18FA. Power of Central Government to authorise, with the permission of
the High Court, persons to take over management or control of industrial
undertakings - (1) If the Central Government is of opinion that there are
possibilities of running or re-starting an industrial undertaking, in relation to which
an investigation has been made under section 15A, and that such industrial
undertaking should be run or re-started, as the case may be, for maintaining or
increasing the production, supply or distribution of articles or class of articles
relatable to the scheduled industry, needed by the General public, that
Government may make an application to the High Court praying for permission to
appoint any person or body of persons to take over the management of the
industrial undertaking or to exercise in respect of the whole or any part of the
industrial undertaking such functions of control as may be specified in the
application.
(2) Where an application is made under sub-section (1), the High Court shall
made an order empowering the Central Government to authorise any person or
body of persons (hereinafter referred to as the A authorised person@) to take
over the management of the industrial undertaking or to exercise functions of
control in relation to the whole or any part of the industrial undertaking
(hereinafter referred to as the Aconcerned part@) for a period not exceeding five
years:
Provided that if the Central Government is of opinion that it is expedient in the
interests of the general public that the authorised person should continue to
manage the industrial undertaking, or continue to exercise functions of control in
relation to the concerned part, as the case may be, after the expiry of the period
of five years aforesaid, it may make an application to the High Court for the
continuance of such management or functions of control, for such period not
exceeding two years at a time, as may be specified in the application and
thereupon the High Court may make an order permitting the authorised person to
continue to manage the industrial undertaking or to exercise functions of control
in relation to the concerned part:
Provided further that the total period of such continuance (after the expiry of the
initial period of five years) shall not, in any case, be permitted to exceed twelve
years.
(3) Where an order has been made by the High Court under sub-section (2), the
High Court shall direct the Official Liquidator or any other person having, for the
time being, charge of the management or control of the industrial undertaking,
whether by or under the orders of any court, or any contract or instrument or
otherwise, to make over the management of such undertaking or the concerned
part, as the case may be, to the authorised person and thereupon the authorised
person shall be deemed to be the Official Liquidator in respect of the industrial
undertaking or the concerned part, as the case may be.
(4) Before making over the possession of the industrial undertaking or the
concerned part to the authorised person, the Official Liquidator shall make a
complete inventory of all the assets and liabilities of the industrial undertaking or
the concerned part, as the case may be, in the manner specified in section 18FG
and deliver a copy of such inventory to the authorised person, who shall, after
verifying the correctness thereof, sign on the duplicate copy thereof as evidence
of the receipt of the inventory by him.
(5) On taking over the management of the industrial undertaking, or on the
commencement of the exercise of functions of control in relation to the
concerned part, the authorised person shall take immediate steps to so run the
industrial undertaking or the concerned part as to ensure the maintenance of
production.
(6) The authorised person may, on such terms and conditions and subject to
such limitations or restrictions as may be prescribed, raise any loan for the
purpose of running the industrial undertaking or the concerned part, and may, for
that purpose, create a floating charge on the current assets of the industrial
undertaking or the concerned part, as the case may be.
(7) Where the authorised person is of opinion that the replacement or repair of
any machinery of the industrial undertaking or the concerned part is necessary
for the purpose of efficient running the industrial undertaking or such part, he
shall, on such terms and conditions and subject to such limitations or restrictions
as may be prescribed, make such replacement or repair, as the case may be.
(8) The loan obtained by the authorised person shall be recovered from the
assets of the industrial undertaking or the concerned part, in such manner and
subject to such conditions as may be prescribed.
(9) For the purpose of running the industrial undertaking, or exercising functions
of control in relation to the concerned part, the authorised person may employ
such of the former employees of the industrial undertaking whose services
became discharged by reason of the winding up of the company owning such
undertaking and every such person employed by the authorised person shall be
deemed to have entered into a fresh contract of service with the company.
(10) The proceedings in the winding up of the company in so far as they relate to
-
(a) the industrial undertaking, the management of which has been taken over by
the authorised person under this section, or
(b) the concerned part in relation to which any function of control is exercised by
the authorised person under this section,
shall, during the period of such management or control, remain stayed, and, in
computing the period of limitation for the enforcement of any right, privilege,
obligation or liability in relation to such undertaking or the concerned part, the
period during which such proceedings remained stayed shall be excluded.