REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No. 33]

NEW DELHI, FRIDAY, JULY 28, 1978/SRAVANA 6, 1900

Separate paging is given to this Part in order that it may be filed

as a separate compilation

LOK SABHA

The following Bills were introduced in Lok Sabha on the 28th July,

1978: —

BILL NO. 113 OF 1978

A Bill to provide for the acquisition and transfer of the right, title and

interest of the undertakings of Britannia Engineering Company in

relation to the Mokameh unit owned by it and the right, title and in-

terest of Arthur Butler and Company in relation to the undertakings

owned by it, with a view to ensuring the continued manufacture of

railway wagons and other goods essential to the needs of the country

in general and the Railways in particular, and for matters connected

therewith or incidental thereto.

WHEREAS Britannia Engineering Company at the Mokameh unit and

Arthur Butler and Company were engaged in the manufacture of railway

wagons and other goods;

AND WHEREAS as a result of the closure of the wagon and other under-

takings owned by the companies aforesaid, there was a substantial; fall in

the manufacture of railway wagons and other goods;

AND WHEREAS for the purpose of bringing the closed works of the com-

panies aforesaid into operation the management of the Mokameh unit of

Britannia Engineering. Company and the management of the under-

takings of Arthur Butler and Company were taken over by the Central

Government under the Industries (Development and Regulation) Act,

1951;

AND WHEREAS it is necessary to acquire the said wagon and other

undertakings to ensure the continued manufacture of railway wagons and

65 of 1931.

(895)

896

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

other goods which are essential to the needs of the country in general,

and the Railways in particular;

BE it enacted by Parliament in the Twenty-ninth Year of the

Republic of India as follows: —

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Britannia Engineering Company

Limited (Mokameh Unit) and the Arthur Butler and Company (Muza-

ffarpore) Limited (Acquisition and Transfer of Undertakings) Act, 1978.

(2) The provisions of sections 27 and 28 shall come into force at once

and the remaining provisions of this Act shall be deemed to have come

into force on the 1st day of April, 1978.

2. In this Act, unless the context otherwise requires,—

(a), "appointed day" means the 1st day of April, 1978;

(b) "Arthur Butler and Company" means Messrs. Arthur Butler

and Company (Muzaffarpore) Limited, a company within the mean-

ing of the Companies Act, 1956, and having its registered office at

40, Strand Road, Calcutta, in the State of West Bengal;

Engineering Company Limited, a company within the meaning of

the Companies Act, 1956, and having its registered office at 3, Netaji

Subhash Road, Calcutta, in the State of West Bengal;

(d) ''Commissioner" means the Commissioner of Payments

appointed under section 15;

(e) "Government company" means a company

within the

meaning of section 617 of the Companies Act, 1956 and referred to

in section 5 of this Act;

(f) "Mokameh unit" means ithe wagon and other undertakings

owned by Britannia Engineering Company at Mokameh, in the State

of Bihar;

(sQ "notification" means a notification published in the Official

Gazette;

(h) "prescribed' means prescribed by rules made under this

Act;

(i) "specified date", in relation to any provision of this Act, means

euoh date as the Central Government may, by notification, specify for

the purpose of that provision and different dates may be specified for

different provisions of this Act;

(j) "wagon and other undertaking" means the undertaking which

Is engaged in the manufacture of railway wagons and other goods;

(k) words and expressions used herein and not defined but

defined in the Companies Act, 1956, have the meanings, respectively,

assigned, to them In thait Act.

Short title

and com-

mencement

Definitions.

1 of 1956,

1 Qt 1956.

1 ot 1956.

1 of 1000.

SEC. 2]

THE GAZETTE OF INDTA EXTRAORDINARY

897

CHAPTER II

ACQUISITION AND TRANSFER OF MOKAMEH UNIT AND UNDERTAKINGS OF

ARTHUR BUTLER AND COMPANY

3. On the appointed day,—

(i) the Mokameh unit and the right, title and interest of

Britannia Engineering Company in relation to the Mokamah unit; and

(if) the undertakings owned by Arthur Butler

and Company

and the right, title and interest of Arthur Butler and Company in

relation to the said undertakings,

shall, by virtue of this Act, stand transferred to, and shall vest in, the

Central Government.

4. (1) The Mokameh unit, and the undertakings of Arthur Butler

and Company, 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, buildi rig's, work-

shops, stores, instruments, machinery and equipment, cash balances!

cash in hand, reserve funds, investments and book debts pertaining to

the Mokameh unit or, as the case may be, the undertakings of Arthur

Butler and Company, 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—

(o) of Britannia Engineering Company, in relation tb the

Mokameh unit, or

(b) of Arthur Butler and Company, in relation to the under-

takings owned by it,

whether within or outside India, and all books of account, registers

and other documents of whatever nature relating thereto.

(2) All properties as aforesaid which have vested¹ in the Central

Government under section 3 shall, by force of su'cH vesting; be freed'

and discharged from any trust, obligation, mortgage, charge," lien and^r

all other incumbrances affecting it, and any attachment, injunction or

decree or order of any court or other authority, 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.

(.9) 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 inti-

mation to the Commissioner of such mortgage, charge, lien or other)

interest.

(4) For the removal of doubts, it is hereby declared that the mort-

gagee 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

pa^t out of the amounts specified in the First Schedule and also out of

Vesting In

the

Central

Govern,

ment of

Mokameh

unit

and under-

takings of

Arthur

Butler and

Company.

General

effect of

vesting.

898

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Power of

Central

Govern-

ment to

direct

vesting of

Mokameh

unit and

the under-

takings of

Arthur

Butler and

Company

In a Gov-

ernment

company.

Britannia

Engineer-

ing Com-

pany

and

Arthur

Butler

and com-

pany to

be liable

for

certain

prior

liabilities,

the monies determined under section '8, but no such mortgage, charge,

lien or other interest shall be enforceable against any property which

has vested in the Central Government or the Government company, as

the case may be.

(5) If, on the appointed day, any suit, appeal or other proceeding

of whatever nature instituted or preferred

by or against Britannia

Engineering Company in relation to the Mokameh unflt, or by or against

Arthur Butler and Company in relation to any undertaking owned by it,

is pending, the same shall not abate, be discontinued or be, in any way,

prejudicially affected by reason of the transfer of the Mokameh unit or,

as ,the case may be, the undertakings of Arthur Butler and Company, or

of anything contained in this Act, but the suit, appeal or other proceed-

ing may be continued, prosecuted or enforced by or against the Central

Government or the Government company, as the case may be.

5. (1) Notwithstanding anything contained In section 3, the Central

Government may, if it is satisfied that a Government company (whether

in existence at the commencement of this Act *or incorporated there-

after) is willing to comply, or has complied, with such terms and condi-

tions as that Government may think fit to impose, direct, by notification,

that the Mokameh unit and the undertakings referred to in section 3,

and the right, title and interest of Britannia Engineering Company In

relation to the Mokameh unit, and the right, title and Interest of Arthur

Butler and Company in relation to the undertakings owned by it, which

have vested in the Central Government under section 3, shall, instead

of continuing to vest In the Central Government, vest in the Govern-

ment 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 in relation to the Mokameh

unit and! in relation to the other undertakings referred to in section 3,

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 of the Mokameh unit and of the undertakings of Arthur

Butler and Company and all the rights and liabilities of the Central Gov-

ernment In relation to the Mokameh unit and the undertakings of Arthur

Butler and Company shall, on and from the date of such vesting, be

deemed to have been the rights and liabilities, respectively, of the Gov-

ernment company.

C. (1) Every liability of Britannia "Engineering Company in relation

to, the Mokameh unit, or of Arthur Butler and Company in relation

to the undertakings owned by It, in respect of any period prior to the

appointed day, shall be the liability of Britannia Engineering Company,

or Arthur! Butler and Company, as the case may be, and shall be enforce-

able against such company and not against the Central Government or

the Government company.

(2) For the removal of doubts, it is hereby declared that,—

(a) save as otherwise expressly provided In this section or In

any other section of this Act,—

(i) no liability of Britannia Engineering Company, in rela-

tion to the Mpfcarneh unit, and

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

899

{ii) no liability of Arthur Butler and Company, in relation

to the undertakings owned by it,

in respect of any period prior to the appointed day, shall be en-

forceable against thp Central Government or the Government com-

pany, as the case may be;

(0) no award, decree or order of any court, tribunal or other

authority in relation to the Mokameh unit, or in relation to the un-

dertakings owned by Arthur Butler and Company, passed after the

appointed day in respect of any matter, claim or dispute, which

arose before that day, shall be enforceable against the Central Gov-

ernment or the Government company, as thel case may be;

(i) Britannia Engineering Company, in relation to the

Mokameh unit, or

(ii) Arthur Butler and Company, in relation to the under-

takingg owned by it,

for the contravention of any provision of law for the time being

in fore© shall be enforceable against the Central Government or

the Government company, as the case may be.

