THE KERALA CASHEW FACTORIES (ACQUISITION) ACT, 1974

1. Short title, extent and commencement.—(1) This Act may be called the Kerala Cashew Factories (Acquisition) Act, 1974. (2) It extends to the whole of the State of Kerala. (3) It shall come into force at once.

2 . Definitions.—In this Act, unless the context otherwise requires,— (a) "appointed day" means the date of publication of the declaration under sub-section (1) of section 3 1[or under sub-section (1) of section 3A] 2[or under section 3B]; (b) "cashew factory" means a factory as defined in the Factories Act, wherein processing of cashewnuts is being carried on and includes the factory building, the site thereof, and the buildings and lands appurtenant thereto used or necessary for, or in connection with, the working of the factory; (c) "Corporation" means the Kerala State Cashew Development Corporation Limited, incorporated under the Companies Act, 1956 (Central Act 1 of 1956); (d) "Factories Act" means the Factories Act, 1948 (Central Act 63 of 1948); 3[(dd) "Federation" means the Kerala State Co-operative Marketing Federation;] (e) "occupier" means an occupier as defined in the Factories Act; (f) "prescribed" means prescribed by rules made under this Act ; (g) "processing", with reference to cashewnuts, includes extraction of cashwenut oil and roasting, shelling, peeling, grading and treating of cashewnuts. 4[(h) "workers’ co-operative society" or “society" means a co-operative society registered under the Kerala Co-operative Societies Act, 1969 (21 of 1969) and formed with the object of managing a cashew factory which has been closed down or vested under this Act in the Government and of which at least ninety percent of the members are workmen within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947) who have been, immediately before the appointed day, in the employment of the cashew factory.]

3. Order of acquisition.—(1) The Government may, if they are satisfied— (a) that the occupier of a cashew factory does not conform to the provisions of law relating to safety, conditions of service or fixation and payment of wages to the workers of the factory; or (b) that raw cashewnuts allotted to a cashew factory by the Cashew Corporation of India are not being processed in the factory to which allotment has been made or that such nuts are being transferred to any other cashew factory; or 5[(c) that there has been large scale unemployment other than by way of lay off or retrenchment of the workers of a cashew factory; or (d) that the cashew factories possessed by the Kerala State Cashew Development Corporation either under a lease existing or expired or under requisition current or expired and returned to their owners pursuant to any judgment, order or decree of any court, tribunal or other authority or on the expiry of any contract or agreement, the employees/workers therein may be rendered unemployed, by order published in the Gazette, declare that those cashew factories shall stand transferred to, and vest in, the Government:] Provided that before making a declaration under this sub-section in respect of a cashew factory, the Government shall give the occupier of the factory and the owner of the factory, where he is not the occupier, a notice of their intention to take action under this sub-section and the grounds therefor and consider the objections that may be preferred in pursuance of such notice. Explanation.—For the purposes of this sub-section, the expressions "lay off" and "retrenchment" shall have the meanings respectively assigned to them in the Industrial Disputes Act, 1947 (Central Act 14 of 1947). (2) The notice referred to in the provisio to sub-section (1) shall also be published in two newspapers published in the State of Kerala, and such publication shall be deemed to be sufficient notice to the occupier, to the owner where he is not the occupier and to all other persons interested in the cashew factory. (3) On the making of a declaration under sub-section (1), the cashew factory to which the declaration relates, together with all machinery, other accessories and other movable properties as where immediately before the appointed day in the ownership, possession, power or control of the occupier in relation to the factory and all books of accounts, registers and other documents relating thereto shall stand transferred to, and vest in, the Government.

