The Britannia Engineering Company Limited (Mokameh Unit) and the Arthur Butler and Company (Muzaffarpore) Limited (Acquisition and Transfer of Undertakings) Act, 1978
# THE BRITANNIA ENGINEERING COMPANY LIMITED (MOKAMEH UNIT) AND THE
 ARTHUR BUTLER AND COMPANY (MUZAFFARPORE) LIMITED (ACQUISITION AND
 TRANSFER OF UNDERTAKINGS) ACT, 1978

_________

# ARRANGEMENT OF SECTIONS

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CHAPTER I


PRELIMINARY


SECTIONS

1. Short title and commencement.
2. Definitions.

CHAPTER II

ACQUISITION AND TRANSFER OF MOKAMEH UNIT AND UNDERTAKINGS OF ARTHUR BUTLER AND

COMPANY

3. Vesting in the Central Government of Mokameh unit and undertakings of Arthur Butler and

Company.

4. General effect of vesting.
5. Power of Central Government to direct vesting of Mokameh unit and the undertakings of Arthur

Butler and Company in a Government company.

6. Britannia Engineering Company and Arthur Butler and Company to be liable for certain prior

liabilities.


CHAPTER III


PAYMENT OF AMOUNT


7. Payment of amount.
8. Payment of further amount.


CHAPTER IV


MANAGEMENT, ETC., OF MOKAMEH UNIT AND THE UNDERTAKINGS OF ARTHUR BUTLER AND COMPANY


9. Management, etc., of Mokameh unit and the undertakings of Arthur Butler and Company.
10. Duty to deliver possession of Mokameh unit and undertakings of Arthur Butler and Company.
11. Duty of the companies to furnish particulars.
12. Duty of persons in charge of management of Mokameh unit or undertakings of Arthur Butler and

Company to deliver assets, etc.


CHAPTER V


PROVISIONS RELATING TO EMPLOYEES OF MOKAMEH UNIT AND OF ARTHUR BUTLER AND COMPANY


13. Employment of employees to continue.
14. Provident fund and other funds.


CHAPTER VI


COMMISSIONER OF PAYMENTS


15. Appointment of Commissioner of Payments.
16. Payment by Central Government to the Commissioner.
17. Certain powers of the Central Government or Government company.
18. Claims to be made to the Commissioner.
19. Priority of claims.
20. Examination of claims.
21. Admission or rejection of claims.


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SECTIONS

22. Disbursement of money by Commissioner.
23. Disbursement of amounts to Britannia Engineering Company and Arthur Butler and Company.
24. Undisbursed or unclaimed amount to be deposited with the General Revenue Account.


CHAPTERVII


MISCELLANEOUS


25. Act have overriding effect.
26. Contracts to cease to have effect unless ratified by the Central Government or the Government

company.

27. Penalties.
28. Offences by companies.
29. Protection of action taken in good faith.
30. Delegation of Powers.
31. Power to make rules.
32. Power to remove difficulties.
33. Declaration as to the policy of the State.

THE FIRST SCHEDULE
THE SECOND SCHEDULE


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# THE BRITANNIA ENGINEERING COMPANY LIMITED (MOKAMEH UNIT) AND THE
 ARTHUR BUTLER AND COMPANY (MUZAFFARPORE) LIMITED (ACQUISITION AND
 TRANSFER OF UNDERTAKINGS) ACT, 1978

 ACT NO. 41 OF 1978

[8th December, 1978.]

# An Act to provide for the acquisition and transfer of the right, title and interest of the
 undertakings of Britannia Engineering Company in relation to the Mokameh unit owned by it and the right, title and interest of Arthur Butler and Company in relation to the undertakings owned by it, with a view to ensuring the continued manufacture of railway wagons and other goods essential to the needs of the country in general and the Railways in particular, and for matters connected therewith or incidental thereto.

WHEREAS Britannia Engineering Company at the Mokameh unit and Arthur Butler and Company

were engaged in the manufacture of railway wagons and other goods;

AND WHEREAS as a result of the closure of the wagon and other undertakings owned by the

companies aforesaid, there was a substantial fall in the manufacture of railway wagons and other goods;

AND WHEREAS for the purpose of bringing the closed works of the companies aforesaid into operation

the management of the Mokameh unit of Britannia Engineering Company and the management of the
undertakings of Arthur Butler and Company were taken over by the Central Government under the
Industries (Development and Regulation) Act, 1951 (65 of 1951);

AND WHEREAS it is necessary to acquire the said wagon and other undertakings to ensure the

continued manufacture of railway wagons and other goods which are essential to the needs of the country
in general, and the Railways in particular;

BE it enacted by Parliament in the Twenty-ninth Year of the Republic of India as follows:—

CHAPTER I

PRELIMINARY

**1. Short title and commencement.—(1) This Act may be called the Britannia Engineering**

Company Limited (Mokameh Unit) and the Arthur Butler and Company (Muzaffarpore) Limited
(Acquisition and Transfer of Undertakings) Act, 1978.