CHAPTER III

PAYMENT OF AMOUNT

7. (I) For the transfer to, and vesting in, the Central Government,

under section 3,—

(a) of the Mokameh unit and the right, title and; interest

Britannia Engineering Company, in relation to that unit; and

(b) of the undertakings owned hy Arthur Butler and Company,

and the right, title and interest of Arthur Butler and Company, in

relation to those undertakings,

there shall be given by the Central Government to Britannia Engineer-

ing Company and Arthur Butler and Company, in cash and in the manner

specified in Chapter VI, an amount equal to the amount specified, res-

pectively, in the Fiist Schedule, against Britannia Engineering Company

and Arthur Butler and Company.

(2) For the removal of doubts, it is hereby declared that the liabili-

ties of—

(i) Britannia Engineering Company, in relation to the Mokameh

unit, and

(ii) Arthur Butler and Company, in relation to the undertakings

owned by it,

shall be met, in accordance with the rights and interests of the creditors

of the respective company from the amount due, respectively, to Bri-

tannia Engineering Comp&ny and Arthur Butler and Company, under

sub-section (IJ-

Payment

of amount.

900

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Payment

of further

amount.

8. (2) For the deprivation of Britannia Engineering Company of the

management of the Mokameh unit and' for the deprivation of Arthur

Butler and Company of the management of the undertakings owned &y

it, there shall be given, in cash, by the Central Government to the res-

pective company, in addition to the amount specified in section 7, an

amount computed at the rate of ten thousand rupees per annum for the

period commencing on the date on which the management of such unit

or, as the case may be, such undertakings, was taken over by the Central

Government under the Industries (Development and^: Regulation) Act,

1951 and ending with the appointed day.

(2) In consideration of the retrospective operation of the provisions

of sections 3, 4 and 6, there shall also be given, in cash, by the Central

Government to Britannia Engineering Company and to Arthur Butler

and Company an amount equal to an amount calculated at the rate of

ten thousand rupees per annum for the period' commencing on the ap-

pointed day and ending with the date on which thin' Act- receives the

assent of the President.

(3) The amount specified in section 7 and the amount computed under

<(ubLsectionr (1) and (2) shall carry simple Interest afr the rat* of four

per cent, per annum for the period commencing: on¹ the¹ appointed-day

and ending with the date on which the payment of amount Is made by

the Central Government to the Commission.

(4) The amounts determined in accordance with the provisions of

sub-sections (1), (2) and (3) shall be given to Britannia Engineering

Company and to Arthur Butler and Company in addition to the amount

specified in the First Schedule-

CHAPTER IV

MANAGEMENT, ETC., or MOKAMEH trtfrr AND THE; UNDERTAKINGS OF ARTHUB

BUTLER AND COMPANY

9. On the appointed day, the general superintendence, direction, con-

trol and management of the affairs and business of the Mokameh liriit

and of the undertakings owned by Arthur Butler and Company sHall—

(a) where a direction has been made by the Central Government

under section 5, vest in the Government company specified in such

direction, or

(b) where no such direction has been made, vest in such person

or body of persons as may be appointed by the Central Government

in this behalf,

and thereupon the Government company so specified or the- person or

body of persons so appointed, as the case may be, shall be entitled to

exercise all such powers andi do all such thinga as Britannia Engineering

Company ia authorised to exercise and do in relation to its Mokameh

uni/tor, as the case may be, Arthur Butler and Company Is authorised to

pxercise and do m relation to the undertakings owned by it,

65 of 1951.

Manage-

ment, etc.(

of Moka-

meh unit

and the

under-

takings

of Arthur

Butler

and

Company.

9KC. 2]

tHE GAZETTE OF INDIA EXTRAORDINARY

9oi

10. (1) Every pjerson( in whose possession or custody or control—

(i) the Mokameh unit, or

(ii) any undertaking of Arthur Butler and Company, or

any part of such unit or undertaking or any machinery, instrument or

other movable assets forming part of such unit or undertaking, may be

immediately before the appointed day, shall forthwith deliver possession

of the Mokameh unit or such undertaking or such part, machinery,

instrument or other asset, as the case may be, to the Central Government

or the Government company or to such person or body of persons as the

Central Government or the Government company may specify in this

behalf.

(2) Every person who has, on the appointed day, in his possession or

under his control any assets, books, documents or other papers relating

to the Mokameh unit or any undertaking owned by Arthur Butler and

Comp1any) which has vested in the Central Government or a Government

company under this Act, and which belong to Britannia Engineering

Company or, as the case may be, Arthur Butler and Company, or would

have so belonged if the Mokameh unit, or, as the case may be, the under-

takings owned by Arthur Butler and Company, had not vested in the

Central Government or the Government company, shall be liable to

account for the said assets, books, documents and other papers to the

Central Government or the Government.company and shall deliver them

up; to the Central Government or the Government company or to such

person or body of persons as the Central Government or the Government

company may specify in this behalf.

(3) The Central Government may take or cause to be taken all neces-

sary steps for securing possession of the Mokameh unit and the under-

takings of Arthur Butler and Company which have vested in it under

section 3.

11. Britannia Engineering Company and Arthur Butler and Company

shall, within such period as the Central Government may allow in this

behalf, furnish to that Government a complete inventory of all its pro-

perties and assets, as on the appointed day, pertaining to the Mokameh

unit orf as the case may be, the undertakings owned by Arthur Butler

and Company which has or have vested in the Central Government under

section 3, and, for this purpose the Central Government or the Govern-

ment company shall afford Britannia Engineering Company or Arthur

Butler and Company all reasonable facilities.

12. On the vesting in the Central Government or the Government

company of tfre management of the Mokameh unit or of any undertakings

owned by Arthur Butler

and Company, all persons in charge of the

management of the Mokameh unit or, as the case may be, the undertak-

ings owned by Arthur Butler and Company immediately before the date

of such vesting, shall be bound to deliver to the Central Government or

the Government company or to such person or body of persons as the

Central Government or the Government company may specify in this

behalf, all assets, books of account, registers or other documents in their

custody relating to the Mokameh unit or, as the case may be, any under-

taking owned by Arthur Butler and Company.

Duty to

deliver

possession

of Mo-

kameh

unit and

under-

takings

of Arthur

Butler

and

Company.

Duty of

the com-

panies to

furnish

particu-

lars.

Duty of

persons in

charge of

manage-

ment of

Mokameh

unit or

under-

takings of

Arthur

Butler

and Com-

pany to

deliver

aas$P,

«tc,

902

THfi GAZETTE OF INDIA EXTRAORDINARY

[PAAT II—

Employ-

ment of

employees

to con-

tinue.

Provident

fund

and other

funds.

Appoint-

ment of

Com-

missioner

of Pay-

ments.

CHAPTER V

PROVISIONS

RELATING TO

EMPLOYEES OF

MOKAMEH

UNIT AND OF

ARTHUR

BUTLER AND COMPANY

13. (/) Every person who has been, immediately before the appointed

day, employed by—

(i) Britannia

Engineering Company, in connection with

the

Mokameh unit, or

(ii) Arthur Butler and Company, in connection with any under-

taking owned by it,

shall become, on and from the appointed day, an employee of the Central

Government or, as the case may be, of the Government company,

and

shall hold office or service under the Central Government or the Govern-

ment company, as the case may be, with the same rights and privileges

as to pension, gratuity and other matters as would hove been admissible

to him if there had been no such vesting and shall continue to do so

unless and until his employment under the Central Government or

the

Government company, as the case may be, is duly terminated or until

his remuneration and other conditions of service are duly altered by the

Central Government or the Government company, as the case may be.

(2) Notwithstanding anything contained in the Industrial

Disputes

Act, 1947, or in any other law for the time being in force, the transfer

of the services of any officer or other person employed in the Mokameh

unit or any undertakings owned by Arthur Butler and Company, to the

Central Government or the Government company shall not entitle such

officer or other employee to any compensation under this Act or any other

law for the time being in force and no such claim shall be entertained

by any court, tribunal or other authority.

14. (/.) Where Britannia Engineering Company or Arthur Butler and

Company has established a provident fund, superannuation fund, welfare

fund or other fund for the benefit of persons employed in the Mokameh

unit or, as the case may be, any of the undertakings owned by Arthur But-

ler and Company, the monies relatable to the employees, whose services

have become transferred by or under this Act to the Central Government

or the Government company shall, out of the monies standing, on the

appointed day, to the credit of such provident fund, superannuation fund,

welfare fund or other funds,

stand transferred

to, and . vest in, the

Central Government or the Government company, as the case may be.

(2) The monies which stand transferred under subsection (1) to the

Central Government or the Government company, as the case m«y be,

shall be dealt with by that Government or the Government company in

such manner as may be prescribed.

CHAPTER VI

COMMISSIONER OF PAYMENTS

15.(2) The Central Government shall, for the purpose of disbursing

the amount payable under sections 7 and 8 to Britannia

Engineering;

Company and to Arthur Butler and Company, by notification, appoint a

Commissioner of Payments.

14 of 1947.

s*e. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

9 ^{d j}

(2) The Central Government may appoint such other persons as it

may think fit to assist the Commissioner and thereupon the Commissioner

may authorise one or more of such persons also to exercise all or any

of the powers exercisable by him under thig Act and different persons

Bwy he authorised to exercise different powers.

