The Dr. Paul Lohmann ( India ) Limited ( Acquisition And Transfer Of Undertakings ) Act, 1986

GOVERNMENT OF WEST BENGAL 
LEGISLATIVE DEPARTMENT 
West Bengal Act XXX of 1986 
THE DR. PAUL LOHMANN (INDIA) LIMITED 
(ACQUISITION AND TRANSFER OF 
UNDERTAKINGS) ACT, 1986. 
[Passed by the West Bengal Legislature.] 
[Assent of the President of India was first published in the Calcutta 
Gazette, Extraordinary, of the 7th August, 1987.] 
[7th August, 1987.] 
An Act to provide for the acquisition and transfer, in the public interest, of 
the undertakings of the Dr. Paul Lohmann (India) Limited, and for 
matters connected therewith or incidental thereto. 
WHEREAS the Dr. Paul Lohmann (India) Limited had been engaged in 
the manufacture of fine chemicals for drugs and pharmaceuticals; 
AND WHEREAS the management of the undertakings of the Dr. Paul 
Lohmann (India) Limited had been conducted in a manner highly 
detrimental to the public interest; 
AND WHEREAS the management of the undertakings of the Dr. Paul 
Lohmann (India) Limited was taken over by the Central Government 
6 of 1951. 	 under section 18FA of the Industries (Development and Regulation) Act, 
1951; 
AND WHEREAS for the purpose of reconstructing and rehabilitating the 
undertakings of the Dr. Paul Lohmann (India) Limited so as to subserve the 
interests of the general public by the augmentation of production and 
distribution of the aforesaid articles which are essential to the needs of the 
general public, it is necessary to acquire the undertakings of the Company; 
It is hereby enacted in the Thirty-seventh Year of the Republic of India, 
by the Legislature of West Bengal, as follows:— 
CHAPTER I 
Preliminary 
1. (1) This Act may be called the Dr. Paul Lohmann (India) Limited 
(Acquisition and Transfer of Undertakings) Act, 1986. 
(2) It shall come into force on such date as the State Government may, 
by notification, appoint. 
Short title 
and 
commence-
ment. 
191 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
(Chapter I.—Preliminarv.—Section 2.—Chapter 11.—Acquisition 
and transfer of the undertakings of the Company.—Sections 3, 4.) 
Deftnitions. 2. In this Act, unless the context otherwise requires,— 
(a) "appointed day — means the date on which this Act comes 
into force; 
(b) "Commissioner" means the Commissioner of Payments 
appointed under section 16; 
(c) "Company" means the Dr. Paul Lohmann (India) Limited, 
being a company as defined in the Companies Act, 1956, and 
having its registered office at Chatterjee International Centre, 
33A, Jawaharlal Nehru Road, Calcutta-700 071; 
(d) "date of taking over of management of the undertakings of 
the Company" means the 10th day of November, 1978; 
(e) "existing Government company" means a Government 
company which is carrying on business on the appointed 
day; 
(0 "new Government company" means a Government company 
formed and registered on or after the appointed day; 
(g) "notification" means a notification published in the Official 
Gazette; 
(h) "prescribed" means prescribed by rules made under this Act; 
(i) "specified date" means such date as the State Government 
may, for the purpose of any of the provisions of this Act, by 
notification, specify, and different dates may be specified 
for different provisions of this Act; 
(j) words and expressions used herein and not defined, but 
defined in the Companies Act, 1956, have the meanings 
respectively assigned to them in that Act. 
1 of 1956. 
Transfer to, 
and vesting 
in, State 
Government 
of the under-
takings of the 
Company. 
General 
effect of 
Vesting. 
CHAPTER II 
Acquisition and transfer of the undertakings of the Company 
3. On the appointed day, the undertakings of the Company, and the 
right, title and interest of the Company in relation to its undertakings, 
shall, by virtue of this Act, stand transferred to, and vest in, the State 
Government. 
