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Vaisakha 31, 1938, at 06:38:46 PM
The Esso Undertakings (Vesting) Act, 1976
1Act No. LXXIX OF 1976
[27th December, 1976]
An Act to provide for vesting in the
Federal Government of certain undertakings of Esso Eastern Inc. in
WHEREAS it is expedient to
provide for vesting in the Federal Government of certain undertakings of Esso
Eastern Inc. in
AND WHEREAS Esso Eastern
Inc., a foreign company, has approached the Federal Government for vesting of
certain of its undertakings in
AND WHEREAS the scope of
such vesting and the amount and manner of the payment to be made to Esso
Eastern Inc. for such undertakings has been agreed upon between the Federal
Government and Esso Eastern Inc.;
It is hereby enacted as
follows:---
1. Short title, extent
and commencement.—(1)
This Act may be called the Esso Undertakings (Vesting) Act, 1976.
(2) It extends to the whole
of
(3) It shall come into
force at once.
2. Definitions. In this Act, unless there is
anything repugnant in the subject or context,---
(a) ”commencing day” means the day on which
this Act comes into force;
(b) ”Government company'' means a company
directly or indirectly owned or controlled by the Federal Government in which
the Esso undertakings are vested by notification under sub-section (1) of
section 5;
(c) ”Esso” means Esso Eastern Inc., incorporated under the laws
of the State of
1For Statement of Objects and Reasons,
see Gaz., of P., 1976, Ext.,
(d) ”Esso undertakings” means the
business in Pakistan of Esso of purchasing, storing, distributing, blending,
marketing and selling of refined petroleum products, of lubricants and of chemical
products, and includes,---
(i) all assets, rights, powers, authorities and privileges and
all property, movable and immovable, book-debts, cash balances, reserves,
provisions and investments pertaining to such business, and all other rights
and interests in or arising out of such property, in Pakistan, as were,
immediately before the commencing day, in the ownership, possession, power or
control of Esso;
(ii) all books of accounts, registers, records and all
other documents of. Whatever nature pertaining to such business in
(iii) all debts, liabilities and obligations of whatever
kind in
(iv) all liabilities and entitlements of Esso
undertakings for amounts payable to and recoverable from any other businesses
or undertakings of Esso in Pakistan which, immediately before the commencing
day, were subsisting on the basis of moneys pertaining to or arising out of any
other businesses or undertakings of Esso in Pakistan which were utilized for
the purposes of Esso undertakings being treated as liabilities and moneys
pertaining to or arising out of Esso undertakings which were utilized for the
purposes of any other businesses or undertakings of Esso in Pakistan being
treated as entitlements;
(v) all liabilities and entitlements of the Esso branch in
Pakistan for amounts payable to and receivable from the principal office of
Esso in the United States of America which, immediately before the commencing
day, were subsisting on account of products and services pertaining to Esso
undertakings;
(vi) all liabilities and obligations of Esso
for the payment of pensions to such of its former employees, or their personal
representatives, who were, immediately before the commencing day, entitled to
receive pensions on account of the past service of such former employees with
Esso in Pakistan;
(vii) all contracts and agreements pertaining to
Esso undertakings, including the Sale and Purchase Agreement dated the first
day of January, 1976, between Pakistan Refinery and Esso and the-Agreements
between Burmah Shell Oil Storage and Distributing Company of Pakistan Limited,
Standard-Vacuum Oil Company and Caltex Oil (Pakistan) Limited relating to the
Joint Hydrant System at the Karachi Airport;
(viii) the profit or loss arising out of any Esso
undertakings during the period between the first day of January, 1976, and the
close of business on the day immediately preceding the commencing day;
(ix) all liabilities of Esso for taxes and
surcharges thereon leviable on or in relation to the income, profits or gains
of Esso arising out of any Esso undertakings up to and inclusive of the year of
account ending the thirty-first day of December, 1975;
(x) all entitlements of Esso to credit or refund of taxes or any
payments made for or in respect of any assessment or liability under the
Income-tax Act, 1922 (XI of 1922), relating to any income, profits or gains of
Esso arising out of any Esso undertakings up to and inclusive of the year of
account ending the thirty-first day of December, 1975;
but does not include,---
(1) the business of Esso in
(2) the corporate name,
trading styles and trade and service names, marks and other insignia used by
