 the hindustan tractors limi'ied (acquisition and transfer of undertakings) bill, 1978 l-lb bel as in troduced in ipk sabha 7 j 1 page 4, line 5,- rsu: "0 thee " ~ "other"2 page 7, line 27,-fill: "set cion " ~ "section" 3 page 7, line 29,-for "sub- sectaion n 1l!&l "sub- section" 4 page 14, line 13,-after "in to " in ser t "in " 5' - page 14, line 35',-before ''the state" insert "the custodian, or" 6 page 14, line 36,-omit "or the custodian" 7 page 17, line 3,-for "liariuties" read "liabilities" new delhi; march 3r 1978 phalguna 12, 1899 ( salta)  transfer of undertakings) bill, 1978 arrangement of clauses chaptelt iprlaimin ary ,  c4usjc8 1 short title and commencement 2 definitions  chapi'er ii acquismon and transfer of the under'l'aiongs of the company3 transfer to and vesting in the central government of the undertakings of the company 4 general effect of vesting s companyto be li$ble for certain prior liabilities 6 vesting o~ the undertakings of the company in the state g~vem­ment of gujarat 7 power of state government to direct vesting of the ~dertak­ings of the company in a government company  chart~m payment of amomms8 payment of amount 9 payment of further amount  chapter iv management, etc, of me 'undertakings of the company10 management etc, of the undertakings of· the company 11 duty to deliver possession of property a~quired and documents relating thereto 12 accounts to be rendered by the company or any other person 13 a'ccounts  chapi'er v provisions relating to the employees of the company14 employment of certain employees to continue 15 provident fund and other funds  chapter vi commissioner of payments clausm16, appointmept ,of commissioner of payments 17 payment 'by- the central government to the commissioner ----18 :certain powerl of the central goyemment or state go_d· ment or government company 19 claims to be made to the commissioner 20 priority of claims 21 examination of claims 22 admission or rejection of claims  23 disbursement of amount by the commissioner to claimants 24 disbursement of amounts to the company 25 undisbursed or unclaimed amount to be deposited to the gefterat revenue account 26 assumption of liability  chapter vii'ii" ,'!  miscellanious27 act to have overriding effect 28 provision relating to contratts 29 transfer of assets, etc, to be void in certain cases 30: protection "of action taken in good faith 31 ~enalties 32 offences by companies 33 delegation of powers 34 power of central government to make rules 35 power to remove diftlculties 36 declaration as to the policy of the state the schedule t '  the hindustan tractors limited (acquisition and transfer of undertakings) bill, 1978 a billto provtde for the acquisition and 'ttamfer of the undertakings oj hindustan tractors limited, vishwamitri, vadodara, for the purpose of ensuring the conti,nuity of ?"oduction of goods which are 'vital to meet the needs of the general public and for matters connected ,'therewith or' incidental thereto wllbri:4s hindustan tractors limited, vishwamitri, vadodara, are engaged in the manufacture and distribution o~ tractors which are vital to meet the needs of the genera} public; and whebeas the management of the undertakings of hindustan 5 tractors limited was conducted in a manner highly detrimental to the public interest and had suffered heavy losses; and' ~hereas the management of the undertakings of hindustan tractors limited was taken over by the central governm~nt under section 18a of ~ industries (development and regulation) act, 1951; 85 of 1951 10 and whereas it is necessary to ncquir~ the undertakings ot hfndustan tractors limited to ensure the continuance of the production of goods which are vital to meet the needs of, the general public; be it enacted by parliament in the twenty-ninth year of the republ1c e~ india as follows:- chapter i preliminary1 (1) this act may be called the hindustan tractors limited (acqui-s sition and transfer of undertakings) act, 1978 short title and commencement (2) it shall come into force on the 1st day of april, 1978 2 in this act, unless the context otherwise requires,-deftnltiona (a) "appointed day" means the 1st day of april, 1978; (b) "authorised controller" means the gujarat agro industries 10 corporation limited, ahmedabad, which took over the management ot the undertakings of the company by virtue of the order of the government of india in the ministry of industrial development no so 137 (e) /18a/idra/73, dated the 12th march, 1973, made under clause (b) of sub-section (1) of section l8a of the industries (deve-15 lopment and regulation) act, 1951; 65 ot 1951 (c) "bank" means-(i) the state bank of india constituted under the state 23 of 195~ bank of india act, 1955; (ii) a subsidiary bank as defined in the state bank of india 20 f 1 59 ,(subsidtr!'y banks) 'act, 1959; 38 0 9 - (iii) a corresponding new bank constituted under section 3 of tile billildng companies (acquisition and 'l'rahsfer of 'undertakings) act, 1970; 5 of 1970 (iv) any other bank, b\!ing a scheduled bank as defined in 25 clause (e) of section 2 of the reserve bank of india act, 193'; 2otl934 (~) ~'commis8ioner" means the commissioner of ,paymenta ap-, pqinted under section 16; ~ (e), "coln~any" ineans hmdustan tractors limited, 'be~g a 'eothtlahy as'de'ftlied ~n the compa~tes ae:t, 1956, and having its'~egis- 30 10tl956 tered office at vishwamitri, vadodara; -(n "'custodian" means the custodian appolttted linder tib~sec­tion (3) of sectlon 10 to take over, or carryon, themafiageim~tof the undertakings of the 'c~pany; , (g) "date of taking over" means the date on 'which the manage- 35 mept oj, the ,under~likings of the company was taken over by tbe authorised controller; (h)" "government c~mpany" has the meaning assignal to it by 1 of 1958 , section 617 01 the companies act, 1956; (i) "n'otification" means a notification published in the official 40 gazette; 'i 'b ',' (j) i prescri ed" act; means prescribed by rules made under tbii (ie) '!spedfied dam" means such date as the cmtral goftminent may, for the purpose of any provision o£ this aid, by botifteatifjft, epacify aad d4fterent dates may be specified for ~tpl'o'risions of w act; s ! of 1956 (l) "state government" means the state governtnent 6f gujarat; (m) words and· expressions used herein and not defined but defined il'1 the comparues act, i956, shall· have the meailings, resj>ecttvely, assigned to thetn in that act   chaptti ii 10 acquisltion and transfer of the underta:kings of the compally-3 on the appointed day, the 'urdertaki1lgs of the 'compawy, "8114 ihe right, title and interest of hle company in relation to its uftdertakmp, shall, by virtue of this act, stand