The Amritsar Oil Works (Acquisition and Transfer of Undertakings) Act, 1982 was enacted on October 19, 1982. The Amritsar Sugar Mills Company Limited was started in 1924 added with two units including the Amritsar Oil works and Amritsar Sugar Mills located at Uttar Pradesh. The company was not managed and controlled in an efficient manner; financial instability arose in its functions. Consequently, the Amritsar Oil Works came to an end for approximately one and a half years. The Central Government took over the control of Amritsar Oil Works in 1974 according to the provisions of Industries (Development and Regulation) Act, 1951. Moreover, the Amritsar Sugar Mills had primarily been under the control of Uttar Pradesh Government as per the Uttar Pradesh Zamindari Abolition and Land Reforms Act. From that time onwards, the unit is under the management and control of the receiver who is appointed by the Uttar Pradesh Government.

In addition to the Amritsar Oil Works, the Ganesh Flour Mills Company Limited which is an undertaking under the control of the Central Government engaged in the refining of crude rapeseed oil which is imported from outside India for sale. The unit had significant role in supplying goods which are primary to the want of people. It was also aimed to expand the working of the unit by enhancing manufacture ability. The Government also introduced some strategies for the expansion of the said unit. When the Amritsar Oil works are taken over by the Government, it was functioning at great loss and was unable to invest capital and provide labourers to attain its previous status. The Government decided to raise loan for raising funds along with labourers and technical assistance. In order to raise further funds to control the economy for edible oil and modernize the equipments, the Government decided to get hold of the undertakings of Amritsar Sugar Mills Company Limited with regard to the Amritsar Oil Works.

The present Act was initiated to acquire and transfer the privileges, interest and title of the said undertakings belonging to the Amritsar Sugar Mills Company connected with Amritsar Oil Works in order to maintain and enlarge the functions of the mill to increase the supply of Vanaspathi as well as refined edible oils at rational price to the public and to implement the policy enumerated under the Article 39 (b) and (c) of the Constitution of India. The Act provides that from the implementation of the Act, the Amritsar Oil Works along with the privileges, interest and title of the Company shall be transferred to the Central Government. The Amritsar Oil Works shall consist of assets, privileges, authority, lease holds, land, structures, stores, machinery, cash balances, records, documents, workshops, investments, etc. These properties shall belong to the Central Government and hence shall be discharged from liabilities, lien, trust, charge, encumbrances, injunction, order of the court, attachment and so on.

Moreover, the Central Government is empowered to give direction to transfer the Company vested in the Central Government or a Government Company if such Company is wiling to take over the management of Amritsar Oil Works. The Government has to comply with the stipulations of the Central Government and the Central Government shall issue notification in this regard. Thereafter, the Government Company shall be considered as the owner of the Amritsar Oil Works and all rights and liabilities shall stand transferred to the Government Company. Any liability subsisting prior to the commencement of the Act with respect the Amritsar Oil Works shall be vested with the Amritsar Sugar Mils Company Limited and not with the Central Government. The liability sustained by the Amritsar Oil works by violating any of the provisions of law enforced during that period, shall not be imposed against the Central Government or the Government Company.

Hence, by the pioneering of the Act, the Government acquired the Amritsar Oil Works in order to comply with the constitutional mandates enshrined under the Directive Principles of State Policy.