Esso, any trade marks registered by Esso in Pakistan, or any right of Esso to
use any trade mark registered in Pakistan by Exxon Corporation, a corporation
incorporated in. the State of New Jersey, United States of America, and having
its principal office in New York, State of New York, United States of America;
(3) any patent or design
registered in
(4) any confidential and
proprietary information and material or information and material pertaining to
trade secrets belonging to Esso or procured by Esso for use in connection with
Esso undertaking;
(5) the business and any
assets of Esso situated in the territories which immediately before the
sixteenth day of December, 1971, constituted the Province of East Pakistan, and
any claims by or against Esso and any receivables and payables of Esso
pertaining to any business at any time carried on by Esso in such territories;
(6) the Agreement dated the
fifteenth day of September, 1976, between the President of
(7) the policies of
insurance issued in Pakistan by New Hampshire Insurance Company of Manchester,
New Hampshire, U.S.A., in favour of Esso;
(8) the benefits of any
policies of insurance available to Esso in connection with the supply in
(9) any contracts entered
into by Esso for the delivery of aviation fuels and lubricants outside
(e) “Pak-Stanvac Petroleum
Project” means the joint exploration and production arrangements created by the
Memorandum of Agreement between Esso under its former name of Standard-Vaccum
Oil Company and the Governor-General of Pakistan, dated the 24th September,
1954, as amended; and
(f) ”Pakistan Refinery” means Pakistan Refinery Limited, a
company incorporated in
3. Act to override other
laws. This Act shall
have effect notwithstanding anything contained in any other law for the time
being in force or in any instrument having effect by virtue of any law other
than this Act and notwithstanding any decree or order of any court, tribunal,
commission or other authority.
4. Vesting of Esso undertakings.—(1) As from the commencing day, the Esso
undertakings, and all rights, titles and interests therein, shall stand
transferred to and vest in the Federal Government.
(2) All deeds, bonds,
contracts, agreements, powers-of-attorney, grants of legal representation and
other instruments of whatever nature in relation to Esso undertaking subsisting
and having effect immediately before the commencing day to which Esso is a
party or which are in favour of Esso shall be of full force and effect against
or in favour of the Federal Government and may be enforced and acted upon as
fully and effectively as if references in such deeds, bonds, contracts,
agreements, powers, grants and instruments to Esso were references to the
Federal Government.
(3) All suits, appeals and
other legal proceedings instituted by or against Esso for the purpose of, or in
relation to, Esso undertakings, and pending immediately before the commencing
day, shall be deemed to be suits, appeals and legal proceedings by or against
the Federal Government and the same shall not abate, be discontinued or be in
any way prejudicially affected by reason of the vesting of Esso undertakings,
or of anything contained in this Act, but the suit, appeal or other proceeding
may be continued, prosecuted and enforced by or against the Federal Government.
(4) where any property is
held by Esso for the purpose of or in relation to Esso undertakings under any
lease or licence or under any right of tenancy or occupancy, the Federal
Government shall be deemed to have become the lessee, licencee, occupant or tenant,
as the case may be, in respect of such property as if the lease, licencee,
right of occupancy or tenancy had been granted to the Federal Government and
thereupon all rights under such lease, licence, occupancy or tenancy, including
any right of renewal thereof, shall be deemed to have vested in the Federal
Government.
(5) The profit or loss
arising during the period between the first day.of January, 1976, until the
close of business on the day immediately preceding the commencing day out of
any business comprised in Esso undertakings shall be deemed to be the profit or
loss of the Federal Government and such profit or loss shall not be treated as
accruing or arising or as having been received, whether actually or nationally,
by Esso for any purpose including, the computation of Esso's taxable income for
the year 1976 or any other period for purposes of assessment of taxes and
surcharges thereon levied on or in relation to income, profits or gains.
5. Vesting in a
Government company.—(1)
The Federal Government may, by notification in the official Gazette, direct
that the Esso undertakings shall stand transferred to and vest in the
Government company on such day, not being a day earlier than the commencing
day, as may be specified in the notification.
