PREAMBLE


Statement of Object

The Hind Cyles Limited and Sen-Raleigh Limited have been engaged in the manufacture and production of bicycles and their component parts and accessories for more than two decades and they have developed a good brand image and adequate consumer acceptance for their products. These two companies account for a total annual capacity of more than ten lakhs of bicycles. However, as there had been a steady fall in production and the companies continued to incur cash losses, the management of the two units of Hind Cycles Limited and Sen-Raleigh Limited, along with its associate and subsidiary units, was taken over by the Central Government under the Provisions of the Industries (Development and Regulation) Act, 1951, in January, 1974 and September, 1975 respectively.2. Though nationalised banks and public financial institutions have been advancing large amounts of money, the companies were facing acute shortage of liquid funds for their working capital requirements. Funds were also required for modernisation of the plant and machinery of the two companies. But pending nationalisation of these two companies, it was not possible for Government to invest any more money in these companies. Studies made of the financial condition of the companies revealed that the companies were not fit for reconstruction as the capital base had been eroded many times over and the companies could be re-started with unencumbered assets only after total elimination of the external liabilities through a process of nationalisation. It was also felt that it would not be appropriate in the public interest to allow these units to close down as between the two companies they accounted for about one-sixth of the total production of bicycles in the country. Closure of the units also would have thrown out of employment a labour force of over six thousand. In view of this, it was decided to acquire the undertakings of the two companies so that fresh capital could be invested by Government. The Hind Cycles Limited and Sen-Raleigh Limited (Nationalisation) Ordinance, 1980, was, therefore, promulgated by the President on the 15th October, 1980.3. The said Ordinance, apart from providing for the acquisition and transfer of the undertakings of the two companies, provided for the payment of an amount for such acquisition, vesting to the undertakings of the companies in two Government companies, appointment of a Commissioner of Payments for the purpose of disbursing the amounts payable to the companies, and for other incidental and consequential matters.4. The Bill seeks to replace the aforesaid Ordinance.

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