DPLL Act 5Chapter II · Acquisition and transfer of the undertakings of the Company

Section 5 · Central Government or State Government or existing or new Government company not to be liable for certain liabilities

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(1)

Every liability, other than the liability specified in sub-section (2), of the Company 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 or the State Government or, where the undertakings of the Company are directed to vest, under section 6, in an existing Government Company, or, under section 7, in a new Government Company, against such Government company.

(2)

Any liability arising in respect of-

(a)

loans advanced by the Central Government or the State Government, or both, to the Company (together with interest due thereon), on or after the date of taking over of management of the undertakings of the Company,

(b)

loans advanced by a bank to the Company (together with interest due thereon), on or after the date of taking over of management of the undertakings of the Company,

(c)

loans advanced by the Industrial Reconstruction Corporation of India Limited to the Company (together with interest due thereon) on or after the date of taking over of management of the undertakings of the Company,

(d)

wages, salaries and other dues of employees of the Company and dues on account of any deductions made from wages and salaries and other dues of such employees relating to any period commencing on and from the date of taking over of management of the undertakings of the Company, or

(e)

any debt incurred by the Company during any period commencing on and from the date of taking over of management of the undertakings of the Company, not being a debt falling under clause (a), clause (b), clause (c) or clause (d),
shall, on and from the appointed day, be the liability of the State Government or the Government company as aforesaid and shall be discharged by the State Government or the existing Government company or the new Government company as aforesaid as and when repayment of such loans becomes due or such wages, salaries and other dues or debt becomes due and payable.

(3)

For the removal of doubts, it is hereby declared that,-

(a)

save as otherwise expressly provided in this Act, no liability of the Company in relation to its undertakings in respect of any period prior to the appointed day shall be enforceable against the Central Government or the State Government or, where the undertakings of the Company are directed to vest, under section 6, in an existing Government company, or under section 7, in a new Government company, against such Government company;

(b)

no award, decree or order of any court, tribunal or other authority in relation to the undertakings of the Company passed on or after the appointed day, in respect of any matter, claim or dispute, which arose before the appointed day shall be enforceable against the Central Government or the State Government or where the undertakings of the Company are directed to vest, under section 6, in an existing Government company, or under section 7, in a new Government company, against such Government company;

(c)

no liability incurred by the Company before the appointed day for the contravention of any provision of any law for the time being in force shall be enforceable against the Central Government or the State Government or, where the undertakings of the Company are directed to vest, under section 6, in an existing Government company, or under section 7, in a new Government company, against such Government company.

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