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REGISTERED No. D 221

The Gazette of India

EXTRAORDINARY

PART II—Section 3—Sub-section (i)

PUBLISHED BY AUTHORITY

No. 279] NEW DELHI, THURSDAY, NOVEMBER 16, 1972/KARTIKA 25, 1894

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

as a separate compilation

MINISTRY OF FINANCE

(Department of Revenue and Insurance)

NOTIFICATION

New Delhi, the 16th November 1972

G.S.R. 461 (E). In exercise of the powers conferred by section 16 of the General Insurance (Emergency Provisions) Act, 1971 (17 of 1971), the Central Government hereby makes the following rules further to amend the General Insurance (Emergency Provisions) Rules, 1971, namely:-—

1. (1) These rules may be called the General Insurance (Emergency Provisions) Third Amendment Rules, 1972.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the General Insurance (Emergency Provisions) Rules, 1971 (hereinafter referred to as the said rules), in sub-rule (1) of rule 1, for the figures "1971", the figures "1972" shall be substituted.

2117 )

,'i For rule 3 of the said ru.es, the following rule shall besubstituted.namely:—

"3. Compensation how to be dealt with.—(1) The compensation payable under section 6 oi' the said Act, in respect of the vesting in the Central Government of the management oi the undertaking of an insurer who is an Indian insurance company as defined in section ',} of the General Insurance Business (Nationalisa- tion) Act, 1972 (57 of 1972) (hereinafter referred to as the Nationalisation Actj. up to the day appointed by the Central Government under clause (b) of section 3 of the Nationalisation Act (hereinafter referred to as the nationalisation day) shall be dealt with by the insurer in the following manner, namely:—

(a) Seventy per cent of every such payment of compensation, received by the insurer before the nationalisation day sha.l be held oy him in a separate deposit with a Scheduled Bank, Nationalised Bank or any branch of the State Bank of India for a period expiring not earlier than the nationalisation day as security for the liability of the insurer in respect of income-tax and any other tuxes or dues under any law tor the time being in force which trie insurer would be liable to pay on such compensation, and the remaining thirty per cent of such payment received by the insurer before the nationalisation day may, after meet- Ing the expenses incurred in the discharge oi the corporate functions of the Insurer, be distributed in such manner as the shareholders may decide at a general meeting held before the nationalisation day.

(b) The insurer shall on the nationaisation day open in his books of account a separate account, to be called the "Former Shareholders' Fund" (hereinafter referred to as the Fund) and credit that Fund with the amount of seventy per cent of the compensation kept in deposit in accordance with clause (a), together with interest which has accrued up to the nationalisation day, and also credit that Fund with the balance, if any, left out of the amount of thirty par cent of the compensation received by the Insurer before that day,

(c) The compensation which may be received by the insurer on or after the nationalisation day shall be credited to the Fund.

(d) The insurer shall invest the Fund separately and keep an account of the investments thereof, and credit the Fund with the income earned on the invest- ments of the Fund from time to time.

(e) The insurer shall draw on the Fund for meeting the expenses incurred in connection with the Fund and lor discharging the "lability for income-tax and any oth^r taxes or dues under any law for the time being in force in respect of the compensation received by the insurer from time to time and in respect of the other receipts of the Fund:

Provided that in case the shareholders decide at a general meeting held before the nationalisation day to appoint a committee, by whatever name called, consisting of shareholders or Directors for the time being, or both, to look after the rights and interests of the shareholders in relation to the compensation, and the com- mittee al any time requests the insurer that he may represent against any tax which rnay be levied on the compensation or on the other receipts of the Fund, whether in the original assessment proceedings, or in any proceedings by way of appeal, revision or reference, the insurer shall make such representation provided there is sufficient amount available in the Fund for the purpose and the expenses incurred in respect of such representation shall be met out of the Fund.

(1) After the insurer has met out of the Fund all the expenses in connectioi with the Fund and has fully discharged the liability for income-tax and any other taxes or dues under any law lor the time being in force in respect of the com- pensation received by him from time to time and in respect of the other receipts of the Fund the insurer shall distribute thu balance if any of the Fund amonjc the shareholders on the register immediately before the nationalisation day In the prouoitlon of the amount paid up on the shares held bv them, so, howeve; thnt the amount in respect nf each share shall be in whole paise:

Provided thnt if the shareholders have at a general meeting held before the nationalisation day decide,! that the balance so distributed shall be in such multi-

pies of paise as are specified in the relevant resolution, and that t^e residue of the Fund after the distribution* made in accordance with the resolution should be disposed of in the manne: which the shareholders or the committee, if any, appointed by them for this purpose, may indicate to the insurer, the distribution shall be made by the insurer accordingly:

Provided further that the insurer may, from time to time, distribute out of the Fund among the shareholders, on the register imemdiately before the nationalisa- tion day such amounts as, in his view, do not require to be reserved for meeting the liabilities and the expenses of the Fund.

(2) The compensation payable under section 6 of the said Act, in respect of the vesting in the Central Government of the management of the undertaking of an insurer, other than an Indian insurance company or a foreign insurer as defined in section 3 of the Nationalisation Act, up to the nationalisation day shall be dealt with in the same manner as the amount referred to In section 11 of the Nationalisation Act is dealt with in the case of such insurer."

4. The Schedule appended to the said rules shall be omitted.

[No, F.63(48)-Ins.I/71.1

A. RAJAGOPPALAN,

Officer on Special Duty and Ex-officio Addl.

PRfNTrED BY THE GENERM. MANAGER. GOVERNMENT OF INDIA PRESS. MINTO ROAD, N 1W DELHI AND PUBLISHED BY THE MANAGER OP PUBLICATIONS, DELHI, 1972