(3) Any person authorised by the. Commissioner to exercise any of

the powers exercisable by the Commissioner may exercise those powers

ia the same manner and with the same effect as if they have been con-

ferred on that person directly by this Act and not by way of authorisation.

(4) The salaries and allowances of the Commissioner aiid other per-

sons appointed under this section shall he defrayed out of the Consoli-

dated Fund of India-

16. (I) The Central Government shall, within thirty days * ^{r o m t n e}

specified date, pay, In cashi to the Commissioner, for payment to Britan-

nia Engineering Company and to Arthur Butler and Company,—

(a) an amount equal to that specified against each of their names

in the First Schedule,

(b) an amount equal to that payable to Britannia Engineering

Company and Arthur Butler and Company under section 8.

(2) A deposit account shall be opened by the Central Government

in favour of the Commissioner in the Public Account of India, and every

amount paid under this Act to the Commissioner shaU he deposited by

him to the credit of the said deposit account and the said deposit account

shall be operated by the Commissioner.

(3) Separate records shall be maintained by the Commissioner in res-

pect of Mokameh unit and the undertakings owned by Arthur Butler and

Company in relation to which payment has been made to him under

this Act.

(4) Interest accruing on the amounts standing to the credit of the

deposit account referred to in sub-section (2) shall enure to the benefit

of Britannia Engineering Company and Arthur Butler and Company.

17. (1) The Central Government or the Government company, as the

case may be, shall be entitled to receive, up to the specified date, to the

exclusion of all other persons, any money due to Britannia Engineering

Company in relation to the Mokameh unit, or Arthur Butler and Com-

pany in relation to any of the undertakings owned by it, which has vested

In the Central Government or the Government company, and realised

after the appointed day, notwithstanding that the realisation pertains to

a period prior to the apppinted day.

(2) The Central Government or the Government company, as the case

may be, may make a claim to the Commissioner with regard to every

payment made by that Government after the appointed day for discharg-

ing any liability of Britannia Engineering Company in relation to the

Mokameh unit, or of Arthur Butler and Company in relation to aiyy Of the

undertakings owned by it, in relation to any period prior to the appointed

day, and every such claim shall have priority, in accordance with the

priorities attaching under this Act, to the matter in relation to which such

Payment

by Cen-

tral Gov-

ernment

to the

Commis-

sioner.

Certain

powers

of the

Central

Govern-

ment or

Govern-

ment com-

pany.

&04

tHE GAZETTE OF INDIA EXTRAOREWNARV

[PAST II—

Claims to

be made

to the

Commis-

sioner.

Priority of

claims.

Examina-

tion of

claimi.

Admission

rejection

of claims.

liability has been discharged by the Central Government or the Govern-

ment company.

(3) Save as otherwise provided in this Act, the liabilities of Britannia

Engineering Company in relation to the Mokameh unit, or of Arthur

Butler and Company in relation to any of the undertakings owned by

it, in respect of any transaction prior to the appointed day, which have

not been discharged on or before the specified date, shall be the liabilities

of Britannia Engineering Company or Arthur Butler and Company, as

the case may be.

18. Every person having a claim against Britannia Engineering Com-

pany in relation to the Mokameh unit, or against Arthur Butler and Com-

pany in relation to the undertakings owned by it, shall prefer such claim

before the Commissioner within thirty days from the specified date:

Provided that if the Commissioner is satisfied that the claimant

was

prevented by sufficient cause from preferring the claim within the said

period of thirty days, he may entertain the claim within a further period

of thirty days, but not thereafter.

19. The claims arising out of the matters specified in the Second Sche-

dule shall have priorities in accordance with the following principles,

namely: —

(a) category I shall have precedence over all categories and cate-

gory II shall have precedence over category III and so on;

(b) the claims specified in each of the categories, except category

IV, shall rank equally and he paid in full, but, if the amount is in-

sufficient to meet such claims in full, they shall abate in equBl pro-

portion and be paid accordingly;

subject to the priorities specified in this section in accordance with

the terms of the secured loan and the priority, inter se, of such loans;

and

(d) the question of discharging any liability with regard to a

matter specified in a lower category shall arise only if a surplus is

left

after

meeting all the liabilities specified in the immediately

higher category,

20. (2) On receipt of the claims made under section 18, the Commis-

sioner shall arrange the claims in the order of priorities specified in the

Second Schedule and examine the same in accordance with such order

of priorities,

(2) If on an examination of the claim, the Commissioner is of opinion

that the amount paid to him under this Act is not sufficient to meet the

liabilities specified in any lower category, he shall not be required to

examine the claim in respect of such lower category.

21. (1) After examining the claims with reference

to the priorities

set out in the Second Schedule, the Commissioner shall fix a date on or

before which every claimant shall file the proof of his claim failing

which he will be excluded from the benefit of the disbursement made by

the Commissioner.

Sire. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

905

5 of 1908.

45 of I860.

2 of 1974.

(2) Not less than fourteen days' notice of the date so fixed shall be

given by advertisement in one issue of the daily newspaper in the English

language having circulation in the major

part of the country and one

issue of such daily newspaper in the regional language as the Commis-

sioner may consider suitable, and every such notice shall call upon the

claimant to file the proof of his claim with the Commissioner within the

period specified in the advertisement.

(3) Every claimant who fails to file the proof of his claim within the

period specified by the Commissioner shall be excluded

from the dis-

bursement made by the Commissioner.

(4) The Commissioner shall, after such investigation as may, in his

opinion, be necessary and ait.;r giving Britannia Engineering Company

or, as the case may be, Arthur Butler and Company, an opportunity of

refuting the claim and after giving the claimant a reasonable opportunity

of being heard, in writing, admit or reject the claim in whole or in part.

(5) The Commissioner shall have the power to regulate his own pro-

cedure in all matters arising out of the discharge of his functions, includ-

ing the place or places at which he may hold his sitting and shall, for

the purpose of making any investigntion under this Act, have the same

powers as are vested in a civil court under the Code of Civil Procedure,

1908, while trying a suit, in respect of the following matters, namely: —

(o) the summoning and enforcing the attendance of any witness

and examining him on oath;

(b) the discovery and production of any document or other

material object producible as evidence;

(d) the issuing of any commission for the examination of wit-

nesses.

(6) Any investigation before the Commissioner shall be deemed

be a judicial proceeding within the meaning of sections 193 and 228 of

the Indian Penal Code and the Commissioner shall be deemed to be a

civil court for the purposes of section 195 and Chapter XXVI of the Code

of Criminal Procedure, 1973.

(7) A claimant who is dissatisfied with the decision of the Commis-

sioner may prefer an appeal against the decision to the principal court

of original jurisdiction within the local limits of whose jurisdiction the

Mokameh unit or, as the case may be, the registered office of

Arthur

Butler and Company is situated:

Provided that where a person, who is a Judge of a High Court is

appointed to be the Commissioner, such appeal shall lie to the High

Court of the State in which the registered office of Britannia Engineer-

ing Company or, as the case may be, Arthur Butler and Company is

situated, and such appeal shall be heard and disposed of by not less than

two Judges of the High Court.

22. After admitting the claim under this Act, the amount due in res-

pect of such claim shall be paid by the Commissioner to the person or

persons to whom such sums are due and on such payment the liability

of Britannia Engineering Company in relation to the Mokameh unit, or

of Arthur Butler and Company in respect of any claim relating to the

undertakings owned by it shall stand discharged.

Disburse-

ment of

money by

Commis-

sioner,

9o6

THE GAZETTE OF INDIA EXTRAORDINARY

[PAKT II—

Disburse-

ment of

amounts to

Britannia

Engineer-

ing Com-

pany and

Arthur

Butler

and Com-

pany.

Undis-

bursed or

unclaimed

amount to

be deposit-

ed with

the Gene-

ral Re-

venue

Account.

Act to

have over-

riding

effect.

Contracts

to cease

to have

effect un-

less

ratified

by the

Central

Govern-

ment or

the Gov-

ernment

company.

23. (1) If out of the monies paid to him in relation to the Mokameh

unit or in relation

to any undertaking owned by Arthur Butler

and

Company there is a balance left after meeting the liabilities as specified

in the Second Schedule, the Commissioner shall disburse such balance

to Britannia Engineering Company,

or as the case may be, to Arthur

Butler and Company,

(2) Where the possession of any machinery, equipment or other pro-

perty has vested in the Central Government or the Government company

under 'this Act, but such machinery, equipment or other property doe»

not belong to Britannia Engineering Company or, as tha case may be,

Arthur Butler and Company, it shall be lawful for the Central Govern-

ment to continue to possess such machinery or equipment or other pro-

perty on the same 'terms and conditions under which they were possessed

by Britannia Engineering Company or, as the case may be, Arthur BuUer

and Company, immediately before the appointed day.

24. Any money paid to the Commissioner which remains undisbursed

or unclaimed for a period of three years from the last date on which

the disbursement was made, shall be transferred by the Commissioner

to the General Revenue Account of the Central Government; but a claim

to any money so transferred may be preferred! to the Central Governn

mentt by the person entitled to such payment and shall be dealt with as

if such transfer had not been made, the order, if any, for payment of

the claim being treated as an order for the refund of the revenue.

