The COMMONWEALTH TRUST, KOZHIKODE (ACQUISTION AND TRANSFER OF UNDERTAKING) ACT, 2012

THE COMMONWEAL TH TRUST, KOZHIKODE (ACQUISTION AND TRANSFER OF
UNDERTAKING) ACT, 2012
(Act 1 of 2018)
CONTENTS
Preamble.
Sections:
1)  Short title and commencement.
2)  Definitions.
3)  Acquisition of rights of owner in respect of the undertaking.
4) General effect of vesting.
5) Owner to be liable for certain prior liabilities.
6) State Industrial Development Corporation to form subsidiary  corporations. 
7) Shares to be issued by the State Industrial Development Corporation for the value of
the assets transferred to it by Government.
8) Payment of amount to owner of the undertaking.
9) Payment of further amount.
10) Payment of compensation to owners of properties sold and vested in Government.
11) Management, etc., of the undertaking and the land vested in Government.
12) Duty of persons in charge of management of the undertaking to deliver all assts, etc.
13) Accounts.
14)  Employment of certain employees to continue.
15) Provident and other funds.
16) Transfer of employees to Subsidiary Corporation.
17) Appointment of Commissioner of Payments.
18) Payment by the Government to the Commissioner.
19) Claims to be made to the Commissioner.
20) Priority of claims.
21) Examination of claims.
22) Admission or rejection of the claims.
23) Disbursement of money by the Commissioner to claimants.
24) Disbursement of amounts to the owner of the undertaking.
25) Undisbursed or unclaimed amounts to be deposited to the general revenue account.
26) Assumption of liability.
27) Act to over-ride all other enactments.
28) Contracts to cease to have effect unless ratified by the State Industrial Development
Corporation.
29) Penalties.
30) Offences by companies.
31) Protection of action taken in good faith.
32) Delegation of powers.
33) Power to remove difficulties.
34) Declaration as to the policy of the State.
35) Power to make rules.
First Schedule.
Second Schedule.
Third Schedule.
ACT 1 OF 2018
THE COMMONWEALTH TRUST, KOZHIKODE (ACQUISITION
 AND TRANSFER OF UNDERTAKING) ACT, 2012*
An  Act  to  provide  for  the  acquisition  and  transfer  of  the  Handloom  Weaving  Factory,
Mananchira, Kozhikode, a unit of the Commonwealth Trust (India) Limited and the
right,  title  and  of  the  owners  in  respect  of  the  said  undertaking  with  a  view  to
reorganising and rehabilitating the undertaking and to establish an industrial museum
and production centre under the Kerala State Industrial Development Corporation and
for matters connected therewith or incidental thereto.
Preamble.—WHEREAS, it is expedient to provide for the acquisition and transfer of the
Handloom Weaving Factory, Mananchira, Kozhikode, a unit of Commonwealth Trust (India)
Limited and the right, title and interest of the owners in respect of the said undertaking with a
view to reorganising and rehabilitating the undertaking and to establish an industrial museum
and production centre under the Kerala State Industrial Development Corporation and for
matters connected therewith or incidental thereto;
BE it enacted in the Sixty-third year of the Republic of India as follows:-
CHAPTER 1
PRELIMINARY
1  Short title and commencement. — (1) This Act may be called the Commonwealth
Trust, Kozhikode (Acquisition and Transfer of Undertaking) Act, 2012.
(2) It shall come into force at once.
2. Definitions.—(1) In this Act, unless the context otherwise requires,—
(a)  “Commissioner”  means  the  Commissioner  of  payments  appointed  under
section 17;
(b) “Government” means the Government of Kerala;
(c)  “owner”  means  the  person  or  association  of  persons  who  or  which  was
immediately before the date of commencement of this Act the proprietor or lessee or occupier
of the undertaking or any part thereof or a person or persons who purchased land from the
undertaking and includes the subsequent transferees of such land;
(d) “prescribed” means prescribed by rules made under this Act;
* Received the assent of the President on the 1 st day of February, 2018 and published in the Kerala Gazette
Extraordinary No. 405  dated 19th  February, 2018.
