 the burn company and indian standard wagon company (nationalisation) bill, 1976 arrangement of clauses chapter i preliminary clauses1 short title &nd commencement 2 definitions  chapter ii acquisition of the undertakings of the two companies3 transfer and vestin'g in central government of the undertakings of the two companies 4 general effect of vesting 5 owners of the two companies to be liable for certain prior liabilities 6 power of the central government to rurect vesting of the undertakings of the two companies in a government company  chapter iii payment of amounts7 payment of amount 8 payment of further amount  chapter iv management, etc, of the undertakings of thr: two companies9 management, etc, of the undertakings of the two campanies 10 duty of persons in charge of management of the undertakings of the two companies to deliver all assets, etc 11 accounts and audit  chapter v provisions relating to employees of the two companies12 employment of certain employees to continue 13 provident and other funds   chapter vi commissioner of payments clauses14 appointment of commissioner of payments 15 payment by the central government to the commissioner 16 certain powers of the central government or government company 17 claims to be made t() the commissioner 18 priority of claims 19 examination of claims 20 admission ()r rejection of claims 21 disbursement of money by commissioner to claimants 22 disb:1rsements of amounts to the two companies 23 unctisbursed or unclaimed amount to be deposited with the general revenue account  chapter vii miscellaneous24 assumption of liability 25 act to have overriding effect 26 contracts to cease to have effect unless ratified by the central government or government company 27 penalties 28 offences by companies 29 protection of action taken in good faith 30 delegation of powers 31 power to make rules 32 power to remove difficulties 33 declaration as to the policy of the state 34 repeal and saving the first schedule the second schedule  the burn company and indian standard wagon company (na tionalisation) bill, 1976 a billto ptovide fot the acquisition of the undettakings of the bum 'and company limited and the indian standard wagon company limited with a view to ensuring the continuity of the production of goods which ate vital to the needs of the economy of the c01mtty and fot the fulfilment of the co-nttacts fot the supply of railway wagons abroad and for matters connected therewith or incidental thereto be it enacted by parliament in the twenty-seventh year of the republic of india as follows:- chapter i preliminarymencement s 1 (1) this act may be called the burn company and indian standard short wagon company (nationalisation) act, 1976 title and com-(2) the provisions of sections 27 and 28 shall come into force at once and the remaining provisions of this a~t sqall be deemed to have come into forc~ on the 1st 4ay of april, 1975 deftnitions 2 in this act, unless the cootext otherwise requires,-(a) "appointen day" means the 1st day of april, 1975; (b) "burn and company limited" includes its wholly owned subsidiary company, namely, coburn properties limited, having its registered office at 10 c, hungerford street, calcutta-17; 5 (c) "commissioner" means the commissioner of payments appointed under section 14; (d) "custodian" means the custodian appo,inted under sub-section (2) of section 9 to take over, or carry on, the management of the undertakings of either or both of the two companies; 10 (e) "ordinance" means the bum company and indian standard wagon company (nationalisation) ordinance, 1976; 8 of 1976 (f) "notification" means al notification published in the official gazette; (g) "prescribed" means prescribed by rules made under this act; is (h) "specified date" means such date as the central government may, by notification, specify for the purpose of any provision of this act, and different dates may be specified for different provisions of this act; 1 of 1956 (i) "two companies" means burn and company limited and 20 indian stannard wagon company limited, being companies as defined in the companies act, 1956, and both having their registered offices at lo-c, hungerford street, calcutta-17; (j) words and expressions used herein and not defined but defined in the companies act, 1956, have the meanings, respectively, 25 1 of 1956 assigned to them in that act  chapter ii acquismon of the undertakings of the two companies3 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 30 to such undertakings, shall stand transferred to, and shall vest absolutely in, the central government  transfer and vesting in central government of the undertakings of the two companies general e1fectof vesting 4 (1) the undertakings of each of the two companies referred to in section 3 shall be deemed to include au assets, rights, lease-holds, powers, authorities and privileges and all property, movable and immovable, includ- 3s ing lands, buildings, workshops, stores, instruments, machinery and equipment, cash balances, cash on hand, reserve funds, investments and book debts and all other rights and interests in, or arising out of, such property as were immediately before the appointed day in the ownership, possesaion, power ()r control of either of the two companies, whether within or outside 40 india, and all books of account, registers and all other documents of whatever nature relating thereto, and shall also be deemed to include the liabilities and obligations spe:ified in