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REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No. 39] NEW DELHI, THURSDAY, AUGUST 2, 1984/SRAVANA 11, 1906

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

as a separate compilation

LOK SABHA

The following Bills were introduced in Lok Sabha on the 2nd August,

1984:—

BILL NO. 55 OF 1984

A Bill to provide for the establishment of the Industrial Reconstruction Bank of India, and for the transfer to, and vesting in, the ;said Recons- truction Bank, of the undertaking of the Corporation known as the Industrial Reconstruction Corporation of India Limited, with a view to enabling the said Reconstruction Bank to function as the principal credit and reconstruction agency for industrial revival and to co~ ordinate similar work of the other institutions engaged therein and to assist and promote industrial development, and to rehabilitate industrial concerns, and for matters connected therewith or inciden- tal thereto.

BE it enacted by Parliament in the Thirty-fifth Year of the Republic

of India as follows:—

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Industrial Reconstruction Bank

of India Act, 1984.

Short

title and

commen-

cement.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.

( 1)

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

Defini- tions,

(a) "appointed day", in relation to any provision of this Act, means the date on which such provision comes into force and any reference to the appointed day in any provision of this Act shall be construed as a reference to the commencement of that provision;

(b) "assistance" means any direct or indirect financial, manage- rial or technical assistance granted by the Reconstruction Bank in pursuance of any business referred to in section 18;

(c) "assisted industrial concern" means any industrial concern to which any assistance has been given by the Reconstruction Bank;

(d) "Board" means the Board of directors of the Reconstruction Bank;

(e) "charge" includes a charge referred to in section 37;

1 of 1966.

(/) "Corporation" means the Industrial Reconstruction Corpora- tion of India Limited, a company formed and registered under the Companies Act, 1956, and having its registered office in the State of West Bengal;

18 of 1964.

(g) "Development Bank'¹ means the Industrial Development Bank of India, established under section 3 of the Industrial Develop- ment Bank of India Act, 1964;

(h) "dues" means any dues payable by any person to the Re- > construction Bank in relation to any assistance given by, or any bond, or debenture issued to, the Reconstruction Bank, and Includes Interest, rent, costs, charges and commission payable in relation

thereto;

(i) "industrial concern"—

(I) means any concern engaged, dr to be engaged, in—

(i) the manufacture, preservation or processing of goods;

(n) shipping;

(in) mining;

(iv) the hotel industry; (u) the transport of passengers or goods by road or by water or by air or by ropeway or by lift;

(vi) the generation or distribution of electricity or any other form of power;

(vii) the maintenance, repair, testing or servicing of machinery of any description or vehicles or vessels or motor boats or trailers or tractors;

(vili) assembling, repairing or packing any article with the aid of machinery or power;

(ix) the development of any contiguous area of land as fin industrial estate;

(x) fishing or providing shore facilities for fishing or maintenance thereof;

(xi) providing special or technical knowledge or other services for the promotion of industrial growth; or

(xii) the research and development of any process or product in relation to any of the matters aforesaid,

(2) and includes—

(i) an undertaking owned,-controlled or managed by a company, firm or other body corporate, which is, or is to be, so engaged,

(u) such other concern as the Central Government may, by notification in the Official Gazette, specify in this behalf.

Explanation.—The expression "processing of goods" includes any art or process for producing, preparing or making an article by subjecting any material to a manual, mechanical, chemical, electrical or any other like operation;

(j) "nationalised bank" means a corresponding new bank as denned in section 2 of the—

(i) Banking Companies (Acquisition and Transfer of 5 of 1970.

Undertakings) Act, 1970;

(ii) Banking Companies (Acquisition and Transfer of 40 of 1980.

Undertakings) Act, 1980;

(k) "prescribed" means prescribed by rules made tinder this Act;

(I) "public financial'institution • means a puouc nnanciai institu- 1 of 10S6.

tion specified in, or under, section 4A of the Companies Act, 1956;

(m) "Reconstruction Bank" means the Industrial Reconstruction Bank of India, established under section 3;

(n) "regulation" means a regulation made under this Act;

(0) "Reserve Bank" means the Reserve Bank of India constituted 2 of 1034.

under section 3 of the Reserve Bank of India Act, 1934;

(p) ''share" means a share in the capital of the Corporation;

(q) "shareholder" means a person registered by the Corporation as the holder of a share;

(r) "scheduled bank" means a bank for the time being included 2 of 1934.

in the Second Schedule to the Reserve Bank of India Act, 1934;

(s) "State Bank" means the State Bank of India constituted 23 of 1955.

under section 3 of the State Bank of India Act, 1955;

(t) "State co-operative bank" means the principal co-operative society in a State, the primary object of which is the financing of other co-operative societies in the State;

43 of 1051.

(u) "State Financial Corporation" means a financial corporation established tinder section 3 or section 3A or an institution notified under section 46, of the State Financial Corporations Act, 1951;

(v) "State level uRCiicv" means such institution or apencv operating in any State or Union territory, as may be specified 03 its agency by the Reconstruction Bank.

CHAPTER II

ESTABLISHMENT OP THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA

3. (1) With effect from such date as the Central Government may, by notification In the Official Gazette, appoint, there shall be established, for the purposes of this Act, a corporation, to be known as the Industrial Reconstruction Bank of India.

Estab- lish- ment of the Be. construc- tion Sank.

(2) The Reconstruction Bank shall be a body corporate with the name aforesaid, having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, holtJ and dispose of property, and to contract, and may, by that name, sue and be sued.

(3) The head office of the Reconstruction Bank shall be at Calcutta, and the Reconstruction Bank may establish offices, branches or agencies at any other place, whether in, or outside, India.

4. (2), The authorised capital of the Reconstruction Bank shall be

rupees two hundred crores.

Authoris- ed capi- ta

(2) The Initial paid-up capital of the Reconstruction Bank shall be

nipees fifty] crores which shall be obtained,—

(a) by the appropriation, out of the assets of the Corporation which stand transferred to the Reconstruction Bank by virtue of the provisions of section u of a sum of rupees twenty crores, being an amount equal to the amount paid-up on the shares of the Cor- poration;

(b) by the conversion, to the extent of rupees twenty crores, of the loans granted by the Central Government to the Corporation, Into the capital of the Reconstruction Bank; and

(c) by the subscription, bv the Central Government, to the paid- up capital of the Reconstruction Bank, of a sum of rupees ten crores.

(3) The Reconstruction Bank may increase Its paid-up capital bv making further Issue of shares of such amount as it may think expedient, but in doing¹ so, the Reconstruction Bank shall ensure that its total capital does not, In any case, exceed its authorised capital-

(4) The entire paid-up capital of the Reconstruction Bank shall be

wholly subscribed by, and allotted to, the Central Government.

CHAPTER TTT

ACQUISITION AND TRANSFER OF THE UNDERTAKING OF THE INDUSTRIAL

RECONSTRUCTION CORPORATION OF INDIA LIMITED

Under-

5. (1) On such date 'as the Central Government may, by notification in the Official Gazette,-appoint, the undertaking of the Corporation shall stand transferred to, and shall vest in, the Reconstruction Bank.

(2) For the transfer to. and vesting In, the Reconstruction Bank of the undertaking of the Corporation, the Cornnration shall be given. In cash, by the Central Government an amount equal to the amount of the total paid-up capital of the Corporation.

taking of the Corpo- ration to betrnni- f erred to the Re- construc- tion Bank.

