law: 5. Company to be liable for certain prior liabilities.-
  (1) Every liability, other than the liability specified in sub-section (2), of the Company in respect of any period prior to the appointed day, shall be the liability of the Company and shall be enforceable against it and not against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company.
  (2) Any liability arising in respect of-
  (a) loans advanced by the Central Government or the State Government, or both, to the Company (together with interest due thereon), on or after the after of taking over;
  (b) loans advanced by a bank to the Company (together with interest due thereon) on or after the date of taking over 1[, but excluding loans advanced, on or after such date, by a bank to the Company to the extent such loans have been utilised by the Company for the re-payment of, or the payment of interest on, secured loans advanced to the Company by a bank at any time before such date];
  1. Ins. by Act 50 of 1980, s. 2 (w.e.f. 1-4-1978).
  (c) loans advanced by the Industrial Reconstruction Corporation of India Limited to the Company (together with interest due thereon) on or after the date of taking over;
  (d) wages, salaries and other dues of employees of the Company and the dues on account of any deduction made from wages and salaries and other dues of employees, relating to any period commencing on and from the date of taking over;
  (e) any debt incurred by the Company during any period commencing on and from the date of taking over, not being a debt falling under clause (a), clause (b), clause (c) or clause (d) or specified in Category I of the Schedule,
  shall, on and from the appointed day, be the liability of the Central Government, or the State Government, or the Government company aforesaid and shall be discharged by the Central Government or the State Government, or the Government company aforesaid as and when repayment of such loans becomes due or as and when such wages, salaries and other dues and debt become due and payable.
  (3) For the removal of doubts, it is hereby declared that,-
  (a) save as otherwise expressly provided in this section or in any other provision of this Act, no liability, including any liability arising out of any guarantee given by the State Government in respect of any loan or advance given to the Company but not including the liability specified in sub-section (2), of the Company in relation to its undertakings in respect of any period prior to the appointed day, shall be enforceable against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company;
  (b) no award, decree or order or any court, tribunal, officer or other authority in relation to the undertakings of the Company, passed after the appointed day, in respect of any matter, claim or dispute, not being matter, claim or dispute in relation to any matter referred to in sub-section (2), which arose before that day, shall be enfroceable against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company;
  (c) no liability incurred by the Company before the appointed day, for the contravention of any provision of law for the time being in force, shall be enforceable against the Central Government, or the State Government, or where the undertakings of the Company are directed, under section 7, to vest in a Government company, against that Government company.