(2) Where Esso undertakings
vest in the Government company under sub-section (1), the Government company
shall, on and from the day of such vesting, be deemed to have become the owner,
tenant, occupant, lessee or licence, as the case may be, in relation to Esso
undertakings, and all the rights and liabilities of the Federal Government in
relation to Esso undertakings shall, on and from the day of such vesting, be
deemed to have become the rights and liabilities, respectively, of the
Government company.
(3) Where Esso undertakings
vest in the Government company, under sub-section (1), all officers and
employees transferred to the Federal Government under sub-section (1) of
section 10 shall, on and from the day of such vesting, stand transferred to the
Government company, and the provisions of sub-sections (2), (3), (4) and (5) of
section 4, sections 6 and 7, subsection (5) of section 10 and sections 11, 12,
13, 15 and 17 shall apply to the Government company as they apply to the
Federal Government and, in the application of the said sections for the
purposes of this section, a reference to the Federal Government shall be
construed as a reference to the Government company.
6. Contracts.—(1) Every contract referred to in
sub-clause (vii) of clause (d) of section 2 and entered into by Esso for any
service, sale or supply in Pakistan or abroad and in force immediately before
the commencing day shall, unless terminated under sub-section (2) within one
year from the commencing day, continue to be of full force and effect against
or in favour of the Federal Government.
(2) The Federal Government
may, if it is satisfied that any contract referred to in sub-section (1) is
unduly onerous or is detrimental to the interests of the Federal Government, by
order in writing, either terminate such contract or make such alterations or
modifications therein as it may think fit:---
Provided that the Federal
Government shall not terminate any contract or make any alteration or
modification therein except after giving to the parties to the contract a
reasonable opportunity of being heard and except after recording its reasons
for such termination, alteration or modification, as the case may be.
7. Lease. On the expiry of the term of any
lease, licence or tenancy referred to in sub-section (4) of section 4, such
lease, licence or tenancy shall, if so desired by the Federal Government, be
renewed on the same terms and conditions on which the lease, licence or tenancy
was held by Esso immediately before the commencing day.
8. Re-organization of
Government company.—(1)
If the Esso undertakings are vested in a Government company under sub-section
(1) of section 5, the Federal Government may direct the Board of Management
constituted under the Marketing of Petroleum Products (Federal Control) Act,
1974 (XVII of 1974), to draw up a plan for the re-organization of the company
with a view to increasing its efficiency and rationalising its operations,
hereafter in this section referred to as the re-organization plan.
(2) The re-organization
plan may include provision for amalgamation of the Government company with any
one or more managed companies under the Marketing of Petroleum Products
(Federal Control) Act, 1974 (XVII of 1974), and may provide for a scheme for
the re-construction of the Government company or such company or companies or
amalgamation of the Government company with any one or more such company or
companies and such scheme may provide for all or any of the matters contained
in section 153 or section 153B of the Companies Act, 1913 (VII of 1913), or for
alteration of share capital or loan structure and alteration of existing, or
adoption of fresh, memorandum or articles of association of such companies.
(3) The re-organization
plan shall be submitted to the Federal Government for approval and shall be
simultaneously published in the official Gazette accompanied by a certified
statement showing the value of the holdings of the shares of the Federal
Government in the companies covered by the plan on the date of the submission
of the plan, and, from the date of such submission, dealings in shares of the
companies covered by the plan in any of the stock exchanges shall remain
suspended until the Federal Government has approved the re-organization plan.
(4) The re-organization
plan shall be implemented and shall take effect in such manner and at such,
time and with such modification as may be approved by the Federal Government.
9. Payment. The Federal Government shall pay
Esso for Esso undertakings on the commencing day the sum set forth in the
Agreement dated the fifteenth day of September, 1976, between the President of
Pakistan and Esso, and such payment shall be made in the currencies and in the
manner provided in the said Agreement.
