THE INCHEK TYRES LIMITED AND NATIONAL RUBBER MANUFACTURERS 
LIMITED (NATIONALISATION) ACT, 1984 
_________ 

ARRANGEMENT OF SECTIONS 
________ 

SECTIONS 

1. Short title and commencement. 

2. Definitions. 

CHAPTER I 
PRELIMINARY 

CHAPTER II 

ACQUIAITON AND TRANSFER OF THE UNDERTAKINGS OF THE TWO COMPANIES 

3. Transfer to, and vesting in, the Central Government of the undertakings of the two companies. 

4. General effect of vesting. 

5. Companies to be liable for certain prior liabilities. 

6. Power of Central Government to direct vesting of the undertakings of the two companies in an      

existing Government Company. 

7. Transfer of the undertakings of the two companies from an existing Government company to a           

new Government company. 

8. Payment of amount. 

9. Payment of further amounts. 

CHAPTER III 

PAYMENT OF AMOUNTS 

CHAPTER IV 

MANAGEMENT, ETC., OF THE UNDERTAKINGS OF THE TWO COMPANIES 

10. Management, etc., of the undertakings of the two companies. 

11. Duty of persons in charge of management of undertakings of the two companies to deliver all 

assets, etc. 

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

CHAPTER V 

PROVISIONS RELATING TO EMPLOYEES OF THE TWO COMPANIES 

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 Central Government or existing, or new, Government company. 

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SECTIONS 

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 Commissioner. 

23. Disbursement of amounts to the companies. 

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

CHAPTER VII 

MISCELLANEOUS 

25. Act to have over-riding effect. 

26.  Contracts  to  cease  to  have  effect  unless  ratified  by  the  Central  Government  or  existing,  or 

New, 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. Repeal and saving. 

THE FIRST SCHEDULE. 

THE SECOND SCHEDULE. 

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THE INCHEK TYRES LIMITED AND NATIONAL RUBBER MANUFACTURERS 
LIMITED (NATIONALISATION) ACT, 1984 

ACT NO. 17 OF 1984 

[31st March, 1984.] 

An  Act  to  provide  for  the  acquisition  and  transfer  of  the  undertakings  of  the  Inchek  Tyres 
Limited and the National Rubber Manufacturers 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  continued  manufacture,  production  and  distribution  of  tyres,  tubes  and  other 
rubber goods which are essential to the needs of the economy of the country and for matters 
connected therewith or incidental thereto. 

WHEREAS  the  Inchek  Tyres  Limited  and  the  National  Rubber  Manufacturers  Limited  had  been 
engaged in the manufacture, production and distribution of articles mentioned in the First Schedule to the 
Industries (Development and Regulation) Act, 1951 (65 of 1951), namely, tyres, tubes and other rubber 
goods; 

AND WHEREAS the management of the undertakings of the Inchek Tyres Limited and the management 
of  the  undertakings  of  the  National  Rubber  Manufacturers  Limited  were  taken  over  by  the  Central 
Government under the provisions of the Industries (Development and Regulation) Act, 1951 (65 of 1951); 

AND  WHEREAS for the purpose of securing the optimum utilisation of the available facilities for the 
manufacture, production and distribution of tyres, tubes and other rubber goods by the undertakings of the 
two companies, investment of a large amount is necessary; 

AND  WHEREAS  it  is  necessary  to  acquire  the  undertakings  of  the  Inchek  tyres  Limited  and  the 
National  Rubber  Manufacturers  Limited  to  enable  the  Central  Government  to  have  such  investments 
made  and  to  ensure  that  the  interests  of  the  general  public  are  served  by  the  continuance,  by  the 
undertakings of the companies, of the manufacture, production and distribution of the aforesaid articles 
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  Inchek  Tyres  Limited  and 

National Rubber Manufacturers Limited (Nationalisation) Act, 1984. 

(2) It shall be deemed to have come into force on the 14th day of February, 1984. 

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

(a) “appointed day” means the 14th day of February 1984; 

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

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

business on the appointed day; 

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

the appointed day; 

(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; 

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(h)  “two  companies”  means  the  Inchek  Tyres  Limited  and  the  National  Rubber  Manufacturers 
Limited,  being  companies  as  defined  in  the  Companies  Act,  1956  (1  of  1956),  and  having  their 
registered offices at “Leslie House”, 19 Jawaharlal Nehru Road, Calcutta-700013; 

(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 

ACQUIAITON AND TRANSFER OF THE UNDERTAKINGS OF THE TWO COMPANIES 

3.  Transfer  to,  and  vesting  in,  the  Central  Government  of  the  undertakings  of  the  two 
companies.—On the appointed day, the undertakings of each of the two  companies, and the right, title 
and interest of each of the two companies in relation to its undertakings, shall, by virtue of the Act, stand 
transferred to, and shall vest in, the Central Government. 