sub-section (2) of section 5 (2) all properties as aforesaid which have vested in the central government under section 3 shall, by force of such vesting, be freed and 4s d'i~charged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree 01' order of any court restricting the use of such properties in any manner or appointing any receiver in respect of the whole or any part of such s 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 10 commissioner of such mortgage, charge, lien or other interest (4) for the removal of doubts, it is hereby declared that the mortgagee of any property referred to in sub-section (3) or any other person holding any char~e, lien or other interest in, or in relation to, any such property shall be entitled to claim, in accordance with his rights and interests, pay-is ment of the mortga'ge money or other dues, in whole or in part, out of the amount specified, in relation to the company owning such property, in the first schedule, but no such mortgage, charge, lien or other interest shall be enforceable against' any property which has vested in the central government 20 (5) if, on the appointeci day, any suit, appeal or other proceeding of whatever nature in relation to any matter specified in sub-section (21) of section 5 in respect of any undertaking of either of the two compariies, instituted or preferred by or against either of the two companies, is pending, the same shall not abate, be discontinued or be in any way, prejudi-2s cially affected by reason of the transfer of the undertakings of either of the two companies or of anything contained in this act, but the suit, appeal or other proceeding may be continuerl, prosecuted or enforced by or against the central government, or, where the undertakings of the two companies are directed, under section 6 to vest in a government company, against 30 that government company 5 (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, 35 where the undertakings of the two companies are directed, under section 6, to vest in a government company, ,against that government company owners of the two companies to bellable for certain prior liabilities (2) any liability arising in respect of-(a) the loans advanced by the central government, or a state government, or both, to either of the two companies, or to both (to-40 gether with interest due thereon) after th,c management of the undertakings of the concerned company had been taken over by the central government; (b) the wages, salaries and other dues of employees of each of the two companies in respect of any period after the management of the 4s undertakings of the two companies 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 government company aforesaid and shall be discharged bv that government or government company, as and when repayment of 50 s~cb loans or amounts becomes due or as and when such wages, salaries or other dues become due and payable (3) for the removal of doubts, it is hereby declared that,-(a) save as otherwise expressly provided in this section or in any other provision of this act, no liability, 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 s be enforceable against the central government, or, where the undertakings of the two companies 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 either of the two com- 10 panie!t, passed after the appointed day, in respect of any matter, claim or dispute, not being a matter, claim or dispute in relation to any matter referred to in sub-section (2), which arose before that day, shall be enforceable against the central government or, where the undertakings of the two companies are directed, under section 6, to is vest in a government company, against that 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 undertakin'gs of the two companies are directed, 20 under section 6, to vest in a government company, against that government company pow-erof the central governmentto direct vesting of the undertakinis of the two companies in a government company 6 (1) notwithstanding anything contained in sections 3 and 4, the central government may, if it is satisfierl that a government company is willing to comply, or has complied, with such terms and conditions as that 25 government may think fit to impose direct, by notification, that the undertakings of the two companies and the right, title and interest of the two companies in relation to their respective undertakings which have vested in that government under section 3, and such of the liabilities of the two companies as are specified in sub-section (2) of section 5, shall 30 instead of continuing to vest in the central government, vest in the government company either on the date of the notification or on such earlier or later date (not being a date earlier than the appointed day) as may be ~pecified in the notification (2) where the right, title ann interest, and the liabilities referred to in 35 sub-section (2) of section 5, of each of the two companies, 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 1<uch undertakings, and all the rights and liabilities of the central govern- 40 ment in relation to such undertakings shall, on and from the date of such vesting, be deemed to, have becpme the rights and liabilities, respectively, of the government company  chapter iii payment of amountspayment 7 for the transfer to, and vesting in, the central government, under of amount section 3, of the undertakings of eaeh of the two companies and the right, title and interest