THE JUTE COMPANIES (NATIONALISATION) ACT, 1980 

_________ 

ARRANGEMENT OF SECTIONS 

SECTIONS 

1. Short title. 

2. Definitions. 

________ 

CHAPTER I 

PRELIMINARY 

CHAPTER II 

ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE JUTE COMPANIES 

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

4. General Power of vesting. 

5. Jute companies to be liable for certain prior liabilities. 

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

Jute Manufactures Corporation. 

7. Payment of amount. 

8. Payment of further amount. 

CHAPTER III 

PAYMENT OF AMOUNTS 

CHAPTER IV 

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

9. Management, etc., of the undertakings of the jute companies. 

10. Duty of persons in charge of management of the undertakings to deliver all assets, etc. 

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

CHAPTER V 

PROVISIONS RELATING TO EMPLOYEES OF THE JUTE COMPANIES 

12. Continuance of employees. 

13. Provident fund and other funds. 

CHAPTER VI 

COMMISSIONER OF PAYMENTS 

14. Appointment of Commissioner of Payments. 

15. Payment by Central Government to the Commissioner. 

16. Certain powers of Central Government or Jute Manufactures Corporation. 

17. Claims to be made to the Commissioner. 

18. Priority of Claims. 

19. Examination of claims. 

1 

 
SECTIONS 

20. Admission or rejection of claims. 

21. Disbursement of money by the Commissioner. 

22. Disbursement of amounts to the jute companies. 

23. Undisbursed or unclaimed amounts to be deposited with the general revenue account. 

CHAPTER VII 

MISCELLANEOUS 

24. Act to have overriding effect. 

25. Assumption of liability. 

26. Management to continue to vest in certain persons until alternative arrangements have been 

made. 

27.  Contracts  to  cease  to  have  effect  unless  ratified  by  the  Central  Government  or  Jute 

Manufactures Corporation. 

28. Penalties. 

29. Offences by companies. 

30. Protection of action taken in good faith. 

31. Delegation of powers. 

32. Power to make rules. 

33. Power to remove difficulties. 

THE FIRST SCHEDULE. 

THE SECOND SCHEDULE. 

2 

 
 
 
THE JUTE COMPANIES (NATIONALISATION) ACT, 1980 

ACT NO. 62 OF 1980 

[21st December, 1980.] 

An  Act  to  provide  for  the  acquisition  and  transfer  of  the  undertakings  of  the  jute  companies, 
specified  in  the  First  Schedule  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 articles made of jute, which are essential to the 
needs  of  the  economy  of  the  country  and  for  matters  connected  therewith  or  incidental 
thereto. 

WHEREAS  the  said jute  companies  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, textiles made wholly or in part of jute; 

AND  WHEREAS  the  management  of  the  undertakings  of  each  of  the  said  jute  companies  was          

taken  over  by 
Act, 1951 (65 of 1951); 

the  Central  Government  under 

the  Industries  (Development  and  Regulation)                             

AND WHEREAS it is necessary to acquire the undertakings of the said jute companies to ensure that the 
interests  of  the  general  public  are  served  by  the  continuance,  by  the  undertakings  of  the  said  jute 
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-first Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1.  Short title.—This Act may be called the Jute Companies (Nationalisation) Act, 1980. 

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

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

(b) “Commissioner” means the Commissioner of Payments appointed under section 14; 

(c)  “jute  companies”  means  the  companies  (being  companies  as  defined  in  the  Companies       

Act, 1956 [1 of 1956]) specified in the First Schedule; 

(d)  “Jute  Manufactures  Corporation”  means   the  National  Jute  Manufactures  Corporation 

Limited, a company incorporated and registered under the Companies Act, 1956 (1 of 1956); 

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

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

CHAPTER II 

ACQUISITION AND TRANSFER OF THE UNDERTAKINGS OF THE JUTE COMPANIES 

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

3 

 
4.  General  Power  of  vesting.—(1)  The  undertakings  of  each  jute  company  shall  be  deemed  to 
include  all  assets,  rights,  lease-holds,  powers,  authorities  and  privileges  and  all  property,  movable  and 
immovable,  including  lands,  buildings,  workshops,  stores,  instruments,  machinery  and  equipment,  cash 
balances,  cash  on  hand,  reserve  funds,  investments,  book  debts  and  all  other  rights  and  interests  in,  or 
arising out of, such property as were, immediately before the appointed day, in the ownership, possession, 
power or control of the jute company, whether within or outside India, and all books of account, registers 
and  all  other  documents  of  whatever  nature  relating  thereto  and  shall  also  be  deemed  to  include  the 
liabilities specified in sub-section (2) of section 5. 

