 corrigenda to the smith stanistreet and company limi'led (acquisition and transfer of undertakings) bill, 1977 l-to be/as introduced in 10k sabhaj1 page 4, line 32,-for ito by " read ''by'' 2 page 7, line 20,-for "ensure" ~ "enure" 3 page 11, line 29,-- for "power" ~ "powers" 4 docket page, last line,-tqr "pe tro lium" ~ "pe tro leum" new:delhi; n,q,vember ~6, ~977 kartika 2 , 1 99 (saka)   (acquis~tionand'transferof undertakings) ,', "' i bal, 1977 ' , ", f " arrangement of clauses ,~i prl:liminary,~""use& " 1 short title and commencement 2 definitions  chapter ii alcquisitlon and tralljsfer of the undertakings of 'l'h&' c~3 transfer to and vesting in central goverdnlent of the undertakings of the company 4 general effect of vesting " i, i 5 central government or qov81'nment company no~ to be llable for prior liabilities  , ",,', 6 power of central government to di~ect vesting of the undel'-takings of the company in a governni8l1t· iloidpy~,; , chapter iii payment of amounts 7 payment of amount 8 payment of further amount chapter iv management, etc, of the undertakings of the company 9 management, etc, of the undertakings of the company 10 duty of persons in charge of management of the unciertakidji of the company to deliver all assets, etc 11 accounts and audit chapter v  provisions relating to employeu of thj: compahy 12 employment of employees to continue1& provident and other funds chapter vi  comkissiober of paymbn'l'ii14 appointment of commissioner of payments 15 payment by the central goverjlidlll!nt to the conmdssfoner 18 certain powers of the central government or govel'llldedt company 17 claims to be made to the commissioner 18 priority of claims 19 examination of claims ,20 admission or rejection of claims 21 disbursement of money by cgmmissioner to daimants - ,  ~ i 22 disbursement of amounts to the company 23 undisbursed or unclaimed amount to be deposited with the general revenue account 24 assumption of liability  chapter viimiscellaneous 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 protectior of action taken in good faith 30 delegation of powers 31 power to make rules 32 power to remove difficulties 33 declaration as to pollcy of the state 34 repeal and saving the schedule  bill, i977 a billto ptovide for, in the p1tblic interest, the acquibition and trat'&l~r of the     right, t~tle and interest of the undertakings of messrs smith, stani-    street and company limited, calcutta and for matters connected     therewith or incidental thereto                                                                                      whelteas messrs smith, stanistreet and company limited, calcutta were engaged in the manufacture and distribution of phannaceuueals and chemicals which are essential to meet the needs of the public;     and whereas the management of the undertakings of the company s was in a manner highly detrimental to the public interest and had  suffered heavy losses;   and whereas the management of the company was taken over by the central govemment under section 18a of the industries (developmen't and regulation) act, 1951; 10       and wheilidas for the purpose of recqtlstructlng and rehabwtating the   undertakings of the company so as to subserve the interest of tb:e general   public by the augmentation and distriblltion of the different varieties ot   essential phannadeuticals and chemicals produced by the said company,   and to ensure the eo~tinued supply thereof, it is necelilsary to acquire the is right, title and interest of the undertakings of messrs smith, stanistreet   ,nd 'company limited, calcutta   be it enacted by                       parliamen~ in the twenty-eighth year of the republic of india asfollows:- chapter i preliminary1 (1) this act may be called the smith, stanistreet and company s limited (acquisition and transfer of undertakings) act, "1977 shortutle id4commencemet (2) it shall be deemed to have come into foi'c'3 ~ the 1st day of october, 1977 l in this act, unless the context otherwise requires,-(a) "appointed day" means the 1st day of october, 1977; 10 (b) "company" means the smith, stanistreet and company limited, being a cumpany as defined in the companies act, 1956 and 1 of 1958 having its registered office at 18, convent road, calcutta-700014; (c) iicommissioner" means the commissioner of payments appointed under section 14; is (d) "notification" means a notification published in the official gazette; (e) "prescribed" m;eans prescribed by rules made under this act; 0jn(fk~lspe~d s\ate""jilqa'lls such d,w; ~; tpe, (c~~jaev~-'20 ('p-~,yillfy, ·for ,the plrposes of 'illly of the prov~i\,ot:ij1ii m ~ notification, specify and different datesillay be specified "for' dl1i'erent provisions of this act;  (g) words and expressions used herein and not defined but defined in ~he companies act, 1966 have the meanings respectively 2s 1 of 1958   assigned to them in: that act  chapter ii:, ,", ~ \                                    i - v                                                      - ~ ~                                                                                            -                                                                                                         i \': j :·')1 !       , ~uisit;ion ~d transfer of the undert~in~ o~ the company        a,j                  i                        -'                            ~                                  '  h-'                                                           t'''·                                                                       i                                                                                               '                                                                                                        • :~                                                                                                                  f'~  !m  ·,                                                                                                                                     ~  :,  ~'!~i~                                                                                                                                                        'r'~~1!l"'~ 'v'\l       ii,on the,appqinted day, the unc1ertaldngajqf·,tpe '~~"'~'i~' i right, title:and :interest of ,the company in" relatipn 1 tor,itt' un4f~:30 shall, by virtue of this act, be transferred to, and shall vest in, the ce~tr~1 ''gb~emment~ tradafer "to ad vel_in central qovem-mento! the under-tajddp of the com-pany general etrect of veatldj·                                                                             '                                                                                                                                                                           :'/ /~                                                                                                      "        • (1) the lmdertaldngs of the company shall, be clfaia6neci'to "~; all •• ri •• lease-hcjds, powers, authqritjes ad4'·priv~ ~;aa1 , pr~~=~v~li 'lnd i!rirnovab~ -~tluding ~~                                                                                                                                   ' ~·,b~gi, i'! ::wgffr: ~s ' shops,                            ' ldstruments,                                                                        m3chinery:and,eqwpm~tif' casq ~~9'¥h, calfi·::6niflaftdi'reservetunds,·:irtvesbnmb, ~,dsbitai'~ ~i                                                                                                                                                                       ~,,, and" ih1jwmte ' 1ft, or arisingout 01" ,such· ~m                                                                                                                                         ~q\ljrq~~~ befon! tjtei:·ppt'lfmtid day in theown~hip pcmt$sih!,,~\!er,pr,~trql'ji"t of the company, whether within or outsi~e'~ 8z)d il1l p,()oq "of ~                                      3 < i, ~t, registers and all other documents of wh,atever nature relating thereto (2) all properties as aforesaid which have vested in the central ~qvernqlent ,under section 3 shall, by force of such vesting, be ~ and 5 4}~~ged ti'!lin any trust, obliga~on, mortgage, charge, lien and an other ~cwnbrri;lces affecting it, and any attachment, injunction or decree 61" ~der qf any court restricting the use of such property in any manner or ~inting any receiver in respect of the whole or any part of such  p~ shall be deemed '(0 have been withdrawn " , ' 10 (3) every mortgagee of ~y property which has vested under ttds act in the central government and every person holding any charg~, lien or other interes~in, or in relation to, any such propercy $all give, witbfn such time and in such manner as may be prescribed, an intimation to the commi~oner of such mortgage, charge, lien or other interest 15 (4) for the removal of doub~s, it is hereby declared that th~ ~ort:-8,\gee of any property referred to in sub-section (3) or any other persor ~din,g any charge, lien or oth;er intereslt in, or in relation to, ahysueh' i¥pp'j;'ty shall be entitled to claim, in accordance with hisrlghts' 'and  intereats, payment of the mortgage money or other dues, in whole or in 2~' p;u-t, 'outqf the amount specified in section 7, a,nd also out of, the monies determined under section 8, but, no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested fft the cen'tral government (5) if on the appointed day, any· $u1t, appeal or other proceeding by 25, 0f,a~~i~! ~!je ~ompany, o~ whatever nature in relation to any properly ~w~hj}ibs ,:,ested ih t~e central govemmlent, under section 3; fa pehdiilg, t~·~ shall" not abate, de discontinued or be, in anyway, prejudicially ai¥~ by reason of the transler of the undertakings of the comp~ ~j;; p,f ~~ng contained in this act, but the suit, appeal or ·other pro;,  30 ~ee&g may be continued, prosecuted or enforced by or against the  company  , :s: '(1) ev9lj' liability of the company in respect of any il'riqd prior ~)" to the appointed day, shall be the liability of the company ~d 11:))8 gawmjtr ehforeeable against it and not against the central govet;pmept, ,01,,, meft\iillhf: 35 ~ere the undertak~ngs of the company are directed,  under sectipn 6, :::::n to vest in a 'government company: again!jt that govern~ent company pany not (2) for the removal of doubts, it is hereby declajted that,-, , to be hable (a) save as otherwibe exprcsly provided in this act, no l~ty ~=:  i"of the company in relation to its un4ertakillgs j,n respeqt,pf any 40 i ·pelrf0d prior tq the appointed day, shall be enforceable against the central government, or, where the undert,pkings ot the co~~~ &ire directed, under section 6, to vest ·in a government i company,·, against that