The Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993

Summary of the Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993
Key Points Summary
1. Objective and Repeal: - Transfer Undertaking: From Oil and Natural Gas Commission (ONGC) to Oil and Natural Gas Corporation Limited.
• Repeal: Oil and Natural Gas Commission Act, 1959.
2. Commencement: - Effective Date: Deemed effective from 2nd July 1993.
3. Transfer Details: - Undertaking Transfer: Entire ONGC undertaking transfers to the Corporation, including assets, liabilities, rights, contracts, and proceedings.
• Appointed Day: Notification by the Central Government dictates the transfer date.
4. Consequences of Vesting: - Assets & Liabilities: Fully vested in the Corporation.
• Contracts & Proceedings: Continue uninterrupted with the Corporation as the party.
• Licences & Permits: Automatically granted to the Corporation.
• Tax Benefits: Continue as applicable to ONGC.
5. Employee Provisions: - Employment Continuity: ONGC employees under the transferred undertaking join the Corporation with same terms and conditions.
• Option to Opt Out: Within one year, with opting out deemed as resignation.
6. Governance and Legal Provisions: - Entry for Inspection: Corporation's right to inspect lands for oil/natural gas with compensation for damages.
• Rule Making: Authority vested in the Central Government.
• Repeal of Old Act: Effective on the appointed day.
7. Miscellaneous Provisions: - Guarantees: Continue for the Corporation.
• Employee Welfare: Schemes like pension and provident fund continue.
• No Compensation for Loss of Office: For ONGC's chairman and members.

Legislative History:

The Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993

Act Title The Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993

Act Number 54 of 1993

Act ID (India Code) 199354

Presidential Assent Date September 4, 1993

Enforcement Date February 1, 1994

Nodal Ministry Ministry of Petroleum and Natural Gas

Precedent & Historical Rationale

1. Shift Toward Corporate Autonomy and Global Competitiveness:

o Originally established as a statutory commission under the Oil and Natural Gas Commission Act, 1959, ONGC operated under rigid direct government control. In alignment with the economic liberalization policies of 1991, public sector enterprises required commercial flexibility, access to domestic and international capital markets, and operational autonomy.

2. Restructuring into a Public Limited Company:

o To enable the commission to raise equity from the public, dilute government shareholding, and function efficiently on market principles, the 1959 statutory Act had to be repealed and its entire undertaking legally transferred to a newly incorporated public limited company known as the Oil and Natural Gas Corporation Limited.

Parliamentary Trajectory & Enactment

• Formulation: Drafted by the Ministry of Petroleum and Natural Gas to facilitate the conversion of the statutory commission into a corporate entity registered under the Companies Act, 1956.

• Parliamentary Passage: Introduced, reviewed, and passed by both Houses of Parliament (Lok Sabha and Rajya Sabha) during the Monsoon Session of 1993.

• Presidential Assent: Received Presidential Assent on September 3, 1993.

• Enforcement: Enforced on February 1, 1994.

• Source: Official Records of Parliament, India Code, and Ministry of Petroleum and Natural Gas.