Section 6 in Tamil Nadu Electricity Supply Undertakings (Acquisition) Act, 1954
6. Vesting of the undertaking or assets.
(1)If compensation is payable in respect of an undertaking under Basis A or Basis B, all property belonging to the undertaking including fixed assets, cash, securities, investments, documents and the like and all its rights, liabilities and obligations as on the vesting date, shall vest or shall be deemed to have vested in the Government:Provided that liabilities and obligations not incurred in a bona fide manner shall not vest or be deemed to have vested in the Government -(i)in so far as they are in excess of the value on the vesting date of the corresponding assets, if any, vesting or deemed to have vested in the Government; or(ii)where there are no corresponding assets which vest or are deemed to have vested in the Government.Explanation. - For the purposes of this sub-section, "undertaking" includes every business carried on by the licensee, the funds of which form part of the funds of the licensee.(2)(a)If compensation is payable in respect of an undertaking under Basis C, only the property, rights, liabilities and obligations specified herein shall vest or be deemed to have vested in the Government on the vesting date -(i)all the fixed assets of the licensee and all the documents relating to the undertaking;(ii)all the rights, liabilities and obligations of the licensee under hire-purchase agreements, if any, for the supply of materials or equipment made bonafide before the vesting date;(iii)all the rights, liabilities and obligations of the licensee under any other contract entered into bonafide before the vesting date not being a contract relating to the borrowing or lending of money.(b)All the assets specified in clause (a)(i) shall vest or shall be deemed to have vested, in the Government free from any debts, mortgages or similar obligations of the licensee or attaching to the undertaking:Provided that such debts, mortgages or obligations shall attach or shall be deemed to have attached to the compensation payable under this Act for the assets.(3)In the case of all undertakings which vest or are deemed to have vested in the Government under this Act, the licence granted or the sanction given for the supply of electricity shall be deemed to have been terminated on the vesting date and all the rights, liabilities and obligations of the licensee under any agreement to supply electricity entered into before that date shall devolve or shall be deemed to have devolved on the Government:Provided that where any such agreement is not in conformity with the rates and conditions of supply approved by the Government and in force on the vesting date, the agreement shall be voidable or shall be deemed to have been voidable at the option of the Government.(4)In respect of any undertaking to which section 4 applies or any undertaking taken over, it shall be, and shall be deemed always to have been lawful for the Government, after removing any obstruction that may be or might have been offered, to take possession of the entire undertaking or, as the case may be, of the fixed assets and of all documents relating to the undertaking which the Government may require, or required for carrying it on.
