The present Act is one of Central Government which was enacted with the name and short title as ‘the Caltex [Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited] Act, 1977’ (Act no. 17 of 1977). The purpose and object for which the present Act is provided, is to make provisions as to acquisition in the interest of public the Shares of the ‘Caltex Oil Refining (India) Limited’ and also acquiring and transferring the right, interest and title of the ‘Caltex (India) Limited’ relating to the undertakings thereof in India for securing the ownership and control of the ‘Petroleum products’ which were produced by the said ‘Caltex Oil Refining (India) Limited’, and were marketed and distributed by aforesaid undertakings, in India, for sub- serving the common interest.
It was pointed earlier to the said enactment, that the foreign company being ‘Caltex Petroleum Corporation’ was having the ownership and control over the most significant portion of the Petroleum products which were produced, marketed, etc. in India as one of the subsidiaries being the ‘Caltex Oil Refining (India) Limited’ was carrying on the business of refining crude oil and also of producing Petroleum products in India and other one being the ‘Caltex (India) Limited’ which was a Foreign company was carrying on a business of marketing, distributing said products through its undertakings in India. As such it was deemed expedient in the interest of public to acquire the shares of the said ‘Caltex Oil Refining (India) Limited’ and also the undertakings in India of the said ‘Caltex (India) Limited’. The Present Act was assented by the President of India on 23rd day of April, 1977. And it is clearly mentioned in the Act itself that the provisions of this Act should be given effect on 30th day of December, 1976, i.e. retrospectively.
The provisions corresponding to the object of the Act are contained from the second chapter of the Act, where it is required that the from the date on which the present Act was brought into operation i.e. 30th December, 1976, all the shares in the capital of the ‘Caltex Oil Refining (India) Limited should be transferred and vested with the Central Government. And all such shares so vested are required to be freed from all liabilities and other encumbrances and the Central Government will be liable to pay dividends which were to be paid by the said entity, from 1st January 1976. The Central Government is empowered under this Act to bring modifications, alterations by way of amending Memorandum of Association- MOA and Article of Association- AOA of that company so as to enable it to function as Government Company. And such modifications will not be affected by any provisions of the Companies Act, 1956 (Act no. 1 of 1956).
The next chapter being Chapter III of the Act makes provisions as to the acquisition of the Undertakings in India which were belonging to the Caltex (India) Limited. It is given in this chapter that, the Central Government is vested with these Undertakings which here in this Act is transferred, along with right, title and interest thereof. Such transfer and vesting is also including the assets, powers, privileges, etc. and also the properties of whatever nature (free from all encumbrances) and also all account books, registers and other documents. It is also made clear that, whatever profits from 1st day of January, 1976, which said Company would have earned in relation to those acquired undertakings in India, should be paid by it to the Central Government. Also every bonds contracts, etc. which the company entered into in relation to the said Undertakings, are here required to continue to have force under the Central Government. Similar provision is also made in relation to the legal proceedings. Moreover, besides other provisions, the Act provides empowerment of the Central Government in relation to the vesting of the said acquired undertakings in the Government Company, which is willing to obey the terms and conditions as will be imposed by the Central Government.
Further, the Act requires payment of the consideration (amount) for afore discussed acquiring and vesting of the Undertakings in the Central Government. Chapter IV of the Act provides that the Central Government should pay to bother the companies an amount of 13 crores of rupees along with the interest from the dated 1st January, 1977, till the payment of amount. Similar, transfer is required in cases of the employees who were appointed to the Caltex (India) Limited in relation to those acquired undertakings, to the Central Government along with all their privileges, and conditions of services. These provisions are contained under chapter V of the Act.
The last chapter of the Act is containing the miscellaneous provisions, where overriding effect of the provisions of the Act and obligations in relation to the transferring and delivering the properties, books of accounts, etc. of the acquired undertakings are given. And besides these provisions the Act provides for certain penal provisions too. And, further, the Act sought to protect the actions taken in good faith by the Central Government or aforesaid Government companies to which the undertakings acquired can be transferred by the Central Government or even by the officers, or employees. Such protection is offered against the legal actions. The Central Government is empowered under this Act to provide for the orders, which will serve for removing the difficulties which would arise while effecting the provisions of this Act. The Act, further, empowers the Central Government in relation to the rule making. And the Caltex [Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited] Ordinance, 1976 was sought to be repealed by the last provision of this Act, however, the provision protects the actions which were taken in furtherance with that Ordinance.
However, recently, in the year 2014, the Law commission of India in its report being Fourth Interim Report specified a reason that the Act has served for its purpose and, it also does not contain the management provisions, and as such the said Commission had recommended for considering the present Act for repeal. The fourth Interim report was submitted by it, in relation to its study on ‘Legal Enactments: Simplifications and Streamlining’.