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The Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Act, 1976

An Act being one of Central Government vide its no. 96 of the year 1976 was enacted with the name and short title as ‘the Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Act, 1976’. The purpose and object of the same, is to make provisions as to acquiring and transferring of the Undertaking of Messrs. Braithwaite and Company (India) Limited to ensure the production’s continuity of the goods needed vitally for the Country. Earlier, the said company being engaged in manufacturing and production of railway wagons, structural steel works for bridges, etc. was suffered heavy losses which was resulted in closing of certain works thereof. As such it was deemed necessary in the interest of nation to take over the management of the company for speedily brining into operation the closed work thereof, for the limited period within the provisions of the Industrial (Development and Regulation) Act, 1951. And later by enacting this Act, the said undertakings were acquired. The Act was enacted by the Parliament of India in the 27th year of republic of India and the same was assented by President of India on 5th day of September, 1976. Currently, as per statistics of 2014, the said Company is a subsidiary to the Bharat Bhari Udyog Nigam Limited and under the administrative control of the Department of Heavy Industries.

The provisions of the Act are divided under seven Chapters and one schedule. The first chapter wherein provides for preliminary provisions relating to short title, commencement of the Act as aforesaid, and also describes certain terminologies by providing definitions thereof, which are used under various provisions of this Act.

The acquisition and transfer as aforesaid of the Undertakings of that Company is provided under second chapter, where the it is contemplated that the Central Government will be an authority to which such undertakings along with its rights, titled, etc. should be vested under this Act. And such undertaking should also include while transferring as such, the assets, rights, powers, properties, books, documents, etc. relating thereto and also such transferred properties are required to be freed from any encumbrances and any legal proceedings relating to such properties should also be continued by the Central Government or by the Government Company as the case may be. However, for any previous liabilities of that Company, the said Company should be held bounded and not the transferees. It is also made clear in the second Chapter that, the Central Government is having an authority that to transfer the undertakings of that Company to the Government Company which is desirous to comply and follow the terms and conditions imposed by the Government.

Chapter third requires the Central Government to make payment of amount of rupees 16.25 crores to that Messrs. Braithwaite and Company (India) Limited for such acquiring of the undertakings and also rupees 50 thousands per year to the years starting from the date on which there was taking over of management of the Undertakings of the Company and till the acquisition thereof to be paid to the Company.

Next chapter being fourth one dealt with management provisions, where the Central Government is empowered to take under its control the management, general superintendence, etc. of the business of the Undertaking. However, if in case the undertaking was vested with the Government Company by virtue of aforesaid provisions, the Government Company will be then vested with such management, etc. otherwise, the Central Government will appoint Custodians for vesting such management, etc. with them.

Chapter V of the Act makes provisions as to employees of the earlier company connected with such Undertakings and their status after such acquisition and vesting. It is made clear that such employees should be treated, after such acquisition as that of the Central Government with all their earlier rights, privileges and conditions as to services. Provisions regarding provident and other funds for such employees have also be explained under this chapter. The next chapter is making provisions as to appointment of commission for payments, by the Central Government. Such commissioner will be responsible to make payments received from the Central Government under this Act. The corresponding provisions relating to such payments, claims, etc. are contemplated under this chapter.

In the last chapter of the Act the miscellaneous provisions includes that the provisions of this Act should have overriding effect. It is further given that any contracts for service, sale, supply, etc. entered into previously should be ceased to have effect after such acquisition. However, such contracts can be continued by the Central Government or Government Company, if so ratified by them. Moreover, it is provided that for any actions or otherwise, the Central Government, any officer or Custodian thereof should be protected against the legal actions if the same is done in good faith or intended to be done in furtherance with this Act. Section 28 of the Act makes penal provisions under this Act, where wrongfully withholding properties from the Central Government or Government Company, while being under possession, custody, etc. of the same, wrongfully obtaining possession of any such properties, failure to furnish documents required by the Central Government or Government company and also other acts being treated offensive under this Act, the punishment is given extending to 2 years’ imprisonment or fine extending to 10,000 rupees or there can both fine and jail. Further, section 29 describes the offences by companies and persons should be held liable thereof. The rule making power is also vested with the Central Government under this Act and also specified the list of matter on which such rules to be provided. Further, Central Government is also given an authority to provide for its order for removing difficulties which would arise while effecting the provisions under this Act. The Act declares that it was enacted for effecting the policy of the State within the provisions of Article 39(b) of the Constitution of India. Last provisions of section 33 provides for repealing of the Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Ordinance, 1976 without affecting the acts done in pursuance with the provisions thereof.

Recently, in the year 2014, the report of Law commission of India, being ‘Fourth Interim report – ‘Obsolete laws – warranting immediate repeal’ is making recommendation for the repealing of the present Act as the purpose of the same has been served and it does not contain any provision as to management transferred entity. The report was made in furtherance of study on ‘Legal Enactments: Simplifications and Streamlining’ (LESS).

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