(3) The undertaking of the Corporation shall be deemed to inHude ell assets, business, rights, powers, authorities fin fac. 2] THE GAZETTE OF INDIA EXTRAORDINABY 5

perry, movable and immovable, cash balances, reserve funds, investments, book-debts and all other rights and interests in, or arising out of, such property as were, immediately before the appointed day, in the ownership, possession, power or conttol of the Corporation whether within or outside India, and all books of account, registers, records, and all other docu- ments of whatever nature relating thereto, and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting o£ the Corporation in relation to its undertaking.

Power of Central Govern- ment to authorlw a person to taktt over the manage, merit of the Corpo- ration.

1 of 1056.

I of 195$.

the appointment of the person under sub-section (1), shall be deemed to have vacated their offices as such.

(4) Notwithstanding anything contained in this Act or in any other law for the time being in force or in any agreement or contract, any person holding, immediately before the appointed day, office as the Chairman or director of the Corporation, who vacates his office as such on the ap- pointed day by reason of the provisions of Kulbt-scction) (3), shall not be entitled to any compensation from the Reconstruction Bank for the loss of office or for the premature termination of any agreement or contract relating to his employment, except such compensation or other benefit which the Reconstruction Bank may grant to him, having regard to what that person would have received as an officer of the Corporation if this Act had not been passed and if he had retired from his employment in the ordinary course.

Transfer of the services of the oflkerg and other employees of the Corpora- tion to the Re- construc-

1. (1) Save as otherwise provided in sub-section (3) of section 6, every officer or other employee of the Corporation shall become, on and from the appointed day, an -officer or other employee, as the case may be, of the Reconstruction Bank and shall hold his office or service in that bank on the same terms and conditions and with the same rights to gratuity and other matters as would have been admissible to him, if the undertaking of the Corporation had not been transferred to, and vested in, the Recons- truction Bank, and continue to do so unless and until his employment In the Reconstruction Bank is duly terminated or until his remuneration, terms and conditions are duly altered by the Reconstruction Bank:

tion Bank.

Provided that an officer or other employee who does not Intend to continue as an employee of the Reconstruction Bank may, within ninety days from the appointed day, serve a notice of his intention to the Re- construction Bank, and, on the expiry of the period of thirty days from the date of service of the notice, he shall cease to be an employee of the Reconstruction Bank and, on such cesser, superannuation and other benefits due to him under the terms oF his employment shall be paid to him forthwith by the Reconstruction Bank as if he had retired from service.

(2) Any person who, on the appointed day, is entitled to, or is in receipt of, any superannuation or compassionate allowance or benefit from the Corporation or any provident or other fund or anv authority adminis- tering such fund shall be entitled to be paid by. and to receive from, the Reconstruction Bank or any provident or other fund or anv authority ad- ministering such fund, tho same allowance or benefit so long as he observes the conditions on which the allowance or benefit was granted, and, if any question arises whether he has so observed such conditions, the question shall be determined by the Central Government and the decision of the Central Government thereon shall be final.

(3) Where, under the terms of any contract of service or otherwise, any person whose service becomes transferred to ihe Reconstruction Bank by reason of the provisions of this Act is entitled to any payment bv wav of gratuity or retirement benefit or compensation for any leave not availed of, or any other benefits, such person may enforce his claim n^ainst the Reconstruction Bank.

(4) Notwithstanding anything contained in Fub-rection {!) or sub- Bection (2), no application made or promotion, increment in salary, allow-

"nce or any oilier bcnelil granted to any person, oeiore xiie apponuwu u"^, which would not ordinarily have been made or granted or which would not ordinarily have been admissible under the rules or authorisation of the Corporation, or oi any provident or other fund in force prior to the appointed day, shall have cllcct ur be payable or claimable from the Reconstruction Bank or from any provident or other fund or from an authority administering such fund, unless the Central Government has, by general or special order, confirmed the appointment, promotion or incre- ment or has directed the continued grant of such allowance or other bene- fit, as the case may be.

14 of 1047

(5) Notwithstanding anything contained in the Industrial Disputes Act, 1947, or in any other law for the time being in force, the transfer of the services of any officer or other employee of the Corporation to the Re- construction Bank shall not entitle such officer or other employee to any compensation under that Act or other law, and no such claim shall be entertained by any court, tribunal or other authority.

(6) Where any person, Chairman, or other director, by whatever name called, or other employee of the Corporation has, before the appoint- ed day, J-ecn paid a sum by way of compensation or gratuity, the Re- construction Bank shall be entitled to claim refund of any sum so paid, if the payment is not confirmed by the Central Government by general or special order.

(7) Where one or more provident funds have been established, or maintained, by the Corporation or any other authority, for the benefit of its officers and other employees, the money debitable to the officers and other employees whose services have become transferred, by, or under this Act to the Reconstruction Bank, shall, out of the monies standing on the appointed day to the credit of such provident fund, stand transferred to, and vested in, the provident fund established by the Reconstruction Bank under section 62.

(5) Where superannuation, welfare and other funds have been established by the Corporation for the benefit of its officers or other employees \vhose services stand transferred to the Reconstruction Bank, the amount standing to the credit of such fund shall stand transferred, on the appointed day, to the Reconstruction Bank for distribution to the concerned officers or other employees in accordance with their rights and obligations.

Dissolll.. tJon of the Cor. poration, 8. (Z) As soon as realisation and distribution of the amount have been made under section 6, the person appointed under sub-section (2) of that section shall submit his duly audited account to the Central Govern- ment and shall apply to that Government for orders as to the dissolution of the Corporation.

(2) The Central Government shall, after hearing such person as it may think lit, and upon perusing the accounts so audited, if satisfied that the amount has been realised and distributed in accordance with the pro- visions of this Act, make an order that the Corporation is dissolved from the date of the order and the Corporation shall stand dissolved accord- ingly.

r

(3) A copy of the order made by the Central Government for the dissolution of the Corporation shall be filed by the Reconstruction Bank with the Registrar of Companies within thirty days from the date of such order, and the Registrar of Companies shall give effect to the said order as if it were an order made by the Court for the dissolution of the Corpora- tlon.

1 of 1956.

(4) The provisions of this section shall have effect, notwithstanding anything to the contrary contained in the Companies Act, 1956, or in any other law for the time being in force.

CHAPTER IV

MANAGEMENT OF THE RECONSTRUCHON BANK

Manage- ment.

9. (1) The general .superintendence, direction and management of the affairs and business of the Reconstruction Bank shall vest in a Board of directors which may exercise all powers and do all acts and things which may be exercised or done by the Reconstruction Bank.

(2) Save as otherwise provided in the regulations made under this Act, the Chairman shall also have powers of general superintendence, direction and management of the affairs and business of the Reconstruc- tion Bank and may also exercise all powers and do all acts and things which may be exercised or done by the Reconstruction Bajnk.

(3) Subject to the provisions of this Act, the Board, in discharging its functions, shall act on business principles with due regard to public interest.

(4) In the discharge of its functions under this Act, the Reconstruct tion Bank shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing, and if any dispute arises as to whether a question is or is not a question of such policy, the dispute shall be decided by the Central Government whose decision thereon shall be final.

10. (i) The Board shall consist of the following, namely: —

Board oi direc- tors.

(a) a Chairman, to be appointed by the Central Government, who shall function both as the Chairman and as the managing director;

(fa) a Deputy Governor of the Reserve Bank, to be nominated

by that Bank;

(c) a director, to be nominated by the Development Bank;

(d) not more than fifteen directors to be nominated by the

Central Government, of whom—

(i) three shall be officials of the Central Government,

(ii) not more than three shall be from the public financial

institutions,

(/") not more than five shall be from the State Bank,

nationalised banks and the State Financial' Corporations,

(r'v) not more than four shall be from among persons who have, in the opinion of the Central Government, special know* ledge of, and professional experience in, science, technology, eco- nomics, industry, industrial co-operatives, law, industrial finance, investment, accountancy, marketing or any other matter, the special knowledge of, or professional experience in, which would, in the opinion of the Central Government, be useful to the Reconstruction Bank.