4. (1) The undertakings of the Company shall be deemed to include 
all assets, rights, lease-holds, powers, authorities and privileges, and all 
property, movale and immovable, including lands, buildings, offices, 
factories, workshops, stores, instruments, plants, machinery and equipment, 
192 
The Dr. Paul Lohman (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
KXX of 1986.] 
(Chapter 11.—Acquisition and transfer of the undertakings 
of the Company.—Section 4.) 
installations, laboratories, office furniture, stationery and equipment, 
vehicles, patents, trade marks, cash balances, cash in hand, reserve.funds, 
instruments, book debts 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 Company, whether within 
or outside India, and all books of account, registers and all other documents 
of whatever nature relating thereto. 
(2) All properties and assets as aforesaid which have vested in the 
State Government under section 3 shall, by force of such vesting, be freed 
and discharged from any trust, obligation, mortgage, charge, lien and all 
other encumbrances affecting them, and any attachment, injunction, 
decree or order of any court or other authority restricting the use of such 
properties or assets in any manner or appointing any receiver in respect of 
the whole or any part of such properties or assets shall be deemed to have 
been withdrawn. 
(3) Every mortgagee of any property which has vested under this Act 
in the State 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. 
(4) For the removal of doubts, it is hereby declared that the mortgagee 
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 part, out of the amount 
of compensation determined under section 8, and also out of the amount 
determined under section 9, but, no such mortgage, charge, lien or other 
interests shall be enforceable against any property which has vested in 
the State Government. 
(5) Any licence or other instrument granted to the Company in 
relation to any undertaking which has vested in the State Government 
under section 3 at any time before the appointed day and in force 
immediately before the appointed day shall continue to be in force on and 
after such day in accordance with its tenor in relation to and for the purpose 
of such undertaking, and, on and from the date of vesting of such 
undertaking, under section 6, in an existing Government company, or 
under section 7, in a new Government company, the existing or the new 
Government company, as the case may be, shall be deemed to be substituted 
193 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
(Chapter IL—Acquisition and transfer of the undertakings 
of the Company.—Section 5.) 
in such licence or other instrument as if such licence or other instrument 
had been granted to such existing or new Government company and 
such existing or new Government company shall hold it for the remainder 
of the period for which the Company would have held it under the terms 
thereof. 
(6) If, on the appointed day, any suit, appeal or other proceeding of 
whatever nature, in relation to any property or asset which has vested in the 
State Government under section 3, instituted or preferred by or against the 
Company, is pending, the same shall not abate, be discontinued or be, in 
any way, prejudicially affected by reason of the transfer of the undertakings 
of the Company or of anything contained in this Act, but the suit, appeal 
or other proceeding may be continued, prosecuted or enforced by or 
against the State Government or, where the undertakings of the Company 
are directed to vest, under section 6, in an existing Government company, 
or under section 7, in a new Government company, by or against such 
Government company. 
Central 
Government 
or State 
Government 
of existing 
or new 
Government 
company not 
to he liable 
for certain 
liabilities. 
5. (1) Every liability, other than the liability specified in sub-
section (2), of the Company in respect of any period prior to the appointed 
day shall be the liability of the Company and shall be enforceable against 
it and not against the Central Government or the State Government 
or, where the undertakings of the Company are directed to vest, under 
section 6, in an existing Government company, or under section 7, in a 
new Government company, against such Government company. 
(2) Any liability arising in respect of— 
(a) loans advanced by the Central Government or the State 
Government, or both, to the Company (together with interest 
due thereon), on or after the date of taking over of management 
of the undertakings of the Company, 
(b) loans advanced by a bank to the Company (together with 
interest due thereon) on or after the date of taking over of 
management of the undertakings of the Company, 
(c) loans advanced by the Industrial Reconstruction Corporation 
of India Limited to the Company (together with interest due 
thereon) on or after the date of taking over of management of 
the undertakings of the Company, 
(d) wageS, salaries and other dues of employees of the Company 
and dues on account of any deductions made from wages and 
salaries and other dues of such employees relating to any 
period commencing on and from the date of taking over of 
management of the undertakings of the Company, or 
194 
The Dr. Paul Lohrnann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
XXX of 1986.] 
