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THE TEXTILE UNDERTAKINGS (NATIONALISATION) ACT, 1995

Title : THE TEXTILE UNDERTAKINGS (NATIONALISATION) ACT, 1995

Year : 1995



(1) For the purpose of disbursing the amount payable to the owner of each textile undertaking, the Central Government shall, by notification in the Official Gazette.-

(a) Appoint such number of persons as it may think fit to be Commissioners of Payments; and

(b) Define the local limits within which the Commissioners of Payments shall exercise the powers conferred, and perform the duties imposed, on them by or under this Act.

(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 powers 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 Conslidated Fund of India.

(5) References in this Act to the Commissioner shall, where more than one Commissioner has been appointd be construed as references to the Commissioner in relation to the textile undertaking within the local limits of the jurisdiction specified under clause (b) of sub-section (1).



(1) The Central Government shall, within fifty days from the specified dale, pay in cash to the Commissioner, for payment to the owner of a textile undertaking, an amount equal to the amount specified against the textile undertaking in the First Schedule and shall also pay to the Commissioner such sums as may be due to the owner of a textile undertaking under sub-sections (1) and (2) of section 9.

(2) In relaion to the textile undertakings, the management of which was taken over by the Central Government under the Textile Undertakings (Taking Over of Management) Act, 1983, there shall be paid by the Central Government [in addition to the amount referred to in sub-section (1) ], to the Commissioner, in cash, such amount payable under section 5 of that Act as remains unpaid in relation to the period commencing on the date on which such management was taken over by the Central Government and ending on the appointed day.

(3) In relation to the textile undertakings, the management of which was taken over by the Central Government under the Laxmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976, there shall be paid by the Central Government [in addition to the amount referred to in sub-section (1)], to the Commissioner, in cash, such amount payable under section 5 of that Act as remains unpaid in relation to the period commencing on the date on which such management was taken over by the Central Government and ending on the appointed day.

(4) 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 in the Public Account of India, and thereafter the said deposit account shall be operated by the Commissioner.

(5) Separate records shall be maintained by the Commissioner in respect of each textile undertaking in relation to which payments have been made to him under this Act.

(6) Interest accruing on the amounts standing to the credit of the deposit account referred to in sub-section (4) shall enure to the benefit of the owners of the textile undertakings.



(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 the textile undertaking, realised after the appointed day, notwithstanding that the realisations pertain to a period prior to the appointed day.

(2) The National Textile Corporation may make a claim to the Commissioner with regard to every payment made by the Custodian after the appointed day but before the date on which the Textile Undertaking (Nationalisation) Ordinance, 1995 was promulgated for discharging any liability of the owner of textile undertaking in relation to any period prior to the appointed day, and every such claim shall have priority, in accordance with the priorities attaching under this Act, to the matter in relation to which such liability has been discharged by the Custodian.

(3) Save as otherwise provided in this Act, the liabilities in relation to a textile undertaking in respect of any period prior to the appointed day which have not been discharged by the Custodian shall be the liabilities of the owner of that textile undertaking.



Every person having a claim against the owner of a textile undertaking 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.



The claims arising out of the matters specified in the Second Schedule shall has 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, except category IV, shall rank equally and be paid in full, but if the amount is insufficient to meet such claim in full, they shall abate in equal proportions and be paid accordingly;

(c) The liabilities specified in category IV shall be discharged, subject to the priorities specified in this section, in accordance with the terms of the secured loans and the priority inter se of such loans; and

(d) The question of payment of a liability with regard to 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.



(1) On receipt of the claims under section 20 the Commissioner shall arrange the claims in the order of priority specified in the Second Schedule and examine the same in accordance with the said order.

(2) If, on examination of the claims, the Commissioner is of the opinion that the amount paid to him under this Act is not sufficient to meet the liabilities specified in any lower category, he shall not be required to examine the liabilities in respect of such lower category.



(1) After examining the claims with reference to the priority set out in the Second Schedule, the Commissioner shall fix a certain date on or before which every claimant shall file the proof of his claim or be excluded from the benefit of the disbursement made by the Commissioner.

(2) Not less than fourteen days notice of the date so fixed shall be given by advertisement in one issue of the daily newspaper in the English language and one issue of the daily newspaper in the 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 time specified in the advertisement.

(3) Every claimant who fails to file the proof of his claim within the time 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 owner of the textile undertaking an opportunity of refuting the claim and after giving the claimants a reasonable opportunity of being heard, 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 sittings and shall, for the purpose of making any investigation under this Act, have the same powers as are vested in a civil Court under the Code of Civil Procedure, 1908, 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; and

(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 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.

(7) A claimant who is dissatisfied with the decision of the Commissioner may prefer an appeal against the decision to the principal Civil Court of original jurisdiction within the local limits of whose jurisdiction the textile undertaking is situated :

Provided that where a person who is a Judge of a High Court is appointed to be the Commissioner, such appeal shall lie to the High Court for the State in which the textile undertaking is situated and such appeal shall be heard and disposed of by not less than two Judges of that High Court.



After admitting a claim under this Act, the amount due in respect of such claim shall be credited by the Commissioner to the relevant fund or be paid to the person or persons to whom such sums are due and on such credit or payment the liability of the owner in respect of such claim shall stand discharged.



(1) If, out of the monies paid to him in relation to a textile undertaking, there is a balance left after meeting the liabilities as specified in the Second Schedule, the Commissioner shall disburse such balance to the owner of such textile undertaking.

(2) Before making any payment to the owner of any textile undertaking under sub-section (1) the Commissioner shall satisfy himself as to the right of such person to receive the whole or any part of such amount, and in the event of there being a doubt or dispute as to the right of the person to receive the whole or any part of the amount referred to in sections 8 and 9 the Commissioner shall refer the matter to the Court and make the disbursement in accordance with the decision of that Court.

(3) For the removal of doubts, it is hereby declared that the entries in cloumn (3) of the First Schedule shall not be deemed to be conclusive as to the right, title and interest of any person in relation to any textile undertaking specified in the corresponding entries in column (2) of the said Schedule and evidence shall be admissible to establish the right, title and interest of any person in relation to such textile undertaking.

(4) Where any machinery, equipment or other property in a textile undertaking has vested in the National Textile Corporation, but such machinery, equipment or other property does not belong to the owner of such textile undertaking, the amount specified in column (4) of the First Schedule against such textile undertaking shall, on a reference made to it by the Commissioner, be appointed by the Court between the owner of such textile undertaking and the owner of such machinery, equipment or other property having due regard to the value of such machinery, equipment or other property on the appointed day.

Explanation.- In this section "Court", in relation to a textile undertaking, means the principal Civil Court of original jurisdiction within the local limits of whose jurisdiction the textile undertaking is situated.



Any money paid to the Commissioner which remains undisbursed or unclaimed for a period of three years from the last day on which the disbursement was made, shall be transferred by the Commissioner 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, the order, if any, for payment of the claim being treated as an order for the refund of revenue.

Last updated on July, 2016

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