The Esso (Acquisition Of Undertakings in India) Act, 1974

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The Esso (Acquisition Of Undertakings in India) Act, 1974 (Act No. 4 of 1974) dated 13th March, 1974 being Central Government Act enacted by parliament to make provisions as to acquisition and transfer of the right, title and interest of Esso Eastern Inc. relating to its undertaking in India with a view to ensure co-ordinated distribution and utilization of petroleum products which are distributed and marketed in India by Esso.

Section 2 of the Act provides for definitions of certain terms including the definition of terms Esso which means Esso Eastern Inc. being foreign company registered under the laws of State of Delaware in USA, and also provides for certain other terms used in the provisions of the Act like Esso Standard, Government Company, Lube India, etc.

Chapter II of the Act dealt with provisions as to acquisition of the undertaking in India of Esso, wherein as per section 3 of the Act makes provisions as to transfer of right, title and interest of Esso relating to its undertakings in India to Central Government. Section 4 of the Act explains effect of such vesting of right, interest, etc.

Section 5 of the Act clears that if the Esso in India held any property under lease or tenancy in such circumstances Central Government should be treated as lessee or tenant of such property as if such lease or tenancy granted to the Central Government. In the case of Amiya Kumar Datta vs Amar Petrol Pump Manendragarh (2011), Hon’ble Chattisgarh High Court held that, the renewal of lease one after another is not right of lessee, however, lease can only be renewed once as a matter of right. Similarly, after lapse of 20 years of renewal of lease, lessee can have no right to further renewal thereof.

The Central Government empowered under Section 7 of the Act to direct the vesting of right, interest and even title of Esso with Government Company by notification on its satisfaction that such Government Company is willing to comply with or has already complied with the terms and conditions which Government imposes.

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As per Section 8 of the Act the Central Government is required to make payment of 2 crores and fifty nine lakhs rupees for vesting of right, title, etc of Esso relating to its undertaking in India. The next important Section i.e. Section 9 of the Act dealt with transfer of every full time officer or employee of Esso to Central Government service under same terms of his service and on same rights to pension, gratuity, etc. until such employment is terminated.

The Act under Chapter IV provides for miscellaneous provisions, wherein Section 11 says that any provisions of law in force for the time being, if is not consistent with provisions of this Act, then such provisions of this Act should only be applicable in spite of those provisions of other law. Section 12 of the Act create obligation as to delivery of possession of properties of Esso undertaking in India which is being transferred in Central Government. Central Government or even Government Company can initiate action against recovery of possession of such properties. Similarly, Section 13 specks for continuation of Contracts entered into by Esso unless and until it is terminated.

Section 14 of the Act is a penalize the persons in possession of the property of Esso, if wrongfully withholding it from the Central Government or such Government Company, or if wrongfully obtains possession thereof, etc. All such acts of such persons are liable to be given punishment under this Section, either with imprisonment or with fine maximum up to ten thousand rupees or even under special circumstances with both.

The Act under Section 15 describes offences by Companies and also explains the about the persons to be held liable for committing such offences. Section 17 says that no cognizance in respect of such offences committed under the Act can be taken unless a written complaint is made by or on behalf of Central Government.  Protection is given to certain acts done in good faith under Section 16 of the Act, where any suit or other civil or criminal proceedings can not be initiated against the Central Government or the Government Company as the case may be or even this list includes officers or other employees thereof.

Every loss or expenditure incurred while discharging duties by Officers or Employees of Government Company should be indemnified by Central Government as per Section 18 of the Act. However, if such expenditure of losses are caused due to his own done act or default then no such indemnity condition will be applicable. The Central Government empowered under Section 20 of the Act to frame Rules as to carrying out purpose and object of this Act.

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by Faim Khalilkhan Pathan