The Sick Textile Undertakings (Nationalisation) Act, 1974

(1) This Act may be called the Sick Textile Undertakings(Nationalisation) Act, 1974. (2) The provisions of sections 32 and 33 shall come into force at once and the remaining provisions ofthis Act shall be deemed to have come into force on the 1st day of April, 1974.

(1) In this Act, unless the context otherwise requires,-- (a) "appointed day" means the 1st day of April, 1974; (b) "bank" means-- (i) the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955); (ii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks)Act, 1959 (38 of 1959); (iii) a corresponding new bank constituted under section 3 of the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970); (iv) any other bank, being a scheduled bank as defined in clause (e) of section 2 of theReserve Bank of India Act, 1934 (2 of 1934); (c) "Commissioner" means a Commissioner of Payments appointed under section 17; (d) "Custodian" means a Custodian appointed under section 5 of the Sick Textile Undertakings(Taking Over of Management) Act, 1972 (72 of 1972), and includes the person, or body of personsauthorised by the Central Government to take over the management of a textile undertaking under theIndustries (Development and Regulation) Act, 1951 (65 of 1951); (e) "National Textile Corporation" means the National Textile Corporation Limited, formed andregistered under the Companies Act, 1956 (1 of 1956); (f) "notification" means a notification published in the Official Gazette; (g) "Ordinance" means the Sick Textile Undertakings (Nationalisation) Ordinance,1974 (12 of 1974); (h) "owner", when used in relation to a sick textile undertaking, means any person or firm who orwhich is, immediately before the appointed day, the immediate proprietor or lessee or occupier of thesick textile undertaking or any part thereof, and in the case of a textile company which is beingwound up or the business whereof is being carried on by a liquidator or receiver, includes suchliquidator or receiver, and also includes any agent or manager or such owner but does not include anyperson or body of persons authorised under the Industries (Development and Regulation)Act, 1951 (65 of 1951), or the Sick Textile Undertakings (Taking Over of Management)Act, 1972 (72 of 1972), to take over the management of the whole or any part of the sick textileundertaking; (i) "prescribed" means prescribed by rules made under this Act; (j) "sick textile undertaking" means a textile undertaking, specified in the First Schedule, themanagement of which has, before the appointed day, been taken over by the Central Governmentunder the Industries (Development and Regulation) Act, 1951 (65 of 1951), or as the case may be,vested in the Central Government under the Sick Textile Undertakings (Taking Over of Management)Act, 1972 (72 of 1972); (k) "specified date" means such date as the Central Government may, for the purpose of anyprovision of this Act, by notification, specify; and different dates may be specified for differentprovisions of this Act; (l) "Subsidiary Textile Corporation" means a Textile Corporation formed by the National TextileCorporation as its subsidiary; (m) "textile" includes yarn or fabrics made either wholly or partly of cotton, wool, jute, syntheticand artificial (man-made) fibres; (n) "textile company" means a company specified in column (3) of the First Schedule as owningthe textile undertaking specified in the corresponding entry in column (2) of that Schedule; (o) "textile undertaking" means an undertaking engaged in the manufacture of textiles and towhich the provisions of the Factories Act, 1948 (63 of 1948), apply. (2) Words and expressions used but not defined in this Act and defined in the Industries(Development and Regulation) Act, 1951 (65 of 1951), shall have the meanings respectively assigned tothem in that Act. (3) Words and expressions used but not defined either in this Act or in the Industries (Developmentand Regulation) Act, 1951 (65 of 1951), but defined in the Companies Act, 1956 (1 of 1956), shall havethe meanings respectively assigned to them in the Companies Act, 1956.

(1) On the appointedday, every sick textile undertaking and the right, title and interest of the owner in relation to every suchsick textile undertaking shall stand transferred to, and shall vest absolutely in, the Central Government. (2) Every sick textile undertaking which stands vested in the Central Government by virtue ofsub-section (1) shall, immediately after it has so vested, stand transferred to, and vested in, the NationalTextile Corporation. 1[(3) Notwithstanding the transfer and vesting of any sick textile undertaking to the National TextileCorporation by virtue of sub-section (2), the lease-hold rights of the sick textile undertakings shallcontinue to remain vested in the Central Government on payment of lease-hold rents and shall bedischarged, for and on behalf of that Government, by the National Textile Corporation as and whenpayment of such lease-hold rents or any amount becomes due and payable. (4) Subject to sub-section (3), no court shall have jurisdiction to order divestment from the NationalTextile Corporation of the property vested in it by the Central Government.]

