The ENGINEERING TECHNICIANS' CO-OPERATIVE SOCIETIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1977

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THE ENGINEERING TECHNICIANS' CO-OPERATIVE SOCIETIES
(ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1977
(Act 20 of 1977)
CONTENTS
Preamble.
Sections:
  1.   Short title and commencement.
  2.  Definitions.
  3.   Undertakings of Engineering T echnicians' Co-operative Societies to vest in the government.
  4.   General effect of vesting.
  5.   Duty to deliver possession of property acquired, and documents relating thereto.
  6.   Duty to furnish particulars.
  7.   T ermination of service of existing employees.
  8.   Payment of amount.
  9.   Penalties.
10.  Offences by companies.
11.  Protection of action taken in good faith.
12.  Power to make rules.
13.  Repeal and saving.
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ACT 20 OF 1977 
THE ENGINEERING TECHNICIANS' CO-OPERATIVE SOCIETIES (ACQUISITION
AND TRANSFER OF UNDERTAKINGS) ACT, 1977* 
 An Act to provide for the acquisition of the undertakings of the Kerala State Engineering
Technicians (Workshop) Industrial Co-operative Society Limited S. Ind (ST) No.1 and
the societies promoted by it and for matters connected therewith or incidental thereto. 
Preamble.—WHEREAS  the  Kerala  State  Engineering  Technicians  (Workshop)
Industrial Co-operative Society Ltd., S. Ind. (ST) No.1, a society deemed to be registered
under the Kerala Co-operative Societies Act, 1969, with the whole of the State of Kerala as
the area of its operation, and having as its object the taking up and running of Industrial
Projects with a view to providing employment opportunities to Engineers, Technicians, etc.,
based on the concept of share-participation-cum-employment (hereinafter referred to as the
ENCOS) took up the implementation of a number of industrial projects; 
AND  WHEREAS the  ENCOS had promoted  the  registration  of the  Kerala  Auto
Industrial  Co-operative  Limited  IND  (EP)  No.1  Trivandrum,  the  Co-operative  Societies
Limited IND (SP) No.2, Alleppey and the Co-operative Foundries Limited S. IND (P) No.46,
Ottappalam (hereinafter referred to as the promoted societies) for implementing the industrial
projects undertaken by the ENCOS; 
AND WHEREAS the Government of Kerala and the Planning Commission which
have  been  financing  the  said  projects  have  come  to  the  conclusion  that  on  account  of
organizational, financial and managerial problems it has become impossible for the ENCOS
and the promoted societies to implement the industrial projects undertaken by the ENCOS; 
AND WHEREAS the functioning of the ENCOS and the promoted societies have
come to a standstill on account of the financial crisis facing them and a substantial portion of
the assets of the societies consisting of machinery and implements is lying idle; 
AND WHEREAS the continued existence of the ENCOS and the promoted societies
is causing huge losses to those societies, which are receiving financial assistance from the
Government; 
AND WHEREAS it is expedient in the public interest to dissolve the ENCOS and the
promoted societies and to acquire their undertakings with a view to making use of the assets
and other facilities of such undertakings for productive purposes;
BE it enacted in the Twenty-eight year of the Republic of India as follows:—
1.  Short  title  and  commencement.—(1)  This  Act  may  be  called  the  Engineering
Technicians' Co-operative Societies (Acquisition and Transfer of Undertakings) Act, 1977.
(2) It shall be deemed to have come into force on the 17 th day of March, 1977.
* Received the assent of the President on the 12 th day of August, 1977 and published in the Kerala Gazette
Extraordinary No. 477 dated 12th August, 1977.
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2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “appointed day” means the date on which this Act comes into force; 
(b)  “Director of Industries and Commerce” means the Director of Industries
and Commerce of the State of Kerala and includes any officer authorized by the Government
to perform the functions of the Director of Industries and Commerce under this Act; 
(c)  “Engineering Technicians' Co-operative Society” or “society” means the
ENCOS or any of the promoted societies;
(d)  “member-employee” means an employee of a society who has taken share
in the society for the purpose of securing employment in the service of the society;
(e)  “prescribed” means prescribed by rules made under this Act; 
(f)  “share” means a share in the capital of the society. 