goy8mment companyi 45 (b) no award, decree (if orderqf nycourt, tribunal or o'ther authority in relation to the undertakings of the company, passed after the appointed day, in respect of any matter, clim or disjilute, which arose befo~e that ~y, shall be enforceable against the ,9entral government, or, w~ere ~he undertakings of the company are ,direc,teci, under section 6, to vest in a governmept company, against t118t government company; 50 (c) no liability incurred by th~ company before t~ awoint:e4 day, for the contr01vention of any prqvision of law (or t~ time being in force, shall be enforceable against the central government, or, where the undertakings of the company are directed, under section 6, to vest in a government company, against that government cqillpany 6 (1) notwithstanding anything contained in sections 3 and 4, the, power of central government to diredvestingof the undertakinpofthe company in a government company c~ntral government may, if it is satisfied that a government company is willing to comply, or has complied, with such terms and conditions as that government may think fit to impase, direct, by notification, that the undertakings of the company and the right, title and interest of the company in i'elation to its undertakings which have vested in that [0 government under s'cction 3, shall, instead of continuing 'to vest in that government, vest in the government company either on the date of the notification or on such earlier or la'ter date (not being a date ealrlier than the appointed day) as may be speeified in the notification (2) where the right, title and interest of the company in relation to is 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 ownler in relation to such undertakings, and all the rights and liabilities of the central government in relatlon to such undertakings shall, on and from the date of such vesting, be 20 deemed to have become the rights and liabilities, respectively, of the government company  chapter iii payment of amountspayment of amount 7 for the transfer to, and vesting in, the central ~vermnent, under 2s section 3, of the undertakings of the company ,and the ri,)lt, title and interest of the company in relation to its undertakings,there shan b~ given by the central government to the company, in cash, and in the manner specified in chapter vi, an amount of three crores and seventyfour thousand rupees 30 payment offutitber amount 8 (1)' for the deprivatioil of the company of the management of-its undertakings, there shall be given to the company oby the central govern ment an amount calculated at the rate of ten thousand rupees per annum for the period commencing on the date on which the management of tbe undertakings of the company was taken over by the central governme~t ,3s and ending on·the appointed day '" (~) the amount specified in section 7 and the amount determined under sub-section (1) shall carry simple interest at the rate of four ,per cent pet' annum for the period ('ommencing on the appointed day and  eliding on the date on which the payment' of the amount is made by the 40 central government to the commissioner (3) the amount determined in accordance with the provisions of subsections (1) and (2) shall be given by the central gqvernment to the company in additior;' to the amou!llt sp"ecified in section 7 (4) for the removal of doubts it is hereby declared that the liabilities 45 of' the company in relation to its undertakings whicoh have vested in the central government under section 3, shall be discharged from the amount referred to in section 7, and also from the amounts determined under sub-sections (1) and (2), in accordance with the rights and lnt-ereets 'of the creditors of the company ,0  chapterlv management etc, of the undertakings of the companyman  i t (1) the g~leral superintendence, direclion, cootrol and management  qf the aitalrl:i and busuwss or the wldertaluugs of t1ie company, 5 the right, tj:tle and imerel>lt in relation to which ha ve vested in tne central government under section 3, shall,-ment~ - , 01 the \ldciertu  inpofthe compad1' (a) where a direction has been issued by the central government under sub-section (1) of section 6, \'lest in the: government company specified in such direction; or 10 (b) where no such direction has been issued by the ceutral government, vest in one or more custodians appointed by the central government under sub-section (2), and thereupon the go~nmenl co-mpany so specified or the custodiwa so appointed, as the case may ,be, shall be entitled to exercise all such 15 powers and do all such things as the company is authorised to exercise and do in relation to its under'akings (2) the central government may appoint one or more individuals or a goverrunent company as the cwitodlan of the undertakulgs of tbje company in relation to which no direc~ion has been issued by it under 20 sub-section (1) of section 6  lb (1) on the vesting of the management of the undertakinas 9f the company in a goverrunent company or on the appointnlerx, of a cwnodian, all persons in charge of the management of the updertakings 'of the company immediately before such vesung or appointment, 'shajl be 25' ~und to deliver to the lioverrunent (ompany or the custodian, 8& the ase may be, all assets, books of account, registers or other documents in their custody relating to the undertakings of thecomp,any ~;,4(, pel'lodlia