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 such undertakings, shall stand transferred to, and shall vest absolutely 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, reserve funds, investments and 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 either of the two companies, 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 and obligations 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 it, and any attachment, injunction or 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any manner or appointing any receiver in respect of the whole or any part of such property shall be deemed to have been withdrawn.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 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 amount specified, in relation to the company owning such property, in the First Schedule, but no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the Central Government.
(5) 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 undertaking of either of 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 the 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 a Government company, against that 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 a Government company, against that Government company.
(2) Any liability arising in respect of
(a) the loans advanced by the Central Government, or a State Government, or both, to either of the two companies, or to both (together with interest due thereon) after the management of the undertakings of the concerned company had been taken over by the Central Government;
(b) the wages, salaries and other dues of employees of each of the two companies in respect of any period after the management of the undertakings of the two companies 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 Government company aforesaid and shall be discharged by that Government or Government company, as and when repayment of such loans or amounts becomes due or as and when such wages, salaries or other dues become 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 be enforceable against the Central Government, or, where the undertakings of the two companies are directed, under section 6, to vest in a Government company, against that 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 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 a Government company, against that 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 a Government company, against that Government company.
Section 6 - Power of the Central Government to direct vesting of the undertakings of the two companies in a Government company
(1) Notwithstanding anything contained in sections 3 and 4, the Central Government may, if it is satisfied that a 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 two companies and the right, title and interest of the two companies in relation to their respective undertakings which have vested in that Government under section 3, and such of the liabilities 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 the Government company 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 its undertakings, vest in a Government company under sub-section (1), the Government company shall, on and from the date of such vesting, be deemed to have become the owner 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 company.