(2) The provisions of sections 27 and 28 shall come into force at once and the remaining provisions of

this Act shall be deemed to have come into force on the 1st day of April, 1978.

**2. Definitions.—In this Act, unless the context otherwise requires,—**

(a) “appointed day” means the 1st day of April, 1978;

(b) “Arthur Butler and Company” means Messrs. Arthur Butler and Company (Muzaffarpore)

Limited, a company within the meaning of the Companies Act 1956 (1 of 1956), and having its
registered office at 40, Stand Road, Calcutta, in the State of West Bengal;

(c) “Britannia Engineering Company” means Messrs.Britannia Engineering Company Limited, a

company within the meaning of the Companies Act 1956 (1 of 1956), and having its registered office
at 3, Netaji Subhash Road, Calcutta, in the State of West Bengal;

(d) “Commissioner” means the Commissioner of Payments appointed under section 15;

(e) “Government company” means a company within the meaning of section 617 of the

Companies Act, 1956 (1 of 1956) and referred to in section 5 of this Act;

(f) “Mokameh unit” means the wagon and other undertakings owned by Britannia Engineering

Company at Mokameh in the State of Bihar;

(g) “notification” means a notification published in the Official Gazette;


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(h) “prescribed” means prescribed by rules made under this Act;

(i) “specified date”, in relation to any provision of this Act, means such date as the Central

Government may, by notification, specify for the purpose of that provision and different dates may be
specified for different provisions of this Act;

(j) “wagon and other undertaking” means the undertaking which is engaged in the manufacture of

railway wagons and other goods;

(k) words and expressions used herein and not defined but defined in the Companies

Act, 1956 (1 of 1956), have the meanings, respectively assigned to them in that Act.

CHAPTER II

ACQUISITION AND TRANSFER OF MOKAMEH UNIT AND UNDERTAKINGS OF ARTHUR BUTLER AND

COMPANY

**3. Vesting in the Central Government of Mokameh unit and undertakings of Arthur Butler and**

**Company.—On the appointed day,—**

(i) the Mokameh unit and the right, title and interest of Britannia Engineering Company in

relation to the Mokameh unit; and

(ii) the undertakings owned by Arthur Butler and Company and the right, title and interest of

Arthur Butler and Company in relation to the said undertakings,

shall, by virtue of this Act, stand transferred to, and shall vest in, the Central Government.

**4. General effect of vesting.—(1) The Mokameh unit, and the undertakings of Arthur Butler and**

Company, referred to in section 3, shall be deemed to include all assets, rights, lease-holds powers,
authorities and privileges and all property, movable and immovable, including lands, buildings,
workshops, stores, instruments, machinery and equipment, cash balances, cash in hand, reserve funds,
investments and book debts pertaining to the Mokameh unit or, as the case may be, the undertakings of
Arthur Butler and Company, and all other rights and interests in, or arising out of, such property as were
immediately before the appointed day in the ownership, possession, power or control—

(a) of Britannia Engineering Company, in relation to the Mokameh unit, or

(b) of Arthur Butler and Company, in relation to the undertakings owned by it,

whether within or outside India, and all books of account, registers and other documents of whatever
nature relating thereto.

(2) All properties as aforesaid which have vested in the Central Government under section 3 shall, by

force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all
other incumbrances affecting it, and any attachment, injunction or decree or order of any court or other
authority, restricting the use of such properties in any manner or appointing any receiver in respect of the
whole or any part of such properties shall be deemed to have been withdrawn.

(3) Every mortgagee of any property which has vested under this Act in the Central Government and

every person holding any charge, lien or other interest in, or in relation to, any such property shall give,
within such time and in such manner as may be prescribed, an intimation to the Commissioner of such
mortgage, charge, lien or other interest.

