(1) The provisions hereinafter laid down shall apply where the Central Government decides that the course of action specified in sub-section (1) of section 18FD should be followed, namely:-
(a) the decision of the Central Government that the course of action specified in clause (a) of sub-section (1) of section 18FD should be followed in relation to a company owning an industrial undertaking shall be deemed to be a ground specified in section 433 of the Companies Act, 1956 (1 of 1956), on which the company may be wound up by the High Court;
(b) the authorised person shall, as soon as may be, after the decision specified in clause (a) of sub-section (1) of section 18FD has been taken by the Central Government, present an application to the High Court for the winding up of the company owning the industrial undertaking;
(c) when an application is made by the authorised person, under clause (b), for the winding up, by the High Court, of the company owning the industrial undertaking, the High Court shall order the winding up of the company and shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), appoint the authorised person as the Official Liquidator in relation to such undertaking;
(d) whenever the Central Government decides under clause (b) of sub-section (1) of section 18FD that the industrial undertaking should be sold as a running concern, it shall cause a copy of its decision to be laid before the High Court:
(e) until the industrial undertaking referred to in clause (d) or clause (b) of sub-section (1) of section 18FD is sold or purchased in pursuance of this section, the authorised person shall continue to function as the Official Liquidator in relation to the said undertaking in the winding up proceeding of the company, and, thereafter the Official Liquidator appointed by the Central Government under section 448 of the Companies Act, 1956 (1 of 1956), shall take over and function as the Official Liquidator in the said proceedings.
(2) The authorised person shall make a report to the Central Government as to what should be the reserve price for [he sale of the industrial undertaking as a running concern.
(3) In making a report under sub-section (2) the authorised person shall have regard to--
(a) the financial condition of the company owning the industrial undertaking on the date on which the order under section 18FD is made-
(i) as disclosed in its books of account,
(ii) as disclosed in its balance-sheet and profit and toss account during a period of five years immediately preceding the said date;
(b) the condition and nature of the plant, machinery, instruments and other equipment from the point of view of their suitability for profitable use in the running of the industrial undertaking;
(c) the total amount of liability on account of secured and unsecured debts including overdrafts, if any, drawn on banks, liabilities on account of terminal benefits to the employees and other borrowings and other liabilities of the company; and
(d) other relevant factors including the factor that the industrial undertaking will be sold free from all encumbrances.
(4) Notice of the reserve price determined by the authorised person shall be given in such manner as may be prescribed to the members and creditors of the company owning such industrial undertaking to make representations within a specified lime to the Central Government through the authorised person and the Central Government shall, after considering the representations received and the report of the authorised person, determine the reserve price.
(5) The authorised person shall thereafter, with the permission of the High Court, invite tenders from the public in such manner as may be determined by the High Court for the sale of the industrial undertaking as a running concern subject to the condition that it will be sold to the person offering the highest price which shall not be less than the reserve price determined under sub-section (4):
Provided that the High Court shall not refuse to grant such permission if it is satisfied that the company is not in a position to meet its current liabilities out of its current assets.
(6) The industrial undertaking shall be sold to the highest bidder, as a running concern, only if the price offered by him therefor is not less than the reserve price.
(7) Where no offer of price is equal to, or more than, the reserve price, the industrial undertaking shall be purchased by the Central Government at the reserve price.
(8) (a) The amount realised from the sale of the industrial undertaking as a running concern together with any other sum which may be realised from any contributory,
purchaser or any other person from whom any money is due to the company shall be utilised in accordance with the provisions of the Companies Act, 1956 (1 of 1956), in discharging the liabilities of the company and distributing the balance, if any, amongst the members of the company.
(b) In other respects, the provisions of the Companies Act, 1956 (1 of 1956), relating to the winding up of a company by High Court shall, as far as may be, apply.
(9) When an industrial undertaking is sold to any person under sub-section (6), or purchased by the Central Government under sub-section (7), there shall be transferred to and vested in the purchaser, free from all encumbrances, all such assets relating to the industrial undertaking as are referred to in sub-clause (i) of clause (a) of section 18FG and existing at the lime of the sale or purchase.
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