(Chapter 11.—Acquisition and transfer of the undertakings 
of the Cotnpany.—Section 5.) 
(e) any debt incurred by the Company during any period 
commencing on and from the date of taking over of management 
of the undertakings of the Company, not being a debt falling 
under clause (a), clause (b), clause (c) or clause (d), 
shall, on and from the appointed day, be the liability of the State Govern-
ment or the Government company as aforesaid and shall be discharged 
by the State Government or the existing Government company or the new 
Government company as aforesaid as and when repayment of such loans 
becomes due or such wages, salaries and other dues or debt become due 
and payable. 
(3) For the removal of doubts, it is hereby declared that,— 
(a) save as otherwise expressly provided in this Act, no liability 
of the Company in relation to its undertakings in respect of any 
period prior to the appointed day shall be enforceable against 
the Central Government or the State Government or, where 
the undertakings of the Company are directed to vest, under 
section 6, in an existing Government company, or under 
section 7, in a new Government company, against such 
Government company; 
(b) no award, decree or order of any court, tribunal or other 
authority in relation to the undertakings of the Company 
passed on or after the appointed day, in respect of any matter, 
claim, or dispute, which arose before the appointed day shall 
be enforceable against the Central Government or the State 
Government or where the undertakings of the Company are 
directed to vest, under section 6, in an existing Government 
company, or under section 7, in a new Government company, 
against such Government company; 
(c) no liability incurred by the Company before the appointed day 
for the contravention of any provision of any law for the time 
being in force shall be enforceable against the Central 
Government or the State Government or, where the 
undertakings of the Company are directed to vest, under 
section 6, in an existing Government company, or under 
section 7, in a new Government company, against such 
Government company. 
195 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
(Chapter 11.—Acquisition and transfer of the undertakings 
of the Company.—Sections 6, 7.) 
Power of 
State 
Government 
to direct 
vesting of 
the under-
takings of the 
Company in 
an existing 
Government 
company. 
Power of 
State 
Government 
to direct 
vesting of 
the under-
takings of the 
Company in 
a new 
Government 
company. 
6. (1) Notwithstanding anything contained in sections 3 and 4, and 
subject to the provisions of section 7, the State Government may, if it is 
satisfied that an existing Government company is willing to comply, or 
has complied, with such terms and conditions as that Government may 
think fit to impose, direct, by notification, that the undertakings of the 
Company, and the right, title and interest of the Company in relation 
to its undertakings which have vested in the State Government under 
section 3, shall, instead of continuing to vest in the State Government, vest 
in that existing Government company either on the date of publication 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 of the Company in relation to 
its undertakings vest under sub-section (1) in an existing Government 
company, that Government company shall, on and from the date of such 
vesting, be deemed to have become the owner in relation to such under-
takings and the rights and liabilities of the State Government in relation 
to such undertakings shall, on and from the date of such vesting, be deemed 
to have become the rights and liabilities, respectively, of that existing 
Government company. 
7. (1) Notwithstanding anything contained in sections 3, 4 and 6, 
the State Government may, if it is satisfied that a new Government 
company is willing to comply, or has complied, with such terms and 
conditions as that Government may think fit to impose, direct, by 
notification, that the undertakings of the Company, and the right, title 
and interest of the Company in relation to its undertakings which 
have vested in the State Government under section 3, shall, instead of 
continuing to vest in the State Government, vest in that new Govern-
ment company either on the date of publication of the notification or on 
such earlier or later date (not being a date earlier than the date of 
registration of the new Government company) as may be specified in the 
notification. 
(2) Where the right, title and interest of the Company in relation to its 
undertakings vest under sub-section (1) in a new Government company, 
that new Government company shall, on and from the date of such vesting, 
be deemed to have become the owner in relation to such undertakings 
and the rights and liabilities of the State Government in relation to such 
undertakings shall, on and from the date of such vesting, be deemed to 
have become the rights and liabilities, respectively, of that new Government 
company. 