charle of manapment ot the undertakinrt of the company to deuverall uleta, etc : l , :, t ~(', j - • (2) the central g<lvernment may issue such directions' as it may deem desilrable in the circums~ of the case to the government company ~r the custodian as to its or his powers and duties and the gov-30 ernment company or custodian may also, if it or hello desires, apply to the central gqv1ernment at any time for instructions as to the·~ in which the management of the wldertakings of the company shall'be conducted by it or him or in relation 'to any other matter arising in the course of such managemjelll 35 (3) the custodian shall receive from the funds of the undertakinas of the company such remuneration as the central govermnen~ may fix and ahall hold office during the pleasure of 'the government hfj~ "" lot 18&8 , ,,!;i 11 the c\,lstodian of the undertakings of the company shall maintain the' accounts of the undertakings of the company in such form and in such 4oma1mer and under such conditions as may' be prescribed an4 the·· prcr  ~ons of the companies act~' 1956,' shall apply to the audit of·1he ~unta so ~tained as t4ey apply to the audit of the accounts of a i -  ','  -company  chapter v  ' i provisions relating to ;£mployees of the companyemploy-~of ed1p1oy8el to ocmtidue - ,'" i~ • :12 (1) every p;erson who has been, immmediately 'befqre the appointed day, employed by the company in relation to its undertakings, shall become, on and from the appointed day, an employee of tbe s central government or, as the calle may be, 01 the liovemment company referred to in section 6, and shall hold o1'ftce or service under ·the central govemment or government company, as the c~ may be, with the same remuneration and upon the same terms and conditions, with the same rights and privileges as to pension, gratuity and other matters as 10 would have been admissible to him if tnere had been no such vesting and shall' continue to do so unl~s and until his employm,ent under the central government or ihe government company, as the case may be, ~ duly 'terminated or until his remuneration, tt;rnl& and conditions ~ servk:e are duly altered by the central government or the govel'lulledt is ~mpany, as the case may be (2) notwithstanding anythij;lg contained in the industrial disputes act, 11147 or in any olher law for the time being in force the transret· of 14 of 1947 the sel'vices of any officer or other person employed in  the undertakings of the company to the central government or the government company 20 shall no~ entitle such officer or other employee to any compensatioll under this act qr undf::r any other law for the tilne being in force '3:nd no such claim shall be entertained by any court, 'tribunal or other authority: ,  13 (1) where' the company has established a provident, superannuiition;  welfare or other fund for the benefit of the persons employed 25 in the undertakings of the company, the monies relatable t4 the employees, whose services have become tcansferred by or under this act to 'the central g'lvemment or government company, shall, out of ·the monies j;'taruiing, on the appo,inted day, to the credit of such provi-:-dent, superannuation, welfare or other fund, stand transferred to, add 30 shall vest in, the ~tral government or the go'vemment company as the case may be _ _ il - : (2) the monies which stand transferred under sub-sedtion (1) to the central goveminent or the· govtemment eqmpany, as the case may be, ;~1l ~ dealt with by that government or the government company in 3s juch manner as may be prescribed ; '-"  ,   chapter vi commissioner of paymli:hts appointment of commii- ~·'of 1itva ••14 (1) the central government shall, for the pul'pose of  the adlouotl;payabj8'to the company'ubderilectlonl 'i  8, hf-otmiea- 40 tiod, appoint a commissioner of payments ·c···· (2) tbe cntr~ go~cu'dldent lbay appoidt iuch other persou u   ,it may wak 6t toua,ist tbecodld1issi~v ud lliehupon tbe>'dbiml~ _her may authorise ·oaeor ~ol"e of such perion's also to eite'r~~c~or , oltbe jh)w~ ,~erels,e~ble ,by ~im~~' 't!ils a~t· ~d r~~"'t 4s ; • ' pet'iodi may he autborised to exercise 4il&r8bt powers   , ", r 'r j - , (3vahyperson authorised jy the comlldssteaer to exercise any of the powers exerdaeable by the commissioaer may exerdse those powers in the same manner and with the same effect as if they have been eellferred on that person directly by this act and n~t by way of authorisation s (4) the salaries and allowances of the commissioner and other penoas appointed under this section shall be defrayed out oftha colilolidated f1ibd of india 1~ (1) the central government shall, within thirty days from the specified date, pay, in cash,to the commissioner, for payment to the 10 company-(a) an amount equal to the amount specified in section 7; and payment by the central govemment to the corn-'m1ss1oner (b) an amount equal to the amount payable to t~ company under section 8 (2) a deposit account shall be opened by the central government is 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 account and the said deposit account shall be' operated by th,e commissioner (3) interest accruing on the amounts 1¢anding to the credit of ~ 20 deposit account referred to in sub-section (2) shall ensure to the said account certain powenvf the centralgovemment or government compall7 !g (1) the oentral government or the government