THE BRITANNIA ENGINEERING COMPANY LIMITED (MOKAMEH UNIT) AND THE 
ARTHUR BUTLER AND COMPANY (MUZAFFARPORE) LIMITED (ACQUISITION AND 
TRANSFER OF UNDERTAKINGS) ACT, 1978 
_________ 
ARRANGEMENT OF SECTIONS 
__________ 

CHAPTER I 

PRELIMINARY 

SECTIONS 

1. Short title and commencement. 
2. Definitions. 

CHAPTER II 
ACQUISITION AND TRANSFER OF MOKAMEH UNIT AND UNDERTAKINGS OF ARTHUR BUTLER AND 
COMPANY 

3.  Vesting  in  the  Central  Government  of  Mokameh  unit  and  undertakings  of  Arthur  Butler  and 

Company. 

4. General effect of vesting. 
5. Power of Central Government to direct vesting of Mokameh unit and the undertakings of Arthur 

Butler and Company in a Government company. 

6.  Britannia  Engineering  Company  and  Arthur  Butler  and  Company  to  be  liable  for  certain  prior 

liabilities. 

CHAPTER III 
PAYMENT OF AMOUNT 

7. Payment of amount. 
8. Payment of further amount. 

CHAPTER IV 
MANAGEMENT, ETC., OF MOKAMEH UNIT AND THE UNDERTAKINGS OF ARTHUR BUTLER AND COMPANY 

 9.  Management, etc., of Mokameh unit and the undertakings of Arthur Butler and Company. 
10. Duty to deliver possession of Mokameh unit and undertakings of Arthur Butler and Company. 
11. Duty of the companies to furnish particulars. 
12. Duty of persons in charge of management of Mokameh unit or undertakings of Arthur Butler and 

Company to deliver assets, etc. 

CHAPTER V 
PROVISIONS RELATING TO EMPLOYEES OF MOKAMEH UNIT AND OF ARTHUR BUTLER AND COMPANY 

13. Employment of employees to continue. 
14. Provident fund and other funds. 

CHAPTER VI 
COMMISSIONER OF PAYMENTS 

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

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SECTIONS 

22. Disbursement of money by Commissioner. 
23. Disbursement of amounts to Britannia Engineering Company and Arthur Butler and Company. 
24. Undisbursed or unclaimed amount to be deposited with the General Revenue Account. 

CHAPTERVII 
MISCELLANEOUS 

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

company. 
27. Penalties. 
28. Offences by companies. 
29. Protection of action taken in good faith. 
30. Delegation of Powers. 
31. Power to make rules. 
32. Power to remove difficulties. 
33. Declaration as to the policy of the State. 

THE FIRST SCHEDULE 
THE SECOND SCHEDULE 

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THE BRITANNIA ENGINEERING COMPANY LIMITED (MOKAMEH UNIT) AND THE 
ARTHUR BUTLER AND COMPANY (MUZAFFARPORE) LIMITED (ACQUISITION AND 
TRANSFER OF UNDERTAKINGS) ACT, 1978 

ACT NO. 41 OF 1978 

[8th December, 1978.] 

An  Act  to  provide  for  the  acquisition  and  transfer  of  the  right,  title  and  interest  of  the 
undertakings of Britannia Engineering Company in relation to the Mokameh unit owned by it 
and the right, title and interest of Arthur Butler and Company in relation to the undertakings 
owned by it, with a view to ensuring the continued manufacture of railway wagons and other 
goods essential to the needs of the country in general and the Railways in particular, and for 
matters connected therewith or incidental thereto. 