10. Provisions relating
to officers and other employees of Esso undertakings.—(1) Except as otherwise agreed between
the Federal Government and Esso, every whole-time officer or other employee of
Esso who was, immediately before the commencing day, employed by Esso in
Pakistan in connection with Esso undertakings, and every such whole-time
officer or other employee of Esso in Pakistan who was, immediately before the
commencing day, temporarily holding any assignment outside Pakistan, shall, on
the commencing day, become an officer or other employee, as the case may be, of
the Federal Government and shall hold office on the same terms and conditions
and with the same rights to pension, gratuity and other matters as would have
been admissible to him if this Act had not come into force and shall continue
to do so unless and until his employment by the Federal Government is
terminated or until his remuneration and conditions of service are altered by
the Federal Government.
(2) Any officer or employee
who becomes an officer or employee of the Government company under sub-section
(3) of section 5 may be transferred by the Federal Government to any other
corporation, company or industrial unit controlled by it, and shall hold office
therein on such terms and conditions as are not less favourable than those to
which he was entitled immediately before such transfer.
(3) Any officer or employee
who becomes an officer or employee of the Government company under sub-section
(3) of section 5 or is transferred under sub-section (2) shall not be entitled
to any compensation or to the designation which he was holding immediately
before the commencing day or on the date of such transfer, as the case may be,'
and no claim for such compensation or designation shall be entertained by any
court, tribunal or other authority.
(4) Notwithstanding
anything contained in any agreement or any law for the time being in force, and
notwithstanding any decree, order, award or direction of any court, tribunal,
arbitrator, commission or other authority, the transfer of the services of any
officer or other employee under sub-section (1) shall not entitle any such
officer or other employee to any payment, whether by way of separation
benefits, compensation, gratuity or otherwise, by reason only of his ceasing to
be an employee of Esso, and no proceedings for the declaration, recognition,
quantification or enforcement of any such entitlement or payment, whether filed
before, on or after the commencing day, shall be adjudicated upon or otherwise
entertained by any court, tribunal, arbitrator, commission or other authority.
(5) Where any officers or
employees have become officers or employees of the Federal Government under
sub-section (1), the Federal Government may, for the purpose of rationalising
the pay scales of such officers or employees or for any other good and adequate
reason, alter the terms and conditions of service of such officers or employees
as to their remuneration in such manner as it thinks fit; and if the alteration
thus made is not accepted in writing by the officer or employee concerned
within such period as may be specified, which period shall not be less than
thirty days, he shall be deemed to have resigned from service on the expiry of
such period, and notwithstanding anything contained in any other law, or in any
agreement or in any decree, order, award, or directions of any Court,
arbitrator, Commission or other authority, or in any conditions of service, he
shall only be entitled to benefits payable on resignation and not termination
of employment.
(6) Where any question
arises as to whether any person was immediately before the commencing day a
permanent officer or other employee of Esso for the purpose of or in relation
to Esso undertakings, the question shall be referred to the Federal Government whose
decision thereon shall be final.
11. Provident Fund.-(1) The moneys and investments in the
provident fund established by Esso for the benefit of the persons employed by
it in Pakistan shall, on the commencing day, stand transferred to and vest in
the Federal Government free from any trust that may have been constituted by
Esso in respect thereof, and the trustees of the provident fund shall, as from
the commencing day, stand discharged from the trust, expect as respects things
done or omitted to be done before the commencing day.
(2) The Federal Government
shall cause the firm of chartered accountants in Pakistan agreed with Esso to
determine as of the day immediately preceding the commencing day the
contributions to the provident fund of such officers and other employees of
Esso as are excepted under sub-section (1) of section 10 by agreement between
the Federal Government and Esso and the contributions of Esso to the provident
fund in respect of such officers and employees, and the interest due on all
such contributions, and within thirty days of the commencing day the Federal
Government shall,---
(a) pay to the new trustees of the provident fund to be
appointed ]by Esso the amount of all such contributions and interest; and
(b) pay and transfer the balance of the moneys
and investment then remaining to the trustees of the trust or trusts referred
to in sub-section (3).
(3) The Federal Government
shall, as soon as may be after the commencing day, constitute, in respect of
the balance of moneys and investments referred to in clause (b) of sub-section
(2) one or more trusts having such objects as in the circumstances may be
practicable so, however, that the rights and interests of the beneficiaries
under the trust created by Esso are not in any way prejudiced or diminished:---
Provided that the Federal
Government may not constitute any new trust if a suitable trust already exists
for the benefit of the officers and employees for whose benefit a trust is to
be created and may transfer the balance of the said moneys and investments to
the existing trust.