of each of th,~ two com~anies in relation to suc:h undertakings, there shall be given by the central governm",nt t each of the two companies, in cash and in the manner specified in chapter vi, an amount equal to the amount specified against the name of such companyin the first schedule payment of further amount 8 (1) in consideration of the retrospective operation of the provisions s of sections 3, 4 and 5, there shall also be given, in cash, by the central government to each of the two companies an amount equal to an amount, calculated at the rates specified in section 5 of the burn company and indian standard wago,p company (taking over of management) act 57 of 1973 1973 for the period commencing on the appointed day and ending on the iodate of promulgation of the ordinance (2) the amount specified in section 7, and the amount determined under sub-section (1), shall carry simple interest at tbe rate of four per cedt per annum for the period commencing on the date of promulgation f the ordinance and ending on the date on which payment of such is amount is made by the central government to the commissioner (3) the amounts netermined in accordance with the provisions of slbsections (1) and (2) shall be given to each of the companies in addition to the amount specified against its name in the first schedule  chapter iv 20 management, etc, of the undertakings of the two companies9 (1) the general superintendence, direction, control and management of the affairs and business of the undertakings of each of the two companies the right, title and interest in relation to which have vested in the central government under section 3 shall,-mana8'ement etc, of the undertaldnpof the two companies 2s (a) where a direction has been made by the central government under sub-section (1) of section 6, vest in the government company specifie(\ in such direction, or (b) where no such direction has been made by the central government, vest in one or more custodians appointed by the central 30 government under sub-section (2), and thereupon the government company so specified or the custodian so appointed, as the case may be, shall be entitled to exercise all such powers and do all such things as either, or both, of the companies is or are authorised to exercise and do in relation to its or their undertakings 3s (2) the central government may appoint one or more individuals or a government company as the customan of the undertakings of either, or both of the two companies in relation to which no direction has been made by it under sub-section (1) of section 6 duty of persons in charge of man&iementof the undertakings of the two companies 10 (1) on the vestin'g, of the management of the undertakings of the 40 two companies in a government company or on the appointment of a custodian, all persons in charge of the management of the undertakings of either of the two companies 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 4s documents in their custody relating to the undertakings of such company tod~liver all assets etc (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 rluties 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 two companies shall be conducted by it or him or in relation to any other matter arising in the course of 5 such management (3) the custodian shall receive from the funds of the undertakings, in relation to which he is the custodian, such remuneration as the central government may fix and shall hold office during the pleasure of the central government 10 accounts and audit 11 the custodian of the undertakings of either, or both, of the companies shall maintain an account of the undertakings of the concernen company or companies in such form and manner and under such conditions as may be prescribed and the provisions of the companies act, 1956, shall 1 of 1966 apply to the audit of the account so maintained as they apply to the is audit of the accounts of a company  chapter v provisions relating to employees of the two companiesemploymentof certain employees to continue lz (1) every person who is a workman within the meaning of the inrlustrial disputes act, 1947, and has been, immediately before the appoint- 20 14011947 ed day, employed in any undertaking of either of the two companies shall become, on anrl 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 two companies in relation to their undertakings have vested under this act, and shall hold office or service under 25 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 30 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 meanin'g of the industrial disputes act, 1947, and who has been, immediately before 35 14: of 11147 the appointed day, employed in any unnertaking of either of the two companies 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 conditions and with the same rights and privileges as 40 to pension and gratuity and other matters as would have been admissible to him if the undertakings of the company in which he was employeci 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 45 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 oiaputel 14 of 194" 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 either of the two companies, to the central government or the govern-5 ment 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 (4) where, under the terms of any contract of service or otherwise, 10 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 other payment, not being payment by way of gratuity or