(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 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 amounts directed to be given under sections 7 and 8 to 
the  jute  company  concerned  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 a jute company in relation to its undertakings which 
have 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 undertakings, and, on and from the date of vesting of such 
undertakings under section 6, in the Jute Manufactures Corporation, that Corporation shall be deemed to 
be substituted in such licence or other instrument as if such licence or other instrument had been granted 
to such Corporation and such Corporation shall hold it for the remainder of the period for which the jute 
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 
matter specified in sub-section (2) of section 5, in respect of the undertakings of any jute company which 
has vested in the Central Government under section 3, instituted or preferred by or against that 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 such jute 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 such jute company are directed under section 6, to vest in the 
Jute Manufactures Corporation, by or against that Corporation. 

5.  Jute  companies  to  be  liable  for  certain  prior  liabilities.—(1)  Every  liability,  other  than  the 
liability specified in sub-section (2), of a jute company in respect of any period prior to the appointed day, 
shall  be  the  liability  of  that  company  and  shall  be  enforceable  against  it,  and  not  against  the  Central 
Government, or, where the undertakings of the jute company vest in the Jute Manufactures Corporation, 
against that Corporation. 

(2)  Any  liability  arising  in  respect  of  loans  advanced  by  the  Central  Government  or  any  State 
Government, or both, to a  jute company (together with interest due thereon) after the management of the 
undertakings of the said jute company  had been taken over by the Central Government shall, on and from 
the appointed day, be the liability of the Central Government and shall be discharged by that Government, 
or  by   the  Jute  Manufactures  Corporation  as  and  when  repayment  of  such  loans  becomes  due 
and  payable. 

4 

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

(a) save as otherwise expressly provided in this Act, no liability, other than the liability specified 
in sub-section (2), of any jute company in relation to its undertakings in respect of any period prior to 
the appointed day, shall be enforceable against the Central Government or where the undertakings of 
such company are directed under section 6, to vest in the Jute Manufactures Corporation, against that 
Corporation; 

(b)  no  award,  decree  or  order  of  any  court,  tribunal  or  other  authority  in  relation  to  the 
undertakings of  any jute company, passed after the appointed day, in respect of any matter, claim or 
dispute, which arose before that day,  not being a matter,  claim  or dispute in relation to any liability 
specified  in  sub-section  (2),  shall   be  enforceable  against  the  Central  Government  or  where  the 
undertakings  of  such  company  are  directed  under  section  6,  to  vest  in  the  Jute  Manufactures 
Corporation,  against that Corporation; 

(c) no liability incurred by  any jute company before the appointed day for the contravention of a 
provision of any law for the time being in force shall be enforceable against the Central Government 
or  where  the  undertakings  of   such  company   are  directed  under  section  6,  to  vest  in  the  Jute 
Manufactures Corporation,  against that Corporation. 

6. Power of Central Government to direct vesting of the undertakings of the jute companies in 
Jute  Manufactures  Corporation.—(1)   Notwithstanding  anything  contained  in  sections  3  and  4,  the 
Central  Government   shall,  as  soon  as  may  be,  after  the  appointed  day,  direct,  by  notification,  that  the 
undertakings of every  jute company and the right, title and interest of every jute company in relation to 
its  undertakings,  which  have  vested  in  that   Government  under  section  3,  and  such  of  the  liabilities  of 
every jute company as are specified in sub-section (2) of section 5,  shall, instead of continuing to vest in 
the Central Government, vest in the Jute Manufactures Corporation  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, and the liabilities referred to in sub-section (2) of section 5, of 
the  jute  companies  in  relation  to  their  respective  undertakings  vest,  under  sub-section  (1),  in  the  Jute 
Manufactures  Corporation, that  Corporation  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, respectively, of the Jute Manufactures Corporation. 

