REGISTERED D, 221

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No.

21]

NEW DELHI, THURSDAY, APRIL 28, 1966/VAISAKHA 8,1888

Separate paging is given to this Part in order that it may be filed

as a separate compilation.

LOK SABHA

The following Bill was introduced in Lok Sabha

on the 28th

April, 1966:—

BILL NO. 33 OF 1986

A bill to implement the international agreement for the establish-

ment and operation of the Asian Development Bank and for

matters connected therewith.

BE it enacted by Parliament in the Seventeenth Year of the

'Republic of India as follows: —

1. (1) This Act may be called the Asian Development Bank Act,

1966.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Govern-

ment may, by notification in the Official Gazette, appoint.

Short

title,

extent

and

commence-

ment

(277)

278

THE GAZETTE OF INDIA EXTRAOEDINARY

[FAHT II

Definition*.

2. In this Act, unless the context otherwise requires,—

(a) "Agreement" means the Agreement for the establish-

ment and operation of the international body known as the Asian

Development Bank;

(b) "Bank" means the Asian Development Bank established *

under the Agreement.

Payments

to Bank.

3. (1) There shall be paid out of the Consolidated Fund of India,

after due appropriation made by Parliament by law In this behalf,

all such sums as may, from time to time, be required for the purpose

of paying,—

(a) the subscriptions payable by the Central Government

to the Bank under paraprronhs 1, 2 and 3 of Article 5 of tho

Agreement;

(b) any commission, fcos or other rharjfes payable bv the

Central Government to the Bank under Article 16 of the Agree- 15

ment;

Government to the

Bunk under paragraph 1 of Article 25 of the Agreement.

(2) The Central Government may, if it thinks fit so to do, create

and issue to the Bank, in such form as it thinks fit, any such non-

interest bearing and non-ncgotiahle nnt*»s or other obligations ni arc

provided for by paragraph 3 of Article fi of the Agreement.

Rticrve

Bank to

tit deposi

tory for

Bank.

4. The Reserve Bank of India shall be the depository of the Indian

currency holdings of the Bank.

Confermn

rtatui

and

certain

lmmunltlaf,

exemption!

and pri-

vileges on

Bank

and confari

ment of

certain

immunities,

exemptions

and privi-

leges on

Its

officer j

«nd em-

ployees.

5. (1) Notwithstanding anything to thr contrary contained in anv²*

other law, the provisions of tho Agreement set out in the Schedule

shall have the force of law in India:

Provided that nothing in Article 5C of the Agreement shall be

construed as—

(a) entitling the Bank to import into India goods free of any 3°

duty of customs without any restriction on their subsequent sale

therein; or

(b) conferring on the Bank any exemption from duties or

taxes which form part of the price of goods sold; or

taxes which are in fact no more than

charges for

services

rendered.

SE- 2]

THE GAZETTE OF INDIA EXTRAORDINARY

279

(2) The Central Government may, by notification in the Official

Gazette, amend the Schedule in conformity with any amendments,

duly made and adopted, of the provisions of the Agreement set out

therein.

6. The Central Government may, by notification in the Official

Gazette, make rules for carrying out the purposes of this Act.

7. Every notification issued under sub-section (2) of section 5 and

every rule made under section 6 shall be laid as soon as may be aitei

it is issued or made before each House of Parliament while it is in

10 session for a total period of thirty days, which may be comprised in

one session or in two successive sessions, and if, before the expiry

of the session in which it is so laid or the session immediately follow-

ing, both Houses agree in making any modification in the notification

or, as the case may be, in the rule, or both Houses agree that the

15 notification or rulp should not be issued or made, the notification or

rule shall thereafter have effect only in such modified form or be of

no effect, as the case may be; so, however, that any such modifica-

tion or annulment shall be without prejudice to the validity of any.

thing previously done under that notification or rule.

Power

to maka

rules.

Notiflci-

tionj

issued

under

section

S and

rule* mad*

under sec-

tion 6 to

be laid

befor*

ParliuQMM

2¹8Q

I'HE GAZETTE OF INDIA EXTRAORDINARY

[PAST II

THE SCHEDULE

(See section 5)

PROVISIONS OF THE AGREEMENT WHICH SHALL HAVE

FORCE OF LAW

CHAPTER VIII

STATUS, IMMUNITIES, EXEMPTIONS AND PRIVILEGES

ARTICLE 48

PURPOSE OF CHAPTER

To enable the Bank effectively to fulfil its purpose and carry out

the functions entrusted to it, the status, immunities, exemptions and io

privileges set forth in this Chapter shall be accorded to the Bank in

the territory of e»ch member.

ARTICLE 49

LEGAL STATUS

The Bank shall possess full juridical personality and, in particular, 15

lull capacity:

(i) to contract;

(ii) to acquire, and dispose of, immovable and

movable

property; tnd

(tit) to institute legal proceedings.

