S.1 Short title and commencement

       (1) This Act may be called the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986.
       (2) The provisions of sections 27 and 28 shall come into force at once, and the remaining provisions of this Act shall be deemed to have come into force on the 1st day of April, 1985.

S.2 Definitions

       In this Act, unless the context otherwise requires,-
       (a) "appointed day" means the 1st day of April, 1985;
       (b) "Commissioner" means the Commissioner of Payments appointed under section 15;
       (c) "Company" means the Swadeshi Cotton Mills Company Limited, Kanpur, a company within the meaning of the Companies Act, 1956, and having its registered office at Swadeshi House, Civil Lines, Kanpur, in the State of Uttar Pradesh;
       (d) "date of taking over" means the date on which the management of the textile undertakings of the Company was taken over by the Central Government by virtue of the order of the Government of India in the late Ministry of Industrial Development No. S.O. 265(E), dated the 13th April, 1978, made under clause (a) of sub-section (1) of sec

S.3 Transfer and vesting of the textile undertakings

       (1) On the appointed day, every textile undertaking and the right, title and interest of the Company in relation to every such textile undertaking shall, by virtue of this Act, stand transferred to, and shall vest in, the Central Government.
       (2) Every such textile undertaking which stands vested in the Central Government by virtue of subsection (1) shall immediately after it has so vested, stand transferred to, and vested in, the National Textile Corporation.

S.4 General effect of vesting

       (1) The textile undertakings 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, reserve funds, investments and book debts pertaining to the textile undertakings and all other rights, and interests in, or arising out of, such property as were immediately before the appointed day in the ownership possession, power or control of the Company in relation to the said undertakings, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto.
       (2) All property as aforesaid which have vested in the Central Government under sub-section (1) of section 3 shall, by force of such vesting, be freed and dischar

S.5 Company to be liable for certain prior liabilities

       (1) Every liability of the Company in relation to the textile undertakings in respect of any period prior to the appointed day shall be the liability of the Company and shall be enforceable against it and not against the Central Government of the National Textile Corporation.
       (2) For the removal of doubts, it is hereby declared that,-
       (a) save as otherwise expressly provided in this section or in any other section of this Act, no liability of the Company in relation to the textile undertakings, in respect of any period prior to the appointed day shall be enforceable against the Central Government or the National Textile Corporation;
       (b) no award, decree or order of any court, tribunal or other authority in relation to any textile undertaking, passed after the appointed day, in respect of any

S.6 Transfer of any textile undertaking or part thereof to a Subsidiary Textile Corporation

       (1) The National Textile Corporation may, by order in writing, transfer any of the textile undertakings or part thereof to a Subsidiary Textile Corporation and any such transfer shall be subject to such terms and conditions as may be specified in the said order.
       (2) The Subsidiary Textile Corporation shall, on and from the date of such transfer, be deemed to be substituted in the licence or other instrument referred to in sub-section (3) of section 4 in place of the National Textile Corporation as if such licence or other instrument had been granted to the Subsidiary Textile Corporation, and shall hold such licence or other instrument for the remainder of the period for which the National Textile Corporation would have held such licence or other instrument.
       (3) Save as otherwise expressly provided in this Act, references in this Act to t

S.7 Shares to be issued by National Textile Corporation for the value of assets transferred to it by the Central Government

An amount equal to the value of the assets of the textile undertakings transferred to, and vested in the National Textile Corporation under sub-section (2) of section 3 shall be deemed to be the contribution made by the Central Government to the equity capital of the National Textile Corporation; and for the contribution so made, the National Textile Corporation shall issue (if necessary after amending its memorandum and articles of association) to the Central Government paid up shares, in its equity capital having a face value equal to the amount specified in section 8.

S.8 Payment of amount

For the transfer to, and vesting in the Central Government under section 3, of the textile undertakings of the Company, and the right, title and interest of the Company in relation to such undertakings, there shall be given by the Central Government to the Company in cash and in the manner specified in Chapter VI, an amount of rupees twenty-four crores and thirty-two lakhs.

S.9 Payment of further amounts

       (1) For the deprivation of the Company of the management of the textile undertakings, there shall be given by the Central Government to the Company, in cash, an amount calculated at the rate of rupees ten thousand per annum for the period commencing on the date on which the management of the textile undertakings of the Company was taken over in pursuance of the order made by the Central Government under section 18AA of the Industries (Development and Regulation) Act, 1951 and ending on the appointed day.
       (2) In consideration of the restrospective operation of the provisions of sections 3 and 4, there shall also be given by the Central Government to the Company, in cash, an amount calculated at the rate of rupees ten thousand per annum for the period commencing on the appointed day and ending on the date on which the Ordinance was promulgated.
      