(2) A director nominated under sub-section (1) shall hold officfi

Atting the pleasure of the authority nominating him.

11. No person shall be qualified to be a member of the Board M—

(a) he has been removed or dismissed from service of—

DjsqlMli-

ileatiotts

tit DWM-

benbip

of the

Board.

(i) Government, or (it) Reserve Bank, State Bank or any other bank, or

(Hi) any public financial institution or State financial eor- poration, or

(iv) any other corporation owned or controlled by Govarn- ment,

on a charge of corruption or bribery; or

(b) he is, or at any time has been, adjudicated an Insolvent or has suspended payment of his debts or has compounded with his creditors; or

(c) he is a lunatic and stands so declared by a competent court;

or

(d) he is or has been convicted of any offence, which, in the opinion of the Central Government, involves moral turpitude.

12. (1) The Chairman shall hold office for such term not exceeding five years as the Central Government may specify in this behalf and any person so appointed shall be eligible for re-appointment for a like term.

(2) Notwithstanding anything contained in sub-section (1),—

T"rmof

offlc*.

NkUriM

andaUow-

MKMO(

OulnOaa.

(a) the Central Government shall have the right to terminate the term of office of the Chairman at any time before the expiry of the term specified under sub-section (1) by giving him notice of not less than three months In writing or three months' salary and allow- ances In lieu of such notice; and the Chairman shall also have the right to reBnquisfli his office at any time before tbe expiry of tfce term specified under sub-section (1) by giving, to the Central GOT- ernment, notice of not leas than three months in writing;

(b) the Central Government may, at eny time, remove the Chairman from office:

Provided that no person shall be removed from his office under this clause, unless he has been given a reasonable opportunity of showing cause against his removal.

(3) Where any vacancy occurs in the office of the Chairman, the Central Government shall appoint a suitable person to discharge the functions of the Chairman.

(4) When the Chairman is unable to discharge his functions owing to absence, illness or any other cause, the Central Government may appoint a suitable person to function as the Chairman until the day on which the Chairman resumes the charge of his functions.

(5) The Chairman shall be a whole-time officer of the Reconstruction Bank and shall receive such salaries, allowances and other benefits, and shall be subject tr> such other terms and conditions, as may be determined hy the Central Government:

Provided that the Board may, if it Is of opinion, that it ia necessary in the public interest so to do, permit the Chairman to undertake, at the request of the Central Government or the Reserve Bank, such part-time honorary work as is not likely to interfere with bis duties as Chairmafi,

Disclo- sure of interest.

13. No member of the Board shall have an interest, direct or indirect, In any business, industry or concern to which any assistance has been given or is to be given by the Reconstruction Bank under thig Act and if any such member acquires such interest at any time during the continu- ance of such assistance, he shall immediately disclose it to the Board and shall either resign his membership of the Board or dispose of his interest In such manner and within such time as the Board may direct.

Meeting! of the Board.

14. (1) The Board shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be provided for in the regulations.

(2) If, for any reason, the Chairman is unable to attend any meeting of the Board, any other director nominated by the Chairman in this behalf, and in the absence of. such nomination, any director elected by the dir- ectors present, from amongst themselves, shall preside at the meeting.

(3) All questions which come up before any meeting of the Board sha.ll be decided by a majority of votes of the directors present and voting, and in the event of an equality of votes, the Chairman, or, in his absence, the person presiding, shall have a second or casting vote.

(4) Save as otherwise provided under sub-section (3), every director

of the Board shall have one vote.

15. (1) The Board may constitute an Executive Committee consisting

of such number of directors as may be provided for in the regulations.

Executive Commit- tee and other

commit- tees.

(.?) The Executive Committee shall discharge such functions as may be provided for in the regulations, or, as may be delegated to it, by the Board.

(3) The Board may constitute such other committees, whether consist- ing only of directors or only of other persons or partly of directors and partly of other persons, for such purpose or purposes, as it may think fit.

(4) The Executive Committee or any other committee constituted under this section shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at Its meetings as may be provided for in the regulations.

16. (1) No act or proceeding of the Board or of any Executive or other committee constituted by it shall be invalid merely on the ground of the existence of any vacancy in, or any defect in the constitution of, such Board, or committee, as the case may be.

(2) All acts done by a person acting in good faith as a member of the Board or of any committee constituted by it shall be valid, notwith- standing that it mav afterwards be discovered that his appointment was Invalid by reason of any defect or disqualification or had terminated by virtue of any provision of this Act or any other law for the time being in force:

Provided that nothing in this section shall be deemed to give validity to any act of a member of the Board or of any committee after his appoint- ment has been shown to the Reconstruction Bank to be invalid or to hav" terminated.

Existence of vac- ancy in, or defect in the constitu- tion of, the Board or defect or dla- qualiflca. tion of a member not to in- validate the pro- ceedingj oftha Hoard.

17. The directors and members of the committee shall be paid such fees and allowances as may be provided for in the regulations for attending the meetings of the Board or of any committee constituted in pursuance of this Act or for attending to any other work of the Reconstruction Bank:

Fees and allowances of directors and mem-

bers of com- mittees.

Provided that no fees shall be payable to the Chairman or to any other director or member who is an official of the Government, or, to a Deputy Governor of the Reserve Bank or to any official of the Development Bank or Reconstruction Bank.

CHAPTER V

OBJECTS OF, AND BUSINESS TO BE TRANSACTED BY, THE RECONSTRUCTION

BANK

Objects and

business of the Re- construc- tion Bank 18. (I) The Reconstruction Bank shall function as the principal credit and reconstruction agency for industrial revival by undertaking modernisa- tion, expansion, re-organisation, diversification or rationalisation of indus- tries, and by co-ordinating similar work of other institutions engaged therein, and shall assist and promote industrial development, recons- truction and revival, and undertake rehabilitation of industrial concerns, by providing or procuring assistance and operating schemes for the same, and may, for attaining the said objects, carry on and transact all or any of the following businesses, namely: —

(a) granting loans and advances (including working capital) to any industrial concern or subscribing to or purchasing or under- writing the issue of stocks, shares, bonds or debentures of any indus- trial concern or converting the dues in respect of such loans or de- bentures into the shares of any industrial concern;

(ft) guaranteeing, counter-guaranteeing or providing indemnity, as the case may be, in respect of—

(0 loans raised by an industrial concern from any schedul- ed bank or State co-operative bank or any public financial in- stitution or any other prescribed institution or agency in, or outside, India;

(ft¹) deferred payments due from an industrial concern;

(Hi) the performance obligations of any contract under- taken by an industrial concern, including repayment of any advance obtained by such industrial concern in connection with such contract;

(c) subscribing to or purchasing or underwriting the issue of stocks, shares, bonds or debentures of any institution which may be notified by the Central Government in this behalf;

(d) providing credit to any State level agency or other prescrib- ed institution or agency for grant of loans and advances to industrial concerns;

(e) providing or obtaining credit from other public financial institutions, scheduled banks and State co-operative banks, for grant of loans and advances to or to furnish guarantees on behalf of the industrial concern;

Of) providing inirastructural facilities and raw materials;

(g) providing machinery and other equipment on lease or hire- purchase basis;

(h) providing consultancy and merchant banking services in and outside India relating to reconstruction and development of any industrial concern or industry in general;

