The Alok Udyog Vanaspati And Plywood Limited ( Acquisition And Transfer Of Undertakings ) Act, 1986

GOVERNMENT OF WEST BENGAL 

LAW DEPARTMENT 

Legislative 

West Bengal Act XXXIV of 1986 

THE ALOK UDYOG VANASPATI AND PLYWOOD 
LIMITED (ACQUISITION AND TRANSFER 

OF UNDERTAKINGS) ACT, 1986. 

[Passed by the West Bengal Legislature.] 

[Assent of the President of India was first published in the Calcutta 

Gazette, Extraordinary, of the 4th June, 1988.] 

[4th June, 1988.] 

An Act to provide for the acquisition and transfer, in the public interest, of 
the undertakings of the Alok Udyog Vanaspati and Plywood Limited, 
and for matters connected therewith or incidental thereto. 

WHEREAS the Alok Udyog Vanaspati and Plywood Limited had been 
engaged in the manufacture and production of plywood and decorative 
laminate; 

AND WHEREAS the management of the undertakings of the Alok Udyog 
Vanaspati and Plywood Limited had been conducted in a manner highly 
detrimental to the public interest; 

AND WHEREAS the management of the undertakings of the Alok Udyog 
Vanaspati and Plywood Limited was taken over by the Central Government 

65 of 1951. 

	

	under section 18A of the Industries (Development and Regulation) Act, 
1951; 

AND WHEREAS for the purpose of reconstructing and rehabilitating the 
undertakings of the Alok Udyog Vanaspati and Plywood Limited so as the 
subserve the interests of the general public by the augmentation of 
production and distribution of the aforesaid articles which are essential to 
the needs of the general public, it is necessary to acquire the undertakings 
of the Company; 

It is hereby enacted in the Thirty-seventh Year of the Republic of India, 
by the Legislature of West Bengal, as follows:- 

253 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

(Chapter 1.—Preliminary.—Sections 1, 2.) 

CHAPTER I 

Preliminary 

[West Ben. Act 

Short title 
and 
commence-
ment. 

1. (1) This Act may be called the Alok Udyog Vanaspati and 

Plywood Limited (Acquisition and Transfer of Undertakings) Act, 1986. 

(2) It shall come into force on such date as the State Government may, 

by notification, appoint. 

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

(a) "appointed day" means the date on which this Act comes into 

force; 

(b) "Commissioner" means the Commissioner of Payments 

appointed under section 16; 

(c) "Company" means the Alok Udyog Vanaspati and Plywood 

Limited, being a company as defined in the Companies Act, 

1956, and having the registered office at 6A, Raja Subodh 

Mullick Square (7th floor), Calcutta 700 013; 

(d) "date of taking over of management of the undertakings of the 

Company" means the 29th day of March, 1978; 

(e) "existing Government company" means a Government 

company which is carrying on business on the appointed day; 

(f) "new Government company" means a Government company 

formed and registered On or after the appointed day; 

(g) "notification" means a notification published in the Official 

Gazette; 

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

(i) "specified date" means such date as the State Government 
may, for the purpose of any of the provisions of this Act, by 

notification, specify, and different dates may be specified for 

different provisions of this Act; 

(j) words and expressions used herein and not defined, but 

defined in the Companies Act, 1956, have the meanings 

respectively assigned to them in that Act. 

1 of 1956. 

254 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

(XXIV of 1986.] 

(Chapter 11.—Acquisition and transfer of the undertakings 
of the Company.—Sections 3, 4.) 

CHAPTER II 

Acquisition and transfer of the undertakings of the Compamy 

3. On the appointed day, the undertakings of the Company, and the 
right, title and interest of the Company in relation to its undertakings, shall, 
by virtue of this Act, stand transferred to, and vest in, the State Government. 

4. (1) The undertakings of the Company shall be deemed to include 
all assets, rights, lease-holds, powers, authorities and privileges, and all 
property, movable and immovable, including lands, buildings, offices, 
factories, workshops, stores, instruments, plants, machinery and equipment, 
installations, laboratories, office furniture, stationery and equipment, 
vehicles, patents, trade marks, cash balances, cash in hand, reserve funds, 
instruments, book debts 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 of the Company, whether within 
or outside India, and all books of account, registers and all other documents 
of whatever nature relating thereto. 

