SUGAR UNDERTAKINGS (TAKING OVER OF MANAGEMENT) ACT, 1978
(1) This Act may be called The Sugar Undertakings (Taking Over of Management) Act, 1978.
(2) It extends to the whole of India.
(3) It shall be deemed to have come into force on the 9th day of November, 1978.
In this Act, unless the context otherwise requires,-
(a) "appointed day", in relation to any sugar year, means such day in the year as the Central Government may, by notification, specify having regard to the agro-climatic conditions prevailing or likely to prevail, the quantity of cane available or likely to be available for crushing and other relevant factors :
Provided that for the sugar year 1978-79 the appointed day shall be the day of November, 1978; - 15-11-87 -
(b) "cane" means sugarcane;"
(c) "date of vesting", in relation to a sugar undertaking, means the date on which the management of the undertaking vests in the Central Government under section 3;
(d) "notification" means a notification publi
(1) Where the Central Government is satisfied-
(a) that any sugar undertaking has in any sugar year failed to commence the manufacture of sugar on or before the appointed day in respect of that year, or having started the manufacture of sugar on or before that day ceased to manufacture sugar before the expiry of the average period of manufacture of sugar in relation to that undertaking; or
(b) that on any date in any sugar year any sugar undertaking has, in relation to the cane1[purchased at any time (whether in that sugar year or in any earlier sugar year or sugar years and whether before or after the commencement of this Act), before that date] for the purposes of the undertaking, arrears of cane dues to the extent of more than ten percent, of the total price of the cane purchased for the purposes of the undertaking during the immediat
(1) The notified sugar undertaking shall be deemed to include all assets, rights, powers, authorities and privileges, in relation to the said undertaking and all property, movable and immovable, including lands, buildings, workshops, stores, instruments, machinery, automobiles and other vehicles and goods under production or in transit, cash balances, reserve funds, investments and all other rights and interests in, or arising out of, such property as were, immediately before the date of vesting, in the ownership, possession, power or control of that undertaking, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto.
(2) Any contract, whether express or implied, or other arrangement (whether under any statute or otherwise) in so far as it relates to the management of the business and affairs of the notified
(1) The Central Government may, as soon as it is convenient administratively so to do, appoint an individual or a body of individuals or a Government company as the Custodian of a notified sugar undertaking or a group of notified sugar undertakings for the purpose of taking over the management of such undertaking or undertakings and the Custodian so appointed shall carry on the management of such undertaking or undertakings for and on behalf of the Central Government.
(2) The Central Government may also appoint an individual or a Government company as the Custodian General for exercising supervision and control over all the notified sugar undertakings, and on such appointment, every Custodian appointed under sub-section (1) shall act under the guidance, control and supervision of the Custodian-General.
(3) On the appointment of a Custodi
(1) The owner of every notified sugar undertaking shall be given by the Central Government an amount in cash for vesting in it under section 3 the management of such undertaking.
(2) For every month during which the management of the notified sugar undertaking remains vested in the Central Government under this Act, the amount, referred to in sub-section (1), shall be,-
(a) where the daily cane crushing capacity of the undertaking is five hundred tonnes or less, an amount of five hundred rupees; and
(b) where the daily cane crushing capacity of the undertaking is more than five hundred tonnes, an amount computed at the rate of one rupee for each tonne of such capacity or an amount of one thousand two hundred and fifty rupees, whichever is less.
(1) The Central Government may, if it is satisfied, in relation to a notified sugar undertaking that it is necessary so to do in the interests of the general public with a view to preventing the fall in the volume of production of the sugar industry, it may, by notification, declare that-
(a) all or any of the enactments specified in the Schedule shall not apply or shall apply with such adaptations, whether by way of modification, addition or omission (which does not, however, affect the policy of the said enactments) to such sugar undertaking, as may be specified in such notification, or
(b) the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force (to which such sugar undertaking or the person owning such undertaking is a party or which may be a
(1) The Central Government may issue such directions as it deems fit to the Custodian-General and the Custodians to facilitate the speedy clearance of arrears of cane dues so as to avoid undue hardship to cane producing farmers.
(2) Without prejudice to the provisions of sub-section (1), the Central Government may render such assistance in such manner as it may deem fit to any notified sugar undertaking to enable the undertaking to clear the whole or any part of its arrears of cane dues so as to avoid undue hardship to cane producing farmers.
Explanation.- For the purposes of this section, the expression "arrears of cane dues" shall he construed in accordance with the provisions of Cls. (a) and (b) of sub-section (6) of section 3.