196 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
XXX of 1986.] 
(Chapter III—Payment of amounts.—Sections 8, 9.—Chapter IV.— 
Management, etc., of the undertakings of the Company.— 
Section 10.) 
CHAPTER III 
Payment of amounts 
8. For the transfer to, and vesting in, the State Government, under Payment of 
section 3, of the undertakings of the Company and the right, title and amount. 
interest of the Company in relation to its undertakings, there shall be 
given by the State Government to the Company in the manner specified 
in Chapter VI an amount of rupees fifty-two lakhs and eighty-seven 
thousand. 
9. (1) For the deprivation of the Company of the management of its 
undertakings, there shall be given to the Company by the State Government 
an amount of rupees thirteen thousand. 
(2) The amount specified in section 8 and the amount specified in 
sub-section (1) of this section shall carry simple interest at the rate of four 
per cent. per annum for the period commencing on the appointed day 
and ending on the date on which payment of such amounts is made by the 
State Government to the Commissioner. 
(3) The amount specified in sub-section (1) and the amount determined 
in accordance with the provisions of sub-section (2) shall be given by the 
State Government to the Company in addition to the amount specified in 
section 8. 
(4) The amounts payable under section 8 and sub-sections (1) and (2) 
of this section shall be payable in four equal annual instalments. 
(5) For the removal of doubts, it is hereby declared that the liabilities 
of the Company in relation to its undertakings which have vested in the 
State Government under section 3 shall be discharged from the amount 
specified in section 8, and also from the amount specified in sub-
section (1) and the amount determined under sub-section (2) of this 
section, in accordance with the rights and interests of the creditors of the 
Company. 
CHAPTER IV 
Management, etc., of the undertakings of the Company 
10. (1) The general superintendence, direction, control and 
management of the affairs and business of the undertakings of the 
Company, the right, title and interest in relation to which have vested in the 
State Government under section 3, shall,— 
Payment of 
further 
amount. 
Management, 
etc., of the 
undertakings 
of the 
Company. 
197 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
(Chapter IV.—Management, etc., of the undertakings of the 
Company.—Section 11.) 
(a) where a drection has been given by the State Government 
under sub-section (1) of section 6, vest, on and from the date 
specified in such direction, in the existing Government 
company specified therein; or 
(b) where a direction has been given by the State Government 
under sub-section (1) of section 7, vest, on and from the date 
specified in such direction in the new Government company 
specified therein; or 
(c) where no direction has been given under clause (a) or 
clause (b), vest in one or more Custodians appointed by the 
State Government under sub-section (2), 
and thereupon the existing, or new, Government company so specified or 
the Custodian or Custodians so appointed, as the case may be, shall be 
entitled to exercise, to the exclusion of all other persons, all such powers 
and do all such things as the Company is authorised to exercise and do in 
relation to its undertakings. 
(2) The State Government may appoint one or more individuals 
or a Government company as the Custodian or Custodians of the 
undertakings of the Company in relation to which no direction has 
been given by it under sub-section (1) of section 6 or sub-section (1) of 
section 7. 
(3) The Custodian or Custodians so appointed shall receive from the 
funds of the undertakings of the Company such remuneration as the State 
Government may fix and hold office during the pleasure of the State 
Government. 
Duty of 
persons in 
charge of 
management 
of the under-
takings of the 
Company to 
deliver all 
assets, etc. 
11. (1) On the vesting of the management of the undertakings of the 
Company in an existing, or new, Government company or on the 
appointment of a Custodian or Custodians, all persons in charge of the 
management of the undertakings of the Company immediately before such 
vesting or appointment shall be bound to deliver to such Government 
company, or Custodian or Custodians, as the case may be, all assets, books 
of account, registers and other documents in their custody relating to the 
undertakings of such Company. 
198 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
(XX of 1986.] 
