash balances, cash on hand, cheques, demand drafts, reserve funds, investments books debts, and all other rights and interest 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 records 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 them, and my attachment, injunction, decree or order of any Court, unounall or other authority restricting the of such properties in any manner shall be deemed to haw 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 five, within such time and in such manner as may be prescribed, an intimation to the Commissioner of such mortgage, charge, lien or other intents.
(4) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in subjection (3) or any other person holding any charge, lien or other interest in, or in relation to, any such property shall be entitled to claim, in accordance with his rights and interests, payment of the mortgage money or other dues, in whole or in part, out of the amount specified in section 7-and also out of the amounts 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) Any licence or other instrument granted to the Company in relation to any undertaking which has vested in the Central Government under section ) 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 6-, in Andrew Yule, that company shall be deemed to be substituted in such licence or other instruments as if such licence or other instrument had been granted to Andrew Yule and that company shall hold it for the remainder of the period for which the Company would have had it under the terms thereof.
(6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any property which has vested in the Central Government under section 3-, instituted or preferred by or against the Company is pending, the same .shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertakings of the Company or of anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced by or against the Central Government or where the undertakings of the Company are directed, under section 6-. to vest in Andrew Yule, by or against Aardreww Yule.
SECTION 05: COMPANY TO BE LIABLE FOR CERTAIN PRIOR LIABILITIES
(1) Every liability of the Company, other than the liabilities specified in sub-section (2), 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, o(, where the undertakings of the Company are directed, under section 6-, to vest in Andrew Yule, against Andrew value.
(2) Any liability arising in respect of advances made to the Company for the supply of articles, or in respect of materials supplied to the Company, after the management of the undertakings of the Company had been taken over by the Central Government shall, on and from the appointed day, be the liability of the Central Government or of Andrew Yule, as the case may be, and shall be discharged by that Government or Andrew Yule, a* and when payment for such advances or supplies becomes 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 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 Andrew Yule, against Andrew Yule;
(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 Andrew Yule, against Andrew Yute;
(c) no liability incurred by the Company before the appointed day for the contravention of any provision of law for (he 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 Andrew Yule, against Andrew Yule.
SECTION 06: POWER OF CENTRAL GOVERNMENT TO DIRECT VESTING OF THE UNDERTAKINGS OF THE COMPANY IN ANDREW YULE
(1) Notwithstanding anything contained in section 3-andSection 4-, the Central Government may, subject to such terms and conditions as it may think fit to impose, direct, by notification,1that 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 Andrew Yule, 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 referred to in subjection (2) of section 5, of the Company Act-in relation to its undertakings vest in Andrew Yule under sub-section (1), Andrew Yule shall, on and from the date of such vesting, he 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 Andrew Yule.
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,and the Company, and the right, title and interest of the Company in relation to its undertakings, there shall be paid by the Central) Government to the Company in cash, and in the manner specified in Chapter VI, an amount of rupees thirty-seven lakhs and Fifty thousand.
SECTION 08: PAYMENT OF FURTHER AMOUNTS
(1) For the deprivation of the company of the management of it undertaking, there shall he paid by the Central Government to the Company in cash, an amount calculated at the rate of five thousand rupees per annum for the period commencing on the date on which the management of the undertakings of the Company was taken over in pursuance of the order made by the Central Government under section 18AA of the Industries (Development and Regulation) Act, 1951, and ending on the appointed day.
(2) In consideration of the retrospective operation of the provisions of sections 3-,section 4-and section 5-, time shall also be paid by the Central Government to the Company in cash, an amount calculated at the rate of five thousand rupees per annum for the period commencing on the appointed day and ending on the date on which this Act receives the assent of the President.
(3) The amounts specified in section 7-, and the amounts determined in accordance with the provisions of sub- sections (1) and (2), shall carry simple interest at the rate of four per cent per annum for the period commencing of the appointed day and ending on the date on which payment of such amount 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 paid 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 undertaking which have vested in the Central Government under section 3-, shall be discharged from the amount referred to in section 7-, and also from the amounts determined under sub-sections (1), (2) and (3), in accordance with the rights and interests of the creditors of the Company.
SECTION 10: DUTY OF PERSONA IN CHARGE OF MANAGEMENT OF THE UNDERTAKINGS OF THE COMPANY TO DELIVER ALL ASETS, ETC
(1) On the vesting of the management of the undertaking Of the Company in Andrew Yule, all powers in charge of the management of the undertakings of the Company immediately before such vesting shall be bound to deliver to Andrew Yule all assets, books of account, registers or other documents in their custody relating to the undertakings of the Company.
(2) The Central Government may issue such directions as it may deem desirable in the circumstances of the case lo Andrew Yule as to its powers and duties and Andrew Yule 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.