transferred to, and shall vest in, the is central government ' •• ~~ tranaf to and veatinl in the central government of the undertakings of the company general effect at veninl· 4 (1) the undertakings of the company referred to in section 31hal1 be deemed to include all assets, rights, lease-holds, powers, authorities and privileges, and all prop'ei'ty, movable and immovable, including lands, buildings, workshops, stores, instruments machinery and equip' 30 ment, bank balance$, cash balances, cash on hand, reserve funds, investments and book debts and all other rights and interests in, or ariling- out of, such property as were immediately before the appointed day ial,;cllle ownenhip, possession, power or control of the company, whether wlihin or outside india, and all books of account, registers and all other doau-2s ments of whatever nature relating thereto add shall be deemedio include the liabilities and obligations specified in sub-section (2) of seeton 5 (2) all property as aforesaid which have vested in the central government under section 3 shall, " forae (}f such -tihg,  be :freed and discharged from any trust, obligation, mortgage chal1'!, lk!t1 'add 'all'other encumbrances affecting them, and any attaohment ldjuhcfiott, : decree 30 "r order of any court, tribunal, officer or other authority restricting the use of such property in any manner shall be deemed to mve beed withdrawn (3) where any licence or other instrument iii relation to \ the ulldertoldnas of the company bad been granted at my time: belate 'the ap-3s pointed day, to the company by the central governlnet\t,a (stttte government or any other authority, the central govemmen~, the state government of gujarat or, as the case may be, the goverruoent company, in which the right, title and interest of the cgmpany in relation to its undertakings have vested und~r section 7, shall, on and from ihe,awointed 40 day, be deemed to be substituted in such licence or other instrument in , pieee of the company referred to therein as if such lteellee or other instrument bad beeh granted to it and shall hold ·such '~nee tit 'the undertatmgs ormly part thereof specffted in such ot~'instrume'ntlf(trlthe re-4s mainder of the period for which 'the cornpanywould f have 'tiehl such licence or undertakings or any part thereof under such other instrument (4) every mortgagee of any property whicb has veste~ 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 commissioner of such mortgage, charge, lien or othee interest s ' (5) for the removal of doubts, it is hereby declared that the mortgagee of any property referred to m sub-section (4) or any other person holdins any charge, lien or other interest in, or in relation to,' any such property shall be entitled to claim, in accordance with his rights and interests, payment of the mortgage money or other dues, in whole or in 10 part, out of the amounts specified in section 8 and also out of the monies determined under section 9 but no such mortgage, charge, lien or other interest sball be enforceable against any property which has vested in the central government (6) if, on the appointed day, any suit, appeal or other proceeding of 15 whatever nature in relation to any matter specified in sub-section (2) of section 5 in respect of the undertakings of the company instituted or preferred by or against the company is pending, the same b,hall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertakings of the company or of anything contained ih 2 this act, but the suit, appeal or other p'i'oceeding may be continued prosecuted or enforced by or against the central government, or the state government, or where the undertakings of the company are directed, under section 7, to vest in a government company, that government company ~5 5 (1) every liability other than the liabilityspecifled in sub-section ·(z) ol the company in respect of any period prior to the appointed day, irhall be the liability of the company and shall be enforceable against it and not against the central government, or the state government, or where the undertakings of the company are directed, under section 7, to 30 vest in a government company, against that government company company to be liable for certain prior uabllitiel (z) any liability arising in respect of-(a) loads advanced by the central government or the state government, r both, totbe company (together with interest due thereon) on or after the date of taking over; 35 (b) loads advanced by a bank to the company' (together with interest due· thereon) on or ,iter the date of taking over; (c) loans advaaced· by the industrial reeonstruction ~rpora­tion of india limited to the company (together with inietwt due thereon) or ~ lifter the date of taking ovel'; 40 (d) w  salaries and other dues of employees of the company and the dues on ~count of any deduction made from 'wages and salaries add other dues of employees relating to any period  eemmendng oil and from the date of taking over;  i j, } ;",~ , (e) any debt ~curred by the company dul'ing any period cojd- 45 me~'w on add from the date of taldni over, not being a debt faluali1lder clause (a), clause (b), dause (c) or ela_so, (d) or speeuled,in category 1 of the sc:~dule; s shall oil and :from the appo'nted day, be the liability of the central government, or the state government, or the govel'lilnent company aforesaid and shall be discharged by the centnl government or the stlde govel'lllllellt, or the govemment company aforesaid as and when repayment of ,reh loans becomes~due or as and when sueb wares, a· , ries and other'dues and debt become due and payable (3) for the removal of doubts, it is hereby declared that,-10 is (0) save as otherwise expressly provided in this section or in  any other provision of this act, no liability, including any liability 'arising out of any guarantee given by the state government in res· pect of any loan or advance given to 'the company but not including the liability specified' in sub-section (2), 01 :the company in relation to its under~akings in respect of any period prior to the appointed day, shall be enforceable against the central government, or the state government, or where the undertakings of the company are directed, under section 7, to vest in a government company, against that govemment company; 20 2s (b) no award, decree or order of any court, tribunal, officer or other authority in relation to the undertakings of the company, pas8-ed after the appointed day, in respect of any matter, claim or bispute, 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 enforce-able against the central government, or the state government, or where the undertakings