(2) All properties and assets as aforesaid which have vested in the 
State Government under section 3 shall, by force of such vesting, be freed 
and discharged from any trust, obligation, mortgage, charge, lien and all 
other encumbrances affecting them, and any attachment, injunction, 
decree or order of any court or other authority restricting the use of such 
properties or assets in any manner or appointing any receiver in respect of 
the whole or any part of such properties or assets shall be deemed to have 
been withdrawn. 

(3) Every mortgagee of any property which has vested under this Act 
in the State 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 
any 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 
the amount of compensation determined under section 8, and also out of 
the amount determined under section 9, but, no such mortgage, charge, 
lien or other interests shall be enforceable against any property which 
has vested in the State Government. 

Transfer to, 
and vesting 
in, State 
Government 
of the 
undertakings 
of the 
Company. 

General 
effect of 
vesting. 

255 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

(Chapter 11. Acquisitionand transfer of the undertakings 
of the Company.—Section 5.) 

(5) Any licence or other instrument granted to the Company in 
relation to any undertaking which has vested in the State Government 
under section 3 at any time before the appointed day and in force 
immediately before the appointed day shall continue to be in force on and 
after such day in accordance with its tenor in relation to and for the purpose 
of such undertaking, and, on and from the date of vesting of such 
undertaking, under section 6, in an existing Government company, or 
under seection 7, in a new Government company, the existing or the new 
Government company, as the case maybe, shall be deemed to be substituted 
in such licence or other instrument as if such licence or other instrument 
had been granted to such existing or new Government company and such 
existing or new Government company shall hold it for the remainder of the 
period for which the Company would have held it under the terms thereof. 

(6) If, on the appointed day, any suit, appeal or other proceeding of 
whatever nature, in relation to any property or asset which has vested in the 
State Government under section 3, instituted or preferred by or against the 
Company, is pending, the same shall not abate, be discontinued or be, in 
any way, prejudicially affected by reason of the transfer of the undertakings 
of the 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 State Government or, where the undertakings of the Company 
are directed to vest, under section 6, in an existing Government company, 
or under section 7, in a new Government company, by or against such 
Government company. 

'Central 
Government 
or State 
Government 
or existing or 
new 
Government 
company not 
to be liable 
for certain 
prior 
liabilities. 

5. (1) Every liability, other than the liability specified in sub-section 
(2), of the Company in respect of any period prior to the appointed day shall 
be the liability of the Company and shall be enforceable against it and not 
against the Central Government or the State Government or, where the 
undertakings of the Company are directed to vest, under section 6, in an 
existing Government company, or under section 7, in a new Government 
company, against such Government company. 

(2) Any liability arising in respect of— 

(a) loans advanced by the Central Government or the State 
Government, or both, to the Company (together with interest 
due thereon), on or after the date of taking over of management 
of the undertakings of the Company, 

256 



The Alok Uclyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter 1L —Acquisition and transfer of the undertakings 
of the Company.—Section 5.) 

(b) loans advanced by a bank to the Company (together with 
interest due thereon) on or after the date of taking over of 
management of the undertakings of the Company, 

(c) loans advanced by the Industrial Reconstruction Corporation 
of India Limited to the Company (together with interest due 
thereon) on or after the date of taking over of management of 
the undertakings of the Company, 

(d) wages, salaries and other dues of employees of the Company 
and dues on account of any deductions made from wages and 
salaries and other dues of such employees relating to any 
period commencing on and from the date of taking over of 
management of the undertakings of the Company, or 

(e) any debt incurred by the Company during any period 
commencing on and from the date of taking over of 
management of the undertakings of the Company, not being a 
debt falling under clause (a), clause (b), clause (c) or clause (d), 

shall, on and from the appointed day, be the liability of the State Government 
or the Government company as aforesaid and shall be discharged by the 
State Governemnt or the existing Government company or the new 
Government company as aforesaid as and when repayment of such loans 
becomes due or such wages, salaries and other dues or debt becomes due 
and payable. 

