{"id":5118,"date":"2025-01-10T16:57:31","date_gmt":"2025-01-10T11:27:31","guid":{"rendered":"https:\/\/indianlawsociety.com\/?p=5118"},"modified":"2025-01-12T15:15:41","modified_gmt":"2025-01-12T09:45:41","slug":"the-swadeshi-cotton-mills-company-limited-acquisition-and-transfer-of-undertakings-act-1986","status":"publish","type":"post","link":"https:\/\/karma.law\/insights\/law-library\/the-swadeshi-cotton-mills-company-limited-acquisition-and-transfer-of-undertakings-act-1986\/","title":{"rendered":"The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986"},"content":{"rendered":"\n
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Download Act<\/span>Download Act<\/span><\/span><\/a><\/div>\n<\/div>\n\n\n\n

Ministry of Textiles<\/p><\/blockquote><\/figure>\n\n\n

The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986, nationalized six textile undertakings of the Swadeshi Cotton Mills Company Limited. The company’s textile units were already under government management due to earlier financial difficulties. This Act aimed to fully acquire these undertakings to ensure continued production and distribution of cloth and yarn, essential commodities for the country. The nationalization was also intended to safeguard the employment of workers in these mills. This Act falls under the Ministry of Textiles.<\/span><\/p>\n

Enactment Date, Number of Chapters, Number of Sections:<\/span><\/h4>\n

The Act was enacted on May 30, 1986, with sections 27 and 28 coming into force immediately and the rest deemed effective from April 1, 1985. It consists of seven chapters and 33 sections, along with a schedule outlining the order of priorities for discharging the company’s liabilities.<\/span><\/p>\n

Act Governed By:<\/span><\/h4>\n

The Act’s implementation was overseen by the Central Government, which acquired the textile undertakings and vested them in the National Textile Corporation (NTC). A Commissioner of Payments was appointed to manage the financial transactions related to the acquisition and disbursement of funds.<\/span><\/p>\n

On Whom It Is Applicable:<\/span><\/h4>\n

The Act primarily applied to the Swadeshi Cotton Mills Company Limited, its employees, shareholders, creditors, and the six nationalized textile undertakings. It also affected the National Textile Corporation and any subsidiary corporations to which the undertakings were transferred.<\/span><\/p>\n

Penalties\/Punishments:<\/span><\/h4>\n

The Act prescribes penalties, including imprisonment and fines, for offenses such as obstructing the acquisition process, making false claims, and wrongfully withholding assets. It also addresses offenses by companies.<\/span><\/p>\n

Important Pointers:<\/span><\/h4>\n