company, as the case may be, shall be entitled to receive up to the specified, date, to the exclusion of all other persons, any money due to the company in rtela-2s tion 'to its undertakings which have vested in the central government, or the go~rnment company, realised after the appljdnted day notwith-s'tandlng that the realisations pertain to a period prior to the appointed day (z) the central government or the government company, as the 30 case may be, may make a claim to the commissioner with regard to every payment made by it after the appointed day ror discharging any liability of the company, in relation to any period prior to the appointed day; and every such claim shall have priority, in accordance with the priori--ties attaching, under this act, to the matter in relation to which such 3s lia})1lity has been discharged by 'the central government or the goveri1ment company (3) sa~ as otherwise provided in this act, 'the liabilities of the company in respect of nny transaction prior to the appointed day, whkh have not been discharged on or before'the specified date, shall be th,e 40 lilbilities of the company "17 e't1ery person having a claim against the co-npany shall' prefer such ~18fm before the commigsloner within thirty days from the liipticifted "date: clalms to be made to the coidiiui-doner provided that if the commissioner is satfsfted that the claimant was 4s prevented by sufficient cause from preferring the claim within the said perr;d of'thi11y de:ys, he may'entettain the claim wlthta a fartbe:r period of thirty days and not thereafter; priority of 18 the claims arising out of the matters specified in the schedule claims shall have priorities in accordance with the following principles name1y:-(a' category i will have precedence over all other categories and category ii will have precedence over category iii, and so on; 5 (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; (c) the question of discharging any liaibillty with regard to a 10 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 19 (1) on receipt of the claims made under section 17, the commissioner shall arrange the claims in the order of priorities specified in the is schedule and examine the same in accordance with such order of priori ties (z) if, on examination of the claims, the commissioner is of the 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 20 examine the liabilities in respect of such lower category admission or rejection of c1alma 20 (1), after examining the claims with reference to the priority set out in the schedule, the commissioner shall fix a date on or before which every claimant shall file the proof of his claim, failing which he shall 'be ~cluded from the benefit of the disbursements made by the 2s commissioner :j (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 english language and in one issue of the daily newspaper in the regional langllage as the commissiortetr may consider suitable, and every such notice 30 shall call upon the c1aimant to file the proof of his claim with the ~­missioner 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-, ments made by the commissioner   , ' 35 (4) the commissioner shall, after such investigation as may, in his, opinion, be necessary and after giving the company an opportunity of refuting the claim and after giving the claimant a reasonable opportunity of being heard, in writing, admit or reject the' claim in whole or in part (5) the commissioner shall have ,the power to regulate his own pro- 40 cedure in all matters arising out of the discharge of his functions, thcluding th,q place or places at which he will hold his sittings and shall, 'fm the p~ of making au, investigation under this a:c1;, hav'e the surie powen as are vested in a civil court under the code of civil procedure, 5 of 1808 1908, while trying a suit, in respect of the 'following matters, namely:- 45 (a) the summoning and enforcing the attendance of any witness and examining him on oath; (b) the discovery and production ol any document or otha', iiliiterial object producible 8s 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 s be a judicial proceeding within the meaning of sections 193 and 228 of 45 of 1860 the indian penal code and the commissioner shall be deemed to ije a civil court for the purp:>ses of section 195 and chapter xxvi of the code 2 of 1974 of criminal procedure, 1973 (7) a claimant who is dissatisfied with the decision of the comm!s-10 stoner may prefer an appeal against the decisiqn to the principal civil court of original jurisdiction 'within the local limits of whose jurjsdiction the registered office of the company is situatled: provided that where a person who is a judge of a high court is appointed to be the commissioner, the appeal shall lie to the high court is at calcutta and siuch appeal shall be heard and disposed of by not less than two judges of that high court  21 after adm~tting a claim under this act, the amount due in respect of such claims shall be paid by the commjssioner to the person or persons to whom such sums are due, and, on such payment, the liability of 20 th~ company in respect of such daim shall stand discharged disbursement of money by commissioner te claimants %2 (1) if, out of the monies paid to him in relation to the undertakings of the company, there is a balance left after meeting the liabilities as specified in the schedule, the