The Public Sector Iron and Steel Companies (Restructuring) and Miscellaneous Provisions Act has been incorporated on 30th April, 1978. This Act has been established to remodulate the iron and steel Companies in public sector for efficient administration and workings. The Public Sector steel plants make huge productions. Inorder to have overall control for better performance of these industries by the Government this Act has been came into force.
The meaning of the word “Undertaking” has been discussed in detail. This Undertaking is nothing but when a Company is dissolved or transferred, its tangible and intangible assets, approvals and permits, its records and other materials, etc, shall be took over by the transferee Company or any other Individual Corporate or the Government.
In case of dissolution or transfer the materials of such companies shall be vested with the Integral Company. The Undertakings of all the transferred units shall be transferred to the Integral Companies namely Kiriburu Iron Ore Mines, unit of the National Mineral Development Corporation Limited and Meghahatuburu Iron Ore project of National Mineral Development Corporation Limited. The transfer of all shares held by the Integral Companies in the Share Capital of each Company shall be transferred to the Central Government. All the shares held by the Central Government in the Share Capital of Indian Iron and Steel Company Limited shall be transferred to the Integral Company.
The Bharat Refractories Limited having their register Office at Ranchi in Bokaro Steel City undertakes some refractory plants in Bihar, Meghalaya and Bhilai. One another Company is Metallurgical and Engineering Consultants (India) Limited holding the rights, Titles, interests and liabilities of Hindustan Steel Limited in Ranchi. The Shares held by the Bokaro Steel City in the Share Capital of Bharat Refractories Limited shall be transferred to the Central Government. The Shares held by the Integral Company of Share Capital of Indian Firebricks and Insulation Company Limited shall be transferred to Bharat Refractories Limited.
The Central Government or Bharat Refractories Limited or any Integral Company has to be registered themselves under the register members of the Companies. The Central Government at time to time by notification in the Official Gazette shall disclose upon how the Paidup Share Capital of the Integral Company, Bharat Refractories Limited, etc, varies as a result of transfer of Shares, undertakings, etc. While disclosing the amount of Paidup Share Capital, the Central Government shall consider the book values of Shares, the net values of undertakings, the book values of immovable properties, etc. Any order passed by the Central Government shall contain the direction for issuance and cancellations of Shares as prescribed by this Act.
The Employees and Officers of such dissolved Company, who hold Office before the appointment date shall continue to hold Office as that of corresponding Unit of the integral Company. They hold the same tenure with same terms and condition of service. They are also eligible for all rights and privileges including retirement benefits as admissible as if his Company has not been dissolved. Any rules or Standing Orders shall remain the same until there arise any alterations by the Integral Company or such other authority.
The Employees and Officers holding Office in the transferred unit before the appointment date shall hold Office in the transferee Company correspondingly. They hold for the same tenure with same terms and conditions of service and they are eligible for all rights and privileges as before. The Directors of the dissolved Company shall immediately cease to hold Office before the appointment day. The Directors, who were in whole time employment in the dissolved Company before the appointment day, shall continue as an employee with same tenure, terms and conditions of service and he is eligible for all rights and privileges as before.
An Auditor of the dissolved Company before the appointment day shall remain to hold Office as an Auditor of the Transferee Company with same terms and conditions unless there is any alteration by the Integral Company. The Employees or Officers who are transferred shall not be entitled for any claim of compensation under any law in force. No Court or Tribunal or such other authority shall entertain such claim. In case of provident fund, gratuity and such other funds shall remain the same as that in dissolved Company before the appointment day until if there is any alteration by the Integral Company.
The Integral Company shall pay any sum under the provision of Income Tax Act and the Companies (profits) surtax act as that of any dissolved Company if they are not so dissolved. In case of making assessment of Income and chargeable profits of any dissolved Company and for the purpose of levying any sum, any proceedings made against the dissolved Company immediately before the appointment day shall be taken upon the Integral Company. Any other legal proceedings shall also continued on Integral Company as that was pending during dissolution of the Company.
The Central Government inorder to introduce a provision has to notify in the Official Gazette without making it inconsistent to any other law in force. Not only that they should seek assent from both the Houses of the Parliament. These provisions shall not override the law in force and not derogative to any other laws. The Central Government inorder to make effect of such provisions shall have powers to amend the Memorandum and Articles of Associations of both the Integral Company and the Transferee Company.
This Act contains several provision with regard to restructure the Iron and steel Companies and several miscellaneous Provisions with regard and related to them. Though this Act looks vague, it clearly shows how the responsibility shifts from transferred Company to the transferee Company and Integral Company after dissolution of a Company etc.
by C.Srivenkatesh Prabhu.