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

(a) save as otherwise expressly provided in this Act, no laibility 
of the Company in relation to its undertakings in respect of 
any period prior to the appointed day shall be enforceable 
against the Central Government or the State Government or, 
where the undertakings of the Company are directed to vest, 
under section 6, in an existing Government company, or 
under section 7, in a new Government company, against such 
Government company; 

(b) no award, decree or order of any court, tribunal or other 
authority in relation to the undertakings of the Company 
passed on or after the appointed day, in respect of any matter, 
claim or dispute, which arose before the appointed day shall 
be enforceable against the Central Government or the State 
Government or, where the undertakings of the Company are 
directed to vest, under section 6, in an existing Government 
company, or under section 7, in a new Government company, 
against such Government company; 

257 



The Alok Udvog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

(Chapter 11.—Acquisition and transfer of the undertakings 
of the Company—Sections 6, 7.) 

(c) no liability incurred by the Company before the appointed 
day for the contravention of any provision of any law for the 
time being in force shall be enforceable against the Central 
Government or the State Government or, where the 
undertakings of the Company are directed to vest, under 
section 6, in an existing Government company, or under 
section 7, in a new Governemnt company, against such 
Government company. 

Power of 
State 
Government 
to direct 
vesting of 
the 
undertakings 
of the 
Company in 
an existing 
Government 
company. 

Power of 
State 
Government 
to direct 
vesting of 
the 
undertakings 
of the 
Company in 
a new 
Government 
company. 

6. (1) Notwithstanding anything contained in sections 3 and 4, and 
subject to the provisions of section 7, the State Government may, if it is 
satisfied that an existing-Government company 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 undertakings of the Company, 
and the right, title and interest of the Company in relation to its undertakings 
which have vested in the State Government under section 3, shall, instead 
of continuing to vest in the State Government, vest in that existing 
Government company either on the date of publication 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 of the Company in relation to its 
undertakings vest under sub-section (1) in an existing Government company, 
that Government company shall, on and from the date of such vesting, be 
deemed to have become the owner in relation to such undertakings and the 
rights and liabilities of the State Government in relation to such undertakings 
shall, on and from the date of such vesting, be deemed to have become the 
rights and liabilities, respectively, of that existing Government company. 

7. (1) Notwithstanding anything contained in sections 3, 4 and 6, the 
State Government may, if it is satisfied that a new Government company 
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 
undertakings of the Company, and the right, title and interest of the 
Company in relation to its undertakings which have vested in the State 
Government under section 3, shall, instead of continuing to vest in the 
State Government, vest in that new Government company either on the 
date of publication of the notification or on such earlier or later date (not 
being a date earlier than the date of registration of the new Government 
company) as may be specified in the notification. 

258 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter 111.—Payment of amounts.—Sections 8, 9.) 

(2) Where the right, title and interest of the Company in relation to its 
undertakings vest under sub-section (1) in a new Government company, 
that new Government company shall, on and from the date of such vesting, 
be deemed to have become the owner in relation to such undertakings and 
the rights and liabilities of the State Government in relation to such 
undertakings shall, on and from the date of such vesting, be deemed to have 

become the rights and liabilities, respectively, of that new Government 
company. 

CHAP I hR III 

Payment of amounts 

8. For the transfer to, and vesting in, the State Government, under 
section 3, of the undertakings of the Company and the right, title and 
interest of the Company in relation to its undertakings, there shall be given 
by the State Government to the Company in the manner specified in 
Chapter VI an amount of rupees fifteen lakhs and sixteen thousand. 

9. (1) For the deprivation of the Company of the management of its 
undertakings, there shall be given to the Company by the State Government 

an amount of rupees three thousand and seven hundred. 

(2) The amount specified in section 8 and the amount specified in sub-
section (1) of this section shall carry simple interest at the rate of four per 
cent. per annum for the period commencing on the appointed day and 
ending on the date on which payment of such amounts is made by the State 
Government to the Commissioner. 

