THE HOOGHLY DOCKING AND ENGINEERING COMPANY LIMITED (ACQUISITION 
AND TRANSFER OF UNDERTAKINGS) ACT, 1984 
_________ 
  ARRANGEMENT OF SECTIONS 
  __________ 

CHAPTER I 
PRELIMINARY 

SECTIONS 

1.  Short title and commencement. 
2.  Definitions. 

CHAPTER II 
ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE COMPANY 

3.  Transfer to, and vesting in, the Central Government of the undertakings of the Company. 
4.  General effect of vesting. 
5.  Power of Central Government to direct vesting of the undertakings of the Company in an existing 

Government Company. 

6.  Transfer of undertakings of the Company from an existing Government company to a new 

Government company. 

7.  Company to be liable for certain prior liabilities. 

CHAPTER III 
PAYMENT OF AMOUNTS 

8.  Payment of amount. 
9.  Payment of further amount 

CHAPTER IV 
MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE COMPANY 

10.  Management, etc., of the undertakings of the Company. 
11.  Duty of persons in charge of management of the undertakings of the Company to deliver all 

assets, etc. 

12.  Duty of persons to account for assets, etc., in their possession. 

CHAPTER V 

PROVISIONS RELATING TO THE EMPLOYEES OF THE COMPANY 

13.  Continuance of employees. 
14.  Provident fund and other funds. 

CHAPTER VI 
COMMISSIONER OF PAYMENTS 

15.  Appointment of Commissioner of Payments. 
16.  Payment by the Central Government to the Commissioner. 
17.  Certain powers of the Central Government or the Government company. 
18.  Claims to be made to the Commissioner. 
19.  Priority of claims. 
20.  Examination of claims. 
21.  Admission or rejection of claims. 
22.  Disbursement of money by the Commissioner to claimants. 
23.  Disbursement of amounts to the Company. 

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SECTIONS 

24.  Undisbursed or unclaimed amount to be deposited to the general revenue account. 

CHAPTER VII 
MISCELLANEOUS 

25.  Act to have overriding effect. 
26.  Contracts to cease to have effect unless ratified by the Central Government or the Government 

company. 

27.  Protection of action taken in good faith. 
28.  Delegation of powers. 
29.  Penalties. 
30.  Offences by companies. 
31.  Power to make rules. 
32.  Power to remove difficulties. 
33.  Repeal and saving. 
THE SCHEDULE. 

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THE HOOGHLY DOCKING AND ENGINEERING COMPANY LIMITED (ACQUISITION 
AND TRANSFER OF UNDERTAKINGS) ACT, 1984 

ACT NO. 55 OF 1984 

[23rd August, 1984.] 

An Act to provide for the acquisition and transfer of the undertakings of the Hooghly Docking 
and  Engineering  Company  Limited  with  a  view  to  securing  the  better  utilisation  of  the 
available infrastructure thereof, to modernise and increase the capacity for ship building and 
ship  repairing  so  as  to  reduce  the  import  of  ships,  vessels  and  craft  and  to  augment              
the production of grey iron, non-ferrous and alloy castings by the said undertakings so as to 
subserve  the  interests  of  the  general  public  by  ensuring  the  continued  supply  of  the  said 
articles  which  are  essential  to  the  needs  of  the  economy  of  the  country,  and  for  matters 
connected therewith and incidental thereto. 

