Ministry of Textiles
The National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980, nationalized National Company Limited, a jute manufacturing company. The company’s management was taken over by the Central Government earlier under the Industries (Development and Regulation) Act, 1951, due to mismanagement. This Act aimed to fully acquire the company’s undertakings to ensure continued production of jute products, which were deemed essential for the national economy. This Act falls under the Ministry of Textiles.
Enactment Date, Number of Chapters, Number of Sections:
The Act was enacted on July 19, 1980, with sections 29 and 30 coming into force immediately, and the rest deemed effective from April 27, 1980. It consists of seven chapters and 35 sections, along with a schedule listing the categories of liabilities.
Act Governed By:
The acquired undertakings were initially vested in the Central Government, with provisions for their subsequent transfer to an existing or a new government company. A Commissioner of Payments was appointed to oversee the financial transactions and disbursement of funds.
On Whom It Is Applicable:
The Act primarily applied to National Company Limited, its employees, shareholders, creditors, and any other parties with claims against the company. It also affected the government company to which the undertakings were potentially transferred.
Penalties/Punishments:
The Act prescribes penalties, including imprisonment and fines, for offenses such as obstructing the acquisition process, wrongfully withholding property, and making false claims. It also addresses offenses committed by companies.
Important Pointers:
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Transfers all assets, rights, and liabilities of the company to the Central Government, with the option of subsequent transfer to a government company.
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Provides for compensation to the company in two installments, one for the transfer of undertakings and another for the period of government management prior to nationalization.
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Safeguards the rights of the company’s employees, ensuring their continued employment under the Central Government or the government company with comparable terms and conditions.
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Provides for the transfer and management of the company’s provident fund and other employee funds.
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Appoints a Commissioner of Payments to handle the disbursement of funds and settlement of claims against the company.
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Establishes a priority of claims, giving precedence to employee dues and secured loans.
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Allows for the Central Government or the government company to continue possessing any assets not originally belonging to the company but vested in them under the Act.