(e) “State Industrial Development Corporation” means the Kerala State Industrial
Development Corporation formed and registered under the Companies Act, 1956 (Central Act
1 of 1956);
(f) “textile company” means the company specified in column (1) of the First
Schedule as owning the undertaking specified in the corresponding entry in column (2) of
that Schedule;
(g) “undertaking” means the textile undertaking specified in the First Schedule;
(h) “unused land” means the properties sold by the undertaking or any person or
authority on its behalf which are in the possession and ownership of the transferees but
remain unused as on the date of commencement of this Act and more specifically described
in the Third Schedule to this Act;
(2) Words and expressions used but not defined in this Act and defined in the
Industries (Development and Regulation) Act, 1951 (Central Act 65 of 1951), shall have the
meanings respectively assigned to them in that Act.
(3) Words and expressions used but not defined either in this Act or in the Industries
(Development  and  Regulation)  Act,  1951  (Central  Act  65  of  1951),  and  defined  in  the
Companies Act. 1956 (Central Act 1 of 1956), shall have the meanings respectively assigned
to them in the Companies Act, 1956 (Central Act 1 of 1956).
CHAPTER II
ACQUISITION OF THE RIGHTS OF OWNER OF THE 
UNDERTAKING
3. Acquisition of rights of owner in respect of the undertaking. —(1) The right, title and
interest of the owner in relation to the undertaking and the unused land shall, by virtue of this
Act, stand transferred to, and shall vest absolutely in, the Government.
(2) The said undertaking and the unused land which stand vested in the Government
by virtue of sub-section (1) shall, immediately after it has so vested, stand transferred to, and
vest in, the State Industrial Development Corporation.
4.  General effect of vesting. —(1) The undertaking referred to in section 3 shall be
deemed  to  include  all  assets,  rights  including  lease-hold  rights,  powers,  authorities  and
privileges and all property, movable and immovable, including lands, buildings, workshops,
stores, instruments, machinery and equipment, cash balances, cash on hand, reserve funds,
investments and book debts and all other rights and interests in, or arising out of, such
property as were immediately before the date of commencement of this Act in the possession,
power or control of the owner and all books of account, registers and all other documents of
whatever  nature  relating  thereto  and  shall  also  be deemed  to  include  the  liabilities  and
obligations specified in sub-section (2) of section 5.
(2) All property as aforesaid which have vested in the Government under sub-section
(1) of section 3 shall, by force of such vesting, be freed and discharged from any trust,
obligation,  mortgage,  charge,  lien  and  all  other  encumbrances  affecting  it,  and  any
attachment, injunction or decree or order of any court restricting the use of such property in
any manner shall be deemed to have been withdrawn.
(3) Where any licence or other instrument in relation to the said undertaking had
been granted at any time before the date of commencement of this Act to an owner by the
Central  Government  or  a  State  Government  or  any  other  authority,  the  State  Industrial
Development Corporation shall, on and from such date be deemed to be substituted in such
licence or other instrument in place of the owner referred to therein as if such licence or other
instrument had been granted to it and shall hold such licence or the said undertaking specified
in such other instrument for the remainder of the period for which the owner would have held
such licence or the undertaking under such other instrument.
(4)  Every  mortgagee  of  any  property  which  has  vested  under  this  Act  in  the
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
intimation to the Commissioner, of such mortgage, charge, lien or other interest.
(5) For the removal of doubts, it is hereby declared that the mortgagee of any
property referred to in sub-section (2) 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 interest, payment of the mortgage money or other dues, in whole or in part, out
of the amount specified in relation to such property, in the First Schedule, but no such
mortgage, charge, lien or other interest shall be enforceable against any property which has
vested in the Government.
(6) If, any suit, appeal or other proceeding of whatever nature in relation to any
matter specified in sub-section (2) of section 5 in respect of the said undertaking, instituted or
preferred by or against the textile company is pending as on the date of commencement of
this Act, the same shall not abate, be discontinued or be, in any way, prejudicially affected by
reason of transfer of the undertaking or of anything contained in this Act but the suit, appeal
or other proceedings may be continued, prosecuted and enforced by the State Industrial
Development Corporation.