WHEREAS  the  Hooghly  Docking  and  Engineering  Company  Limited  is,  through  its  undertakings, 

engaged in shipbuilding, ship repairing, general engineering and other activities; 

AND WHEREAS the Company has the capacity and infrastructure to effect an increase in the country’s 

capacity to manufacture ships and other vessels and craft; 

AND WHEREAS an increase in the production of such vessels and craft would reduce the need of the 
country to make imports of such vessels and craft and would thereby enable the country to save foreign 
exchange; 

AND  WHEREAS  the  Company  is  also  engaged  in  the  production  of  grey  iron,  non-ferrous  and  alloy 

castings which are essential to the needs of the economy of the country; 

AND  WHEREAS  the  Company  had  been  suffering  heavy  losses  for a  number of  years  mainly  due  to 

lack of fresh investment and modernisation; 

AND WHEREAS further investment of substantial sums of money is needed to run and modernise the 
undertakings of the Company: but in view of the serious adverse financial condition of the Company it is 
not in a position to secure such investment; 

AND  WHEREAS  the  liquidation  of  the  Company,  by  reason  of  its  inability  to  pay  its  debts,  would 
prejudicially affect the country’s capacity to manufacture such ships, vessels and craft and would thereby 
be prejudicial to the public interest; 

AND WHEREAS in view of the position aforesaid it is necessary to acquire the undertaking of the said 
Company  to  enable  the  Central  Government  to  make  necessary  investments  for  securing  the  proper 
utilisation  of  the  available  facilities  for  shipbuilding  and  ship  repairing  (including  the  production  of 
vessels  and  craft)  and  also  for  the  production  of  grey  iron,  non-ferrous  and  alloy  castings  which  are 
essential to the needs of the economy of the country; 

BE it enacted by Parliament in the Thirty-fifth Year of the Republic of India as follows:— 

CHAPTER I 
PRELIMINARY 

1.  Short  title  and  commencement.—(1)  This  Act  may  be  called  the  Hooghly  Docking  and 

Engineering Company Limited (Acquisition and Transfer of Undertakings) Act, 1984. 

(2) It shall be deemed to have come into force on the 28th day of June, 1984. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “appointed day” means the date of commencement of this Act; 

(b) “Commissioner” means the Commissioner of Payments appointed under section 15; 

(c)  “Company”  means  the  Hooghly  Docking  and  Engineering  Company  Limited,  being  a 
company as defined in the Companies, Act, 1956 (1 of 1956), and having its registered office at 12, 
Mission Row, Calcutta-700001; 

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(d)  “existing  Government  company”  means  a  Government  company  which  is  carrying  on 

business on the appointed day; 

(e) “new Government company” means a Government company formed and registered on or after 

the appointed day; 

(f) “notification” means a notification published in the Official Gazette; 

(g) “prescribed” means prescribed by rules made under this Act; 

(h)  “specified  date”,  in  relation  to  any  provision  of  this  Act,  means  such  date  as  the  Central 
Government may, by notification, specify for the purposes of that provision and different dates may 
be specified for different provisions of this Act. 

(i)  words  and  expressions  used  herein  and  not  defined  but  defined  in  the  Companies                 

Act, 1956 (1 of 1956), shall have the meanings, respectively, assigned to them in that Act. 

CHAPTER II 
ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE COMPANY 

3. Transfer to, and vesting in, the Central Government of the undertakings of the Company.—
On the appointed day, the undertaking of the Company, and the right, title and interest of the Company in 
relation  to  its  undertakings,  shall,  by  virtue  of  this  Act,  stand  transferred  to,  and  vested  in,  the  Central 
Government. 

4. General effect of vesting.—(1) The undertakings of the Company shall be deemed to include all 
assets, rights, lease-holds, powers, authorities and privileges, and all property, movable and immovable, 
including lands, buildings, workshops, stores, instruments, machinery and equipment, cash balances, cash 
on hand, reserve funds, investments, book debts and all other rights and interests in, or arising out of, such 
property as were immediately before the appointed day in the ownership, possession, power or control of 
the Company, whether within or outside India, and all books of account, registers and all other documents 
of whatever nature relating thereto. 

(2) All properties as aforesaid which have vested in the Central Government under section 3 shall, by 
force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all 
other incumbrances affecting them, and any attachment, injunction, decree or order of any court, tribunal 
or  other  authority  restricting  the  use  of  such  properties  in  any  manner  shall  be  deemed  to  have  been 
withdrawn. 