(0 accepting or discounting of bills of exchange and promissory notes, made, drawn, accepted or endorsed by any industrial concern or by any person selling capital goods manufactured by one indus- trial concern to another industrial concern;

(j) promoting, owning, laking over, managing industrial con- cerns and acting as authorised person, where so appointed by the Central Government, to manage an industrial concern, including ancillariee;

(k) transferring or acquiring for consideration any instrument

relating to loans and advances;

(/) providing technical, legal, administrative and marketing assistance, promoting, assisting and financing mergers, amalgamation or reconstruction of an industrial or business concern;

(tn) providing managerial assistance to industrial concerns in- cluding nationalised undertakings by deputing officers from its own cadre or a separate management pool constituted for the purpose;

(n) undertaking research and surveys for evaluating or dealing with marketing or investments, carrying on techno-economic studies in connection with reconstruction and development of industry and establishment of institutes to: such purposes including training of

personnel;

(o) granting, opening, issuing, confirming or endorsing letters of credit and negotiating or collecting bills and other documents drawn thereunder;

(p) forming, or controlling, of subsidiaries for carrying out any of its functions or to carry on such other activities conducive to its business;

(q) acting as an agent of—

(/) Central Government or State Government;

(if) Reserve Bank, State Bank, scheduled bank, State co- operative bank, public financial institutions, State Financial Corporations;

(Hi) such other Government or .person at- the Central

Government may authorise;

and to appoint one or more of those institutions, or agenda, or any other prescribed person, as its agent;

(r) performing functions entrusted to or required of it by Cen-

tral Government under this Act or any other law;

(s) doing any kind of business or assignment in or outside the

country which the Central Government may authorise;

(t) collecting information from all concerned a^ncies relating

to industrial sickness and industrial development;

(M) preparing guidelines to assist the Central Government in fo/mulating policy framework to reconstruct, revive or rehabilitate industrial concerns or any industry;

(v) granting loans for ' housing and other purposes to the offi- cers and other employees (including persons employed on contract) of the Reconstruction Bank;

(iv) generally doing such other acts and things as may be inci- dental to or consequential upon the exercise of its powers or of its duties under this Act or any other law, including sale or transfer of any of its assets.

(2) The Reconstruction Bank may receive in consideration of any of the services mentioned in sub-section (1), such commission, brokerage, interest, rent, remuneration or fees, as may Ve agreed upon.

(3) The Reconstruction Bank shall not grant any loan Or advance or other assistance on the security of its own bonds or debentures.

19. (1) The Reconstruction Bank shall no¹ enter into any kind of Prohi- bited businaw.

business with any industrial concern, of which any of the directors of the Reconstruction Bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of tbe Recons- truction Bank together hold substantial interest:

Provided that this t;ub-section shall not apply to any industrial concern if any director of the Reconstruction Bank—

(0 is nominated as a director of the Board of such concern by Government, or a Government company, or by the Reconstruction Bank or by a corporation established by any other law, or

(ii) is elected as a director on the Board of such industrial con- cern by virtue of shares held in that industrial concern by Govern- ment, or a Government company, or by the Reconstruction Bank oi by a corporation established by any other law,

by reason only of such nomination or election, as the case may be.

Explanation I.—"Government company" has the meaning assigned to it in section 617 of the Companies Act, 1956.

1 of 1056.

1 of 1956.

Explanation II.—"Substantial interest", in relation to any industrial concern, means the beneficial interest held by one or more of the directors of the Reconstruction Bank or iby any relative [ag defined in clause (41)] of section 2 of the Companies Act, 1956] of such director whether singly or taken together, in the shares of the industrial concern, the aggregate am- ount paid-up on which either exceeds five lakhs of rupees or five per cent, of the paid-up share capital of the industrial concern, whichever is the lesser.

(2) The provisions of sub-section (1)—

(i) shall not apply to any industrial concern as specified therein if the Reconstruction Bank is satisfied that it is necessary in the public interest to enter into business with that concern, and entering into any kind of business with such industrial concern shall be in accord- ance with and subject to such conditions and limitations as may be provided for in the regulations;

(ii) shall apply only so long as the conditions precedent to such

disability as set out in the said sub-section continue.

20. The Central Government may, after due appropriation made by Parliament by law In this behalf, advance to the Reconstruction Bank In- terest free loans or loans with interest on such terms and conditions, as may be agreed upon-

Loans by Central Govern- ment.

21. (1) The Reconstruction Bank may, for the purpose of carrying

out its functions under this Act—

(a) issue and sell bonds and debentures with or without guaran-

tee of the Central Government;

(b) borrow money from the Reserve Bank—

Borrow- ing and accept- ance of deposits by the Kecoiw tructioa Bank.

(i) repayable on demand or on the expiry of fixed periods, not exceeding ninety days from the date on which the money is so borrowed against the security of stocks, funds and securities (other than immovable property) ia which a trustee is authorised to invest trust money by any law for the time being in force in India;

(ii) against bills of exchange or promissory notes arising out of bona fide commercial or trade transactions, bearing two oi more good signatures and maturing within five years from the date of borrowing;

2 of 1934.

(///) for any other purpose approval by the Central Gov- ernment in accordance with the provisions of the Reserve Bank of India Act, 1934;

(c) borrow money from such other authority, organisation, insti- tution or trust in India as may be generally or specially approved by the Central Government;

(&) accept deposits repayable after the expiry of a period which shall not be less than twelve months from the date of making of the deposit on such terms as may be generally or specially approved by the Reserve Bank.

(2) The Central Government may, on a request being made to it by the Reconstruction Bank, guarantee the bonds and debentures issued by that Bank as to the repayment of principal and the payment of interest at such rate as may be fixed by that Government.

2 oi 1882. 4 of 193B. 10 of 1949.

(3) Notwithstanding anything contained in any other law for the time being in force, the bonds and debentures issued or sold by the Recons- truction Bank shall be approved seen ii ties for the purposes of the Indian Trusts Act, 1882, the Insurance Act, 1038 and the Banking Regulation Act, 1949.

Pow"r to trans- fer rights.

22. The rights and interests of the Reconstruction Bank (including any other rights incidental thereto) in relation to any loan or advance granted, or any amount recoverable, by it may be transferred by the Recons- truction Bank, either in whole or in part, by the execution or issue of any instrument, or by the transfer of any instrument by endorsement, or in any other manner in which the rights and interests in relation to such loan or advance may be lawfully transferred, and the Reconstruction Bank may, notwithstanding such transfer, act as the trustee of the transferee.

46 of 1073.

Lo&of In foreign current.

23. (I) Notwithstanding anything contained in the Foreign Exchange Regulation Act, 1973, or in any other enactment lor the time being in force relating to foreign exchange, the Reconstruction Bank may, for the pur- pose of granting loans and advances under this Act, borro-v, with the pre- vious consent of the Central Government, foreign currency from any bank or financial institution in any foreign country or as otherwise prescribed.

(2) The Central Government may, where necessary, guarantee any loan taken by the Reconstruction Bank under sub-section (1) or any part thereof, as to the repayment of principal and payment of interest and other incidentail charges.

(3) All loans and advances granted by the Reconstruction Bank out of foreign currency borrowed under pub-section (1) shall be expressed in terms of foreign currency as equivalent of Indian currency, calculated in accordance with the rate of exchange prevailing in India at the time of grant thereof, and the amount due thereunder shall be repayable in equiva- lent Indian cuiTency, calculated in accordance with the rate of exchange prevailing in India at the time of repayment of such loan or advance.