ARTICLE 50

IMMUNITY FROM JUDICIAL PROCEEDINGS

1. The Bank shall enjoy immunity from

every form of legal

process, except in cases arising out of or in connexion with the exer-

ciie of its powers to borrow money, to guarantee obligations, or to 25

buy and sell or underwrite the sale of securities, in which cases

actions may be brought against the Bank in a court of competent

jurisdiction in the territory of a country in which the Bank has its

principal or a branch office, or has appointed an agent for the purpose

SEC. 2 ]

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3^8l

of accepting service or notice of process, or has issued or guaranteed

securities.

2. Notwithstanding the provisions of paragraph 1 of this Article,

no action shall be brought against the Bank by any member, or by

5 any agency or instrumentality of a member, or by any entity or

person directly or indirectly acting for or deriving claims from a

member or from any agency or instrumentality of a member. Mem-

bers shall have recourse to such special procedures for the settlement

of controversies between the Bank and its members as may be pres-

10 cribed in this Agreement, in the by-laws and regulations of the Bank,

or in contracts entered into with the Bank.

3. Property and assets of the Bank shall, wheresoever located and

by whomsoever held, be immune from all forms of seizure, attach-

ment or execution before the delivery of final judgment against the

15 Bank.

ARTICLE 51

IMMUNITY OF ASSETS

Property and assets of the Bank, wheresoever located and by

whomsoever held, shall be immune from search, requisition, confls-

3 0^{cation, expropriation or any other form of taking or foreclosure by}

executive or legislative action.

ARTICLE 52

IMMUNITY OP ARCHIVES

The archives of the Bank and, in general, all documents belong-

3 ^{, ing to it, or held by it, shall be inviolable, wherever located.}

ARTICLE 53

FREEDOM OP ASSETS FROM RESTRICTIONS

To the extent necessary to carry out the purpose and functions of

the Bank effectively, and subject to the provisions of this Agreement,

30 all property and assets of the Bank shall be free from restrictions,

regulations, controls and moratoria of any nature.

a82

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[PAHT II

ARTICLE 54

PRIVILEGE FOR COMMUNICATIONS

Official communications of the Bank shall be accorded by each

member treatment not less favourable than that it accords to

the

official communications of any other member.

ARTICLE 55

IMMUNITIES AND PRIVILEGES OF BANK PERSONNEL

All Governors, Directors, alternates, officers and employees of the

Bank, including experts performing missions for the Bank:

(i) shall be immune from legal process with respect to acts 10

performed by them in their offic/al capacity, except when the

Bank waives the immunity;

(ii) where they are not local citizens or nationals, shall b«

accorded the same immunities from immigration

restrictions,

alien registration requirements and national service obligations,

and the same facilities as regards exchange regulations, as are

accorded by members to the representatives, officials and em-

ployees of comparable rank of other members; and

(Hi) shall be granted the same treatment in respect of travel-

ling facilities as is accorded by

members to representativtf, 20

officials and employees of comparable rank of other memberi.

ARTICLE 56

EXEMPTION FROM TAXATION

1. The. Bank, its assets, property, income and its operation! and

transactions, shall be exempt from all taxation and from all cuitom*²5

duties. The Bank shall also be exempt from any obligation for th«

payment, withholding or collection of any tax or duty.

2. No tax shall be levied on or in respect of salaries and emolu-

ments paid by the Bank to Directors, alternates, officers or employeys

of the Bank, including experts performing missions for the Bank, 30

except where a member deposits with its instrument of ratification

or acceptance a declaration that such member retains for itself and

its political sub-divisions the right to tax salaries and emolument!

paid by the Bank to citizens or nationals of such member.

SEC. 2 ]

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283

3. No tax of any kind shall be levied on any obligation or security

issued by the Bank, including any dividend or interest thereon, by

whomsoever held:

(i) which discriminates against such obligation or security

solely because it is issued by the Bank; or

(ii) if the sole jurisdietional basis for such taxation Is the

place or currency in which it is issued, made payable or paid,

or the location of any office or place of business maintained by

the Bank.

4. No tax of any kind shall be levied on any obligation or security

guaranteed by the Bank, including any dividend or interest thereon,

by whomsoever held:

(i) which discriminates against such obligation or security

solely because it is guaranteed by the Bank; or

(ii) if the sole jurisdictional basis for such taxation is the

location of any office or place of business maintained by the

Bank.

ARTICLE 58

2«

WAIVER OF IMMUNITIES, EXEMPTIONS AND PRIVILEGES

The Bank at its discretion may waive any »f the privileges, immu-

nities and exemptions conferred under this Chapter in any case or

instance, in such manner and upon such conditions &* it may deter-

tnine to be appropriate in the best interests of tb*: Bank.