(3) Every mortgagee of any property which has vested under this Act in the Central Government and 
every person holding any charge, lien or other interest in, or in relation to, any such property, shall give, 
within such time and in such manner as may be prescribed, an intimation to the Commissioner of such 
mortgage, charge, lien or other interest. 

(4) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in 
sub-section (3) or any other person holding any 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 part, out of the amount specified in sections 8 and also out of the 
amount  determined  under  section  9,  but  no  such  mortgage,  charge,  lien  or  other  interest  shall  be 
enforceable against any property which has vested in the Central Government. 

(5) Any licence or other instrument granted to the Company in relation to any undertaking which has 
vested  in  the  Central  Government  under  section  3,  at  any  time  before  the  appointed  day  and  in  force 
immediately before that day, shall continue to be in force on and after such day in accordance with its 
tenor in relation to, and for the purposes of, such undertaking and on and from the date of vesting of such 
undertaking  under  section  5,  in  an  existing  Government  company,  or  under  section  6,  in  a  new 
Government company, the existing, or new, Government company, as the case may be, shall be deemed 
to  be  substituted  in  such  licence  or  other  instrument  as  if  such  licence  or  other  instrument  had  been 
granted to such existing, or new, Government company and such existing, or new, Government company 
shall hold it for the remainder of the period for which the Company would have held it under the terms 
thereof. 

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(6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any 
property which has vested in the Central Government under section 3, instituted or preferred by or against 
the  Company  is  pending,  the  same  shall  not  abate,  be  discontinued  or  be,  in  any  way,  prejudicially 
affected  by  reason  of  the  transfer  of  the  undertakings  of  the  Company  or  of  anything  contained  in  this 
Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced by or against the 
Central Government, or, where the undertakings of the Company are directed, under section 5, to vest in 
an existing Government company or become transferred by virtue of the provisions of section 6 to a new 
Government company, by or against such Government company. 

5.  Power  of  Central  Government  to  direct  vesting  of  the  undertakings  of  the  Company  in  an 
existing  Government  Company.—(1)  Notwithstanding  anything  contained  in  sections  3  and  4,  and 
subject  to  the  provisions  of  section  6,  the  Central  Government  may,  if  it  is  satisfied  that  an  existing 
Government  company  is  willing  to  comply,  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, title and interest of the Company in relation to its undertakings which have vested in the Central 
Government under section 3, shall, instead of continuing to vest in the Central Government, vest in that 
existing Government company either on the date of publication of the notification or on such earlier or 
later date (not being a date earlier than the appointed day) as may be specified in the notification. 

(2)  Where  the  right,  title  and  interest  of  the  Company  in  relation  to  its  undertakings  vest,  under        

sub-section (1), in an existing Government company, that Government company shall, on and from the 
date of such vesting be deemed to have become, and until the transfer of the undertakings by virtue of the 
provisions of section 6, to a new Government company, be deemed to be, the owner in relation to such 
undertakings  and  the  rights  and  liabilities  of  the  Central  Government  in  relation  to  such  undertakings 
shall, on and from the date of such vesting, be deemed to have become, and until the date of such transfer, 
be deemed to be, the rights and liabilities, respectively, of that existing Government company. 

6. Transfer of undertakings of the Company from an existing Government company to a new 
Government  company.—(1)  Notwithstanding  anything  contained  in  sections  3  and  4,  where  the 
undertakings of the Company have been directed, under sub-section (1) of section 5, to vest in an existing 
Government company, the Central Government may, if it is satisfied that a new Government company is 
willing to comply, or has complied, with such terms and conditions as that Government may think fit to 
impose,  declare,  by  notification,  that  the  undertakings  of  the  Company  be  transferred  to  that  new 
Government company; and on the issue of such declaration, the right, title and interest of the Company in 
relation  to  its  undertakings,  which  had  been  directed  under  sub-section  (1)  of  section  5  to  vest  in  an 
existing Government company, shall, instead of continuing to vest in that existing Government company, 
vest in that new Government company with effect from the date on which such declaration is made. 