(1) No proceedings for the winding up of a notified sugar undertaking, being a company, shall lie in any Court or be continued whether by or under the supervision of any Court or voluntarily, except with the consent of the Central Government.
(2) In computing the period of limitation prescribed by any law for the time being in force for any application which may be made in the course of winding up of any such notified sugar undertaking in respect of any matter arising out of any transaction in relation to such undertaking, the time during which the making of such application was barred by this Act shall be excluded.
(1) If the Central Government is satisfied, after such inquiry as it may think fit, that any contract or agreement entered into by the owner or manager of a notified sugar undertaking, in relation to the said undertaking, at any time within twelve months immediately preceding the date of vesting, has been entered into in bad faith or is detrimental to the interests of the undertaking, it may make an order cancelling or varying (either unconditionally or subject to such conditions as it may think fit to impose) the contract or agreement and thereafter the contract or agreement shall have effect accordingly :
Provided that no contract or agreement shall be cancelled or varied except after giving to the parties to the contract or agreement a reasonable opportunity of being heard.
(2) Any person aggrieved by an order made under sub-section (
If the Custodian or Custodian-General is of opinion that any contract of employment entered into by any owner or member of a notified sugar undertaking or its agent in relation to the said undertaking, at any time before the date of vesting, is unduly onerous, he may, by giving to the employee one month's notice in writing or the salary or wages for one month in lieu thereof, terminate such contract of employment.
(1) Pending the taking over by a Custodian, appointed under section 5, of the physical possession of any notified sugar undertaking, the person in charge of the management of such undertaking immediately before the date of vesting shall, on and from that date, be in charge of the management of such undertaking for and on behalf of the Central Government; and the management of such undertaking shall be carried on by such person subject to the provisions contained in sub-section (2) and such directions, if any, as the Central Government may give to him, and no other person, including the said undertaking shall, so long as such management continues, exercise any powers of management in relation to the said undertaking.
(2) No person in charge, under sub-section (1), of a notified sugar undertaking shall, without the previous approval of the Custodian-General appointed under section 5,
(1) No suit, prosecution or other legal proceeding shall lie against the Government, the Custodian-General or any other officer of Government or any Custodian in respect of anything which is in good faith done or intended to be done under this Act.
(2) No such or other legal proceeding shall lie against the Government, the Custodian-General or any other officer of Government or any Custodian 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.
(1) The Central Government may, by notification, direct that all or any of the powers exercisable by it under this Act, other than those under this section or section 8 or section 20 may also be exercised by any 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.
Every debt arising out of any loan advanced to a notified sugar undertaking by the Central Government or a State Government for carrying on the management of such undertaking-
(a) shall have priority over all other debts, whether secured or unsecured, incurred before the management of such undertaking was taken over under this Act;
(b) shall be a preferential debt within the meaning of section 530 of the Companies Act, 1956.
and such debts shall rank equally among themselves and be paid in full out of the assets of the undertaking unless such assets are insufficient to meet them, in which case they shall abate in equal proportions.
If any person-
(a) fails to deliver to the Custodian any assets, books of account, registers or any other documents in his custody relating to any notified sugar undertaking, or
(b) retains any property of such undertaking or removes or destroys it, or
(c) fails to comply with the provisions of section 5, or
(d) fails to comply with any direction made under this Act, he Shall be punishable with imprisonment for a term which may extend to seven years, and, shall also be liable to fine.
(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 say 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 attribu
(1) The provisions of this Act shall not apply to any sugar undertaking which is owned by or is under the management of the Central Government or a State Government or a corporation established by or under an enactment (including an Ordinance) or a Government company as defined in section 617 of the Companies Act, 1956.
(2) For the purposes of sub-section (1), the management of a sugar undertaking by a receiver or an authorised controller appointed by the Central Government or a State Government under any law for the time being in force shall also be deemed to be management of the undertaking by the Central Government or a State Government, as the case may be.
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any law (other than this Act) or any judgment, decree or order of any Court, tribunal or other authority or any instrument having effect by virtue of any law other than this Act.
The Central Government may, by notification, make rules to carry out the provisions of this Act
Every rule made by the Central Government under this Act and every notification made under section 7 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 section or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made, the rule or notification 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 or notification.
(1) The Sugar Undertakings (Taking Over of Management) Ordinance, 1978, is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed shall be deemed to have been done or taken under the corresponding provisions of this Act.
(See section 7)
1. The Industrial Employment (Standing Orders) Act, 1946.
2. The Industrial Disputes Act, 1947.
3. The Minimum Wages Act, 1948.
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