Statement of Object
Due to mismanagement, the undertakings of the Laxmirattan Cotton Mills Company Limited and Atherton West and Company Limited, two large-seized mills at Kanpur, which were engaged in the manufacture of certain varieties of cloth needed by the weaker sections of the community and also by the Defence Department, were lying closed since May, 1975. The closure had resulted in the unemployment of over five thousand workers.
2. Various avenues of re-opening the mills were explored by the Central Government in consultation with the Government of Uttar Pradesh and the bankers of the two companies. It was found that liabilities of the two companies had exceeded their respective assets and a sum of Rs. 4.90 crores was needed for renovation and modernisation before the Mills of these companies could re-start The Government of Uttar Pradesh pleaded its inability to shoulder the responsibility. The bankers were also reluctant to advance finance to the existing managements of the two Companies. In the circumstances, there was no alternative other than the nationalisation of the undertakings of the two Companies. The valuation of the undertakings of the two Companies was necessary to determine the amount to be paid for the acquisition of the undertakings. Such valuation would require some time. In the meantime, there was an apprehension that there might be large-scale frittering away of assets which may prove detrimental to the public interest. In the circumstances, the Laxmirattan and Atherton West Cotton Mills (Taking Over of Management) Ordinance, 1976, was promulgated by the President on 19th July, 1976.
3. The Bill seeks to replace the said Ordinance.
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