5. Owner to be liable for certain prior liabilities. — (1) Every liability, other than the
liability specified in sub-section (2), of the owner in respect of any period prior to the date of
commencement of this Act shall be the liability of such owner and shall be enforceable
against him and not against the Government or the Kerala State Industrial Development
Corporation.
(2) Any liability arising in respect of,—
(a) loans advanced by the Central Government or the State Government to the
undertaking (together with interest due thereon);
(b)  wages,  salaries  and  other  dues  of  employees  of  the  said  undertaking,  in
respect of any period after the undertaking has been taken over by the Government, shall be
the liability of the Government and shall be discharged, for and on behalf of the Government,
by the State Industrial Development Corporation as and when repayment of such loans or
amounts become due or as and when such wages, salaries or other dues become due and
payable.
(3) For the removal of doubts, it is hereby declared that,—
(a) save as otherwise expressly provided in this section or in any other secton of
this Act, no liability, other than the liability specified in sub-section (2), in relation to the
undertaking or the property sold in respect of any period prior to the date of commencement
of  this  Act,  shall  be  enforceable  against  the  Government  or  the  Kerala  State  Industrial
Development Corporation;
(b) no award, decree or order of any court, tribunal or other authority in relation
to the undertaking or the properties sold, which are passed after the date of commencement of
this Act in respect of any matter, claim or dispute, in relation to any matter not referred to in
sub-section (2) which arose before that day, shall be enforceable against the Government or
the State Industrial Development Corporation;
(c) no liability of the undertaking or any owner thereof for the contravention,
before the company has been closed, of any provision of a law for the time being in force,
shall  be  enforceable  against  the  Government  or  the  State  Industrial  Development
Corporation.
6.  State Industrial Development Corporation to form subsidiary corporations. — (1)
The State Industrial Development Corporation may, if it consider it necessary to do so, form
subsidiary corporations under the Companies Act, 1956 (Central Act 1 of 1956), and register
them under that Act.
(2)The State Industrial Development Corporation may, by order in writing, transfer
the undertaking or part thereof to a subsidiary corporation or other agency of the Government
and any such transfer shall be subject to such terms and conditions as may be specified in the
order.
(3) The subsidiary corporation or other agency of the Government shall, on and from
the date of such transter, be deemed to be substituted in the licence or other instrument
referred  to in sub-section  (3) of section  4 in place  of the  State Industrial Development
Corporation  as  if  such  licence  or  other  instrument  had  been  granted  to  the  subsidiary
corporation  or  other  agency  of  the  Government  and  shall  hold  such  licence  or  other
instrument for the remaining period for which the State Industrial Development Corporation
would have held such licence or other instrument.
(4) On transfer of the undertaking or part thereof to a subsidiary corporation or other
agency of the Government the liabilities required to be discharged, by the State Industrial
Development Corporation under sub-section (2) of section 5 shall, in so far as they relate to
the said undertaking or part thereof so transferred to the subsidiary corporation or other
agency of the Government be discharged on and from the date of such transfer by the
subsidiary corporation or other agency of the Government as and when any such liability is
required to be discharged.
(5) Save as otherwise expressly provided in this Act, references in this Act to the
State Industrial Development Corporation shall in respect of the said undertaking or any part
thereof which is transferred to a subsidiary corporation or other agency of the Government be
construed as references to such subsidiary corporation or other agency of the Government.
7. Shares to be issued by the State Industrial Development Corporation for the value of
the assets transferred to it by Government .— (1) An amount equal to the value of the assets
of the undertaking and the properties sold which are transferred to, and vested in, the State
Industrial Development Corporation under sub-section (2) of section 3, shall be deemed to be
the  contribution  made  by  the  Government  to  the  equity  capital  of  the  State  Industrial
Development  Corporation;  and  for  the  contribution  so  made,  the  State  Industrial
Development Corporation  shall  issue (if necessary after amending  its  memorandum  and
articles of association) to the Government paid-up shares, in the equity capital, having a face
value equal to the amount specified against the undertaking in the corresponding entry in
column (3) of the First Schedule.
