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INCHEK TYRES LIMITED AND NATIONAL RUBBERMANUFACTURERS LIMITED (NATIONALISATION) ACT 1984

ACT NO. 17 OF 1984

[31st March, 1984.]

Short title and commencement.

1. Short title and commencement. (1). This Act may be called the Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984.

(2) It shall be deemed to have come into force on the 14th day of February, 1984.

Definitions. 2. Definitions. In this Act, unless the context otherwise requires,- (a) "appointed day" 'means the 14th day of February 1984; (b) "Commissioner" means the Commissioner of Payments appointed under section 15; (c) "existing Government company" means a Government company which is carrying on business on the appointed day; (d) "new Government company" means a Government company formed and registered on or after the appointed day; (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 provision of this Act, means such date as the Central Government may, by notification, specify for the purposes of that provision, and different dates may be specified for different provisions of this Act; (h) "two companies" means the Inchek Tyres Limited and the National Rubber Manufacturers Limited, being companies as defined in the Companies Act, 1956 (1 of 1956), and having their registered offices at "Leslie House", 19 Jawaharlal Nehru Road, Calcutta-700013; (i) words and expressions used herein and not defined but defined in the Companies Act, 1956 (1 of 1956), shall have the meanings respectively assigned to them in that Act. 118

Transfer to, and vesting in, the Central Government of theundertakings of the two companies. 3. Transfer to, and vesting in, the Central Government of the undertakings of the two companies. On the appointed day, the undertakings of each of the two companies, and the right, title and interest of each of the two companies in relation to its undertakings, shall, by virtue of the Act, stand transferred to, and shall vest in, the Central Government.

Companies to be liable for certain prior liabilities.

5. Companies to be liable for certain prior liabilities. (1) Every liability, other than the liability specified in sub-section

(2), of each of the two companies in respect of any period prior to the appointed day, shall be the liability of the concerned company and shall be enforceable against it and not against the Central Government, or where the undertakings of the two companies vest in an existing, or a new, Government Company, against such Government company.

(2) Any liability arising in respect of materials supplied to either of the two companies after the management of its undertakings had been taken over by the Central Government, shall, on and from the appointed day, be the liability of the Central Government or of the existing, or new, Government company aforesaid, and shall be discharged by that Government or, as the case may be, the existing, or new, Government company, as and when repayment for such 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, other than the

liability specified in sub-section (2), of either of the two companies in relation to its undertakings in respect of any period prior to the appointed day shall be enforceable against the Central Government, or, where the undertakings of the two companies vest in an existing, or a new, Government company, against such Government company; (b) no award, decree or order of any court, tribunal or other authority in relation to the undertakings of either of the two companies, passed on or 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 where the undertakings of the two 120 companies vest in an existing, or a new, Government company, against such Government company; (c) no liability incurred by either of the two companies 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 two companies vest in an existing, or a new, Government company, against such Government company. CHAP PAYMENT OF AMOUNTS CHAPTER III PAYMENT OF AMOUNTS

Payment of amount. 8. Payment of amount. For the transfer to, and vesting in, the Central Government, under section 3, of the undertakings of each of the two companies, and the right, title and interest of each of the two companies in relation to its undertakings, there shall be paid by the Central Government to each of the two companies, in cash and in the manner specified in Chapter VI, amount equal to the amount specified against the name of such company in the First Schedule.

Management, etc., of the undertakings of the two companies. 10. Management, etc., of the undertakings of the two companies. The general superintendence, direction, control and management of the affairs and business of the undertakings of each of the two companies, the Tight, title and interest in relation to which have vested in the Central Government under section 3, shall,- (a) where a direction has been given by the Central Government under

sub-section (1) of section 6, vest on and from the date specified in such direction, in the existing Government company specified therein; or

(b) where a declaration has been made under sub-section (1) of section 7, vest, on and from the date of such declaration, in the new Government company specified therein; and thereupon the existing, or new, Government company so specified, shall be entitled to exercise, to the exclusion of all other persons all such powers and do all such things as either, or both, of the two companies, is or are, authorised to exercise and do in relation to its or their undertakings. 122

Duty of persons in charge of management of undertakings of the twocompanies to deliver all assets, etc. 11. Duty of persons in charge of management of undertakings of

the two companies to deliver all assets, etc. (1) On the vesting of the management of the undertakings of the two companies in an existing, or a new, Government company, all persons in charge of the management of the undertakings of either of the two companies immediately before such vesting shall be bound to deliver to such Government company, all assets, books of account, registers and other documents in their custody relating to the undertakings.

