(1) The State Government may, if in its opinion public interest so require by order in writing, declare in respect of the undertaking of any licensee that it shall vest in the State Government on the date specified therein, such date not being earlier than four months from the date of the declaration :
Provided that the State Government may, from time to time, postpone such date, however that the postponed date shall not be later than one year from the originally fixed :
Provided further that except with the previous approval of the Government of India, no such declaration shall be made in respect of any undertaking which, with the consent of the Government of India, raised any loan or in respect of which a guarantee has been given by the Government of India and the loan or IV part thereof it still outstanding or the guarantee it still in operation at the one of making such declaration.
(2) Every order under sub-section (1) shall be served on the licensee in the prescribed manner and shall also be published in such manner as the State Government.
5. When an order under sub-section (1) of section 4 is made in respect of an undertaking of a licensee, all property belonging to such undertaking including assets, cash securities, investments, documents and the like and all its rights, liabilities and obligations as on the vesting date shall vest or shall be deemed have vested in the State Government, free from any debt, mortgage or similar obligations of the licensee or attaching to the undertaking :
Provided that any such debt, mortgage or similar obligations shall attach to the amount of compensation payable to the license under section 6 in substitution for the undertaking :
Provided further that liabilities and obligations not incurred in a bona-fide manner shall not vest in the State Government-
(i) in so far as they are in excess of the value on the vesting date of the corresponding assets, if any, vesting or deemed to have vested in the State Government ; or
(ii) where there are no corresponding assets which vest or are deemed to have vested in the State Government.
Explanation.-For the purposes of this section, “undertaking” includes every business carried on by the licensee, the funds of which form part of the funds of the licensee.