of the company are directed, under section 7, to vest in a government company, against that government company; (c) no liability incurred by the company before the appqinted day, for the contravention of any provision of law for the time being in force, shall be enforceable against the central government, or the state government, or where the undertakings of the company are directed, under section 7, to vest in a government company, against ithat government company , fi' (1) notwithstanding anything con~ned in sections 3 i and 4, the vea"", centr¥ q?verm;nent shall, as soon as may 'be, after the commencement of ot the 3s this act, 'direct, by notification, that the un~akings of tbe company, underand th~ rig~t" title and interest of the company in relation to i~ under- takin, takings, which have vested in the central government under section 3- , cg the and such of the liabijities of the company as are specified in i!ub-section in~::ny (2) :of,gection 5, wii, in5tead of continuing to vest in the central goy-state 40 ernment, vest in ,the state government\(\l gujarateither on the date of govern: the! notification or on such earlier or later-,date (i1ot being a date earlier ment of than the appointed day) as may be specified in the notification gnlarat (2) where the right, title and interest of the company in relation to its undertakings ,~d the liabilities of the company specified in iu~ 4s section (2) o:fi section 5 vest in the state government under subeection (1), the state government shall, on and from the date of such vesting, be d~med to have become the owner in relation to such undedakidgs, and ~ll the rights and liabilities of the central government in relation to such undertakings shall, on and from the date of such vesting, be so deemed tohawe become the rights and liabilities, respectively, of the state government 7 (1) notw~tb&ttmding anything contained in sections 3, 4 and 6 t~strte g~filrnmellt:may, if it is satisfied that a government company is willing to £oidply, or has complied with such terms and conditions as that government may think fit to impose, direct, by notification, that the undertakings of the company, and the right, tiue and interest of 5 the company in relation to its undertakings and such of the liabiltti~ of the company as are specified in 'sub-section (2) of section 5, which have vasted in the central government under section 3 end thereafter in the state government under section 6 shall, instead of continuing to vest in the state government, vest in the government company either on the 10 date of the notiflcation or on such t!arlier or later date (not being a ~te earlier than the appojnted day) as may be specified in the noti1tcation power of btate government to direct vesting of the undertakings of the company ina government company ~) where the right, title and interest, and the liabilities specified d i' in 8ub-lt€!:tipn, (2) of section 5, ()f the company in relation to its under-~ vest in a government company under sulb-section (1), the gov- 15 emment company shall, on and from the date of such vesting, be deemed to have become the owner in relation to such und~rtakings, and all the rights and liabilities of the central government or the state government in relation to such undertakings shall on and from the date of such vesting, be doeemed to have become the rights and liabilities, respectively, 20 of, the gownment company  chapi'er iii payment of amountspayment 8 for the transfer to, and vesting in, the central goveml;dpt ~~r of ' ~f~n la,' of the undertaking of the comp~ny aq~ ole ri,gllt ti~ apo amolftlt  : j ; \ inter~ of the c,ompany in relatiol) to its un,4ertekings, t~ere1i be ·lll jiwn: 'tty the central government to the omtpany, in cqjjh, 'i),el in the 30 •• ",( j m4rmer spedfled in chapter vi, an ~101l,nt of l'1,lpee5 one hw1,clred 'ijjj!i  ' ; :~; flffy lakhs  "  ' payment of f"ftb,er amouj;l,t',  i  f1) for tbe deprintioft of the company of the management of its  uniettainp, chere shan be gwen to the company by the central goveraent 8ft amount cal_ated at the rate of rupees ftfty thousand per 3s  annum for the periodcommeneingon the date of taking over iidci ending on the ap,pointed day (z,) '!'he  t speftfted in section 8 and the amount detennine4 udder sub-hdlon (1) sh  u carry simple interest at the rate of four per cent per endtiid 'for the perted commencing on the appointed clay and ending 40 on die date on ~ch payment of saeh amounts is made by the central g-rnment to the commissioner db) th~ mounts determined in accordance with the pi'owsions - sub-scctions (1) and (2) shall be given by the central government to the company in addition to the amount specified in section 8 4s  chapter iv management, etc, of the undertakings of the company10 (1) the state government in which the undertakings of the company and the right, title and interest of the company in relation to its s undertakings vested under section 6 shall be entitled to exercise au such powers and do all such things as the company is authorised to exercise and do in relation to its undertakings manaiement, etc, of the undertakings of the company (2) the general superintendence, direction, control and management of the affairs and business of the undertakings of the company, the right, 10 title and interest in relation to which have vested under section 3 in the central government and, under section 6, in the state government, shall,-(a) where a direction has been made by the state government under sub-section (1) of section 7, vest in the government coupany specifled in such direction; or is (b) where no such direction has been made by the state government, vest in one or more custodians appointed under sub-section (3), and thereupon the government company so specified or the custodian so appoint\>d shah be entitled to exercise all sooh powers and do all sueh 20 things i\s the company is authorised to exercise and do in relation to its undertakings (3) the state government may appoint one or more individuals ot a government company as the custodian of the undertakings of the company in' relation to which no direction has been made by it under sub-2s saetion (1) of section 7 11 (1) on the vesting of the management of the undertakings of the company in the state government under setcion 6, every person in whose possession or custody or under whose control any, property referred tb in sub-s~taion (1) of section 4 may be, shall deliver the property to 30 the state government forthwith duty to deliver possession of property acquired rnd documents relating thereto (2) any· person, who 'on the appointed day has in his possession or under his cotrtrol