3.  Undertaking of  Engineering  Technicians'  Co-operative Societies to vest  in the
Government.—On the appointed day, the undertakings of the Engineering Technicians' Co-
operative  Societies  shall,  by  virtue  of  this  Act,  stand  transferred  to  and  vested  in  the
Government, and the societies shall be deemed to have been dissolved.
4. General effect of vesting.—(1) The undertakings of the societies shall be deemed to
include all assets, rights, powers, authorities and privileges and all properties, movable and
immovable,  including  lands,  buildings,  workshops,  stores,  instruments,  machinery  and
equipment, cash balances, cash on hand, reserve fund, investments and book debts, letters of
intent, licences 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 of the
societies in relation to their undertakings, and all books of account, registers and all other
documents  of whatever  nature  relating  thereto,  and  shall  also be  deemed  to  include  all
borrowings, liabilities and obligations of whatever kind then subsisting of the societies in
relation to their undertakings and their employees.
(2) All contracts and working arrangements which are subsisting immediately
before the appointed day and affecting any of the societies shall, in so far as they relate to the
undertaking of that society, cease to have effect or be enforceable against that society or any
officer thereof or any person who was surety or had guaranteed the performance thereof, and
shall be of as full force and effect against or in favour of the Government and may be
enforced or acted upon as fully and effectually as if, instead of the society, the Government
had been named or had been a party thereto.
(3) Any proceeding or cause of action pending or existing immediately before the
appointed day by or against any of the societies in relation to its undertaking may, as from
that day, be continued and enforced by or against the Government as it might have been
enforced by or against the society if this Act had not been passed, and shall cease to be
enforceable by or against the society, its officers, sureties or guarantors.
5. Duty to deliver possession of property acquired and documents relating thereto .—
(1) Where any property has vested in the Government under this Act, every person, in whose
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possession or custody or under whose control the property may be, shall deliver the property
forthwith to the Government or to such person as the Government may authorise in this
behalf.
(2) Any person who, on the appointed day, has in his possession or under his
control any books, documents or other papers relating to the under takings of the societies
which have vested in the Government under this Act, shall be liable to account for the said
books,  documents  and  papers  to  the  Government  and  shall  deliver  them  up  to  the
Government or to such person as the Government may authorise in this behalf.
(3) The Government may take, or cause to be taken, all necessary steps for
securing possession of all properties which have vested in the Government under this Act.
6. Duty to furnish particulars .—(1) Notwithstanding anything contained in section 7,
the Government may direct the Managing Director of the ENCOS and any other officer or
employee employed in connection with the affairs of the undertaking of any of the societies
immediately before the appointed day to furnish to the Government within one month from
the appointed day or such further period as the Government may allow in this behalf, a
complete inventory of all the properties and assets of the societies on the appointed day, all
the liabilities and obligations of the societies subsisting on that day and also all agreements
entered into by the societies and in force on that day (including agreements, whether express
or implied, relating to leave, pension, gratuity and other terms of service of officers or other
employees of the societies) under which, by virtue of this Act, the Government have or will
have or may have liabilities or obligations.
(2)  The  Managing  Director  of  the  ENCOS  and  the  officers  and  employees
required to furnish the inventory under sub-section (1) shall, for the period referred to in that
sub-section, be entitled to the same salaries and allowances and be subject to the same
conditions of service as they were entitled or subject to immediately before the appointed
day.
7. Termination of service of existing employees .—(1) The services of every officer or
other employee employed, immediately before the appointed day, in connection with the
affairs of the undertaking of any of the societies, except officers and other employees of the
Central Government or the Government of Kerala on deputation, shall, as from the appointed
day, stand terminated.
(2)  Any officer or other employee of the Central Government or the Government
of Kerala deputed for employment in connection with the affairs of the undertaking of any of
the societies and employed as such immediately before the appointed day shall, as from that
day, revert to the service of the Central Government or the Government of Kerala, as the case
may be.
(3) Notwithstanding anything to the contrary contained in the Industrial Disputes
Act, 1947 (Central Act 14 of 1947) or in any other law for the time being in force, no person
whose  services  stand  terminated  by  virtue  of  sub-section  (1)  shall  be  entitled  to  any
compensation or other payment under that Act or such other law and no claim for such
compensation or payment shall be entertained by any court, tribunal or other authority.
