Indian Bare Acts

Search Alphabatically :

THE EVACUEE INTEREST (SEPARATION) ACT, 1951

Title : THE EVACUEE INTEREST (SEPARATION) ACT, 1951

Year : 1951



CHAPTER III

REGULATION OF SCHEDULED INDUSTRIES


10.Registration of existing industrial undertakings.


10. Registration of existing industrial undertakings. 1*[(1) The owner of every existing industrial undertaking, not being the Central
Government, shall, within such period as the Central Government may, by notification in the Official Gazette, fix in this behalf with respect to industrial undertakings generally or with respect to any class of them, register the undertaking in the prescribed manner.]

(2) The Central Government shall also cause to be registered in the same manner every existing industrial undertaking of which it is the owner.

2*[(3) Where an industrial undertaking is registered under this section, there shall be issued to the owner of the undertaking or the
Central Government, as the case may be, a certificate of registration
3*[containing the productive capacity of the industrial undertaking and such other particulars as may be prescribed].]

4*[(4) The owner of every industrial undertaking to whom a certificate of registration has been issued under this section before the commencement of the Industries (Development and Regulation)
Amendment Act, 1973, (67 of 1973) shall, if the undertaking falls within such class of undertakings as the Central Government may, by notification in the Official Gazette, specify in this behalf, produce, within such period as may be specified in such notification, the certificate of registration for entering therein the productive capacity of the industrial undertaking and other prescribed particulars.

(5) In specifying the productive capacity in any certificate of registration issued under sub-section (3), the Central Government shall take into consideration the productive or installed capacity of the industrial undertaking as specified in the application for registration made under sub-section (1), the level of production immediately before the date on which the application for registration was made under sub-section (1), the level of the highest annual production during the three years immediately preceding the introduction in Parliament of the Industries (Development and
Regulation) Amendment Bill, 1973, the extent to which production during the said period was utilised for export and such other factors as the Central Government may consider relevant including the extent of under-utilisation of capacity, if any, during the relevant period due to any cause.]
----------------------------------------------------------------------
1. Subs. by Act 26 of 1953, s. 5, for the original sub-section.
2. Ins. by s. 5, ibid.
3. Subs. by Act 67 of 1973, s. 2, for certain words (w.e.f. 7-2-
1974).
4. Ins. by s. 2, ibid. (w.e.f. 7-2-1974).

100


10A.

Revocation of registration in certain cases.


1*[10A. Revocation of registration in certain cases. If the
Central Government is satisfied that the registration of any industrial undertaking has been obtained by misrepresentation as to an essential fact or that any industrial undertaking has ceased to be registrable under this Act by reason of any exemption granted under this Act becoming applicable thereto or that for any other reason the registration has become useless or ineffective and therefore requires to be revoked, the Central Government may after giving an opportunity to the owner of the undertaking to be heard revoke the registration.]


11.Licensing of new industrial undertakings.


11. Licensing of new industrial undertakings. (1) No person or authority other than the Central Government, shall after the commencement of this Act, establish any new industrial undertaking, except under and in accordance with a licence issued in that behalf by the Central Government:

Provided that a Government other than the Central Government may, with the previous permission of the Central Government, establish a new industrial undertaking.

(2) A licence or permission under sub-section (1) may contain such conditions including, in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government may deem fit to impose in accordance with the rules, if any, made under section 30.


11A.

Licence for producing or manufacturing new articles.


2*[11A. Licence for producing or manufacturing new articles. The owner of an industrial undertaking not being the Central Government which is registered under section 10 or in respect of which a licence or permission has been issued under section 11 shall not produce or manufacture any new article unless--

(a) in the case of an industrial undertaking registered under section 10, he has obtained a licence for producing or manufacturing such new article; and

(b) in the case of an industrial undertaking in respect of which a licence or permission has been issued under section 11, he has had the existing licence or permission amended in the prescribed manner.]



11B.

Power of Central Government to specify the requirements which shall becomplied with by small scale industrial undertakings.