(2)  Where  any  liability  is  assumed  by  the  Government  under  sub-section  (1)  of
section 26 they may call upon the State Industrial Development Corporation to issue (if
necessary, after amending the memorandum and articles of association of the Corporation) to
the Government additional paid-up shares, in its equity capital having a face value equal to
the amount of the liability assumed by the Government under the said sub-section.
CHAPTER III
PAYMENT OF AMOUNT OR COMPENSATION
8. Payment of amount to owner of the undertaking. — (1) The owner of the undertaking
shall be given by the Government, in cash and in the manner specified in Chapter VI for the
transfer to, and vesting in, it under sub-section (1) of section 3, of such undertaking and the
right, title and interest of the owner in relation to the undertaking, an amount equal to the
amount specified against it in the corresponding entry in column (3) of the First Schedule.
(2) In addition to the amount referred to in sub-section (1), there shall be given by
the Government, in cash, to the owner of the undertaking, simple interest at the rate of four
per cent per annum on the amount specified against such owner in the corresponding entry in
column (3) of the First Schedule for the period commencing on the date of commencement of
this  Act,  and  ending  on  the  date  on  which  payment  of  such  amount  is  made  by  the
Government to the Commissioner.
9.  Payment  of  further  amount.— (1)  The  textile  company  shall  be  given  by  the
Government for the deprivation of its management an amount of one thousand rupees per
annum for the period commencing on the date on which the undertaking has been closed and
ending on the date of commencement of this Act.
(2) The amount calculated in accordance with the provisions of sub-section (1) shall
carry simple interest at the rate of four per cent per annum for the period commencing on the
date of commencement of this Act and ending on the date on which the payment of such
amount is made by the Government to the Commissioner.
(3) The amounts determined in relation to the undertaking in accordance with the
provisions  of  sub-sections  (1)  and  (2)  shall  be  given  by  the  Government  to  the  textile
company in addition to the amount specified in the First Schedule against that company.
10. Payment of compensation to owners of properties sold and vested in Government .-
(1) The owners of the properties sold and vested in Government under this Act shall be
entitled for an amount by way of compensation at the rate of the market value of the land
prevalent in the area as on the date of commencement of this Act.
(2) The Commissioner shall be competent to fix the market value as compensation
payable under sub-section (1). In the matter of fixation of compensation under sub-section
(1), the Commissioner shall have all the powers of a Collector under the Land Acquisition
Act.
(3) The owners of the land shall be entitled to interest at the rate of 12% per annum
on the amount so fixed by the Commissioner or in appeal, as the case may be, from the date
of commencement of this Act till the date of payment of the amount to him.
CHAPTER IV
MANAGEMENT, ETC., OF THE UNDERTAKING
11. Management, etc., of the undertaking and the land vested in Government. — The
State Industrial Development Corporation or any person which that Corporation may, by
order in writing, specify, shall be entitled to exercise the powers of general superintendence,
direction, control and management of the affairs and business of the undertaking, the right,
title and interest of an owner in relation to which have vested in that Corporation under sub-
section (2) of section 3, and do all such things as the owner of the undertaking is authorised
to exercise and do.
12. Duty of persons in charge of management of the undertaking to deliver all assets,
etc.—  On  the  vesting  of  the  management  of  the  undertaking  in  the  State  Industrial
Development  Corporation,  all  persons  in  charge  of  the  management  of  undertaking
immediately  before  such  vesting  shall  be  bound  to  deliver  to  the  State  Industrial
Development Corporation all assets, books of account, registers or other documents in their
custody relating to the said undertaking.
13.  Accounts.— The  State  Industrial  Development  Corporation  shall  maintain  the
accounts of the said undertaking in accordance with the provisions of the Companies Act,
1956 (Central Act 1 of 1956).
CHAPTER V
PROVISIONS RELATING TO EMPLOYEES OF THE 
UNDERTAKING
14.  Employment  of  certain  employees  to  continue.— (1)  Every  person  who  is  a
workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947),
and has been immediately before 1st February, 2009, employed in the undertaking shall
become, on and from the date of commencement of this Act, an employee of the State
Industrial  Development  Corporation  with  the  same  rights  and  privileges  as  to  pension,
gratuity and other matters as would have been admissible to him if the rights in relation to the
undertaking had not been transferred to, and vested in, the Government and shall continue to
do so unless and until his employment in the State Industrial Development Corporation is
duly terminated or until his remuneration, terms and conditions of employment are duly
altered by the State Industrial Development Corporation.
