Section 17 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984
- (1)The Central Government or the existing, or new, 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 either of the two companies in relation to its undertakings which have vested in the Central Government or the existing, or new, Government company, as the case may be, and realised after the appointed day notwithstanding that the realisation pertains to a period prior to the appointed day.
- (2)The Central Government, or the existing, or new, Government company, as the case may be, may make a claim to the Commissioner with regard to every payment made by it after the appointed day, for discharging any liability of either of the two companies, not being any liability specified in sub-section (2) of section 5, 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 liability has been discharged by the Central Government or the existing, or new, Government company.
- (3)Save as otherwise provided in this Act, the liabilities of either of the two companies 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 the respective company
Summary
- The Central Government or government company has the exclusive right to receive and collect any money due to either company up to the specified date.
- This exclusive right applies to any money collected after the appointed day, even if the debt itself was created before that day.
- The government or government company can make a claim to the Commissioner to get reimbursed for any prior debts they pay off.
- These reimbursement claims get the exact same priority category as the original debt that was discharged.
- Any prior debts of the two companies that are not paid off on or before the specified date remain the sole responsibility of those companies.
- This process excludes post-takeover material supply liabilities, which are direct liabilities of the government or its company under Section 5.
Practical examples
FAQ
1. Can the original directors of the two companies collect old customer payments after February 14, 1984?
No, only the Central Government or the designated government company has the exclusive right to collect and receive these payments up to the specified date.
2. What happens if the government company pays off an old debt that belonged to one of the companies before February 14, 1984?
The government company can make a claim to the Commissioner for reimbursement, and the claim will have the same priority as the original debt.
3. Who is responsible for prior debts of the two companies that are still unpaid after the specified date?
Unless the Act says otherwise, those unpaid prior debts remain the sole responsibility of the respective original company.
4. Does the government company's exclusive right to collect money cover debts that arose before February 14, 1984?
Yes, it covers any money due to the companies even if it relates to a period before the appointed day, as long as it is collected after that day.
Test yourself
Q1.Under Section 17 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, who is exclusively entitled to receive any money due to the companies and realized after the appointed day?
Q2.Under Section 17 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, what happens to liabilities of either company from before the appointed day that are not discharged on or before the specified date?
Q3.Under Section 17 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, read together with Section 5, which of the following liabilities CANNOT be claimed by the government from the Commissioner for reimbursement?
Q4.Under Section 17 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, what priority does a reimbursement claim made by the government or government company to the Commissioner receive?