pension, such person may, except to the extent of such liability which is has been taken over by the central government or the government company under sub-section (2) of section 5, enforce his claim against the company by which he was employed immediately before such transfer, but not against the central government or the government company 13 (1) where either of the two companies have established a p!'ovi- provident 20 dent fund, superannuation, welfare or other fund for the benefit of the and other persons employed in any of its und~'gs, the monies relatable to the funds officers or other employees, whose services have become transferrecl 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 25 such provirioent fund, superannuation, welfare or other fund, stand transferred to, and 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 government company in such 30 manner as may be prescribed  chaprer vi commissioner of payments14 (1) the central government shall, for the purpose of disbursing the amounts payable under seeiion 7, section 8, and sub-section (2) of section 35 15, to each of the two companies, by notification, appoint a commissioner of payments appointmentol commasionerol payment • (2) 'lbe cedtral government may appoint such other persons as it may think fit ,to assist the commissioner and thereupon the commillsioner may authorise one or more of such persons abo to exercise all 40 or ady ef the powers exercisable by him under this act and different persoilii li18y 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 eon-45 ferred on that person directly by this act and not hy way of authorisation (4) the salaries and allowances of the commissioner and other pe1'01 sods appointed under this section shall be defrayed out of the consolidated fund of india 15 (1) the central government shall, within thirty days from the specified date, pay in cash to the commissioner, for payment to each of j the two companies,-(a) an amount ~ual to the amount specified against the name of such company in the first schedule; and payment by th'e central govemmentto the commillioner (b) an amount equal to the amount payable to each of the two companies under section 8 10 (2) in addition to the sums referred to in sub-section (1), there shall be paid by the central government to the commissioner, in cash, such amount, payable under section 5 of the bum company and indian standard wagon company (taking over of management) act, 1973, to each 67 of 19'18 of the two companies in relation to the period commencing on the date is on which the management of the undertakings of each of the two eompanieji was taken over by the central government and ending on the appointed day, as remains unpaid (3) a deposit account shall be opened by the central government in favour of the commissioner, in the public account of india, and f!!very 20 amount pain 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 (4) separate records shall be maintained by the commissioner in respect of the undertakings of each of the two companies in relation to 25 which payments have been made to him under this act (5) interest accruing on the amounts standing to the credit of the deposit account referred to in sub-section (3) shall enure to the benefit of the two companies 16 (1) the central government or the goverrlment company, as the 30 case may be, shall be entitlen 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 ~he undertakings which have vested in the central government or the government company, ,ealised after the appointed day, notwithstanding that the realisation pertains to a period prior to the 35 appointed day certain powers of the central govemmentor government eompany (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 that government after the appointed day for discharging any liability of either of the two companies, not being any liability 40 specified in sub-section (2) of section 5, in relation to any peri-od prior to the appointeri day, and evfyry 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 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 tile liabilities of the respective company 17 every person having a claim against either of the two companies shall prefer such claim before the commissioner within thirty days from the specified date: clalmsto bemacte to the comma-_oiler provided that if the commissioner is satisfied that the claimant was s preventect 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 priority olclalml 18 the claims arising out of the matters specified in the second scheliule shall have priorities in accordance with the following principles, 10 namely:-(a) category i shall have precedence over all other categories and category ii shall have precedence over category ill, and so on; (b) the claims specified in each of the categories, except category iv, shall rank equally and be paid in full, but, if the amount is insufti-is cient to! meet such claims in full, they shall abate in equal propor+:ions and be paid accorciingly; (c) the liabilities specified in category iv 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; 20 and (d!) the question of dischargin'g 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 ~na­tionol clajma 25 19 (1) on receipt of the claims made unner section 17, 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 of priorities (2) if, on examination of the claims,· the commissioner is of opinion 30 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 