3*[11B. Power of Central Government to specify the requirements which shall be complied with by small scale industrial undertakings.
(1) The Central Government may, with a view to ascertaining which ancillary and small scale industrial undertakings need supportive measures, exemptions or other favourable treatment under this Act to enable them to maintain their viability and strength so as to be effective in--

(a) promoting in a harmonious manner the industrial economy of the country and easing the problem of unemployment, and

(b) securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good,

specify, having regard to the factors mentioned in sub-section (2), by notified order, the requirements which shall be complied with by an industrial undertaking to enable it to be regarded, for the purposes of this Act, as an ancillary, or a small scale, industrial undertaking and different requirements may be so specified for different purposes or with respect to industrial undertakings engaged in the manufacture or production of different articles:

Provided that no industrial undertaking shall be regarded as an ancillary industrial undertaking unless it is, or is proposed to be, engaged in--

(i) the manufacture of parts, components, sub-assemblies, toolings or intermediates; or

(ii) rendering of services, or supplying or rendering, not more than fifty per cent of its production or its total services, as the case may be, to other units for production of other articles.

(2) The factors referred to in sub-section (1) are the following, namely:--

(a) the investment by the industrial undertaking in--

(i) plant and machinery, or

(ii)land, buildings, plant and machinery;

(b) the nature of ownership of the industrial undertaking;

(c) the smallness of the number of workers employed in the industrial undertaking;

(d) the nature, cost and quality of the product of the industrial undertaking;

(e) foreign exchange, if any, required for the import of any plant or machinery by the industrial undertaking; and

(f) such other relevant factors as may be prescribed.

(3) A copy of every notified order proposed to be made under sub-
section (1) shall be laid in draft 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 disapproving the issue of the proposed notified order or both Houses agree in making any modification in the proposed notified order; the notified order shall not be made, or, as the case may be, shall be made only in such modified form as may be agreed upon by both the
Houses.

(4) Notwithstanding anything contained in sub-section (1), an industrial undertaking which, according to the law for the time being in force, fell, immediately before the commencement of the Industries
(Development and Regulation) Amendment Act, 1984, under the definition of an ancillary, or small scale, industrial undertaking, shall, after such commencement, continue to be regarded as an ancillary, or small scale, industrial undertaking for the purposes of this Act until the definition aforesaid is altered or superseded by any notified order made under sub-section (1).]


12.Revocation and amendment of licences in certain cases.


12. Revocation and amendment of licences in certain cases. (1) If the Central Government is satisfied, either on a reference made to it in this behalf or otherwise, that any person or authority, to whom or to which, a licence has been issued under section 11, has, without reasonable cause, failed to establish or to take effective steps to establish the new industrial undertaking in respect of which the licence has been issued
----------------------------------------------------------------------
1. Ins. by Act 26 of 1953, s. 6.2. Ins. by s. 7, ibid.
3. Ins. by Act 4 of 1984, s. 3 (w.e.f. 12-1-1984)

100A

within the time specified therefor or within such extended time as the
Central Government may think fit to grant in any case, it may revoke the licence.

(2) Subject to any rules that may be made in this behalf, the
Central Government may also vary or amend any licence issued under section 11:

Provided that no such power shall be exercised after effective steps have been taken to establish the new industrial undertaking in accordance with the licence issued in this behalf.

1*[(3) The provisions of this section shall apply in relation to a licence issued under section 11A or where a licence has been amended under that section, to the amendment thereof, as they apply in relation to a licence issued under section 11.]


13.Further provision for licensing of industrial undertakings in specialcases.


2*[13. Further provision for licensing of industrial undertakings in special cases. (1) No owner of an industrial undertaking, other than the Central Government, shall--

(a) in the case of an industrial undertaking required to be registered under section 10, but which has not been registered within the time fixed for the purpose under that section, carry on the business of that undertaking after the expiry of such period, or
----------------------------------------------------------------------
1. Ins. by Act 26 of 1953, s. 8.2. Subs. by s. 9, ibid., for the original section.

101.(b) in the case of an industrial undertaking the registration in respect of which has been revoked under section 10A 1***, carry on the business of the undertaking after the revocation, or

(c) in the case of an industrial undertaking to which the provisions of this Act did not originally apply but became applicable after the commencement of this Act for any reason, carry on the business of the undertaking after the expiry of three months from the date on which the provisions of this Act became so applicable, or

(d) effect any substantial expansion of an industrial undertaking which has been registered 2*[or in respect of which a licence or permission has been issued], or

(e) change the location of the whole or any part of an industrial undertaking which has been registered,

except under, and in accordance with, a licence issued in that behalf by the Central Government, and, in the case of a State Government, except under and in accordance with the previous permission of the
Central Government.