(4) Any loss or profit in connection with any borrowing of foreign currency under sub-section (1), for the purpose of granting loans and advances under this Act, or with its repayment to the concerned foreign lending agency, on account of any fluctuations in the rate of exchange accruing—

(a) during the period within which the loan or advance is repay- able by the industrial concern or the period of actual repayment thereof by the concern, whichever is longer, shall be reimbursed by, or paid to, as the caise may be, the recipients of such loans and advances;

(/>) after the expiry of the period specified in clause (a),—

(i) ghall be borne by the Reconstruction Bank in respect of normal market fluctuations in foreign exchange;

(ii) shall be reimbursed by, or paid to, as the case may- be, the Central Government in respect of fluctuations other than the normal market fluctuations in foreign exchange.

Explanation—If any question arises as to whether any fluctuation as aforesaid is a normal fluctuation or not, the same shall be decided by the Central Government whose decision thereon shall be final.

24. The ^construction Bank may receive gifts, grants, donations or benefactions from Government or any other source.

CHAPTER VI

Grant*, donations, etc., to the Re- ronstruc- tlon Bank.

RECONSTRUCTION ASSISTANCE FUND

25. With effect from the appointed day, the Reconstruction Bank shall establish a special fund to be called the Reconstruction Assistance Fund.

Recon- struction Assistance

26. To the Reconstruction Assistance Fund shall be credited—

Credit* to

the Recon-

struction

Assistance

Fund.

(a) all amounts received for the purposes of that Fund by way of loans, gifts, grants, donations or benefactions from Government or any other source;

(b) repayments or recoveries in respect of loans, advances or

other facilities granted from the Fund;

(c) income or profits from investments made from the Fund; and

(d) income accruing or arising to the Fund by way of interest 01 otherwise, on account of the application of the Fund in accordance with the provisions of section 27.

Utilisa-

tion

of Recon-

ttractio*

Assistant*

Fund.

27. (1) Where the Reconstruction Bank considers it necessary or desirable so to do, it may, subject to the provisions of sub-sections (3) and (4), disburse or spend from the Reconstruction Assistance Fund any amount on account, or in consequence, of the grant of any loan or advance or on account, or in consequence, of entering into any arrangement, under section 1^:

Provided that before granting any such loan or advance to an Indus- trial concern or entering into any such arrangement with or in relation to an industrial concern, the Reconstruction Bank shall obtain the prior approval of the Central Government.

(2) Where the Reconstruction Bank considers it necessnry or desi- rable so to do, it may, subject to the provisions of sub-sections (3) and (4), disburse or spend from the Reconstruction Assistance Fund any amount for one or more of the purposes specified in section 18.

(3) Before seeking the approval of the Central Government under aub-section (1), the Reconstruction Bank shall satisfy itself that the banking or other financial institutions or other agencies are not likely to grant such loan or advance to the industrial concern or to enter into any such arrangement with or in relation to the industrial concern In the ordinary course of business.

(4) The Central Government shall, before giving its approval, satisfy itself that such loan, advance or arrangement is necessary as a matter of priority in the interests of industrial reconstruction, revival, rehabili- tation or development.

(5) For the removal of doubts, it is hereby declared that nothing contained in this section shall be deemed to preclude the Reconstruction) Bank from granting any loan or advance or from entering Into any arrangement under clause (a) or under clause (b) of sub-section (1) of section 18. without the npnroval of the Central Government, if no amount in respect thereof ^ to be disbursed or spent from the Recon- struction Assistance Fund

28. (1) To the Reconstruction Assistance Fund shall be debited—

(a) such amounts as may from time to time be disbursed or

Debits to Reconstruc- tion Aasia- taace Fund.

spent under section 27;

(b) such amounts as may be required for discharging the liabilities In respect of loans received for the purposes of that Fund;

(c) any loss arising on account of investment made out of

thai Fund; and

(cl) such expenditure arising out of, or in connection with, the administration and application of the Fund as may be deter- mined by the Board.

(2) No amount shall be debited to the Reconstruction Assistance

Fund except as provided for in sub-section (1).

29. (1) The balance-sheet and accounts of the Reconstruction Assis- tance Fund shall be prepared in such form and manner as may be provided lor in the regulations.

(2) The Board shall cause the books and accounts of the Fund to

Accounts and audit of Recons- truction Assistance Fund.

be closed and balanced as on the 30th day of June each year.

(3) The Reconstruction Assistance Fund shall be audited by one or more auditors appointed by the Central Government under section 34, who shall make a separate report thereon.

(4) The provisions of sub-sections (2), (3), (4) and (6) of section 34 shall, so far as may be, apply in relation to the audit of the Recon- struction Assistance Fund, as they apply to the audit of the accounts of the Reconstruction Bank.

(5) The Reconstruction Bank shall furnish to the Central Govern- ment, within four months from the date on which the accounts of the Fund are closed and balanced, a copy of the balance-sheet and accounts together with a copy of the auditors' report and a copy of the report on the operation of the Fund during the relevant year and the Central Government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament.

30. The Reconstruction Assistance Fund shall not be closed or wound up save by the order of the Central Government and in such manner as that Government may direct,

CHAPTER VII

Liquida- tion of Recons- truction Assistance Fund.

GENERAL FUND, ACCOUNTS AND AUDIT

Genera Fund.

31. All receipts of the Reconstruction Bank other than those which are to be credited to the Reconstruction Assistance Fund under this Act shall be credited to a Fund to be called the General Fund and all payments by the Reconstruction Bank, other than those which are to be debited to the Reconstruction Assistance Fund, shall be made out of the General Fund.

32 (1) The balance-sheet and accounts of the Reconstruction Bank shall be prepared in such form and manner as may be provided for In the regulations.

Prepara- tion of accounts and balance- aheet.

(2) The Board shall cause the books and accounts of the Reconstruc- tion Bank to be cloted and balanced as on the 30th day*of June each year.

33. (1) The Reconstruction Bank may establish a reserve fund to which may be transferred such sums as that Bank may deem lit out of the annual profits accruing to the General Fund.

Disposal of profits accruing to General Fund

(2) After making provision for bad and doubtful debts, depreciation of assets and for all other matters for which provision is necessary or expedient or which is usually provided for by bankers and for the reserve fund referred to in sub-section CO, ihe Reconstruction Bank shall transfer the balance of the net profits to the Central Government.

Audit.

1 of 3C56.

34. (1) The accounts of the Reconstruction Bank shall be audited by auditors duly qualified to act as auditors under sub-section (1) of section 226 of the Companies Act, 1956 who shall be appointed by the Central Government for such term and on such remuneration as the Central Government may fix.

(2) The auditors shall be supplied with a copy of the annual balance-sheet of the Reconstruction Bank and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the Reconstruction Bank and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the Reconstruction Bank.

(3) The auditors may, in relation to such accounts, examine any director or any officer or other employee of the Reconstruction Bank and shall be entitled to require from the Board or officers Or other employees of the Reconstruction Bank such information and explana- tion as they may think necessary for the performance of their duties.

(4) The auditors shall make a report to the Reconstruction Bank upon the annual balance-sheet and accounts examined by them and in every such report they shall state whether in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and fair view of the state of affairs of the Reconstruction Bank and in ca^e they had cal'ed ior any explanation or information from the Board or any officer or other employee of the Reconstruction Bank whether it has been given and whether it is satisfactory.

(5) The Reconstruction Bank shall furnish to the Central Government within four months from the date on which iU accounts are closed and balanced, a copy of its balance-sheet and accounts together with a copy of the auditors' report and a report of the working of the Reconstruction Bank during the relevant year, an3 the Central Government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament.