(4)  Notwithstanding anything contained in sub-section (3), every officer or other
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employee appointed under a contract executed by him and any of the societies, shall be paid
the amount to which he is entitled under such contract.
(5) The amount payable to an officer or employee under sub-section (4) shall be
paid by the Director of Industries and Commerce in cash within a period of six months from
the appointed day:
Provided that if the amount is not paid within the period aforesaid, the Director of
Industries and Commerce shall pay interest on the amount at the rate of four percent per
annum from the date of expiry of the said period. 
8. Payment of amount .—(1) For the transfer under section 3, of the undertakings of
the societies to the Government, there shall be paid by the Government to every shareholder
of each of the societies an amount equal to the value of the shares held by him in the society
immediately before the appointed day after deducting any amount due by him to the society.
(2)  Notwithstanding  anything  contained  in  sub-section  (1),  where  a  member
employee has obtained a loan from any bank for purchase of shares in any of the societies
and the society has stood surety for such loan with interest thereon or has undertaken to
recover the loan from the salary of the member-employee, the balance, if any, of the loan
together  with  interest  remaining  outstanding  on  the  appointed  day shall  be  paid  by  the
Government to the bank and the member-employee shall be paid only the balance after
deducting the amount paid to the bank under this sub-section from the amount to which he is
entitled under sub-section (1).
(3) The amount payable to a shareholder under this section shall be paid by the
Director  of  Industries  and  Commerce  in  cash  within  a  period  of  six  months  from  the
appointed day on production and surrender of valid share certificates issued by the societies:
Provided that if the amount is not paid within the period aforesaid, the Director of
Industries and Commerce shall pay interest on the amount at the rate of four percent per
annum from the date of expiry of the said period. 
9. Penalties.—(1) Any person who—
(a) having in his possession, custody or control any property forming part of
the  undertaking  of  any  of  the  societies  wrongfully  withholds  such  properties  from  the
Government; or 
(b)  wrongfully  obtains  possession  of  any  property  forming  part  of  the
undertaking of any of the societies, which has vested in the Government under this Act; or 
(c) willfully withholds or fails to furnish to the Government as required by
sub-section (2) of section 5 any books, documents or other papers which may be in his
possession, custody or control, shall be punishable with imprisonment for a term which may
extend to two years, or with fine, or with both:
Provided that the court trying any offence under clause (a) or clause (b) or clause (c)
may, at the time of convicting the accused person, order him to deliver up or refund, within a
time to be fixed by the court any property or cash wrongfully withheld or obtained or any
document willfully withheld or not furnished. 
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(2) No court shall take cognizance of an offence punishable under this section
except with the previous sanction of the Government or of an officer authorized by the
Government in this behalf.
10. Offences by companies.—(1) 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 well 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 diligence to prevent the commission of such offence. 
(2) Notwithstanding anything contained in sub-section (1), where any offence
under this Act has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any neglect on the part of,
any director, manager, secretary or other officer of the company, such director, manager,
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 and includes a firm or other association of
individuals; and 
(b) “director”, in relation to a firm, means a partner in the firm. 
11. Protection of action taken in good faith .—(1) No suit, prosecution or other legal
proceedings shall lie against the Government or any officer or other person for anything
which is in good faith done or intended to be done under this Act.
(2) No suit or other legal proceedings shall lie against the Government or any
officer or other person 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.
12. Power to make rules .—(1) The Government may, by notification in the Gazette,
make rules to carry out the provisions of this Act. 
(2) Every rule made under this section shall be laid, as soon as may be after it is
made, before the Legislative Assembly while it is in session for a total period of fourteen
days which may be comprised in one session or in two successive session, and if before the
expiry  of  the  session  in  which  it  is  so  laid  or  the  session  immediately  following,  the
Legislative Assembly makes any modification in the rule or decides that the rule should 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 modification or annulment shall be without
prejudice to the validity of anything previously done under that rule.
13.  Repeal  and  saving.—(1) The  Engineering  Technicians'  Co-operative  Societies
(Acquisition and Transfer of Undertakings) Ordinance, 1977 (12 of 1977), is hereby repealed.
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(2) Notwithstanding such repeal, anything done or deemed to have been done or
any action taken or deemed to have been taken under the said Ordinance shall be deemed to
have been done or taken under this Act.
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