WHEREAS  Britannia  Engineering  Company  at  the  Mokameh  unit  and  Arthur  Butler  and  Company 

were engaged in the manufacture of railway wagons and other goods; 

AND  WHEREAS  as  a  result  of  the  closure  of  the  wagon  and  other  undertakings  owned  by  the 

companies aforesaid, there was a substantial fall in the manufacture of railway wagons and other goods; 

AND WHEREAS for the purpose of bringing the closed works of the companies aforesaid into operation 
the  management  of  the  Mokameh  unit  of  Britannia  Engineering  Company  and  the  management  of  the 
undertakings  of  Arthur  Butler  and  Company  were  taken  over  by  the  Central  Government  under  the 
Industries (Development and Regulation) Act, 1951 (65 of 1951); 

AND  WHEREAS  it  is  necessary  to  acquire  the  said  wagon  and  other  undertakings  to  ensure  the 
continued manufacture of railway wagons and other goods which are essential to the needs of the country 
in general, and the Railways in particular; 

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

CHAPTER I 

PRELIMINARY 

1.    Short  title  and  commencement.—(1)  This  Act  may  be  called  the  Britannia  Engineering 
Company  Limited  (Mokameh  Unit)  and  the  Arthur  Butler  and  Company  (Muzaffarpore)  Limited 
(Acquisition and Transfer of Undertakings) Act, 1978. 

(2) The provisions of sections 27 and 28 shall come into force at once and the remaining provisions of 

this Act shall be deemed to have come into force on the 1st day of April, 1978. 

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

(a) “appointed day” means the 1st day of April, 1978; 

(b)  “Arthur  Butler  and  Company”  means  Messrs.  Arthur  Butler  and  Company  (Muzaffarpore) 
Limited,  a  company  within  the  meaning  of  the  Companies  Act  1956  (1  of  1956),  and  having  its 
registered office at 40, Stand Road, Calcutta, in the State of West Bengal; 

(c) “Britannia Engineering Company” means Messrs.Britannia Engineering Company Limited, a 
company within the meaning of the Companies Act 1956 (1 of 1956), and having its registered office 
at 3, Netaji Subhash Road, Calcutta, in the State of West Bengal; 

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

(e)  “Government  company”  means  a  company  within  the  meaning  of  section  617  of  the 

Companies Act, 1956 (1 of 1956) and referred to in section 5 of this Act; 

(f)  “Mokameh  unit”  means  the  wagon  and  other  undertakings  owned  by  Britannia  Engineering 

Company at Mokameh in the State of Bihar; 

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

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

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

(j) “wagon and other undertaking” means the undertaking which is engaged in the manufacture of 

railway wagons and other goods; 

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

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

CHAPTER II 

ACQUISITION AND TRANSFER OF MOKAMEH UNIT AND UNDERTAKINGS OF ARTHUR BUTLER AND 
COMPANY 

3. Vesting in the Central Government of Mokameh unit and undertakings of Arthur Butler and 

Company.—On the appointed day,— 

(i)  the  Mokameh  unit  and  the  right,  title  and  interest  of  Britannia  Engineering  Company  in 

relation to the Mokameh unit; and 

(ii)  the  undertakings  owned  by  Arthur  Butler  and  Company  and  the  right,  title  and  interest  of 

Arthur Butler and Company in relation to the said undertakings, 

shall, by virtue of this Act, stand transferred to, and shall vest in, the Central Government. 

4.  General  effect  of  vesting.—(1)  The  Mokameh  unit,  and  the  undertakings  of  Arthur  Butler  and 
Company,  referred  to  in  section  3,  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  in  hand,  reserve  funds, 
investments and book debts pertaining to the Mokameh unit or, as the case may be, the undertakings of 
Arthur Butler and Company, 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— 

(a) of Britannia Engineering Company, in relation to the Mokameh unit, or 

(b) of Arthur Butler and Company, in relation to the undertakings owned by it, 

whether  within  or  outside  India,  and  all  books  of  account,  registers  and  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 it, and any attachment, injunction or decree or order of any court or other 
authority, restricting the use of such properties in any manner or appointing any receiver in respect of the  
whole or any part of such properties 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 and 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 amounts specified in the First Schedule and also out of 
the  monies  determined  under  section  8,  but  no  such  mortgage,  charge,  lien  or  other  interest  shall  be 
enforceable  against  any  property  which  has  vested  in  the  Central  Government  or  the  Government 
company, as the case may be. 

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(5)  If,  on  the  appointed  day,  any  suit,  appeal  or  other  proceeding  of  whatever  nature  instituted  or 
preferred by or against Britannia Engineering Company in relation to the Mokameh unit, or by or against 
Arthur  Butler  and  Company  in  relation to  any  undertaking  owned  by  it,  is  pending,  the  same  shall  not 
abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the Mokameh 
unit or, as the case may be, the undertakings of Arthur Butler and 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 the Government company as the case may be. 