(4) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in

sub-section (3) or any other person holding and charge, lien or other interest in, or in relation to any such
property shall be entitled to claim, in accordance with his rights and interests, payment of the mortgage
money or other dues, in whole or in part, out of amounts specified in the First Schedule and also out of
the monies determined under section 8, but no such mortgage, charge, lien or other interest shall be
enforceable against any property which has vested in the Central Government or the Government
company, as the case may be.


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(5) If, on the appointed day, any suit, appeal or other proceeding of whatever nature instituted or

preferred by or against Britannia Engineering Company in relation to the Mokameh unit, or by or against
Arthur Butler and Company in relation to any undertaking owned by it, is pending, the same shall not
abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the Mokameh
unit or, as the case may be, the undertakings of Arthur Butler and Company, or of anything contained in
this Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced by or against
the Central Government or the Government company as the case may be.

**5. Power of Central Government to direct vesting of Mokameh unit and the undertakings of**

**Arthur Butler and Company in a Government company.—(1) Notwithstanding anything contained in**
section 3, the Central Government may, if it is satisfied that a Government company (whether in
existence at the commencement of this Act or incorporated thereafter) is willing to comply, or has
complied, with such terms and conditions as that Government may think fit to impose, direct, by
notification, that the Mokameh unit and the undertakings referred to in section 3, and the right, title and
interest of Britannia Engineering Company in relation to the Mokameh unit, and the right, title and
interest of Arthur Butler and Company in relation to the undertakings owned by it, which have vested in
the Central Government under section 3, shall instead of continuing to vest in the Central Government,
vest in the Government company either on the date of the notification or on such earlier or later date (not
being a date earlier than the appointed day) as may be specified in the notification.

(2) Where the right, title and interest in relation to the Mokameh unit and in relation to the other

undertakings referred to in section 3, vest in a Government company under sub-section (1), the
Government company shall, on and from the date of such vesting, be deemed to have become the owner
of the Mokameh unit and of the undertakings of Arthur Butler and Company and all the rights and
liabilities of the Central Government in relation to the Mokameh unit and the undertakings of Arthur
Butler and Company shall, on and from the date of such vesting, be deemed to have been the rights and
liabilities, respectively, of the Government company.

**6. Britannia Engineering Company and Arthur Butler and Company to be liable for certain**

**prior liabilities.—(1) Every liability of Britannia Engineering Company in relation to the Mokameh unit,**
or of Arthur Butler and Company in relation to the undertakings owned by it, in respect of any period
prior to the appointed day, shall be the liability of Britannia Engineering Company, or Arthur Butler and
Company, as the case may be, and shall be enforceable against such company and not against the Central
Government or the Government company.

(2) For the removal of doubts, it is hereby declared that,—

(a) save as otherwise expressly provided in this section or in any other section of this Act,—

(i) no liability of Britannia Engineering Company, in relation to the Mokameh unit, and

(ii) no liability of Arthur Butler and Company, in relation to the undertakings owned by it,

in respect of any period prior to the appointed day, shall be enforceable against the Central
Government or the Government company, as the case may be;

(b) no award, decree or order of any court, tribunal or other authority in relation to the Mokameh

unit, or in relation to the undertakings owned by Arthur Butler and Company, passed after the
appointed day in respect of any matter, claim or dispute, which arose before that day, shall be
enforceable against the Central Government or the Government company, as the case may be;

(c) no liability incurred before the appointed day by—


(i) Britannia Engineering Company, in relation to the Mokameh unit, or


(ii) Arthur Butler and Company, in relation to the undertakings owned by it,


for the contravention of any provision of law for the time being in force shall be enforceable against
the Central Government or the Government company as the case may be.


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CHAPTER III


PAYMENT OF AMOUNT


**7. Payment of amount.—(1) For the transfer to, and vesting in, the Central Government, under**

section 3,—

(a) of the Mokameh unit and the right, title and interest of Britannia Engineering Company, in

relation to that unit; and

(b) of the undertakings owned by Arthur Butler and Company, and the right, title and interest of

Arthur Butler and Company, in relation to those undertakings,

there shall be given by the Central Government to Britannia Engineering Company and Arthur Butler and
Company, in cash and in the manner specified in Chapter V1, an amount equal to the amount specified,
respectively, in the First Schedule, against Britannia Engineering Company and Arthur Butler and
Company.

(2) For the removal of doubts, it is hereby declared that the liabilities of—


(i) Britannia Engineering Company, in relation to the Mokameh unit, and


(ii) Arthur Butler and Company, in relation to the undertakings owned by it,


shall be met, in accordance with the rights and interests of the creditors of the respective company from
the amount due, respectively, to Britannia Engineering Company and Arthur and Company, under
sub-section (1).