CHAPTER VII

MISCELLANEOUS

25. The provisions of this Act shall have effect notwithstanding any-

thing inconsistent therewith contained in any other law for the time

being in force or in any instrument having effect by Virtue of any law,

other than this Act, or in any decree or order of any court, tribunal or

other authority.

26. (1) Every contract entered into by Britannia Engineering

Com-

pany in relation to the Mokameh unit, or Arthur Butler and Company

in relation to any of the undertakings owned by it, which has vested in the

Central Government under section 3, for any service, sale or supply

and in force immediately before the appointed day, shall, on and from

the expiry of one hundred and eighty days from the date on which this

Act receives the assent of the President, cease to have effect unless

such contract is, before the expiry of that period, ratified, in writing,

by the Central Government, or the Government company, and in rati-

fying such contract, the Central Government or the Government com-

pany may make such alteration or modification therein as it may think

fit:

Provided that the Central Government or the Government company

shall not omit to ratify a contract and shall not make any alteration

or modification in a contract unless it is satisfied that such contract fa

unduly onerous or has been entered into in bad faith or is detrimental

to the interests of, the Central Government or the Government com-

pany.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

907

(2) The Central Government or the Government company shall not

omit to ratify a contract, and shall not make any alteration or modifica-

tion therein, except after giving the parties to the contract a reasonable

opportunity of being heard and except

after

recording in writing its

reasons for refusal to ratify the contract or for making any alteration or

modification therein.

27. Any person who,—

(a) having in hia possession, custody or control any property

forming part of the Mokameh unit, or any of the undertakings

owned by Arthur Butler .and Company, wrongfully

withholds such

property from the Central Government or the Government company;

(b) wrongfully obtains possession of, or retains, any property

forming part of, the Mokameh unit, or any of the undertakings

owned by Arthur Butler and Company; or

withholds or fails to furnish to the Central Gov-

ernment or the Government company or any person or body ol

persons specified by that Government or the Government corppany

as the case may be any document relating to the Mflkameh unit,

or any of the undertakings owned by Arthur Butler and Company,

which may be in his possession, custody or control; or

(d) fails to deliver to the Central Government

or the GoVtern^

ment company or any person or body of persons specified by that"

Government

or the Government

company, any assets, books of

account, registers or other documents in his possession, custody or

control relating to the Mokameh unit, or any of the

undertakings

owned by Arthur jiutler and Company; or

(e) wrongfully removes or destroys any property forming part

of the Mokameh unit, or any of the undertakings, owned by Arthur

Butler and Company or prefers any claim under this Act which he

knows or has reason to believe to be false or grossly inaccurate,

shall be punishable with imprisonment for a term which may

extend

to two years, or with fine which may extend to ten thousand

rupees,

or with both,

28. (I) Where an offence under this Act has been committed by a

company, every person who, at the time the offence was committed, was

in charge of. and was responsible to, the company for the conduct of the

business of the company, as we'll as the company, shall be deemed to be

guilty of the offence and shall be liable to be proceeded against

and

punished accordingly:

Provided that nothing contained in this sub-section shall render any

such person liable to any punishment, if he proves that the offence was

committed without his knowledge or that he had exercised all due dili-

gence to prevent the commission of such offence.

(2) Notwithstanding

anything contained in

sub-section (I),

where

any offence under this Act has been committed by a corrtpany and it is

proved that the offence has been committed with the consent or conni-

vance of, or is attributable to any neglect on the part of, any director,

Penalties

Offences

by com-

panies.

9o8

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

manager, secretary or other officer of the company, such director, mana-

ger, secretary or other officer shall be deemed to be guilty of that offence

and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section,—

(a) "company" means any body corporate and includes a firm

or other association of individuals; and

(b) "director", in relation to a firm, means a partner in the

firm.

29. (1) No suit, prosecution or other legal proceeding shall lie against

the Central Government or any officer of that Government or the Gov-

ernment company or other person authorised by that Government or

the Government company for anything which is in good faith done or

intended ta be done under this Act.

(2) No suit or other legal proceeding shall lie against the Central

Government or any of its officers or other employees or the Govern-

ment company or any officer or other person authorised by that com-

pany for any damage caused or likely to be caused by anything which

is in good faith done or intended to be done under this Act.

30. (1) The Central Government may, by notification, direct that all

OF , any of the powers exercisable by it under this Act, other than the

powers conferred by sections 31 and 32, may also be exercised by such

person or persons as may bo specified in the notification.

(2) Whenever any delegation of power is made under

sub-section

(1), the person to whom such power has been delegated shall act under

the direction, control and supervision of the Central Government.

31. (2) The Central Government may, by notification, make rules for

carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the fore-

going powers, such rules may provide for all or any of the following

rhatWs, namely: —

(a) the time within which, and the manner in which, an Inti-

mation referred to in sub-section (3) of section 4 shall be given;

(b) the manner In which the monies in any provident fund or

other fund,

referred to in sub-section (2) of section 14 shall be

dealt with;

cribed.*

(3) Every rule made by the Central Government

under

this

Act

shall be laid, as soon as may be after it is made, before each House of

Parliament while it is in session for a total period of thirty days which

may be comprised in one session or in two or more successive sessions

and It before the expiry of the session immediately following

the

session or successive sessions aforesaid, both Houses agree in making

any modification in the rule or both Houses agree that the rule should

Protec-

tion of

action

taken in

good faith.

Ddtgation

of powwi.

Power to

make

rules.

Sac. i]

tfHE &AfcBTTE OF iNftlA EXtRAOfttaNAft'Y

9b9

not be made, the rule shall thereafter have effect only In such modified

form or be of no effect, as the case may be; so, however, that any such

modiftcaition or annulment shall be without prejudice to the validity of

anything previously done under tha" rule.

32. If any difficulty arises in giving effect to the provisions, of thia

Ad;, the Central Government may, by order, not inconsistent with Xh»

pravisions of this Act, remove the difficulty:

Provided that no such order shall be made after the expiry of a period

of two years from the appointed day.

33. It is hereby declared that this Act is for giving effect to the policy

of the State towards securing the principles specified in clause (b) of

article 39 of the Constitution.

Explanation.—In this section, "Staite" has the same meaning as in

article 12 of the Constitution.

Power to

remove

difficulties.

Declara-

tion as to

the policy

of th«

State.

THE FIRST SCHEDULE

(See sections 4, 7, 8 and 16)

S. No.

Name of the company

The Britannia Engineering Company

Arthur Butler and Company

Amount

(Rupees in lakh*>

152;85

137:70

THE SECOND SCHEDULE

(See sections 19, 20, 21 and 28)

ORDER OF PRIORITIES

Category 1

(i) Employees' dues on account of arrears of tripartite

settle-

ment for the period from the 1st day of January, 1975 to the 31st day

of May, 1975.

(ii) Employees' dues on account of unpaid salaries, wage's^ 'provi-

dent fund, Employees' State Insurance contribution or premium re-

lating to Life Insurance Corporation of India.

Category II

Stecured loans from nationalised banks and secured loans from In-

dustrial Reconstruction Corporation of India for the post-take-over man-

agement period.

Category III

Central Government loans for the post-take-qver management period.

Category IV

Secured loans from nationalised banks and secured loans from finan-

cial institutions for the pre-take-over management period.

Category V

Revenue, taxes, cesses, rates or other dues to Central Government,

State Government and local authorities or State Electricity Board for

the pre-take-over management period.

Category VI

Trade and other creditors for the pre-take-over management period.

f&t GAZETTE OF wtoiA ixTRAORbWAflY

[PAST i t -

STATEMEIftT OF OBJECTS AND REASONS

Britannia'Engineering Company Limited was incorporated in 1917

with its registered office at Calcutta. It owned at Titagarh an engineering

unit (where it manufactured road rollers, jute mill machinery and other

industrial machinery) and a steel foundry. It also set up in 1960 at

Mokameh, a unit to manufacture Railway Wagons, steel structural^ etc.

The engineering unit at Titagarh closed down in October 1970 and on the

22nd May, 1976 its management was taken over by the Central Govern-

ment and entrusted to

M|s. Westinghouse Saxby Farmer Limited,

Calcutta, a company managed by the Government of West Bengal and

in which the West Bengal Government has 87.75 per cent, share-holding.

The West Bengal Government has taken complete financial and mana-

gerial responsibility for managing the Titagarh unit. The steel foundry

is being managed by Industrial Reconstruction Corporation of India.

The wagon unit at Mokameh closed down in March 1973. The Central

Government took over the management of this unit on the 15th February,

1974 under the Industries (Development and Regulation) Act, 1951 and the

unit was re-opened on the 22nd February, 1974.

2. Arthur Butler and Company (Muzaffarpore) Limited was incor-

porated in 1919 with its registered office at Calcutta and its manufactur-

ing unit at Muzaffarpur. In the past, the company manufactured various

types pf industrial machinery and when it closed down in February 1972,

it was also manufacturing metre-gauge railway wagons. The manage-

ment of this Company was taken over by the Central Government on

the 14th December, 1973 under the Industries (Development and Re-

gulation) Act, 1951 and the unit re-opened on the 10th August, 1974.