commissioner shall disburse such ba  lance to the company dibursement ot amounts to the (2) where any machinery, equipment or other property has vested company, in the central government or a government company under thtgact, but such machinery, equipment or other property does not belong to the company, it shall be lawful for the central government or the govern-  ment company to continue to possess such machinery, equipment or other 30 property on the same terms and conditions under which they were possessed by the company immediately before the 4th day of may, 1972 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 b~ transferred by the commissioner to the 3s general revenue account of the central governmentj but a claim to any money so transferred may be preferred to the central government by the person entitled to such payment and shall be dealt with as if such trilnsfer had not been made, the order, if any, for payment of the claim being treated as an order for the refund of the revenue undisbursed or unclaimed amount to be deposited with the general revenue account assumption of llabiuty 40 k (1) when any liabiuty of the company arilin out of all  ~ny of the items spedfled fn category i, catepry ii, eatepry m or eatepry iv of the schedule are i)ot diacbal'led fully by the comml-ioner out of the amount paid to him under this aet, the commislloner shall intimate fa writu to the central govetlbdent the ext_ of the liability whieh 45 remainsua4lseharpd, and that liability shajl be allll1llbed by the central government (2) the central government may, by order, direct the government company to take over any uability assumed by that government under sub-section (1), and on receipt of such direction, it shall be the duty of so the government company to di'jcharge such liability  cijapter vii miscellaneousact to have overriding et!ect 25 the provisions of this act shall ha,ve effect notwithstanding al~y­thil!lg 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 s than this act, or in any decree or order of any cour\ tribupal or o~f authority is contracts to cease to have effect unleu ratified by the central government or governmentcom-j)anf 2l6 (1) every contract entered into by the company in relation to its undertakings for any service, sale or supply, and in force immediately before the appointed day, shall or and from the expiry of one hundred 10 add eighty days from that day, cease to have effect, unless such contra~t is before the expiry of the 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 alteratiol) or modification t~erein as it may think fit: provided that the central government or the government company shall not omit to ratify a contrllct, and, shall not make any alteration 'jr 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 interests of the central government or government company 20 (2) the central government or government company shall not omit to ratify a contract, and, shall not make any alteration or modification therein, except after giving to the parties to the contract a reasonable opportunity of being heard and except after recording in writing its reasons for refusal to ratify the contract or for making any alteration or 2s modification therein ft any person who,-penalties (a) having in his p'ossession, custody 01' control any property forming part of the undertakings of the company, wrongfully withholds such property from the central government or the government 30 company or any p'el'son or body of persons authorised by th~t government or government company; or (b) wrongfully obtains possession of, or retains, any property forming part of the undertakings of the com-pfuly or wilfully withholds or fails to furnish to the central government, or the govern- 3s ment company or ;jny person or body of persons authorised by that government or government company any document relating to such undertakings which may be in his possession, cust':)dy or control or fails to deliver to the central government or the government company or any person or b:>dy of persons authorised by that 40 government or government company, any bsse~l, books of account, registers or other documents in his pouession, oustody or control relating to the undertakings of the cottlpaayi or (c) wrongfully, remove~ or destrqys any property f9rining part of the underta~ings,of the co~ary, or prefers bl1yclaim under 45 this act 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 so , (1) where an offence under this act has been committed by a oftences company, every person who at the time the offence was committed was by comin charge af, and ~as responsible to, the coj;rpany for the conduct of the pant  bta,iness of the company, as well as the company, shall be deemed to be s guilty of the offence and shall be liable to be proceeded against and punished accordingly: provided that nothing contained in this sub-aection shall redder any such person liable to any punishment, if he proves that the oft'ence was committed without his knowledge or that he had exercised all due 10 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 an,d it is pl'oved 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, is secretary or other officer of the company,such director, manager, secretary or other officer shaube 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-(4) "company" means any body corporate and includes a firm or 20 