6[3A. Power to acquire any cashew factory in public interest.—(1) Notwithstanding anything contained in section 3, if the Government are satisfied, in relation to a cashew factory, that it has been closed for a period of not less than three months 7[prior to the date of coming into force of this Act or any day thereafter] and such closure has prejudicially affected the interest of the majority of the workers engaged in that factory and that immediate action is necessary to restart the cashew factory and such restarting is necessary in the public interest, they may, by order published in the Gazette, declare, that the cashew factory shall stand transferred to, and vest in, the Government: Provided that no order under this sub-section shall be published unless the proposal for such acquisition is supported by a resolution of the Legislative Assembly 8[which shall be passed within a period of six months from the date of publication of the order under sub-section (1) of this section]. 9[Explanation.— The vesting in pursuance of the order mentioned in sub-section (1) shall take effect on the date of publication of such order.] (2) The provisions of sub-section (3) of section 3 and section 4 shall, as far as may be, apply to a declaration made under sub-section (1), as they apply to a declaration made under sub-section (1) of section 3. (3) The provisions of sections 7 to 16 (both inclusive) shall, as far as may be apply to, or in relation to, the cashew factory, in respect of which a declaration has been made under sub-section (1), its occupier or Government, as the case may be, as they apply to a cashew factory in relation to which a declaration has been made under sub-section (1) of section 3.]

10[3B. Acquisition of Cashew Factories, which are in the possession of the Kerala State Cashew Development Corporation (KSCDC) either under a lease existing or expired or under requisition current or expired.—Notwithstanding anything contained in section 3 or in any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in any other law, agreement or other instrument for the time being in force, if the Government are of opinion that the cashew factories specified in schedule II of this Act now in the possession of Kerala State Cashew Development Corporation either under a lease existing or expired or under requisition current or expired, if returned to their respective owners, they may not provide employment to the entire/any of the employees/workers and such employees/workers may be rendered unemployed and in order to continue to provide employment to such employees/workers the government, may in public interest by order published in the Gazette, declare that those factories shall stand transferred to, and vest in, the government .]

4. General effect to vesting under section 3.—All property vesting in the Government under section 3 shall, by force of such vesting, be freed and discharged from any trusts, obligations, mortgages, charges, lien and other encumbrances affecting it, and any attachment, injunction or any decree or order of court restricting the use of such property in any manner shall be deemed to have been withdrawn.

5. Inventory of properties.—(1) An officer authorised by the Government in this behalf shall, after the service of the notice under the proviso to sub-section (1) of section 3 11[or the publication of that notice under sub-section (2) of that section or after a resolution is passed by the Legislative Assembly under sub-section (1) of section 3A, as the case may be] and before the publication of the declaration under the said sub-section (1), prepare a complete inventory of all the properties of the cashew factory to which the notice relates, as on the date of service of the said notice or the date of publication of that notice, as the case may be. (2) The officer referred to in sub-section (1) shall, for the purpose of preparing the inventory, have the power to enter the premises of the cashew factory and to require the occupier or any person employed therein to furnish such information as he deems necessary. (3) Any person who is required to furnish any information under sub-section (2) shall be bound to furnish such information as is within his knowledge. 12[(4) In the case of the Cashew Factories which are originally leased or requisitioned and now in the possession of Kerala State Cashew Development Corporation, the inventory prepared originally shall be the inventory for all purposes.]

6. Property and assets not to be damaged or removed after service of notice.—After the service of the notice under the proviso to sub-section (1) of section 3, 13[or the publication of that notice under sub-section (2) of that section or after a resolution is passed by the Legislative Assembly under sub-section (1) of section 3A, as the case may be,] the occupier or any other person shall not commit any act which will diminish the value of the properties and asset of the cashew factory to which the notice relates or remove any such property or assets from the premises of the factory.