(6) Without prejudice to anything contained in the preceding sub- sections, Ihe Central Government may at any time appoint the Comp- troller and Auditor-General of India to examine and report upon the accounts of the Reconstruction Bank and any expenditure incurred by him in connection with such examination and report shall be payable by the Reconstruction Bank to the Comptroller and Auditor-General of tndia.

Saving.

35. Save as otherwise provided in sub-section (4) of section 29, no- thing contained in this Chapter shall apply to the Reconstruction Assist- ance Fund.

CHAPTER VIII

SPECIAL TOWERS OF THE RECONSTRUCTION BANK

36. (1) In entering into any arrangement under section 18 with an

Power to impose condition* for assis- tance.

industrial concern, the Reconstruction Bank may impose such conditions as it may think necessary or expedient for protecting the interests of the Reconstruction Bank, and securing that the assistance granted by it is put to the best use by the industrial concern.

1 of lose

(2) Where any arrangement entered into by the Reconstruction Bank with an industrial concern provides for the appointment by the Recon- struction Bank -of one or more directors of such industrial concern, such provision and any appointment of directors made in pursuance thereof shall he valid and effective notwithstanding anything to the contrary contained in the Companies Act, 1956, or in any other law for the time being in force or in the memorandum, articles of association or any other instrument relating to the industrial concern, and any provision regard- ing share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any such law or instrument aforesaid, shaU not apply to any director appointed by the Reconstruction Bank in pursuance of the arrangement as aforesaid.

(3) Any director appointed in pursuance of sub-section (2) shall—

(a) hold office during the pleasure of the Reconstruction Bank and may be removed or substituted by any person by order in writ- ing by the Reconstruction Bank;

(b) not incur any obligation or liability by reason only of hia being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in rela- tion thereto;

(c) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.

Assist, ance to industrial concern when to operate &i a charge on the property offered as secu- rity.

37. (1) Where any person or industrial concern seeks any assistance from the Reconstruction Bank on the security of any immovable property belonging to him or to the industrial concern or on the security of the property of some other person whose property is offered as a collateral Security for such assistance, such person or industrial concern or, as the case may be, such other person may execute a written declaration in the form specified in the First Schedule stating therein the particulars of the immovable property which is proposed to be offered as security or, as the case may be, collateral security, for such assistance and agreeing that the dues relating to the assistance, if granted, shall be a charge on such property, and, if, on receipt of such declaration, the Reconstruction Bank grants any assistance to the person or the industrial concern aforesaid, the dues relating to such assistance shall, without prejudice to the rights of any other creditor holding any prior charge or mortgage in

respect of the property so specified, be, by virtue of the provisions of this section, a charge on the property specified in the declaration aforesaid.

(2) Where any further immovable property is offered as security for Ihe assistance referred to in sub-section (I), a fresh declaration shall be executed, as far as may be, in the form specified in the First Schedule.

3 6 of 190!- (3) Every declaration referred to in sub-section (I) or sub-section (2) shall be deemed to be a document registrable as an agreement under the provisions of the Registration Act, 1908, and no such declaration shall have effect unless it is so registered.

Power to call fen repayment before agreed period.

38. Notwithstanding anything contained in any agreement to the contrary, the Reconstruction Bank may, by notice in writing, require any Industrial concern to which it has granted any assistance to discharge forthwith in full its entire dues and also discharge its other liabilities to the Reconstruction Bank—

(a) if it appears to the Board that false or misleading information in any material particular was given in the application for the assis- tance; or

(b) if the industrial concern has failed to comply with the terms of its agreement with the Reconstruction Bank in the matter of assistance; or

(c) if there is a reasonable apprehension that the industrial concern is unable to pay its debts or that proceedings for liquida- tion has beenf or may be, commenced in respect thereof; or

(d) if the property assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank as a security for assistance is not insured and kept insured by the industrial concern to the satis- faction of the Reconstruction Bank or if such property depreciates in value to such an extent that, in the opinion of the Board, further¹ security to the satisfaction of the Board should be given and suchj security is not given; or

(e) if, without the permission of the Board, any machinery, plant or other equipment, whether forming part of the security or other- wise, is removed from the premises of the undertaking or the indus- trial concern, as the case may be, without being replaced; or

(/) if for any other reason, it is necessary so to do to protect the interests of the Recnnst.ruction Bank.

Rights of Recons- truction Bank in case of default.

39. (1) Where an assisted industrial concern, which is under a lia- bility to the Reconstruction Bank under any agreement with the Bank, makes any default in the payment of any dues, or in meeting its obligation- in relation to any other assistance given by the Reconstruction Bank or otherwise fails to comply with the terms of the agreement with that Bank, the Reconstruction Bank shall have the right to take over the manage- ment, or possession, or both, of the industrial concern, as well as the right to transfer by way of lease or sale of the property assigned, charger), hypothecated, mortgaged or pledged to the Reconstruc- tion Bank for the purpose of realising its dues or for the revival of the Industrial co^

(2) Any transfer of property made by the Reconstruction Bank in exercise of the powers conferred on it by sub-section (1) shall vest in the transferee the rights in. or in relation to, the property transferred as if the transfer had been made by the owner of such property.

(3) The Reconstruction Bank shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from tfoods forming part of the security held by it as it had with rp^n*w ti the original goods,

(4) Where any action has been taken against an industrial concern under the provisions of sub-section (1), all costs, charges and expenses which, in the opinion o* the Reconstruction Bank, have been properly incurred by it as incidental thereto, shall be re- coverable from the industrial concern and the money which is received by the Reconstruction Bank shall, in the absence of any contract to the contrary, be held by it in trust, to be applied, firstly, in payment, nf ^i"¹* costs, charges and expenses, and, secondly, in discharge of the dues of the Reconstruction Bank and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests.

(5) Where the Reconstruction Bank takes over the management or possession of any industrial concern under sub-section (I), such indus- trial concern may suej and be sued, in its name.

40. (1) (a) Where an assisted industrial concern makes any default in the payment of any dues to, or in meeting its obligation in relation to any other assistance given by the Reconstruction Bank or otherwise fails to comply with the terms of agreement with that Bank, or

Enforce- ment i>f cl.iims by the Recon- imKtioj) Bank, (b) where the Reconstruction Bank makes an order under section 33 requiring the assisted industrial concern to make immediate repay- ment of any assistance granted to it and the industrial concern fails to make such repayment,

4 of Jfip;

then, without prejudice to the provisions of section 39 of this Act an<* of section 69 of the Transfer of Property Act, 1882, any officer of the Reconstruction Bank generally or specially authorised by the Board in this behalf, may apply to the concerned High Court for one or more of the following reliefs, namely:-—

(i) for an order for the sale or lease of the property assigned, charged, hypothecated, mortgaged or pledged to the Reconstruc- tion Bank as security for the assistance granted to it, or for the sale or lease of any other property, of the industrial concern; or

(11) for transferring the management of the industrial concern to the Reconstruction Bank or to its nominee; or

(ni) for an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant <*r equipment from the premises of the industrial concern without +h" previous permission oj" the Board, where such transfer or removal industrial concern.

(w) for an order for the appointment of a receiver where there is apprehension of the machinery, equipment or any other property of substantial value which has been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank, being removed from the premises of the industrial concern or of being transferred without the previous permission of the Reconstruction Bank.

(2) An application under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Reconstruction Bank, the ground on which it is made and such other particulars as may be necessary for obtaining the relief prayed for.

