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ALCOCK ASHDOWN COMPANY LIMITED (ACQUISITION OF UNDERTAKINGS) ACT, 1973
56 OF 1973
STATEMENT OF OBJECTS AND REASONS Messrs. Alcock Ashdown and Company Limited was incorporated on 17-3-1884 at Bombay. The Company owns two plants, one at Bombay and the other at Bhavnagar. Its activities which are included in the list of priority industries, comprise of Light and Heavy Structurals, Transmission Line Towers, Railway Points and Crossings, Ship Repairs, BoatBuilding, Marine Diesel Engines, etc. 2. The Company which was making substantial profits till 1965 started declining from 1969 onwards and came to a close in January, 1971. The affairs of the Company were subsequently investigated by the Government through an Investigation Committee and the report revealed that while the deterioration in the performance of the Company was caused by a number of factors, the primary cause was the serious lapse on the part of the management in running the Company. 3. After the. closure of the Company, on the application of one of its unsecured creditors, an order for the winding up of the Company was made by the Bombay High Court on 13-1-1972. After the winding up order, on the application of the Bank of Maharashtra one of the secured creditors of the Company, a Receiver was appointed by the High Court for looking after the interests of the secured creditors. The Official Receiver has now invited tenders regarding the auctioning of the properties of the Company at Bombay and Bhavnagar. 4. As the Company was formerly engaged in the boat building, ship repairs and the production of marine diesel engines, and was also engaged in the production of goods which are essential to the needs of the country in general and defence departments in particular, the necessity to revive the activities of the Company for the production of goods for the various strategic use was carefully considered. After considering all the aspects of the matter, it is felt that it is expedient, in public interest, to acquire, on payment of a sum of rupees one crore, the undertakings of Messrs. Alcock Ashdown and Company Limited at Bombay and Bhavnagar. The Bill seeks to achieve the said object.- S.O.R. Gaz. of Ind., 28-11-1973, Pt. II, S. 2, Ext., p. 968. Act 33 of 1974.- Section 4 (1) of the Alcock Ashdown Company Limited (Acquisition of Un- dertakings) Act, 1973, specifies the properties which are deemed to be included within the ambit of the expression "undertakings of the company". A doubt has been expressed as to whether book debts due to the company and loans and advances made by the company, and moneys recoverable by the company from its directors or shareholders by way of misfeasance or other proceedings are also in- cluded within the ambit of the expression "undertakings of the company". The Central Government has been advised that by way of abundant caution, a clarificatory amendment should be made to make it clear that the expression "undertakings of the company" does not include book debts due to the company and loans and advances made by the company and any amounts recoverable by the company from its shareholders or directors. Accordingly, the Act was amended by an Ordinance promulgated by the President to make explicit what was already implicit in section 4(1) of the Act. 2. The Bill seeks to replace the Alcock Ashdown Company Limited (Acquisition of Undertakings) Amendment Ordinance, 1974.- SOR - Gaz. of Ind., 1-8-1974, Pt-ll, S. 2, Ext., p. 792. Act 38 of 1988.- The undertakings of the Alcock Ashdown Company Limited comprised of two units, one in Bombay and the other in Bhavnagar, Gujarat which were acquired by the Central Gov- ernment through the Alcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973. Immediately after the acquisition of the undertakings, the Central Government, in exercise of powers under section 8 of the Act entrusted the management, and administration of the two units viz,; (1) Bombay unit and (2) Bhavnagar unit to (1) Mazagon Dock Limited, a Government of India undertaking under the Ministry of Defence and (2) Industries Commissioner, Government of Gujarat, respectively. Since then, the respective managements of Mazagon Dock Limited and Government of Gujarat have been running the units. 2. Prior to the acquisition of the undertakings of the company both the Mazagon Dock Limited and the Government of Gujarat had expressed their keen interest in ultimately owning the respective units in public interest. While acquiring the undertakings of the company, the Central Government was also of the view that th^ownership of the two units would in due course be transferred to them who had been managing these units. 3. While the Central Government was actively considering the transfer of the two units, a question arose whether under the existing provisions of the Act, the units could be transferred. After examining the provisions of the Act, it however appeared that in the absence of specific provisions in the Act, the Central Government cannot transfer the right, title and interest vested in it to any other Government or organisation. 4. The Bill seeks to re-vest the property of the Bhavnagar and Bombay units of the undertakings of the Alcock Ashdown Company Limited in the State Government of Gujarat and Mazagon Dock Limited, respectively. The Bill also seeks to safeguard the interests of the existing employees of Bhavnagar unit by continuing their employment, provide for the transfer of Provident fund and other funds to the State Government and for the saving of all contracts, deeds and bonds, to which the Central Government is a party in relation to the said unit. Gaz. of Ind., 14-12-1987, Pt.ll, S.2, Ext" P. 5 (No. 65) An Act to provide for the acquisition of the undertakings of the Alcock Ashdown Company Limited for the purpose of ensuring rational and coordinated develop- ment and production of goods essential to the needs of the country in general, and defence department in particular and for matters connected therewith or incidental thereto. WHEREAS Alcock Ashdown Company Limited were engaged in boat building, ship repairs and the production of marine diesel engines, and were also engaged in the production of goods which are essential to the needs of the country, such as, the company an order has been made by the High Court at Bombay for the winding up of the company; AND WHEREAS there has been a complete closure of the work of the undertaking owned by the company from after January, 1971; AND WHEREAS it is urgently necessary to bring the undertakings owned by the company into operation so that the interests of the country in general, and the defence department in particular, may not be adversely affected by reason of the stoppage of production and supply of goods produced by the company; BE it enacted by Parliament in the Twenty-fourth Year of the Republic of India as follows
SECTION 1: Short title:
This Act may be called The Alcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973.