(2)  Where  the  right,  title  and  interest  of  the  existing  Government  company  in  relation  to  the 
undertakings  of  the  Company  vest  under  sub-section  (1)  in  a  new  Government  company,  that  new 
Government company shall, on and from the date of such vesting, be deemed to have become the owner 
in  relation  to  such  undertakings  and  the  rights  and  liabilities  of  the  existing  Government  company  in 
relation to such undertakings shall, on and from the date of such vesting, be deemed to have become the 
rights and liabilities, respectively, of that new Government company. 

7.  Company  to  be  liable  for  certain  prior  liabilities.—(1)  Every  liability,  other  than  the  liability 
specified in sub-section (2), of the Company in respect of any period prior to the appointed day, shall be 
the liability of the Company and shall be enforceable against it, and not against the Central Government, 
or where the undertakings of the Company vest in an existing, or a new, Government company, against 
such Government company. 

(2) Any liability arising in respect of advances from customers for shipbuilding and non-shipbuilding 
orders shall, on and from the appointed day, be the liability of the Central Government or of the existing, 
or new, Government company aforesaid, and shall be discharged by that Government or, as the case may 
be, the existing, or new, Government company. 

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(3) For the removal of doubts, it is hereby declared that,— 

(a) save as otherwise expressly provided in this Act, no liability of the Company in relation to its 
undertakings,  in  respect  of  any  period  prior  to  the  appointed  day,  shall  be  enforceable  against  the 
Central  Government,  or  where  the  undertakings  of  the  Company  vest  in  an  existing,  or  a  new, 
Government company, against such Government company; 

(b)  no  award,  decree  or  order  of  any  court,  tribunal  or  other  authority  in  relation  to  the 
undertakings of the Company, passed on or after the appointed day, in respect of any matter, claim or 
dispute, which arose before that day, shall be enforceable against the Central Government, or where 
the undertakings of the Company vest in an existing, or a new, Government company, against such 
Government company; 

(c) no liability incurred by the Company before the appointed day for the contravention of any 
provision of law for the time being in force shall be enforceable against the Central Government, or 
where the undertakings of the Company vest in an existing, or a new, Government company, against 
such Government company. 

CHAPTER III 
PAYMENT OF AMOUNTS 

8. Payment of amount.—For the transfer to, and vesting in, the Central Government, under section 
3, of the undertakings of the Company and the right, title and interest of the Company in relation to its 
undertakings, there shall be paid by the Central Government to the Company, in cash and in the manner 
specified in Chapter VI, an amount of rupees six hundred and fifty lakhs. 

9. Payment of further amount.—(1) The amount specified in section 8 shall carry simple interest at 
the rate of four per cent. per annum for the period commencing on the appointed day and ending on the 
date on which payment of such amount is made by the Central Government to the Commissioner. 

(2) The amount determined in accordance with the provisions of sub-section (1) shall be paid by the 

Central Government to the Company in addition to the amount specified in section 8. 

(3) For the removal of doubts, it is hereby declared that the liabilities of the Company, in relation to 
its undertakings which have vested in the Central Government under section 3, shall be discharged from 
the  amount  referred  to  in  section  8;  and  also  from  the  amount  determined  under  sub-section  (1)  in 
accordance with the rights and interests of the creditors of the Company. 

