Ministry of Textiles
The Textile Undertakings (Nationalisation) Act, 1995, nationalized several textile undertakings listed in the Act’s schedule. These undertakings were already under government management due to financial difficulties. The Act aimed to formally acquire these units to boost the production and distribution of cloth and yarn, essential commodities for the country. The move was also intended to secure the continued employment of workers in these mills. This Act falls under the Ministry of Textiles.
Enactment Date, Number of Chapters, Number of Sections:
The Act was enacted on September 8, 1995, with sections 31 and 32 coming into force immediately, and the remaining provisions deemed effective from April 1, 1994. It consists of seven chapters and 39 sections, along with two schedules listing the nationalized undertakings and their owners.
Act Governed By:
The Act’s implementation was overseen by the Central Government, which acquired the textile undertakings and transferred them to the National Textile Corporation (NTC). Commissioners of Payments were appointed to handle the financial aspects of the acquisition and compensation.
On Whom It Is Applicable:
The Act primarily applied to the textile undertakings listed in the First Schedule, their owners, employees, and creditors. It also impacted the National Textile Corporation (NTC) and any subsidiary corporations to which the undertakings were transferred.
Penalties/Punishments:
The Act prescribes penalties, including imprisonment and fines, for offenses such as obstructing the acquisition process, making false claims, and wrongfully withholding assets. It also addresses offenses by companies.
Important Pointers:
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Nationalizes the textile undertakings listed in the First Schedule.
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Vests ownership of these undertakings in the National Textile Corporation.
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Provides for compensation to the owners of the nationalized mills, including interest for the period between the date of taking over management and the appointed day.
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Ensures continued employment for the employees of the nationalized undertakings under the NTC, with terms and conditions no less favorable than before.
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Addresses the transfer and management of provident funds and other employee funds.
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Empowers the NTC to form subsidiary corporations and transfer the management of the undertakings to them.
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Establishes Commissioners of Payments to handle financial transactions and claims settlement.
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Sets a priority for claims against the owners of the textile undertakings, giving precedence to employee dues and secured loans.
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Includes a validation clause to address legal challenges and ensure the Act’s effectiveness.