any books, documents or other papers relating to the urdertalt!ings of' the company which h4ts vested in the state government under section 6 and which belong to the company or, would hav£> 35 so belpnged if· the undertakings of the colilpany had not vested in the state government, shall be liable to account for the said books, documents or, other papers' tet the state government and shall deliver them up to the state government _ (3) the state government may take or cause to be taken all neces-40 sary steps for securing possession of all properties which have vested in that' government under this act (4) the central g9vernment may issue such directtiojis as' it may deem desirable' in the' circumstanees of the case to the state government as to its powers and, duties and the state government may also, 4s if it so desires, apply to the central government at any time for instrueti«ims as to the manner in" which the management of: the undertakings  of the company shall be conducted bv it ()(' in- relation to anr other matter arising in th~ co~ of such managemen~, (5) on the vesting of the management of the undertakings of the company in a government company or in the custodian, the provisions of sub-sections (1) to (4) shall apply to, or in relation to, the government company or the custodian, as the case may be, as they apply to, or in relation to, the state government, subject to the modification that 5 the references to the state government shall be construed as references to the government company or the custodian, as the case may be 12 (1) where, in pursuance of any decree, order or injunction of 'lny court or otherwise,-accounts to be rendered by the company or any other person (a) the authorised controller was, after the date of taking over 10 and before the appointed day; and (b) the central government, the state government or the government company, as the case may be, is on or after the appointed day, prevented from taking over the management of any part of the under- is takings of the company, the company, or any other person in possession, custody or control of such part shall, within sixty days from the appointed -day, render accounts to the state government or the government company in relation to the period commencing on the date of taking over and ending on the date on which such part was or is handed over to the 20 authorised controller or, as the case may be the central government, the state government, or the government company, with regard to the-(i) assets and stores of the undertakings or any part thereof, acquired, utilised or sold during the said period; and (ii) income derived by the company or any other person from 25 the undertakings or any part thereof during the said period (2) if, on examination of the accounts referred to in sub-section (1), any income or other moneys is or are found to have been derived by the comnany or any other person from such undertakings or any part thereof during the period referred to in that sub-section or any other 30 moneys are found to be payable, such income or either moneys shall be recoverable by the central government, the state government or the government company from the company or such other person, as the ~ase may be, and from the amount payable under this act to the companv and the debt due to the central government, the state govern- 35 ment or the government company on this account shall rank as an unsecured debt (3) if no account is rendered by the company or such other person in respect of _ the undertakings or any part thereof within the p~riod referred to in sub-section (1) or if the central government, the state 40 government or the government company, as the case may be, has any reason to believe that the account rendered by the company or such other person is incorrect or false in any material particular, the cerltral government, the state government or the government company may refer the matter to the commissioner and thereupon the commissioner shall determine the income derived by the company or such other per- 45 son from such undertakings or any part thereof during the period refer-j!ed to in sub·section (1) and take steps to recover the said income or other moneys from the company or such other person and from the amount payable to the company under this act as if the debt due to the central government, the state government or the government 50 company on this account were an unsecured debt (4) no mortgage, charge, lien or other encumbrance in relation to the undertakings of the company or any part thereof shall be binding on the central government, the state government or the government company, if such mortgage, charge, lien or other encumbrance was 5 created, at any time during the period in which the authorised controller was, and the central government, the state government or the government company, as the case may be, is, prevented, by any decree, order or injunction of any court of otherwise, from taking over the management of the undertakings or any part thereof accounts, 10 13 the custodian sball maintain accounts o~ the undertakings of the 1 of 1956 company in accordance with the provisions of the companies act, 1956  chapter vemployment of certaita employees to continue provisions relating to the employees of the company 1' (1) every person who has been, immediately before the appointed is day, employed in any of the undertakings of the company shall b !come, on and f'rom the appointed day or such later date, as the case may be, an employee of the state government or, as the case may be, of the government company in which the right, title and interest of the' company in relation to its undertakings, have vested under this act, and shan hold 20 office or, service under the state government, or the government company, as the case may be, with the same rights and privileges uta 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 state government, or the government 2s company, as the case may be, is duly terminated or until his remuneration and other conditions of service are duly altered by the; state government, or by the government company, as the case may be 14 of 1947 (2) notwithstanding anything contained in the int1uslrial disputes act, 1947, or in any other law for the time being in force, the transfer of 30 the services of any officer or other person employed in any of ~e undertakings of the company to the state government, or the government company, shall not entitle such officer or other employee to any compensation under this act or under any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other 3s authority - -(3) where, under the terms of any contract of