(3) Where an application is for any relief mentioned in sub-clause (i) of sub-section (1), the High Court may,—

(a) by an order, authorise the Reconstruction Bank to grant lease of such property to such person and on such terms and condi- tions as may be specified in the said order; or

(b) pass an order calling upon the person whose property has been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank to show cause, on a date to be specified in the notice, as to why an order for the sale of such property or so much ol such property, as would, on being sold, realise, in it3 estimation, an amount equivalent in value to the outstanding dues of the indus- trial concern to the Reconstruction Bank, together with costs of the proceedings taken under thig section, shall not be made; or

(c) pass an ad interim order attaching any property of the industrial concern which has not been assigned, charged, hypothe- cated, mortgaged or pledged to the Reconstruction Bank, or so much of such property, as would, on being sold, realise, Jn its estimation, an amount equivalent in value to the outstanding dues of the industrial concern to the Reconstruction Bank, together with costs of the proceedings taken under this section, and pass an order calling upon the industrial concern to show cause on a date to be specified in the notice as to why such order of ad interim attach- ment shall not be made absolute.

(4) Where an application is for the relief mentioned in sub-clause (ii) of sub-section (J), the High Court shall issue a notice calling upon the industrial concern to show cause, on a date to be specified in the notice, as to why the management of the industrial concern shall not be transferred to the Reconstruction Bank or to its nominee.

(5) Where an application is for the relief mentioned in sub-clause (Hi) of sub-section (1), the High Court shall grant an ad interim injunction restraining the industrial concern from transferring or removing its machinery or other equipment and issue a notice calling upon the industrial concern to show cause, on a date to be specified in the notice, as to why such od interim injunction shall not be made absolute.

(fi) Where an application is for the relief mentioned in sub-clause (iv) of sub section (1), the High Court shall pass an ad interim order appointing a receiver in respect of the property assigned, charged, hypothecated, mortgaged or pledged and shall issue a notice calling upon the industrial concern to show cause, on a date to be specified in the notice, as to why the ad interim order appointing the receiver shall not be made absolute.

(7) If no cause is shown, on or before the date specified in the notice issued by the High Court, the Court shall forthwith—

(a) make an order for the sale of the property which has been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank or sq much of such properly, as would, on being sold, realise, in its estimation, an amount equivalent in value to the outstanding duos of the industrial concern to the Reconstruc- tion Bank, together with costs of the proceedings taken under this section;

(b) direct the sale of the attached property or the transfer of the management of the industrial concern to the Reconstruction Bank or to its nominee;

and shall apply the proceeds of such sale for the discharge of the dues to the Reconstruction Bank and the residue of such proceeds, if any, shall be made over to the person entitled thereto in accordance with his rights and interests;

(c) make the ad interim injunction made under sub-section (5), and the ad interim order of appointment of the receiver made under sub-section (6), as the case may be, absolute.

5 i f 1908.

(S) If cause is shown, the High Court shall proceed to investigate the claim of the Reconstruction Bank and the provisions of the Code of Civil Procedure, 1908, shall, as far as practicable, apply to such pro- ceedings.

(9) On an investigation made under sub-section (8), the High Court may pass an order,—

(a) for the sale of the property which has been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank or so much of such property, as would, on being sold, realise, in its estimation, an amount equivalent in value to the outstanding dues of the assisted industrial concern to the Reconstruction Bank, together with costs of the proceedings taken under this section; or

(b) confirming the order of attachment and directing the sale of the attached property, or the transfer af the management of the assisted industrial concern to the Reconstruction Bank or to its nominee; or

(c) Varying the order of attachment so as to release a portion of the property from attachment and directing the sale of the remainder of the attached property;

and shall apjJy the proceeds of such sale for the discharge of the dues to the Reconstruction Bank and the residue of such proceeds, if any, shall be made over to the person entitled thereto, in accordance with his rights and interests;

(d) releasing the property from attachment, if it is satisfied, that

it is not necessary in the interests of the Reconstruction Bank; or

(e) confirming or vacating the injunction or the order for the appointment of the receiver:

Provided that when making any order under clause (d), the High Court may make such further orders as it thinks necessary to protect the interest of the Reconstruction Bank, and may apportion the costs of the proceedings in such manner a'a it thinks fit:

Provided further that unless the Reconstruction Bank intimates to the High Court that it will not prefer an appeal against any order releasing any property from any attachment, such order shall not be given effect to until the expiry of the period fixed under sub-section (12) within which an appeal may be preferred, or if an appeal is preferred, unless the court empowered to hear appeals from the decisions of the said High Court otherwise directs, until the appeal Is disposed of.

5 of 1908.

(10) An order of attachment or sale of property under this seetlon shall be carried into effect as far as practicable in the manner pro- vided in the Code of Civil Procedure, 1908, for the attachment or sale of property in the execution of a decree as if the Reconstruction Bank were the decree-holder.

5 of 1908.

(11) An order under this section transferring the management of any industrial concern to the Reconstruction Bank or to its nominee shall be carried into effect, as far as may be practicable, in the manner provided in the Code of Civil Procedure, 1908, for the possession of immovable property or the delivery of movable property in the execution of a decree, as if the Reconstruction Bank or its nominee were the decree- holder.

(12) Any party aggrieved by an order under sub-section (3), sub- section (7) or sub-section (9) may, within thirty days from the date of the order, prefer an appeal to the court empowered to hear appeals from the decisions of the High Court which passed the order and the appellate court may, after hearing the parties, pass such orders as it thinks proper.

(13) Nothing in this section shall be construed, where proceedings for liquidation in respect of an industrial concern have commenced before an application is made under sub-section (1), as giving to the Reconstruction Bank any preference over the other creditors of the industrial concern not conferred on it by any other law.

Power of Re- construc- tion Bank rela- ting to property offered as primary 01 collateral security.

41. (I) Where a pulton has oiic-ied any property as security, whether primary or collateral, f 1 any assistance given by the Reconstruction B,mk to any indtr trial concern, or to such person, and a def^iU Ins been committed by the industrial concern or by such person in the payment of any dues of the Recon- struction Bank or in meeting any obligation in relation to the assistance given by the Reconstruction Bank to the industrial concern aforesaid, the Reconstruction Bank shall have the right to take over the manage- ment, or possession, or both, of the property so offered as security, and shall have the right to transfer by lease or sale the property aforesaid for the purpose of realising its dues.

(2) Any transfer of property made by the Reconstruction Bank, in exercise of the powers conferred on it by sub-scciion (1), shall vest In the transferee, the rights in or in relation to the property transferred as if the transfer had been made by the owner of such property.

(3) Where any action has been taken under the provisions of sub- section (1), costs, charges and expenses which, in the opinion of the Reconstruction Bank, have been properly incurred by it as incidental thereto, shall be recoverable out of the money received by the Recon- struction Bank by the sale or lease of the property referred to in sub- section (2) and shall, in the absence of any contract to the contrary, be held by it in trust, to be applied, firstly, in payment of such costs, charges and expenses and, secondly, in the discharge of the dues of the Reconstruction Bank and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests.

4 of 1882.

(4) The Rec nstruclion Bank may, instead of exercising the powers conferred on it by sub-section (1), apply foi the sale or lease of the property referred to in sub-section (1) or for any other relief, to the High Court within the local limits of whose jurisdiction the property aforesaid is situated, and, thereupon, the provisions of section 40 shall, without prejudice to the provisions of section 69 of the Transfer of Property Act, 18C2, apply thereto as if the property aforesaid were the property referred to in section 40, and powers shall be exprclsable by the High Court accordingly.

42. (1) When the management of an industrial concern is taken over by the Reconstruction Bank, that Bank may, by order, notified in the Official Gazette, appoint as many persons as it thinks fit,—

(a) in any case in which the industrial concern is a company, as defined in the Companies Act, 1956, to be the directors of that 1 of 1956.