**8. Payment of further amount.—(1) For the deprivation of Britannia Engineering Company of the**

management of the Mokameh unit and for the deprivation or Arthur Butler and Company of the
management of the undertakings owned by it, there shall be given, in cash, by the Central Government to
the respective company, in addition to the amount specified in section 7, an amount computed at the rate
of ten thousand rupees per annum for the period commencing on the date on which the management of
such unit or, as the case may be, such undertakings, was taken over by the Central Government under the
Industries (Development and Regulation) Act, 1951 (65 of 1951) and ending with the appointed day.

(2) In consideration of the retrospective operation of the provisions of sections 3, 4 and 6, there shall

also be given, in cash, by the Central Government to Britannia Engineering Company and to Arthur
Butler and Company an amount equal to an amount calculated at the rate of ten thousand rupees per
annum for the period commencing on the appointed day and ending with the date on which this Act
receives the assent of the President.

(3) The amount specified in section 7 and the amount computed under sub-sections (1) and (2) shall

carry simple interest at the rate of four per cent. per annum for the period commencing on the appointed
day and ending with the date on which the payment of amount is made by the Central Government to the
Commissioner.

(4) The amounts determined in accordance with the provisions of sub-sections (1), (2) and (3) shall be

given to Britannia Engineering Company and to Arthur Butler and Company in addition to the amount
specified in the First Schedule.


CHAPTER IV


MANAGEMENT, ETC., OF MOKAMEH UNIT AND THE UNDERTAKINGS OF ARTHUR BUTLER AND COMPANY


**9. Management, etc., of Mokameh unit and the undertakings of Arthur Butler and Company.—**

On the appointed day, the general superintendence, direction, control and management of the affairs and
business of the Mokameh unit and of the undertakings owned by Arthur Butler and Company shall—

(a) where a direction has been made by the Central Government under section 5, vest in the

Government company specified in such direction, or


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(b) where no such direction has been made, vest in such person or body of persons as may be

appointed by the Central Government in this behalf,

and thereupon the Government company so specified or the person or body of persons so appointed, as
the case may be, shall be entitled to exercise all such powers and do all such things as Britannia
Engineering Company is authorised to exercise and do in relation to its Mokameh unit or, as the case may
be, Arthur Butler and Company is authorised to exercise and do in relation to the undertakings owned by
it.

**10. Duty to deliver possession of Mokameh unit and undertakings of Arthur Butler and**

**Company.—(1) Every person, in whose possession or custody or control—**


(i) the Mokameh unit, or


(ii) any undertaking or Arthur Butler and Company, or


any part of such unit or undertaking or any machinery, instrument or other movable assets forming part of
such unit or undertaking, may be immediately before the appointed day, shall forthwith deliver possession
of the Mokameh unit or such undertaking or such part, machinery, instrument or other asset, as the case
may be, to the Central Government or the Government company or to such person or body of persons as
the Central Government or the Government company may specify in this behalf.

(2) Every person who has, on the appointed day, in his possession or under his control any assets,

books, documents or other papers relating to the Mokameh unit or any undertaking owned by Arthur
Butler and Company, which has vested in the Central Government or a Government company under this
Act, and which belong to Britannia Engineering Company or, as the case may be, Arthur Butler and
Company, or would have so belonged if the Mokameh unit, or as the case may be, the undertakings
owned by Arthur Butler and Company, had not vested in the Central Government or the Government
company, shall be liable to account for the said assets, books, documents and other papers to the Central
Government or the Government company and shall deliver them up to the Central Government or the
Government company or to such person or body or persons as the Central Government or the
Government Company may specify in this behalf.

(3) The Central Government may take or cause to be taken all necessary steps for securing possession

of the Mokameh unit and the undertakings of Arthur Butler and Company which have vested in it under
section 3.

**11. Duty of the companies to furnish particulars.—Britannia Engineering Company and Arthur**

Butler and Company shall, within such period as the Central Government may allow in this behalf,
furnish to that Government a complete inventory of all its properties and assets, as on the appointed day,
pertaining to the Mokameh unit, or as the case may be, the undertakings owned by Arthur Butler and
Company which has or have vested in the Central Government under section 3, and, for this purpose the
Central Government or the Government company shall afford Britannia Engineering Company or Arthur
Butler and Company all reasonable facilities.