14[6A. Acquisition of factories specified in Schedule III.—(1) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in any other law, agreement or other instrument for the time being in force, it is hereby declared that it is expedient in public interest that the cashew factories specified in Schedule III of this Act shall, stand transferred to, and vest in; the Government with effect from the date noted against each: Provided that such transfer shall be supported by a resolution of the Legislative Assembly which shall be passed within a period of six months from the date of publication of the Kerala Cashew Factories (Acquisition) Amendment Act, 2015 in the Gazette. (2) The provisions of section 4, sections 7 to 16 (both inclusive) of the Act shall, as far as may be, apply to, or in relation to, the cashew factory in relation to which a declaration has been made under sub-section (1) of section 3A. (3) For the removal of doubt it is hereby decared that the dates mentioned in the Schedule against each factory shall be the 'appointed day' in respect of that factory for the purposes of the Act. (4) All acts, proceedings or things done or taken by the govenment or any officer or authority in respect of cashew factories mentioned in the Schedule III including all the orders issued under sub-section (1) of section 8 during the periods commencing on and from the dates noted against each and ending with the date of publication of the Kerala Cashew Factories (Acquisition) Amendment Act, 2015 in the Gazette, shall, for all purposes be and shall be deemed always to have been as valid and effective as if the amendments made to the Act by the said amendment Act had been in force at all material times.]

7. Duty to deliver possession of property acquired and documents relating thereto.— (1) Where any property has vested in the Government under this Act, every person in whose possession or custody or under whose control the property may be, shall deliver the property to the Government forthwith. (2) The Government may take or cause to be taken all necessary steps for securing possession of the properties which have vested in the Government under this Act and, for this purpose, the Government may use such force as they deem necessary.

8. Power of Government to direct vesting of cashew factory in the Corporation.— 15[(1) Notwithstanding anything contained in section 3, the Government may, by order in writing:— (a) direct that a cashew factory vested in them under this Act shall, instead of continuing to vest in the Government, vest in the Corporation with effect from such date (not being a date earlier than the appointed day) as may be specified in the order; or (b) entrust a cashew factory vested in them under this Act to the Federation or to a workers co-operative society or to any other institution approved by the Government in this behalf for management for such period and on such terms and conditions as may be specified in the order.] (2) Where an order vesting a cashew factory in the Corporation is made under sub-section (1), all the rights, liabilities and obligations of the Government in relation to such factory shall, on and from the date of such vesting, be deemed to have become the rights, liabilities and obligations respectively of the Corporation.

9. Payment of amount.—(1) The occupier of every cashew factory which is acquired under this Act shall be paid by the Government an amount which shall be determined in accordance with the principles specified in the Schedule: Provided that where the occupier is not, the owner of the cashew factory, such owner shall be entitled to such portion of the amount as may be determined by the District Court under sub-section (5). (2) The amount payable under sub-section (1) shall be determined by the District Collector within a period of three months from the appointed day. (3) Where there is dispute as to the amount determined by the District Collector, or where there are more persons than one claiming to be entitled to the amount, the District Collector shall refer the matter for the determination of the District Court within whose jurisdiction the cashew factory is situate. (4) A reference under sub-section (3) shall be in such form, shall contain such particulars and shall be accompanied by such documents, as may be prescribed. (5) On receipt of a reference under sub-section (3), the District Court shall, after such inquiry as it deems necessary, pass an order determining the amount payable under sub-section (1) or apportioning the amount among the persons entitled thereto. (6) Every secured debt due from the owner or occupier of a cashew factory vested in the Government or the Corporation under this Act shall have priority over all other debts and shall be paid in accordance with the rights and interests of the secured creditors. (7) The amount determined in accordance with the foregoing provisions shall be paid to the person or persons entitled thereto in cash within a period of six months from the date of such determination: Provided that if the amount is not paid within the period aforesaid, the Government shall pay interest on the amount at the rate of four per cent per annum from the date of expiry of the said period. 16[(8) Notwithstanding anything contained in any other law for the time being in force or any judgment, order or decree passed by any court, tribunal or authority, where the occupier or owner of a cashew factory has accepted the amount determined in accordance with the provisions herein contained, the cashew factory shall be deemed to have been conveyed to the Government by means of execution of a conveyance as defined in section 54 of the Transfer of Property Act, 1882 (Central Act 4 of 1882) and accordingly the right, title and interest of the occupier or owner shall stand extinguished upon the date of recipt of the compensation. (9) If the conveyance refferred to in sub-section (8) has taken place, the Government shall not be obliged to give possession, right and title of the factory back to the owners/occupiers.]