(3) The amount specified in sub-section (1), and the amount determined 
in accordance with the provisions of sub-section (2) shall be given by the 

State Government to the Company in addition to the amount specified in 
section 8. 

(4) The amounts payable under section 8 and sub-sections (1) and (2) 
of this section shall be payable in four equal annual instalments. 

(5) For the removal of doubts, it is hereby declared that the liabilities 
of the Company in relation to its undertakings which have vested in the 
State Government under section 3 shall be discharged from the amount 
specified in section 8, and also from the amount specified in sub-section 
( I ) and the amount determined under sub-section (2) of this section, in 
accordance with the rights and interests of the creditors of the Company. 

Payment of 
amount. 

Payment of 
further 
amount. 

259 



The Alok Udvog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

(Chapter 1V.—Management, etc., of the undertakings 
of the Company.—Sections 10, 11.) 

CHAPTER IV 

Management, etc., of the undertakings of the Company 

Manage-
ment, etc., of 
the 
undertakings 
of the 
Company.  

Duty of 
persons in 
charge of 
management 
of the 
undertakings 
of the 
Company to 
deliver all 
assets, etc. 

10. (1) The general superintendence, direction, control and 
management of the affairs and business of the undertakings of the 
Company, the right, title and interest in relation to which have vested in the 
State Government under section 3, shall,— 

(a) where a direction has been given by the State Government 
under sub-section (1) of section 6, vest, on and from the date 
specified in such direction, in the existing Government 
company specified therein; or 

(b) where a direction has been given by the State Government 
under sub-section (1) of section 7, vest, on and from the date 
specified in such direction, in the new Government company 
specified therein; or 

(c) where no direction has been given under clause (a) or clause 
(b), vest, in one or more Custodians appointed by the State 
Government under sub-section (2), 

and thereupon the existing, or new, Government company so specified or 
the Custodian or Custodians so appointed, as the case may be, shall be 
entitled to exercise, to the exclusion of all other persons, all such powers 
and do all such things as the Company is authorised to exercise and do in 
relation to its undertakings. 

(2) The State Government may appoint one or more individuals or a 
Government company as the Custodian or Custodians of the undertakings 
of the Company in relation to which no direction has given by it under sub-
section (1) of section 6 or sub-section (1) of section 7. 

(3) The Custodian or Custodians so appointed shall receive from the 
funds of the undertakings of the Company such remuneration as the State 
Government may fix and hold office during the pleasure of the State 
Government. 

11. (1) On the vesting of the management of the undertakings of the 
Company in an existing, or vew, Government company or on the 
appointment of the Custodian or Custodians, all persons in charge of the 
management of the undertakings of the Company immediately before such 
vesting or appointment shall be bound to deliver to such Government 
company, or Custodian or Custodians, as the case may be, all assets, books 
of account, registers and other documents in their custody relating to the 
undertakings of such company. 

260 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter IV.—Management, etc., of the undertakings 
of the Company.—Section 12.) 

(2) The State Government may issue such directions as it may deem 
desirable in the circumstances of the case to the existing, or new, Government 
company or the Custodian or Custodians as to the powers and duties of 
such Government company or Custodian or Custodians, and such 
Government company or Custodian or Custodians may also, if it is 
considered necessary so to do, apply to the State Government at any time 
for instructions as to the manner in which the management of the 
undertakings of the Company shall be conducted or in relation to any other 
matter arising in the course of such management. 

(3) Any person, who on the appointed day has in his possession or 
under his control any books, documents or other papers relating to the 
undertakings of the Company which have vested in the State Government 
or in any existing, or new, Government company and which belong to the 
Company, or would have so belonged if the undertakings of the Company 
had not vested in the State Government or the existing, or new, Government 
company, shall be liable to account for the said books, documents or other 
papers to the State Government or the existing, or new, Government 
company, as the case may be, and shall deliver them up to the State 
Government or the existing, or new, Government company or to such 

person or body of persons as the State Government or such Government 
company may specify in this behalf. 