admiabion fir rejectionot clalmi 20 (1) after examining the claims with reference to the priorities set out in the second schedule, the commissioner shall fix a certain date on 3s or before which every claimant shall file the proof of his claim or be excluded from the benefit of the rusbursement 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 the daily newspaper in the english language and one issue of such daily newspaper in the regional language 40 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 disburse-45 ments marie by the commissioner (4) the commissioner shall, after such investigation as may, in his opinion, be necessary and after giving the cojlcerned 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 (5) the commissioner shall have the power to regulate his own procedure in all matters arising out of th~ discharge of his functions, including the place or places at which he will hold his sitting 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, while 10 5 of 1908 trying a suit, in respect of the following matters, namely:-(4) 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; 15 (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 20 indian penal code and the commissioner shall be deemed to be a civil 45 of 1860 court for the purposes of section 345 and chapter xxvi of the code of criminal procedure, 1973 2 of 1974 (7) a claimant who is dissatisfied with the decision of the commissioner, may prefer an appeal against the decision to the principal civil 25 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 a commissioner, such appeal shall lie to the high court at calcutta and such appeal shall be heard and disposerl of by not less 30 than two jud'ges of that high court 21 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 each of the' two companies in respect of such claim shall stand discharged 3s diaburaementof money by commiaaiod8i'to claimants zz (1) if, out of the monies 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 ,l)ubarsements of amounts to the two companies (2) where the possession of any machinery, equipment or other property, has vested in the central government or a government company 40 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 government cojillpany 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, or both, the companies 4s immediately before the> 1st day of april, 1975 23 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 ge'neral revenue account of the central government; but a claim to any s money so transferred may be preferred to the central gqvernment 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 o'f revenue undisbursed ot unclaimed amount to be deposited with the general revenue account  chapter vii10  miscellaneousassumption ot liability, 24 (1) where any liability oif either of the two companies arising out of any item specified in category i of the second schedule is not discharged fully by the commissioner out of the amounts paid to him under this act, the commissioner shall intimate in writing to the central government is the extent of the liability which remains undischarged, and to that e;:tent the liability shall be assumed by the central government (2) the central government may, by order, direct the government company to take over any liability assumed by that government under sub-section (1) ami on receipt of such direction, it shall be the duty of ao the government company to discharge such liability act to have overriding effect 25 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 2s other authority 26 (1) every contract entered into by either of the two companies in relation to any of its undertakings which have 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 30 one hundred and eighty ~ys from the date of promulgation of the ordinance, cease to have effect unless such contract is, before the expiry of that period, ratified, in writing, by the central government, or government company, and in ratifying such contract the central government or government company may make such alteration or modification therein 35 as it may think fit: contracts to c'ease to have eftect unless ratified by the cenkal governmentor government company provided that the central government or government company shall not omit to ratify a contract and shall not make any alteration or modification in a contract unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith or is detrimental to the 40 interests of the central government or the government company (2) the central government or government company shall not omit to ratify a contract, and, shall not make any alteration or mcwtiftcation therein, except after 'giving to the parties to the contract a reasonable op~ortunity of being heard and except after recorciing in writing its rea-45 sons for refusal to ratify the contract or for making any alteration or modification therein 27 any person who,-penalities (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 government company; or 5 (b) wrongfully obtains possesion of, or retains, any property forming part of any undertaking of either of the two companies, or wilfully withholds or fails to furnish to the central government or government company or any person or body of persons specified by that government or government company, any document relat- 10 ing to such undertaking, which may be in his possession, custody or control, or fails to deliver to the central government or government company 