Chapter II ACQUISITION OF THE RIGHTS OF OWNER OF THE UNDERTAKING

(1) The right, title and interest of the owner in relation to the undertaking and the unused land shall, by virtue of this Act, stand transferred to, and shall vest absolutely in, the Government. (2) The said undertaking and the unused land which stand vested in the Government by virtue of sub-section (1) shall, immediately after it has so vested, stand transferred to, and vest in, the State Industrial Development Corporation.

(1) The undertaking referred to in section 3 shall be deemed to include all assets, rights including lease-hold rights, 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 date of commencement of this Act in the possession, power or control of the owner and all books of account, registers and all other documents of whatever nature relating thereto and shall also be deemed to include the liabilities and obligations specified in sub-section (2) of section 5. (2) All property as aforesaid which have vested in the Government under sub-section (1) of section 3 shall, by force of such vesting, 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or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn. (3) Where any licence or other instrument in relation to the said undertaking had been granted at any time before the date of commencement of this Act to an owner by the Central Government or a State Government or any other authority, the State Industrial Development Corporation shall, on and from such date be deemed to be substituted in such licence or other instrument in place of the owner referred to therein as if such licence or other instrument had been granted to it and shall hold such licence or the said undertaking specified in such other instrument for the remainder of the period for which the owner would have held such licence or the undertaking under such other instrument. (4) Every mortgagee of any property which has vested under this Act in the 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. (5) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in sub-section (2) 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 interest, payment of the mortgage money or other dues, in whole or in part, out of the amount specified in relation to such property, in the First Schedule, but no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the Government. (6) If, any suit, appeal or other proceeding of whatever nature in relation to any matter specified in sub-section (2) of section 5 in respect of the said undertaking, instituted or preferred by or against the textile company is pending as on the date of commencement of this Act, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of transfer of the undertaking or of anything contained in this Act but the suit, appeal or other proceedings may be continued, prosecuted and enforced by the State Industrial Development Corporation.

(1) Every liability, other than the liability specified in sub-section (2), of the owner in respect of any period prior to the date of commencement of this Act shall be the liability of such owner and shall be enforceable against him and not against the Government or the Kerala State Industrial Development Corporation. (2) Any liability arising in respect of,— (a) loans advanced by the Central Government or the State Government to the undertaking (together with interest due thereon); (b) wages, salaries and other dues of employees of the said undertaking, in respect of any period after the undertaking has been taken over by the Government, shall be the liability of the Government and shall be discharged, for and on behalf of the Government, by the State Industrial Development Corporation as and when repayment of such loans or amounts become due or as and when such wages, salaries or other dues become due and payable. (3) For the removal of doubts, it is hereby declared that,— (a) save as otherwise expressly provided in this section or in any other secton of this Act, no liability, other than the liability specified in sub-section (2), in relation to the undertaking or the property sold in respect of any period prior to the date of commencement of this Act, shall be enforceable against the Government or the Kerala State Industrial Development Corporation; (b) no award, decree or order of any court, tribunal or other authority in relation to the undertaking or the properties sold, which are passed after the date of commencement of this Act in respect of any matter, claim or dispute, in relation to any matter not referred to in sub-section (2) which arose before that day, shall be enforceable against the Government or the State Industrial Development Corporation; (c) no liability of the undertaking or any owner thereof for the contravention, before the company has been closed, of any provision of a law for the time being in force, shall be enforceable against the Government or the State Industrial Development Corporation.

(1) The State Industrial Development Corporation may, if it consider it necessary to do so, form subsidiary corporations under the Companies Act, 1956 (Central Act 1 of 1956), and register them under that Act. (2) The State Industrial Development Corporation may, by order in writing, transfer the undertaking or part thereof to a subsidiary corporation or other agency of the Government and any such transfer shall be subject to such terms and conditions as may be specified in the order. (3) The subsidiary corporation or other agency of the Government shall, on and from the date of such transter, be deemed to be substituted in the licence or other instrument referred to in sub-section (3) of section 4 in place of the State Industrial Development Corporation as if such licence or other instrument had been granted to the subsidiary corporation or other agency of the Government and shall hold such licence or other instrument for the remaining period for which the State Industrial Development Corporation would have held such licence or other instrument. (4) On transfer of the undertaking or part thereof to a subsidiary corporation or other agency of the Government the liabilities required to be discharged, by the State Industrial Development Corporation under sub-section (2) of section 5 shall, in so far as they relate to the said undertaking or part thereof so transferred to the subsidiary corporation or other agency of the Government be discharged on and from the date of such transfer by the subsidiary corporation or other agency of the Government as and when any such liability is required to be discharged. (5) Save as otherwise expressly provided in this Act, references in this Act to the State Industrial Development Corporation shall in respect of the said undertaking or any part thereof which is transferred to a subsidiary corporation or other agency of the Government be construed as references to such subsidiary corporation or other agency of the Government.

(1) An amount equal to the value of the assets of the undertaking and the properties sold which are transferred to, and vested in, the State Industrial Development Corporation under sub-section (2) of section 3, shall be deemed to be the contribution made by the Government to the equity capital of the State Industrial Development Corporation; and for the contribution so made, the State Industrial Development Corporation shall issue (if necessary after amending its memorandum and articles of association) to the Government paid-up shares, in the equity capital, having a face value equal to the amount specified against the undertaking in the corresponding entry in column (3) of the First Schedule. (2) Where any liability is assumed by the Government under sub-section (1) of section 26 they may call upon the State Industrial Development Corporation to issue (if necessary, after amending the memorandum and articles of association of the Corporation) to the Government additional paid-up shares, in its equity capital having a face value equal to the amount of the liability assumed by the Government under the said sub-section.