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The Hindustan Tractors Limited (Acquisition and Transfer of Undertaking) Act, 1978

The Hindustan Tractors Limited (Acquisition and Transfer of Undertaking) Act, 1978 was enacted and came into force on 1 April 1978. It was enacted to transfer and acquire the undertaking of Hindustan Tractors Limited, Vishwamitri, Vadodara and continue the production of goods to meet general needs and interest of public.

Definitions has been stated under Section 2 of the Act. Words like Appointed Day, Authorised Controller, Bank, Commissioner, Company, Custodian, Date of Taking Over, Government Company, Notification, Prescribed, and Specified Date State Government are explained. Words defined in Companies Act 1956 can be used in the said Act.

All the rights, title and interest of the company shall rest in the Central Government from the appointed day. General effect of vesting in Central Government is also discussed under Section 4 of the Act.

Any liability that has been enforced against any company before appointed day it shall be done against company only and not the Central Government. If anything done after appointed day or the company is over taken by the Central Government then it shall be done by Central Government only.

Section 6 of the Act states that Central Government after Gazette notification can vest the rights and titles in State Government of Gujarat. After such vesting of rights and titles in State Government shall be the owner of the undertaking. Section 7 explains that State Government can vest the right, titles of such Company in a Government Company after notification on a specified date and once it vest in a Government Company then it shall be considered the owner in relation to such undertakings and have all right and liabilities in it.

For the Company to transfer and vest the right, title and interest of such company in Central Government, Central Government has to pay in cash Rupees 150 Lakhs to the company. Management, direction, and control of the undertaking of the company, appointing Custodians are all discussed under Section 10 of the act.

Section 11 of the Act states that any person who possess any property, books, documents or other papers, shall deliver the property to the State Government. Central Government can issue directions to State Government with regard to its powers and duties. Any reference made to State Government upon vesting the management to Government Company or Custodian it shall refer to such Custodian.

Section 12 of the Act explains about the accounts to be submitted by the company or any other person from appointed day. Custodian will be incharge of maintaining the accounts of the undertakings of the Company as per the provisions of Companies Act 1956.

Section 14 explains about employment of employees shall continue even after the ownership of the Company has shifted to Government Company/State Government. Even under Industrial Disputes Act 1947 no employee of the Government Company is entitled to any compensation and no claim shall be put in any court or tribunal. If a person’s service is transferred to Government Company then he is entitled to arrears of salary but it is only up to the extent of liability that has been taken over the Central Government.

Provident Fund, Superannuation Fund, Welfare Fund shall continue to vest in the authority established under the said Act.  Central Government shall appoint Commissioners of Payments and assistant for him for the purpose of disbursing the amounts payable to the Company. Their salaries are defrayed from Consolidated Fund of India.

Central Government shall open deposit account in favour of Commissioner in Public Account of India and interest accrued on it shall be used for benefit of the company. Liability of the company before appointed day which has not been discharged shall be liability of the company itself.

Commissioner is the person who hears claims against the company.  Priority of claims, examination of claims, admissions or rejection of claim, disbursement of amount by commissioner, depositing unclaimed amount in general revenue account has also been explained under the Act.

Assumptions of liability is on the Central Government with regard to undischarged amount by it and upon vesting of undertaking in State Government liability shall be of such State Government itself.

Provisions with regard to contracts, transfer of assets, offences by companies are also explained under the Act. No suit shall be made against any authorised person for his/her acts done in good faith.  Penalties are laid against persons who possess the property of State Government or fails to furnish such property details to Government.

Section 33 of the Act explains about delegation of powers by Central Government.  Central Government has the power to make rules and such rules must be put before Houses of Parliament while it is in session for 30 days and Houses can modify the rule.

Central Government has the power to remove any difficulty arising while giving effect to provisions of the said Act but it can be done only within 2 years period from the appointed day. The word “State” in this Act has the same meaning as in article 12 of the constitution.

by Sushma Javare