10. Employment of certain employees to continue.—(1) Every person who is a workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947), and has been, immediately before the appointed day, in the employment of a cashew factory vested under this Act in the Government or the Corporation, as the case may be, shall become, on and from the appointed day, an employee of the Government, or, as the case may be, of the Corporation and shall hold office or service in the cashew factory on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if such cashew factory had not been trasferred to, and vested in, the Government or the Corporation, as the case may be, and continue to do so unless and until his employment in such cashew factory is duly terminated or until his remuneration, terms and conditions of employment are duly altered, by the Government or the Corporation, as the case may be. (2) The Government or the Corporation, as the case may be, in which a cashew factory has vested under this Act, may employ, on mutually acceptable terms and conditions, any person who is not a workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947) and who has been, immediately before the appointed day, in the employment of such cashew factory, and on such employment the said person shall become an employee of the Government or the Corporation, as the case may be. (3) Save as otherwise provided in sub-sections (1) and (2), the services of every person who is, on the appointed day, an employee of a cashew factory vested in the Government or the Corporation under this Act shall stand terminated on and from such date as may be specified by the Government. (4) Where, under the terms of any contract of service or otherwise any person whose service becomes terminated or whose service becomes transferred to the Government or the Corporation by reason of the provisions of this Act, is entitled to any payment by way of gratuity or retirement benefits or for any leave not availed of, or any other benefits, such person may enforce his claim against the occupier of the cashew factory but not against the Government or the Corporation.

17[10A. Continuance of Employees where cashew factory is entrusted to the Federation or to a workers' co-operative society or to an institution for management.—(1) Where a cashew factory vested under this Act in the Government has been entrusted to the Federation or to any other institution approved by the Government in this behalf under sub-section (1) of section 8 for management, every person who is a workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947), and has been immediately before the appointed day in the employment of the cashew factory, shall become, on and from the date on which the cashew factory, is so entrusted for management, an employee of the Federation or, as the case may be, of the institution and shall hold office or service in the cashew factory on the same terms and conditions and with the same rights as to pension, gratuity and other matters as would have been admissible to him if such cashew factory had not been transferred to, and vested in, the Government and continue to do so unless and until his employment in such cashew factory is duly terminated or until his remuneration, terms and conditions of employment are duly altered, by the Federation or the institution, as the case may be. (2) Notwithstanding anything contained in section 10 or in any other law for the time being in force, where a cashew factory vested under this Act in the Government has been entrusted to a workers' co-operative society under sub-section (1) of section 8 for management, only such of those persons who are workmen within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947), and have been, immediately before the appointed day, in the employment of the cashew factory and who become members of the worker's co-operative society to which the management has been so entrusted shall be eligible for employment in the cashew factory. (3) Every person who is eligible for employment under sub-section (2) in a cashew factory vested under this Act in the Government and is entrusted to a workers' co-operative society for management, shall become, on and from the date on which the cashew factory is so entrusted to the society for management or the date on which he becomes a member of such society, whichever is later, an employee of the society and shall, hold office or service in the cashew factory on such remuneration, terms and conditions of employment as may be determined by the society. (4) The federation or a workers' co-operative society or any institution to which the management of a cashew factory vested under this Act in the Government is entrusted under sub-section (1) of section 8, may employ on mutually acceptable terms and conditions any person who is not a workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947) and who has been, immediately before the appointed day, in the employment of such cashew factory and on such employment the said person shall become an employee of the Federation or the society or the institution, as the case may be. (5) Where the management of a cashew factory vested under this Act in the Government is entrusted to the Federation or to a workers' co-operative society or to any other institution for management under sub-section (1) of section 8, any person whose service becomes terminated or who becomes an employee of the Federation or the society or the institution by reason of the provisions of this section, is entitled to any payment by way of gratuity or retirement benefits or for any leave not availed of, or any other benefits, prior to the appointed day, such person may enforce his claim against the occupier of the cashew factory immediately before the appointed day but not against the Government or the Federation or the society or the institution. (6) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947), or in any other law for the time being in force, any person whose service becomes terminated of whose terms and conditions of employment have been altered in pursuance of the provisions of this section, shall not be entitled to any compensation under this Act or under any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority.]