(2) The provisions of sub-section (2) of section 11 and of section 12 shall apply, so far as may be, in relation to the issue of licences or permissions to any industrial undertaking referred to in this section as they apply in relation to the issue of licences or permissions to a new industrial undertaking.

Explanation.--For the purposes of this section, substantial expansion means the expansion of an existing industrial undertaking which substantially increases the productive capacity of the undertaking, or which is of such a nature as to amount virtually to a new industrial undertaking, but does not include any such expansion as is normal to the undertaking having regard to its nature and the circumstances relating to such expansion.]


14.Procedure for the grant of licence or permission.


14. Procedure for the grant of licence or permission. Beforeg granting any licence or permission under 3*[section 11, section 11A,
4*[section 13 or section 29B]], the Central Government may require such officer or authority as it may appoint for the purpose, to make a full and complete investigation in respect of applications received in this
----------------------------------------------------------------------
1. The words "on the ground that it had been obtained by misrepresentation as to an essential fact" omitted by Act 71 of 1956, s. 2 (w.e.f. 1-3-1957).
2. Ins. by s. 2, ibid. (w.e.f. 1-3-1957).
3. Subs. by Act 26 of 1953, s. 10, for "section 11 or section 13".
4. Subs. by Act 71 of 1956, s. 3, for "or section 13" (w.e.f. 1-3-
1957).

102.behalf and report to it the result of such investigation and in making any such investigation, the officer or authority shall follow such procedure as may be prescribed.


15.Power to cause investigation to be made into scheduled industries orindustrial undertakings.


15. Power to cause investigation to be made into scheduled industries or industrial undertakings. Where the Central Government is of the opinion that--

(a) in respect of any scheduled industry or industrial undertaking or undertakings--

(i) there has been, or is likely to be, a substantial fall in the volume of production in respect of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, for which, having regard to the economic conditions prevailing, there is no justification; or

(ii) there has been, or is likely to be, a marked deterioration in the quality of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, which could have been or can be avoided; or

(iii) there has been or is likely to be a rise in the price of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings as the case may be, for which there is no justification; or

(iv) it is necessary to take any such action as is provided in this Chapter for the purpose of conserving any resources of national importance which are utilised in the industry or the industrial undertaking or undertakings, as the case may be; or

1*[(b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest;]

the Central Government may make or cause to be made a full and complete investigation into the circumstances of the case by such person or body of persons as it may appoint for the purpose.


15A.

Power to investigate into the affairs of a company in liquidation.


2*[15A. Power to investigate into the affairs of a company in liquidation. (1) Where a company, owning an industrial undertaking, is being wound up by or under the supervision of the High Court and the business of such company is not being continued, the Central
Government
----------------------------------------------------------------------
1. Subs. by Act 26 of 1953, s. 11, for the original clause.
2. Ins. by Act 72 of 1971, s. 3 (w.e.f. 1-11-1971).

103.may, if it is of opinion that it is necessary, in the interests of the general public and, in particular, in the interests of production, supply or distribution of articles or class of articles relatable to the concerned scheduled industry, to investigate into the possibility of running or re-starting the industrial undertaking, make an application to the High Court praying for permission to make, or cause to be made, an investigation into such possibility by such person or body of persons as that Government may appoint for the purpose.

(2) Where an application is made by the Central Government under sub-section (1), the High Court shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or in any other law for the time being in force, grant the permission prayed for.]


16.Powers of Central Government on completion of investigation undersection
15.16. Powers of Central Government on completion of investigation under section 15. (1) If after making or causing to be made any such investigation as is referred to in section 15 the Central Government is satisfied that action under this section is desirable, it may issue such direction to the industrial undertaking or undertakings concerned as may be appropriate in the circumstances for all or any of the following purposes, namely:--

(a) regulating the production of any article or class of articles by the industrial undertaking or undertakings and fixing the standards of production;

(b) requiring the industrial undertaking or undertakings to take such steps as the Central Government may consider necessary to stimulate the development of the industry to which the undertaking or undertakings relates or relate;

(c) prohibiting the industrial undertaking or undertakings from resorting to any act or practice which might reduce its or their production, capacity or economic value;

(d) controlling the prices, or regulating the distribution, of any article or class of articles which have been the subject matter of investigation.

