9. Notified sugar undertaking, if a company, not to be wound up.—(1) No proceedings for the
winding up of a notified sugar undertaking, being a company, shall lie in any Court or be continued
whether by or under the supervision of any Court or voluntarily, except with the consent of the Central
Government.
(2) In computing the period of limitation prescribed by any law for the time being in force for any
application which may be made in the course of winding up of any such notified sugar undertaking in
respect of any matter arising out of any transaction in relation to such undertaking, the time during which
the making of such application was barred by this Act shall be excluded.
10. Contracts, etc., in bad faith may be cancelled or varied.—(1) If the Central Government is
satisfied, after such inquiry as it may think fit, that any contract or agreement entered into by the owner or
manager of a notified sugar undertaking, in relation to the said undertaking, at any time within twelve
months immediately preceding the date of vesting, has been entered into in bad faith or is detrimental to
the interests of the undertaking, it may make an order cancelling or varying (either unconditionally or
subject to such conditions as it may think fit to impose) the contract or agreement and thereafter the
contract or agreement shall have effect accordingly:
Provided that no contract or agreement shall be cancelled or varied except after giving to the parties
to the contract or agreement a reasonable opportunity of being heard.
(2) Any person aggrieved by an order made under sub-section (1) may make an application to the
principal Court of civil jurisdiction within the local limits of whose jurisdiction the registered office of the
sugar undertaking is situated for the variation or reversal of such order and, thereupon such Court may
confirm, vary or reverse such order.
11. Power to terminate the contract of employment.—If the Custodian or Custodian-General is of
opinion that any contract of employment entered into by any owner or member of a notified sugar
undertaking or its agent in relation to the said undertaking, at any time before the date of vesting, is
unduly onerous, he may, by giving to the employee one month’s notice in writing or the salary or wages
for one month in lieu thereof, terminate such contract of employment.
12. Management of notified sugar undertakings pending taking over physical possession by the
Custodian.—(1) Pending the taking over by a Custodian, appointed under section 5, of the physical
possession of any notified sugar undertaking, the person in charge of the management of such undertaking
immediately before the date of vesting shall on and from that date, be in charge of the management of
such undertaking for and on behalf of the Central Government; and the management of such undertaking
shall be carried on by such person subject to the provisions contained in sub-section (2) and such
directions, if any, as the Central Government may give to him, and no other person, including the said
undertaking shall, so long as such management continues, exercise any powers of management in relation
to the said undertaking.
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(2) No person in charge, under sub-section (1), of a notified sugar undertaking shall, without the
previous approval of the Custodian-General appointed under section 5,—
(i) incur any expenditure from the assets appertaining to the undertaking otherwise than for the
purpose of making routine payments of salaries or commissions to employees, agents or for the
purpose of meeting the routine day to day expenditure;
(ii) transfer or otherwise dispose of any such assets or create any charge, hypothecation, lien or
other incumbrance thereon;
(iii) invest in any manner any moneys forming part of such assets;
(iv) acquire any immovable property out of the moneys forming part of such assets;
(v) enter into any contract of service or agency, whether expressly or by implication, for purposes
connected wholly or partly with the undertaking or vary the terms and conditions of any contract
relating to any such transaction subsisting on the date of vesting.
(3) The approval of the Custodian-General may be given either generally in relation to certain classes
of transactions relating to the notified sugar undertaking or specially in relation to any of its transactions.
13. Protection of action taken in good faith.—(1) No suit, prosecution or other legal proceeding
shall lie against the Government, the Custodian-General or any other officer of Government or any
Custodian in respect of anything which is in good faith done or intended to be done under this Act.
(2) No suit or other legal proceeding shall lie against the Government, the Custodian-General or any
other officer of Government or any Custodian for any damage caused, or likely to be caused, by anything
which is in good faith done or intended to be done under this Act.
14. Delegation of powers.—(1) The Central Government may, by notification, direct that all or any
of the powers exercisable by it under this Act, other than those under this section or section 8 or
section 20 may also be exercised by any person or persons as may be specified in the notification.
(2) Whenever any delegation of power is made under sub-section (1), the person to whom such power
has been delegated shall act under the direction, control and supervision of the Central Government.
15. Debts incurred for the purposes of notified sugar undertakings to have priority.—Every debt
arising out of any loan advanced to a notified sugar undertaking by the Central Government or a State
Government for carrying on the management of such undertaking—
(a) shall have priority over all other debts, whether secured or unsecured, incurred before the
management of such undertaking was taken over under this Act;
(b) shall be a preferential debt within the meaning of section 530 of the Companies
Act, 1956 (1 of 1956),
and such debts shall rank equally among themselves and be paid in full out of the assets of the
undertaking unless such assets are insufficient to meet them, in which case they shall abate in equal
proportions.
16. Penalties.—If any person—
(a) fails to deliver to the Custodian any assets, books of account, registers or any other documents
in his custody relating to any notified sugar undertaking, or
(b) retains any property of such undertaking or removes or destroys it, or
(c) fails to comply with the provisions of section 5, or
(d) fails to comply with any direction made under this Act,
he shall be punishable with imprisonment for a term which may extend to seven years, and shall also be
liable to fine.
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17. Offences by companies.—(1) Where an offence under this Act has been committed by a
company, every person who, at the time the offence was committed, was in charge of, and was
responsible to, the company for the conduct of the business of the company as well as the company, shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment, if he proves that the offence was committed without his knowledge or that he had exercised
all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been
committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other
officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of
that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means any body corporate and includes a firm or other association of
individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.
18. Act not to apply to certain sugar undertakings.—(1) The provisions of this Act shall not apply
to any sugar undertaking which is owned by or is under the management of the Central Government or a
State Government or a corporation established by or under an enactment (including an Ordinance) or a
Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956).
(2) For the purposes of sub-section (1), the management of a sugar undertaking by a receiver or an
authorised controller appointed by the Central Government or a State Government under any law for the
time being in force shall also be deemed to be management of the undertaking by the Central Government
or a State Government, as the case may be.
19. Act to have overriding effect.—The provisions of this Act shall have effect notwithstanding
anything inconsistent therewith contained in any law (other than this Act) or any judgment, decree or
order of any Court, tribunal or other authority or any instrument having effect by virtue of any law other
than this Act.
20. Power to make rules.—The Central Government may, by notification, make rules to carry out
the provisions of this Act.
21. Laying of rules and certain notifications.—Every rule made by the Central Government under
this Act and every notification made under section 7 shall be laid, as soon as may be after it is made,
before each House of Parliament, while it is in session, for a total period of thirty days which may be
comprised in one session or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the rule or notification or both Houses agree that the rule or notification should not be
made, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as
the case may be; so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule or notification.
22. Repeal and saving.—(1) The Sugar Undertakings (Taking Over of Management)
Ordinance, 1978 (Ord. 5 of 1978), is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed
shall be deemed to have been done or taken under the corresponding provisions of this Act.