3. Britannia Engineering Works, Mokameh, is engaged in the manu-

facture of Railway Wagons, Under-frames and Steel Structural and

Arthur Butler and Company (Muzaffarpore) Limited in the manufacture

of Wagons, Sugar Mills machinery, Structural, Agricultural implements,

Foundry products and Wagon components.

The fabrication of wagons,

particularly under the old orders from the Railways, has been un-economi-

cal, causing financial loss to the Companies. These losses -are being met

by the Government by way of grant of loans to the two companies. The

companies have been successful in taking up the new lines of production,

such as, Coal Tubs, Bridge Girders, Brake Beams, Furnace Structure,

Mine Cars and Transmission Tower Lines.

4. After the take over of the management of these two companies,

there has been considerable progress in the production performance. It

is in the public interest that both the units continue their manufacture of

wagons and other goods. These units provide substantial employment

and their closure would render a large labour force unemployed. It is

not possible to hand over the management of these two units to private

management as substantial Government loans have been given to the

units. After, careful consideration of the whole matter, the Government

has decided to acquire these units.

9. The BUI seeks to acquire the Mokameh unit of Britannia Engineer-

Ing Company Limited and the undertakings owned by Arthur Butler and

Company (Muzaffarpore) Limited.

NEW DELHI;

GEORGE FERNANDES.

The 17th July, 1978.

Sffic. 2]

THE GAZET^JS OF INDIA EXTRAORDINARY

911

FINANCIAL MEMORANDUM

Clause 7 of the Bii] providos for payment, in cash and in the manner

specified in Chapter VI thereof, an amount equal to the amount specified

; against the name of each of the companies specified in the First Schedule

to the Bill for vesting in the Central Government the right, title and

interest of the Mokameh unit of Britannia Engineering Company Limited

and Arthur Butlur and Company (Muzaffarpore) Limited in relation to

the undertakings owned by it. The amount payable will be of the order

of RE- 2,90,55,000,

2. Sub-clause (1) of clause 8 provides for payment, to each of the com-

panies., of further amount in cash, in consideration for the deprivation of

the companies ol" the management of their undertakings, an amount to

be calculated ai the rate of Rs. 10,000 per annum for the period com-

mencing on the date on which the managements of the undertakings of

these companies were taken over by the Central Government and ending

on the appointed day (1st April, 1978). It is estimated that this amount

will be of the order oi Rs. 90,000-

3- Sub-eiause (2) of clause S provides that in consideration of the

retrospective operation of certain provisions of the Bill a3

specified

therein, there shall be given, in cash, to each of the companies, an amount

equal to the amount vacillated at the rate of Rs. 10,000 per annum for

Vh'cf poriod commencing on the appointed day and ending on the date on

V'IULM the BiJl receive the assent of the President. This amount is

estimated to be of: thy order of Rs. 10,000.

4. Sub-clause (5) of clause 8 provides for payment of simple interest

at the rate of four p~-r cent, per annum, in respect of the amounts pay-

able under clause 7 and sub-clauses (1) and (2) of clause 8, for the period

commencing on the appointed day and ending on the date on which the

payment of such amounts is made by the Central Government to the

Commissioner of Payments. It is estimated that the interest payment in

terms of the provisions of sub-clause (3) of clause 8 is likely to be ol the

order of Rs. 1,00,000 per month.

6. Clause 15 of the Bill provides for appointment of Commissioner of

Payments by the Government with adequate staff to assist him for the

purpose of disbursing the amounts payable to each of the companies.

The salary and allowances of the Commissioner of Payments and his

ataff and expenditure on office and establishment will be defrayed out of

the Consolidated Fund of India- The estimated expenditure on this

accoun't is likely to be of the order of Rs. 10,000 per month.

6. Funds will also have to be provided far capital expenditure for

modernisation and expansion of the undertakings to make them finan-

cially viable. It is estimated that about Rs. 20,00,000 may have to be pro-

vided on this account during the current financial year-

7. It has been decided that in so far as the secured loans of Banks and

Financial Institutions are concerned the short-fall will be assumed by the

Central Government outside the scheme of acquisition. This short-fall

is estimated to be of the order of Rs. 33,00,000.

8. The Bill, if enacted, is not likely to involve any other recurring or

non-recurring expenditure-

THE GAZETTE OP INDIA EXTRAORDINARY

[PART n ^

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 31 of the Bill empowers the Central Government to make rules

to carry out the provisions of the Bill. Sui-h rules may provide

for

matters, such as—

(a) the time within which, and the msnner in which, an intimation

referred to in sub-clause (3) of cliuse 4 of the Bill shall be given,

and

(b) the manner in which the monies in any provident fund or

other fund referred to in sub-clause (2) of clause 14 shall be dealt

with.

The matters in respect of which such rules may be made are matters

of procedure and administrative detail and it is not practicable to pro-

vide for them in the Bill itself. The delegation of legislative power is,

therefore, of a normal character.

SEC. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

913

104 of 1956.

BILL NO. 114 OF 1978

A Bill to amend the Suppression of Immoral Traffic in Women and Girts

Act, 1956.

BE it enacted by Parliament in the Twenty-ninth Year of the Republic

of India as follows: —

1. (i) This Act may be called the Suppression of Immoral Traffic in

Women and Girls (Amendment) Act, 1978.

(2) It shall come into force on such date as the Central Government

may, by notification in the Official Gazette, appoint.

2. In the Suppression of Immoral Traffic in Women and Girls Act,

1956 (hereinafter referred to as the principal Act), in section 2,—

(a) in clause (a), after the word "room", in both the places

where It occurs, the word ", conveyance" shall be Inserted;

(b) after clause (a), the following clause shall be inserted,

namely: —

'(aa)

"corrective institution" means an institution, by

whatever name called (being an institution

established or

licensed as such under section 21), in which women and girls,

who are in need of correction, may be detained under this Act,

and includes a shelter where female undertrials may be kept

in pursuance of this Act;';

Short

title

and com-

mence-

ment.

Amend-

ment of

section 2,

THE GAZETTE OF INDIA EXTRAORDINARY

[PAST It—

Insertion

of new

section

2A.

Rule

construc-

tion re-

garding

enact-

ments not

extending

to Jammu

and Kash

mlr.

Amend-

ment of

section 4.

namely:—

'(c) "magistrate" means a magistrate specified in the second

column of the Schedule as being competent to exercise the

powers conferred by the section in which the expression

occurs and which is specified in the first column of the Schedule;';

(d) clause (e) shall be omitted;

(e) for clauses (f) and (g), the following clauses shall be sub-

stituted, namely: —

'(f) "prostitution" means the act of a female offering her

body for promiscuous sexual intercourse for hire, whether in

money or in kind, and whether offered immediately or other-

wise, and the expression "prostitute" shall be construed accord-

ingly;

(g) "protective home" means an institution, by whatever

name called (being an institution established or licensed

such under section 21), in which women and girls, who are In

need of care and protection, may be kept under this Act, but

does not include—

(i) a shelter where female undertrials may be kept in

pursuance of this Act, or

(ii) a corrective institution;'.

3. After section 2 of the principal Act, the following section shall be

Inserted, namely:—

"2A. Any reference in this Act to a law which is not in force

in the State of Jammu and Kashmir shall, in relation to that State,

be construed as a reference to the corresponding law. if any. in

force in that State.".

4. In section 4 of the principal Act, for sub-section (2), the following

sub-section shall be substituted, namely: —

" (2) Where any person over the age of eighteen years is proved—

(a) to be living with, or to be habitually in the company of,

a prostitute; or

(b) to have exercised control, direction or influence over the

movements of a prostitute in such a manner as to show that such

person is aiding, abetting or compelling her prostitution; or

it shall be presumed, until the contrary Is proved, that such person

ia knowingly living on the earnings of prostitution of another person

within the meaning of sub-section (1).".

SEC 2]

THE GAZETTE OF INDIA EXTRAORDINARY

915

5. In section 7 of the principal Act,—

(a) for sub-section (1), the following sub-section shall be sub-

stituted, namely: —

"(I) Any woman or girl, who carries on prostitution and

the person with whom such prostitution is carried on, in any

premises—

(a) which are Within the

area

or areas, notified

under sub-section (.3), or

(b) which are within a distance of two hundred met-

res of any place of< public religious worship, educational

institution, hostel, hospital, nursing home or such other puB-

lic place of any kind as may be notified in this behalf by

the Commissioner of Police or magistrate in the manner

prescribed,

shall be punishable with imprisonment lor a term which may

extend to three months.¹';

(b) after sub-section (2), the following sub-sectiona shall be In-

serted, namely: —

"(3) The State Government may, having regard to the

kinds of persons frequenting any area or areas in the State, the

nature and the density of population therein and other relevant

considerations, by notification

in the Official Gazette, direct

that prostitution shall not be carried on in such area or areas

as may be specified in the notification.

(4) Where a notification is issued under sub-section (3) In

respect of any area or areas, the State Government shall define

the limits of such area or areas in the notification with, reason-

able certainty.

(5) No such notification shall be issued so as to have effect

from a date earlier than the expiry of a period of ninety days

after the date on which it is issued.".

6. In section 9 of the principal Act, in sub-section (1), for the words

"having the custody, charge or care of any woman or girl", the words

"having the custody, charge or care of, or a position of authority over,

any woman or girl" shall be substituted.