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 no suit, prosecution or other legal proceeding shall lie against the central government or any officer of that government or the custodian of the undertakings of the company or the government company or an)' 25 officer or other person authorised by that government or the government company for anything which is in good 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 power exerciseable by it under this act, other than the power 30 conferred by section 31, may also be exercised by any person or persons as may be specified in the notification (2) whenever any delegation of power is made unde, sub-section (1), the person to whom such power has been delegated shall act under tho direc~ion, control and supervision of the central government 35 31 (1) the central government may, by notification, make rules for power to carrying out the provisiolul of this act make rules (2) in particular, and with:lut prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-40 (4) the time within which and the madder in which an intimation referred to in sub-secti~n (3) of section 4 shall be given; (b) the form and the manner in which, and the conditions under which, the custodian shall maintain accounts as required by section 11; 45 (c) the manner in which monies in any provident or other fund referred to in section 13 shall be dealt with; cd) any other matter which is required to be, or may be, prescribed (3) every rule made by the central government under this act shan be laid, as soon as may be after it is made, before eaeh house of parlianient while it is in session for a total period of thirty days which may!lc s comprised in one session or in two or more successive sessions, and if, before the expiry of the sc:~sion immediately following the session or tte succeslive 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 shall thereafter have effect only in such modified form or be 10 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 duftculties 32 if any difficulty arises in giving effect to the provisions of this act, the central government may, by order, not inconsistent with the is provisions of this act, remove the difficulty: provided that no such  order shall be made after the expiry of a period of two years from the drte on which this act receives the assent of the president 33 it is hereby declared that this act is for giving effect to the pjli<'y 20 of the state towards securing the principles specified in clause (b) of article 39 of the constitu~ion declaration as to policy of the state explanation-in this section "state" has the meaning as in article 12 of the constitution 34 (1) the smith, stanistrcet and company limited (acfluisition and transfer of undertakings) ordinance, 1977; is hereby repealed 2s 13 of 1977 repeal and saving (2) notwithstanding such repeal, anything done :lr any ac~ion t:ken under the ordinance sll repealed shall be deemed to have been done or taken under the corresponding provisions of this, act the schedule 30 (see sections 18, 19, 20, 22 and 24) order of priorities for the discharge of liabiuties of the company  part 'a'| post-take-over management                                 | palod       ||-----------------------------------------------------------|-------------|| categcwy                                                  | ·1         ||                                                          | 35          || (a) wages, salaries                                       | and         || of                                                        |             || the                                                       | conl-'      || pany                                                     |             || (b) loans advanced by                                     |             || the                                                       | central     || govemment~                                                |             || (c) loans advanced by indian drugs and pharmaceijticlirs |             || limited                                                  |             || (d) loans advanced                                        | by          || ment                                                     |            || 40                                                        |             || (e) credit availed of for                                 | purposes of || opera~lons                                               |             |category ii (a) revenue, taxes, cesses, rates or other dues to the central government or a state government 5 (b) sales tax, rates and taxes, contributiods to: be made to the employees' state insurance fund and additional dearness allowances payable to employees   part 'b' pre-tad-over management pilriod category iii10 arrears in relation to provident fund, salaries and wages and other amounts due to employees of the company categcwy iv principal amount due in relation to all secured loans category v amounts due by way of interest due in relation to  the secured loans referred to in category iv category vi revenue, taxes, cesses, rates or any other dues to the central government, a state government, a local authority or a state electricity board ;'0 category vii ~ : (a) any credit availed of for purposes of trade or manufacturing operations (b) any other dues  statement of objects and reasonsmessrs smith, stanistreet