General effect of vesting

General effect of vesting.

1. (1) The sick textile undertaking, the right, title and interest in relation to which vest in the State Government or a State Government company under this Act shall be deemed to include all assets, rights, leaseholds, powers, authorities and privileges and all property, movable and immovable, including lands, buildings, workshops, stores, instruments, machinery and equipment, cash balances, cash on hand, reserve funds, investments and 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 owner of the sick textile undertaking, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto.
2. (2) All property as aforesaid which vest in the State Government or a State Government company shall, by force of this Act, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other encumbrances affecting it, and any attachment, injunction or decree or order of any court or other authority restricting the use of such property in any manner shall be deemed to have been withdrawn.
3. (3) Where any licence or other instrument in relation to a sick textile undertaking had been granted at any time before the appointed day to the owner by the Central or State Government or any other authority, the State Government or the State Government company, as the case may be, shall be deemed to be substituted in such licence or other instrument in place of the owner and shall hold the licence or the other instrument as if it had been granted to the State Government or the State Government company and the State Government or the State Government company shall hold it for the remainder of the period for which the owner would have held such licence or other instrument.
4. (4) Every mortgagee of any property which has vested under this Act in the State Government or a State Government company 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.
5. (5) For the removal of doubts, it is hereby declared that if any property of the owner of a sick textile undertaking had vested in the State Government or a State Government company under this Act, the mortgagee of such property or any 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 payable to such owner under section 8, but shall not be entitled to enforce any claim against any property so vested in the State Government or the State Government company.
6. (6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any property or assets of a sick textile undertaking, in respect of which this Act applies, is pending by or against the owner of such undertaking, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of such undertaking or of any thing contained in this Act, but the suit, appeal or other proceeding may be prosecuted, continued and enforced by or against the State Government or the State Government company, as the case may be.