5.  Power  of  Central  Government  to  direct  vesting  of  Mokameh  unit  and  the  undertakings  of 
Arthur Butler and Company in a Government company.—(1) Notwithstanding anything contained in 
section  3,  the  Central  Government  may,  if  it  is  satisfied  that  a  Government  company  (whether  in 
existence  at  the  commencement  of  this  Act  or  incorporated  thereafter)  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 Mokameh unit and the undertakings referred to in section 3, and the right, title and 
interest  of  Britannia  Engineering  Company  in  relation  to  the  Mokameh  unit,  and  the  right,  title  and 
interest of Arthur Butler and Company in relation to the undertakings owned by it, which have vested in 
the Central Government under section 3, shall instead of continuing to vest in the Central Government, 
vest in the Government company either on the date of the notification or on such earlier or later date (not 
being a date earlier than the appointed day) as may be specified in the notification. 

(2)  Where  the  right,  title  and  interest  in  relation  to  the  Mokameh  unit  and  in  relation  to  the  other 
undertakings  referred  to  in  section  3,  vest  in  a  Government  company  under  sub-section  (1),  the 
Government company shall, on and from the date of such vesting, be deemed to have become the owner 
of  the  Mokameh  unit  and  of  the  undertakings  of  Arthur  Butler  and  Company  and  all  the  rights  and 
liabilities  of  the  Central  Government  in  relation  to  the  Mokameh  unit  and  the  undertakings  of  Arthur 
Butler and Company shall, on and from the date of such vesting, be deemed to have been the rights and 
liabilities, respectively, of the Government company. 

6.  Britannia  Engineering  Company  and  Arthur  Butler  and  Company  to  be  liable  for  certain 
prior liabilities.—(1) Every liability of Britannia Engineering Company in relation to the Mokameh unit, 
or  of  Arthur  Butler  and  Company  in  relation  to the undertakings  owned  by  it, in  respect  of  any  period 
prior to the appointed day, shall be the liability of Britannia Engineering Company, or Arthur Butler and 
Company, as the case may be, and shall be enforceable against such company and not against the Central 
Government or the Government company. 

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

(a) save as otherwise expressly provided in this section or in any other section of this Act,— 

(i) no liability of Britannia Engineering Company, in relation to the Mokameh unit, and 

(ii) no liability of Arthur Butler and Company, in relation to the undertakings owned by it, 

in  respect  of  any  period  prior  to  the  appointed  day,  shall  be  enforceable  against  the  Central 
Government or the Government company, as the case may be; 

(b) no award, decree or order of any court, tribunal or other authority in relation to the Mokameh 
unit,  or  in  relation  to  the  undertakings  owned  by  Arthur  Butler  and  Company,  passed  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 the Government company, as the case may be; 

(c) no liability incurred before the appointed day by— 

(i) Britannia Engineering Company, in relation to the Mokameh unit, or 

(ii) Arthur Butler and Company, in relation to the undertakings owned by it, 

for the contravention of any provision of law for the time being in force shall be enforceable against 
the Central Government or the Government company as the case may be. 

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CHAPTER III 

PAYMENT OF AMOUNT 

7.  Payment  of  amount.—(1)  For  the  transfer  to,  and  vesting  in,  the  Central  Government,  under 

section 3,— 

(a)  of  the  Mokameh  unit  and  the  right,  title  and  interest  of  Britannia  Engineering  Company,  in 

relation to that unit; and 

(b)  of  the  undertakings  owned  by  Arthur  Butler  and  Company,  and  the  right,  title  and  interest  of 

Arthur Butler and Company, in relation to those undertakings, 

there shall be given by the Central Government to Britannia Engineering Company and Arthur Butler and 
Company, in cash and in the manner specified in Chapter V1, an amount equal to the amount specified, 
respectively,  in  the  First  Schedule,  against  Britannia  Engineering  Company  and  Arthur  Butler  and 
Company. 