(2)  Every  person  who  is  not  a  workman  within  the  meaning  of  the  Industrial
Disputes Act, 1947 (Central Act 14 of 1947), and who has been, immediately before Ist
February, 2009, employed in the undertaking shall, in so far as such person is employed in
connection with the undertaking which has vested in the Government become, on and from
the date of commencement of this Act, an employee of the State Industrial Development
Corporation and shall hold his office or service therein by the same tenure, at the same
remuneration and upon the same terms and conditions and with the same rights and privileges
as to pension and gratuity and other matters as he would have held the same under the
undertaking if it had not vested in the State Industrial Development Corporation and shall
continue  to do so unless and until his employment  in the  State  Industrial  Development
Corporation  is  duly  terminated  or  until  his  remuneration,  terms  and  conditions  of
employment are duly altered by the State Industrial Development Corporation.
(3) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (Central
Act 14 of 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 undertaking to the State Industrial Development
Corporation 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.
(4) Where, under the terms of any contract of service or otherwise, no person whose
services become terminated or whose services become transferred to the State Industrial
Development Corporation by reason of the provisions of this Act is entitled to any arrears of
salary or wages or any payment for any leave not availed of or other payment, not being
payment by way of gratuity or pension, for any period prior to the 1st day of February, 2009,
such person may, except to the extent such liability has been taken over by the Government
under section 5, enforce his claim against the owner of the undertaking but not against the
Government or the State Industrial Development Corporation.
15.  Provident  and  other  funds.— (1)  Where  the  owner  of  the  undertaking  has
established a provident fund, superannuation, welfare or other fund for the benefit of the
persons employed in such undertaking, the money relatable to the employees, whose services
have  become  transferred  by  or  under  this  Act  to  the  State  Industrial  Development
Corporation shall, out of the money standing, on the appointed day, to the credit of such
provident fund, superannuation, welfare or other fund, stand transferred to, and shall vest in
the State Industrial Development Corporation.
(2) The money which stand transferred under sub-section (1) to the State Industrial
Development Corporation shall be dealt with by that Corporation in such manner as may be
prescribed.
16. Transfer of employees to Subsidiary Corporation. —Where the undertaking or any
part thereof is transferred under this Act to a subsidiary corporation or other agency of the
Government every person referred to in sub-section (1) and sub-section (2) of section 14,
shall on and from the date of such transfer, become an employee of the subsidiary corporation
or other agency of the Government and the provisions of sections 14 and 15 shall apply to
such employee as they apply to an employee of the State Industrial Development Corporation
as if references in the said sections to the State Industrial Development Corporation were
references to the subsidiary corporation or other agency of the Government.
CHAPTER VI
COMMISSIONER OF PAYMENTS
17. Appointment of Commissioner of Payments.— (1) For the purpose of disbursing the
amounts payable to the owner of the undertaking and the owners of the properties sold, the
Government shall, by notification in the Gazette, appoint a person as they may think fit to be
the Commissioner of payments.
(2) The Government may appoint such other persons as they 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 this Act and
different persons may be authorised to exercise different powers.
(3) Any person authorised by the Commissioner to exercise any of the powers may
exercise those powers in the same manner and with the same effect as if they have been
conferred on that person directly by this Act and not by way of authorisation.
(4) The salaries and allowances of the Commissioner shall be as may be prescribed
and it shall be defrayed out of the Consolidated Fund of the State of Kerala.
18. Payment by the Government to the Commissioner. — (1) The Government shall,
within thirty days from the commencement of this Act, pay in cash to the Commissioner, for
payment to the owner of the undertaking, an amount equal to the amount specified against the
undertaking in the First Schedule and shall also pay to the Commissioner such sums as may
be due to the owner of the undertaking and the owners of the properties sold under sub-
section (2) of section 8, section 9 and section 10.
(2)  A separate  account  shall  be  opened  by  the  Government  in  favour  of  the
Commissioner and every amount paid under this Act to the Commissioner shall be deposited
by him in that account and thereafter such account shall be operated by the Commissioner.