I of 1056. 
(Chapter IV.—Management, etc., of the undertakings of the 
Company.—Section 12.) 
(2) The State Government may issue such directions as it may deem 
desirable in the circumstances of the case to the existing, or new, Government 
company or the Custodian or Custodians as to the powers and duties of 
such Government company or Custodian or Custodians, and such 
Government company or Custodian or Custodians may also, if it is 
considered necessary so to do, apply to the State Government at any time 
for instructions as to the manner in which the management of the 
undertakings of the Company shall be conducted or in relation to any other 
matter arising in the course of such management. 
(3) Any person, who on the appointed day has in his possession or 
under his control any books, documents or other papers relating to the 
undertakings of the Company which have vested in the State Government 
or in any existing, or new, Government company and which belong to the 
Company, or would have so belonged if the undertakings of the Company 
had not vested in the State Government or the existing, or new, Government 
company, shall be liable to account for the said books, documents or other 
papers to the State Government or the existing, or new, Government 
company, as the case may be, and shall deliver them up to the State 
Government or the existing, or new, Governinent company or to such 
person or body of persons as the State GovernMent or such Government 
company may specify in this behalf. 
(4) The State Government or the existing, or new, Government 
company may take, or cause to be taken, all necessary steps for securing 
possesssion of all undertakings which have vested in the State Government 
or the existing, or new, Government company under this Act. 
(5) The Company shall, within such period as the State Government 
may allow in this behalf, furnish to that Government a complete inventory 
of all its properties and assets, as on the appointed day, pertaining to the 
undertakings which have vested in the State Government under section 3, 
and, for this purpose, the State Government or the existing, or new, 
Government company shall afford to the Company all reasonable facilities. 
12. The Custodian or Custodians of the undertakings of the Company 
shall maintain an account of the undertakings of the Company in such form 
and under such conditions as may be prescribed and the provisions of the 
Companies Act, 1956 shall apply to the audit of the account so maintained 
as they apply to the audit of the accounts of a Company. 
Accounts and 
audit. 
199 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
(Chapter V.—Provisions relating to the employees of the 
Company.—Sections 13, 14.) 
CHAPTER V 
Provisions relating to the employees of the Company 
Employment 
of certain 
employees 
to continue. 
Provident 
fund and 
other funds. 
13. ( I ) Every person who has been, immediately before the appointed 
day, employed in any of the undertakings of the Company shall become,— 
(a) on and from the appointed day, an employee of the State 
Government, and 
(b) where the undertakings of the Company are directed to vest, 
under sub-section (1) of section 6, in an existing Government 
company, or under sub-section (1) of section 7, in a new 
Government company, an employee of such Government 
company on and from the date of such vesting, 
and shall hold office or service under the State Government or the existing, 
or new, Government company, as the case may be, with the same rights and 
privileges as to pension, gratuity and other matters as would have been 
admissible to him if there had been no such vesting or transfer and shall 
continue to do so unless and until his employment under the State 
Government or the existing, or new, Government company, as the case 
mey be, is duly terminated or until his remuneration and other conditions 
of service are duly altered by the State Government or the existing, or new, 
Government company, as the case may be. 
(2) Notwithstanding anything contained in the Industrial Disputes 	 14 of 1947. 
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 undertakings of 
the Company to the State Govenment or the existing, or new, Government 
company, as the case may be, shall not entitle such officer or other 
employee to any compensation under this Act or under any other law for 
the time being in force and no such claim shall be entertained by any court, 
tribunal or other authority. 
14. (1) Where the Company has established a provident fund or 
superannuation, welfare or other fund for the benefit of the persons 
employed in the undertakings of the Company, the moneys relatable to the 
employees, whose services have become transferred by or under this Act 
to the State Government or the existing, or new, Government company, as 
the case may be, shall, out of the moneys standing, on the appointed day, 
to the credit of such provident fund or superannuation, welfare or other 
fund, stand transferred to, and vest in, the State Government or the 
existing, or new, Government company, as the case may be. 
