An Act of Central Government was enacted with the name and title as ‘the Tyre Corporation of India Limited (Disinvestment of Ownership) Act, 2007’ being the Act no. 50 of the year 2007. The provisions thereof, intended to provide for the purpose and object of disinvesting the equity of the Government in the ‘Tyre Corporation of India Limited’. Earlier, there was an Act being the Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984 which was enacted to transfer the ‘Inchek Tyres Limited’ and ‘National Rubber Manufacturers Limited’ which was engaged in manufacturing, producing and distributing the certain articles including rubber goods, to the Calcutta based ‘Tyre Corporation of India Limited’ from the 5th day of March, 1984 and also nationalized the said. The said Tyre Corporation of India Limited was having Government’s equity, however, it was deemed that for the purpose of optimum utilization of the available facilities relating to manufacturing, production, etc. of those products, the large amount’s investment was necessary and as such the Parliament of India by enacting this Act provide for disinvestment of such Government’s equity in that company for enabling the private sector to raise their investments. The Act has received the assent of President of India on 12th day of December, 2007.
The Act makes provisions as similar to the purpose thereof under its section 2, where it is provided that the Central Government can make an order as to transfer, exchange or relinquish the shares in the aforesaid Tyre Corporation of India Limited company to any person. However, while making such order the Central Government is required to consider the recommendations of the Board for Reconstruction of Public Sector Enterprises and after being satisfied that the recommended disinvestment is necessary then only such order can be passed by it. There can be certain terms and conditions on which such transfer, exchange, etc. can be made in favour of ordered person.
Similarly, the provisions of section 3 of the Act, says that there should be paid consideration for such disinvestment or for the transfer of shares of the said Company in favour of aforesaid person to the Central Government by such person or if transferee here is a company then by that company. For determining the amount of consideration the optimum valuation of the land, assets and liabilities, etc. of Tyre Corporation of India Limited, company is to be considered and the Central Government’s specified valuation method should also be applied. Such amount of consideration is to be paid in the manner agreed between such transferor, and transferee.
Further, the Act provides for the manner in which the disinvestment can be done under this Act, where section 4 of the Act provides that the Central Government is to provide for such manner while making an order of disinvestment of shares from that company. There are two situations provided under the provisions of the Act, including the one in which the concerned disinvestment can be done by making an Public offer, preferential allotment or by making private placement as per the procedures applicable in case of any other Governmental companies and the other way of disinvestment is provided as by directing the company to make further issue of equity capital to the members of the public or preferential allotment or private placement, as foresaid as per the same procedure which is applicable in relation to the Government companies.
Moreover, the Act makes provisions in relation to the employees and officers of that Company under section 5 thereof. It is provided that all such officers and employees of the Tyre Corporation of India Limited company who were severing under employment of that Company, are required to serve or hold their respective offices even after such disinvestment is taken place. The terms and conditions as to their employment will be same and such service or employment was required to continue till the expiry of 3 years from the day of such disinvestment. However, the provisions of such service continuation are not applicable to the Chairman and Directors of that company. If any employee or officer decides to not serve under such condition and opts for not to be under such employment or service then such officer or employee will be treated as have resigned from his post.
Lastly, the section 6 of the Act specifies that the provisions of this Act will survive in all cases of other provisions which would be inconsistent to them, of the Act being the Inchek Tyres Limited and National Rubber Manufacturers, Limited (Nationalisation) Act, 1984 or even of any other law in forced for the time being.
by Faim Khalilkhan Pathan.