(3) Separate records shall be maintained by the Commissioner in respect of the
undertaking and the payment made to him under this Act.
(4) Interest accruing on the amounts standing to the credit of the account referred to
in sub-section (2) shall ensure to the benefit of the owners of the undertaking and payment of
interest to the owners of the properties sold.
19. Claims to be made to the Commissioner.— Every person having a claim against the
owner  of  the  undertaking  or  the  properties  sold  shall  prefer  such  claim  before  the
Commissioner within thirty days from the date of appointment of the Commissioner or such
extended period, as the Government may, by notification in the Gazette, specify:
 
Provided that if the Commissioner is satisfied that the claimant was prevented by
sufficient cause from preferring the claim within the said period he may entertain the claim
within a further period of thirty days but not thereafter.
20.  Priority  of  claims.—(1) The  claims arising out of the  matters  specified in the
Second Schedule shall have priorities in accordance with the following principles, namely:—
(a) Category I will have precedence over all other categories and Category II will
have precedence over Category III and so on;
(b) The claims specified in each of the categories, except Category V , shall rank
equally and be paid in full, but if the amount is insufficient to meet such claims in full, they
shall abate in equal proportions and be paid accordingly;
(c) The liabilities specified in Category V shall be discharged subject to the
priorities specified in this section, in accordance with the terms of the secured loans and the
priority, inter se, of such loans; and
(d) The question of payment of a 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.
(2)  The  provisions  of  this  section  shall  not  in  any  way  affect  payment  of
compensation to the owners of properties sold.
21  Examination  of  claims.—(1)  On  receipt  of  the  claims  under  section  19,  the
Commissioner  shall  arrange  the  claims  in  the  order  of  priority  specified  in  the  Second
Schedule and examine the same in accordance with the said order.
(2) If, on examination of the claims, the Commissioner is of the 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 liabilities in respect of such lower
category.
22. Admission or rejection of the claims.—(1) After examining the claim with reference
to the priority set out in the Second Schedule, the Commissioner shall fix a certain date on or
before which every claimant shall file the proof of his claim or be excluded from the benefit
of the disbursement made by the Commissioner.
(2)  Not  less  than  fourteen  days’ notice  of  the  date  so  fixed  shall  be  given  by
advertisement in one issue of a daily newspaper in the English Language and one issue of a
daily newspaper in the regional language, as the Commissioner may consider suitable, and
every  such  notice  shall  call  upon  the  claimant  to  file  the  proof  of  his  claim  with  the
Commissioner within the time specified in the advertisement.
(3) Every claimant who fails to file the proof of his claim within the time specifid by
the Commissioner shall be excluded from the disbursement made by the Commissioner.
(4) The Commissioner shall, after such investigation as may, in his opinion, be
necessary and after giving the owner of the undertaking 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 procedure in all
matters arising out of the discharge or his functions, including the place or places at which,
he will hold his sittings and shall, for the purpose of making any investigation under this Act,
have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908
(Central Act 5 of 1908), while trying a suit, in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on
oath;
(b) discovery and production of any document or other material object producible as
evidence;
(c) reception of evidence on affidavits;
(d) issue of commissions for the examination of witnesses.
(6) Any investigation before the Commissioner shall be deemed to be a judicial
proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (Central Act
45 of 1860); 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 (Central Act 2 of
1974).
(7)  Any  person  aggrieved  by,  or  who  is  dissatisfied  with  the  decision  of  the
Commissioner may, within thirty days from the date of receipt of the order leading to such
decision,  prefer  an  appeal  against  the  decision  to  the  principal  civil  court  of  original
jurisdiction within the local limits of whose jurisdiction the undertaking is situated.
23. Disbursement  of  money by the Commissioner to  claimants.—After admitting a
claim under this Act, the amount due in respect of such claim shall be credited by the
Commissioner to the relevant fund or be paid to the person or persons to whom such sums
are due and on such credit or payment the liability of the owner in respect of such claim shall
stand discharged.