**12. Duty of persons in charge of management of Mokameh unit or undertakings of Arthur**

**Butler and Company to deliver assets, etc.—On the vesting in the Central Government or the**
Government company of the management of the Mokameh unit or of any undertakings owned by Arthur
Butler and Company, all persons in charge of the management of the Mokameh unit or, as the case may
be, the undertakings owned by Arthur Butler and Company immediately before the date of such vesting,
shall be bound to deliver to the Central Government or the Government company or to such person or
body or persons as the Central Government or the Government company may specify in this behalf, all
assets, books of account, registers or other documents in their custody relating to the Mokameh unit or, as
the case may be, any undertaking owned by Arthur Butler and Company.


CHAPTER V


PROVISIONS RELATING TO EMPLOYEES OF MOKAMEH UNIT AND OF ARTHUR BUTLER AND COMPANY


**13. Employment of employees to continue.—(1) Every person who has been, immediately before**

the appointed day, employed by—


(i) Britannia Engineering Company, in connection with the Mokameh unit, or


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(ii) Arthur Butler and Company, in connection with any undertaking owned by it,


shall become, on and from the appointed day, an employee of the Central Government or, as the case may
be, of the Government company, and shall hold office or service under the Central Government or the
Government company, as the case may be, with the same rights and privileges as to pension, gratuity and
other matters as would have been admissible to him if there had been no such vesting and shall continue
to do so unless and until his employment under the Central Government or the Government company, as
the case may be, is duly terminated or until his remuneration and other conditions of service are duly
altered by the Central Government or the Government company, as the case may be.

(2) Notwithstanding anything contained in the Industrial Disputes Act 1947 (14 of 1947), or in any

other law for the time being in force, the transfer of the services of any officer or other person employed
in the Mokameh unit or any undertakings owned by Arthur Butler and Company, to the Central
Government or the Government company shall not entitle such officer or other employee to any
compensation under this Act or any other law for the time being in force and no such claim shall be
entertained by any court, tribunal or other authority.

**14. Provident fund and other funds.—(1) Where Britannia Engineering Company or Arthur Butler**

and Company has established a provident fund, superannuation fund, welfare fund or other fund for the
benefit of persons employed in the Mokameh unit or, as the case may be, any of the undertakings owned
by Arthur Butler and Company, the monies relatable to the employees, whose services have become
transferred by or under this Act to the Central Government or the Government company shall out of the
monies standing, on the appointed day, to the credit of such provident fund, superannuation fund, welfare
fund or other funds, stand transferred to, and vest in, the Central Government or the Government
company, as the case may be.

(2) The monies which stand transferred under sub-section (1) to the Central Government or the

Government company, as the case may be, shall be dealt with by that Government or the Government
company in such manner as may be prescribed.


CHAPTER VI


COMMISSIONER OF PAYMENTS


**15. Appointment of Commissioner of Payments.—(1) the Central Government shall, for the**

purpose of disbursing the amount payable under sections 7 and 8 to Britannia Engineering Company and
to Arthur Butler and Company, by notification, appoint a Commissioner of Payments.

(2) The Central Government may appoint such other persons as it may think fit to assist the

Commissioner and thereupon the Commissioner may authorise one or more of such persons also to
exercise all or any of the powers exercisable by him under this Act and different persons may be
authorised to exercise different powers.

(3) Any person authorised by the Commissioner to exercise any of the powers exercisable by the

Commissioner may exercise those powers in the same manner and with the same effect as if they have
been conferred on that person directly by this Act and not by way of authorisation.

(4) The salaries and allowances of the Commissioner and other persons appointed under this section

shall be defrayed out of the Consolidated Fund of India.

**16. Payment by Central Government to the Commissioner.—(1) the Central Government shall,**

within thirty days from the specified date, pay, in cash, to the Commissioner, for payment to Britannia
Engineering Company and to Arthur Butler and Company,—


(a) an amount equal to that specified against each of their names in the First Schedule,


(b) an amount equal to that payable to Britannia Engineering Company and Arthur Butler and

company under section 8.
(2) A deposit account shall be opened by the Central Government in favour of the Commissioner in

the Public Account of India, and every amount paid under this Act to the Commissioner shall be
deposited by him to the credit of the said deposit account and the said deposit account shall be operated
by the Commissioner.


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(3) Separate records shall be maintained by the Commissioner in respect of Mokameh unit and the

undertakings owned by Arthur Butler and Company in relation to which payment has been made to him
under this Act.