CHAPTER IV 
MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE COMPANY 

10.  Management,  etc.,  of  the  undertakings  of  the  Company.—The  general  superintendence, 
direction,  control  and  management  of  the  affairs  and  business  of  the  undertakings  of  the  Company,        
the  right,  title  and  interest  in  relation  to  which  have  vested  in  the  Central  Government  under             
section 3, shall,— 

(a)  where  a  direction  has  been  made  by  the  Central  Government  under  sub-section  (1)  of          

section 5, vest, on and from the date specified in such direction, in the existing Government company 
specified therein; or 

(b) where a declaration has been made under sub-section (1) of section 6, vest, on and from the 

date of such declaration, in the new Government company specified therein, 

and  thereupon  the  existing,  or  new,  Government  company,  as  the  case  may  be,  shall  be  entitled  to 
exercise, to the exclusion of all other persons, all such powers and do all such things as the Company is 
authorised to exercise and do in relation to the undertakings owned by it. 

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

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

12. Duty of persons to account for assets, etc., in their possession.—(1) Any person who has, on 
the appointed day, in his possession or under his control, any assets, books, documents or other papers 
relating to any of the undertakings owned by the Company, which have vested in the Central Government 
or  in the existing,  or  new, Government  company  under  this  Act,  and  which  belong  to  the  Company  or 
would  have  so  belonged,  if  the  undertakings  owned  by  the  Company  had  not  vested  in  the  Central 
Government  or  such  Government  company,  shall  be  liable  to  account  for  the  said  assets,  books, 
documents  and  other  papers  to  the  Central  Government  or  the  Government  company  and  shall  deliver 
them  up  to  the  Central  Government  or  the  Government  company  or  to  such  person  or  persons  as  the 
Central Government or the Government company may specify in this behalf. 

(2) The Central Government may take or cause to be taken all necessary steps for securing possession 

of the undertakings of the Company which have vested in it under section 3. 

(3)  The  Company  shall,  within  such  period  as  the  Central  Government  may  allow  in  this  behalf, 
furnish to that Government a complete inventory of all its properties and assets, as on the appointed day, 
pertaining to the undertakings which have vested in the Central Government under section 3, and, for this 
purpose,  the  Central  Government  or  the  existing,  or  new,  Government  company  shall  afford  to  the 
Company all reasonable facilities. 

CHAPTER V 

PROVISIONS RELATING TO THE EMPLOYEES OF THE COMPANY 

13. Continuance of employees.—(1) Every person who has been, immediately before the appointed 

day, employed in any undertakings of the Company shall become,— 

(a) on and from the appointed day, an employee of the Central Government; and 

(b)  where  the  undertakings  of  the  Company  are  vested  in  an  existing,  or  a  new,  Government 

company, an employee of that company on and from the date of such vesting, 

and  shall  hold  office  or  service  under  the  Central  Government  or  the  existing,  or  new,  Government 
company, as the case may be, with the same rights and privileges as to pension, gratuity and other matters 
as would have been admissible to him if there had been no such vesting and shall continue to do so unless 
and until his employment under the Central Government or the existing, or new, Government company, 
as the case may be, is duly terminated or until his remuneration and other conditions of service are duly 
altered by the Central Government or the existing, or new, Government company, as the case may be: 

Provided  that,  unless  any  extension  of  service  is  granted  to  such  person  after  the  appointed  day  in 
accordance with the rules in that behalf in force for the time being, such person shall retire compulsorily 
from the service of the Central Government or the existing, or new, Government company, as the case 
may be,— 

(a) where he has attained or attains the age of fifty-eight years before, or on, or within a period of 
three months from, the appointed day, on the date of expiry of the said period of three months or on 
the  date  on  which  he  shall  retire  compulsorily  from  service  in  accordance  with  the  conditions  of 
service applicable to him immediately before the appointed day, whichever date is earlier; 

(b) in any other case, on his attaining the age of fifty-eight years. 

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

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14.  Provident  fund  and  other  funds.—(1)  Where  the  Company  has  established  a  provident  fund, 
superannuation fund, welfare fund or any other fund for the benefit of the persons employed in any of the 
undertakings  of  the  Company,  the  monies  relatable  to  the  officers  or  other  employees,  whose  services 
have  become  transferred,  by  or  under  this  Act  to  the  Central  Government  or  the  existing,  or  new, 
Government  company,  shall,  out  of  the  monies  standing,  on  the  appointed  day,  to  the  credit  of  such 
provident fund, superannuation fund, welfare fund or other fund, stand transferred to, and shall vest in, 
the Central Government or the Government company, as the case may be. 