200 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
:XX of 1986.] 
(Chapter VI.-Commissioner of Payments.-Sections 15, 16.) 
(2) The moneys which stand transferred under sub-section (1) to the 
State Government or the existing, or new, Government company, as the 
case may be, shall be dealt with by that Government or the existing, or 
new, Government company in such manner as may be prescribed. 
CHAPTER VI 
Commissioner of Payments. 
15. (1) The State Government shall, for the purpose of disbursing the 
amounts payable under sections 8 and 9, by notification, appoint a 
Commissioner of Payments. 
(2) The State 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 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 exercisable by the Commissioner 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 and other 
persons appointed under this section shall be defrayed out of the 
Consolidated Fund of the State. 
16. (1) Subject to the provisions of sub-section (4) of section 9 and 
sub-section (4) of this section, the State Government shall, within thirty 
days from the specified date, pay, in cash, to the Commissioner for 
payment to the Company,— 
(a) the first instalment of the amount specified in section 8, and 
(b) the first instalment of the amount payable to the Company 
under section 9: 
Provided that twelve months shall not intervene between 
the date of payment of one instalment and the date of payment 
of the next instalment. 
(2) A deposit account shall be opened by the State Government in 
favour of the Commissioner in the Public Account of the State, and every 
amount paid under this Act to the Commissioner shall be deposited by him 
to the credit of the said deposit account and the said deposit account shall 
be operated by the Commissioner. 
(3) Intefest accruing on the amounts standing to the credit of the 
deposit account referred to in sub-section (2) shall enure to the said 
account. 
Appoint-
ment of 
Commis-
sioner of 
Payments. 
Payment by 
State 
Government 
to the 
Commis-
sioner. 
201 
The Di Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Aci 
(Chapter VI.—Commissioner of Payments.—Sections 17, 18.) 
(4) Notwithstanding anything contained elsewhere in this Act,— 
(a) any amount payable to any bank or financial institution 
towards repayment of the principal amount of any secured 
loans advanced by such bank or financial institution to the 
Company before the date of taking over of management of 
the undertakings of the Company, shall be paid directly by the 
State Government to such bank or financial institution in 
accordance with such agreement, in writing, as the State 
Government and the bank or the financial institution may 
enter into with each other, and 
(b) the amount payable by the State Government directly to any 
bank or financial institution under clause (a) shall be deducted 
from the amounts payable to the Company under sections 8 
and 9. 
Certain 
powers of 
State 
Government 
or existing. 
or new. 
Govern ment 
company. 
Claims to be 
made to the 
Commis-
miner. 
17. ( I ) The State 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 the Company, 
in relation to its undertakings which have vested in the State 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 State 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 discharg-
ing any liability of the Company, 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 State Government or the 
existing, or new, Government company, as the case may be. 
(3) Save as otherwise provided in this Act, the liabilities of the 
Company 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 Company. 
18. Every person having a claim against the Company 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 and not thereafter. 
202 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
:XX of 1986.] 
(Chapter VT—Commissioner of Payments.—Sections 19-21.) 
19. The claims arising out of the matters specified in the Schedule Priority of 
shall have priorities in accordance with the following principles:— claims. 
(a) Category I shall have precedence over all other categories and 
Category II shall have precedence over Category III, and so 
on; 
(b) the claims specified in each of the categories 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 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. ( I ) On receipt of the claims made under section 18, the Examination 
Commissioner shall arrange the claims in the order of priorities specified of claims. 
in the Schedule and examine the same in accordance with such order of 
priorities. 
(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 any claim in respect of such lower category. 
21. (1) After examining the claims with reference to the priorities set 
out in the Schedule, the Commissioner shall fix a date on or before which 
every claimant shall file the proof of his claim. 
(2) Not less than fourteen days' notice of the date so fixed shall be 
given by advertisement in such issue of any daily newspaper in the English 
language and in such issue of daily newspaper in such 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 specified by the Commissioner shall be excluded from the 
disbursements made by the Commissioner. 