(4) Interest acquiring on the amounts standing to the credit of the deposit account referred to in

sub-section (2) shall enure to the benefit of Britannia Engineering Company and Arthur Butler and
Company.

**17. Certain powers of the Central Government or Government company.—(1) The Central**

Government or the Government company, as the case may be, shall be entitled to receive, up to the
specified date, to the exclusion of all other persons, any money due to Britannia Engineering Company in
relation to any of the Mokameh unit, or Arthur Butler and Company in relation to any of the undertakings
owned by it, which has vested in the Central Government or the Government company, and realised after
the appointed day, notwithstanding that the realisation pertains to a period prior to the appointed day.

(2) The Central Government or the Government company, as the case may be, may make a claim to

the Commissioner with regard to every payment made by that Government after the appointed day for
discharging any liability of Britannia Engineering Company in relation to the Mokameh unit, or of Arthur
Butler and Company in relation to any of the undertakings owned by it, in relation to any period prior to
the appointed day, and every such claim shall have priority, in accordance with the priorities attaching
under this Act, to the matter in relation to which such liability has been discharged by the Central
Government or the Government company.

(3) Save as otherwise provided in this Act, the liabilities of Britannia Engineering Company in

relation to the Mokameh unit, or of Arthur Butler and Company in relation to any of the undertakings
owned by it, in respect of any transaction prior to the appointed day, which have not been discharged on
or before the specified date, shall be the liabilities of Britannia Engineering Company or Arthur Butler
and Company, as the case may be.

**18. Claims to be made to the Commissioner.—Every person having a claim against Britannia**

Engineering Company in relation to the Mokameh unit, or against Arthur Butler and Company in relation
to the undertakings owned by it, shall prefer such claim before the Commissioner within thirty days from
the specified date:

Provided that if the Commissioner is satisfied that the claimant was prevented by sufficient cause

from preferring the claim within the said period of thirty days, he may entertain the claim within a further
period of thirty days, but not thereafter.

**19. Priority of claims.—The claims arising out of the matters specified in the Second Schedule shall**

have priorities in accordance with the following principles, namely:—

(a) category I shall have precedence over all categories and category II shall have precedence over

category III and so on;

(b) the claims specified in each of the categories, except category IV, shall rank equally and be paid

in full, but if the amount is insufficient to meet such claims in full, they shall abate in equal proportion
and be paid accordingly;

(c) the liabilities specified in category IV shall be discharged subject to the priorities specified in this

section in accordance with the terms of the secured loan and the priority inter se, of such loans; and

(d) the question of discharging any liability with regard to a matter specified in a lower category shall

arise only if a surplus is left after meeting all the liabilities specified in the immediately higher category.

**20. Examination of claims.—(1) On receipt of the claims made under section 18, the Commissioner**

shall arrange the claims in the order or priorities specified in the Second Schedule and examine the same
in accordance with such order of priorities.

(2) If on an examination of the claim, the Commissioner is of opinion that the amount paid to him

under this Act is not sufficient to meet the liabilities specified in any lower category, he shall not be
required to examine the claim in respect of such lower category.


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**21. Admission or rejection of claims.—(1) After examining the claims with reference to the**

priorities set out in the Second Schedule, the Commissioner shall fix a date on or before which every
claimant shall file the proof of his claim failing which he will be excluded from the benefit of the
disbursement made by the Commissioner.

(2) Not less than fourteen days’ notice of the date so fixed shall be given by advertisement in one

issue of the daily newspaper in the English language having circulation in the major part of the country
and one issue of such daily newspaper in the regional language as the Commissioner may consider
suitable, and every such notice shall call upon the claimant to file the proof of his claim with the
Commissioner within the period specified in the advertisement.

(3) Every claimant who fails to file the proof of his claim within the period specified by the

Commissioner shall be excluded from the disbursement made by the Commissioner.

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary and after

giving Britannia Engineering Company or, as the case may be, Arthur Butler and Company, an
opportunity of refuting the claim and after giving the claimant a reasonable opportunity of being heard, in
writing, admit or reject the claim in whole or in part.

(5) The Commissioner shall have the power to regulate his own procedure in all matters arising out of

the discharge of his functions, including the place or places at which he may hold his sitting and shall, for
the purpose of making any investigation under this Act, have the same powers as are vested in a civil
court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, respect of the following
matters, namely:—


(a) the summoning and enforcing the attendance of any witness and examining him on oath;


(b) the discovery and production of any document or other material object producible evidence;


(c) the reception of evidence on affidavits;


(d) the issuing of any commission for the examination of witnesses.