284

T H E GAZETTE OF INDIA EXTRAORDINARY

[PART II

STATEMENT OP OBJECTS AND REASONS

Tn pursuance of an International Agreement to which India will

be a signatory, a new financial institution called the Asian Develop-

ment Bank is being

established for

accelerating the

economic

development of Asia and the Far East. Chapter VIII of the Articles

of Agreement provides for the granting to the Bank and its officers

and employees certain status, immunities, exemptions and privileges

in the territory of each member country. Article 57 of the Agree-

ment stipulates that each member country, in accordance with Its

juridical system, shall promptly take such action as is necessary

to make effective in its own territory, the provisions set forth

in Chapter VIII of the Agreement. By this Bill, it is proposed to

enact the necessary legislation to give effect to the provisions of the

said Chapter VIII of the Articles of Agreement. Provision has also

been made in the Bill empowering the Central Government to make

payments to the Bank towards subscriptions, fees and other charge?

and for matters connected therewith.

SACHINDRA CHAUDHURI.

NEW DELHI;

The 16th, April, 1966.

PRESIDENT'S RECOMMENDATIONS UNDER ARTICLES 117

AND 274 OF THE CONSTITUTION OF INDIA

[Copy of Letter No. 2(39)/66-FBT, dated the 16th April. 1966 from

Shri Sachindra Chaudhuri, Minister of Finance to the Secretary,

Lok Sabha.],

The President having been informed of the subject matter of the

proposed Bill to implement the international agreement for the

establishment and operation of the As'an Development Bank in so

far as it relates to the status, immunities, exemptions and privileges

of the Asian Development Bank, and for matters connected there-

with, recommend- the introduction of the Bill in the Lok Sabha as

required under articles 117(1), 117(3) and 274(1) of the Constitution

qi India,

SBC. 2 ]

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285

FINANCIAL MEMORANDUM

India has been allotted a share of $93 million (Rs. 44-29 crorea)

in the total capital stock of $1,000 million of the Asian Development

Bank and is the second largest Asian Contributor to the capital of

the Bank.

2. Under Article 5(1) of the Articles of Agreement of the Bank,

only half of each member's capital subscription will be initially pay-

able and the other half shall be subject to calls only as and when

required by the Bank to meet its obligations on borrowings of funds

for making or participating in direct loans or for guaranteeing loans

for economic development- The payment of the paid-in-capital is

to be made, under Article 6 of the Agreement, in five equal annual

instalments, the first of such instalments being payable within 30

days after the entry into force of the Articles of Agreement or on

or before the date of deposit of its instrument of ratification by the

member, whichever is later.

3. The Agreement is likely to be entered into force shortly, and

on this basis, India's payments towards the capital subscription of

the Bank are expected to be phased as shown below:—

Amount

(U.S. $ million)

Foreign

Exchange

4 65

4-65

465

4 65

23 25

Indian

Rupees

4 65

4'65

4 65

4-65

23 25

Total

9 3

9-3

9 3

4 ⁶5

Likely dates

of payment

June-July, 1966

July, 1967

July, 1968

July, 1969

July, 1970

286

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[PAST II

The remaining amount of $46" 5 million will be payable as and

when called-up by the Bank for meeting its obligations referred to

above.

4. Article 5 of the Agreement also provides that the capital stock

of the Bank shall be reviewed at intervals of not less than five years.

The earliest of such a review will therefore take place in 1971. If

and when such a review leads to an increase in the Bank's capital

stock, each member shall be given an opportunity to subscribe to a

proportion of the increase in the Bank's capital stock. Any payments

that may have to be made by India on account of such an increase,

cannot be foreseen at this stage and will in any case be at her

own option.

SEC. 2 J

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287

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 5 (2) of the Bill confers power on the Central Government

to amend the Schedule in conformity with any amendments, duly

made and adopted, of the provisions of the Agreement set out therein

2. Clause 6 of the Bill confers power upon the Central Govern-

ment to make rules for carrying out the purposes of the Act. The

immunities, exemptions and privileges of the Asian Development

Bank and its officials and employees having been specified in the

Schedule to the Bill, occasions for making rules, if any, will be few

and far between. The Asian Bank has not yet started its functions.

It is not possible, therefore, to envisage at this stage the matters

which may have to be provided for by rules. But as the immunities,

exemptions and privileges have been specified in the Bill, it is clear

that rules, if any, will be confined to matters of procedure and other

matters of minor detail relating to the enjoyment of those immuni-

ties, exemptions and privileges and their waiver. For instance, if

the Bank decides to waive any of the immunities, exemptiona or

privileges, a rule may be necessary prescribing the manner in which

and the officer of the Government to whom such waiver should be

communicated.

3- The delegation of legislative

power is thus

of a

normal

character.

S. L. SHAKDHER,

Secretary.

PRINTKD IN INDIA BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS

NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI, 1966.