3. Transfer to, and vesting in, the Central Government of the undertakings of the two
companies.—On the appointed day, the undertakings of each of the two companies, and the right, title
and interest of each of the two companies in relation to its undertakings, shall, by virtue of the Act, stand
transferred to, and shall vest in, the Central Government.
4. General effect of vesting.—(1) The undertakings of each of the two companies referred to in
section 3 shall be deemed to include all assets, rights, lease-holds, 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 interest 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.
(2) All properties as aforesaid which have vested in the Central Government under section 3 shall, by
force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all
other incumbrances affecting them, and any attachment, injunction, decree or order of any court, tribunal
or other authority restricting the use of such properties in any manner or appointing any receiver in
respect of the whole or any part of such properties shall be deemed to have been withdrawn.
(3) Every mortgagee of any property which has vested under this Act in the Central 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.
(4) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in
sub-section (3) 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 the company owning
such property, in the First Schedule, and also out of the amounts referred to in section 9, but, no such
mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the
Central Government.
(5) Any licence or other instrument granted to either of the two companies in relation to any
undertaking which has vested in the Central Government under section 3 at any time before the appointed
day and in force immediately before that day shall continue to be in force on and after such day in
accordance with its tenor in relation to an for the purposes of such undertaking, and , on and from the date
of vesting of such undertaking under section 6 in an existing Government company, or under section 7 in
a new Government company, the existing, or new, Government company, as the case may be, shall be
deemed to be substituted in such licence or other instrument as if such licence or other instrument had
been granted to such existing, or new, Government company and such existing, or new, Government
company, shall hold it for the remainder of the period for which the company to which it was granted
would have held it under the terms thereof.
(6) If, on the appointed day, any, suit, appeal or other proceeding of whatever nature, in relation to
any property which has vested in the Central Government under section 3, instituted or preferred by or
against either of the two companies is pending, the same shall not abate, be discontinued or be, in any
way, prejudicially affected by reason of the transfer of the undertakings of such company or of anything
contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted or enforced
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by or against the Central Government, or where the undertakings of the two companies vest under
section 6 or section 7 in an existing, or a new, Government company, by or against such Government
company.
5. Companies to be liable for certain prior liabilities.—(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 vest in an existing, or a new,
Government Company, against such Government company.
(2) Any liability arising in respect of materials supplied to either of the two companies after the
management of its undertakings 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 existing, or new, Government
company aforesaid, and shall be discharged by that Government or, as the case may be, the existing, or
new, Government company, as and when repayment for such supplies becomes 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 provision of this Act, no
liability, other than the liability specified in sub-section (2), of either of the two companies in relation
to its undertakings in respect of any period prior to the appointed day shall be enforceable against the
Central Government, or, where the undertakings of the two companies vest in an existing, or a new,
Government company, against such Government company;
(b) no award, decree or order of any court, tribunal or other authority in relation to the
undertakings of either of the two companies, passed on or after the appointed day, in respect of any
matter, claim or dispute, not being a matter, claim or dispute in relation to any matter referred to in
sub-section (2), which arose before that day, shall be enforceable against the Central Government, or
where the undertakings of the two companies vest in an existing, or a new, Government company,
against such Government company;
(c) no liability incurred by either of the two companies before the appointed day, for the
contravention of any provision of law for the time being in force, shall be enforceable against the,
Central Government, or, where the undertakings of the two companies vest in an existing, or a new,
Government company, against such Government company.
6. Power of Central Government to direct vesting of the undertakings of the two companies in
an existing Government Company.—(1) Notwithstanding anything contained in section 3 and 4, and
subject to the provisions of section 7, the Central Government may, if it is satisfied that an existing
Government company is willing to comply, or has complied with such terms and conditions as that
Government may think fit to impose, direct, by notification, that the undertakings of each of the two
companies and the right, title and interest of each of the two companies in relation to its undertakings
which have vested in the Central Government under section 3, shall, instead of continuing to vest in the
Central Government, vest in that existing Government company either on the date of the notification or
on such earlier or later date (not being a date earlier than the appointed day) as may be specified in the
notification.
(2) Where the right, title and interest of the two companies, in relation to their undertakings vest,
under sub-section (1), in an existing Government company, that Government company shall, on and from
the date of such vesting, be deemed to have become, and, until the transfer of the undertakings, by virtue
of the provisions of section 7, to a new Government company, be deemed to be, the owner in relation to
such undertakings, and the rights and liabilities of the Central Government in relation to such
undertakings shall, on and from the date of such vesting, be deemed to have become, and, until the date of
such transfer, be deemed to be, the rights and liabilities, respectively, of that existing Government
company.
7. Transfer of the undertakings of the two companies from an existing Government company to
a new Government company.—(1) Notwithstanding anything contained in sections 3 and 4, where the
undertakings of each of the two companies have been directed, under sub-section (1) of section 6, to vest
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in an existing Government company, the Central Government may, if it is satisfied that a new
Government company is willing to comply, or has complied, with such terms and conditions as that
Government may think fit to impose, declare, by notification, that the undertakings of each of the two
companies and the right, title and interest of each of the two companies in relation to its undertakings be
transferred to that new Government company, and on the issue of such declaration, the right, title and
interest of each of the two companies in relation to its undertakings which had been directed under subsection (1) of section 6 vest in an existing Government company, shall, instead of continuing to vest in
that existing Government Company, vest in that new Government company with effect from the date on
which such declaration is made.
(2) Where the right, title and interest of the existing Government company in relation to the
undertakings of the two companies vest, under sub-section (1), in a new Government company, that
Government company shall, on and from the date of such vesting, be deemed to have become the owner
in relation to such undertakings and the rights and liabilities of the existing Government company in
relation to such undertakings, shall, on and from the date of such vesting, be deemed to have become the
rights and liabilities, respectively, of that new Government company.