The Bird and Company Limited (Acquisition and Transfer of Undertakings and Other Properties) Act, 1980

The Bird and Company Limited (Acquisition and Transfer of Undertakings and Other Properties) Act, 1980 (Act no. 67 of 1980) being one of Central Government was enacted with the intent to make provisions as to acquisition and transfer of Undertakings of the Bird and Company Limited to ensure continuity of Production of Goods which are vital for the needs of the Country. Similarly, the same is also provided to make provisions for acquiring the shares held by said company in the specified companies so as to secure aforesaid undertakings with the facilities deriving due to such share holding. And also for enabling the Central Government as to exercise of such control upon such affairs of the Specified companies which is deemed necessary for ensuring those affairs not to be mismanaged. Earlier it was seen that the affairs of the Company was mismanaged by the top management thereof, which resulted in heavy losses and also those mismanagement affected prejudicial to the interest of the Company and also interest of the public interest. Looking towards this, Central Government had appointed 6 Directors on the Board of that Company, as per the provisions of Companies Act, 1956. It is observed that for the maintenance and development of the production of undertaking of the Company large amount’s investment is necessary. And as such the undertakings of the Company sought to acquired in the interest of public and enable the Central Government for making such investment. As such the Act was enacted by parliament of India and has received the assent on 27th day of December, 1980. And the provisions of this Act were brought into force on 25th day of October, 1980 as per the provision.

The provisions of this Act were divided under several chapters, in which the first chapter deals with preliminary provisions, where short titling, commencement of the Act is explained along with the definition clause. Whereas, the second chapter of the Act is very much important, so far as it making provisions corresponding to the purpose of this Act. It is declare that the Undertaking of the aforesaid Company with its right, title and interest in relation to that undertaking should be transferred and vested in the Central Government by this Act. Further, whatever shares which that Company was holding in the specified Companies should also be transferred and vested similarly. And in the Register of Members of those specified Companies, the Central Government should be treated as registered as the holder of such shares. And for the effect of such vesting, the same transfer and vesting should be along with all assets, rights, powers, authorities, also properties, books of accounts, etc. The properties so vested, required to be free from all obligations and encumbrances. Besides other specified vesting, the Act sought to transfer the legal proceedings relating to such properties also. However, as to any previous liabilities of that Company the Central Government or Government company should not be held responsible.

On such transfer and vesting with the Central Government, it can direct the vesting of that acquired Undertaking with the Government Company if it is willing to comply with imposed terms and conditions by that Government.

Further, chapter III of the Act requires the Central Government to make payment an aggregate amount of rupees 283 lakh to that Company for such acquisition and vesting of Undertaking. And similarly, for the shares’ transfer and vesting, that Government is required to pay an aggregate amount of rupees 27 lakh to the Company. Besides this, there should be an Interest being simple of 4 % annually on that amounts, till the payment is made.

The chapter IV of the Act makes provisions as to vesting of management, superintendence, directions, etc. of the affairs of the Business of the Undertaking. If the said Undertaking is vested with the Government Company then such management, etc. should be vested with that company and if not, then the Central Government’s appointed one or more Custodians.

Similarly, in chapter V of the Act, it is given that whoever, employed in relation to the Undertaking of that Company prior to the transfer or vesting, should be after such vesting taken place the employees of the Central Government, or Government company, as the case may be and should have all similar rights and privileges along with similar conditions of service. Further, if any provident, etc. Fund, which were established by that previous company in relation to those employees, then the same should also vested in the Central Government or that Government company, as the case may be.

The next chapter is making provisions as to appointment of commission of payments in relation to the making of payments of the aforesaid amounts for such vesting.

The Chapter VII being last one, makes miscellaneous provisions, where it is specified that, the present Act should have effect irrespective of whatever inconsistent contained under any other law, etc. And whatever contracts relating to service, sale or supply, etc. enter into by that previous company in relation to that vested undertaking should not be continued after the period of 180 days, however, if any of them is ratified by the Central Government or Government company then can be continued. Provisions have also been made as to penalties against violations and also for protection to that Government and officers under this Act. Similarly, the Act empowers the Central Government to direct the delegation of powers to any specified persons under the notification of such delegation. Also rule making power is given to the Central Government and certain matters have been enlisted under the provisions on which such rules should be made. Moreover, the Central Government can also provide for removing difficulties which can arise while giving the effect to the provisions of this Act. And lastly, Act sought to repeal and The Bird and Company Limited (Acquisition and Transfer of Undertakings and Other Properties) Ordinance, 1980, however, the actions taken under the provisions of that ordinance, are protected.

Adv. Faim Khalilkhan Pathan