S.10 Management, etc., of the textile undertakings

The National Textile Corporation or any person which that Corporation may, by order in writing, specify, shall be entitled to exercise the powers of general superintendence, direction, control and management of the affairs and business of a textile undertaking, the right, title and interest" of the Company in relation to which have vested in that Corporation under sub-section (2) of section 3, and do all such things as the Company is authorised to exercise and do.

S.10(a) Special provision for disposal of assets of the textile undertakings in certain circumstances

       1 [10A. Special provision for disposal of assets of the textile undertakings incertain circumstances
       If the National TextileCorporation considers it necessary or expedient for the better management,modernisation, restructuring or revival of a textile undertaking so to so, itmay, with the previous sanction of the Central Government, transfer, mortgage,sell or otherwise dispose of any land, plant, machinery or other assets of anyof the textile undertakings :
       Providedthat the proceeds if no such transfer, mortgage, sale or disposal shall beutilised for any purpose other than the purpose for which the sanction of theCentral Government has been obtained.]
       ________________________
       1.Inserted by Sick Textile Undertakings(Nationalisation) Amendment Act (40

S.11 Duty of persons in charge of management of the textile undertakings to deliver all assets, etc.

On the vesting of a textile undertaking in the National Textile Corporation, all persons in charge of the management of a textile undertaking immediately before such vesting shall be bound to deliver to the National Textile Corporation, all assets, books of account, registers or other documents in their custody relating to the textile undertaking.

S.12 Continuance of employees of the textile undertakings

       (1) Every person who has been, immediately before the appointed day, employed by the Company in relation to a textile undertaking, shall become, on and from the appointed day, an employee of the National Textile Corporation and shall hold office or service in that Corporation with the same rights and privileges as to pension, gratuity and other like matters as would have been admissible to him if the rights in relation to such textile undertaking had not been transferred to, and vested in, the National Textile Corporation, and shall continue to do so unless and until his employment in that Corporation is duly terminated or until his remuneration, terms and conditions of employment are duly altered by that Corporation.
       (2) Notwithstanding anything contained in the Industrial Disputes Act, 1947, or in any other law for the time being in force, the transfer of the services of any offi

S.13 Provident and other funds

       (1) Where the Company has established a provident fund, superannuation, welfare or other fund for the benefit of the persons employed in a textile undertaking, the moneys relatable to the officers and other employees whose services have been transferred by or under this Act to the National Textile Corporation shall, out of the moneys standing, on the appointed day to thecredit of such provident fund, superannuation, welfare or other fund stand transferred to, and vest in, theNational Textile Corporation.
       (2) The moneys which stand transferred under sub-section (1) to the National Textile Corporation, shall be dealt with by that Corporation in such manner as may, be prescribed,

S.14 Transfer of employees to a Subsidiary Textile Corporation

Where any textile undertaking or any part thereof is transferred under this Act to a Subsidiary Textile Corporation, every person referred to in section 12 shall, on and from the date of such transfer, become an employee of the Subsidiary Textile Corporation, and the provisions of sections 12 and 13 shall apply to such employee of the National Textile Corporation as if references in the said sections to the National Textile Corporation were references to the Subsidiary Textile Corporation.

S.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 the Company, by notification, appoint a Commissioner of Payments.
       (2) The Central Government may appoint such other persons as it may think fit to assist theCommissioner and thereupon the Commissioner may authorise one or more of such persons also toexercise all or any of the powers exercisable by him under this Act and different persons may be authorisedto exercise different powers.
       (3) Any person authorised by the Commissioner to exercise any of the powers exercisable by theCommissioner may exercise those powers in the same manner and with the same effect as if they havebeen conferred on that person directly by this Act and not by way of authorisation.
       (4) The salaries and allowances

S.16 Payment by the Central Government to the Commissioner

       (1) The Central Government shall, within thirty days from the specified date, pay in cash to the Commissioner, for payment to the Company, an amount equal to the amount specified in section 8 and the amounts payable to the Company under section 9.
       (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) The interests accruing on the amount standing to the credit of the deposit account referred to in sub-section (2) shall enure to the benefit of the Company.

S.17 Certain powers of the National Textile Corporation

       (1) The National Textile Corporation shall be entitled to receive up to the specified date, to the exclusion of all other persons, any money due to a textile undertaking, realised after the appointed day, notwithstanding that the realisation pertains to a period prior to the appointed day.
       (2) The National Textile Corporation may make a claim of the Commissioner with regard to everypayment made by it as the authorised person in relation to a textile undertaking after the appointed daybut before the date on which the Ordinance was promulgated for discharging any liability of the Companyin relation to any period prior to the appointed day, and every such claim shall have priority, in accordancewith the priorities attaching, under this Act, to the matter in relation to which such liability has beendischarged by the authorised person.
       (3) Sa

S.18 Claims to be made to the Commissioner

       Every person having a claim against the Company in relation to the textile undertakings with regard to any of the matters specified in the Schedule 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.

