Section 3 of TU(N)A : Section 3: Acquisition Of Rights Of Owners And Vesting Of The Textile Undertakings

Explanation using Example

Imagine a hypothetical situation where there is a textile company called 'Fabric Innovations Ltd.' that has been struggling financially. The Indian government decides to nationalize the company to prevent its collapse and to protect the employees' jobs. On the designated 'appointed day', as per Section 3(1) of The Textile Undertakings (Nationalisation) Act, 1995, the ownership of 'Fabric Innovations Ltd.' automatically transfers to the Central Government without the need for any additional documentation or transfer deeds. All the assets, rights, and interests are now owned by the government.

Following this, as described in Section 3(2), 'Fabric Innovations Ltd.' is handed over to the National Textile Corporation (NTC), which is a government entity set up to manage such nationalized textile undertakings. The NTC now becomes responsible for the operation and management of 'Fabric Innovations Ltd.'

In accordance with Section 3(3), if 'Fabric Innovations Ltd.' was operating on leased land, the lease-hold rights remain with the Central Government, but the NTC will handle the payment of lease rents and any related obligations on behalf of the government.

Lastly, Section 3(4) ensures that once the property has vested in the NTC, no court has the authority to reverse this decision or order the NTC to divest the property that has been transferred to it.