The Sugar Undertaking (Taking over of Management) Act, 1978

The Sugar Undertaking (Taking over of Management) Act, 1978 is an Act of Central Government was enacted by Indian Parliament for making provisions as to taking over, temporarily the management of certain Sugar Undertakings in the given circumstances, in the interest of public. Such taking over of management is to maintain the continuity in production of sugar and to avoid undue hardship to the farmers producing cane and also to best sub serve the interests of all sections of the people. The Act was assented by the President of India on 30th day of December, 1978. The provisions of Act are extended to the whole of Indian territories. And the date on which the Act was to bring into operation is 9th of November, 1978 i.e. the retrospective effect given to the provisions of this Act, as specified in its first section. The Act under its first Chapter makes preliminary provisions including aforesaid short titling, extension, commencement and also defining certain terms used under the Act.

Further, second chapter under this Act makes provisions as to taking over and vesting of Sugar undertaking’s management in the Central Government, in case of failure of such undertaking to start manufacturing sugar in any sugar year or if have started manufacturing sugar but ceased to manufacture sugar before the expiry period which is being Average period of manufacture of sugar relating to that undertaking. Moreover, if there is any dues of arrears relating to cane purchased by any sugar undertaking extending to 10 per cent of total purchase price thereof in provided sugar year. Such taking over or acquisition of the undertaking is also for the purpose of effective functioning of thereof. And so far as the procedure regarding such taking over of undertaking, the Central Government is required to issue a notice to the owner or manager concerned requiring them to make good the aforesaid defaults and also answered as to why the Central Government should not take over the management of such undertaking under this Act. Section 4 of the Act says that such taking over of undertaking will also include acquisition of all assets, rights, powers, etc. and also properties, contracts, etc. of that undertaking.

Further, section 5 of the Act requires the Central Government to appoint any individual, or body thereof or even any company being Government Company as Custodian of the undertaking in relating to which the notification for taking over management was made by it. Such Custodian is appointed for taking over and carry on the management of such undertakings as on behalf of the Central Government. There can also be appointed Custodian General from amongst the individuals or Government Companies to exercise supervisions and control over every such undertakings notified as aforesaid. And also all Custodians as appointed above should be subjected to such Custodian General in respect of control and supervision thereof. Moreover, the Central Government is empowered to provide directions to the Custodian or even to Custodian General in respect of their necessary powers and functions including those relating to initiating, defending or continuing any legal proceedings.

Section 6 of the Act is again important provision as, it provides that the Central Government should pay the amount in cash to the owner of all those undertakings which are selected under this Act for taking over management thereof, for every months for which such management is vested with the Central Government under this Act.

Moreover, chapter III of the Act says that the Sugar undertakings and Cane producing Farmers are to be provided relief under this Act. Such reliefs include the declaration by the Central Government in relation to any such sugar undertakings as aforesaid notified, if it is deemed expedient in the general public interest for preventing fall in the volume of production thereof. Such declaration as to declaring the enactments provided under schedule to the Act, should not have applicability in case of such undertakings and also suspension of operation of any or every contracts, assurances of property, agreements, etc. in relation thereto. Moreover, the Central Government can also provide for the directions to the Custodian General or Custodians concerned that to facilitate the speedy clearance of arrears of cane dues. It can also provide for such necessary assistance for those undertakings as aforesaid for enabling them in clearing such arrears or parts thereof.

Finally, the last chapter i.e. Chapter IV of the Act makes miscellaneous provisions. Section 9 wherein says that if such sugar undertaking is a company then the procedure regarding winding up of such company should not be lied before any Court unless there is a consent of the Central Government. Moreover, there are certain other relevant provisions also provided under this Act under subsequent provisions. Section 13 gives immunity to the Central Government, Custodian and Custodian General, etc. as to be protected against legal actions either civil or criminal, in respect of their actions taken or even damage caused while doing anything under good faith or within the provisions of this Act. Penal provisions provided under section 16 of the Act. And also rule making power is vested with the Central Government under this Act. And lastly Act sought to repeal the Sugar Undertakings (Taking Over of Management) Ordinance, 1978 without affecting actions therein.

by Faim Khalilkhan Pathan.