(4) The Commissioner shall, after such investigation as may, in his 
opinion, be necessary and after giving the Company an opportunity of 
refuting the claim and after giving the claimant a reasonable opportunity 
of being heard, by order in writing, admit or reject the claim in whole or 
in part. 
Admission 
or rejection 
of claims. 
203 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
Disburse-
ment of 
money by 
Commis-
sioner to 
claimants. 
Disburse-
ment of 
amounts to 
the Company 
and posses-
sion of 
certain 
machinery, 
equipment, 
etc. 
(Chapter VI—Commissioner of Paymetits.—Sections 22, 23.) 
(5) The Commissioner shall have the power to regulate his own 
procedure in all matters arising out of the discharge of 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, while trying a suit, in respect of the following matters:— 
(a) the summoning and enforcing the attendance of any witness 
and examining him on oath; 
(b) the discovery and production of any document or other 
matetrial object producible as evidence; 
(c) the reception of evidence on affidavit; 
(d) the issuing of any commission 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 and the Commissioner shall be deemed to be a civil 
court for the purpose of section 195 and Chapter XXVI of the Code of 
Criminal Procedure, 1973. 
(7) A claimant who is dissatisfied with the decision of the Commissioner 
may prefer an appeal against the decision to the principal civil court of 
original jurisdiction within the local limits of whose jurisdiction the 
registered office of the Company is situated: 
Provided that where a person who is a Judge of High Court is 
appointed to be the Commissioner, the appeal shall lie to the High Court 
at Calcutta and such appeal shall be heard and disposed of by not less 
than two Judges of the High Court. 
22. After admitting a claim under this Act, the amount due in respect 
of such claim shall be paid by the Commissioner to the person or persons 
to whom such amount is due, and, on such payment, the liability of the 
Company in respect of such claim shall stand discharged. 
23. (1) If, out of the moneys paid to him in relation to the under-
takings of the Company, there is a balance left after meeting the 
liabilities in accordance with the priorities specified in the Schedule, the 
Commissioner shall disburse such balance to the Company. 
(2) Where any machinery, equipment or other property has vested 
under this Act in the State Government or the existing, or new, Government 
company, as the case may be, but such machinery, equipment or other 
property does not belong to the Company, it shall be lawful for the State 
Government or the existing, or new, Government company, as the case 
may be, to continue to possess such machinery, equipment or other 
property on the same terms and conditions under which they were 
possessed by the Company immediately before the appointed day. 
5 of 1908. 
45 of 1860. 
2 of 1974. 
204 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
8.XX of 1986.] 
(Chapter VI—Commissioner of Payments.—Section 24.—
Chapter VII.—Miscellaneous.—Sections 25-27.) 
24. Any money paid to the Commissioner which remains undisbursed 
or unclaimed on the date immediately preceding the date on which the 
office of the Commissioner is finally wound up shall be transferred by the 
Commissioner to the general revenue account of the State Government; 
but a claim to any money so transferred may be preferred to the State 
Government by the persons entitled to such payment and shall be dealt 
with as if such transfer had not been made, and the order, if any, for the 
payment of the claim shall be treated as an order for the refund of the 
revenue. 
CHAPTER VII 
Miscellaneous 
25. 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 ih any decree or order of any court, tribunal or other 
authority. 
26. (1) Where any liability of the Company arising out of any item 
specified in Category I of the Schedule is not discharged fully by the 
Commissioner out of the amounts paid to him under this Act, the 
Commissioner shall intimate in writing to the State Government the extent 
of the liability which remains undischarged and that liability shall be 
assumed by the State Government. 
(2) The State Government may, by order, direct the Company to take 
over the liability assumed by the State Government under sub-section (1), 
and, on receipt of such direction, it shall be the duty of the Company to 
discharge such liability. 
Undisbursed 
or 
unclaimed 
amount to 
be 
deposited to 
the general 
revenue 
account. 