CHAPTER III 

PAYMENT OF AMOUNTS 

7.  Payment  of  amount.—Every  jute  company  shall  be  given  by  the  Central  Government,  for  the 
transfer to and vesting in that Government under section 3 of the undertakings of that company and the 
right, title and interest of that company in relation to its undertakings, in cash and in the manner specified 
in Chapter VI, such amount as is specified against the name of that company in the First Schedule. 

8. Payment of further amount.—(1) Every jute company shall be given by the Central Government, 
for the deprivation of the management of its undertakings, an amount of rupees ten thousand per annum 
for the period commencing on the date on which management of the undertakings of that company was 
taken  over  in  pursuance  of  the  order  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. 

(2) Every amount specified in the First Schedule or calculated in accordance with the provisions of 
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 amount is made by 
the Central Government to the Commissioner. 

(3)  The  amounts  determined  in  relation  to  any  jute  company  in  accordance  with  the  provisions  of   

sub-sections (1) and (2) shall be given by the Central Government to the jute company in addition to the 
amount specified in the First Schedule against that company. 

5 

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

CHAPTER IV 

9.  Management,  etc., of the  undertakings of the  jute  companies.—The  general superintendence, 
direction, control and management of the affairs and business of the undertakings  owned by each of the 
jute companies,  the right, title and interest in relation to which have vested in the Central Government 
under section 3, shall, where a direction has been made by the Central Government under sub-section (1) 
of section 6, vest in the Jute Manufactures Corporation and thereupon the Jute Manufactures Corporation 
shall be entitled to exercise, to the exclusion of all other persons, all such powers and do all such things in 
relation to each such undertaking as the jute company which  owned it was authorised to exercise and do 
immediately before the appointed  day. 

10. Duty of persons in charge of management of the undertakings to deliver all assets, etc.—(1) 
On  the  vesting  of  the  management  of  the  undertakings  of   the  jute  companies  in  the  Central 
Government   or  the  Jute  Manufactures  Corporation,  as  the  case  may  be,  the  persons  in  charge  of  the 
management  of  such  undertakings  immediately  before  such  vesting  shall  be  bound  to  deliver  to  the 
Central  Government  or  the  Jute  Manufactures  Corporation,  as  the  case  may  be,  all  assets,  books  of 
account, registers and all other documents in their custody relating to such undertakings. 

(2) The Central Government may issue such directions as it may deem desirable in the circumstances 
of the case to the Jute Manufactures Corporation and the said Corporation 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 jute companies 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 a jute company which has vested in the Central Government or  the 
Jute  Manufactures   Corporation   under  this  Act,  shall  be  liable  to  account  for  the  said  assets,  books, 
documents and other papers to the Central Government or the Jute Manufactures  Corporation and shall 
deliver them up to the Central Government or the Jute Manufactures  Corporation or to such person or 
persons as the Central Government or the Jute Manufactures  Corporation may specify in this behalf. 

(2) The Central Government or the Jute Manufactures Corporation may take or cause to be taken all 
necessary steps for securing possession of the undertakings of the jute companies which have vested in 
the Central Government or the Jute Manufactures Corporation under this Act. 

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

CHAPTER V 

PROVISIONS RELATING TO EMPLOYEES OF THE JUTE COMPANIES 

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

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

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

(b)  where  the  undertakings  of  the  jute  companies  are  vested  in  the  Jute  Manufactures 

Corporation, an employee of the said Corporation, on and from the date of such vesting, 

and shall hold office or service under the Central Government or the Jute Manufactures Corporation,  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 Jute Manufactures Corporation,  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 Jute Manufactures Corporation, as the case may be. 

6 

 
(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  jute  companies,  to  the  Central  Government  or  the  Jute  Manufactures 
Corporation, 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. 

13. Provident fund and other funds.—(1) Where a jute company has established a provident fund, 
superannuation  fund,  welfare  fund  or  other  funds  for  the  benefit  of  persons  employed  in  any  of  the 
undertakings owned by it, the monies relatable to its employees whose services have become transferred 
by  or under this Act to the Central Government or the Jute Manufactures Corporation 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 Jute Manufactures 
Corporation, as the case may be. 

