THE ANDHRA SCIENTIFIC COMPANY LIMITED (ACQUISITION AND 
TRANSFER OF UNDERTAKINGS) ACT, 1982 
__________ 

ARRANGEMENT OF SECTIONS 
_________ 

SECTIONS 

1.  Short title and commencement. 
2.  Definitions. 

CHAPTER I 

PRELIMINARY 

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.  Company to be liable for certain prior liabilities. 
6.  Power of Central Government to direct vesting of the undertakings of the Company in a 

Government company. 

CHAPTER III 

PAYMENT OF AMOUNTS 

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

CHAPTER IV 

MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE COMPANY 

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

assets, etc. 

11.  Duty of persons to account for assets, etc., in their possession. 
12.  Accounts and audit. 

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 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. 
22.  Disbursement of money by the Commissioner. 
23.  Disbursement of amounts to the Company. 

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SECTIONS 

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

CHAPTER VII 

MISCELLANEOUS 

25.  Act to have overriding effect. 
26.  Contracts to cease to have effect unless ratified by Central Government or Government company 
27.  Penalties. 
28.  Offences by companies. 
29.  Protection of action taken in good faith. 
30.  Delegation of powers. 
31.  Power to make rules. 
32.  Power to remove difficulties. 

THE SCHEDULE. 

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THE ANDHRA SCIENTIFIC COMPANY LIMITED (ACQUISITION AND  

TRANSFER OF UNDERTAKINGS) ACT, 1982 

ACT NO. 71 OF 1982 

[13th November, 1982.] 

An Act to provide for the acquisition and transfer of the undertakings of the Andhra Scientific 
Company Limited, with a view to securing the proper management of such undertakings so 
as to subserve the interests of the general public by ensuring the continuity of production of 
scientific instruments which are vital to the needs of the country and for matters connected 
therewith or incidental thereto. 

WHEREAS  the  Andhra  Scientific  Company  Limited  had  been  engaged  in  the  manufacture  and 
production  of  articles  mentioned  in  the  First  Schedule  to  the  Industries  (Development  and  Regulation) 
Act, 1951 (65 of 1951), namely, scientific instruments; 

AND WHEREAS the management of the undertakings of the Andhra Scientific Company Limited was 
taken  over  by  the  Central  Government  under  section  18AA  of  the  Industries  (Development  and 
Regulation) Act, 1951 (65 of 1951); 

AND WHEREAS it is necessary to acquire the undertakings of the Andhra Scientific Company Limited 
to ensure that the interests of the general public are served by the continuance, by the undertakings of the 
Company, of the production of the aforesaid articles which are vital to the needs of the country; 

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

CHAPTER I 

PRELIMINARY 

1.  Short  title  and  commencement.—(1)  This  Act  may  be  called  the  Andhra  Scientific  Company 

Limited (Acquisition and Transfer of Undertakings) Act, 1982. 

(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 July, 1981. 

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

(a) “appointed day” means the 1st day of July, 1981; 

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

(c) “Company” means the Andhra Scientific Company Limited, a company within the meaning of 
the Companies Act, 1956 (1 of 1956), and having its registered office at Machilipatnam in the State of 
Andhra Pradesh; 

(d) “Custodian” means the Custodian appointed under sub-section (2) of section 9 to take over, or 

carry on, the management of the Company; 

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

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

(g)  “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; 

(h)  “the  Government  company”  means  the  Government  company  in  which  the  undertakings  of 

the Company are directed to vest under sub-section (1) of section 6; 

(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. 

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ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE COMPANY 

CHAPTER II 

3. Transfer to, and vesting in, the Central Government of the undertakings of the Company.—
On the appointed day, the undertakings 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  shall  vest  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, cheques, demand drafts, 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 in cumbrances 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  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 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  section  7  and  also  out  of  the 
amounts  determined  under  section  8,  but  no  such  mortgage,  charge,  lien  or  other  interest  shall  be 
enforceable against any property which has vested in this 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 6 in a Government company, such Government company shall be deemed to be 
substituted in such licence or other instrument as if such licence or other instrument had been granted to 
such Government company and that Government company shall hold it for the remainder of the period for 
which the Company would have held it under the terms thereof. 

(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 6, to vest in a Government company, by or against the Government company. 

 5.  Company  to  be  liable  for  certain  prior  liabilities.—(1)  Every  liability  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  are  directed,  under  section  6,  to  vest  in  a  Government  company,  against  that  Government 
company. 