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

(i) Britannia Engineering Company, in relation to the Mokameh unit, and 

(ii) Arthur Butler and Company, in relation to the undertakings owned by it, 

shall be met, in accordance with the rights and interests of the creditors of the respective company from 
the  amount  due,  respectively,  to  Britannia  Engineering  Company  and  Arthur  and  Company,  under            
sub-section (1). 

8. Payment of further amount.—(1) For the deprivation of Britannia Engineering Company of the 
management  of  the  Mokameh  unit  and  for  the  deprivation  or  Arthur  Butler  and  Company  of  the 
management of the undertakings owned by it, there shall be given, in cash, by the Central Government to 
the respective company, in addition to the amount specified in section 7, an amount computed at the rate 
of ten thousand rupees per annum for the  period commencing on the date on which the management of 
such unit or, as the case may be, such undertakings, was taken over by the Central Government under the 
Industries (Development and Regulation) Act, 1951 (65 of 1951) and ending with the appointed day. 

(2) In consideration of the retrospective operation of the provisions of sections 3, 4 and 6, there shall 
also  be  given,  in  cash,  by  the  Central  Government  to  Britannia  Engineering  Company  and  to  Arthur 
Butler  and  Company  an  amount  equal  to  an  amount  calculated  at  the  rate  of  ten  thousand  rupees  per 
annum  for  the  period  commencing  on  the  appointed  day  and  ending  with  the  date  on  which  this  Act 
receives the assent of the President. 

(3) The amount specified in section 7 and the amount computed under sub-sections (1) and (2) shall 
carry simple interest at the rate of four per cent. per annum for the period commencing on the appointed 
day and ending with the date on which the payment of amount is made by the Central Government to the 
Commissioner. 

(4) The amounts determined in accordance with the provisions of sub-sections (1), (2) and (3) shall be 
given to Britannia  Engineering  Company and to Arthur Butler and Company in addition  to the  amount 
specified in the First Schedule. 

CHAPTER IV 

MANAGEMENT, ETC., OF MOKAMEH UNIT AND THE UNDERTAKINGS OF ARTHUR BUTLER AND COMPANY 

9. Management, etc., of Mokameh unit and the undertakings of Arthur Butler and Company.—
On the appointed day, the general superintendence, direction, control and management of the affairs and 
business of the Mokameh unit and of the undertakings owned by Arthur Butler and Company shall— 

(a)  where  a  direction  has  been  made  by  the  Central  Government  under  section  5,  vest  in  the 

Government company specified in such direction, or 

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(b)  where  no  such  direction  has  been  made,  vest  in  such  person  or  body  of  persons  as  may  be 

appointed by the Central Government in this behalf, 

and thereupon the Government company so specified or the person or body of persons so appointed, as 
the  case  may  be,  shall  be  entitled  to  exercise  all  such  powers  and  do  all  such  things  as  Britannia 
Engineering Company is authorised to exercise and do in relation to its Mokameh unit or, as the case may 
be, Arthur Butler and Company is authorised to exercise and do in relation to the undertakings owned by 
it. 

10.  Duty  to  deliver  possession  of  Mokameh  unit  and  undertakings  of  Arthur  Butler  and 

Company.—(1) Every person, in whose possession or custody or control— 

(i) the Mokameh unit, or 

(ii) any undertaking or Arthur Butler and Company, or 

any part of such unit or undertaking or any machinery, instrument or other movable assets forming part of 
such unit or undertaking, may be immediately before the appointed day, shall forthwith deliver possession 
of the Mokameh unit or such undertaking or such part, machinery, instrument or other asset, as the case 
may be, to the Central Government or the Government company or to such person or body of persons as 
the Central Government or the Government company may specify in this behalf. 

(2)  Every  person  who  has,  on  the  appointed  day,  in his  possession  or  under  his  control any  assets, 
books,  documents  or  other  papers  relating  to  the  Mokameh  unit  or  any  undertaking  owned  by  Arthur 
Butler and Company, which has vested in the Central Government or a Government company under this 
Act,  and  which  belong  to  Britannia  Engineering  Company  or,  as  the  case  may  be,  Arthur  Butler  and 
Company,  or  would  have  so  belonged  if  the  Mokameh  unit,  or  as  the  case  may  be,  the  undertakings 
owned  by  Arthur  Butler  and  Company,  had  not  vested  in  the  Central  Government  or  the  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  body  or  persons  as  the  Central  Government  or  the 
Government Company may specify in this behalf. 