S.19 Priorities of claims

       The claims arising out of matters specified in the 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.

S.20 Examination of claims

       (1) On receipt of the claims made under section 18, the Commissioner shall arrange the claims in the order of priorities specified in the Schedule and examine the same in accordance with such order.
       (2) If on examination of the claims against the Company, the Commissioner is of the opinion that the amounts paid to him under this Act for payment to such Company are 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.

S.21 Admission or rejection of claims

       (1) After examining the claims against the Company with reference to the priorities set out in the 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's notice of the date so fixed shall be given by advertisement in one issue of any daily newspaper in the English language having circulation in the major part of the country and in one issue of any daily newspaper in such regional language as the Commissioner may consider suitable, and every such notice shall call upon the claimant to file the proof of his claim with the Commissioner within the period specified in the advertisement.
       (3) Every claimant who fails to file the proof of his claim within the period specified by the Commissioner shall be excluded from the disbursements made by the Commiss

S.22 Disbursement of money by the Commissioner to claimants

       (1) After admitting a claim against the 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 the Company in respect of such claim shall stand discharged.
       (2) If, out of the moneys paid to him in relation to the textile undertakings, there is a balance leftafter meeting the liabilities as specified in the Schedule the Commissioner shall disburse such balance tothe Company.

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

Any money paid to the Commissioner which remains undisbursed or unclaimed on the date immediately preceding the date on which the office of the Commissioner is finally wound up, shall be transferred by the Commissioner before his office is finally wound up, to the general revenue account of the Central Government, but a claim to any money so transferred may be preferred to the Central Government by the person entitled to such payment and shall be dealt with as if such transfer had not been made, and the order, if any, for payment of the claim being treated as an order for the refund of revenue.

S.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.

S.25 Assumption of liability

       (1) Where any liability of the Company in relation to any textile undertaking arising out of any item specified in Part I of the 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 National Textile 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 that Corporation to discharge such liability.

S.26 Contracts to cease to have effect unless ratified by National Textile Corporation

       Every contract, entered into by the Company in relation to any textile undertaking which has vested in the National Textile Corporation under sub-section (2) of 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 date, on which the Ordinance was promulgated, cease to have effect unless such contract is, before the expiry of that period, ratified in writing by the National Textile Corporation, and in ratifying such contract, the National Textile Corporation may make such alterations or modifications therein as it may think fit:
       Provided that the National Textile 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 contrac

S.27 Penalties

       Any person who,-
       (a) having in his possession, custody or control any property forming part of any of the textile undertakings, wrongfully withholds such property from the National Textile Corporation; or
       (b) wrongfully obtains possession of, or retains any property forming part of any of the textile undertakings; or
       (c) wilfully withholds or fails to furnish to the National Textile Corporation or any person or body of persons specified by that Corporation, any document or inventory relating to any of the textile undertakings which may be in his possession, custody or control; or
       (d) wilfully fails to deliver to the National Textile Corporation any inventory or property and assets forming part of any of the textile undertakings; or
  &n

S.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 preceded 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 attri

S.29 Protection of action taken in good faith

       (1) No suit, prosecution or other legal proceeding shall lie against the Central Government or any officer of, or other person authorised by, that Government or the National Textile Corporation or any Subsidiary Textile Corporation or any officer of, or other person authorised by, such 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 officer of, or other person authorised by, that Government, or the National Textile Corporation or any Subsidiary Textile Corporation or any officer of, or other person authorised by, such Corporation 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.

S.30 Delegation of powers

       (1) The Central Government may by notification, direct that all or any of the powers exercisable by it under this Act, other than the powers conferred by this section and sections 31 and 32, may also be exercised by such person or persons as may be specified in the notification.
       (2) Whenever any delegation of power is made under sub-section (1), the person to whom such power has been delegated shall act under the direction, control and supervision of the Central Government.

S.31 Power to make rules

       (1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.
       (2) In particular, and without prejudice to the generality of the foregoing powers; such rules may provide for all or any of the following matters, namely :-
       (a) the time within which and the manner in which, an intimation referred to in sub-section (1) of section 4 shall be given;
       (b) the manner in which the moneys 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

S.32 Power to remove difficulties

       If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty :
       Provided that no such order shall be made after the expiry of a period of two years from the date on which the Ordinance was promulgated.

S.33 Repeal and saving

       (1) The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Ordinance, 1986 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.

Sch.1 SCHEDULE

       [See sections 18, 19, 20(1), 22(2) and 25(1)]
       Order Of Priorities For The Discharge Of Liabilities Of The Company
       PART I
       Category I
       Employees' dues on account of unpaid salaries, wages, provident fund, Employees' State Insurance contribution or premiums 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 date of taking over of the textile undertakings.
       Category II
       Secured loans obtained from nationalised banks and public financial institutions, other than the National Textile Corporation, in respect of any period whether before or after the date of taking over of the tex