(4) The State Government or the existing, or new, Government 
company may take, or cause to be taken, all necessary steps for securing 
possession of all undertakings which have vested in the State Government 
or the existing, or new, Government company under this Act. 

(5) The Company shall, within such period as the State 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 
undertakings which have vested in the State Government under section 3, 
and, for this purpose, the State Government or the existing, or new, 
Government company shal afford to the Company all reasonable facilities. 

I of 1956. 

12. The Custodian or Custodians of the undertakings of the Company Accounts 

shall maintain an account of the undertakings of the Company in such form 
and audit. 

 

and under such conditions as may be prescribed and the provisions of the 
Companies Act, 1956 shall apply to the audit of the accounts so maintained 
as they apply to the audit of the accounts of a company. 

261 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

(Chapter V.—Provisions relating to the employees 
of the Company.—Sections 13, 14.) 

CHAPTER V 

Provisions relating to the employees of the Company 

Employment 
of certain 
employees to 
continue. 

Provident 
fund and 
other funds. 

13. (1) Every person who has been, immediately before the appointed 
day, employed in any of the undertakings of the Company shall become,— 

(a) on and from the appointed day, an employee of the State 
Government, and 

(b) where the undertakings of the Company are directed to vest, 
under sub-section (1) of section 6, in an existing Government 
company or under sub-section (1) of section 7, in a new 
Government company, an employee of such Government 
company on and from the date of such vesting, 

and shall hold office or service under the State Government or the existing, 
or new, 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 or transfer and shall 
continue to do so unless and until his employment under the State 
Government or the existing, or new, Government company, as the case 
may be, is duly terminated or until his remuneration and other conditions 
of service are duly altered by the State Government or the existing, or new, 
Government company, as the case may be. 

(2) Notwithstanding anything contained in the Industrial Disputes 14 of 1947. 

Act, 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 undertakings of 
the Company to the State Government or the existing, or new, Government 
company, as the case may be, shall not entitle such officer or other 
employee to any compensation under this Act or under any other law for 
the time being in force and no such claim shall be entertained by any court, 
tribunal or other authority. 

14. (1) Where the Company has established a provident fund or 
superannuation, welfare or other fund for the benefit of the persons 
employed in the undertakings of the Company, the moneys relatable to the 
employees, whose services have become transferred by or under this Act 
to the State Government or the existing, or new, Government company, as 
the case may be, shall, out of the moneys standing, on the appointed day, 
to the credit of such provident fund or superannuation, welfare or other 
fund, stand transferred to, and vest in, the State Government or the 
existing, or new, Government company, as the case may be. 

262 



The A-lok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter V1—Commissioner of Payments.—Sections 15, 16.) 

(2) The moneys which stand transferred under sub-section (1) to the 
State Government or the existing, or new, Government company, as the 
case may be, shall be dealt with by that Government or the existing, or new, 
Government company in such manner as may be prescribed. 

CHAPTER VI 

Commissioner of Payments 

15. (1) The State Government shall, for the purpose of disbursing the 
amounts payable under sections 8 and 9, by notification, appoint a 
Commissioner of Payments. 

(2) The State 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 the 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 the State. 

16. (1) Subject to the provisions of sub-section (4) of section 9 and 
sub-section (4) of this section, the State Government shall, within thirty 
days from the specified date, pay, in cash, to the Commissioner for 
payment to the Company,— 

(a) the fist instalment of the amount specified in section 8, and 
(b) the first instalment of the amounts payably to the Company 

under section 9: 

Provided that twelve months shall not intervene between 
the date of payment of one instalment and the date of payment 
of the next instalment. 

(2) A deposit account shall be opened by the State Government in 
favour of the Commissioner in the Public Account of the State, 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. 

Appointment 
of Commis-
sioner of 
Payments. 

Payment by 
State 
Government 
to the 
Commis-
sioner. 

263 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

Certain 
powers of 
State 
Government 
or existing, 
or new 
Government 
company. 

[West Ben. Act 

(Chapter VI.—Cornnzissioner of Payments.—Section 17.) 