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 15 the undertakings of either of the two companies; or (c) 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, 20 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 (1) where an offence under this act has been committed by a company, every person who, at the time when the offence was committed 25 was in charge of, and was responsible to, the company for the conduct of the business of the co,mpany, 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 30 such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due dilige:nce 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 3s pr~ved 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 officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished 40 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 45 protection of action taken in good faith 19 (1) no suit, prosecution or other legal proceeding shall lie against the central government or any officer of that government or the custodian or the government company or other person authorised by that government or government company for anything which is in good s faith done or intended to ,be aone under this act (2) no suit or other legal proceeding shall lie against the central government or any of its officers or other employees of the governmen~ company or any officer or other person authorised by that company for any damage caused or likely to be caused by anything which is in good to faith done or intended to be done under this act delegation of powers 30 (1) the central government may, by notification, direct that all or any of the powers exercisable by it under this act, other than the power conferred by section 31, may also be exercised by such person or persons as may be specified in the notification is (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 a~d supervision of the central government 31 (1) the central government may, by notification, make rules for carrying out the provisions of this act power to make 20 (2) in particular and without prejudice to the generality of the rules foregoing powers, 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; 25 (b) the form and the manner in which and the conditions under which the custodian shall maintain the accounts as required by in section 11; (c) the manner in which the monies in any provident fund or other fund, referred to in section 13, shall be dealt with; 30 (d) 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, 3s may be comprised in one ses'sion 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 be made, the rule shal1 thereafter have effect only in such modified 40 form or he 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 power to remove difflcultiea 32 if any difficulty arises in giving effect to the provisions of this act, the central government may, by order, not inconsistent with the 45 provisions of this act, remove the difficulty: ~rovided that no such order shall be made after the expiry of 8 period of two years from the date on which this act receives the assent or the president 33 it is hereby declared that this act is for giving effect to the poiiey of the state towards securing the principles specified in clause (b) of article 39 of the constitution f>eciara tion as to the policy of the state expzanation-in this section, "state" has the same meaning as in article 12 of the constitution s repeal and saving 57 of 1973 8 of 1976 :m (1) the burn company and indian standard wagon company (taking over of management) act, 1973, and the bum company and indian standard wagon company (nationalisation) ordinance, 1976, are hereby repealed 10 (2) notwithstanding such repeal,-(a) anything doone or any action taken by the custodian in exercise of the powers of the board of management of the two! companies at any time within the period during which the management of the undertakings of the two companies remained vested in the central government or at any time before the date on which this act is receives the assent of the president, shall be deemed to have been done or taken in accordance with law; (b) anything done or any action taken under the ordinance so repealed shall be deemed to have been done or taken under the corresponding provisions of this act 20  the first schedule[see sections 7, 8 and 15 (2)] s1 name of the company no amount (rupees in lakhs) 1,38800 25 1 burn and company limited 1,13500 2 indian standard wagon company limited  the second schedule (see sections 18, 19, 20 and 24) order of priorities for the discharge of liabilities of the two companies part "a" post-take-over management periodcatego'l'y 1-(a) loans advanced by banks (b) loans advanced by the industrial reconstruction corporation of india  35 (c) credit availed of for purposes of trade or manufacturing operatioll'b category 11-(a) revenue, taxes, cesses, rates or other dues of central government or a state government 40 <b) sales tax; rates and taxes; contributions to be made to the employees' state insurance fund, and additional dearness allowance payable to employees  part "b" pre-take-over management periodct1t~gory 111-arrelli'l in relatior to provident fund, salaries and wages and other 5 amounts due to employees category iv-secured loam category v-revenue, taxes, cesses, rates or any other dues to the central govern-]0 ment, a state government, a local authority or a state electricity board category vi-(a) any credit availed of for purpose of trade or manufacturing operations (b) any