(1) The sick textile undertaking referred to in section 3 shall bedeemed to include all assets, rights, lease-holds, powers, authorities and privileges and all property,movable and immovable, including lands, buildings, workshops, stores, instruments, machinery andequipment, cash balances, cash on hand, reserve funds, investments and book debts and all other rightsand interests in, or arising out of, such property as were immediately before the appointed day in theownership, possession, power or control of the owner of the sick textile undertaking, whether within oroutside India, and all books of account, registers and all other documents of whatever nature relatingthereto and shall also be deemed to include the liabilities and obligations specified in sub-section (2) ofsection 5. (2) All property as aforesaid which have vested in the Central Government under sub-section (1) ofsection 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 ofany court restricting the use of such property in any manner shall be deemed to have been withdrawn. (3) Where any licence or other instrument in relation to a sick textile undertaking had been granted atany time before the date on which the Ordinance was promulgated, to an owner by the CentralGovernment or a State Government or any other authority, the National Textile Corporation shall, on andfrom such date, be deemed to be substituted in such licence or other instrument in place of the ownerreferred to therein as if such licence or other instrument had been granted to it and shall hold such licenceor the sick textile undertaking specified in such other instrument for the remainder of the period for whichthe owner would have held such licence or the sick textile undertaking under such other instrument. (4) Every mortgagee of any property which has vested under this Act in the Central Government andevery 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 suchmortgage, charge, lien or other interest. (5) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to insub-section (2) or any other person holding any charge, lien or other interest in, or in relation to, any suchproperty shall be entitled to claim, in accordance with his rights and interests, payment of the mortgagemoney or other dues, in whole or in part, out of the amount specified in relation to such property in theFirst Schedule, but no such mortgage, charge, lien or other interest shall be enforceable against anyproperty which has vested in the Central Government. (6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to anymatter specified in sub-section (2) of section 5 in respect of the sick textile undertaking, instituted orpreferred by or against the textile company, is pending, the same shall not abate, be discontinued or be, inany way, prejudicially affected by reason of the transfer of the sick textile undertaking or of anythingcontained in this Act but the suit, appeal or other proceeding may be continued, prosecuted and enforcedby or against the National Textile Corporation. (7) Any person, who, on the date on which the Ordinance was promulgated, was in possession of, orhad under his custody or control, the whole or any part of any sick textile undertaking referred to insection 3, the management of which could not be taken over by the Central Government by reason of anydecree, order or injunction of any court or otherwise, shall deliver forthwith the possession of suchundertaking or part and all books of account, registers and all other documents of whatever nature relatingto such undertaking or part to the Central Government or the National Textile Corporation or such otherperson as the Central Government or the National Textile Corporation, as the case may be, may specify inthis behalf. 1[(8) Notwithstanding the fact that the textile operations have been discontinued in any sick textileundertaking being revived, shall for all effects and purposes be deemed that the textile operations arebeing continued and no suit or proceeding shall be instituted or if instituted be maintainable against theNational Textile Corporation on the ground that it has discontinued such activity in the sick textileundertaking. (9) For the removal of doubts, it is hereby declared that the continued deemed vesting of thelease-hold land in the Central Government shall not affect, impair or in any manner prejudice the rights ofthe National Textile Corporation to prosecute or defend any proceedings as a subsequent vestee in respectof any such lease-hold rights and no such proceedings shall fail only on account of the non-impleadmentof that Government.]

(1) Every liability, other than the liabilityspecified in sub-section (2) of the owner of a sick textile undertaking, in respect of any period prior to theappointed day, shall be the liability of such owner and shall be enforceable against him and not againstthe Central Government or the National Textile Corporation. (2) Any liability arising in respect of-- (a) loans advanced by the Central Government, or a State Government, or both, to a sick textileundertaking (together with interest due thereon) after the management of such undertaking had beentaken over by the Central Government. (b) amounts advanced to a sick textile undertaking (after the management of such undertakinghad been taken over by the Central Government), by the National Textile Corporation or by a StateTextile Corporation, or by both, together with interest due thereon. (c) wages, salaries and other dues of employees of the sick textile undertaking, in respect of anyperiod after the management of such undertaking had been taken over by the Central Government, shall, on and from the appointed day, be the liability of the Central Government and shall be discharged,for and on behalf of that Government, by the National Textile Corporation as and when repayment ofsuch loans or amounts becomes due or as and when such wages, salaries or other dues become due andpayable. (3) 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, noliability, other than the liability specified in sub-section (2), in relation to a sick textile undertaking inrespect of any period prior to the appointed day, shall be enforceable against the Central Governmentor the National Textile Corporation; (b) no award, decree or order of any court, tribunal or other authority in relation to any sick textileundertaking passed after the appointed day in respect of any matter, claim or dispute, in relation toany matter not referred to in sub-section (2), which arose before that day, shall be enforceable againstthe Central Government or the National Textile Corporation; (c) no liability of any sick textile undertaking or any owner thereof for the contravention, beforethe appointed day, of any provision of law for the time being in force, shall be enforceable against theCentral Government or the National Textile Corporation. Explanation.-- In this section, "State Textile Corporation" means a corporation, formed andregistered under the Companies Act, 1956 (1 of 1956), in a State, which is in charge of the managementof a sick textile undertaking either as a person authorised under the Industries (Development andRegulation) Act, 1951 (65 of 1951), or as the Custodian under the Sick Textile Undertakings (TakingOver of Management) Act, 1972 (72 of 1972) and includes the West Bengal State Textile CorporationLimited which has advanced amounts to sick textile undertakings in the State.