4.  General  effect  of  vesting.—(1)  The  undertakings  of  each  of  the  two  companies  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  on  hand,  cheques,  demand  drafts,  reserve  funds, 
investments,  book  debts  and  all  other  rights  and  interest  in,  or  arising  out  of  such,  property  as  were 
immediately before the appointed day in the ownership, possession, power or control of such 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  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 interest, payment of the mortgage 
money or other dues, in whole or in part, out of the amount specified, in relation to the company owning 
such  property,  in  the  First Schedule,  and also  out  of  the  amounts  referred  to in 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  either  of  the  two  companies  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 an for the purposes of such undertaking, and , on and from the date 
of vesting of such undertaking under section 6 in an existing Government company, or under section 7 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  to  which  it  was  granted 
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 either of the two companies 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 such company or of anything 
contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced 

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by  or  against  the  Central  Government,  or  where  the  undertakings  of  the  two  companies  vest  under   
section  6  or  section  7  in  an  existing,  or  a  new,  Government  company,  by  or  against  such  Government 
company. 

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

(2)  Any  liability  arising  in  respect  of  materials  supplied  to  either  of  the  two  companies  after  the 
management of its undertakings had been taken over by the Central Government, 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, as and when repayment for such supplies becomes due and payable. 

(3) 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, other than the liability specified in sub-section (2), of either of the two companies 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 two companies 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 either of the two companies, passed on or after the appointed day, in respect of any 
matter, claim or dispute, not being a matter, claim or dispute in relation to any matter referred to in 
sub-section (2), which arose before that day, shall be enforceable against the Central Government, or 
where  the  undertakings  of the two  companies  vest in  an  existing,  or  a new,  Government  company, 
against such Government company; 

(c)  no  liability  incurred  by  either  of  the  two  companies  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 two companies vest in an existing, or a new, 
Government company, against such Government company. 

6. Power of Central Government to direct vesting of the undertakings of the two companies in 
an  existing  Government  Company.—(1)  Notwithstanding  anything  contained  in  section  3  and  4,  and 
subject  to  the  provisions  of  section  7,  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  each  of  the  two 
companies  and  the  right,  title  and  interest  of  each  of  the  two  companies  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 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  two  companies,  in  relation  to  their  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 7, 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. 

7. Transfer of the undertakings of the two companies from an existing Government company to 
a new Government company.—(1) Notwithstanding anything contained in sections 3 and 4, where the 
undertakings of each of the two companies have been directed, under sub-section (1) of section 6, to vest 

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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  each  of  the  two 
companies and the right, title and interest of each of the two companies in relation to its undertakings be 
transferred  to  that  new  Government  company,  and  on  the  issue  of  such  declaration,  the  right,  title  and 
interest of each of the two companies in relation to its undertakings which had been directed under sub-
section (1) of section 6 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  two  companies  vest,  under  sub-section  (1),  in  a  new  Government  company,  that 
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. 

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 each of the two companies, and the right, title and interest of each of the 
two companies in relation to its undertakings, there shall be paid by the Central Government to each of 
the  two  companies,  in  cash  and  in  the  manner  specified  in  Chapter  VI,  amount  equal  to  the  amount 
specified against the name of such company in the First Schedule. 

9. Payment of further amounts.—(1) For the deprivation of the two companies of the management 
of their undertakings during the period commencing on the date on which the undertakings of each such 
company was taken over in pursuance of the orders made by the Central Government under the provisions 
of the Industries (Development and Regulation) Act, 1951 (65 of 1951) and ending on the appointed day, 
there shall be paid by the Central Government to each of the Companies in cash, an amount of rupees fifty 
thousand. 

(2) The amount referred to in section 8 and the amount specified in sub-section (1) 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  is  made  by  the  Central  Government  to  the 
Commissioner. 

(3)  The  amount  referred  to  in  sub-section  (1)  and  the  amount  determined  in  accordance  with  the 
provisions of sub-section (2) shall be given by the Central Government to the two companies in addition 
to the amount specified in section 8. 

