Pre-acquisition provident fund damages stayed with the company under the acquisition statute, not the transferee government entity.

Liabilities incurred by a textile company before the appointed day, including statutory damages for delayed provident fund remittance, remained enforceable against the company under the acquisition statute. Although the undertakings vested in the Central Government, the statutory scheme preserved pre-appointed-day liabilities and did not transfer them to the Central Government or the National Textile Corporation. Damages for contravention of provident fund obligations arising before acquisition were therefore outside the liabilities shifted to the transferee, and recovery against the company was upheld.

---

---

Issues: Whether damages levied for delayed payment of provident fund dues, arising before the appointed day, formed part of the liabilities transferred to the Central Government under the acquisition statute or remained enforceable against the company.

Analysis: The acquisition statute vested the textile undertakings in the Central Government, but it also preserved liabilities incurred by the company in relation to the undertakings for the period prior to the appointed day. The statutory scheme distinguished between liabilities to be discharged out of the acquisition amount and liabilities that remained the company's own obligations. The Court noted that the impugned damages were levied for contravention of provident fund obligations arising before the appointed day and that such liabilities were not made enforceable against the Central Government or the National Textile Corporation. On that construction, the damages did not fall within the liabilities shifted to the transferee under the acquisition regime.

Conclusion: The company remained liable for the damages, and the challenge to the recovery order failed.

Ratio Decidendi: Liabilities incurred by the company before the appointed day, including statutory damages for delayed provident fund remittance, remain enforceable against the company and are not transferred to the Central Government or the National Textile Corporation merely because the undertaking is acquired.

---