3. Transfer and vesting of the textile undertakings.—(1) On the appointed day, every textile
undertaking and the right, title and interest of the Company in relation to every such textile undertaking
shall, by virtue of this Act, stand transferred to, and shall vest in, the Central Government.
(2) Every such textile undertaking which stands vested in the Central Government by virtue of
sub-section (1) shall, immediately after it has so vested, stand transferred to, and vested in, the National
Textile Corporation.
4. General effect of vesting.—(1) The textile undertakings 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, reserve funds, investments and book debts pertaining to the textile undertakings
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 in relation to the said
undertakings, whether within or outside India, and all books of account, registers and all other documents
of whatever nature relating thereto.
(2) All property as aforesaid which have vested in the Central Government under sub-section (1) of
section 3 shall, by force of such vesting, be freed and discharged from any trust, obligation, mortgage,
charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree or order of
any court or other authority restricting the use of such property in any manner shall be deemed to have
been withdrawn.
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(3) Where any licence or other instrument had been granted at any time before the appointed day to
the Company in relation to the textile undertakings by the Central Government or a State Government or
any local authority, the National Textile Corporation shall, on and from such day, be deemed to be
substituted in such licence or other instrument in place of the Company as if such licence or other
instrument had been granted to the National Textile Corporation and that Corporation shall hold it for the
remainder of the period of which the Company to which it was granted would have held it under the terms
thereof.
(4) 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.
(5) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in
sub-section (2) 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 section 9, but no
such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in
the Central Government.
(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 textile undertakings or of anything contained in this Act, but the
suit, appeal or other proceeding may be continued, prosecuted or enforced by or against the National
Textile Corporation.
5. Company to be liable for certain prior liabilities.—(1) Every liability of the Company in
relation to the textile undertakings 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 of the
National Textile Corporation.
(2) For the removal of doubts, it is hereby declared that,—
(a) save as otherwise expressly provided in this section or in any other section of this Act, no
liability of the Company in relation to the textile undertakings, in respect of any period prior to the
appointed day shall be enforceable against the Central Government or the National Textile
Corporation;
(b) no award, decree or order of any court, tribunal or other authority in relation to any textile
undertaking, 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 the National Textile
Corporation;
(c) no liability incurred by the Company in relation to any textile undertaking 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 the National Textile Corporation.
6. Transfer of any textile undertaking or part thereof to a Subsidiary Textile
Corporation.—(1) The National Textile Corporation may, by order in writing, transfer any of the textile
undertakings or part thereof to a Subsidiary Textile Corporation and any such transfer shall be subject to
such terms and conditions as may be specified in the said order.
(2) The Subsidiary Textile Corporation shall, on and from the date of such transfer, be deemed to be
substituted in the licence or other instrument referred to in sub-section (3) of section 4 in place of the
National Textile Corporation as if such licence or other instrument had been granted to the Subsidiary
Textile Corporation, and shall hold such licence or other instrument for the remainder of the period for
which the National Textile Corporation would have held such licence or other instrument.
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(3) Save as otherwise expressly provided in this Act, references in this Act to the National Textile
Corporation shall, in respect of any textile undertaking or part thereof which is transferred to a Subsidiary
Textile Corporation, be construed as references to the Subsidiary Textile Corporation.
7. Shares to be issued by National Textile Corporation for the value of assets transferred to it by
the Central Government.—An amount equal to the value of the assets of the textile undertakings
transferred to, and vested in, the National Textile Corporation under sub-section (2) of section 3 shall be
deemed to be the contribution made by the Central Government to the equity capital of the National
Textile Corporation; and for the contribution so made, the National Textile Corporation shall issue
(if necessary after amending its memorandum and articles of association) to the Central Government paid
up shares, in its equity capital having a face value equal to the amount specified in section 8.