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Chapter II

Taking Over of Management

3. Vesting of management of a sugar undertaking in Central Government.-

(1) Where the Central Government is satisfied-

(a) that any sugar undertaking has in any sugar year failed to commence the manufacture of sugar on or before the appointed day in respect of that year, or having started the manufacture of sugar on or before that day ceased to manufacture sugar before the expiry of the average period of manufacture of sugar in relation to that undertaking; or

(b) that on any date in any sugar year any sugar undertaking has, in relation to the cane 1[purchased, at any time (whether in that sugar year or in any earlier sugar year or sugar years and whether before or after the commencement of this Act), before that date] for the purposes of the undertaking, arrears of cane dues to the extent of more than ten per cent. of the total price of the cane purchased for the purposes of the undertaking during the immediately preceding sugar year; and

(c) that in either case the effective functioning of the undertaking is necessary for the purposes of this Act,

the Central Government may issue a notice in such form and in such manner as may be prescribed to the owner or the manager of such sugar undertaking calling upon such owner or manager to report in writing within such time, not being less than five days, as may be specified in the notice, the circumstances under which such undertaking has so failed to commence or ceased to manufacture sugar or, as the case may be, clear the said arrears of cane dues and to show cause as to why the management of such undertaking should not be taken over by the Central Government under this Act.

(2) As soon as may be, after the receipt of the report under sub-section (1) from the sugar undertaking, or where the sugar undertaking has failed to make such report within the time specified in the notice to that undertaking under sub-section (1), after the expiry of such time, the Central Government may make such further inquiry (if any) as it may deem fit, and-

(a) if the Central Government is satisfied that having regard to all the circumstances of the case and the purposes of this Act that it would be expedient to give further time to the undertaking to enable it to commence or resume production of sugar or, as the case may be, clear the arrears of cane dues, it may, by order in writing, specify the date on or before which and the manner in which such undertaking shall commence or resume production of sugar or, as the case may be, clear the said arrears of cane dues; or

(b) if the Central Government is not satisfied as provided in clause (a), declare by notification that the management of such undertaking shall vest in the Central Government on and from such date as may be specified in such notification.

(3) If a sugar undertaking has failed to comply with an order made under clause (a) of sub-section (2), or having commenced or resumed the production of sugar on or before the date specified in such order, ceased to manufacture sugar before the expiry of the average period of manufacture of sugar in relation to that undertaking, and the Central Government is satisfied that it is necessary so to do for the purposes of this Act, it may, by notification, declare that the management of such sugar undertaking shall vest in the Central Government on and from such date as may be specified in such notification.

(4) Any failure on the part of the owner or manager of the sugar undertaking to utilise the undertaking for the manufacture of sugar during any period shall not be taken into account for the purpose of issuing a notification in respect of that undertaking under clause (b) of sub-section (2) or sub-section (3) where such failure is attributable to any circumstances (other than financial difficulties) beyond his control.

(5) Every notification issued under sub-section (2) or sub-section (3) for vesting the management of a sugar undertaking in the Central Government shall be in force for such period not exceeding three years from the date of vesting as may be specified in the notification but if 1* * * the Central Government is of opinion that it is expedient in the public interest that the management of the sugar undertaking should continue to vest in the Central Government after the expiry of the period so specified, it may, from time to time, issue, by notification, directions for such continuance for such further period as may be specified in the directions:

Provided that the total period for which the management of the undertaking may remain vested in the Central Government shall in no case exceed 2[seven years] from the date of vesting.

(6) For the purposes of this section-

(a) "cane dues", in relation to any cane purchased by a sugar undertaking, means the price payable in accordance with the agreement (whether express or implied) or arrangement relating to such purchase and where there is no such agreement or arrangement, the price as determined in accordance with the law applicable to such purchase;

(b) any cane dues being the price payable for any cane acquired for the purposes of a sugar undertaking shall not be deemed to be in arrears at any time before the expiry of fourteen days from the date of delivery of such cane to the undertaking;

(c) the average period of manufacture of sugar in relation to any sugar undertaking with respect to any sugar year (hereafter in this clause referred to as the current sugar year) shall be calculated by dividing the total number of calendar days during which the undertaking manufactured sugar during the period of three sugar years immediately preceding the current sugar year by the number of sugar years in which the undertaking manufactured sugar during the said period of three years.

1. Subs. by Act 18 of 1979, s. 2, for "purchased before that date" (w.e.f. 31-3-1979).



Sugar Undertakings (Taking Over o Management) Act, 1978 Back




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