Burn Company and Indian Standard Wagon Company (Nationalisation) Act ,1976
Act No : 97
Section : PRELIMINARY
BURN COMPANY AND INDIAN STANDARD WAGON COMPANY (NATIONALISATION) ACT, 1976
97 of 1976
5th September,1976
The Burn and Company Limited and the Indian Standard Wagon Company Limited are inter-linked, both financially and production-wise. These two Companies were engaged in the production of goods which are vital to the needs of the economy of the country, such as, railway wagons and components thereof, steel structural, iron casting*, forgings and the like and also other goods needed by the iron and steel industry.
2. Both the Companies were functioning reasonably well till 1966-67, after which, due to mismanagement, there was a steady decline in the production of the Companies. Towards the middle of 1973, the Companies reached a stage at which their undertakings were on the verge of closure. As the closure of the undertakings of the two Companies would have adversely affected the production of commodities vital to the needs of the country and also would have prejudicially effected the commitment of the Government of India with regard to the export of railway Wagons, the Central Government took over the management of the undertakings of the Companies, pending nationalisation, of such undertakings, by a Parliamentary legislation with effect from the 19th December, 1973.
3. The liabilities of both the Companies far exceeded the value of their assets at the time when the management of the undertakings of the Companies was taken over. After the taking over the management of the undertakings of the Companies, the Central overnment took a number of steps lo improve the operation of such undertakings, and, as a result of such steps, both the Companies have shown satisfactory upward trends in production.
However, the liabilities of both the Companies with regard to the payment of interests on loans advanced by banks, particularly in relation to the credit facilities made available to them by the banks, came up to as high as Rs. 1.5 lakhs per day. The liquidity position of the Companies was, consequently, going down steeply. In the circumstances, the Burn Company and Indian Standard Wagon Company (Nationalisation) Ordinance; 1976 (8 of 1976) was promulgated by the President to provide for the acquisition of the undertakings of the two Companies.
4. The Bill seeks to replace the said Ordinance and also to repeat the Parliamentary legislation by which the management of the undertakings of the two Companies was taken over by the Central Government.- Gaz. of Ind., 20-8-1976, Pt. II, S. 2, Ext., p. 1196.
An Act to provide for the acquisition of the undertakings of the Burn and Company Limited and the Indian Standard Wagon Company Limited with a view to ensuring the continuity of the production of goods which are vital to the needs of the economy of the country and for the fulfilment of the contracts for the supply of railway wagons abroad and for matters connected therewith or incidental thereto.
Be it enacted by Parliament in the Twenty-seventh Year of the Republic of India as follows:
CHAPTER 01: PRELIMINARY
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