Primary law, Tamil Nadu land law
The National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980
Parliament enacted the National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980, Act Number 42 of 1980, dated 19 July 1980, to acquire and transfer the undertakings of Messrs. National Company Limited to secure continued manufacture, production and distribution of jute articles. Most provisions are deemed to have commenced on 27 April 1980, when the company’s undertakings, including its land, buildings and other property, vested in the Central Government.
What the law does
The National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980 governs the acquisition of the undertakings of Messrs. National Company Limited. Parliament enacted it to secure proper management and continued manufacture, production and distribution of jute articles considered essential to the country’s economy.
The provisions concerning penalties and offences by companies came into force at once. The remaining provisions are deemed to have come into force on 27 April 1980, which the law calls the appointed day.
Property transferred
The National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980 transferred the company’s undertakings and its rights, title and interests in them to the Central Government on the appointed day. The transferred property includes assets within or outside India, including:
- Land, buildings, workshops, stores, machinery and equipment.
- Leasehold interests, rights, powers, authorities and privileges.
- Cash, reserve funds, investments and book debts.
- Books of account, registers and other related documents.
Transferred properties became free from trusts, mortgages, charges, liens and other encumbrances. Court or authority orders restricting their use, or appointing a receiver, are treated as withdrawn.
Who may be affected
The National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980 may affect anyone claiming ownership, a mortgage, a charge, a lien or another interest over property that belonged to Messrs. National Company Limited immediately before 27 April 1980.
- A mortgagee or other interest holder must notify the Commissioner of Payments within the prescribed time and manner.
- Such interests cannot be enforced against property vested in the Central Government.
- Eligible mortgage money or other dues may instead be claimed from the amounts payable under the law.
- Pending property proceedings do not end merely because of the transfer. They may continue by or against the Central Government or the relevant Government company.
Government company ownership and liabilities
The National Company Limited (Acquisition and Transfer of Undertakings) Act, 1980 allows the Central Government, by notification, to vest the undertakings in an existing Government company. It may later transfer them to a new Government company that accepts the imposed terms and conditions.
Liabilities relating to periods before 27 April 1980 generally remain liabilities of Messrs. National Company Limited. They are not enforceable against the Central Government or a Government company receiving the undertakings, except where the law expressly provides otherwise.
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Common questions
Does this law apply to every land purchase in Tamil Nadu?
No. It concerns property forming part of the undertakings of Messrs. National Company Limited. A buyer may need to consider it if the property being checked belonged to or was controlled by that company immediately before 27 April 1980.
What happened to mortgages and charges over the transferred property?
The transferred property became free from mortgages, charges, liens and other encumbrances. Interest holders may claim eligible dues from the amounts payable under the law, but cannot enforce those interests against the vested property.
Did pending property cases end when the undertakings were transferred?
No. A pending suit, appeal or other proceeding concerning vested property may continue by or against the Central Government or the Government company in which the undertaking later vests.
Can the Central Government transfer the property to a Government company?
Yes. The Central Government may direct vesting in an existing Government company and may later transfer the undertakings to a new Government company, subject to the conditions described in the law.
