Industrial Reconstruction Bank of India Act,1984
Act No : 62
Section :
Power of Central Government to grant relief in the case of certainassisted industrial concerns.
49. Power of Central Government to grant relief in the case of certain assisted industrial concerns.-(1) The Central Government may, if it is satisfied on an application made to it by the Reconstruction Bank that it is necessary so to do for the purpose of reconstructing, reviving or rehabilitating any assisted industrial concern, declare by notification in the Official Gazette, that the operation of all or any of the contracts, assurance of property, agreements, settlements, awards, standing orders or other instruments in force (to which such assisted industrial concern is a party, or which may be applicable to such assisted industrial concern) immediately before the issue of such notified order, shall remain suspended or any rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified in the notified order. (2) The notified order made under sub-section (1) shall remain in force, in the first instance, for a period of two years, but the duration of such order may be extended from time to time by a further notified order by a period not exceeding two years at a time: Provided that no such order shall in any case remain in force for more than eight years in the aggregate from the date of issue of the first notified order. (3) Any notified order made under sub-section (1) shall have effect, notwithstanding anything to the contrary contained in any other law, agreement or instrument or any decree or order of a court, tribunal, officer or other authority or of any submission, settlement or standing order. (4) Any remedy for the enforcement of any right, privilege, obligation or liability referred to in sub-section (1) and suspended or modified by notified order made under that sub-section shall, in accordance with the terms of that notified order, remain suspended or modified, and all proceedings relating thereto pending before any court, tribunal, officer or other authority shall accordingly remain stayed or be continued subject to such adaptations, so, however, that on the notified orders ceasing to have effect-- (a) any right, privilege, obligation or liability so remaining suspended or modified shall become revived and enforceable as if the notified order had never been made; (b) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceeding became stayed. (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability referred to in sub- section (1), the period during which it or the remedy for the enforcement thereof, remained suspended shall be excluded. 579 (6) During the period of operation of the notified order made under sub-section (1), the Central Government may, if satisfied that it is necessary so to do in the public interest,- (a) for the reconstruction, revival or rehabilitation of an assisted industrial concern; or (b) for the proper management of the assisted industrial concern; or (c) for scaling down the liabilities of the assisted industrial concern, where the financial condition and other circumstances of the assisted industrial concern are such that such scaling down in necessary, authorise the Reconstruction Bank to prepare as scheme- (i) for the reconstruction, revival or rehabilitation of the assisted industrial concern; or (ii) for scaling down the liabilities of the assisted industrial concern; or (iii) for the amalgamation of the assisted industrial concern with any other industrial concern (referred to in this section as the "transferee industrial concern"). (7) The scheme referred to in sub-section (6) may contain provisions for all or any of the following matters, namely:- (a) the constitution, name and registered office, the capital, assets, powers, rights, interests, authorities and privileges, the liabilities, duties and obligations of the assisted industrial concern on its reconstruction, or, as the case may be, of the transferee industrial concern; (b) in the case of amalgamation of the assisted industrial concern, the transfer to the transferee industrial concern of the business, properties, assets and liabilities of the assisted industrial concern on such terms and conditions as may be specified in the scheme; (c) any change in the Board of Directors, or the appointment of a new Board of Directors, of the assisted industrial concern on its reconstruction, or, as the case may be, of the transferee industrial concern and the authority by whom, the manner in which, and the other terms and conditions on which, such change or appointment shall be made and in the case of appointment of a new Board of Directors or of any director, the period for which such appointment shall be made; (d) the alteration of the memorandum and articles of association of the assisted industrial concern on its reconstruction, or, as the case may be, of the transferee industrial concern for the purpose of altering the capital thereof or for such other purposes as may be necessary to give effect to the reconstruction or amalgamation; (e) subject to the provisions of the scheme, the continuation by, or against, the assisted industrial concern on its reconstruction or, as the case may be, the transferee industrial concern of any actions or proceedings pending against the assisted industrial concern immediately before the date of the notified order made under sub-section (1); (f) the reduction of the interest or rights which the members and other creditors have, in, or against, the assisted industrial concern before its reconstruction or amalgamation to such extent as the Recons- 580 truction Bank considers necessary in the interest of the reconstruction, revival or rehabilitation of the assisted industrial concern or for the maintenance of the business of the assisted industrial concern; (g) the payment in cash or otherwise to the members and other creditors in full satisfaction of their claims- (i) in respect of their interests or rights, in, or against, the assisted industrial concern before the reconstruction or amalgamation; or (ii) where their interests or rights aforesaid, in, or against, the assisted industrial concern has or have been reduced under clause (f), in respect of such interests or rights as so reduced; (h) the vesting of controlling interest, in the reconstructed industrial concern, in the Central Government or its nominee either by the appointment of additional director or by the allotment of additional shares; (i) the allotment to the members of the assisted industrial concern, for any share or shares held by them therein before its reconstruction or amalgamation [whether their interest on such shares has been reduced under clause (f) or not], of shares in the assisted industrial concern on its reconstruction, or, as the case may be, in the transferee industrial concern and where any member claims payment in cash and not allotment of shares, or where it is not possible to allot shares to any member, the payment in cash to those members in full satisfaction of their claims,- (i) in respect of their interest in shares in the assisted industrial concern before its reconstruction or