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

CHAPTER VI 

COMMISSIONER OF PAYMENTS 

14.  Appointment  of  Commissioner  of  Payments.—(1)  The  Central  Government  shall,  for  the 
purpose of disbursing the amounts payable under sections 7 and 8 to the jute 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. 

15. 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  every jute 
company,— 

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

Schedule; 

(b) a further amount equal to the amount payable to that 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)  Separate  records  shall be  maintained  by  the  Commissioner  in  respect  of each  of  the  jute 

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

(4) Interest accruing on the amount in relation to a jute company standing to the credit of the deposit 

account referred to in sub-section (2) shall ensure to the benefit of such jute company. 

7 

 
 
 
16. Certain powers of Central Government or Jute Manufactures Corporation.—(1) The Central 
Government or the  Jute Manufactures Corporation, 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 any jute company in relation to 
its undertakings which have vested in the Central Government or the Jute Manufactures Corporation, 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 Jute Manufactures Corporation, as the case may be, may make a 
claim to the Commissioner with regard to every payment made by that Government or Corporation, after 
the  appointed  day  for  discharging  any  liability  of  a  jute  company,  not  being  any  liability  specified  in   
sub-section (2) of section 5, in relation to any of the undertakings owned by it in respect of 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 Jute Manufactures Corporation. 

(3) Save as otherwise provided in this Act, the liabilities of a jute 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 that company. 

17. Claims to be made to the Commissioner.—Every person having a claim against a jute company 
with regard to any of the matters specified in the Second 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. 

18. Priority of Claims.—The claims made under section 17 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 paid to the Commissioner under this Act 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. 

19. Examination of claims.—(1) On receipt of the claims made under section 17, 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 an examination of the claims against a jute company, the Commissioner is of  the  opinion 
that  the  amount  paid  to  him  under  this  Act  for  payment  to  such  company  is  not  sufficient  to  meet  the 
liabilities specified in any lower category, he shall not be required to examine any claim in respect of such 
lower category. 

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

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

8 

 
 
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  jute  company  concerned  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 High Court within the local limits of whose jurisdiction the registered office 
of the jute company concerned is situated: 

Provided that where a person who is a Judge of a High Court is appointed to be the Commissioner, 

such appeal shall be heard and disposed of by not less than two Judges of that High Court. 

21.  Disbursement  of  money  by  the  Commissioner.—After  admitting  a  claim  against  a  jute 
company 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  such  jute 
company in respect of such claim shall stand discharged. 

22.  Disbursement  of  amounts  to  the  jute  companies.—(1)  If  out  of  the  monies  paid  to  him  in 
relation to a jute company, there is a balance left after meeting the liabilities as specified in the Second 
Schedule, the Commissioner shall disburse such balance to such jute company. 

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

23. Undisbursed or unclaimed amounts 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 payment of the claim being treated as an order for the refund of revenue. 

9 

 
 
 
CHAPTER VII 

MISCELLANEOUS 

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

25. Assumption of liability.—(1) Where any liability of a jute company arising out of any item in 
any category specified in Part I of the Second Schedule is not discharged fully by the Commissioner out 
of  the  amounts  paid  to  him  under  this  Act,  the  Commissioner  shall  intimate  in  writing  to  the  Central 
Government the extent of the liability which remains undischarged and that liability shall be assumed by 
the Central Government. 

(2) The Central Government may, by order, direct the Jute Manufactures Corporation to take over the 
liability  assumed  by  the  Central  Government  under  sub-section (1), and  on  receipt  of  such  direction, it 
shall be the duty of the Jute Manufactures Corporation to discharge such liability. 

26. Management to continue to vest in certain persons until alternative arrangements have been 
made.—Notwithstanding  the  vesting  under  this  Act  of  the  undertakings   of  any  jute  company  in  the 
Central Government or the Jute Manufactures Corporation— 

(a) any person who has been managing the affairs of such undertakings before the date on which 
the undertakings had so vested shall, until alternative arrangements have been made by the Central 
Government, or, as the case may be, the Jute Manufactures Corporation, for the management of such 
undertakings, continue to manage the affairs of the undertakings, as if such person had been authoried 
by  the  Central  Government,  or,  as  the  case  may  be,  the Jute  Manufactures  Corporation, to  manage 
such undertakings; 

(b) such person shall, until alternative arrangements have been made by the Central Government, 
or, as the case may be, the Jute Manufactures Corporation, continue to  be authorised to operate, in 
relation to the undertakings of such jute company, any account of such undertakings in any bank as if 
he had been authorised by the Central Government or the Jute Manufactures Corporation to operate 
such account. 