(4) The Federal Government
may, by order, vest in the trustees of the trust or trusts referred to in
sub-section (3) all collateral securities assigned to the trustees of the
provident fund mentioned in sub-section (1) by officers or employees whose
services stand transferred to the Federal Government under subsection (1) of
section 10.
12. Delivery of
possession of vested property.—(1) Where any property or other assets stand transferred to and
vested in the Federal Government under this Act, every person in whose possession,
custody or control any such property or assets (including books, documents, or
other papers relating to Esso undertakings) may be, shall be liable to account
for such property or assets and shall deliver the same to the Federal
Government upon demand.
(2) Without prejudice to
the provisions of sub-section (1), the Federal Government may take all such
steps as may be necessary to take possession or assume control of the
properties, assets, books, documents and other papers referred to in that
sub-section.
13. Penalty. Any person who,---
(a) wrongfully obtains possession of, or
retains, or having in his possession, custody or control, wrongfully withholds,
any property or other assets transferred to and vested in the Federal
Government under this Act; or
(b) having in his possession, custody or
control any book, register, document or other papers relating to Esso
undertakings, wilfully withholds or fails to furnish or deliver the same to the
Federal Government,
shall he punishable with imprisonment for
a term which may extend to five years, or with fine which may extend to
fifty-thousand rupees, or with both.
14. Offences by
companies. Where an
offence under this Act has been committed by a company, every person who, at
the time the offence was committed was in charge of, and was responsible to,
the company for the conduct of its business, as well as the company, shall be
deemed to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly:---
Provided that nothing
contained in this section shall render any such person liable to any
punishment, if he proves that the offence was committed without his knowledge
or that he had exercised all due diligence to prevent the commission of such
offence.
15. Protection of action
taken in good faith. No
suit prosecution or other legal proceeding shall lie against the Federal
Government or any person for any thing which is in good faith done or intended
to be done under this Act.
16. Cognizance of
offences. Notwithstanding
anything contained in the Code of Criminal Procedure, 1898 (Act of 1898), no court shall take cognizance of any offence
under this Act except on a complaint in writing made by or under the authority
of the Federal Government.
17. Savings.—(1) Nothing contained in this Act shall
affect any undertaking or business of Esso in connection with the exploration
of petroleum, the production, refining, treating and transportation of natural
gas and crude oil, and the purchase, distribution, marketing and selling of
natural gas and crude oil.
(2) In particular, and
without prejudice to the generality of the provisions of sub-section (1),
nothing contained in this Act shall affect,---
(a) any share held by Esso in the equity capital of the Pakistan
Refinery, or any deed, bond, agreement other than the Agreements referred to in
sub-clause (vii) of clause (d) of section 2, power-of-attorney, proxy, grant of
legal representation or other instrument of whatever nature pertaining to the
Pakistan Refinery, including specifically but without limitation the agreement
entitled “Refinery Agreement” between the President of Pakistan, the Burmah Oil
Company Limited, California Texas Oil Corporation, the Shell Petroleum Company
Limited and Esso under its former name of Standard-Vacuum Oil Company, as
supplemented by the Refinery letter Agreements Nos. 1,2 and 3 and by the Tanker
Letter Agreement, all dated the 28th November, 1959, and by the Ministry of
Industries and Natural Resources, Government of Pakistan, letter No. P-III-1
(49)61, dated the 9th November, 1962, and the agreement between the Government
of Pakistan and the parties to the Refinery Agreement, including the Pakistan
Refinery, dated the 21st November, 1975;
(b) any part of the interest held by Esso in the Pak-Stanvac
Petroleum Project, in any licence or lease issued pursuant thereto or in any
asset belonging to or held for the benefit of the participants in the
Pak-Stanvac Petroleum Project;
(c) the assets identified in
the second Schedule to the Agreement referred to in section 9;
(d) any contracts, agreements, assets, rights, powers,
authorities and privileges, or any property movable or immovable, book-debts,
cash balances, reserves, provisions or investments pertaining to any