24. Disbursement of amounts to the owner of the undertaking. — (1) If out of the
amount paid to him in relation to the undertaking, there is a balance left after meeting the
liabilities as specified in the Second Schedule, the Commissioner shall disburse such balance
to the owner of such undertaking.
(2) Before making any payment to the owner of the undertaking under sub-section
(1), the Commissioner shall satisfy himself as to the right of such person to receive the whole
or any part of such amount, and in the event of there being a doubt or dispute as to the right
of the person to receive the whole or any part of the amount referred to in section 8, the
Commissioner shall refer the matter to the court and make the disbursement in accordance
with the decision of the court.
(3) For the removal of doubts, it is hereby declared that the entries in column (2) of
the First Schedule shall not be deemed to be conclusive as to the right, title and interest of
any person in relation to the undertaking specified in the corresponding entries in column (1)
of the said Schedule; and evidence shall be admissible to establish the right, title and interest
of any person in relation to such undertaking.
(4) Where any machinery, equipment or other property in the undertaking has vested
in the State Industrial Development Corporation but such machinery, equipment or other
property does not belong to the owner of such undertaking, the amount specified in column
(3) of the First Schedule against such undertaking shall, on a reference made to it by the
Commissioner, be apportioned by the court between the owner of such undertaking and the
owner of such machinery, equipment or other property having due regard to the value of such
machinery, equipment or other property on the date of commencement of this Act.
Explanation.— In this section, “court”, in relation to the undertaking, means the
principal civil court of original jurisdiction within the local limits of whose jurisdiction, the
undertaking is situated.
25. Undisbursed  or  unclaimed  amounts  to  be  deposited  to  the  general  revenue
account.- Any amount paid to the Commissioner which remains undisbursed or unclaimed
for a period of three years from the last day on which the disbursement was made, shall be
transferred by the Commissioner to the general revenue account of the Government, but a
claim to any money so transferred may be preferred to the Government 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 revenue.
CHAPTER VII
MISCELLANEOUS
26. Assumption of liability. —(1) Where any liability of the undertaking arising out of
any claim specified in Category I, Category II or Category III or Category IV in the Second
Schedule is not discharged fully by the Commissioner out of the amount paid to him under
this Act, the Commissioner shall intimate in writing to the Government the extent of the
liability which remains undischarged, and that liability shall be assumed by the Government.
(2)  The  liability  assumed  by  the  Government  under  sub-section  (1)  shall  be
discharged by payment of the amount of the liability in negotiable bonds redeemable after the
expiry of ten years and carrying simple interest at the rate of seven and a half per cent per
annum with effect from the date of commencement of this Act.
27. Act to over-ride all other enactments. —The provisions of this Act shall have effect
notwithstanding anything 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 authority.
28. Contracts to cease to have effect unless ratified by the State Industrial Development
Corporation.— (1) Every contract entered into by the owner or occupier of the undertaking
for any service, sale or supply and in force immediately before the date of commencement of
this Act, shall, on and from the expiry of one hundred and eighty days from the said date
cease to have effect unless such contract is, before the expiry of that period, ratified, in
writing, by the State Industrial Development Corporation, and in ratifying such contract the
State  Industrial  Development  Corporation,  may,  with  the  previous  approval  of  the
Government, make such alterations or modifications therein as it may think fit:
Provided that the State Industrial Development Corporation 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 is unduly onerous or has been entered into in bad faith or is detrimental to
the interests of the undertaking.
(2) The State Industrial Development Corporation shall not omit to ratify a contract,
and shall not make any alteration or modification therein except after giving to the parties to
the contract a reasonable opportunity of being heard and except after recording in writing its
reason for refusal to ratify the contract or for making any alteration or modification therein.
29. Penalties.— Any person who,—
(a) having in his possession, custody or control any property forming part of the
undertaking  or  wrongfully  withholds  any  property  from  the  Government  or  the  State
Industrial Development Corporation, or any person authorised by the Government or the said
Corporation, as the case may be, in this behalf; or
(b) wrongfully obtains possession of, or retains any property forming part of the
undertaking or willfully withholds or fails to furnish to the Government, the Kerala State
Industrial Development Corporation, or any person specified by the Government or the said
Corporation, as the case may be, any document relating to such undertaking which may be in
his possession, custody or control or fails to deliver to the State Industrial Development
Corporation  or  any  person  specified  by  that  Corporation  any  assets,  books  of  account,
registers or other documents in his custody relating to the undertaking; or
(c) wrongfully removes or destroys any property forming part of the undertaking or
prefers any claim under the Act which he knows or has reasonable cause 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.