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

CHAPTER VI 
COMMISSIONER OF PAYMENTS 

15.  Appointment  of  Commissioner  of  Payments.—(1)  The  Central  Government  shall,  for  the 
purpose  of  disbursing  the  amounts  payable  under  sections  8  and  9,  by  notification,  appoint  a 
Commissioner of Payments. 

(2)  The  Central  Government  may  appoint  such  other  persons  as  it  may  think  fit  to  assist  the 
Commissioner  and  thereupon  the  Commissioner  may  authorise  one  or  more  of  such  persons  also  to 
exercise  all  or  any  of  the  powers  exercisable  by  him  under  this  Act  and  different  persons  may  be 
authorised to exercise different powers. 

(3)  Any  person  authorised  by  the  Commissioner  to  exercise  any  of  the  powers  exercisable  by  the 
Commissioner may exercise those powers in the same manner and with the same effect as if they have 
been conferred on that person directly by this Act and not by way of authorisation. 

(4) The salaries and allowances of the Commissioner and other persons appointed under this section 

shall be defrayed out of the Consolidated Fund of India. 

16.  Payment  by  the  Central  Government  to  the  Commissioner.—(1)  The  Central  Government 
shall, within thirty days from the specified date, pay, in cash, to the Commissioner, for payment to  the 
Company— 

(a) an amount equal to the amount specified in section 8, and 

(b) an amount equal to the amount payable to the Company under section 9. 

(2) A deposit account shall be opened by the Central Government in favour of the Commissioner, in 
the  Public  Account  of  India,  and  every  amount  paid  under  this  Act  to  the  Commissioner  shall  be 
deposited by him to the credit of the said deposit account and the said deposit account shall be operated 
by the Commissioner. 

(3) Records shall be maintained by the Commissioner in respect of the undertakings of the Company 

in relation to which payment has been made to him under this Act. 

(4) The interest  accruing  on  the  amount  standing  to  the  credit  of the  deposit  account referred to  in              

sub-section (2) shall ensure to the benefit of the Company. 

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

(2) The Central Government or the existing, or new, Government company, as the case may be, may 
make  a  claim  to  the  Commissioner  with  regard  to  every  payment  made  by  that  Government  or 
Government company, after the appointed day for 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 
priorities attaching, under this Act, to the matter in relation to which such liability has been discharged by 
the Central Government or the Government company. 

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(3) Save as otherwise provided in this Act, the liabilities of the Company in respect of any transaction 
prior to the appointed day, which have not been discharged on or before the specified date, shall be the 
liabilities of the Company. 

18. Claims to be made to the Commissioner.—Every person having a claim against the Company 
with regard to any of the matters specified in the Schedule pertaining to the undertakings of the Company 
shall prefer such claim before the Commissioner within thirty days from the specified date: 

Provided  that  if  the  Commissioner  is  satisfied  that  the  claimant  was  prevented  by  sufficient  cause 
from preferring the claim within the said period of thirty days, he may entertain the claim within a further 
period of thirty days and not thereafter. 

19. Priority of claims.—The claims made under section 18 shall have priorities in accordance with 

the following principles, namely:— 

(a)  Category  I  shall  have  precedence  over  all  other  categories  and  Category  II  shall  have 

precedence over Category III, and so on; 

(b) the claims specified in each of the categories shall rank equally and be paid in full, but, if the 
amount is insufficient to meet such claims in full, they shall abate in equal proportions and be paid 
accordingly; and 

(c) the question of discharging any liability with regard to a matter specified in a lower category 
shall arise only if a surplus is left after meeting all the liabilities specified in the immediately higher 
category. 

