On the appointed day, the undertakings of each of the two companies, and the right, title and interest of each of the two companies in relation to its undertakings, shall, by virtue of the Act,. stand transferred to, and shall vest in, the Central Government.
Section 4 - General effect of vesting
(1) The undertakings of each of the two companies 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, cheques, demand drafts, reserve funs, investments, book debts, and all other rights and interest in, or arising out of such, property as were immediately before the appointed day in the ownership, possession power or control of such company whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto, and shall also be deemed to include the liabilities specified in sub-section (2) of section 5.
(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, 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manner or appointing any receiver in respect of the whole or any part of such properties shall be deemed to have been withdrawn.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 interest, payment of the mortgage money or other dues, in whole or in part, out of the amount specified, in relation to the company owning such property, in the First Schedule, and also out of the amounts referred to in section 8, 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 either of the two companies 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 that day shall continue to be in force on and after such day in accordance with its tenor in relation to an for the purposes of such undertaking, and , on and from the date of vesting of such undertaking under section 6 in a Government company, and such Government company, shall be deemed to be substituted in such licence or other instrument as if such licence or other instrument had been granted to such Government company and such Government company, shall hold it for the remainder of the period for which the company to which it was granted 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 matter specified in sub-section (2) of section 5 in respect of any undertakings of either the two companies instituted or preferred by or against either of the two companies 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 either of two companies 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 two companies are directed under section 6 to vest in Government by or against such concerned Government company.
Section 5 - Owners of the two Companies to be liable for certain prior liabilities
(1) Every liability, other than the liability specified in sub-section (2), of each of the two companies in respect of any period prior to the appointed day, shall be the liability of the concerned company and shall be enforceable against it and not against the Central Government, or where the undertakings of the two companies are directed under section 6, to vest in Government company, against the concerned Government company.
(2) Any liability arising in respect of materials supplied to either of the two companies after the management of its undertakings had been taken over by the Central Government, shall, on and from the appointed day, be the liability of the Central Government or of the concerned Government company aforesaid, and shall be discharged by that Government or Government Company, as and when repayment for such supplies becomes due and payable.
(3) For the removal of doubts, it is hereby declared that-
(a) save as otherwise expressly provided in this section or in any other provision of this Act, no liability, other than the liability specified in sub-section (2), of either of the two companies in relation to its undertakings in respect of any period prior to the appointed day shall l be enforceable against the Central Government, or, where the undertakings of the two companies are directed, under section 6, to vest in Government company, against the concerned Government company;
(b) no award, decree or order of any court, tribunal or other authority in relation to the undertakings of either of the two companies, passed on or after the appointed day, in respect of any matter, claim or dispute, not being a matter, claim or dispute in relation to any matter referred to in sub-section (2), which arose before that day, shall be enforceable against the Central Government, or where the undertakings of the two companies are directed, under section 6, to vest in Government company, against the concerned Government company;
(c) no liability incurred by either of the two companies 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 two companies are directed, under section 6, to vest in Government company, against the concerned Government company.
Section 6 - Power of Central Government to direct vesting of the undertakings of the two companies in two Government Company
(1) Notwithstanding anything contained in section 3 and 4, the Central Government may, subject to such terms and conditions as it may think fit to impose, direct, by notification, that each of the undertakings of the two companies and the right, title and interest of each of the two companies in relation to their respective undertakings which have vested in the Central Government under section 3, and such of the liabilities of each of the two companies as are specified in sub-section (2) of section 5, shall, instead of continuing to vest in the Central Government, vest in two Government companies either on the date 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, and the liabilities referred to in sub-section (2) of section 5, of each of the two companies, in relation to their undertakings vest, in two Government companies under sub-section (1), the Government companies shall, on and from the date of such vesting, be deemed to have become, owners in relation to such undertakings, and all 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, the rights and liabilities, respectively, of the Government companies.