(2) The Central Government may issue such directions as it may deem desirable in the circumstances of the case to the existing, or new, Government company and such Government company may also, if it is considered necessary so to do, apply to the Central Government at any time for instructions as to the manner in which the management of the undertakings of the two companies shall be conducted or in relation to any other matter arising in the course of such management.

Duty of persons account for assets, etc., in their possession. 12. Duty of persons 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 the undertakings owned by either of the two companies, which have vested in the Central Government or in an existing, or a new, Government company under this Act, shall be liable to account for the said assets, books, documents and other papers to the Central Government or the existing, or new, Government company, as the case may be, and shall deliver them to the Central Government or the existing, or new, Government company or to such person or persons as the Central Government or the existing, or new, Government company may specify in this behalf.

(2) The Central Government or the Government company aforesaid may take, or cause to be taken, all necessary steps for securing possession of the undertakings of the two companies which have vested in the Central Government or the Government company under this Act.

(3) The two companies shall, within such period as the Central Government may allow in this behalf, furnish to that Government a complete inventory of all their 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 the Government company aforesaid shall afford to the two companies all reasonable facilities. CHAP PROVISIONS RELATING TO EMPLOYEES OF THE TWO COMPANIES CHAPTER V PROVISIONS RELATING TO EMPLOYEES OF THE TWO COMPANIES

Continuance of employees.

13. Continuance of employees. (1) Every person who has been, immediately before the appointed day, employed in any undertaking of either of the two companies shall become,- (a) on and from the appointed day, an employee of the Central Government, and (b) where the undertakings of the two companies are directed, under section 6 or under section 7, to vest, in an existing, or a new, Government company, an employee of such Government company on and from the date of such vesting, and shall hold office or service under the Central Government or the existing, or new, Government company, as the case may be, with the rights and privileges as to pension, gratuity and other matters, admissible to him immediately 123 before the appointed day, as modified by the Memorandum of Settlement signed by the representatives of the management and the employees of each of the two companies on the 10th day of February, 1984, and shall continue to do so unless and until his employment under the Central Government or the existing or new, 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 existing, or new, Government company, as the case may be.

(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 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 either of the two companies, to the, Central Government or the existing, or new, Government company, shall not entitle such officer or other employee to any compensation under this Act or any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority.

Provident fund and other funds.

14. Provident fund and other funds. (1) Where either of the two companies has established a provident fund, superannuation, welfare or 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 or an existing, or a new, Government company shall, out of the moneys standing, on the appointed day, to the credit of such provident fund, super-annuation, welfare or other fund, stand transferred to, and shall vest in, the Central Government or the existing, or new, Government company, as the care may be.

(2) The moneys which stand transferred under sub-section (1) to the Central Government or the existing, or new, Government company, as the case may be, shall be dealt with by that Government or the existing, or new, Government company in such manner as may be prescribed. CHAP COMMISSIONER OF PAYMENTS CHAPTER VI COMMISSIONER OF PAYMENTS

Appointment of Commissioner of Payments.

15. Appointment of Commissioner of Payments. (1) The Central Government shall, for the purpose of disbursing the amounts payable under sections 8 and 9 to each of the two companies, 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 defraved out of the Consolidated Fund of India. 124

Payment by Central Government to the Commissioner.

