Pre-appointed day liabilities under nationalisation law remain enforceable only against the company, not the Union of India.

The Delhi HC held that a decree for a company's pre-appointed day liability under a special nationalisation statute could not be enforced against the Union of India. The statute preserved liabilities arising before the appointed day as the company's liabilities alone, except for expressly carved-out obligations, and barred enforcement of any award, decree or order relating to those liabilities against the Central Government. Its non obstante clause gave this scheme overriding effect over inconsistent instruments and prior government management arrangements. The objection to execution against the Union therefore failed, and the liability remained recoverable only from the company.

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Issues: Whether a decree or award in respect of a company's pre-appointed day liability under the nationalisation statute could be enforced against the Union of India.

Analysis: The undertakings of the company had first been taken under government management under the industrial regulation law, but the later nationalisation statute expressly provided that liabilities of the company, other than the specifically carved-out liability, for any period prior to the appointed day remained the liability of the company and were enforceable against it alone. The statute also declared that no award, decree or order in relation to such liabilities could be enforced against the Central Government. The non obstante provision gave the Act overriding effect over inconsistent instruments and orders.

Conclusion: The decree for the company's pre-appointed day liability was not enforceable against the Union of India and the objection to execution against it failed.

Final Conclusion: The appeal was dismissed because the nationalisation law left the relevant pre-appointed day dues recoverable only from the company and not from the Union of India.

Ratio Decidendi: Where a special nationalisation statute expressly preserves pre-appointed day liabilities as liabilities of the company and bars enforcement of awards or decrees against the Central Government, such liabilities cannot be executed against the Government notwithstanding earlier government management of the undertaking.

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