Amend-

ment of

section 7.

Amand-

ment of

section*.

9r6

THE GAZETTE OF INDIA EXTRAORDINARY

[PAET II—

Substitu-

tion of

new sec-

tions for

eec-

tlon 10.

Release on

probation

of fiood

conduct

or after

due

admoni-

tion.

7. For section 10 of the principal Act, the following sections shall be

substituted, namely: —

"10. (1) A person convicted for the first time of any offence under

section 7 or section 8 may, having regard to his age, character, ante-

cedents and the circumstances in which the offence was committed,

be released by the court before which he is convicted, on probation

of good conduct,—

(a) In a case arising in an area where the Probation of

Offenders Act, 1958, is in force, in the manner provided in

section 4 of that Act; and

(b) in any other case, in the manner provided in sub-

section (1) of section 360 of the Code of Criminal Procedure,

1973.

(2) A person convicted for the first time of any offence under

section 7 or section 8 may, having regard to his age, character, ante-

cedents and the circumstances in which the offence was committed,

also be released after due admonition,—

(a) in a case arising in an area, where the Probation 61

Offenders Act, 1958, is in force, in the manner provided in section

3 of that Act; and

(b) in any other case, in tHo manner provided in sub-

section (3) of section 360 of the Code of Criminal Procedure,

1973.

(3) The provisions of sections 5 to 17 (botK inclusive) of the Pro-

bation of Offenders Act, 1958. shall applv to the cases referred to in

clause (a) of sub-section (1) and clause (a) of sub-section (2).

(4) The provisions of sub-sections (2) to (10) (both inclusive)

of section 360 of the- Code of Criminal Procedure, 1973. shall apply

to the cases referred to in clause (b) of sub-section (1) and clause

(b) of sub-section (2).

(5) Notwithstanding anything contained in the Code of Criminal

Procedure, 1973, or any other law for the time being in force, no per-

son convicted of an offence under sub-section (1) or sub-section (2)

of section 3, or under section 4, section 5, section 6 or section 9 shall

be released on probation or after due admonition.

r(6) Notwithstanding anything contained in sub-section (IV or

sub-section (2), if the person convicted of an offence under section

7 or section 8 for the first time is a woman or girl, she shall be

dealt with under this section and no sentence of

imprisonment

shall be awarded to her unless the court is satisfied that, having

regard to the circumstances of the case, including the nature of

the offence and the character of the offender, it would not be

desirable to deal with her under this section; and if the court passes

any sentence of imprisonment on the offender on first conviction, it

shall record its reasons for doing so.

(7) For the purpose of satisfying itself whether or not it would be

desirable to deal with such woman or girl under this section, the court

shall call for a report from the probation officer appointed under

20 of 1938.

2 of 1974.

20 of 1958.

2 of 1974,

20 of 1958.

2 of 1974.

2 of 197<

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

917

SO of 195».

aOofl9B8.

2 mt 1074.

86 of 1W«.

5 of 1808.

2 of 1074.

the Probation of Offenders Act, 1953, and shall consider his report,

If any, and any other information available to it relating to the

character and physical and mental condition of the offender.

10A. (1) Where—

(a) a female offender is found guilty of an offence under

section 7 or section 8, and is not released under sub-section (I)

or sub-section (2) of section 10; and

(b) the character, state of health and mental condition of

the offender and the other circumstances of the case are such

that it is expedient that she should be subject to detention for

such term and such instruction and discipline as are conducive

to her correction,

it shall be lawful for the court to pass, In lieu of a sentence of Im-

prisonment, an order for detention in a corrective institution

for

such term, not being less than two years and not being more than

five years, as the court thinks fit:

i Provided that before passing such an order—

(i) the court shall give an opportunity to the offender to be

heard and shall also consider any representation

which

the

offender may make to the court as to the suitability oft tHe case

for treatment in such an institution, as also the report of the

probation officer appointed, under the Probation of Offenders

Act, 1958; ana

" *

" '"

(il) the court shall record that It Is satisfied that the charac-

ter, state of health and mental condition of the offender and tHe

other circumstances of the case are such that the offender 19

likely to benefit by such instruction and discipline as aforesaid.

(2) Subject to the nrovisions of sub-section (3)', the provisions

of the Code of Criminal Procedure. 1973. relating to appeal, re-

ference and revision, and of the Limitation Act, 1963, as to the period

within which an appeal shall be filed, shall apply in relation to an

order of detention under sub-section (1) as if the order had been a

sentence of imprisonment for the same period as the period for

which the detention was ordered.

(3) Subject to such rules as may be made in this behalf, the

State Government or authority authorised in W^ behalf may,

at any time after the expiration of six months from the date of an

order for detention in a corrective institution, if it is satisfied that

there is a reasonable probability that the offender will lead a useful

and industrious life, discharge her from such an institution, without

condition or with such conditions as¹ may be considered fit, and grant

her a written licence in such form ^ may he prescribed.

(4) The conditions on wnich an offender

is discharged under

sub-section (3), may include requirements relating to residence of

the offender and supervision over the offender's activities and move-

ments.".

8. In section 12 of the principal Act. in sub-section (4>, for the words

and figures "sections 112 to 126 of the Code of Criminal Procedure. 1898",

the words and fleures "sections 111 to 123 of the Code of Criminal Pro-

cedure, 1973" shall be substituted.

Detentionn

in a correc-

tive institu-

tion.

Amend-

ment of

section 12.

9i8

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Amend-

ment of

section 13.

Amend-

ment ot

section 14.

Amend-

ment of

section Is.

9. In section 13 of the principal Act, for sub-section (2), the following

sub-sections shall be substituted, namely:—-

"(2) The special police officer shall not be below the rank of an

Inspector of Police.

(2A) The District Magistrate may, if he considers it necessary

or expedient so to do, confer upon any retired police or military

officer all or any of the powers conferred by or under this Act on a

special police officer, with respect to particular cases or classes of

cases or to cases generally:

Provided that no such power shall be conferred on—

(a) a retired police officer unless such officer, at the "time

of his retirement, was holding a post not below the rank of an

Inspector;

(b) a retired military officer unless

such officer,

the

time of his retirement, was holding a post not below the rank of

a commissioned officer.".

10. In section 14 of the principal Act,—

(a) in the opening paragraph, for the words and figures "the

Code of Criminal Procedure, 1898", the words and figures "the Code

of Criminal Procedure, 1973" shall be substituted;

(b) in clause (Hi) of the proviso, for the word "inspector", the

word "sub-inspector" shall be substituted,

11. In section 15 of the principal Act,—

~~"

(a) in sub-section (2), the following proviso shall be inserted at

the end, namely: —

"Provided that

the

requirement

as to

the

respectable

inhabitants beinp from the locality in which the place to be

searched is situate shall not apply to a woman required to attend

and witness the search.";

(b) for sub-section (4), the following sub-section shall be substi-

tuted, namely: —

" (4) The special police officer entering any premises under

sub-section (?) shall be entitled to remove therefrom.—

(a) any woman, if in his opinion, she is carrying on, or

Is being made to ca^ry on, or attempts are being made to

make her carry on, prostitution; or

(b) any girl, if in his opinion, she is under the age of

twenty-one years and is carrying on, or Is being made to

carrv on, or attempts are being made to make her carry on,

prostitution.";

woman or girl" shall be substituted;

(d) after sub-section (6), the following sub-section shall be in-

serted, namely: —

" (7) The provisions of the Code of Criminal Procedure, 1973,

shall, so far as may be, apply to any search under this section as

they apply to any search made under the authority of a warrant

issued under section 94 of the said Code.

I ot IBM.

3 ot 1974

2 of 1074.

Sue. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

9l9

12. For sections 16 and 17 of the principal Act, the following sections

shall be substituted, namely: —

"16. (2) Where a magistrate has reason to believe from informa-

tion received from the police or from any other person authorised

by the State Government in this behalf or otherwise, that—

(a) a woman is being made to carry on prostitution In a

brothel, or

(b) a girl apparently under the age of twenty-one years is

living, or is carrying on, or is being made to carry on, prostitu-

tion, in a brothel,

he may direct a police officer not below the rank of a sub-inspector to

enter such brothel, and to remove therefrom such woman or girl and

produce her before him.

(2) The police officer, after removing the woman or girl, shall

forthwith produce her before the magistrate issuing the order.

17. (I) When the special police officer removing a woman or girl

under sub-section (4) of section 15 or a police officer rescuing a

woman or girl under sub-section (I) of section 16, is for any reason

unable to produce her before the appropriate magistrate as

required by sub-section

(5)

of section

15, or before

the

magistrate issuing the order under sub-section (2) of section 16,

he shall forthwith produce her before the nearest magistrate of

any class, who shall pass such orders

as he deems proper for

her safe custody until she is produced before the appropriate

magistrate, or, as the case may be, the magistrate issuing the order:,

Provided that no woman or girl shall be—

(i) detained in custody under this sub-section for a period

exceeding ten days from the date of the order under this sub-

section; or

fti) restored to or placed in the custody of a person wno may

exercise a harmful influence over her.