16. Payment by Central Government to the Commissioner. (1) The Central Government shall, within thirty days from the specified*1 date, pay in cash to the Commissioner, for payment to each of the two companies,- (a) an amount equal to the amount specified against the name of such company in the First Schedule; and (b) an amount equal to the amounts payable to each of the two company in the First schedule; and

(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) Separate records shall be maintained by the Commissioner in respect of the undertakings of each of the two companies in relation to which payments have been made to him under this Act.

(4) Interest accruing on the amount standing to the credit of the

deposit account referred to in sub-section (2) shall enure to the benefit of the two companies.

Certain powers of Central Government or existing, or new, Governmentcompany. 17. Certain powers of Central Government or existing, or new,

Government company. (1) The Central Government or the existing, or new, Government company, as the case may be, shall be entitled to receive up to the specified date, to the exclusion of all other persons, any money due to either of the two companies in relation to its undertakings which have vested in the Central Government or the existing, or now, Government company, as the case may be, and realised after the appointed day notwithstanding that the realisation pertains to a period prior to the appointed day.

(2) The Central Government, or the existing, or new, Government company, as the case may be, may make a claim to the Commissioner with regard to every payment made by it after the appointed day, for discharging any liability of either of the two companies, 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 existing, or new, Government company.

(3) Save as otherwise provided in this Act, the liabilities of either of the two companies 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 respective company.

Priority of claims. 19. Priority of claims. The claims arising out of the matters specified in the Second 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; --------------------------------------------------------------------- 1. 1.12.1984: Vide Notification. No. S.O. 895 (E), dt. 30.12.1984 2. 1.4.1985: Vide Notification. No. S.O. 24 (E), dt. 17.1.1985. 125 (b) the claims specified in each of the categories 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; and (c) 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.

Examination of claims.

20. Examination of claims. (1) On receipt of the claims made under section 18, the Commissioner shall arrange the claims in the order of priorities specified in the Second Schedule and examine the same in accordance with such order.

(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.

Admission or rejection of claims.

21. Admission or rejection of claims. (1) After examining the claims with reference to the priorities specified in the Second Schedule, the Commissioner shall fix a 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 in 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 adver- tisement.

(3) Every claimant who fails to file the proof of his claim within the period specified by the Commissioner shall be excluded from the disbursement made by the Commissioner.

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary and after giving the concerned company an opportunity of refuting the claim and after giving the claimant a reasonable opportunity of being heard, admit or reject by order in writing the claim in whole or in part.

(5) The Commissioner shall have the power to regulate his own procedure in all matters arising out of the discharge of his functions, including the place or places at which he may hold his sittings and shall, for the purpose of making any investigation under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 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 and 228 of the Indian Penal Code (45 of 1860) and the Commissioner shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974). 126

(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 concerned company is situated: Provided that where a person who is a Judge of a High Court is appointed, to be the Commissioner such appeal shall lie to the High Court exercising jurisdiction over the place in which the registered office of the concerned company is situated and such appeal shall be heard and disposed of by not less than two Judges of that High Court.

Disbursement of money by Commissioner. 22. Disbursement of money by Commissioner. 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 amount is due, and on such payment, the liability of each of the two companies in respect of such claim shall stand discharged.

Disbursement of amounts to the companies.

23. Disbursement of amounts to the companies. (1) If, out of the moneys paid to him in relation to the undertakings of either of the two companies, there is a balance left after meeting the liabilities as specified in the Second Schedule, the Commissioner shall disburse such balance to the concerned company.

(2) Where the possession of any machinery, equipment or other property has vested in the Central Government or the existing, or new, Government company under this Act, but such machinery, equipment or other property does not belong to either of the two companies, it shall be lawful for the Central Government or the existing, or new, Government company, as the case may be, to continue to possess such machinery or equipment or other property on the same terms and conditions under which they were possessed by either of the two companies immediately before the appointed day.

