The Hooghly Docking and Engineering Company Limited (Acquisition and Transfer of Undertakings) Act, 1984
Overview
The Hooghly Docking and Engineering Company Limited (Acquisition and Transfer of Undertakings) Act, 1984 is a legislation enacted by the Indian Parliament to acquire the undertakings (assets, liabilities, and business operations) of the Hooghly Docking and Engineering Company Limited and transfer them to the Government of India or its designated government companies.
The main purpose of the Act was to rescue the company, which was in financial distress, and to ensure continued operation of shipbuilding, ship repairing, and engineering activities that were considered important for the national economy.
Background
The Hooghly Docking and Engineering Company Limited operated two main units: the Salkia Works and the Port Engineering Works in Howrah, West Bengal.
Since the 1960s, the company faced severe financial difficulties due to obsolete technology, lack of modernization, poor management, and increasing liabilities.
It was declared a sick company and was under the control of the Industrial Reconstruction Corporation of India (IRCI) since 1973.
Despite efforts to revive it, the company continued to struggle, threatening the jobs of thousands of employees and disrupting the supply of critical shipbuilding and engineering products.
The government decided to take over the company to avoid its liquidation, protect employment, and enable restructuring and modernization.
Objectives of the Act
Acquisition of Undertakings: To acquire the entire undertakings of the Hooghly Docking and Engineering Company Limited.
Transfer of Assets and Liabilities: To transfer all assets, properties, rights, obligations, and liabilities of the company to the Central Government or a Government company.
Continuity of Operations: To ensure continued and improved production of ships, ship repairs, and critical engineering components.
Preservation of Employment: To safeguard the interests and service conditions of the employees.
Modernization and Expansion: To enable the Government to invest in modernization and expansion of facilities to meet national needs.
National Interest: To reduce dependence on imports for shipbuilding and engineering goods and support related industries like casting production.
Key Provisions of the Act
1. Acquisition and Transfer (Sections 3-6)
On a specified date (called the “appointed day”), all the undertakings of the Hooghly Docking and Engineering Company Limited automatically transferred to the Central Government or a Government company notified by the Government.
This included all property, assets, rights, contracts, liabilities, and employees.
The Government could also transfer these undertakings from one government company to another if necessary.
2. Employees and Service Conditions (Sections 13-14)
All employees of the company became employees of the Government or the Government company, retaining their existing terms and conditions of employment.
Provident funds, pension funds, and other employee benefits were to be continued without interruption.
Employees’ service continuity and rights were protected.
3. Management and Control (Sections 10-12)
The Act authorized the Government to take possession of the company’s assets and manage the undertakings.
Managers or persons previously in control of the company were required to deliver all documents, records, assets, and accounts to the Government or the designated company.
Proper accounting and inventory of assets were mandated.
4. Compensation (Sections 7-9, 15-16)
The company and its shareholders were entitled to compensation for the acquisition of their undertakings.
The Government appointed a Commissioner of Payments to assess and disburse compensation.
Provisions were laid down for how claims could be submitted and settled.
The Government would make payments in a timely manner.
5. Protection of Actions Taken (Sections 25-28)
Any action taken in good faith by the Government or officials in implementing the Act was protected from legal challenge.
Contracts entered into by the company before acquisition were ratified and enforced.
Powers delegated under the Act could be exercised by authorized officers.
6. Penalties and Offences (Sections 29-30)
The Act specified penalties for offenses such as refusal to comply with provisions, falsification of documents, or obstruction of the Government’s work under the Act.
7. Rules and Implementation (Sections 31-33)
The Central Government was empowered to make rules to implement the Act effectively.
Any difficulties in implementation could be resolved through orders issued by the Government.
The Act repealed an earlier ordinance on the same subject but preserved actions taken under it.
Impact of the Act
The Act allowed the Government to take direct control of a vital industrial enterprise that was critical to the country’s shipbuilding and engineering sector.
It protected thousands of employees from losing their jobs due to the company’s financial crisis.
It paved the way for investment in modernization and capacity expansion.
The continuity of production in shipbuilding and metal casting helped reduce the country’s dependence on imports and supported related industries.
Overall, it was a key step in government intervention aimed at preserving important industrial infrastructure and national interests.
Summary
The Hooghly Docking and Engineering Company Limited (Acquisition and Transfer of Undertakings) Act, 1984 was a legislative measure to rescue a strategically important but financially sick company by acquiring and transferring its undertakings to the Government. It ensured protection of employees’ rights, proper compensation to shareholders, and smooth transition of business operations. This Act exemplifies government efforts in India during that era to safeguard critical industries through nationalization and restructuring. Do write to us if you need any further assistance.
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