The Dalmia Dadri Cement Limited (Acquisition and Transfer of Undertakings) Act, 1981
📘 The Dalmia Dadri Cement Limited (Acquisition and Transfer of Undertakings) Act, 1981
1. Introduction
The Dalmia Dadri Cement Limited (Acquisition and Transfer of Undertakings) Act, 1981 is a special legislation enacted by the Indian Parliament with the primary objective of acquiring the undertakings of Dalmia Dadri Cement Limited (a company engaged in cement manufacturing) and transferring these undertakings to the government or a nominated authority. The Act aims at ensuring the smooth takeover and management of the company’s assets for reasons such as public interest, industrial policy, or economic control.
2. Purpose and Objectives
To acquire the entire or specified undertakings of Dalmia Dadri Cement Limited.
To transfer ownership and control of these undertakings to the Central Government, State Government, or a nominated agency.
To ensure continuity of operations and protect the interests of employees, creditors, and other stakeholders during the transition.
To provide a legal framework for compensation, management, and liabilities relating to the acquisition and transfer.
3. Key Provisions
📌 Section 3 – Acquisition of Undertakings
The Act empowers the government to acquire the whole or any part of the undertakings of Dalmia Dadri Cement Limited.
The acquisition includes all assets, liabilities, contracts, rights, and obligations associated with the undertakings.
📌 Section 4 – Transfer of Undertakings
Upon acquisition, the undertakings vest in the transferee, typically the Central Government or a nominated authority.
The transfer is effected through a notification in the official gazette, making the transfer legally effective.
📌 Section 5 – Vesting of Property and Rights
All properties, assets, rights, and liabilities of the company related to the undertakings automatically vest in the transferee without further act or deed.
This provision ensures a seamless transition of ownership and operational control.
📌 Section 6 – Compensation
The company is entitled to receive compensation from the government for the acquisition.
The amount of compensation is determined based on the value of the undertakings.
Disputes related to compensation are subject to arbitration or judicial review.
📌 Section 7 – Employees’ Rights
The Act protects the rights of employees of the acquired undertakings.
Employees continue their service under the transferee with the same terms and conditions.
This ensures job security and preservation of benefits.
📌 Section 8 – Legal Proceedings
Any ongoing legal proceedings against the company concerning the undertakings are transferred to the transferee.
The transferee assumes the status of the party in such proceedings.
4. Significance of the Act
Facilitates government acquisition and management of a significant industrial undertaking.
Provides a clear legal mechanism for ownership transfer and operational continuity.
Safeguards employee rights and welfare during the acquisition.
Addresses concerns related to creditors and liabilities, ensuring orderly management.
5. Relevant Case Law
Case 1: Dalmia Dadri Cement Ltd. v. Union of India (Hypothetical Example)
Issue: Challenge to the government’s acquisition of undertakings under the Act.
Held: The Court upheld the validity of the acquisition, emphasizing the government’s power to take over for public interest.
Principle: The Act’s provisions grant the government broad powers, subject to compliance with procedural fairness.
Case 2: Employees’ Association of Dalmia Dadri Cement Ltd. v. Transferee Authority (Hypothetical Example)
Issue: Whether employees’ service conditions can be altered post-transfer.
Held: The Court held that employees’ rights must be preserved and service conditions maintained under the Act.
Principle: The Act protects employees from arbitrary termination or reduction in benefits.
Case 3: Creditors of Dalmia Dadri Cement Ltd. v. Government (Hypothetical Example)
Issue: Entitlement of creditors during the acquisition and transfer.
Held: Creditors’ claims must be recognized and accounted for in the compensation.
Principle: The Act ensures creditors are not prejudiced due to government acquisition.
6. Relation with Other Laws
The Act functions alongside The Companies Act, 2013 (formerly 1956) concerning company operations and winding up.
It aligns with industrial and labor laws protecting employee rights.
Also works in harmony with land acquisition and property laws if real estate is involved.
7. Conclusion
The Dalmia Dadri Cement Limited (Acquisition and Transfer of Undertakings) Act, 1981 is a focused statute that empowers the government to acquire and manage the undertakings of a major cement company. It ensures a lawful, transparent, and fair process for acquisition, protects the interests of employees and creditors, and guarantees continuity of operations post-transfer. The judicial interpretation reinforces the government’s authority while safeguarding procedural fairness and stakeholders’ rights.
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