Undisbursed or unclaimed amount to be deposited with the generalrevenue account. 24. Undisbursed or unclaimed amount to be deposited with the general revenue account. Any money paid to the Commissioner which remains undisbursed or unclaimed on the date immediately preceding the date on which the office of the Commissioner is finally wound up, shall be, transferred by the Commissioner, before his office is finally wound up, to the general revenue account of the Central Government; but a claim to any money so transferred may he 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, and the order, if any, for the payment of the claim being treated as an order for the refund of revenue. CHAP MISCELLANEOUS CHAPTER VII MISCELLANEOUS

Act to have over-riding effect. 25. Act to have over-riding effect. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any court, tribunal or other authority.

Contracts to cease to have effect unless ratified by the CentralGovernment or existing or New Government company. 26. Contracts to cease to have effect unless ratified by the Central Government or existing, or New, Government company. Every contract entered into by either of the two companies in relation to any of its undertakings which has vested in the Central Government under section 3 for any service, sale or supply, and in force immediately before the appointed, day, shall, on and from the expiry of a period of one hundred and eighty days from such day, cease to have effect unless such contract is, before the expiry of that period, ratified, in writing, by the Central Government or the existing, or new, Government company and in ratifying such contract, the Central Government or the existing, or new, Government company may make such alteration or modification therein as it may think fit: 127 Provided that the Central Government or the existing, or new, Government company shall not omit to ratify a contract and shall not make any alteration or modification in a contract- (a) unless it is satisfied that such contract is unduly onerous, or has been entered into in bad faith, or is detrimental to the interests of the Central Government or such Government company; and (b) except after giving the parties to the contract a reasonable oppor- tunity of being beard and except after recording in writing its reasons for refusal to ratify the contract or for making any alteration or modification therein.

Penalties. 27. Penalties. Any person who,- (a) having in his possession, custody or control any property forming part of any undertaking of either of the two companies, wrongfully withholds such property from the Central Government or the existing, or new, Government company; or (b) wrongfully obtains possession of, or retains, any property forming part of any undertaking of either of the two companies; or (c) wilfully withholds or fails to furnish to the Central Government or the existing, or new, Government company or any person or body of persons specified by that Government or Government company, any document relating to such undertaking, which may be in his posses- sion, custody or control; or (d) fails to deliver to the Central Government or the existing, or new, Government company, as the case may be, or any person or body of persons specified by that Government, or Government company, any assets, books of account, registers or other documents in his possession, custody or control, relating to the undertakings of either of the two companies; or (e) wrongfully removes or destroys any property forming part of any undertaking of either of the two companies or prefers any claim which he knows or has reasonable cause to believe to be false or grossly inaccurate. shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to ten thousand rupees, or with both.

Offences by companies.

28. Offences by companies. (1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly-: Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other 128 officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section,-- (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm.

Protection of action taken in good faith.

29. Protection of action taken in good faith. (1) No suit, prosecution or other legal proceeding shall lie against the Central Government or the existing, or new, Government company or any officer or other employee of that Government or the Government company or any person authorised by that Government or Government company for anything which is in good faith done or intended to be done under this Act.

(2) No suit, or other legal proceeding, shall lie against the Central Government or the existing, or new, Government company, or any officer or other employee of that Government or Government company or any person authorised by that Government or Government company for any damage caused or likely to be caused by anything which is in good faith done or intended to be done under this Act.

Delegation of powers.

30. Delegation of powers. (1) The Central Government may, by notification, direct that all or any of the powers exercisable by it under this Act, other than the powers conferred by this section, section 31 or section 32, may also be exercised by such person or persons as may be specified in the notification.

(2) Whenever any delegation of power is made under sub-section

(1), the person to whom such power has been delegated shall act under the direction, control and supervision of the Central Government.

Power to make rules.

31. Power to make rules. (1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: - (a) the time within which, and the manner in which, an intimation

referred to in sub-section (3) of section 4 shall be given; (b) the manner in which the moneys in any provident fund or other fund referred to in section 14 shall be dealt with; (c) any other matter which is required to be, or may be, prescribed.

(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not he made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Repeal and saving.

33. Repeal and saving. (1) The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Ordinance, 1984 (4 of 1984), is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.