amalgamation; or (ii) where such interest has been reduced under clause (f), in respect of their interest in shares as so reduced; (j) the continuance of the services of such of the employees of the assisted industrial concern as may be specified in the scheme, in the assisted industrial concern itself on its reconstruction, or in the transferee industrial concern on such terms and conditions as may be specified in the scheme; (k) notwithstanding anything contained in clause (j), where any employees of the assisted industrial concern whose services are proposed in the draft scheme referred to in sub-section (2), have, by notice in writing given to the Reconstruction Bank at any time before the expiry of one month next following the date on which the draft scheme is sent to the assisted industrial concern, intimated their intention of not becoming employees of the assisted industrial concern on its reconstruction or in the transferee industrial concern, the payment, to such employees, and to other employees whose services have not been continued in the assisted industrial concern on its reconstruction or in the transferee industrial concern, of compensation, if any, to which they are entitled under the Industrial Disputes Act, 1947 (14 of 1947), and such pension, gratuity, provident fund and other retirement benefits ordinarily admissible to them under the rules or authorisations of the assisted industrial concern as in force immediately before the date of its reconstruction or amalgamation; (l) any other terms and conditions for the reconstruction or amalgamation of the assisted industrial concern; 581 (m) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out. (8) (a) A copy of the scheme prepared by the Reconstruction Bank shall be sent, in draft, to the assisted industrial concern and also to the transferee industrial concern and any other industrial concern concerned in the amalgamation for suggestions and objections, if any, within such period as the Reconstruction Bank may specify for this purpose; (b) The Reconstruction Bank may make such modifications, if any, in the draft scheme as it may consider necessary in the light of the suggestions and objections received from the assisted industrial concern and as also from the transferee industrial concern, and any other industrial concern concerned in the amalgamation and from any members or other creditors of such industrial concerns and the transferee industrial concern: Provided that where the transferee industrial concern is a company, the scheme aforesaid shall be laid before such company in the general meeting for the approval of the scheme by its members and no such scheme shall be proceeded with unless it has been approved, with or without modification, by a special resolution passed by the members of such company. (9) The scheme shall thereafter be placed before the Central Government for its sanction and the Central Government may sanction the scheme without any modifications or with such modifications as it may consider necessary, and the scheme as sanctioned by the Central Government shall come into force on such date as the Central Government may specify in this behalf: Provided that different dates may be specified for different provisions of the scheme. (10) For the purpose of assisting it to exercise the powers conferred on it by sub-section (9), the Central Government may constitute an advisory committee consisting of such officers of the Central Government, Reserve Bank, State Bank, public financial institutions and nationalised banks, having knowledge of, or experience in, one or more of the following matters, namely:- (a) industry and industrial sickness; (b) finance and banking; (c) industrial relations; (d) law, as it may think fit. (11) The sanction accorded by the Central Government under sub- section (9) shall be conclusive evidence that all the requirements of this scheme relating to the reconstruction, or, as the case may be, amalgamation, have been complied with and a copy of the sanctioned scheme certified in writing by an officer of the Central Government to be a true copy thereof, shall, in all legal proceedings (whether in appeal or otherwise) be admitted as evidence to the same extent as the original scheme. (12) On and from such date of the coming into operation of the scheme or any provision thereof, the scheme or such provision shall be binding on the assisted industrial concern, or as the case may be, on the transferee industrial concern, and any other industrial concern concerned in the amalgamation 582 and also on all the members and other creditors and employees of each of those assisted industrial concerns and of the transferee industrial concern, and on any other person having any right or liability in relation to any of the assisted industrial concerns or the transferee industrial concern including the trustees or other persons managing, or connected in any other manner with, any provident fund or other fund maintained by any of those industrial concerns or the transferee industrial concern. (13) On and from such date as may be specified by the Central Government in this behalf, the properties, and the assets of the assisted industrial concern shall, by virtue of, and to the extent provided in the scheme, stand transferred to, and vest in, and the liabilities of the assisted industrial concern shall, by virtue of, and to the extent provided in, the scheme stand transferred to, and become the liabilities of, the transferee industrial concern. (14) If any difficulty arises in giving effect to the provisions of the scheme, the Central Government may, by order, do anything, not inconsistent with such provisions, which appears to it to be necessary or expedient for the purpose of removing the difficulty. (15) Copies of the scheme or of any order made under sub-section (14) shall be laid before each House of Parliament, as soon as may be, after the scheme has been sanctioned by the Central Government, or, as the case may be, the order has been made. (16) Where the scheme is a scheme for amalgamation of the assisted industrial concern, any business acquired by the transferee industrial concern under the scheme or under any provisions thereof shall, after the coming into operation of the scheme or such provision, be carried on by the transferee industrial concern, in accordance with the law governing the transferee industrial concern, subject to such modifications in that law or such exemptions of the transferee industrial concern from the operation of any provisions thereof as the Central Government, on the recommendation of the Reconstruction Bank, may, by notification in the Official Gazette, make for the purposes of giving full effect to the scheme: Provided that no such modification or exemption shall be made so as to have effect for a period of more than seven years from the date of the acquisition of such business. (17) Nothing in this sub-section shall be deemed to prevent the amalgamation with an assisted industrial concern by a single scheme of several industrial concerns in respect of each of which an order has been made under sub-section (1) of this section.
