27. Assumption of liability.—(1) Where any liability of the owner of a sick textile undertaking
arising out of any item specified in category I of the Second Schedule is not discharged fully by the
Commissioner out of the amount paid to him under this Act, the Commissioner shall intimate in writing
to the Central Government the extent of the liability which remains undischarged, and that liability shall
be assumed by the Central Government.
(2) The Central Government may, by order, direct the National Textile Corporation to take over any
liability assumed by that Government under sub-section (1), and on receipt of such direction, it shall be
the duty of, the National Textile Corporation to discharge such liability.
28. Management to continue to vest in the Custodian until alternative arrangements are
made.—Notwithstanding the vesting, under this Act, of a sick textile undertaking in the National Textile
Corporation,—
(a) the Custodian who has been managing the affairs of such undertaking before the date on
which the Ordinance was promulgated shall, until alternative arrangements have been made by the
National Textile Corporation, continue to manage the affairs of such undertaking as if the Custodian
had been authorised by the National Textile Corporation to manage the affairs of such
undertaking; and
(b) the Custodian or any person authorised by him for this purpose shall, until alternative
arrangements have been made by the National Textile Corporation, continue to be authorised to
operate, in relation to the sick textile undertaking, any account of such undertaking in a bank as if
such Custodian or the person authorised by the Custodian had been authorised by the National Textile
Corporation to operate such account.
29. Act to override all other enactments.—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 authority.
30. Contracts to cease to have effect unless ratified by National Textile Corporation.—(1) Every
contract entered into by the owner or occupier of any sick textile undertaking 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 on which this Act receives the assent of the President, cease to have effect
unless such contract is before the expiry of that period, ratified, in writing, by the National Textile
Corporation and in ratifying such contract the National Textile Corporation may, with the previous
approval of the Central Government, make such alterations or modifications therein as it may think fit:
Provided that the National Textile Corporation shall not omit to ratify a contract, and shall not make
any alteration or modification in a contract, unless it is satisfied that such contract is unduly onerous or
has been entered into in bad faith or is detrimental to the interests of the sick textile undertaking.
(2) The National Textile Corporation shall not omit to ratify a contract, and, shall not make any
alteration or modification therein, except after giving to the parties to the contract a reasonable
opportunity of being heard and except after recording in writing its reasons for refusal to ratify the
contract or for making any alteration or modification therein.
31. Transfer of assets, etc., to be void in certain cases.—(1) Except with the prior approval of the
Central Government, no owner of a sick textile undertaking, specified in the Schedule to the Sick Textile
Undertakings (Taking Over of Management) Act, 1972 (72 of 1972), the management of which could not
be taken over by the Central Government by reason of any decree, order or injunction of any court or
otherwise, shall, on and from the date of introduction of the Sick Textile Undertakings (Nationalisation)
Bill, 1974, in the House of the People, transfer, by sale, mortgage or otherwise, any property or other
assets forming part of the said sick textile undertaking and any such transfer without the previous
approval of the Central Government shall be void and inoperative.
(2) Any person who contravenes the provisions of sub-section (1) 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.
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32. Penalties.—Any person who,—
(a) having in his possession, custody or control any property forming part of a sick textile
undertaking wrongfully withholds such property from the Central Government or the National Textile
Corporation, or any person authorised by that Government or Corporation, as the case may be, in this
behalf, or
(b) wrongfully obtains possession of, or retains, any property forming part of the sick textile
undertaking or wilfully withholds or fails to furnish to the Central Government, the National Textile
Corporation or any person specified by that Government, or Corporation, as the case may be, any
document relating to such sick textile undertaking which may be in his possession, custody or control
or fails to deliver to the National Textile Corporation or any person specified by that Corporation any
assets, books of account, registers or other documents in his custody relating to the sick textile
undertaking, or
(c) wrongfully removes or destroys and property forming part of any sick textile undertaking or
prefers any claim under this Act which he knows or has reasonable cause 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.
33. Offences by companies.—(1) Where an offence under this Act has been committed by a
company, every person who at the time the offence was committed was 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 punished accordingly:
Provided that nothing contained in this sub-section 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 or
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.