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

(a) save as otherwise expressly provided in this section or in any other provision of this Act, no 
liability  of  the  Company  in  respect  of  any  period  prior  to  the  appointed  day,  shall  be  enforceable 
against  the  Central  Government,  or,  where  the  undertakings  of  the  Company  are  directed,  under 
section 6, to vest in a Government company, against that Government company; 

(b)  no  award,  decree  or  order  of  any  court,  tribunal  or  other  authority  in  relation  to  the 
undertakings  of  the  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, where 
the  undertakings  of  the  Company  are  directed,  under  section  6,  to  vest  in  a  Government  company, 
against that 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  are  directed,  under  section  6,  to  vest  in  a  Government 
company, against that Government company. 

6.  Power  of  Central  Government  to  direct  vesting  of  the  undertakings  of  the  Company  in  a 
Government  company.—(1)  Notwithstanding  anything  contained  in  sections  3  and  4,  the  Central 
Government  may,  subject  to  such  terms  and  conditions  as  it  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  that  Government  under  section  3,  shall,  instead  of 
continuing to vest in the Central Government, vest in a 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  of  the  Company,  in  relation  to  its  undertakings,  vest  in  a 
Government  company  under  sub-section  (1),  the  Government  company  shall,  on  and  from  the  date  of 
such vesting, be deemed to have become the owner in relation to such undertakings, and all 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 the rights and liabilities of the Government company. 

CHAPTER III 

PAYMENT OF AMOUNTS 

7. 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 given by the Central Government to the Company, in cash and in the manner 
specified in Chapter VI, an amount of rupees two hundred and twenty-four lakhs and ten thousand. 

8. Payment of further amounts.—(1) For the deprivation of the Company of the management of its 
undertakings,  there  shall  be  given  by  the  Central  Government  to  the  Company  in  cash,  an  amount 
calculated at the rate of rupees ten thousand per annum for the period commencing on the date on which 
the management of the undertakings of the Company was taken over in pursuance of the order made by 
the Central Government under section 18AA of the Industries (Development and Regulation) Act, 1951 
(65 of 1951), and ending on the appointed day. 

(2) In consideration of the retrospective operation of the provisions of sections 3, 4 and 5, there shall 
also  be  given  by  the  Central  Government  to  the  Company  in  cash,  an  amount  calculated  at  the  rate  of 
rupees ten thousand per annum for the period commencing on the appointed day and ending on the date 
on which this Act receives the assent of the President. 

(3) The amount specified in section 7, and the amount determined in accordance with the provisions 
of 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 on the date on which payment of such amounts 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 by the Central Government to the Company in addition to the amount specified in section 7. 

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(5) 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 7, and also from the amounts determined under sub-sections (1), (2) and (3), 
in accordance with the rights and interests of the creditors of the Company. 

CHAPTER IV 

MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE COMPANY 

9.  Management,  etc.,  of  the  undertakings  of  the  Company.—(1)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 

6, vest in the Government company specified in such direction; or 

(b)  where  no  such  direction  has  been  made  by  the  Central  Government,  vest  in  one  or  more 

Custodians appointed by the Central Government under sub-section (2), 

and thereupon the Government company so specified or the Custodian or Custodians so appointed, 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 its undertakings. 

(2)The Central Government may appoint one or more individuals or a Government company as the 
Custodian or Custodians of the undertakings of the Company in relation to which no direction has been 
made by it under sub-section (1) of section 6. 

(3)The Custodian or Custodians so appointed shall receive, from the funds of the undertakings of the 
Company, such remuneration as the Central Government may fix and shall hold office during the pleasure 
of the Central Government. 

10. 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 a Government 
company or on the appointment of a Custodian or Custodians, all persons in charge of the management of 
the  undertakings  of  the  Company  immediately  before  such  vesting  or  appointment,  shall  be  bound  to 
deliver to the Government company or the Custodian or Custodians, as the case may be, all assets, books 
of account, registers or other documents in their custody relating to the undertakings of the Company. 

(2) The Central Government may issue such directions as it may deem desirable in the circumstances 
of the case to the Government company or the Custodian or Custodians, and such Government company 
or  the  Custodian  or  Custodians  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. 

11. 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 undertaking owned by the Company, which have vested in the Central Government or in a 
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 such 
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 or the Government company aforesaid may take or cause to be taken all 
necessary  steps  for  securing  possession  of  the  undertakings  of  the  Company  which  have  vested  in  the 
Central Government or the Government company under this Act. 

(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, 

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pertaining to the undertakings which have vested in the Central Government under section 3, and, for this 
purpose, the Central Government or the Government company aforesaid shall afford to the Company all 
reasonable facilities. 