service or otherwise, any person, whose services become transferred to the state government, or the government company, by reason of the provisions of this act, is entitled to any arrears of salary or wages or any payment for any leave 40'hot availed of or any other payment, 'not being payment by way of ~a­t11ity or pension, such person may, except to the extent of such liability which has been taken over by the central government or the state government or the government company under sub-section (2) of section 5 enforce his claim against the company, by which he was employed imme-45 diately before such transfer but not against the central government, of ~e state government, or the government company provident fund and other fundi 15 where moneys representing provident fund, superannuation £'und, welfare fund or other fund for the benefit of the persons employed in any of the undertakings of the company have vested in an authority establish-50 ed under any law for the time being in force, such moneys shall continue to vest in such authority for the benefit of the said penlons  commissioner of pa ymi4n'l'8appointment of 16 (1) th" central goverament shau, for the purpose of disburplw the amoudb pa,ya),le, to the ~pany under sections 8 'and 9, hy iagtification, appoint a commissioner of 'payments 5 commis~ sioner of payments (2) :the1cenual goverlulient olay appoint sum otber persods ,its it mar think fit, to assist the commissioner and :tbereupou the commi-iodcr  authorise 'one or more of such persons also to exercise all or any of the j)owers exereisable by 'him under this act and 'difterent persons tnay be authorised ,to ~rtise·mfferent powers 10 (3) any person authorised by the commissioner to exercise any of the powers exerdsable by the commissioner may exercise those powers in the same manner and with the same etlect as if they have been conr1erad on tbatpanon dil!edly by' this act and net by  y _-authorisation (4) the  laries and allowances of the commissioner and otberper· is sods qpointed udder this section shall be defrayed out of the consolicla"  fund of iadia 17 (1) the central government shall, within thirty days' from the 'specified date, pay, in cash, to the commissioner, for payment to the 'company-:w (a) an amount equal to the amount specified in sectwn 8, and payment by the central government to the commissioner (b) an mllount equal to the amount payable to the company under section 9' (2) a deposit accnunt shall be o~ned hy the cent?al govemment in fa\'our of the commissioner, in the public account of inrli'8/, and every 25 amount paid under this act to the commissioner shall be deposited by him to the credit of, the said deposit account and thereafter the said deposit account shall be operated by the commissioner (3) the interest accruing on the amounts standing to the credit of the deposit account referred to in sub-section (2) shall enure to the benefit 30 of the company 18 (1) the central government, or the state 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 relation to its undertakings which have vested in 3s the central government, or the state government, or ,the government cl'>mpany, realised after the appointed day notwithstanding that the reaiusation pertains to a period prior to the appointed day certain powers of the central government or state government or government company, (2) the central government, or the state government, or the government company, as the case may be, may malce a claim to the commissioner 40 with regard to every payment made by it after the appointed day for'discharging any liability of the company, not being any liability specified !insub-section (2) of section 5, in relation to any period prior to the appointed dfty; and every such claim shall have priority in accordance with the priorities attaching, under this act, to the matter in relation to which 45 such liability has been discharged by the central government or uae state government, or' the government company (3)  save as otherwise provided in this act, the liabilities of the company in reapect of any transaction prior to the appointed day, which have not been discharged on or before the rpecitiled date, shall be the liabilltii!s of the company s 19 every person having a claim against the company shall pref~r such claim before the commissioner within thirty days from the speoified date: claims to be made to the commis-, sioner provided that if the commissioner is satisfied that the claimant was prevented by sufficient cause from preferring the claim within: tm c;aid period of thirty days, he may ,enter~in ~he claim within a further period 10 of thirty days and not thereafter priority of claims , 130 the claims arising out of the matters specified in the &meeiule shall have priorities in accordance with the following principles, nametly:-(a) category i shall have precedence over all other cakgories and category 11 shall have precedence over category iii, and so on; 15 (b) the claims specified in each of the categories, except category iii, shall rank equally arid 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; 20 (c) the liabilities specified in category iii 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; and 25 (d) the question of discharging any liability with regard to a matter specified in a lower category shall arise only u a surplus is left after meeting all the liabilities specified in :the immediately higher category 2l (1) on reoeipt  of the claims made under ~tion 19, the commis-examinasionershall arrange !the claims in the oilder of priorities specified in the tion of 30 schedule and exantine ,the same in accordance with such order of claims priorities (,2) if, on examination of the claims, the commissioner is of opinion that the amount paid to him under this act is not sufficient to meet the liabilities specified in any lower category, he shall not be required to ex8-35 mine the claims in respect of such lower category admission or rejection of claims %z (1) after exammina ·the claims withre£erence to the priorities set out in the schedule, the commissioner l'hall fix a date on or helott" which every claimant shall rue the proof of his claim faili~ which he will be excluded from the benefit of the disbursement made by the com-40 missioner (2) not less than fourteen days' notice of the date so fixed shall be given by advertisem~nt in one issue of a daily newspaper in the english ,1aqjuageand in one issue of such daijy newspaper in the regional language as the ·commisiioner may consider suitable, and every such notice shall 45 j!a11 upon the claimant to file the proof of his claim with the commissionei 