34. Protection of action taken in good faith.—No suit, prosecution or other legal proceeding shall
lie against the Central Government or any officer of that Government or the Custodian or the National
Textile Corporation or any Subsidiary Textile Corporation or any officer or other person authorised by
either of such Corporations for anything which is, in good faith done or intended to be done under this
Act.
35. Textile companies not to be wound up by the court.—No proceeding for the winding up of a
textile company, the right, title and interest in relation to the sick textile undertaking owned by which
have vested in the National Textile Corporation under this Act or for the appointment of a receiver in
respect of the business of the sick textile undertaking shall lie or be proceeded with in any court except
with the consent of the Central Government.
36. Delegation of powers.—(1) The Central Government may, by notification, direct that all or any
of the powers exercisable by it under this Act, other than the power under section 37, may also be
exercised by any person or persons as may be specified in the notification.
(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 Central Government.
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37. Power to make rules.—(1) The Central Government may, by notification, make rules to carry
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 the manner in which an intimation referred to in sub-section (4) of
section 4 shall be given;
(b) the manner in which monies in any provident or other fund referred to in section 15 shall be
dealt with;
(c) any other matter which is required to be, or may be, prescribed.
(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it
is made, before each House of Parliament 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, both Houses agree in making any
modification in the rule or both Houses agree 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.
38. Power to remove difficulties.—If any difficulty arises in giving effect to the provisions of this
Act, the Central Government may, by order not inconsistent with the provisions of this Act, remove the
difficulty:
Provided that no such order shall be made after the expiry of a period of two years from the date on
which this Act receives the assent of the President.
39. Declaration as to the policy of the State.—It is hereby declared that this Act is for giving effect
to the policy of the State towards securing the principles specified in clause (b) of article 39 of the
Constitution.
Explanation.—In this section, “State” has the same meaning as in article 12 of the Constitution.
40. Repeal and savings.—(1) The Sick Textile Undertakings (Nationalisation) Ordinance,
1974 (Ord. 12 of 1974), as hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed
shall be deemed to have been done or taken under the corresponding provisions of this Act.
1
[41. Validation.—Notwithstanding anything contained in any judgment, decree or order of any
court, tribunal or other authority,—
(a) the provisions of this Act, as amended by the Textile Undertakings (Nationalisation) Laws
(Amendment and Validation) Act, 2014 (36 of 2014), shall have and shall be deemed always to have
effect for all purposes as if the provisions of this Act, as amended by the said Act, had been in force at
all material times;
(b) any lease-hold property divested from the National Textile Corporation to any person under
the provisions of this Act, as it stood immediately before the commencement of the Textile
Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014 (36 of 2014), shall
stand transferred to and vest or continue to vest, free from all encumbrances, in the National Textile
Corporation in the same manner as it was vested in the National Textile Corporation before such
divesting of that property under the provisions of this Act, as if the provisions of this Act as amended
by the aforesaid Act, were in force at all material times;
(c) no suit or other proceedings shall, without prejudice to the generality of the foregoing
provisions, be maintained or continued in any court or tribunal or authority for the enforcement of any
decree or order or direction given by such court or tribunal or authority, notwithstanding any
undertaking filed by the National Textile Corporation in any court or tribunal or authority, directing
divestment of such lease-hold property from the National Textile Corporation vested in it under
section 3 of this Act, as it stood before the commencement of the Textile Undertakings
1. Ins. by Act 36 of 2014, s. 4 (w.e.f. 17-12-2014).
16
(Nationalisation) Laws (Amendment and Validation) Act, 2014 (36 of 2014), and such lease-hold
property shall continue to vest in the National Textile Corporation under section 3 of this Act, as
amended by the aforesaid Act, as if the said section was in force at all material times;
(d) any transfer of any property, vested in the National Textile Corporation, by virtue of any order
of attachment, seizure or sale in execution of a decree of a civil court or orders of any tribunal or
other authority in respect of lease-hold property vested in the National Textile Corporation which is
contrary to the provisions of this Act, as amended by the Textile Undertakings (Nationalisation) Laws
(Amendment and Validation) Act, 2014 (36 of 2014), shall be deemed to be null and void and
notwithstanding such transfer, continue to vest in the National Textile Corporation under this Act.]