(4) For the removal of doubts, it is hereby declared that the liabilities of either of the two companies 
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 specified in sub-section (1) 
and  the  amount  determined  under  sub-section  (2),  in  accordance  with  the  rights  and  interests  of  the 
creditors of the two companies. 

MANAGEMENT, ETC., OF THE  UNDERTAKINGS OF THE TWO COMPANIES 

CHAPTER IV 

10. Management, etc., of the undertakings of the two companies.—The general superintendence, 
direction,  control  and  management  of  the  affairs  and  business  of  the  undertakings  of  each  of  the  two 
companies, 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  given  by  the  Central  Government  under  sub-section  (1)  of    

section 6, vest on and from the date specified in such direction, in the existing Government company 
specified therein; or 

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(b) where a declaration has been made under sub-section (1) of section 7, vest, on and from the 

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

and thereupon the existing, or new, Government company so specified, shall be entitled to exercise, to the 
exclusion  of  all  other  persons,  all  such  powers  and  do  all  such  things  as  either,  or  both,  of  the  two 
companies, is or are, authorised to exercise and do in relation to its or their undertakings. 

11. Duty of persons in charge of management of undertakings of the two companies to deliver 
all assets, etc.—(1) On the vesting of the management of the undertakings of the two companies in an 
existing, or a new, Government company, all persons in charge of the management of the undertakings of 
either  of  the  two  companies  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. 

(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  two  companies  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  the  undertakings  owned  by  either  of  the  two  companies,  which  have  vested  in  the  Central 
Government or in an existing, or a new, Government company under this Act, shall be liable to account 
for the said assets, books, documents and other papers to the Central Government or the existing, or new, 
Government  company,  as  the  case  may  be,  and  shall  deliver  them  to  the  Central  Government  or  the 
existing, or new, Government company or to such person or persons as the Central Government or the 
existing, or new, 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 two companies which have vested in 
the Central Government or the Government company under this Act. 

(3) The two companies shall, within such period as the Central Government may allow in this behalf, 
furnish to  that  Government  a  complete inventory  of  all their  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  Government  company  aforesaid  shall  afford  to  the  two 
companies all reasonable facilities. 

CHAPTER V 

PROVISIONS RELATING TO EMPLOYEES OF THE TWO COMPANIES 

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

day, employed in any undertaking of either of the two companies shall become,— 

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

(b) where the undertakings of the two companies are directed, under section 6 or under section 7, 
to vest, in an existing, or a new, Government company, an employee of such Government 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  rights  and  privileges  as  to  pension,  gratuity  and  other  matters, 
admissible to him immediately before the appointed day, as modified by the Memorandum of Settlement 
signed by the representatives of the management and the employees of each of the two companies on the 
10th day of February, 1984, 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. 

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(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  either  of  the  two  companies,  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 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  either  of  the  two  companies  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  an  existing,  or  a  new,  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 shall vest in, the Central Government or 
the existing, or new, Government company, as the care may be. 

(2)  The  moneys  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 the 
existing, or new, 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  under  sections  8  and  9  to  each  of  the  two  companies,  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 each of the 
two companies,— 

(a)  an  amount  equal  to  the  amount  specified  against  the  name  of  such  company  in  the  First 

Schedule; and 

(b) an amount equal to the amounts payable to each of the two company in the First schedule; and 

(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) Separate records shall be maintained by the Commissioner in respect of the undertakings of each 

of the two companies 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 two companies. 

17. Certain powers of Central Government or existing, or new, 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  either of the 
two  companies  in  relation  to  its  undertakings  which  have  vested  in  the  Central  Government  or  the 

8 

 
existing,  or  new,  Government  company,  as  the  case  may  be,  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 it after the appointed day, for 
discharging  any  liability  of  either  of  the  two  companies,  not  being  any  liability  specified  in                  
sub-section (2) of  section 5,  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 existing, or new, Government 
company. 

(3) Save as otherwise provided in this Act, the liabilities of either of the two companies 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 respective company. 

18. Claims to be made to the Commissioner.—Every person having a claim against either of the 
two  companies  with  regard  to  any  of  the  matters  specified  in  the  Second  Schedule  pertaining  to  any 
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, be 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  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 Second 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 Second Schedule, the Commissioner shall fix a 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 disbursement made by the Commissioner. 

