The Burn Company and Indian Standard Wagon Company (Nationalisation) Act, 1976

The Act being one of Central Government, which was enacted by name and title as ‘The Burn Company and Indian Standard Wagon Company (Nationalisation) Act, 1976’ (Act no. 97 of 1976). The present Act was provide by the India Parliament with the aim and object to provide for acquiring and transferring the of the Undertakings of the ‘Burn and Company Limited’ and ‘Indian Standard Wagon Company limited’ with the an object to ensure goods production continuity being very essential insofar as the needs of Country’s economy is concerned. The purpose also extends to the contracts fulfilment, which were entered into for supply of Railways wagons to abroad. It was, as such assented by the President on 5th September, 1976. And many of its provisions were given effect from 1st day of April, 1975 i.e. retrospectively. It was seen after such acquisition that these two companies were amalgamated within the provisions of the Companies Act, 1956 and renamed as ‘Burn Standard Company Ltd’. In other words the present Act makes provisions as to Nationalisation of those aforementioned companies.

The concerned acquisition and vesting of the Undertakings of those two aforementioned companies are legal covered up by the provisions contained under second chapter of the Act, where it clearly contemplated that, such undertakings along with rights, title, interests to be absolutely vested with the Central Government. And while so, the assets, rights, powers, privileges, etc. and all properties, free from all kinds of encumbrances and every accounts books, registers, etc. relating to those undertakings, here warranted to be transferred and vested with the Central Government, as those Undertakings were vested. Even if any suits or legal proceedings in relation to those Undertakings were pending by or against the concerned two companies, then those legal actions are also required to be treated as are under the Central Government. The Central Government is vested with the most important power under this Act, where it can direct the vesting of those acquired Undertakings in a Government company, which is willing to comply its all imposed terms and conditions. Further, in respect of any previous liability, excluding the liability as to advanced loans from the Central or State Government which was taken after the management of the undertakings were taken over by the Central Government, the owner of those companies will be responsible and not the Central Government or Government company. Similarly, for liabilities as payment of wages, salaries, etc. to the employees thereof, for the period after the management of those undertakings had been taken over as aforesaid, the Central Government or Government Company will be responsible.

The Act made its very clear that, the concerned acquisition and vesting is being made not without payment of any amount towards as such, there is a provisions under III chapter, wherein the Central Government is required to pay to each of those two Companies, Undertakings of which were so acquired under this Act, an amounts specified in the first Schedule annexed with this Act, i.e. more than 13 crores of rupees for each of those companies. Besides, there are several other amounts, including provisions regarding interest is also provided.

Further the provisions of this Act clarifies that whoever was appointed as a Workman or other employee than workman in that acquired undertaking earlier to the acquisition and vesting, will be treated as the employee of the Central Government or of aforesaid Government Company, as per situation and his rights, privileges relating to provident fund, pension, etc. will be the same. Similarly, in case of any funds, including provident, superannuation, welfare, etc. funds were constituted by those earlier companies for their worker’s and employee’s benefits, in so far they are relating to the acquired undertaking, it is given that the same funds will be transferred and vested with the Central Government or that Government company.

Besides all these provisions as to previous effect, the Act sought to provide for management, superintendence, direction, control, etc. in relation to those acquired undertakings’ business affairs, will be vested with the Custodian if the same is not transferred to the Government Company under previous provision, or if such transfer and vesting is done in favour of any Government Company, then the said Government Company will be vested with such management, etc. And these authority, either Government Company or Custodian, are besides other powers will also be responsible for accounting and auditing thereof. The Act, further, also makes provisions as to appointment of commissions who will be responsible for making payments and entertaining, examining claims, etc. under this Act.

Act under its miscellaneous provisions specifies that the provisions contained under this present enactment will be having overriding effect, in relation to any provisions contain contrary to those provisions, given under any laws or any decree, order, etc. of adjudicatory authority. The Act further sought the discontinuance of earlier contracts under the transferee Government entity or the Central Government, however, provisions regarding ratification is also given, which can result in continuation of those contracts. Also Act contains certain penal provisions, where wrongfully dealing with the properties and other situations are treated offensive and punishment is extended against those situations. It is also made clear that if any actions taking in good faith, or intended in furtherance of this Act by the Central Government, its officers or Government Company, its authorized persons, then there should be no legal proceeding against them. Power delegation authority is also vested by this Act with the Central Government. And also it is empowered as with the Rule making powers under this Act, where certain essential matters have been enlisted under section 31 on which and for carrying out the provisions of this Act the rules to be provided. Similarly for removing the difficulties which can arise while giving the effect to the provisions of this Act, the same Government is empowered to make order, which can only be made for 2 years from the assenting date by President to this Act. The Act provided for effecting the Policy of the State as per provisions of India Constitution. And lastly, the Act sought to repeal The Burn Company and Indian Standard Wagon Company (Taking Over of Management) Act, 1973 and the Burn Company and Indian Standard Wagon Company (Nationalisation) Ordinance, 1976 without affecting the effect thereof.

However, recently, the provisions of this Act recommended to be repealed in toto by the fourth interim report of the Law Commission of India, which was being ‘Report no. 251 namely ‘Obsolete Laws: Warranting Immediate Repeal’ and was made in furtherance of its study on ‘Legal Enactments: Simplifications and Streamlining” (LESS). The reason put forwarded for such repealing is that the purpose of present Act has been served insofar the nationalization the entity is concerned and also the Act did not contain any provisions as to the management of that nationalized entity, As such, this enactment is not containing any continuing provision.

Read the Bare Act : The Burn Company and Indian Standard Wagon Company (Nationalisation) Act, 1976

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