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 disburseme'nts made by the commissioner (4') the commissioner shall, after such investiga:tion as may, in his opinion, be necessary and after giving the company an opportunity of 5 refuting 'the claim and after giving the claimant a re3sonable opportunity of being heard, in writing, admit or reject the claim in whole or in part 15 ot 1908 (5) the commissioner shall have the power to regulate his own procedure in all matters arising out of the discharge of his functions, includ-ing the place or places at which he will hold his sittings and shall, for 10 the purpose of making an investigation under this act; have ,the same powers as are vested in a civil court under the code of civil procedure, 1908, while trying a suit, in respect of the following matters, namely:-(a) the summoning and e'nforcing rthe attendance of any witness and examining him on oath; j 5 (b) the discovery and production of any document or other material object producible as ev,idence; (c) the reception of evidence on affidavits; (d) the issuing of any commission for the examination of witnesses 20 (6) any investigation before the commissioner shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the indian penal code and the commissioner shall be deemed to be a civil 45 of 1860 court for the purposes of, section 195 and chapter xxvi of the code of criminal procedure, 1973 2 s 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 court of original jurisdiction within the local limits of whose jurisdiction the registered office ofi the company is situated: provided that where a person who is a judge of a high court is 30 aptkrlnted to be the commissioner, the ap'peal shall lie to the high court of gujarat, and such appeal shall be heard and disposed of by not less than two judges of that high coutt 23 after admitting a claim under this act, the amount due in respect 3s 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 the company in respect of such claim shal~ stand discharged ' disbursement- of amount by the commil  sioner to claimants 24 (1) if, out of the monies paid to him in relation to the undertakings of the company, there is a bal:lnce left after meetin:~ the liabilities as 40 specified in the schedule, the commissioner shall disburse such balance to the company disbursement of amounts to the compatl" (i) where the possession of any machinery, equipment or other property, has vested in the central government, or the state government, or the government company, under this act, but such machinery, equipment or other property doe!" not belong b the company, i,~ shall be 5 lawfud for the f!entral government, or the ~ate government or the , government company ito continue to poss~ such machinery or equipment or other property on the same tenns and conditions under which they were possessed by the company immediately before the appointed day 10 25 any money paid to the commissioner which remains undisbursed or unclaimed for a period of three ye>ars from ithe last day on which the disbursement wac:; made shall be transfetrred by the commissioner to the general revenue account of the central government; but a claim to any money so transferred may be preferred to the central governmenl~ by 15 the person entitled to such payment and shall be dealt with 118 if such traruter had not heen 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 to the general revenue account assumption of liability 26 (1) where any liability of the company arising out of ':any item specified in category i, category -ii and categol'y in of the schedule is 20 not disch8l'ged fully by the commissioner out of the umount paid to him under this act, the commissioner ,hall intimate in writini to the central government the extent of that liability which remaill'l undischarged and that liability shall be assumed by the central government (2) on the vesting of the undertakings of the company in the state 25 government or the government company under this act, the liabt1ity assumed by the central government under sub-section (1) shall be the liability of the state government or the government company, as the case may be  chapter vii 30 miscellaneousact to have overriding effect 27 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 35 or other authority provision relating to contracts 28 (1) every contract entered into by the company in relation to its undertakings before the date of taking over for any service, sale or supply, and in force immediately before the appointed day, shall, on and from the expiry of one hundred and eighty days from the appointed day, 40 cease to have effect unless such contract is, before the expiry of that period, ratified, in writing, by the central government or the state government or the government company and, in ratifying such contract, the central government, the state government, or the government company, as the case may be may make such alterations or modifications 45 therein as it may think fit·~ (2) every contract entered into by the company or the authorised controller on behalf of the company, in relation to its undertakings i)n or after the date of taking over for any service, sale or supply and'in force immediately before the appointed day shall remain in force, unless sooh contract is terminated or modified or altered by the central gov- 5 emment, the state government or the' government company, as the case, may be, within a period of one hundred and eighty days from' the appointed day (3) the central government, the state government or the government company, as the case may be, shall not refuse to ratify, terminate, 10 modify or alter a contract wrder sub-section (i) or sub-seetlon (2)-(a) unless it is satisfied that such contract is unduly onerous or has been entered into bad faith or is detrimental to the interests of the undertakings of the company; and orransfer of eesets etc, to be wid in c~rtbin c3ses (b) except after giving to the parties to such contract a reasonable is opportunity of being heard and recording in writing its reasons for refusal to ratify the contract or for terminating the contract or, for making any alteration or modification therein m (h except with the prior approval of the central government, the state government or the government company, neither the compally 20 nor any other person in possearlon of the undertakings oi the company or any part thereof the management or the' possession of' whieh could not be taken over by the authorised controller or the central government or the state government or the government company by reason of any decree, order or injtldeticm of any court or otherwise shall, on and from 25 th~ appointed day transfer by sale, mortgage or otherwise any property or other assets forming part of the undertakings of the company and any such transfer without such prior approval, shall be void and inoperative (2) any person who contravenes the provisions of sub-section (1) shall be punishable with imprisonment for a term which may extend to 30 two years, or with fine which may extend to ten thousand rupees, or with both protection of action taken in good faith 30 (1) no suit, prosecution or other legal proceeding shad lie against the central government or any officer of that govemment; or the state government, or the government company, or any officer of the 35 state government or the custodian or the government company or other person authorised by the central government, or the state government, or the government company f('lr anything which is in good faith done or intended tl) be done under this act  (2) no suit or other legal proceeding shall lie against the central government or any officer or other employee of that government, or the 40 state government or the custodian or the povernment company, or any offteer or other employee of the state government or of the' gover-nment company or other person authorised by the state governmellt, or the government company for any damage caused or likely to be caused' by, 45 anythin~ which is in good faith done or intended to be done ujllder this act; 31 any person who,-penaltiel (a) having in his possessirm, custody or control any property forming part of any undertaking of the company wrongfully withc holds such property from the central government, or the state s government, or the government company; or  (b) wrongfully obtains possession of, or retains, any property forming part of any undertaking of the company or wilfully withholds or fails to furniah to the central 'government, or the state government, or the government company, or any person 'or body 5 of persons specified by that government, or the state government, or the government company, any document relating to such undertaking which 'may be in his possession, custody or control or fails to deliver to the central government, or the state government, or the government company or any person or body of persons specified 10 by the central government, or the state government, or the government company, any assets, books of account, regitjters or other documents in his possession, custody or control, relating to the undertaking of the company; or (c) wrongfully removes or destroys any property forming part 15 of any undertaking of the company or prefers any claim under 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 m~y extebd to two years, or with fine which may extend to ten thousand rupees, or 20 with both 32 (1) where an offence under this' act has been committed by a offences company, every person who at the time the offence was committed w81!l by com in charge of, and was responsible to, the company for the conduct of panies the business of the company, as well as the company, shall be deemed 25 to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge 017 that he had exercised all due 30 diligence to prevent the commission of such offence (z) notwithstanding anything contained in sub-section (1), where any offence wlder this act has been committed by a company and it is proved that the offence has ooejl committed with the co~t or connivance of, or is attributable to any neglect on the part of, any director, 35 manager, secretary, or other officer of the company, such dir~ctor, manager, secretary or othes officer shall be deemed to be guilty of that offence and shah be liable to be proceeded agairujt add pwlished accordingly explanation-for the purpbses of this section,-40 (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 33 (1) the central government may, by notification, direct that all delegation or any of the powers exercisable by it under this act, other than tlie of powers power conferred by section 34, may also be exercised by such person or persons as may be specified in 1,;be notifi~~tjon -- - (2) whenever any 'delegation of power is made under sub-section \2), the person tp whom such power has been delegated shall act under the direction, control and supervisiolt ot the central government power of 34 (1) the central government may, by notification, make rules central for carrying out the provisions of this act government to make rules (2) in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-(a) the time within which, and the manner in which, an inti~ mation shall be given to the commissioner under sub-section (4) of 10 section 4; (b) 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 is parliament, while it is in session for a total period of thirty days, which may be comprised in one session or i!l 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 20 not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule 35 if any difficulty arises in giving effect to the provisions of this 25 act, the central government may, by order, not inconsistent with the proyisions of this act, remove the difficulty: power to remove diftlcu1-ties provided that no such order shall be made after the expiry of a period of two years from the appointed day 36 it is hereby declared that this act is for giving effect to the 30 policy of the state towards securing the principles specifted in clause (b) of article 39 of the constitution declaration  to the polley of the state explanation-in this section "state" bas the same meaning as in article 12 of the constitution -  the schedule(see sections 5, 20, 21, 22, 24 and 26) order of priorlties 110ft the discharge of liajulltii's of the company  part apost-take-over management period 5 category i loans advanced by the gujarat agro industries corporation for carrying on any trading or manufacturing operations  partbpre-take'-over management period 10 category ii arrears in relation to the provident fund, salaries, wages and other amounts ~ue to the employees of the company category iii secured loans is category iv revenue, taxes, cesses, rates or any other dues to the central government, a state government, a local authority or a state electricty board category v 20 (i) any credit availed of by the company for the purpose of carrying on any trading or manufoacturing operations (it) any other dues  statement of objects and reasonshindustan tractors limited, vaciodara, was a private company wholly owned by its nominees for various reasons including mismanagement, the company began to show steady decline in production and incurred heavy losses, facing imminent closure after investigation into the affairs of