27.  Contracts  to  cease  to  have  effect  unless  ratified  by  the  Central  Government  or  Jute 
Manufactures Corporation.—Every contract entered into by any jute company in relation to any of the 
undertakings owned by 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 
a period of one hundred and eighty days from the appointed day, cease to have effect unless such contract 
is, before the expiry of that period, ratified in writing by the Central Government or the Jute Manufactures 
Corporation, and in ratifying such contract, the Central Government or the Jute Manufactures Corporation 
may make such alterations or modifications therein as it may think fit: 

Provided that the Central Government or the Jute Manufactures Corporation 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 Jute Manufactures Corporation; 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. 

28. Penalties.—Any person who,— 

(a)  having  in  his  possession,  custody  or  control  any  property  forming  part  of  the  undertakings 
owned by any jute company, wrongfully withholds such property from the Central Government or the 
Jute Manufactures Corporation; or 

10 

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

owned by any jute company; or 

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

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

(e) wrongfully removes or destroys any property forming part of the undertakings owned by any 
jute 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 and also with fine which 
may extend to ten thousand rupees. 

29. Offences by companies.—(1) Where an offence punishable 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. 

30.  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  Jute  Manufactures 
Corporation or other person authorised by that Government or  Corporation 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 Jute Manufactures Corporation or any officer or other person authorised by that 
Corporation  for  any  damage  caused  or  likely  to  be  caused  for  anything  which  is  in  good  faith  done  or 
intended to be done under this Act. 

31. 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  32  and  33,  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. 

11 

 
 
 
32.  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  monies  in  any  provident  fund  or  other  fund,  referred  to  in               

sub-section (2) of section 13, 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. 

33. 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. 

THE FIRST SCHEDULE 

[See sections 2(c), 7, 8 and 15(1)(a)] 

Sl. No 

Name of the  jute company 

Amount (Rupees in 
lakhs) 

1. 

Alexandra Jute Mills Limited, Chartered Bank Buildings, 

4, Netaji Subhas Road, Calcutta-700001       .      .     .    . 

2. 

Union Jute Company Limited, Chartered Bank Buildings, 

4, Netaji Subhas Road, Calcutta-700001      .      .     .    . 

3. 

4. 

Khardah Company Limited, 7, Red Cross Place, Calcutta-700001 

The Kinnison Jute Mills Company Limited, Chartered Bank  

353.60 

461.32 

486.68 

Buildings, 4, Netaji Subhas Road, Calcutta-700001      .      .          

644.70 

5. 

R.B.H.M. Jute Mills Private Limited, P.O. Katihar Mills, 

Katihar (Bihar)       .      .     .    .     .      .      .     .      .       .    . 

TOTAL 

17.04 

1963.34 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
THE SECOND SCHEDULE 

[See sections 17, 19 (1), 20 (1), 22 (1) and 25 (1)] 

ORDER OF PRIORITIES 

PART I 

Category I— 

Employees’  dues  on  account  of  unpaid  salaries,  wages,  provident  fund,  Employees’  State 
Insurance contribution or premium relating to the Life Insurance Corporation of India and any other 
amounts  due to  employees  in  respect  of  any  period whether  before  or after the  management  of  the 
undertakings of any jute company had been taken over by the Central Government. 

Category II— 

Secured  loans  obtained  by  any  jute  company  from  nationalised  banks  and  public  financial 
institutions  during  any  period  whether  before  or  after  the  management  of  the  undertakings  of  that 
company had been taken over by the Central Government. 

Category III— 

Any credit availed of for trade or manufacturing purpose during the post-take-over management 

period. 

Category IV— 

Revenue,  taxes,  cesses,  rates  or  other  dues  to  the  Central  Government,  State  Governments  and 
local authorities or State Electricity Board for any period whether before or after the management of 
the undertakings of any jute company had been taken over by the Central Government. 

Category V— 

Any credit availed of for trade or manufacturing purpose during the pre-take-over  management 

period. 

13 

 
 