(3) The Central Government may take or cause to be taken all necessary steps for securing possession 
of the Mokameh unit and the undertakings of Arthur Butler and Company which have vested in it under 
section 3. 

11.  Duty  of  the  companies  to  furnish  particulars.—Britannia  Engineering  Company  and  Arthur 
Butler  and  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  Mokameh  unit,  or  as  the  case  may  be,  the  undertakings  owned  by  Arthur  Butler  and 
Company which has or have vested in the Central Government under section 3, and, for this purpose the 
Central Government or the Government company shall afford Britannia Engineering Company or Arthur 
Butler and Company all reasonable facilities. 

12.  Duty  of  persons  in  charge  of  management  of  Mokameh  unit  or  undertakings  of  Arthur 
Butler  and  Company  to  deliver  assets,  etc.—On  the  vesting  in  the  Central  Government  or  the 
Government company of the management of the Mokameh unit or of any undertakings owned by Arthur 
Butler and Company, all persons in charge of the management of the Mokameh unit or, as the case may 
be, the undertakings owned by Arthur Butler and Company immediately before the date of such vesting, 
shall  be  bound to deliver to  the  Central  Government or the  Government  company  or  to  such  person  or 
body or persons as the Central Government or the Government  company may specify in this behalf, all 
assets, books of account, registers or other documents in their custody relating to the Mokameh unit or, as 
the case may be, any undertaking owned by Arthur Butler and Company. 

CHAPTER V 
PROVISIONS RELATING TO EMPLOYEES OF MOKAMEH UNIT AND OF ARTHUR BUTLER AND COMPANY 

13. Employment of employees to continue.—(1) Every person who has been, immediately before 

the appointed day, employed by— 

(i) Britannia Engineering Company, in connection with the Mokameh unit, or 

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(ii) Arthur Butler and Company, in connection with any undertaking owned by it, 

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

(2) 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  the  Mokameh  unit  or  any  undertakings  owned  by  Arthur  Butler  and  Company,  to  the  Central 
Government  or  the  Government  company  shall  not  entitle  such  officer  or  other  employee  to  any 
compensation  under  this  Act  or  any  other  law  for  the  time  being  in  force  and  no  such  claim  shall  be 
entertained by any court, tribunal or other authority. 

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

(2)  The  monies  which  stand  transferred  under  sub-section  (1)  to  the  Central  Government  or  the 
Government  company,  as  the  case  may  be,  shall  be  dealt  with  by  that  Government  or  the  Government 
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 amount payable under sections 7 and 8 to Britannia Engineering Company and 
to Arthur Butler and Company, 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  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 Britannia 
Engineering Company and to Arthur Butler and Company,— 

(a) an amount equal to that specified against each of their names in the First Schedule, 

(b)  an  amount  equal  to  that  payable  to  Britannia  Engineering  Company  and  Arthur  Butler  and 

company under section 8. 
(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. 

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(3) Separate records shall be maintained by the Commissioner in respect  of Mokameh unit and the 
undertakings owned by Arthur Butler and Company in relation to which payment has been made to him 
under this Act. 

(4)  Interest  acquiring  on  the  amounts  standing  to  the  credit  of  the  deposit  account  referred  to  in              

sub-section  (2)  shall  enure  to  the  benefit  of  Britannia  Engineering  Company  and  Arthur  Butler  and 
Company. 

17.  Certain  powers  of  the  Central  Government  or  Government  company.—(1)  The  Central 
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 Britannia Engineering Company in 
relation to any of the Mokameh unit, or Arthur Butler and Company in relation to any of the undertakings 
owned by it, which has vested in the Central Government or the 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 Government company, as the case may be, may make a claim to 
the  Commissioner  with  regard  to  every  payment  made  by  that  Government  after  the  appointed  day  for 
discharging any liability of Britannia Engineering Company in relation to the Mokameh unit, or of Arthur 
Butler and Company in relation to any of the undertakings owned by it, 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. 