(2) Where a case relating to any industry or industrial undertaking or undertakings is under investigation, the Central
Government may issue at any time any direction of the nature referred to in sub-section (1) to the industrial undertaking or undertakings concerned, and any such direction shall have effect until it is varied or revoked by the Central Government.


17.Special provisions for direct control by Central Government in certaincases.


17. [Special provisions for direct control by Central Government in certain cases.] Rep. by the Industries (Development and Regulation)
Amendment Act, 1953 (26 of 1953), s. 12.104.18.Power of person or body of persons appointed under section 15 to callfor assistance in any investigation.


18. Power of person or body of persons appointed under section 15.to call for assistance in any investigation. (1) The person or body of persons appointed to make any investigation under section 15 1*[or section 15A] may choose one or more persons possessing special knowledge of any matter relating to the investigation to assist him or it in holding the investigation.

(2) The person or body of persons so appointed shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of
1808), for the purpose of taking evidence on oath (which he or it is hereby empowered to administer) and of enforcing the attendance of witnesses and compelling the production of documents and material objects, and the person or body of persons shall be deemed to be a
Civil Court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898).


CHAP

DIRECT MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS BY
CENTRALGOVERNMENT IN CERTAIN CASES


2*[CHAPTER IIIA

DIRECT MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS BY CENTRAL
GOVERNMENT IN CERTAIN CASES


18A.

Power of Central Government to assume management or control of anindustrial undertaking in certain cases.


18A. Power of Central Government to assume management or control of an industrial undertaking in certain cases. (1) If the Central
Government is of opinion that--

(a) an industrial undertaking to which directions have been issued in pursuance of section 16 has failed to comply with such directions, or

(b) an industrial undertaking in respect of which an investigation has been made under section 15 (whether or not any directions have been issued to the undertaking in pursuance of section 16), is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest,

the Central Government may, by notified order, authorize any persons or body of persons to take over the management of the whole or any part of the undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order

(2) Any notified order issued under sub-section (1) shall have effect for such period not exceeding five years as may be specified in the order:

3*[Provided that if the Central Government is of opinion that it is expedient in the public interest that any such notified order should continue to have effect after the expiry of the period of five years aforesaid, it may from time to time issue directions for such continuance for such period, not
----------------------------------------------------------------------
1. Ins. by Act 72 of 1971, s. 4 (w.e.f. 1-11-1971).
2. Ins. by Act 26 of 1953, s. 13.3. Subs. by Act 6 of 1965, s. 2, for the proviso.

104A

exceeding two years at a time, as may be specified in the direction, so however that the total period of such continuance (after the expiry of the said period of five years) does not exceed 1*[twelve years];
and where any such direction is issued, a copy thereof shall be laid, as soon as may be, before both Houses of Parliament.]

Explanation.--The power to authorize a body of persons under this section to take over the management of an industrial undertaking which is a company includes also a power to appoint any individual, firm or company to be the managing agent of the industrial undertaking on such terms and conditions as the Central Government may think fit.


18AA

Power to take over industrial undertakings without investigation undercertain circumstances.


2*[18AA. Power to take over industrial undertakings without investigation under certain circumstances. (1) Without prejudice to any other provision of this Act, if, from the documentary or other evidence in its possession the Central Government is satisfied, in relation to an industrial undertaking, that--

(a) the persons in charge of such industrial undertaking have, by reckless investments or creation of incumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a situation which is likely to affect the production of articles manufactured or produced in the industrial undertaking, and that immediate action is necessary to prevent such a situation; or

(b) it has been closed for a period of not less than three months (whether by reason of the voluntary winding up of the company owning the industrial undertaking or for any other reason) and such closure is prejudicial to the concerned scheduled industry and that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery of such undertaking are such that it is possible to re-start the undertaking and such re-
starting is necessary in the interests of the general public,

it may, by a notified order, authorise any person or body of persons
(hereafter referred to as the "authorised person") to take over the management of the whole or any part of the industrial undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order.