other dues  statement of objects and reasonsthe bum and company limited and the indian standard wagon company limited are inter-linked, both financially and production-wise these two companies were engaged in the production of goods which are vital to the needs of the economy of the country, such as, railway wagons and components thereof, steel structurals, iron castings, forgings and the like and also other goods needed by the iron and steel industry 2 both the companies were functioning reasonably well till 1966-87 after which, due to mismanagement, there was a steady decline in the production of the companies towards the middle of 1973, the companies reached a stage at which their undertakings were on the verge of closure as the closure of the undertakings of the two companies would have adversely affected the production of commqdities vital to the needs of the country and also would have prejudicially affected the commitment of the government of india with regard to the export of railway wagons the central government took over the management of the undertakings of the companies, pending nationalisation of such undertakings, by i a parliamentary legislation with effect from the 19th december 1973 3 the liabilities of both the companies far exceeded the value of their assets at the time when the management of the undertakings of the companies was taken over after the taking over of the management of the undertakings of the companies, the central government took a number of steps to improve the operation of such undertakings; and, as a result of such steps, both the companies have shown satisfactory upward trends in production however, the liabilities of both the companies with regard to the payment of interests on loans advanced by banks, particularly in relati~ to the credit facilities made available to them by the banks, came up to as high as rs 15 lakhs per day the liquidity position of the companies was, consequently, going down steeply in the circumstances, the burn company and indian standard wagon company (nationalisation) qrdinance, 1976 (8 of 19(6) was promulgated by the president to provide for the acquisition of the undertakings of the two companies 4 the bill seeks to replace the said ordinance and also to repeal the parliamentary legislation by which the management of the undertakings of the two companies was taken over by the central government new delhi; t a pal the 4th august 1976  president's recommendation under article 117 of the constitution of india[copy of letter no3 (2) /76/hm-ni, dated the 5th august, 1976 from shri t a pai, minister of industry and civil supplies to the secretary-general, lok sabha] the president having been informed of the subject matter of the bill to provide for the replacement of the ordinance 'the burn company and indian standard wagon company (nationalisation) ordinance, 1976 (no8 of 1976), by act of parliament, recommends, under clauses (1) and (3) of article 117 of the constitution, the introduction of the said bill ~d iui consideration by lok sabha clause 7 of the bill provides for payment, in cash and in the manner specified in chapter vi, an amount equal to the amount specified against the name of each of the two companies specified in the first schedule to the bill for vesting in the central government, the right title and interest of such company in relation to the undertakings owned by it the bill, if enacted, would thus involve an expenditure of the order of rs 138800 lakhs in respect of burn and company limited; and rs 113500 lakhs in respect of indian standard wagon company limited the total expenditure which will thus be involved will be of the order of rs 252300 lakhs 2 sub-clause (2) of clause 5 of the bill provides that the liability arising in respect of (a) the loans advanced by the central government or state government or both, to the two companies (together with interest due thereon) after the management of the undertakings of the concerned company had been taken over by the central government and (b) the wages, salaries and other dues of employees of each of the two companies in respect of any period after the management of the undertakings of the two companies had been taken over by the central government, shall on and from the appointed day, be the liability of the central government ~ of the government company aforesaid and shall be discharged by the government or government company as and when repay- ment of such loans or amounts becomes due or as and when such wages, salaries or other dues become due and payable it is estimated that the expenditure on this account will be of the order of rs 131800 lakhs 3 sub-clause (1) of clause 8 provides for payment of further amount in cash, in consideration of the retrospective operation of the provisions of clauses 3, 4 and 5 to each of these two companies, an amount equal to an amount, calculated at the rates specified in section 5 of the burn company and indian standard wagon company (taking over of management) act, 1973, for the period commencing on the appointed day and ending on the da~ of promulgation of the ordinance viz, 23rd june, 1976 it is estimated that the expenditure on this account will be of the order of rs 1 00 lakh 4 sub-clause (2) of clause 8 provides for payment of simple interest at the rate of 4 per cent per annum for the period commencing from 23rd june, 1976 and ending on the date em which the payment of the amounts specified in 'clause 7 are made by the central government