(3)  Save  as  otherwise  provided  in  this  Act,  the  liabilities  of  Britannia  Engineering  Company  in 
relation  to the  Mokameh  unit,  or  of  Arthur  Butler  and  Company  in  relation to  any  of  the  undertakings 
owned by it, 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 Britannia  Engineering Company or Arthur Butler 
and Company, as the case may be. 

18.  Claims  to  be  made  to  the  Commissioner.—Every  person  having  a  claim  against  Britannia 
Engineering Company in relation to the Mokameh unit, or against Arthur Butler and Company in relation 
to the undertakings owned by it, 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, but not thereafter. 

19. Priority of claims.—The claims arising out of the matters specified in the Second Schedule shall 

have priorities in accordance with the following principles, namely:— 

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

category III and so on; 

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

(c) the liabilities specified in category IV shall be discharged subject to the priorities specified in this 

section in accordance with the terms of the secured loan and the priority inter se, of such loans; and 

(d) 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 or priorities specified in the Second Schedule and examine the same 
in accordance with such order of priorities. 

(2) If on an examination of the claim, 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 claim in respect of such lower category. 

9 

 
21.  Admission  or  rejection  of  claims.—(1)  After  examining  the  claims  with  reference  to  the 
priorities  set  out  in  the  Second  Schedule,  the  Commissioner  shall  fix  a  date  on  or  before  which  every 
claimant  shall  file  the  proof  of  his  claim  failing  which  he  will  be  excluded  from  the  benefit  of  the 
disbursement made by the Commissioner. 

(2)  Not less  than  fourteen days’  notice  of  the  date  so  fixed shall  be  given  by  advertisement  in  one 
issue of the daily newspaper in the English language having circulation in the major part of the country 
and  one  issue  of  such  daily  newspaper  in  the  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  period  specified  by  the 

Commissioner shall be excluded from the disbursement made by the Commissioner. 

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary and after 
giving  Britannia  Engineering  Company  or,  as  the  case  may  be,  Arthur  Butler  and  Company,  an 
opportunity of refuting the claim and after giving the claimant a reasonable opportunity of being heard, in 
writing, admit or reject the claim in whole or in part. 

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

(c) the reception of evidence on affidavits; 

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

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

(7)  A  claimant  who  is  dissatisfied  with  the  decision  of  the  Commissioner  may  prefer  an  appeal 
against  the  decision  to  the  principal  court  of  original  jurisdiction  within  the  local  limits  of  whose 
jurisdiction the Mokameh unit or, as the case may be, the registered office of Arthur Butler and 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 of the State in which the registered office of Britannia Engineering 
Company or, as the case may be, Arthur Butler and 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  Commissioner.—After  admitting  the  claim  under  this  Act,  the 
amount due in respect of such claim shall be paid by the Commissioner to the person or persons to whom 
such sums are due and on such payment the liability of Britannia Engineering Company in relation to the 
Mokameh  unit,  or  of  Arthur  Butler  and  Company  in  respect  of  any  claim  relating  to  the  undertakings 
owned by it shall stand discharged. 

23.  Disbursement  of  amounts  to  Britannia  Engineering  Company  and  Arthur  Butler  and 
Company.—(1) If out of the monies paid to him in relation to the Mokameh unit or in relation to any 
undertaking owned by Arthur Butler and Company there is a balance left after meeting the liabilities as 
specified in the Second Schedule, the Commissioner shall disburse such balance to Britannia Engineering 
Company, or as the case may be, to Arthur Butler and Company. 

10 

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

24.  Undisbursed  or  unclaimed  amount  to  be  deposited  with  the  General  Revenue  Account.—
Any  money  paid  to  the  Commissioner  which  remains  undisbursed  or  unclaimed  for  a  period  of  three 
years from the last date on which the disbursement was made, shall be transferred 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 Government by the person entitled to such payment and shall be dealt with as 
if such transfer had not been made, the order, if any, for payment of the claim being treated as an order 
for the refund of the revenue. 