Act to have 
overriding 
effect. 
Assumption 
of liability. 
27. Every contract entered into by the Company in relation to its Contracts to 
undertakings for any service, sale or supply, and in force immediately cheaayseeetfofect 
before the appointed day, shall, on and from the expiry of one hundred and unless 
eighty days from the date of publication of this Act in the Official Gazette, ratified by 
the State 
cease to have effect unless such contract is, before the expiry of the said • Government 
period, ratified in writing by the State Government or, as the case may be, oor  existing, existing, 
the existing, or new, Government company, and in ratifying such contract, Government 
the State Government or, as the case may be, the existing, or new, company. 
Government company may make such alterations or modifications therein 
as it may think fit: 
205 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Aci 
(Chapter VII—Miscellaneous.—Section 28.) 
Provided that the State Government or, as the case may be, the existing, 
or new, Government company shall not omit to ratify a contract and shall 
not make any alteration or modification therein— 
(a) unless it is satisfied that such contract is unduly onerous or has 
been entered into in bad faith or is detrimental to the interest 
of the State Government or, as the case may be, such 
Government company; and 
(b) except after giving the parties to the contract a reasonable 
opportunity of being heard and except after recording in 
wirting its reasons for its refusal to ratify the contract of for 
making any alteration or modification therein. 
Penalties. 28. Any person, who— 
(a) having in his possession, custody or control any property 
forming part of the undertakings of the Company wrongfully 
withholds such property from the State Government or the 
existing, or new, Government company, as the case may be, 
or any person or body of persons authorised by that 
Government or existing, or new, Government company, or 
(b) wrongfully obtains possession of, or retains, any property 
forming part of any undertaking of the Company or wilfully 
withholds or fails to furnish to the State Government or, as the 
case may be, the existing, or new, Government company or 
any person or body of persons authorised by that Government 
or Government company, any document relating to such 
undertaking which may be in his possession, custody or 
control or fails to deliver to the State Government or, as the 
case may be, the existing, or new, Government company or 
any person or body of persons authorised by that Government 
or existing, or new, Government company, any assets, books 
of account, registers or other documents in his possession, 
custody or control relating to the undertakings of the Company, 
Or 
(c) wrongfully removes or destroys any property forming part of 
the undertakings of the 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. 
206 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
XX of 1986.] 
(Chapter VII—Miscellaneous.—Sections 29-32.) 
29. (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 be 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 the 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. 
30. No suit, prosecution or other legal proceeding shall lie against the 
State Government or any officer of that Government or the Custodian of 
the undertakings of the Company or the existing, or new, Government 
company or any officer or other person authorised by that Government or 
existing, or new. Government company for anything which is in good faith 
done or intended to be done under this Act. 
Offences by 
companies. 
Protection of 
action taken 
in good 
faith. 
31. ( I) The State Government may, by notification, direct that all or Delegation 
any of the powers exercisable by it under this Act, other than the power of powers.  
conferred by this section or section 32 or section 33, may also be exercised 
by such 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 State Government. 
32. (1) The State Government may, by notification, make rules for Power to 
make rules. 
carrying out the provisions of this Act. 
207 
The Dr. Paul Lohmann (India) Limited (Acquisition and 
Transfer of Undertakings) Act, 1986. 
[West Ben. Act 
(Chapter VII—Miscellaneous.—Section 33.) 
(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 (3) of section 4 shall be given; 
(b) the form and the manner in which, and the conditions under 
which, the Custodian or Custodians shall maintain accounts 
as required by section 12; 
(c) the manner in which moneys in any provident fund or other 
fund referred to in section 14 shall be dealt with; 
(d) any other matter which is required to be, or may be, prescribed. 
(3) Every rule made by the State Government under this Act shall be 
laid, as soon as may be after it is made, before the State Legislature, 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 if, before the expiry 
of the session immediately following the session or the successive sessions 
aforesaid, the State Legislature agrees in making any modificati

Excerpt shown. Open the full act in Lexace.

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