to the commissioner of payments it is estimated that the interest payment in terms of the provisions of the said sub-clause is likely to be of the order of rs 462 lakhs per month for burn and cmlpany limited and rs 3781akhs per month for indian standard wagon company limited the total expenditure which is likely to be involved on this account is estimated ~ be of the order of rs 840 lakhs per month 5 under clause 14 of the bill, commissioner of payments will be appointed by the government with adequate staff to assist him for the purpose of disbursing the amounts, payable to these two companies the salary and allowances of the commissioner of payments and hia staff and the expenditure of office and establishment will be defrayed out of the consolidated fund of india the esti~ted expenditure on this account is likely to be of the order of rs 20,000 pe~ month 6 under sub-clause (2) of clause 15 of the blll, the central government shall pay to the commissioner, in cash such amount, payable under section 5 of the burn company and indian standard wason company (taking over of management) act, 1973, to each of th~ two companies in relation to the period commencing on the date on which, the management of the undertakings was taken over by the central government and ending on the appointed day, n, 31st march, 1975, as remains unpaid : the amount is estimated to be of the or~er of rs 100 lakh i ii 7 after the takeover of management of the two companies, tbey have operated the banking transactions through the united badk of india th~ united bank of india bas fully co-operated with the gov-ernment during the post-takeover period in extending credit fadutiet to these two companies at a point of time, when not even the liliwauro finance required to keep the units going could be made available tlwty were assured by the -government in february, 1974 that in the ev~tl of nationalisation, the government would ensure that the interest of the bank does not suffer the total export packing credit for y~via wagon deal obtained from the united bank of india wa be 20oa crores in the case of burn and c~pany limited and rs 814, cro,::es in uut case of indian standard wagon company limited, both during the pretakeover and post-takeover of management periods the united bamk o~ india packing credit extending during the pre-takeover, as well as posttakeover management period, is a separate and distinct arrangement and the government have to ensure that the credit is paid back even though receivables might fall short of thie credit, on account of the reduction in the size of the order and the amounts payable to the companies 10lnder clause 7 might be inadequate the government are therefore r~quired to pay back to the united bank of india the shortfall, whlch approximately works out to rs 660 clore!> in the cases of both, burn and, company ~nd indian standard wagon company th~ ~ill does not, however, contain any provision regarding the said payment the said payment will be made after due appropriation by lrarliament by law 8 funds will also have to be provided to th8tle undertakings, for the modernisation and expansion the expenditure on modern1tt"uon and expansion is necessary to make these undertaiqris ftflul,(;:ially viable the total investment during the remainipg fifth· p1&jl periild: has been estimated at rs 90000 lakhs this expenditure wul also be ,illcurred after due appropriatiotn by parliament by law 9 the bill, if enacted, is not likely to involve any other r~u~_ or non-recurring expenditure clause 31 of the bill empowers, 'tbe cebtral government to make rules to carry out the provisions of the bill such rules may provide for iiultlten, -b lui-~o) the time within which and the manner in which, an intimation referred to in sub-clause (3) of clli1lse 4 df the bill shall be given; (b) the form ,nd the manner in which and the conditions under which the custodian shan maintain the accounts as provided in clause 11; (c) the manner in which monies in any provident fund or other fundr referred to in clause 13 shall be deak with 2 the matters in respect of which such rules may be made are aatterr of procedure and administrative detail and it is harcl1y practicable to provide for them in the bill itself the delegation of the legislative power is, therefore, of a normal character place the burn company and indian standard wagon company (nationazisation) otdinance, 1&76 apart from changes of a formal, drafting and consequential nature two changes have been made in the bill, namely:-(i) it has been clarified that burn and cojnp~y limited includes coburn properties limited, which is its wholly owned subsidiary, and (i~) sub-section (2) of section 22 at the ordinance 'has been modified to enable the central government or a government company t~ possess machinery, equipment or other property, which though not belonging to the twpcompanies, were ~r thqir possession or control, on the same terms and conditions lb'lcier which it was possessed by the two companies immediately before the 1st day of april, 1975 '-'  a billto provide for the acquisition of the undertakings of the bum and company limited and the indian standard wagon company limited with a view to ensuring the continuity of the production 01 goods which are vital to the needs of the economy of the country and for the fulfilment of the contracts for the supply of railway wagqlll abroad and for matrers connected therewith or incidental thereto, (shri t a pai, mmtater of induatry) 