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary and after 
giving  the  concerned  company  an  opportunity  of  refuting  the  claim  and  after  giving  the  claimant  a 
reasonable opportunity of being heard, admit or reject by order in writing the claim in whole or in part. 

9 

 
(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 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 concerned 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 concerned 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 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 each of the two companies in respect of such claim 
shall stand discharged. 

23. Disbursement of amounts to the companies.—(1) If, out of the moneys paid to him in relation 
to the undertakings of either of the two companies, there is a balance left after meeting the liabilities as 
specified  in  the  Second  Schedule,  the  Commissioner  shall  disburse  such  balance  to  the  concerned 
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  either  of  the  two  companies,  it  shall  be  lawful  for  the 
Central  Government  or the  existing,  or  new,  Government  company,  as  the  case  may  be,  to  continue to 
possess such  machinery  or  equipment  or  other  property  on  the same  terms  and conditions under  which 
they were possessed by either of the two companies 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 he 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  over-riding  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. 

10 

 
26. Contracts to cease to have effect unless ratified by the Central Government or existing, or 
New, Government company.—Every contract entered into by either of the two companies 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 
one hundred and eighty days from such 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  and  in  ratifying  such  contract,  the  Central  Government  or  the  existing,  or  new,  Government 
company may make such alteration or modification therein as it may think fit: 

Provided that the Central Government or the existing, or new, 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 such 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 any undertaking of 
either of the two companies, 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 any undertaking of 

either of the two companies; 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 Government 
company,  any  document  relating  to  such  undertaking,  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, as 
the  case  may  be,  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 either of the two companies; or 

(e) wrongfully removes or destroys any property forming part of any undertaking of either of the 
two companies or prefers any claim 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. 

11 

 
 
 
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 the existing, or new, Government company or any officer or 
other  employee  of  that  Government  or  the  Government  company  or  any  person  authorised  by  that 
Government  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  the  existing,  or 
new,  Government  company,  or  any  officer  or  other  employee  of  that  Government  or  Government 
company or any person authorised by that Government 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, section 31 
or 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. 

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 manner in which the moneys in any provident fund or other fund referred to in 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 Inchek Tyres Limited and National Rubber Manufacturers Limited 

(Nationalisation) Ordinance, 1984 (4 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 FIRST SCHEDULE 

[See sections 4 (4), 8 and 16 (1)] 

Sl. No. 

Name of the Company 

1. 

2. 

Inchek Tyres Limited 

National Rubber Manufacturers Limited 

___________ 

Amount 
(Rupees in Lakhs) 

330.40 

159.64 

THE SECOND SCHEDULE 

[See sections 18, 19, 20 (1), 21 (1) and 23 (1)] 

ORDER OF PRIORITIES FOR THE DISCHARGE OF LIABILITIES OF THE TWO COMPANIES 

Category I— 

(a) Wages, salaries and other dues payable to the employees of the companies. 

(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. 

Post-take over management period 

Category II— 

Principal amount of loans advanced by— 

(a) the Central Government; 

(b) a State Government; 

(c) banks and public financial institutions; 

(d) any other sources. 

Category III— 

(a)  Any  credits  availed  of  by  the  companies  for  the  purpose  of  carrying  on  any  trading  or 

manufacturing operations, other than the liabilities specified in sub-section (2) of section 5. 

(b) Any dues of State Electricity Boards or other Government and semi-Government institutions 

against supply of goods or services, other than the liabilities specified in sub-section (2) of section 5. 

(c) Arrears of interest on loans and advances. 

Category IV— 

(a) Revenue, taxes, cesses, rates or other dues to Central Government, a State Government or any 

local authority. 

(b) Any other dues. 

Category V— 

Principal amount of secured loans advanced by— 

(a) the Central Government; 

(b) a State Government; 

(c) banks and public financial institutions. 

13 

 
 
 
Category VI— 

Principal amount of secured loans advanced by— 

(a) the Central Government; 

(b) a State Government; 

(c) banks and public financial institutions; 

(d) any other sources. 

Category VII— 

(a)  Any  credits  availed  of  by  the  companies  for  the  purpose  of  carrying  on  any  trading  or 

manufacturing operations. 

(b) Any dues of State Electricity Boards or other Government and semi-Government institutions 

against supply of goods or services. 

(c) Arrears of interest on loans and advances. 

(d) Revenue, taxes, cesses, rates or other dues to Central Government, a State Government or any 

local authority. 

(e) Any other loans or dues. 

14 

 
 