(3) Interest accruing on the amounts standing to the credit of the 
deposit account referred to in sub-section (2) shall enure to the said 

account. 

(4) Notwithstanding anything contained elsewhere in this Act,— 

(a) any amount payable to any bank or financial institution 

towards repayment of the principal amount of any secured 
loans advanced by such bank or financial institution to the 
Company before the date of taking over of management of the 
undertakings of the Company, shall be paid directly by the 
State Government to such bank or financial institution in 
accordance with such agreement, in writing, as the State 
Government and the bank or the financial institution may 

enter into with each other, and 

(b) the amount payable by the State Government directly to any 
bank or financial institution under clause (a) shall be deducted 
from the amounts payable to the Company under sections 8 

and 9. 

17. (1) The State Government or the existing, or new, 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 the Company, 
in relation to its undertakings which have vested in the State Government 
or the existing, or new, Government company, as the case may be, and 
realised after the appointed day, notwithstanding that the realisation 

pertains to a period prior to the appointed day. 

(2) The State Government or the existing, or new, Government 

company, as the case may be, may make a claM to the Commissioner 
with regard to every payment made by it after the appointed dayfor 
discharging any liability of the Company, 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 State Government or the 
existing, or new, Government company, as the case may be. 

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

264 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter VI—Commissioner of Payments.—Sections 18-21.) 

18. Every person having a claim against the Company 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 and not thereafter. 

19. The claims arising out of the matters specified in the Schedule 
shall have priorties in accordance with the following principles:— 

(a) Category I shall have precedence over all other categories 
and Category II shall have precedence over Category III, 
and so on; 

(b) the claims specified in each of the categories 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 proportions 
and be paid accordingly; 

(c) 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. ( I ) On receipt of the claims made under section 18, the 
Commissioner shall arrange the claims in the order of priorities specified 
in the Schedule and examine the same in accordance with such order of 
priorities. 

(2) If, on examination of the claims, the Commissioner is of the 
opinion that the amount paid to him under this Act is not sufficient to meet 
the liabilities spectified in any lower category, he shall not be required to 
examine any claim in respect of such lower category. 

21. (1) After examining the claims with reference to the priorities set 
out in the Schedule, the Commissioner shall fix a date on or before which 
every claimant shall file the proof of his claim. 

(2) Not less than fourteen days' notice of the date so fixed shall be 
given by advertisement in such issue of any daily newspaper in the English 
language and in such issue of daily newspaper in such 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 time specified in the advertisement. 

Claims to be 
made to the 
Commis-
sioner. 

Priority of 
claims. 

Examination 
of claims. 

Admission or 
rejection of 
claims. 

265 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

Disburse-
ment of 
money by 
Commis-
sioner to 
claimants. 

(Chapter VI.—Commissioner of Payments.—Section 22.) 

(3) Every claimant who fails to file the proof of his claim within the 
time specified by the Commissioner shall be excluded from the 
disbursements made by the Commissioner. 

(4) The Commissioner shall, after such investigation as may, in his 
opinion, be necessary and after giving the Company an opportunity of 
refuting the claim and after giving the claimant a reasonable opportunity 
of being heard, by order 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 will hold his sittings 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, while trying a suit, in respect of the following matters:— 

(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 as evidence; 

(c) the reception of evidence on affidavit; 

(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 and the Commissioner shall be deemed to be a civil 
court for the purpose of section 195 and Chapter XXVI of the Code of 
Criminal Procedure, 1973. 

(7) A claimant who is dissatisfied with the decision of the Commissioner 
may prefer an appeal against the decision to the principal civil court of 
original jurisdiction within the local limits of whose jurisdiction the 
registered office of the Company is situated: 

Provided that where a person who is a Judge of a High Court is 
appointed to be the Commissioner, the appeal shall lie to the High Court 
at Calcutta and such appeal shall be heard and disposed of by not less than 
two Judges of the High Court. 

22. After admitting a 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 amount is due, and, on such payment, the liability of the 
Company in respect of such claim shall stand discharged. 