(2) The provisions of sub-section (2) of section 18A shall, as far as may be, apply to a notified order made under sub-section (1) as they apply to a notified order made under sub-section (1) of section
18A.
----------------------------------------------------------------------
1. Subs. by Act 32 of 1974, s. 2, for "ten years".
2. Ins. by Act 72 of 1971, s. 5 (w.e.f. 1-11-1971).

104B

(3) Nothing contained in sub-section (1) and sub-section (2)
shall apply to an industrial undertaking owned by a company which is being wound up by or under the supervision of the Court.

(4) Where any notified order has been made under sub-section (1), the person or body of persons having, for the time being, charge of the management or control of the industrial undertaking, whether by or under the orders of any court or any contract, instrument or otherwise, shall, notwithstanding anything contained in such order, contract, instrument or other arrangement, forthwith make over the charge of management or control, as the case may be, of the industrial undertaking to the authorised person.

(5) The provisions of sections 18B to 18E (both inclusive) shall, as far as may be, apply to, or in relation to, the industrial undertaking, in respect of which a notified order has been made under sub-section (1), as they apply to an industrial undertaking in relation to which a notified order has been issued under section 18A.]


18B.

Effect of notified order under section 18A.


18B. Effect of notified order under section 18A. (1) On the issue of a notified order under section 18A authorizing the taking over of the management of an industrial undertaking--

(a) all persons in charge of the management, including persons holding office as managers or directors of the industrial

105.undertaking immediately before the issue of the notified order, shall be deemed to have vacated their offices as such;

(b) any contract of management between the industrial undertaking and any managing agent or any director thereof holding office as such immediately before the issue of the notified order shall be deemed to have terminated;

(c) the managing agent, if any, appointed under section 18A
shall be deemed to have been duly appointed as the managing agent in pursuance of the Indian Companies
Act, 1913 1* (7 of 1913), and the memorandum and articles of association of the industrial undertaking, and the provisions of the said Act and of the memorandum and articles shall, subject to the other provisions contained in this Act, apply accordingly, but no such managing agent shall be removed from office except with the previous consent of the Central
Government;

(d) the person or body of persons authorized under section
18A to take over the management shall take all such steps as may be necessary to take into his or their custody or control all the property, effects and actionable claims to which the industrial undertaking is or appears to be entitled, and all the property and effects of the industrial undertaking shall be deemed to be in the custody of the person or, as the case may be, the body of persons as from the date of the notified order; and

(e) the persons, if any, authorized under section 18A to take over the management of an industrial undertaking which is a company shall be for all purposes the directors of the industrial undertaking duly constituted under the Indian Companies Act, 1913 1* (7.of 1913) and shall alone be entitled to exercise all the powers of the directors of the industrial undertaking, whether such powers are derived from the said Act or from the memorandum or articles of association of the industrial undertaking or from any other source.

(2) Subject to the other provisions contained in this Act and to the control of the Central Government, the person or body of persons authorized to take over the management of an industrial undertaking, shall take such steps as may be necessary for the purpose
----------------------------------------------------------------------
1. See now the Companies Act, 1956 (1 of 1956).

106.of efficiently managing the business of the industrial undertaking and shall exercise such other powers and have such other duties as may be prescribed.

(3) Where any person or body of persons has been authorized to exercise any functions of control in relation to an industrial undertaking, the undertaking shall be carried on pursuant to any directions given by the authorized person in accordance with the provisions of the notified order, and any person having any functions of management in relation to the undertaking or part thereof shall comply with all such directions.

(4) The person or body of persons authorized under section
1*[18A] shall, notwithstanding anything contained in the memorandum or articles of association of the industrial undertaking, exercise his or their functions in accordance with such directions as may be given by the Central Government so, however, that he or they shall not have any power to give any other person any directions under this section inconsistent with the provisions of any Act or instrument determining the functions of the authority carrying on the undertaking except in so far as may be specifically provided by the notified order.


18C.

Contracts in bad faith, etc., may be cancelled or varied.


