Section 22 of The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986
Disbursement of money by the Commissioner to claimants.
- (1)After admitting a claim against the Company under this Act, the amount due in respect of such claim shall be paid by the Commissioner to the person or persons to whom such amount is due and on such payment, the liability of the Company in respect of such claim shall stand discharged.
- (2)If, out of the moneys paid to him in relation to the textile undertakings, there is a balance left after meeting the liabilities as specified in the Schedule, the Commissioner shall disburse such balance to the Company.
Summary
- Once a claim is officially admitted, the Commissioner pays the owed amount directly to the person entitled to it.
- As soon as the Commissioner makes this payment, the company is completely legally cleared of that specific debt.
- After every single valid claim in the Schedule has been paid off, there might be money left over.
- Any remaining balance after meeting all scheduled liabilities is given back to the company by the Commissioner.
Practical examples
FAQ
1. Who actually hands over the money for an approved claim?
The Commissioner pays the amount due to the claimant.
2. Can a claimant sue the company later for a claim the Commissioner already paid?
No. Once the Commissioner pays the amount, the liability of the company for that claim stands discharged.
3. What happens if the government provided more money than was needed to pay all the debts?
If there is a balance left after meeting all the liabilities in the Schedule, the Commissioner will disburse the remaining money back to the company.
Test yourself
Q1.Under Section 22 of The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986, what is the legal effect on the company once the Commissioner pays an admitted claim?
Q2.Under Section 22 of The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986, what must the Commissioner do if there is a balance left after meeting all liabilities specified in the Schedule?
Q3.Under Section 22 of The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986, who is responsible for paying the amount due to the claimant once the claim is admitted?
Q4.Under Section 22 and Section 21 of The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986, what procedural milestone must happen before the Commissioner can disburse money to a claimant?