11. Provident fund.—(1) Where a cashew factory has established a provident fund for the benefit of its employees, the moneys relatable to the employees, who services have become transferred, by or under this Act, 18[to the Government or the Corporation or the Federation or a workers' co-operative society or an institution, shall, out of the moneys standing, on the appointed day, to the credit of such provident fund, stand transferred to, and vest in, the Government or the Corporation or the Federation or the workers' co-operative society or the institution, as the case may be.] 19[(2) The moneys which stand transferred, under sub-section (1), to the Government or the Corporation or the Federation or a workers' co-operative society or an institution shall be dealt with by the Government or the Corporation or the Federation or the workers' co-operative society or the institution, as the case may be, in such manner as may be prescribed.]

12. Superannuation, welfare and other funds.—Where a superannuation, welfare or other fund has been established for the benefit of the employees whose services stand transferred to the Government or the Corporation 20[or the Federation or a worker’s cooperative society or an institution] under this Act, the cashew factory, by which such employees were employed, shall distribute the amount due to each employee as if the employee had superannuated, or his services with the cashew factory had terminated, on the day immediately preceding such date as may be specified by the Government in this behalf.

13 . Penalties.—(1) Any person who— (a) fails to furnish any information which he is bound to furnish under sub-section (3) of section 5 or furnishes any such information which he knows or has reason to believe to be false; or (b) contravenes the provisions of section 6; or (c) having in his possession, custody or control any property forming part of a cashew factory in respect of which a declaration under section 3 has been made, wrongfully withholds such property from the Government; or (d) wrongfully obtains possession of any property forming part of a cashew factory which has vested in the Government under this Act, shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both: Provided that the court trying any offence under clause (c) or clause (d) may, at the time of convicting the accused person, order him to deliver up within a time to be fixed by the court any property wrongfully withheld or obtained. (2) No court shall take cognizance of an offence punishable under this section except with the previous sanction of the Government or an officer authorised by the Government in this behalf.

14. Offences by companies.—(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1) where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.—For the purposes of this section,— (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm.

15. Protection of action taken in good faith.—(1) No suit, prosecution or other legal proceeding shall lie against 21[the Government or the Corporation or the Federation or a workers’ co-operative society or an institution] or any officer or other employee of 22[the Government or the Corporation or the Federation or a workers’ co-operative society or an institution] for anything which is in good faith done or intended to be done under this Act. (2) No suit or other legal proceeding shall lie against 23[the Government or the Corporation or the Federation or a workers’ co-operative society or an institution] any officer or other employee of 24[the Government or the Corporation the Federation or a workers’ co-operative society or an institution] for any damage caused or likely to be caused by anything which is in good faith done or intended to be done under this Act.

16. Power to make rules.—(1) The Government may, by notification in the Gazette, make rules to carry out the provisions of this Act. (2) Every rule made under this Act shall be laid, as soon as may be after it is made, before the Legislative Assembly while it is in session for a total period of fourteen days which may be comprised in one session or in two successive sessions and if, before the expiry of the session in which it is so laid or the session immediately following, the Legislative Assembly makes any modification in the rule or decides that the rule should not be made, the rule shall thereafter have effect only in such modified from or be of no effect, as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

17. Repeal and saving.—(1) The Kerala Cashew Factories (Acquisition) Ordinance, 1974 (8 of 1974), is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under this Act as if this Act had commenced on the 28th day of June, 1974.