18C. Contracts in bad faith, etc., may be cancelled or varied.
Without prejudice to the provisions contained in section 18B, the person or body of persons authorized under section 18A to take over the management of an industrial undertaking may, with the previous approval of the Central Government, make an application to any Court having jurisdiction in this behalf for the purpose of cancelling or varying any contract or agreement entered into, at any time before the issue of the notified order under section 18A, between the industrial undertaking and any other person and the Court may, if satisfied after due inquiry that such contract or agreement had been entered into in bad faith and is detrimental to the interests of the industrial undertaking, make an order cancelling or varying (either unconditionally or subject to such conditions as it may think fit to impose) that contract or agreement, and the contract or agreement shall have effect accordingly.


18D.

No right to compensation for termination of office or contract.


18D. No right to compensation for termination of office or contract. Notwithstanding anything contained in any law for the time being in force, no person who ceases to hold any office by reason of the provisions contained in clause (a) of section 18B, or whose contract of management is terminated by reason of the provisions contained in clause (b) of that section, shall be entitled to any compensation for the loss of office or for the premature termination of his contract of management:
----------------------------------------------------------------------
1. Subs. by Act 36 of 1957, s. 3 and Sch. II, for "18".

107.Provided that nothing contained in this section shall affect the right of any such person to recover from the industrial undertaking moneys recoverable otherwise than by way of such compensation.


18E.

Application of Act 7 of 1913.18E. Application of Act 7 of 1913. (1) Where the management of an industrial undertaking, being a company as defined in the Indian
Companies Act, 1913 1* (7 of 1913), is taken over by the Central
Government, then, notwithstanding anything contained in the said Act or in the memorandum or articles of association of such undertaking,--

(a) it shall not be lawful for the shareholders of such undertaking or any other person to nominate or appoint any person to be a director of the undertaking;

(b) no resolution passed at any meeting of the shareholders or such undertaking shall be given effect to unless approved by the Central Government;

(c) no proceeding for the winding up of such undertaking or for the appointment of a receiver in respect thereof shall lie in any Court except with the consent of the
Central Government.

(2) Subject to the provisions contained in sub-section (1), and to the other provisions contained in this Act and subject to such other exceptions, restrictions and limitations, if any, as the Central
Government may, by notification in the Official Gazette, specify in this behalf, the Indian Companies Act, 1913 1* (7 of 1913), shall continue to apply to such undertaking in the same manner as it applied thereto before the issue of the notified order under section 18A.


18F.

Power of Central Government to cancel notified order under section10A.


18F. Power of Central Government to cancel notified order under section 10A. If at any time it appears to the Central Government on the application of the owner of the industrial undertaking or otherwise that the purpose of the order made under section 18A has been fulfilled or that for any other reason it is not necessary that the order should remain in force, the Central Government may, by notified order, cancel such order and on the cancellation of any such order the management or the control, as the case may be, of the industrial undertaking shall vest in the owner of the undertaking.
----------------------------------------------------------------------
1. See now the Companies Act, 1956 (1 of 1956).

107A


CHAP

MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS OWNED BY COMPANIES
INLIQUIDATION


1*[CHAPTER IIIAA

MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS OWNED BY COMPANIES IN
LIQUIDATION


18FA

Power of Central Government to authorise, with the permission of theHigh
Court, persons to take over management or control of industrialundertakings.


18FA. Power of Central Government to authorise, with the permission of the High Court, persons to take over management or control of industrial undertakings. (1) If the Central Government is of opinion that there are possibilities of running or re-starting an industrial undertaking, in relation to which an investigation has been made under section 15A, and that such industrial undertaking should be run or re-started, as the case may be, for maintaining or increasing the production, supply or distribution of articles or class of articles relatable to the scheduled industry, needed by the general public, that Government may make an application to the High Court praying for permission to appoint any person or body of persons to take over the management of the industrial undertaking or to exercise in respect of the whole or any part of the industrial undertaking such functions of control as may be specified in the application.

(2) Where an application is made under sub-section (1), the High
Court shall make an order empowering the Central Government to authorise any person or body of persons (hereinafter referred to as the "authorised persons") to take over the management of the industrial undertaking or to exercise functions of control in relation to the whole or any part of the industrial undertaking (hereinafter referred to as the "concerned part") for a period not exceeding five years:

Provided that if the Central Government is of opinion that it is expedient, in the interests of the general public that the authorised person should continue to manage the industrial undertaking, or continue to exercise functions of control in relation to the concerned part, as the case may be, after the expiry of the period of five years aforesaid, it may make an application to the High Court for the continuance of such management or functions of control, for such period, not exceeding two years at a time, as may be specified in the application and thereupon the High Court may make an order permitting the authorised person to continue to manage the industrial undertaking or to exercise functions of control in relation to the concerned part:

Provided further that the total period of such continuance (after the expiry of the initial period of five years) shall not, in any case, be permitted to exceed 2*[twelve years].