CHAPTER VII 

MISCELLANEOUS 

25.  Act  to  have  overriding  effect.—The  provision  of  this  Act  shall  have  effect  notwithstanding 
anything inconsistent therewith contained in any other law or 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.—(1) Every contract entered into by Britannia Engineering Company in relation 
to the Mokameh unit, or Arthur Butler and Company in relation to any of the undertakings owned but it, 
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 date on which this Act receives the assent of the President, cease to have effect unless such contract is, 
before  the  expiry  of  that  period,  ratified,  in  writing,  by  the  Central  Government,  or  the  Government 
company, and in ratifying such contract, the Central Government or the Government company may make 
such alternation or modification therein as it may think fit: 

Provided that the Central Government or the Government company shall not omit to ratify contract 
and shall not make any alternation or modification in a contract unless it is satisfied that such contract is 
unduly  onerous  or  has  been  entered  into  in  bad  faith  or  is  detrimental  to  the  interests  of,  the  Central 
Government or the Government company. 

(2) The Central Government or the Government company shall not omit to ratify a contract, and shall 
not  make  any  alternation  or  modification  therein,  except  after  giving  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 alternation or modification therein. 

27. Penalties.—Any person who,— 

(a) having in his possession, custody or control any property forming part of the Mokameh unit, 
or  any  of  the  undertakings  owned  by  Arthur  Butler  and  Company,  wrongfully  withholds  such 
property from the Central Government or the Government company; or 

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

or any of the undertakings owned by Arthur Butler and Company; or 

(c) wilfully withholds or fails to furnish to the Central Government or the 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  Mokameh  unit,  or  any  of  the  undertakings  owned  by 
Arthur Butler and Company, which may be in his possession, custody or control; or 

11 

 
(d) fails to deliver to the Central Government or the Government company or 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 Mokameh unit, or 
any of the undertakings owned by Arthur Butler and Company; or 

(e) wrongfully removes or destroys any property forming part of the Mokameh unit, or any of the 
undertakings  owned  by  Arthur  Butler  and  Company  or  prefers  any  claim  under  this  Act  which  he 
knows or has reason 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. 

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

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

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

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

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

30. Delegation of Powers.—(1) The Central Government may, by notification, direct that all or any 
of the powers exercisable by it under this Act, other than the powers conferred by sections 31 and 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. 

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  powers,  such  rules  may 

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

(a) the time within which, and the manner in which, an intimation referred to in sub-section (3) of 

section 4 shall be given; 

(b)  the  manner  in  which  the  monies  in  any  provident  fund  or  other  fund,  referred  to  in                         

sub-section (2) of section 14 shall be dealt with; 

12 

 
(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. Declaration as to the policy of the State.—It is hereby declared that this Act is for giving effect 
to  the  policy  of  the  State  towards  securing  the  principles  specified  in  clause  (b)  of  article  39  of  the 
Constitution, 

Explanation—In this section, “State” has the same meaning as in article 12 of the Constitution. 

13 

 
 
THE FIRST SCHEDULE 

(See sections 4, 7, 8 and 16) 

S. No. 

Name of the company 

1 

2 

The Britannia Engineering Company 

Arthur Butler and Company 

Amount 
(Rupees in lakhs) 

152.85 

137.70 

14 

 
 
 
 
 
 
 
 
 
 
 
THE SECOND SCHEDULE 

(See sections 19, 20, 21 and 23) 

ORDER OF PRIORITIES 

Category I 

(i) Employees’ dues on account of arrears of tripartite settlement for the period from the 1st day 

of January, 1957 to the 31st day of May, 1975. 

(ii)  Employees’  dues  on  account  of  unpaid  salaries,  wages,  providend  fund,  Employees’  State 

Insurance contribution or premium relating to Life Insurance Corporation of India. 

Category II 

Secured loans from nationalised banks and secured loans from Industrial Reconstruction Corporation 

of India for the post-take-over management period. 

Category  III 

Central Government loans for the post-take-over management period. 

Category IV 

Secured  loans  from  nationalised  banks  and  secured  loans  from  financial  institutions  for  the                 

pre-take-over management period. 

Category V 

Revenue,  taxes,  ceases,  rates  or  other  dues  to  Central  Government,  State  Government  and  local 

authorities or State Electricity Board for the pre-take-over management period. 

Category VI 

Trade and other creditors for the pre-take-over management period. 

15 

 
 