(6) Any investigation before the Commissioner shall be deemed to be a judicial proceeding within the

meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Commissioner shall be
deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal
Procedure, 1973 (2 of 1974).

(7) A claimant who is dissatisfied with the decision of the Commissioner may prefer an appeal

against the decision to the principal court of original jurisdiction within the local limits of whose
jurisdiction the Mokameh unit or, as the case may be, the registered office of Arthur Butler and Company
is situated:

Provided that where a person who is a Judge of a High Court is appointed to be the Commissioner,

such appeal shall lie to the High Court of the State in which the registered office of Britannia Engineering
Company or, as the case may be, Arthur Butler and Company is situated, and such appeal shall be heard
and disposed of by not less than two Judges of that High Court.

**22. Disbursement of money by Commissioner.—After admitting the claim under this Act, the**

amount due in respect of such claim shall be paid by the Commissioner to the person or persons to whom
such sums are due and on such payment the liability of Britannia Engineering Company in relation to the
Mokameh unit, or of Arthur Butler and Company in respect of any claim relating to the undertakings
owned by it shall stand discharged.

**23. Disbursement of amounts to Britannia Engineering Company and Arthur Butler and**

**Company.—(1) If out of the monies paid to him in relation to the Mokameh unit or in relation to any**
undertaking owned by Arthur Butler and Company there is a balance left after meeting the liabilities as
specified in the Second Schedule, the Commissioner shall disburse such balance to Britannia Engineering
Company, or as the case may be, to Arthur Butler and Company.


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(2) Where the possession of any machinery, equipment or other property has vested in the Central

Government or the Government company under this Act, but such machinery, equipment or other
property does not belong to Britannia Engineering Company or, as the case may be, Arthur Butler and
Company, it shall be lawful for the Central Government to continue to possess such machinery or
equipment or other property on the same terms and conditions under which they were possessed by
Britannia Engineering Company or, as the case may be, Arthur Butler and Company, immediately before
the appointed day.

**24. Undisbursed or unclaimed amount to be deposited with the General Revenue Account.—**

Any money paid to the Commissioner which remains undisbursed or unclaimed for a period of three
years from the last date on which the disbursement was made, shall be transferred by the Commissioner
to the General Revenue Account of the Central Government; but a claim to any money so transferred may
be preferred to the Central Government by the person entitled to such payment and shall be dealt with as
if such transfer had not been made, the order, if any, for payment of the claim being treated as an order
for the refund of the revenue.


CHAPTER VII


MISCELLANEOUS


**25. Act to have overriding effect.—The provision of this Act shall have effect notwithstanding**

anything inconsistent therewith contained in any other law or the time being in force or in any instrument
having effect by virtue of any law, other than this Act, or in any decree or order of any court, tribunal or
other authority.

**26. Contracts to cease to have effect unless ratified by the Central Government or the**

**Government company.—(1) Every contract entered into by Britannia Engineering Company in relation**
to the Mokameh unit, or Arthur Butler and Company in relation to any of the undertakings owned but it,
which has vested in the Central Government under section 3, for any service, sale or supply and in force
immediately before the appointed day, shall, on and from the expiry of one hundred and eighty days from
the date on which this Act receives the assent of the President, cease to have effect unless such contract is,
before the expiry of that period, ratified, in writing, by the Central Government, or the Government
company, and in ratifying such contract, the Central Government or the Government company may make
such alternation or modification therein as it may think fit:

Provided that the Central Government or the Government company shall not omit to ratify contract

and shall not make any alternation or modification in a contract unless it is satisfied that such contract is
unduly onerous or has been entered into in bad faith or is detrimental to the interests of, the Central
Government or the Government company.

(2) The Central Government or the Government company shall not omit to ratify a contract, and shall

not make any alternation or modification therein, except after giving the parties to the contract a
reasonable opportunity of being heard and except after recording in writing its reasons for refusal to ratify
the contract or for making any alternation or modification therein.

