9911796707
TMI Blog1996 (5) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... on thereafter that it Was being managed in a manner highly detrimental to public interest, issued a notification on January 3, 1974, in exercise of the powers conferred by clause (b) of sub-section (1) of' section 18A of the said Act authorising a body of' persons to take over the management of the whole of the said undertaking, namely, Hind Cycles Ltd., Bombay. In the aforesaid notification dated January 3, 1974, it was stipulated that a body of persons authorised by the said notification would take over the- management of Hind Cycles Ltd., and that the said board of management shall hold office for five years from the date of publication of. the order in the Official Gazette and that the said board shall comply with all the directions issued from time to time by the Central Government. Subsequently, by anther notification dated December 26, 1978, the life of' the order dated January 3, 1974, was extended up to January 2, 1981. The appellant decree holder entered into an agreement with the company on November 28, 1975, where by he was appointed an agent of the Company for the Sale of cycles and cycle parts Manufactured by the company in Iran. By virtue of the aforesaid appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in clause (ii) of the claims. The learned arbitrator, however, held that the appellant is not entitled to recover any amount in respect of clause (iii) and clause (iv) of the claims from Hind Cycles Ltd. or from the Union of India. The learned arbitrator further held that the Union of India was not liable to pay any amount to the appellant in respect of the aforesaid claims. The aforesaid award was passed on August 30, 1985, and was a non-speaking award and no reason has been assigned for the decision arrived at by the arbitrator. The award passed by the arbitrator was filed in the court and the proceeding for making it a rule of the court was registered as Civil Suit No. 1627 of 1985. As stated above, Hind Cycles Ltd. did not contest the proceeding whereas, the appellant an4 the Union of India the respondent herein filed their objections to the award. After hearing the parliesie court by its order, lated October 7, 1986, directed the award to. be made a rule of the court in for Hind Cycles Ltd. is concerned in view of its having preferred on objection. However, the other objections were kept alive for consideration. The decree based on the aforesaid order dated October 7, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government was entering into contract with third parties like the appellant- not on behalf of the Hind Cycles Ltd. but in its own name and, therefore, the dues owed by the company could be for all practical purposes liability on the Central Government and, accordingly, the Union of India was responsible for repayment of the same. It was further submitted that while the appellant entered into an agency agreement with the body of persons on November 28, 1975, the said body of persons entering into the agreement with the appellant described itself, as the Hind Cycles Ltd. (Government of India management)'and, therefore, the contract entered into by the appellant was for all practical purposes a contract entered into with the Union of India and not with the Hind Cycles Ltd. According to learned counsel, the dues of the company were also recoverable from the Union of India in spite of the restrictions put in by the provisions of the Nationalisation Act. We have also heard learned, counsel appearing for the respondents/ Union of India, who had taken us through the provisions of the Nationalisation Act, 1980, and submitted that in view of the various provisions of the said Act, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted: "4. (1) The undertakings of each company referred to in section 3 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, 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 such company, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto, and, shall also be deemed to include the liabilities specified in sub-section (2) of section 5. (2) All properties as aforesaid which have vested in the Central Government under section 3 shall, by force of such vesting, be freed arid discharged from any trust, obligation, mortgage, charge, lien arid all other encumbrances affecting them, and any attachment, injunction, decree or order of any court restricting the use of such properties in any manner or appointing any receiver in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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 two, companies are directed, under section 6, to vest in Government companies, by or against the concerned Government company. 5. (1) Every, liability, other than the liability specified in sub-section (2), of each of the two companies in respect of any period prior to the appointed day, shall be the liability of the concerned company and shall be enforceable against it and not against the Central Government, or, where the undertakings of the two companies are directed, under section 6, to vest in Government companies, against the concerned Government company. (2) Any liability arising in respect of materials supplied to either of the two companies after the management of the undertakings of the company had been taken over, by the Central Government shall on and from the appointed day, be the liability of the. Central Government or of the concerned Government company aforesaid and shall be discharged by that Government or Government company, as and when repayment for such supplies becomes due and payable. (3) For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided for ' under section 4 of the Act was fee and discharged from almost all types of encumbrances detailed particularly in the said provision. It is further specified in section 5 of the Act that "every liability other than the liability specified in sub-section (2) of each of the two companies in respect of any period prior to the appointed day shall be the liability of the concerned company (Hind Cycle Ltd.) and shall be enforceable against it and not against the Central Government". Sub-section (3) of section 5 of the Act makes the position more clear and leaves- no room for any doubt with regard to the intention of the Legislature in this respect clauses ( a ) and ( b ) thereto state, that save-as otherwise expressly provided in, this section or in any other provision of ,this Act, no liability, other-than the liability specified in sub-section (2), of the company in respect of the period ' prior to the appointed day, shall be the liability of the 'Central Government and no decree, award or order it any court, tribunal of other authority in respect of any claim arising profit the appointed day and not being a claim referred to in sub-section 2 would e enforceable against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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