30. 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 corporate and includes a firm or other association
of persons or a Co-operative Society; and
(b) “director” in relation to a firm, means a partner in the firm. 
31.  Protection  of  action  taken  in  good  faith.—No  suit,  prosecution  or  other  legal
proceeding shall lie against the Government or any officer of the Government or the State
Industrial Development Corporation or any Subsidiary Corporation or any officer or other
person authorised by either of such Corporation for anything which is in good faith done or
intended to be done under this Act.
32. Delegation of powers. — (1) The Government may, by notification in the Gazette,
direct that all or any of the powers exercisable by them under this Act, other than the powers
under section 33 and section 35 may also be exercised by any person or persons as may be
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 Government.
33. Power  to  remove  difficulties.—If  any  difficulty  arises  in  giving  effect  to  the
provisions of this Act, the Government may, by order, not inconsistent with the provisions of
this Act, remove such difficulty:
Provided that no such order shall be made after the expiry of a period of two years
from the date of commencement of this Act.
34. Declaration as to the policy of the State. —  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 of India.
Explanation.— In this section “State” has the same meaning as in article 12 of the
Constitution of India.
35. Power to make rules .— (1) The Government may, by notification in the Gazette,
make rules to carry out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely:— 
(a) the time within which and the manner in which an intimation referred to in
sub-section (4) of section 4 shall be given;
(b) the manner in which money in any provident fund or other fund referred to in
section 15 shall be dealt with;
(c) any other matter which is required to be, or may be prescribed.
(3) Every rule made under this Act 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 sessions, 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.
THE FIRST SCHEDULE
[See sections 2(f), 2(g), 4(5) and 8]
Name of the undertaking Name of the Owner    Amount (in Rupees)
(1) (2) (3)
The Handloom Weaving Factory of the 
Commonwealth Trust India Limited, 
Mananchira,Kozhikode.
The  Commonwealth
Trust (India) Limited
500  lakhs  (Excluding
liabilities)
THE SECOND SCHEDULE
(See sections 20, 21, 22 and 26)
ORDER OF PRIORITIES FOR THE DISCHARGE OF LIABILITIES 
IN RESPECT OF THE UNDERTAKING
PART I
Category 1
Arrears in relation to provident fund, salaries and wages, and other amounts, due to
an employee for the pre-take over management period.
PART II-OTHER LIABILITIES
(A) POST-TAKEOVER MANAGEMENT PERIOD
Category II
(a) Loans advanced by a Bank.
(b) Loans advanced by an Institution other than a Bank.
(c) Any other loan.
(d) Any credit availed of for purposes of trade or manufacturing operations.
Category III
(a) Revenue, taxes, cesses, rates or any other dues to the Central Government or a
State Government.
(b) Any other dues.
(B) PRE-TAKEOVER MANAGEMENT PERIOD
Category IV
Principal amounts of the secured loans advanced by any Nationalised Bank or Public
Financial Institution.
Category V
Secured loans other than those specified under Category IV
Category VI
Revenue, taxes, cesses, rates or any other dues to the Central Government, a State
Government, a local authority or a State Electricity Board.
Category VII
(a) Any credit availed of for purpose of trade or manufacturing operations.
(b) Any other dues.
Category VIII
Interest amounts on the secured loans advanced by any Nationalised Bank or Public
Financial Institution.
THE THIRD SCHEDULE
[See sections 2(h)]
Description of
properties 
sold and unused
Name of the Owner Extent Fair Value
(1) (2) (3) (4)
Kozhikode Taluk
Nagaram Village
Resurvey-T S
7-7-128
7-7-131
7-7-132
7-8-134
7-8-135
7-8-137
7-8-139
The Commonwealth
Trust (India) Ltd.,
Kozhikode.
1.5547 Hectare 24,70,000/
Are

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