and company limited, calcutta were engaged in the manufacture of drugs and pharmaceuticals which were essential to the needs of the country the company began to show steady decline in production from 1970 onwards and incurred considerable losses the company was also being mismanaged mter investigation into the affairs of the company through an investigation committee, the management of its undertakings was taken over on 4th may, 1972 by the central government acting under section 18a of the industries (development and regulation) act, 1951 the indian drugs and pharmaceuticals ltd, a public sector undertaking was appointed as authorised controller as the company had to be moder'nised and expansion undertaken in order to ensure the augmentation and distribution of the different varieties of essential pharmaceuticals and chemicals produced by the company and to ensure the continued sup'ply thereof in public interest, it was necessary to acquire the right, title and interest of the underbkings of the company this was done by the smith, stanistreet knd company limited (acquisition and transfer of undertakings) ordinance, 1977 the bill seeks the replacement of the ordinance new delhi; h n bahuguna the 2nd november, 1977 ,  claule tn"'; ~ ,lulil:pl!gl'¥lid~ -1ol'tne·'pylljijilt, iii cash; l4dd!! •• ithe ~ spemw;uj,icheptei1i¥lof ad amouirrt' at ib4 3~,'1ftoqg (rupfjih three crores and seventy-four thousand), for vestingid tbaj£,n,alti!q\wo! ei'jllilent, the right, title and interest of the company in relation to the unaerutkih~:'bwnea ts,:it; :~!l;  :: 'il :',:  '':; i;i"y 'j:'; 11,1 2 'sul:;~c!~ils~jltl) elf ic1ii(lseis p'rohdes"'for! paym~:iit of i1'thrth~r ~iitbunt in cash, in consideration for the deprivation of the :ebirtpany o£·,~he -;~~~~~ ~1~~·j~r4eqb~ip's~,  ~n"~()\w~jl,!~i~~l,aw\ at the f~te ~f!,~"lo,oqp (r~~~!t~ith~sma!pnli'> ~f:~, fp'~~;~iod commencmg on the date on which the management of!tpe ~p~~ings , of the comp'any was taken over by the government and ending w'th thlhlppoiilted dll'y;  ltis estimated th~t :tbu amount ww be'rottile order of rs 55,000 (rupees fifty,tlvethcusand,only) ':' i: 'jf i:il:','  3  sub-clause (2) of clau~e 8 provjdes for payment of simple interest o~,the: a~~~n~s iipe~~'ft~cf iricl~~se1~?d st1b-~lause(1) "6fcilnl'se:s: at ~~~ )~ate of ,4 per p~~,t ,pet,i1nnu~ '}o~ th~ pe~?~t ~~~wm~c'hi~jon; t~ appomted day (1st odobel", 1977) an(h~hding wffilihe'tfay''citl ~hiclfij the payment of these amounts is made by the cenfral"gowrnmem ;to·th~ commissioner of payments the interest payment in terms of the provisions of the said clause is of the order of rs 60,000 (rupees sixty thousand only) 4 clause 14 of the bill provides for the <:i1pointment of the commissioner of payments by the central government with adequate staff to assist him for the purpose of disbursing the amounts payable to the company the salary and allowances of the commissioner of payments and his staff and expenditure on office and establishment will be defrayed out of the consolidated fund of india the estimated expenditure on this account is likely to be of the order of rs 10,000 per month 5 the liabilities relating to gratuity payable to employees amounting to rs 37 lakhs as well as balance of post-take-over liabilities of sundry creditors rmounting to rs 2456 lakhs and principal amounts due in relation to secured loans (pre-take-over) amounting to rs 48 lakhs, are not likely to be discharged fully by the commissioner of payments out of the amount paid to him under clause 7 of the bill in the interest of the company and its continued functioning it is proposed that the central government may assume these liabilities, as p'i'ovided in sub-clause (1) of clause 24 6 funds will also have to be provided to the company for modernisation and expansion the expenditure on this account is necessary to make the company financially viable the total estimated expenditure on the modernisation and expansion scheme is likely to be of the order of rs 1 crore (rupees one crore only) a sum of rs 50 lakhs has been provided in the budget for 1977-78 towards non-plan loans for workingcapital for this company and may have to be disbursed to the company during the year 7 the bill, if enacted, is not likely to involve any other recurring or non-recurring expenditure clauee 31 of the bill empowers the central government to make rules to carry out the provisions of the bill such rules may provide for matters, such as-<a> the time within which and the manner in which an intimation referred to in sub-clcluse (3) of clause 4 of the bill shall be given; (b) the form and the manner in which and the conditions under which the custodian shall maintain the accounts as provided in clause 11; and (c) the manner in which monies in any ptovident or other fund referred to in clause 13 shall be dealt with 2 the matters in respect of which such rules may be made are matters of procedure and administrative detail and it is not practicable to provide for them in the bill itself the delegation of legislative power is, therefore, of a normal character  a billto provide for, in the public interest, the acquisition and transfer of the right, title and interest of the undertakings of messrs smith, stanfstreet and company limited, calcutta and for matters connected therewith or incidental thereto (shri h n bahuguna, minister of petrolium, chemicals and fertilizt1'b) 