(2) When the woman or girl is produced before the appropriate

magistrate under sub-section (5) of section 15 or the magistrate under

sub-section (2) of section 16, he shall, after giving her an opportunity

of being heard, cause an inquiry to be made as to the correctness of

the Information received under sub-section (1) of section 16, the age,

character and antecedents of the woman or girl and the suitability of

her parents, guardian or husband for taking charge of her and the

nature of the influence which the conditions in her home are likely

to have on her if she is sent home, and, for this purpose, he may direct

a probation officer appointed under the Probation of Offenders Act,

1958, to inquire into the above circumstances and into the perso-

nality of the woman or girl and the prospects of her rehabilitation.

(3) The magistrate may, while an inquiry is made into a case

under sub-section (2), pass such orders as he deems proper for the

Substi-

tution of

new sec-

tions for

sections

16 and 17.

Rescue of

•woman or

girl.

Interme-

diate cus-

tody of

women

and girl*

removed

under

section 15

or rescued

under sec-

tion 16.

20 of less.

920

THE GAZETTE OF INDIA EXTRAORDINARY

[PART It-

Amend-

ment of

section 18.

Substitu-

tion of

new

section for

section 19.

Applica-

tion for

being

kept

in a pro-

tective

home

or provid-

ed care

and protec-

tion by .

court.

safe custody of the woman or girl:,

Provided that no woman or girl shall be kept in custody for

this purpose for a period exceeding three weeks from the date of

such an order( and no woman or girl shall be kept in the custody

of a person likely to have a harmful influence over her.

(4) Where the magistrate is satisfied, after making an inquiry

as required under sub-section (2),—

(a) that the information received is correct; and

(b) that she is in need of care and protection,

he may, subject to the provisions of sub-section (5), make an order

that such woman or girl be detained for such period, being not less

than one year and not more than three years, as may be specified in

the order, in a protective home, or in such other custody as he shall,

for reasons to be recorded in writing, consider suitable:

Provided that such custody shall not be that of a person or body

of persons of a religious persuasion different from that of the woman

or girl, and that those entrusted with the custody of the woman or

girl, including the persons in charge of a protective home, may be

required to enter into a bond which may, where necessary and

feasible, contain undertakings based on directions relating to the

proper care, guardianship, education, training and medical and

psychiatric treatment of the woman or girl as well as supervision by a

person appointed by the court, which will be in force for a period

not exceeding three years.

(5) In discharging his functions under sub-section (2), a magis-

trate may summon a panel of five respectable persons, three of

whom shall, wherever practicable, be women, to assist him; and may,

for this purpose, keep a list of experienced social welfare workers,

particularly women social welfare workers, in the field of suppres-

sion of immoral traffic in women and girls.

(£}) An appeal against

an order made under

sub-section (4)

shall lie to the Court of Session whose decision on such appeal shall

be final.".

13. In section 18 of the principal Act, in sub-section

(2), for the

words "two hundred yards", the words "two hundred metres" shall be

substituted.

14. For section 19 of the principal Act, the following section shall

be substituted, namely: —

"19. (2) A woman or girl who is carrying on, or is being made

to carry on, prostitution, may make an application, to the magistrate

within the local limits of whose jurisdiction she is carrying on,

or is being made to carry on, prostitution, for an order that she may

be—

(a) kept in a protective home, or

(b) provided care and protection by the court in the manner

specified in sub-section (3).

SBC. 2J

THJB GAZETTE OF INDIA EXTBAOEJMNARY

921

20 of 1958.

(2) The magistrate may, pending inquiry under s^b-^section (3),

direct that the woman or girl be kept in such custody as he may

consider propier, having regard to the circumstances of the case.

(3) If the magistrate, after hearing the applicant and making

such inquiry as he may consider necessary, including an inquiry

by a probation officer appointed under the Probation of Offenders

Act, 1958, into the personality, conditions of home and prospects of

rehabilitation of the applicant, is satisfied that an order should be

made under this section, he shall, for reasons to be recorded, make

an order that the applicant be kept,—

(i) in a protective home, or

(ii) in a corrective institution, or

(iii) under the supervision of a person appointed by the

magistrate,

for such period as may be specified in the order.".

15. In section 21 of the principal Act,—

(a) in sub-section (1), for the words "as many protective

homes under this Act as it thinks fit and! such homes", the words

"as many protective homes and corrective institutions under this

Act as it thinks fit and such homes and institutions" shall be substi-

tuted;

(b) in sub-sections (2), (7), (8) and (10), for the words "pro-

tective home", wherever they occur, the words "protective home or

corrective institution" shall be substituted;

(i) in the opening paragraph and in the firet proviso, for the

words "protective home", the words "protective home or correc-

tive institution" shall be substituted;

(ii) after the second proviso, the following proviso shall be

inserted, namely:—

"Provided also that a person or authority maintaining

any corrective institution at the commencement of the Sup-

pression of Immoral Traffic in Women and Girls (Amend-

ment) Act, 1978, shall be allowed a period of six months

from such commencement to make an application for such

licence.";

(d) after sub-section (9), the following sub-section shall be inser-

ted, namely-—

"(9A) The State Government or an authority authorised by

it in this behalf may, subject to any rules that may be made in

Amend-

ment

of sec-

tion 21.

9iz

THE GAZETTE OF INDIA EXTRAORDINARY

[PART 11—

this behalf, transfer an inmate of a protective home to another

protective home or to a corrective institution or an inmate

of a corrective institution to another corrective institution or to a

protective home, where such transfer is

considered desirable

having regard to the conduct of the person to be transferred,

the kind of training to be imparted and other circumstances of

the case:

Provided that—

(a) no woman or girl who is transferred under this

sub-section shall be required to stay in the home or institu-

tion to which she is transferred for a period longer than she

was required to stay in the home or institution from which

she was transferred;

(b) reasons shall be recorded for every order of trans-

fer under this sub-section.".

16. In section 22 of the principal Act, for the words, brackets, letter

and figure "a magistrate as defined in clause (c) of section 2", the words

"a Metropolitan Magistrate or a Judicial Magistrate of the first class"

shall be substituted.

17. After section 22 of the principal Act, the following sections shall

be inserted, namely:—

'22A- (I) If the State Government is satisfied that it is necessary

for the purpose of providing for speedy trial of offences under this

Act in any district or metropolitan area, it may, by notification in the

Official Gazette and after consultation with the High Court, establish

one or more Courts of Judicial Magistrates of the first class, or, as

the case may be, Metropolitan Magistrates, in such district or metro-

politan area.

(2) Unless otherwise directed by the High Court, a court estab-

lished under sub-section (1) shall exercise jurisdiction only in respect

of cases under this Act.

(3) Subject to the provisions of sub-section (2), the jurisdiction

and powers of the presiding officer of a court established under sub-

section (1) in any district or metropolitan area shall extend through-

out the district or the metropolitan area, as the case may be.

(4) Subject to the foregoing provisions of this section, a court

established under sub-section (1) in any district or metropolitan area

shall be deemed to be a court established under sub-section (2) of

section 11, or, as the case may be, sub-section (1) a& section 10, of the

Code of Criminal Procedure, 1973 and the provisions of that Code

shall apply accordingly in relation to such courts.

Amend-

ment of

section 22,

Insertion

of new

sections

22A

and 22S.

Power to

establish

Special

Courts,

2 of 1974.

SEO* 2]

THE GAZETTE OF INDIA EXTRAORDINARY

923

Explanation.—In this section, "High Court" has the same mean-

ing as in clause (e) of section 2 of the Code of Criminal Procedure

1973.

22B. Notwithstanding anything contained in the Code of Crimi-

nal Procedure, 1973, the Stale Government may, if it considers it

necessary so to do, direct that offences under this Act shall be tried

in a summary way by a magistrate [including the presiding officer

of a court established under

sub-section (I) of "section 22A]

and the provisions of sections 262 to 265 (both inclusive) of the said

Code, shall, as far as may be, apply to such trial:

Provided that in the case of any conviction in a summary trial

under this section, it shall be lawful for the magistrate to pass a

sentence of imprisonment for a term not exceeding one yeai*:

Provided further that when at the commencement of or in the

course of, a summary trial under this section, it appears to the

magistrate that the nature of; the case is such that a sentence of

imprisonment for a term exceeding one year may have to be passed

or that it is, for any other reason, undesirable to try the case sum-

marily, the magistrate shall, after hearing the parties, record an

order to that effect and thereafter recall any witness, who may have,

been examined and proceed to hear or rehear the case in the manner

provided by the said Code.'.

18. In section 23 of the principal Act, in sub-section (2),—

(a) in clause (b), after the words, brackets and figures "under

sub-section (1) of section 10", the words "where the women or girls

are without a home" shall be inserted;

(b) after clause (b), the following clause shall be inserted,

namely:—

"(bb) the discharge of an offender under subjection (3) of

section 10A from a corrective institution and the form of licence

to be granted to such offender;";

namely: —

" (c) the detention and keeping in protective homes or, as the

case may be, in corrective institutions of women and girls under

this Act and their maintenance;";

(d) for clause (g), the following clause shall be substituted,

namely: —

"(gi)(i) the establishment, maintenance, management and

superintendence of protective homes and corrective institutions

under section 21 and the appointment, powers and duties at

persons employed in such homes or institutions;

2 of 1974.