SECTION 11: DUTY OF PERSONS TO ACCOUNT FOR ASSETS, ETC., IN THEIR POSSESSION
(1) Any person who has, on the appointed day, in his possession or under his control, any assets, books, documents or other papers relating to any undertaking owned by the Company, which have vested in the Central Government or in Andrew Yule under this Act and which belong to the Company or would have so belonged, if the undertakings owned by the Company had not vested in the Central Government or Andrew Yule, shall be liable to account for the said assets, books, documents and other papers to the Central Government or Andrew Yule and shall deliver them to the Central Government or Andrew Yule or to such person or persons as the Central Government or Andrew Yule may specify in this behalf.
(2) The Central Government or Andrew Yule may take or cause to be taken all necessary steps for securing possession of the undertakings of the Company which have vested in the Central Government or Andrew Yule under this Act.
(3) The Company shall, within such period at the Central 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 undertakings which have vested in the Central Government under section 3-and for this purpose, the Central Government or Andrew Yule shall afford to the Company all reasonable facilities.
CHAPTER 05: PROVISIONS RELATING TO THE EMPLOYEES OF THE COMPANY
SECTION 12: CONTINUANCE OF EMPLOYEES
(1) Every person who has been, immediately before the appointed day, employed In any
undertakings of the Company shall become,-
.(a) on and from the appointed day, an employee of the Central Government, and
(b) where the undertakings of the Company are directed under sub-section (1) of section 5-to vest in Andrew Yule, an employee of Andrew Yule on and from the date of such vesting; and shall hold office or service under the Central Government or Andrew Yule, as the case may be, with the rights and privileges as to pension, gratuity and other matters admissible to him immediately before the appointed day, a¯ modified by the Memoranda of Settlement signed by the representatives of the management and the employees of the Company on the 28th day of January, 1986 and the 30th day of January, 1986, and shall continue to do unless and until his employment under the Central Government or Andrew Yule, as the case may be, is duly terminated or his remuneration and other conditions of service are duly altered by the Central Government or Andrew Yule, as the case maybe.
(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 undertaking of the Company, to the Central Government or Andrew Yule shall not entitle such officer or other employee to claim 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.
SECTION 13: PROVIDED FUND AND OTHER FUNDS
(1) Where the Company has established a provident fund, superannuation fund, welfare fund or any other fund for the benefit of the persons employed in any of its undertakings, the moneys relatable to the officers or other employees, whose services have become transferred by or under this Act to the Central Government of Andrew Yule shall, out of the moneys standing, on the appointed day, to the credit of such provident fund, superannuation fund, welfare fund or other fund, stand transferred to and vest in, the Central Government for Andrew Yule, as the case may be.
(2) The moneys which stand transferred under sub-section (1) to the Central Government or Andrew Yule, as the case may be, shall be dealt with by that Government or Andrew Yule in such manner, as may be prescribed.
CHAPTER 06: COMMISSIONER OF PAYMENTS
SECTION 14: APPOINTMENT OF COMMISSIONER OF PAYMENT
(1) The Central Government shall, for the purpose of disbursing the amounts payable
under sections 1-andsection 8-to the Company, 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,2pay, in cash, to the Commissioner, for payment to he Company,-
(a) an amount equal to the amount specified in section 7-, and
(b) further amount equal to the amounts 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) Records shall be maintained by the Commissioner in respect of the undertakings of the Company in relation to which payments have been made to him under this Act.
(4) 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 16: CERTAIN POWERS OFTHI CENTRAL GOVERNMENT OR ANDREW YULE
( I ) The Central Government or Andrew Yule, 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 Andrew Yule, and realised after the appointed day notwithstanding that the realisation pertains to a period prior to the appointed day.
(2) The Central Government or Andrew Yule, as the case may be, may make a claim to the Commissioner with regard to every payment made by the Government or Andrew Yule, after the appointed day, for discharging any liability of the Company, not being any liability specified in subsection
(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 beer discharged by the Central Government or Andrew Yule.
(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 acclaim against the Company with regard to any of ;he matters specified in the Schedule, pertaining to any of its undertakings, 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.
SECTION 18: PRIORITY OF CLAIMS
The claims made under section 17-shall have priorities in accordance with the following principles namely:--
(a) Category I shall have precedence over all other categories and Category III shall have
preceded over Category
(b) the claims specified in each of the categories shall rank equally and be paid in full, but, if the amount )_ insufficient to meet such claims in full, they shall abate in equal proportions and be paid accordingly; wd (c)
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 an examination of the claims, the Commissioner is of opinion that the amount paid to him under this Act it 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.
(2) Not less than fourteen days' notice of the date so fixed shall be given by advertisement in one issue of any daily newspaper in the English language having circulation in the major part of the country and one issue of any daily newspaper in such 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 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, ir. 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, by order 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 may 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 section 193-andsection 228 of the Indian Penal Code-and the Commissioner shall be deemed to be a civil Court for the purposes of , and Chapter XXVI-,section 195 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 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 whose such amount is due and on such payment, the liability of (lie Company in respect of such claim shall stand discharged.
SECTION 22: DISBURSEMENT OF AMOUNTS TO THE COMPANY
(1) If, out of the moneys paid to him in relation to the undertakings of the Company, there is a balance left after meeting the liabilities 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 -Andrew Yule 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 Andrew Yule, 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 appointed day.
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