Textile Undertakings (Nationalisation) Law (Amendment and Validation) Bill 2014 Passed by the RS

Textile Undertakings (Nationalisation) Law (Amendment and Validation) Bill 2014 Passed by the RS

RS on 8th December 2014 passed the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Bill 2014 at the time of the parliamentary session.

Features of the Bill

The Bill was introduced in the LS by Minister of Textiles Santosh Kumar Gangway on 1st December, 2014. The Bill aims to amend the Sick Textile Undertaking (Nationalisation) Act 1974 and the Textile Undertakings (Nationalisation) Act 1995 for reviving sick Textile mills.

Amendments have been made for ensuring the protection of sick textile undertakings and ensuring leasehold rights of such units shall continue to fall under the purview of the Union government.

As per the Statement of Objects and Reasons of the Bills, these two bills sought for the clarification of the vesting of leasehold land with the Union government to prevent the vacation of the land by the NTC or National Textile Corporation at the time when the lease expires.

There will be no maintenance or continuation of court proceedings directing leasehold land that is meant to be divested.

Leasehold rights over land will continue to exist under the power of the NTC on behalf of the central government.

Though leasehold rights of the land are vested with the Union government, the prosecution or defence of any proceedings with regard to the land remains with the National Textile Corporation

Any proceeding cannot be instituted against NTC on the grounds that textile operations were not continued in the textile undertaking. Leaseholds properties which are divested from the NTC to anybody as a result of court proceedings must be returned to the textile corporation.

Moreover, the amendment also centred around transfer of any property from the NTC via an order of the civil court or any other authority will not be in concordance with the act as amended by the Bill shall be deemed void. In 2011, the Supreme Court held that NTC must vacate land on which Toyo Poddar Contton Mills stood as the leasehold tenure had expired. As leasehold rights were with the government, NTC argued that the land must not bee vacated. For this reason, the amendments assume a lot of significance. Retrospective application of the new provisions will be carried out. Each of the provisions of the Act will have deemed to have been in force from the time the Act was enacted.

Revival of Sick Mills

The Government has also indicated that it will be working to turnaround the textile sector and revive sick mills including the NTC. "We will revive sick mills...The Ministry is working to bring to profit a total of eleven mills of NTC in next three months... NTC had acquired 119 mills, out of which 78 are closed under the Industrial Disputes Act," Union Textile Minister Santosh Gangwar told Rajya Sabha.