**27. Penalties.—Any person who,—**

(a) having in his possession, custody or control any property forming part of the Mokameh unit,

or any of the undertakings owned by Arthur Butler and Company, wrongfully withholds such
property from the Central Government or the Government company; or

(b) wrongfully obtains possession of, or retains, any property forming part of, the Mokameh unit,

or any of the undertakings owned by Arthur Butler and Company; or

(c) wilfully withholds or fails to furnish to the Central Government or the Government company

or any person or body of persons specified by that Government or the Government company, as the
case may be, any document relating to the Mokameh unit, or any of the undertakings owned by
Arthur Butler and Company, which may be in his possession, custody or control; or


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(d) fails to deliver to the Central Government or the Government company or any person or body

of persons specified by that Government or the Government company, any assets, books of account,
registers or other documents in his possession, custody or control relating to the Mokameh unit, or
any of the undertakings owned by Arthur Butler and Company; or

(e) wrongfully removes or destroys any property forming part of the Mokameh unit, or any of the

undertakings owned by Arthur Butler and Company or prefers any claim under this Act which he
knows or has reason to believe to be false or grossly inaccurate,

shall be punishable with imprisonment for a term which may extend to two years, or with fine which may
extend to ten thousand rupees, or with both.

**28. Offences by companies.—(1) Where an offence under this Act has been committed by a**

company, every person who, at the time the offence was committed, was in charge of, and was
responsible to, the company for the conduct of the business of the company, as well as the company, shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any

punishment, if he proves that the offence was committed without his knowledge or that he had exercised
all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1) where any offence under this Act has been

committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other
officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and
punished accordingly.

_Explanation—For the purposes of this section,—_

(a) “company” means any body corporate and includes a firm or other association of individuals;

and


(b) “director”, in relation to a firm, means a partner in the firm.


**29. Protection of action taken in good faith.—(1) No suit, prosecution or other legal proceeding**

shall lie against the Central Government or any officer of that Government or the Government company
or other person authorised by that Government or the Government company for anything which is in good
faith done or intended to be done under this Act.

(2) No suit or other legal proceeding shall lie against the Central Government or any of its officers or

other employees or the Government company or any officer or other person authorised by that company
for any damage caused or likely to be caused by anything which is in good faith done or intended to be
done under this Act.

**30. Delegation of Powers.—(1) The Central Government may, by notification, direct that all or any**

of the powers exercisable by it under this Act, other than the powers conferred by sections 31 and 32, may
also be exercised by such person or persons as may be specified in the notification.

(2) Whenever any delegation of power is made under sub-section (1), the person to whom such power

has been delegated shall act under the direction, control and supervision of the Central Government.

**31. Power to make rules.—(1) The Central Government may, by notification, make rules for**

carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may

provide for all or any of the following matters, namely:—

(a) the time within which, and the manner in which, an intimation referred to in sub-section (3) of

section 4 shall be given;


(b) the manner in which the monies in any provident fund or other fund, referred to in

sub-section (2) of section 14 shall be dealt with;


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(c) any other matter which is required to be, or may be, prescribed.


(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it

is made, before each House of Parliament while it is in session for a total period of thirty days which may
be comprised in one session or in two or more successive sessions and if before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter
have effect only in such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything previously done under
that rule.

**32. Power to remove difficulties.—If any difficulty arises in giving effect to the provisions of this**

Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the
difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the appointed

day.

**33. Declaration as to the policy of the State.—It is hereby declared that this Act is for giving effect**

to the policy of the State towards securing the principles specified in clause (b) of article 39 of the
Constitution,


_Explanation—In this section, “State” has the same meaning as in article 12 of the Constitution._


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THE FIRST SCHEDULE


Amount

(Rupees in lakhs)


S. No.


(See sections 4, 7, 8 and 16)

Name of the company


1 The Britannia Engineering Company 152.85

2 Arthur Butler and Company 137.70


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THE SECOND SCHEDULE


(See sections 19, 20, 21 and 23)

ORDER OF PRIORITIES

_Category_ _I_

(i) Employees’ dues on account of arrears of tripartite settlement for the period from the 1st day

of January, 1957 to the 31st day of May, 1975.

(ii) Employees’ dues on account of unpaid salaries, wages, providend fund, Employees’ State

Insurance contribution or premium relating to Life Insurance Corporation of India.

_Category_ _II_

Secured loans from nationalised banks and secured loans from Industrial Reconstruction Corporation

of India for the post-take-over management period.

_Category_ _III_

Central Government loans for the post-take-over management period.

_Category_ _IV_

Secured loans from nationalised banks and secured loans from financial institutions for the

pre-take-over management period.

_Category_ _V_

Revenue, taxes, ceases, rates or other dues to Central Government, State Government and local

authorities or State Electricity Board for the pre-take-over management period.

_Category_ _VI_

Trade and other creditors for the pre-take-over management period.


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