5 of 1908. 

45 of 1860. 

2 of 1974. 

266 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter VI.—Commissioner of Payments.—Sections 23, 24.--
Chapter VIL—Miscellaneous.—Sections 25, 26.) 

23. (1) If, out of the moneys paid to him in relation to the undertakings 
of the Company, there is a balance left after meeting the liablities in 
accordance with the priorities specified in the Schedule, the Commissioner 
shall disburse such balance to the Company. 

(2) Where any machinery, equipment or other property has vested 
under this Act in the State Government or the existing, or new, Government 
company, as the case may be, but such machinery, equipment or other 
property does not belong to the Company, it shall be lawful for the State 
Government or the existing, or new, Government company, as the case 
may be, to continue to possess such machinery, equipment or other 
property on the same terms and conditions under which they were 
possessed by the Company immediately before the appointed day. 

24. Any money paid to the Commissioner which remains undisbursed 
or unclaimed on the date immediately preceding the date on which the 
office of the Commissioner is finally wound up shall be transferred by the 
Commissioner to the general revenue account of the State Government; 
but a claim to any money so transferred may be preferred to the State 
Govenment by the persons entitled to such payment and shall be dealt with 
as if such transfer had not been made, and the order, if any, for the payment 
of the claim shall be treated as an order for the refund of the revenue. 

CHAPTER VII 

Miscellaneous 

25. The provisions of this Act shall have effect notwithstanding 
anything inconsistent therewith contained in any other law for 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. (1) Where any liability of the Company arising out of any item 
specified in Category I of the Schedule is not discharged fully by the 
Commissioner out of the amounts paid to him under this Act, the 
Commissioner shall intimate in writing to the State Government the extent 
of the liability which remains undischarged and that liability shall be 
assumed by the State Government. 

(2) The State Government may, by order, direct the Company to take 
over the liability assumed by the State Government under sub-section (1), 
and, on receipt of such direction, it shall be the duty of the Company to 
discharge such liability. 

Disburse-
ment of 
amounts to 
the Company 
and 
possession of 
certain 
machinery, 
equipment, 
etc. 

Undisbursed 
or unclaimed 
amount to be 
deposited to 
the general 
revenue 
account. 

Act to have 
overriding 
effect. 

Assumption 
of liability. 

267 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

(Chapter VII.—Miscellaneous.—Sections 27, 28.) 

Contracts to 
cease to have 
effect unless 
ratified by 
the State 
Government 
or existing, 
or new• 
Government 
company. 

Penalties. 

27. Every contract entered into by the Company in relation to its 
undertakings 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 of publication of this Act in the Official Gazette, 
cease to have effect unless such contract is, before the expiry of the said 
period, ratified in writing by the State Government or, as the case may be, 
the existing, or new, Government company, and in ratifying such contract, 
the State Government or, as the case may be, the existing, or new, 
Government company may make such alterations or modifications therein 
as it may think fit: 

Provided that the State Government or, as the case may be, the existing, 
or new, Government company shall not omit to ratify a contract and shall 
not make any alteration or modification therein— 

(a) unless it is satisfied that such contract is unduly onerous or 
has been entered into in bad faith or is detrimental to the 
interest of the State Governemnt or, as the case may be, such 
Government company; and 

(b) except after giving the parties to the contract a reasonable 
opportunity of being heard and except after recording in 
writing its reasons for its refusal to ratify the contract or for 
making any alteration or modification therein. 

28. Any person, who— 
(a) having in his possession, custody or control any property 

forming part of the undertakings of the Company wrongfully 
withholds such property from the State Government or the 
existing, or new, Government company, as the case may be, 
or any person or body of persons authorised by that 
Government or existing, or new, Government company, or 

(b) wrongfully obtains possession of, or retains, any property 
froming part of any undertakings of the Company or wilfully 
withholds or fails to furnish to the State Government or, as the 
case may be, the existing, or new, Government company or 
any person or body of persons authorised by that Government 
or Government company, any document relating to such 
undertaking which may be in his possession, custody or 
control or fails to deliever to the State Government or, as the 
case may be, the existing, or new, Government company or 
any person or body of persons authorised by that Government 
or existing, or new, Government company, any assets, books 
of account, registers or other documents in his possession, 
custody or control relating to the undertakings of the Company, 
Or 

268 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(Chapter VIL—Miscellaneous.--Sections 29-31.) 

