3. Transfer to, and vesting in, the Central Government of the undertakings of the
Company.—On the appointed day, the undertakings of the Company, and the right, title and interest of
the Company in relation to its undertakings, shall, by virtue of this Act, stand transferred to, and vest in,
the Central Government.
4. General effect of vesting.—(1) The undertakings of the Company 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, 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
the Company, whether within or outside India, and all books of account, registers and 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 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whole or any part of such properties shall be deemed to have been withdrawn.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 interests, payment of the mortgage
money or other dues, in whole or in part, out of the amounts specified in section 8 and also out of the
amounts determined under 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 the Company 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 the appointed day shall continue to be in force on and after such day in accordance
with its tenor in relation to and for the purposes of such undertaking, and on and from the date of vesting
of such undertaking, under section 5, in an existing Government company, or under section 6, 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 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 the Company, 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 the Company, or of anything
contained in this 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 Company are directed under
section 5, to vest in an existing Government company or become transferred by virtue of the provisions of
section 6 to a new Government company, by or against such Government company.
5
5. Power of Central Government to direct vesting of the undertakings of the Company in an
existing Government company.—(1) Notwithstanding anything contained in sections 3 and 4, and
subject to the provisions of section 6, 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 the Company, and
the right, title and interest of the Company 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 publication 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 Company in relation to its 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 6, 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.
6. Transfer of undertakings of the Company from an existing Government company to a new
Government company.—(1) Notwithstanding anything contained in sections 3 and 4, where the
undertakings of the Company have been directed, under sub-section (1) of section 5, to vest 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 the Company be transferred to that new
Government company; and on the issue of such declaration, the right, title and interest of the Company in
relation to its undertakings, which had been directed under sub-section (1) of section 5 to 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 Company vest under sub-section (1) in a new Government company, that new
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.
7. Company to be liable for certain prior liabilities.—(1) Every liability of the Company in respect
of any period prior to the appointed day, shall be the liability of the Company and shall be enforceable
against it, and not against the Central Government, or where the undertakings of the Company vest in an
existing, or a new, Government company, against such Government company.
(2) For the removal of doubts, it is hereby declared that—
(a) save as otherwise expressly provided in this Act, no liability of the Company 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 Company 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 the Company, passed after the appointed day in respect of any matter, claim or
dispute, which arose before that day, shall be enforceable against the Central Government, or where
the undertakings of the Company vest in an existing, or a new, Government company, against such
Government company;
(c) no liability incurred by the Company 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 Company vest in an existing, or a new, Government company, against
such Government company