(3) Where an order has been made by the High Court under sub-
section (2), the High Court shall direct the Official Liquidator or any
----------------------------------------------------------------------
1. Ins. by Act 72 of 1971, s. 6 (w.e.f. 1-11-1971).
2. Subs. by Act 32 of 1974, s. 2 (w.e.f. 29-6-1974).

107B

other person having, for the time being, charge of the management or control of the industrial undertaking, whether by or under the orders of any court, or any contract or instrument or otherwise, to make over the management of such undertaking or concerned part, as the case may be, to the authorised person and thereupon the authorised person shall be deemed to be the Official Liquidator in respect of the industrial undertaking or the concerned part, as the case may be.

(4) Before making over the possession of the industrial undertaking or the concerned part to the authorised person, the
Official Liquidator shall make a complete inventory of all the assets and liabilities of the industrial undertaking or the concerned part, as the case may be, in the manner specified in section 18FG and deliver a copy of such inventory to the authorised person, who shall, after verifying the correctness thereof, sign on the duplicate copy thereof as evidence of the receipt of the inventory by him.

(5) On taking over the management of the industrial undertaking, or on the commencement of the exercise of functions of control in relation to the concerned part, the authorised person shall take immediate steps to so run the industrial undertaking or the concerned part as to ensure the maintenance of production.

(6) The authorised person may, on such terms and conditions and subject to such limitations or restrictions as may be prescribed, raise any loan for the purpose of running the industrial undertaking or the concerned part, and may, for that purpose, create a floating charge on the current assets of the industrial undertaking or the concerned part, as the case may be.

(7) Where the authorised person is of opinion that the replacement or repair of any machinery of the industrial undertaking or the concerned part is necessary for the purpose of efficient running of the industrial undertaking or such part, he shall, on such terms and conditions and subject to such limitations or restrictions as may be prescribed, make such replacement or repair, as the case may be.

(8) The loan obtained by the authorised person shall be recovered from the assets of the industrial undertaking or the concerned part, in such manner and subject to such conditions as may be prescribed.

(9) For the purpose of running the industrial undertaking, or exercising functions of control in relation to the concerned part, the authorised person may employ such of the former employees of the industrial undertaking whose services became discharged by reason of the winding up of the

107C

company owning such undertaking and every such person employed by the authorised person shall be deemed to have entered into a fresh contract of service with the company.

10 The proceedings in the winding up of the company in so far as they relate to--

(a) the industrial undertaking, the management of which has been taken over by the authorised person under this section, or

(b) the concerned part in relation to which any function of control exercise by the authorised person under this section,

shall, during the period of such management or control, remain stayed, and in computing the period of limitation for the enforcement of any right, privilege, obligation or liability in relation to such undertaking or the concerned part, the period during which such proceedings remained stayed shall be excluded.
Last updated on May, 2015

Find a Lawyer

Legal Hall of Fame

The current Legal Luminaries of India, the credible names in the legal circle along with those who would be the leading stars of the next decade. These are some of the reliable names in field of law. Nominate the Legal Stars of tomorrow

More

Recent Judgment


Sudha Mishra vs. Surya Chandra Mishra( R.F.A 299 of 2014

The Hon'ble High Court of Delhi in Sudha Mishra vs. Surya Chandra Mishra (R.F.A 299 of 2014)has ruled that a woman has a right over the property of her husband but she cannot claim a right to live in the house of her parents-in-law

More

Bare Acts

Helpline Law provides a user friendly compendium of Indian Law & Bare Acts. Get a complete list & detail of Indian Bare Acts, with amendments and repeals. It comes with easy-to-use features like Search by bare acts & by year. You can even email the information to yourself!

More

Have a Legal Matter ?
Need a Lawyer?

Have a Legal Matter ?

Need a Lawyer?

Male
Female