Power of

court to

try easea

sum-

marily.

Amend*

meat of

•ection

23.

924

THE GAZEtTE OF INDIA' ESJtHAOltDlNAilY

[PA*T Il_

(ii) the form in which an application for a licence may be

made and the particulars to be contained in such application;

(in) the procedure for the issue or renewal of a licence,

the time within which such licence shall be issued or renewed

and the procedure to be followed in making a full and complete

Investigation in respect of an application for a licence;

(iv) the form of a licence and the conditions to be specified

therein;

(v) the manner in which the accounts of a protective home

and a corrective institution shall be maintained and¹ audited;

(in) the maintenance

of registers and statements by a

licensee and the form of such registers and statements;

(yil) the care, treatment,

maintenance, training, instruc-

tion, control and discipline of the inmates of protective homes

and corrective institutions;

(viii) the visits to and communication With such Inmates;

(ix) the temporary detention of women and girls sentenced

to detention in protective homes or in corrective institutions until

arrangements ate made for sending them to such homes or

institutions;

Or) the transfer of an inmate from—

(a) one protective home to another, or to a corrective

Institution,

(b) one corrective institution to another or to a protec-

tive home,

under sub-section (9A) of section 21;

(xi) the transfer in pursuance of ah order of the court from

a protective home or a corrective institution to a prison of a

woman or girl found to be incorrigible or exercising bad influ-

ence upon other inmates of the protective home or the corrective

institution and the period of her detention In such prison;

(ant) the transfer to a protective home or corrective institu-

tion of women or girls sentenced under section 7 or section 8

and the period of their detention in such home or Institution;

(xiii) the discharge of Inmates from a protective home or

corrective institution either absolutely or subject to condition!,

and their arrest in the event of breach of such conditions;

(xw) the grant of permission to inmates to absent themselves

for short periods;

(xv) the inspection of protective homes and corrective Insti-

tutions and oth»r institutions in which Women and girl* nuy b«

k«pt, detained and maintain'^!;",

SEC. 2]

THE GAZfcTtK OS* INDIA EX*RAOflBlNAKy

925

19. In the principal Act, the following Schedule shall be inserted at the

end, namely: —

"THE SCHEDULE

[Sec section 2 (c)]

Section

7(1)

11(4)

12(4)

15(5)

22B

Magistrate competent to exercise the powers

District Magistrate.

Metropolitan Magistrate or Judicial Magistrate of the

first class.

Metropolitan Magistrate or Judicial Magistrate of the

first claes.

Metropolitan Magistrate, Judicial Magistrate

the

first class,

District

Magistrate or

Sub-Divisional

Magistrate.

Metropolitan Magistrate, Judicial Magistrate of the

first

class, District

Magistrate

Sub-Diviaional

Magistrate.

District Magistrate or SubJMvisibail Magistrate.

Metropolitan

Magistrate, Judicial Magistrate of

th«

first

class, District

Magistrate

Sub-Divisional

Magistrate.

District Mftgistl-ate, Sub-Diviflioil«l

Magistrate or any

Executive mgttttatfc

tfp^laUy

«ftapb*tifed

the

State GovCThment.

Metropolitan Magistrate or Judicial Magistrate of the

first class.

104 of 1958.

20- In section 18 of the PtoT&ation of (Jflttiders AcO»S8, the words

and figures "or the Suppression of Itnnlbral Walflc itt Wotten and GITIB

Act, 1956" shall be omitted.

Insertion

of new

Schedule.

Amend-

ment of

Act

20 of

1958,

926

THE GAZMTJE OF INDIA EXTRAORDINARY

[PAST &*-

STATEMENT OF OBJECTS AND BEASONS

Hie Suppression of Immoral Traffic in Women and Girls Act, 1959,

was enacted in pursuance of an International Convention signed at New

York on 9th May, 1950. The Act came into force on 1st May, 1958. Its

principal object is to prevent commercialisation "of the vice and trafficking

among women and girls, Experience gained in the implementation of the

Act has brought to light certain inadequacies. It" is proposed to amend the

Act to make good these inadequacies. While formulating the amend-

ments, the recommetidtftit>ns made by an Expert Committee appointed

by the Department of Social Welfare, the Law Commission as contained

In its Sixty-fourth, Benqrtf and the Committee on the Status of Women

in India were also considered. The main amendments proposed are as

follows:—

(i) It i9 proposed to empower the State Governments to declare

certain Areas;'in the public interest, to be places where prostitution

will be prohibited. While notifying such areas, due regard will bo

had to the kinds> ef persqns frequenting such areas, the nature and

densitv of population in those areas and other relevant considerations.

(ii) In order to have adequate man-power to deal with offences

under the Act, it is proposed that the special police officers to be

appointed under,section 13 pfcfthe Act shall not be below the rank

Q$ ian Inspectoralr^Bpliop. The existing provision provides for the

appointment of police officers not belpw the rank of an Assistant

Commissioner, a Superintendent of Police or Deputy Superintendent

of Police as special police officers. Art Enabling provision ia

being made to empower the District Magistrates to appoint retired

police or military officers a§ special police officers with a view to

mobilising additional r man-power repourqes available in the com-

munity.

(iii) In view of the practical difficulties in obtaining necessary

co-operation from respectable local women, the provision requiring

the presence of a woman witness of the locality during a search, is

proposed to be modified to provide that the woman witness need not

necessarily be of the locality in which the place to be searched is

situated.

(iv) Under section 10 of the Act, the provisions of section 562 of

the Code of Criminal Procedure, 1898, relating to probation and

admonition are applicable to persons convicted of certain offences

under the Act. The Probation of Offenders Act, 1958, which was

enacted subsequently, expressly provides that nothing in that Act

shall affect the provisions of the 1956 Act. As such, section 562 of

Code of Criminal Procedure, 1898, (corresponding provision of the

1973 Code) continues to apply to offences under the 1956 Act. It

Is proposed to provide that in areas where the Probation of Offenders

SEC. 2]

THE GA^ETTK "6f INDIA" lafcrftAORDilNARY

9Z7

Act is In force, that Act will apply to the offences under sections 7

and 8 of the 1956 Act and where it is not in force, the provisions of

the Code of Criminal Procedure would be applicable. But in the

State of Jammu and Kashmir, where both the Probation of Offenders

Act, 1958, and the Code of Criminal Procedure, 1973, are not appli-

cable, it is proposed to provide for the iapplicatibn of the correspond-

ing law in force in that State.

(v) The Act does not contain any provision for summary

trial of cases apprehended undeq: the Act, as a result; of

which the disposal of cases often takes a long time. This lacuna

leaves enough scope for

unscrupulous elements involved in

the profession of commercialised prostitution to manipulate material

for delaying cases in Court to their advantage and defeating the pur-

pose of the Act. It is, therefore, proposed to add an enabling provi-

sion to provide for summary trial of cases under thp Act. The pro-

posed provision will not, however, preclude the magistrate from

adopting a regular procedure if,it i& considered necessary to do so in

the interests of justice.

(vi) It is proposed to include an enabling provision for the

setting up of Special Courts to deal with all or any of the offences

under the Act.

2. The other amendments proposed are minor and consequential In

nature.

P. C. CHUNDER.

NEW DEUII;

The nth April, 1978.

528

t3t<^a*p&Qt '$$& | & ^ 9 $ P & A B Y

[*•« I ± -

F1NANCIAL MEMORANDUM

Clause 17 of the Bill which proposes to insert a new section 22A in the

Suppression of Immoral Traffic in ^amen and Girls Act, 19JK>, empowers

the State Governments, after consultation with the High Courts concerned,

to establish one or more Courts of Judicial Magistrates of the First-Class,

or, as the case njay be, of Metropolitan Magistrates for the speedy trial of

offences under the Act in any district or metropolitan area. Expenditure

in respect of Special Courts if and when established for* the Union terri-

tories will be met from out of the Consolidated Fund of India. This ex-

penditure will be of a recurring nature only and is not likely to exceed

Rs. 35,000 annually.

2. The provisions of the Bill do ndt involve any expenditure of a non-

recurring nature from the Consolidated Fund of India.

Sue. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

929

MEMORANDUM REGARDiWG DELEGATED LEGISLATION

Clause 18 of the Bill seeks to amend section 23 of the Suppression of

Immoral Traffic in Women and Girls Act, 1956 so as to empower the

Central Government to make rules to provide for the matters now being

Included in the Act. These matters relate, among other things, to the

discharge of an offender under sub-section (3) of new section 10A from

a corrective institution and the form of licence to be granted to such

offender and to provisions for the establishment, maintenance, manage-

ment and superintendence of corrective institutions and the detention

and keeping in such corrective institutions of persons committing certain

offences under the Act. The matters in relation to which rules may be

made under this section are matters of detail or procedure and as such

the delegation of legislative power is of a normal character.

AVTAR SINGH KIKHY,

Secretary.

PRINTED BY THE GENERAL MANAOER, GOVERNMENT OF INDIA PRESS, MINTO ROAD,

NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI,

1978