12.  Accounts  and  audit.—The  Custodian  or  Custodians of the  undertakings  of  the  Company  shall 
maintain  an  account  of  the  undertakings  of  the  Company  in  such  form  and  manner  and  under  such 
conditions as may be prescribed and the provisions of the Companies Act, 1956 (1 of 1956), shall apply 
to the audit of the accounts so maintained as they apply to the audit of the accounts of a company. 

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 undertaking 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  directed,  under  sub-section  (1) of  section  6,  to 
vest in a Government company, an employee of the Government company on and from the date  of 
such vesting, 

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 any undertaking of the 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  the  Company  has  established  a  provident  fund, 
superannuation, welfare or other fund for the benefit of the persons employed in any of its undertakings, 
the  moneys  relatable  to  the  officers  or  other  employees  whose  services  have  become  transferred  by  or 
under this Act to the Central Government or the Government company, shall, out of the moneys standing, 
on the appointed day, to the credit of such provident fund, superannuation, welfare or other fund, stand 
transferred to, and vest in, the Central Government or the Government company, as the case may be. 

(2)The  moneys  which  stand  transferred  under  sub-section  (1)  to  the  Central  Government  or  the 
Government  company,  as  the  case  may  be,  shall  be  dealt  with  by  that  Government  or  Government 
company in such 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  to  the  Company  under  sections  7  and  8,  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. 

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(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  the 
Company,— 

(a) an amount equal to the amount specified in section 7; and 

(b) an amount equal to the amounts payable to the 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. 

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

in relation to which payments have been made to him under this Act. 

(4) Interest accruing on the amount standing to the credit of the deposit account referred to in sub-

section (2) shall enure to the benefit of the 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  the  Company  in  relation  to  its 
undertakings  which  have  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 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. 

(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 any undertaking 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 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. 

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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. 

(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 specified 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  in  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  period  specified  by  the 

Commissioner shall be excluded from the disbursements 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 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, 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; 

(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 such 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  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.—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 to the Company.—(1) If, out of the moneys 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. 

9 

 
(2)  Where  the  possession  of  any  machinery,  equipment  or  other  property  has  vested  in  the  Central 
Government or a 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  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 with 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  wound  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 the 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 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  Central  Government  or  Government 
company.—Every contract entered into by the Company in relation to any of 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 a period of thirty 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  in  which  such  undertaking  has  been  vested  under  this  Act  and  in  ratifying  such  contract,  the 
Central Government or the Government company may make such alterations or modifications therein as it 
may think fit: 

Provided that the Central Government or the 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  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. Penalties.—Any person who,— 

(a) having in his possession, custody or control any property forming part of the undertakings of 
the 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 undertakings of 

the 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  Government  company,  any 
document relating to such undertakings, which may be in his possession, custody or control; or 

10 

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

(e)  wrongfully  removes  or  destroys  any  property  forming  part  of  the  undertakings  of  the 
Company or prefers any claim under this Act which he knows or has reasonable cause to believe to be 
false or grossly inaccurate, 

shall be punishable with imprisonment for a term which 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 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. 

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  or  other  employee  of  that  Government  or  the 
Custodian  or  the  Government  company  or  other  person  authorised  by  that  Government,  Custodian  or 
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 officer or other 
employee of that Government or the Custodian or the Government company or other person authorised by 
that Government, Custodian or 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. 

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 this section and 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  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 referred to in sub-section (3) of 

section 4 shall be given; 

(b) the form and manner in which, and the conditions under which, the Custodian or Custodians 

shall maintain the accounts as required by section 12; 

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(c) the manner in which the moneys in any provident fund or other fund referred to in section 14 

shall be dealt with; 

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

(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days which 
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 date on 

which this Act receives the assent of the President. 

THE SCHEDULE 

[See sections 18, 20(1), 21(1) and 23(1)] 

ORDER OF PRIORITIES FOR THE DISCHARGE OF LIABILITIES OF THE COMPANY 

Post-take-over management period 

Category I 

Wages, salaries and other dues of the employees of the Company. 

Category II 

Loans advanced by the Central Government. 

Category III 

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

manufacturing operations. 

Category IV 

Revenue, taxes, cesses, rates or any other dues to the Central Government or a State Government. 

Pre-take-over management period 

Category V 

Arrears in relation to contributions to be made by the Company to the provident fund, salaries, 

wages and other amounts due to the employees of the Company. 

Category VI 

Revenue,  taxes,  cesses,  rates  or  any  other  dues,  including  Employees’  State  Insurance 

contributions, to the Central Government, a Local Authority or a State Electricity Board. 

Category VII 

(i)  Any  credit  availed  of  by  the  Company  for  the  purpose  of  carrying  on  any  trading  or 

manufacturing operations. 

(ii) Any other dues. 

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