Statement of Object

The Brentford Electric (India) Limited, Calcutta, (BEIL), established in 1964, has been in existence for about 23 years and has been engaged in the manufacture of regulators of up to 5000 KVA, rectifiers, special transformers, distribution transformers, etc. The products of the company are of high quality and are required for defence establishments, State Electricity Boards and atomic energy establishments. The company is at present employing about 200 persons. 2. BEIL started incurring losses from 1975 and ran into serious financial difficulties in 1976. The management of the company was taken over by the Central Government under section 18A of the Industries (Development and Regulation) Act, 1961 and Andrew Yule and Company Limited, a Government company, was appointed as the 'authorised person' for managing its affairs. The period of take over of the management of BEIL was extended from time to time and is presently stands extended up to the 25th November, 1987. At the time of take over, the accumulated losses of BEIL were Rs.90.37 lacs and its liabilities to third parties aggregated to Rs.87.33 lacs. However, the sales turnover of the company has improved considerably in the post-take-over period and it has been able to turn the corner by 1979-80, thus establishing that its operations are technically and commercially viable. During the years 1979-80, 1980-81and 1981-82 and 1985-86, the company earned profits. During the years 1982-83 and 1984-85, the undertaking incurred losses mainly due to labour problems and lock-out. 3. Considering the fact that the company had have losses on the date to take over, it is evident that it would never be able to service its old liabilities, though its current operations, without the drag of the pre-take-over liabilities, are viable (sic). The company cannot at the same time be run for an indefinite period under the provisions of the Industries (Development and Regulation) Act, 1951. 4. Studies made to determine the future set up of the Company revealed that the undertakings of the company should be nationalised in order to consolidate the gains of management and to ensure uninterrupted supply of critical items required by defence establishments. etc. In view of the importance and high demand of the products manufactured by the company and the loss of employment to about 200 persons, if the company were to be closed down, it is considered necessary to take over the undertakings of the company. 5. The Bill seeks to achieve the aforesaid object. Apart from providing for the acquisition and transfer of the undertakings of the company, the Bill provides for the payment of an amount for such acquisition, vesting of the undertakings of the company in the Andrew Yule, a Government company, appointment of a Commissioner of Payments for the purpose of disbursing the amount payable to the company and for other incidental and consequential matters.

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