3. Transfer to, and vesting in, the Central Government of the undertakings of the Company.—
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 shall vest in, the
Central Government.
4. General effect of vesting.—(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, workshops, stores, instruments, machinery and equipment, cash balances, cash
on hand, cheques, demand drafts, reserve funds, investments, 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 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 in cumbrances affecting them, and any attachment, injunction, decree or order of any court, tribunal
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respect of the whole or any part of such properties shall be deemed to have been withdrawn.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 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 specified in section 7 and also out of the
amounts determined under section 8, but no such mortgage, charge, lien or other interest shall be
enforceable against any property which has vested in this Central Government.
(5) Any licence or other instrument granted to the Company in relation to any undertaking which has
vested in the Central Government under section 3 at any time before the appointed day and in force
immediately before that day shall continue to be in force on and after such day in accordance with its
tenor in relation to and for the purposes of such undertaking, and, on and from the date of vesting of such
undertaking under section 6 in a Government company, such Government company shall be deemed to be
substituted in such licence or other instrument as if such licence or other instrument had been granted to
such Government company and that 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 which has vested in the Central 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 Central Government, or, where the undertakings of the Company are directed, under
section 6, to vest in a Government company, by or against the Government company.
5. Company to be liable for certain prior liabilities.—(1) Every liability 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, where the undertakings of the
Company are directed, under section 6, to vest in a Government company, against that Government
company.
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(2) For the removal of doubts, it is hereby declared that—
(a) save as otherwise expressly provided in this section or in any other provision of this Act, no
liability of the Company in respect of any period prior to the appointed day, shall be enforceable
against the Central Government, or, where the undertakings of the Company are directed, under
section 6, to vest in a Government company, against that Government company;
(b) no award, decree or order of any court, tribunal or other authority in relation to the
undertakings of the 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, where
the undertakings of the Company are directed, under section 6, to vest in a Government company,
against that Government company;
(c) no liability incurred by the Company before the appointed day, for the contravention of any
provision of law for the time being in force, shall be enforceable against the Central Government, or,
where the undertakings of the Company are directed, under section 6, to vest in a Government
company, against that Government company.
6. Power of Central Government to direct vesting of the undertakings of the Company in a
Government company.—(1) Notwithstanding anything contained in sections 3 and 4, the Central
Government may, subject to such terms and conditions as it 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 that Government under section 3, shall, instead of
continuing to vest in the Central Government, vest in a 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 of the Company, in relation to its undertakings, 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 in relation to such undertakings, and all the rights and
liabilities of the Central Government in relation to such undertakings shall, on and from the date of such
vesting, be deemed to have become the rights and liabilities of the Government company.