undertaking or business mentioned in sub-section (1), or any other rights and
interest in or arising out of such property, as are in the ownership,
possession, power or control of Esso;
(e) any books of account, registers, records or.any other
documents of whatever nature pertaining to any undertaking or business
mentioned in sub-section (1);
(f) any liability of Esso for taxes and duties payable in
relation to production, sale, import, export or other dealings pertaining to
any undertaking or business mentioned in sub-section (1), or any entitlement of
Esso to credit for or refund of payments made for or in respect of any such
liability;
(g) any liability of Esso for payment of annuities pensions,
gratuities or other separation benefits to such officers and employees of Esso
as are excepted under sub-section (1) of section 10 by agreement between the
Federal Government and Esso, or any liability or entitlement of Esso for sums
payable to or receivable from such officers and employees;
(h) any other liability, indebtedness or obligation of Esso of
whatever kind pertaining to any undertaking or business mentioned in
sub-section (1);
(i) the claim or entitlement, if any, of Esso
to payment out of the moneys declared and paid to the Administrator under the
Abandoned Properties and Management Act, 1975 (XX of 1975), by the trustees of the provident fund
established by Esso for the benefit of its employees;
(j) ny suit, application or other legal
proceeding instituted against Esso relating to the inland mechanically
propelled vessel M.V Esso Ark registered in the territories which immediately
before the sixteenth day of December, 1971, constituted the Province of East
Pakistan;
(k) ny provisions or allocations of money made in the accounts
of the Esso branch in Pakistan for liabilities accrued or accruing in respect
of any period preceding the commencing day on account of—
(i) any
liability indebtedness or obligations of the kind mentioned in clause (£), (g),
or (h) or sub-clause (5) of clause (d) of section 2; or
(ii) any profits arising from any undertakings or business
mentioned in sub-section (1).
(3) The payment of the
amount determined in accordance with section 9 to Esso for Esso undertakings
shall not release the Federal Government from payment to Esso, or release Esso
from payment to the Federal Government, of the net amount of the accounts pertaining
to Esso undertakings,---
(i) for
sums payable to and receivable from the Esso branch in Pakistan from and to
Esso abroad and Esso affiliates (that is Exxon Corporation or any company of
which Exxon Corporation controls directly or indirectly, fifty per cent or more
of the voting shares) with respect to products and services; and
(ii) or
sums payable to and receivable from Esso undertakings from and to the other
business and undertakings of Esso in
18. Removal of doubts.—(1) For the removal of doubts, it is
hereby declared that the provisions of section 4 shall apply to the extent to
which any property appertains to the Esso undertakings and to the rights,
powers, debts, liabilities and obligations of Esso comprised in Esso
undertakings referred to in clause (d) of section 2, and to contracts,
agreements and other instruments made by Esso in Pakistan in relation to Esso
undertakings, and to legal proceedings relating to those matters pending in any
court or tribunal in Pakistan.
(2) If any question arises,
otherwise than as between the Federal Government or the Government company and
Esso or between Esso and any other persons, as to whether any property in
Pakistan appertains, on the commencing day, to Esso undertakings, or whether
any leases, licences, rights, powers, debts, liabilities or obligations were
vested under this Act or whether any contract, agreement or other instrument was
made by Esso for the purposes of Esso undertakings, or whether any documents
relate to those purposes, the question shall be referred to the Federal
Government which shall, after giving an opportunity of being heard to the
persons interested in the matter, decide it in such manner as it may think fit.
19. Power to make rules. The Federal Government may, by
notification in the official Gazette, make rules for carrying out the purposes
of this Act.
20. Power to remove
difficulties. If any
difficulty arises in giving effect to the provisions or carrying out the
purposes of this Act, the Federal Government may make such orders as it may
consider necessary to remove the difficulty:---
Provided that no such power
shall be exercised after the expiry of one year from the commencement of this
Act.
21. [Repeal.] Omitted by
the Federal Laws (Revision and Declaration) Ordinance, 1981 (XXVIIof 1981), s.
3 and Sch., 11.
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