SECTION 2: Definitions:
In this Act, unless the context otherwise requires,- (a) "appointed day" means the date on which this Act comes into force;
(b) "company" means the Alcock Ashdown Company Limited, being a company as defined in (Companies Act, 1956), and having its registered office in the State of Maharashtra;
(c) "Court" means the High Court at Bombay;
[(ca) "notification" means a notification published in the Official Gazette;
(cb) "undertakings of the company" means- (i) the industrial unit owned by the company and located at Bhavnagar in the State of Gujarat (hereinafter referred to as the Bhavnagar unit); and (ii) the industrial unit owned by the company and located in Bombay in the State of Maharashtra (hereinafter referred to as the Bombay unit).]
(d) words and expressions used herein and not defined but defined in (Companies Act, 1956) , have the meanings respectively assigned to them in that Act.
SECTION 3: Undertakings of the company to vest in the Central Government:
On and from the appointed day, the undertakings of the company shall by virtue of this Act, be transferred to, and shall vest in, the Central Government.
SECTION 4: General effect of vesting:
(1) The undertakings of the company shall be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments 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 [in relation to the undertakings] whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto. [Explanation.- For avoidance of doubt it is hereby declared that the expression undertakings of the company' does not include- (a) any debts due to the company and (b) any amounts recoverable by the company from its shareholders or directors.]
(2) All property included as aforesaid in the undertakings which have vested in the Central Government under (section 3) shall, by force of such vesting, be freed and discharged from any trusts, obligations, mortgages, charges, liens and other incum- brances affecting it, and any attachment, injunction or any decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn.
(3) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any business of the undertakings of the company is pending by or against the company, 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 and enforced by or against the company.
SECTION 5: Duty to deliver possession of the undertakings and documents relating thereto:
(1) Notwithstanding any decree, judgment or order of any court or anything contained in any other law for the time being in force, the Receiver, Official Liquidator of the company or any other person, in whose possession or custody or under whose control the undertakings of the company or any part thereof may be, shall deliver possession of the undertakings of the company or such part thereof as may be in his possession, custody or control to the Central Government forthwith.
(2) The Receiver, Official Liquidator or any other person who has, on the appointed day, in his possession or under his custody or control any books, documents or other papers relating to the undertakings of the company which have vested, under (section 3), in the Central Government, shall be liable to account for the said books, documents or other papers to the Central Government or to such person as the Central Government may specify in this behalf.
(3) The Central Government may take, or cause to be taken, all necessary steps for securing possession of the undertakings which have vested in it under (section3).
SECTION 6: Duty to furnish particulars:
(1) The company shall, within such period as the Central Government may allow in this behalf, furnish to that Government a complete inventory of all the properties and assets of the company, as on the appointed day, pertaining to the undertakings which have vested in the Central Government under (section 3).
(2) So much of the obligation of the company under sub-section (1) as relates to the properties and assets of the company in the possession, custody or control of the Receiver shall be discharged by him and so much of that obligation as relates to the properties and assets in the possession, custody or control of the Official Liquidator shall be discharged by the Official Liquidator.
SECTION 7: Payment of amount:
(1) The Central Government shall deposit, in cash, in Court, to the credit of the company, an amount equal to the sum of rupees one crore for the transfer to, and vesting in, the Central Government, under (section 3), of the undertakings of the company.
(2) For the avoidance of doubts, it is hereby declared that the liabilities of the company in relation to the undertakings which have vested in the Central Government under (section 3), shall be met from the amount referred to in sub-section (1).
(3) In meeting the liabilities of the company in relation to the undertakings which have vested in the Central Government under (section 3), the Court shall distribute the amount referred to in sub-section (1) amongst the creditors of the company, whether secured or unsecured in accordance with their rights and interests, and if there is any surplus left after such distribution, amongst the contributories of the company in accordance with the rights and interests of such contributories.
SECTION 8: Management and administration of the undertakings:
The undertakings, which have vested in the Central Government under (section 3), shall be managed on behalf of the Central Government by such person or body of persons (including one or more Government companies, whether in existence at the commencement of this Act or incorporated thereafter) as may be nominated by the Central Government in this behalf, and such person or body of persons shall carry on the management in accordance with such regulations as may be made by the Central Government in this behalf.
SECTION 8A- Vesting of the Bhavnagar unit in the State Government:
[(1) Notwith- standing anything contained in (section 3) and (section 4), the Central Government shall direct by notification that all assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments and all other rights and interests in, or arising out of, such property of the Bhavnagar unit which have vested in the Central Government under (section 3), shall, instead of continuing of vesting in the Central Government, vest in the State Government of Gujarat (hereinafter referred to as the State Government), either on the date of publication of the notification or on such later date as may be specified in the notification.
(2) Where the assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments and all other rights and interests in, or arising out of, such property of the Bhavnagar unit vest, under sub-section (1), in the State Government that Government shall, on and from the date of such vesting, be deemed to have become the owner of such unit and the rights and liabilities of the Central Government in relation to that unit shall, on and from the date of such vesting, be deemed to have become the rights and liabilities of the State Government.
SECTION 8B: Vesting of Bombay unit in Government company:
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