New Ordinance to shield NTC from rent control laws

  • Aloke Tikku, Hindustan Times, New Delhi
  • Updated: Oct 26, 2014 23:51 IST

President Pranab Mukherjee on Friday promulgated an ordinance to shield the National Textile Corporation from rent control laws that have been used to evict its sick textile units from prime land in several cities.

The ordinance also restores the NTC’s rights over leased property lost in court battles due to expiry of the lease period to the original landlord.

A government source told HT that the Modi Cabinet had cleared the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Ordinance 2014 at its meeting last week. “It has been notified and placed in public domain,” the source said.

The source said the ordinance explicitly clarified that “the lease-hold rights of the sick textile undertakings continued to remain vested in the central government”.

This “clarification” is aimed at reversing the effect of judicial pronouncements that make a distinction between the NTC and the government.

In 2011, the Supreme Court held it was “preposterous” for the NTC to claim to be the government’s agent and ordered its eviction from a prime 2.5 acre plot in Mumbai. The NTC has lost land on similar grounds elsewhere and had placed other sick mills on tenanted land at risk.

According to the presidential proclamation, the five-page ordinance would help protect public investment made to revive sick textile mills transferred to the NTC.

It amends the Sick Textile Undertakings (Nationalisation) Act 1974 and the Textile Undertakings (Nationalisation) Act 1995.

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