this company, the management of its undertakings was taken over by !the oentral government on the 12th march, 1973, under the industries (development and regulation) act, 1951, and was entrusted to the gujarat agro-industries corporation being the authorised controller the period of the management will expire on the 11th march, 1979 the company is engaged in the manufacture of agricultural tractors after the take over of the management of the undertakings of the company the production in the company which had come to a standstill in november, 1972, has progl'tillively improved the net losses have come down from the level of rs 80 lakhs for the year ending march, 1973 to rs 9 lakhs for the year ending march, 1977 and during 1977-78 they expect to achieve a nominal net profit of rs 1 lakh after careful consideration of the whole matter and with a view to improving the technical and economic viability of the undertakings, the central government have decided to acquire the undertaking's of the company and vest them in the state government of gujarat 2 at the time of· take over of the management of the undertakings of the company, it was clear that it was not possible for the company to meet all its past dues accordingly, the central government issued an order on the 26th april, 1973, under section 18fb of the industries (development and regulation) act, 1951, suspending the operation of all the contracts, agreements, settlements, etc, in force immediately before the take over and also payment of the liabilities as on the date of the take-over, excepting those telating to banks and financial institutions the period of this order, which cannot exceed five years in aggregate, expires on the 25th april, 1978 immediate action is, ,therefore, required to be taken to acquire the undertakings of the company by legislation it has, therefore, been decided to introduce a bill in the current session of parliament the bill seeks to acquire the undertakings of hindustan tractors limited new d~hi; george fernandes the 25th february, 1978  president's recommendation under article 117 of the constitution of india[copy of letter no 5 (55) /76-aei (ii), dated the 22nd february, 1978 from shri george fernandes, minister of industry to the secretary, lok babha] the president, having been inf<lrmed of the subject matter of the bill to acquire the undertakings of the hindustan tractors limited "the hindustan tractors limited (acquisition and transfer of undertakings) bill, 1978", by act of parliament, recommends, under clauses (1) and (3) of article 117 of the constitution, the introduction of the said bill and its consideration by lok sabha sub-clause (2) of clause 5 of the bill provides that the liability arising in respect of loans advanced by the central government, state government, banks and industrial reconstruction corporation of india limited to the company after the management of the undertakings of the company had been taken over by the central government and the wages, salaries and other dues of the employees of the company and any debt incurred by the company, other than those mentioned above, in respect of the period after the management had been so taken over, but, excluding the liabilities specified in category i of the schedule to the bill, shall on and from the appointed day, be the liability of the central government, the state government of gujarat or the government company, as the case may be, and shall be discharged by the central government, state government or the government company as and when repayment of such loans or amounts, or such wages, salaries and other dues, become due and payable it is estimated that the expenditure on this accollnt will be of the order of rs 3,92,00,000 2 clause 8 of the bill provides for the payment in cash, and in the manner specified in chapter iii of the bill, an amount of rs 1,50,00,000 for vesting in the central government, the right, title and interest of hindustan traotors limited in relation to undertakings owned by it 3 sub-clause' (1) of clause 9 of the bill provides for payment of further amount in cash, in consideration' for the deprivation of the company o£ the management of its undertakings, an amount calculated at the ,rate of rs 50,000 per annum, for the period commencing on the date on which the management of the undertakings of the company was taken over by the central government and ending on the 1st april, 1978, that is the appointed day it is estimated that this amount wlll be of the order of rs 250,000 4 sub-clause (2) of clause 9 of the bill provides for payment of simple interest on the amount specified in clause 8 and sub-clause (1) of clause 9 at the rate of four per cent per annum for the period commencing on the appointed day and ending on the date on which paymenrt; of such amount is made by the central government to the commissioner of payments it is estimated that the interest'lipayment in terms of the provisions of the said sub-clause is likely to be about rs 50,000 per month 5 clause 16 of the bill provides for the appointment of commissioner of payments by the central government with adequate staff to assist him for the pw1>ose of cusbursing the amount payable to the company the ~alary 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 (in trus account is likely to be rs 16,000 per month 6 clause 26 of the bill provides for assumption of liabilities to the extent that it is not met up to and including category iii (secured loans) ot the schedule attached to the bill it  is estimated that the shortfall on this account in payment due to the banks would be of the order of rs 1,50,00,000 this will be assumed by the central government and transferred immediately ,to the state government of gujarat or the government company as the case may be 7 the bill, if enacted, is not likely to involve any other recl&u mg or non-recurring expendi·ture  memorandum regarding delegated legislationclause 34 of the bi1:l empowers the central government to make rules to carry out the prov~ions of the bill among other things to provide for the time wirthin which, and the manner in which, an intimation referred to in sub-clause (4) of clause 4 of the bill shall be given 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 aegislative power is, therefore, of a normal character '  a billto provide for the acquisition and transfer of the undertakings of hindustan tractors limited, vishwamftri, vadodara, for the purpose of ensuring the continuity of production of goods which are vital to meet the needs of the general publi'c and for matters connected therewith or incidental thereto (shri george fernandes minister oj ind'u8try) 