(c) wrongfully removes or destroys any property forming part of 
the undertakings of the 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. 

29. (1) Where an offence under this Act has been committed by a Offences by 

company, every person who, at the time the offence was committed, was 
companies. 

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 
punishable accordingly: 

Provided that nothing contained in sub-section (1) 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 of connivance of, or 
is attributable to any neglect on the part of, any director, manager, secretary 
or other officer of the Company, such 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. 

30. No suit, prosecution or other legal proceeding shall lie against the 
State Government or any officer of that Government or the Custodian of 
the undertakings of the Company or the existing, or new, Government 
company or any officer or other person authorised by that Government or 
existing, or new, Government company for anything wihich is in good 
faith done or intended to be done under this Act. 

31. (1) The State Government may, by notification, direct that all or 
any of the powers exercisable by it under this Act, other than the power 
conferred by this section or section 32 or section 33, may also be exercised 
by such person or persons as may be specified in the notification. 

Protection of 
action taken 
in good 
faith. 

Delegation 
of powers. 

269 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

[West Ben. Act 

(Chapter V1L—Miscellaneous.—Sections 32, 33.) 

(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 State Government. 

Power to 
make rules. 

Power to 
remove 
difficulties. 

32. (1) The State 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 power, such rules may provide for all or any of the following 
matters, namely:— 

(a) the time within which, and the manner in which, an intima-
tion referred to in sub-section (3) of section 4 shall be 
given; 

(b) the form and the manner in which, and the conditions under 
which, the Custodian or Custodians shall maintain accounts 
as required by section 12; 

(c) the manner in which moneys in any provident fund or other 

fund referred to in section 14 shall be dealt with; 

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

(3) Every rule made by the State Government under this Act shall be 
laid, as soon as may be after it is made, before the State Legislature, 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, the State Legislature agrees in making any modifications in the 
rule or the State Legislature agrees 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. 

33. If any difficulty arises in giving effect to the provisions of this 
Act, the State Government may, by order, not inconsistent with the 
provisions of this Act, remove the difficulty: 

Provided that no such order thall be made after the expiry of a 
period of two years from the date of publication of this Act in the Official 

Gazette. 

270 



The Alok Udyog Vanaspati and Plywood Limited (Acquisition 
and Transfer of Undertakings) Act, 1986. 

XXXIV of 1986.] 

(The Schedule.) 

THE SCHEDULE 

(See sections 19, 20, 21 and 23.) 

Order of priorities for the discharge of the liabilities 
of the Company 

Pre-take-over period 

Category 1— 

(a) Wages, salaries and other dues payable to the employees by the 
Company. 

(b) Deductions made from the salaries and wages of the. employees for 
provident fund, the Employees' State Insurance Fund and premium relating 
to the Life Insurance Corporation of India. 

(c) Arrears in relation to contributions to be made by the Company to 
provident fund, the Employees' State Insurance Fund, premium relating to 
the Life Insurance Corporation of India and any other arrear under any law 
for the time being in force. 

Category II— 

Revenue, taxes, cesses, rates and other dues to the Central and State 
Governments and local authorities or State Electricity Board. 

Category III— 

Principal amount of unsecured loans advanced by banks and financial 
institutions. 

Category IV— 

Amounts due by way of interest on unsecured loans referred to in 
Category III. 

Category V— 

Any other credit availed of for purposes of trade or manufacturing 
operations and any other dues. 

271 


	Page 1
	Page 2
	Page 3
	Page 4
	Page 5
	Page 6
	Page 7
	Page 8
	Page 9
	Page 10
	Page 11
	Page 12
	Page 13
	Page 14
	Page 15
	Page 16
	Page 17
	Page 18
	Page 19