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

21.  Admission  or  rejection  of  claims.—(1)  After  examining  the  claims  with  reference  to  the 
priorities  set  out  in  the  Schedule,  the  Commissioner  shall  fix  a  certain  date  on  or  before  which  every 
claimant shall file the proof of his claim. 

(2)  Not less  than  fourteen days’  notice  of  the  date  so  fixed shall  be  given  by  advertisement  in  one 
issue of any daily newspaper in the English language having circulation in the major part of the country 
and  one  issue  of  any  daily  newspaper  in  such  regional  language  as  the  Commissioner  may  consider 
suitable,  and  every  such  notice  shall  call  upon  the  claimant  to  file  the  proof  of  his  claim  with  the 
Commissioner within the period specified in the 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 disbursement made by the Commissioner. 

(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, by order in writing, admit or reject the claim in whole or in part. 

(5) The Commissioner shall have the power to regulate his own procedure in all matters arising out of 
the discharge of his functions, including the place or places at which he may hold his sittings and shall, 
for the purpose of making an investigation under this Act, have the same powers as are vested in a civil 
court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following 
matters, namely:— 

(a) the summoning and enforcing the attendance of any witness and examining him on oath; 

(b)  the  discovery  and  production  of  any  document  or  other  material  object  producible  as 

evidence; 

9 

(c) the reception of evidence on affidavits; 

(d) the issuing of any commission for the examination of witnesses. 

(6)  Any  investigation  before  the  Commissioner  shall  be  deemed  to  be  a  judicial  proceeding  within  
the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Commissioner shall 
be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal 
Procedure, 1973  (2 of 1974). 

(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 of the Company is situated: 

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

22.  Disbursement  of  money  by  the  Commissioner  to  claimants.—After  admitting  a  claim  under 
this  Act,  the  amount  due  in  respect  of  such  claim  shall  be  paid  by  the  Commissioner  to  the  person  or 
persons to whom such amount is due, and on such payment, the liability of the Company in respect of 
such claim shall stand discharged. 

23. Disbursement of amounts of the Company.—(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 balance to the Company. 

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

24.  Undisbursed  or  unclaimed  amount  to  be  deposited  to  the  general  revenue  account.—Any 
money  paid  to  the  Commissioner  which  remains  undisbursed  or  unclaimed  on  the  date  immediately 
preceding the date on which the office of the Commissioner is finally wound up, shall be transferred by 
the  Commissioner,  before  his  office  is  finally  would  up  to  the  general  revenue  account  of  the  Central 
Government; 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 transfer  had not  been  made,  and  the 
order, if any, for payment of the claim, being treated as an order for the refund of revenue. 

CHAPTER VII 

MISCELLANEOUS 

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

26.  Contracts  to  cease  to  have  effect  unless  ratified  by  the  Central  Government  or  the 
Government  company.—Every  contract  entered  into  by  the  Company  in  relation  to  its  undertakings, 
which has vested in the Central Government under section 3, for any service, sale or supply and in force 
immediately before the appointed day, shall, on and from the expiry of one hundred and eighty days from 
the appointed day, cease to have effect unless such contract is, before the expiry of that period, ratified, in 
writing,  by  the  Central  Government  or  the  existing,  or  new,  Government  company  in  which  such 
undertakings have been vested under this Act, and in ratifying such contract, the Central Government or 
the Government company may make such alteration or modification therein as it may think fit: 

10 

Provided  that  the  Central  Government  or  such  Government  company  shall  not  omit  to  ratify  a 

contract and shall not make any alteration or modification in a contract— 

(a) unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith 

or is detrimental to the interests of the Central Government or the Government company; and 

(b) 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 modification therein. 

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

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

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

(2) Whenever any delegation of power is made under sub-section (1), the person to whom such power 

has been delegated shall act under the direction, control and supervision of the Central Government. 

29. Penalties.—Any person who,— 

(a) having in his possession, custody or control any property forming part of any undertakings of 
either  the  Company,  wrongfully  withholds  such  property  from  the  Central  Government  or  the 
existing, or new, Government company; or 

(b) wrongfully obtains possession of, or retains, any property forming part of the undertakings of 

the Company; or 

(c)  wilfully  withholds  or  fails  to  furnish  to  the  Central  Government  or  the  existing,  or  new, 
Government  company  or  any  person  or  body  of  persons  specified  by  that  Government  or  the 
Government  company,  as  the  case  may  be,  any  document  relating  to  the  undertakings  of  the 
Company, which may be in his possession, custody or control; or 

(d) fails to deliver to the Central Government or the existing, or new, Government company or to 
any person or body of persons specified by that Government or the Government company, any assets, 
books of account, registers or other documents in his possession, custody or control, relating to the 
undertakings of the Company; or 

(e)  wrongfully  removes  or  destroys  any  property  forming  part  of  the  undertakings  of  the 

Company; or 

(f) 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 may extend to two years or with fine which may 
extend to ten thousand rupees, or with both. 

30.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company,  every  person  who,  at  the  time  the  offence  was  committed,  was  in  charge  of,  and  was 
responsible  to,  the  company,  for  the  conduct  of  the  business  of  the  company,  as  well  as  the  company, 
shall  be  deemed  to  be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment, if he proves that the offence was committed without his knowledge or that he had exercised 
all due diligence to prevent the commission of such offence. 

11 

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other 
officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of 
that offence and shall be liable to be proceeded against and punished accordingly. 

Explanation.—For the purposes of this section,— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

(b) “director”, in relation to a firm, means a partner in the firm. 

31.  Power  to  make  rules.—(1)  The  Central  Government  may,  by  notification,  make  rules  for 

carrying out the provisions of this Act. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a)  the  time  within  which,  and  the  manner  in  which,  an  intimation  shall  be  given  to  the 

Commissioner under sub-section (3) of section 4; 

(b) the manner in which the monies in any provident fund or other fund under section 14 shall be 

dealt with; 

(c) any other matter which is required to be, or may be, prescribed. 

(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days which 
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the 
session  immediately  following  the  session  or  the  successive  sessions  aforesaid,  both  Houses  agree  in 
making any modification in the rule or both Houses agree that the rule should not 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. 

32. Power to remove difficulties.—If any difficulty arises in giving effect to the provisions of this 
Act, the Central Government may, by order, not inconsistent with the 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 appointed 

day. 

33. Repeal and saving.—(1) The Hooghly Docking and Engineering Company Limited (Acquisition 

and Transfer of Undertakings) Ordinance, 1984 (7 of 1984), is hereby repealed. 

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be 

deemed to have been done or taken under the corresponding provisions of this Act. 

12 

 
THE SCHEDULE 

[See sections 18, 20, 21 and 23] 

ORDER OF PRIORITIES FOR THE DISCHARGE OF LIABILITIES OF THE COMPANY 

Category I— 

(a) Wages, salaries and other dues payable to the employees of the Company; 

(b)  Arrears  in  relation  to  contributions  to  be  made  by  the  Companies  to  the  provident  fund, 
Employees’  State  Insurance  Fund,  Life  Insurance  Corporation  premium  and  any  other  arrear  under 
any law for the time being in force. 

Category II— 

Loans and interest for which Government of India have given guarantees to the public financial 

institutions. 

Category III— 

Secured loans with interest advanced by— 

(a) public financial institutions; 

(b) banks. 

Category IV— 

Statutory dues. 

Category V— 

Unsecured  loans  with  interest  advanced  by  the  public  financial  institutions,  banks  or  other 

creditors. 

Category VI— 

Any  credits  availed  of  by  the  Company  for  the  purpose  of  carrying  on  any  trading  or 

manufacturing operations. 

Category VII— 

Any other loans or dues. 

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