- industrial concern; or

(b) in any other case, to be the administrator of that industrial

concern.

(2) The power to appoint directors or administrators under this section includes the power to appoint any individual, firm or body corporate to be the manager of the industrial coicern on such terms and conditions as the Reconstruction Bank may think fit.

Power of Recons- truction Bank to appoint directors or ad- ministra- tors of an in- dustrial concern when manage- ment thereofj la taken over.

(3) For the removal of doubts, it is hereby declared that the power to appoint directors, administrators or managers includes the power to remove or replace the person so appointed.

1 of 1956.

(4) Nothing in the Companies Act, 1956 or in any other law for the time being in force or in any instrument relating to the industrial concern shall, in so far as it makes, in relation to a director, any pro- vision for the holding of any share qualification age limit, restriction on the number of directorships, retirement by rotation or removal from office, apply to any director appointed by the Reconstruction Bank under this section.

43. On the issue of a notified order under section 42—

1 of 1966.

Eftect of notified order under section 43,

(a) if the industrial concern is a company as denned in the Companies Act, 1&56, all persons holding office as directors of the industrial concern, and in any other case, all persona holding any office having the powers of superintendence, direction and control of the industrial concern, immediately before the issue of the notified order, shall be deemed to have vacated their offices as such;

(t>) any contract of management between the industrial concern and any director or manager thereof holding office as such imme- diately before the issue of the notified order shall be deemed to have terminated;

(c) the directors or administrators, appointed under section 42, shall take such steps as may be necessary to take into their custody or under their control, the property, effects and actionable claims to which the industrial concern is, or appears to be, entitled, and all the property and effects of the industrial concern shall be deemed to be in the custody of the directors or administrators, as the case may be, as from the date of the notified order;

1 of 19M.

(d) the directors appointed under section 42 shall, for all purposes, be the directors of the industrial concern, duly constituted under the Companies Act, 1956, and such directors, or, as the case may be, the administrators, appointed under section 42, shall alone be entitled to exercise all the powers of the directors, or, as the case may be, of the persons exercising powers of superinten- dence, direction and control of the industrial concern, whether such powers are derived from the said Act or from the memorandum or articles of association of the industrial concern or from any other source whatsoever.

44. (1) Subject to the control of the Reconstruction Bank, the direc- tors, or, as the case may be, the administrators appointed under section 42, shall take such steps as may be necessary for the purpose of efficiently managing the business of the industrial concern and shall exercise such powers and have such duties as may be prescribed.

Powers and duties of direc- tors and adminis- trators.

(2) Without prejudice to the generality of the powers vested In them under sub-section (1), the directors, or, as the case may be, the administrators appointed under section 42, may, with the previous approval of the Reconstruction Bank, make an application to a court for the purpose of cancelling or varying any contract or agreement entered into, at any time before the issue of the notified order under section 42, between the industrial concern and any other person, and the court may, if satisfied after due inquiry that such contract or agreement had been entered into in bad faith and is detrimental to the interests of the Industrial concern, mak" an order cancelling or varying (§ith"r ancon-

ditionally or subject to such conditions as it may think fit to impose) that contract or agreement and the contract or agreement shall have effect accordingly.

45. (1) Notwithstanding anything to the contrary contained in any contract or in any law for the time being in force, no managing or whole-time director or any other director or a manager or any person in charge of management of an Industrial concern shall be entitled to any compensation for the loss of office or for the premature termination, under this Act, of any contract of management entered into by him with such concern.

No right to compen- sation for termina- tion of contract of managing director, ClC.

(2) Nothing contained in sub-section (1) shall affect the right of any such managing or whole-time director, or any other director <\- manager or any such person in charge of management to recover from the industrial concern, moneys recoverable otherwise than by way of such compensation.

Applica- tion of Act 1 of 1956.

46. (I) Where the management of an industrial concern, being a company as defined in the Companies Act, 1956, is taken over by the Reconstruction Bank, then, notwithstanding anything contained in the said Act or in the memorandum or articles of association of such con- cern,—

(a) it shall not be lawful for the shareholders of such concern or any other person to nominate or appoint any person to be a director of the concern;

(b) no resolution passed at any meeting of the shareholders of such concern shall be given effect to unless approved by the Recon- struction Bank;

1 of 1956.

fc) no proceeding for the winding up of such concern or for the appointment of a receiver in respect thereof shall lie in any court, except with the consent of the Reconstruction Bank. (2) Subject to the provisions contained in sub-section (I) and to the other provisions contained in this Act and subject to such other excep- tions, restrictions and limitations, if any, as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Companies Act, 1956, shall continue to apply to such concern in the same manner as it applied thereto before the issue of the notified order under section 42.

1 of 1956.

Restric- tion on filing of suits for 47. Where the management of an Industrial concern not being a company as defined in the Companies Act, 1956, is taken over by the Reconstruction Bank, no suit or proceedings for dissolution or for partition shall, in so far as it relates to that Industrial concern, lie In any court or before any tribunal or other authority except with the consent of the Reconstruction Bank.

dis- solution, etc., of an In- dustrial concern not being a com- pany when lt" manage- ment li taken over.

48. No proceeding for the appointment of any official assignee or

receiver in relation to any industrial concern the management of which has been taken over by the Reconstruction Bank shall lie in any court except with the consent of the Reconstruction Bank.

Official assignee or re- ceiver not to be appoint- ed without the consent of the Recon- struction Bank.

Power of Cen- tral Govern- ment to grant relief In the case of certain assisted indus- trial concerns.

49. (1) The Central Government may, if it is satisfied on an application made to "it by the Reconstruction Bank that it is necessary so to do for the purpose of reconstructing, reviving or rehabilitating any assisted industrial con- cern, declare by notification in the Official Gazette, that the operation of all or any of the contracts, assurances of properly, agreements, settlements, awards, standing oiders or other instruments in force (to which such assisted! industrial concern is a party, or which may be applicable to such assisted in- dustrial concern) immediately before the issue of such notified order, shall remain suspended or any rights, privibget, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in siK'h manner as may be specified in the notified oidcr.

(2) The notified order made und^r sub-secdon (2) shall remain in force, in the first instance, for a period of two years, but the duration of such order¹ may be extended from time to time by a further notified order by a period not exceeding two years at a time:

Provided that no such order shall in any case remain in force for more than eight years in the aggregate from the date of issue of the first notified order.

(3) Any notified order made under sub-section (1) shall have effect, notwithstanding anything to the contrary contained in any other law, agree- ment or instrument or any decree or order of a court, tribunal, officer or other authority or of any submission, settlement or standing order,

(6) During the period of operation of the notified order made under sub- section ( i ), the Central Government may, if satisfied that it is necessary so to do in the public interest,—

(a) for the reconstruction, revival or rehabilitation of an assisted

industrial concern; or

(ft) for the proper management of the assisted industrial concern;

or

(c) for scaling down.the liabilities of the assisted industrial concern,

where the financial condition and other circumstances of the assisted industrial concern are such that such scaling down is necessary,

authorise the Reconstruction Bank to prepare a scheme—

(0 for the reconstruction, revival or rehabilitation of the assisted

industrial concern; or

((7) for scaling down the liabilities of the assisted industrial concern;

or

(Hi) for the amalgamation of the assisted industrial concern with any other industrial concern (referred to in this section as the "transferee in- dustrial concern").

(7) The scheme referred to in sub-section (C) may contain provisions for

all or any of the following matters, namely:—

(a) the constitution, name and registered office, the capital, assets, powers, rights, interests, authorities and privileges, the liabilities, duties and obligations of the assisted industrial concern on its reconstruction, or, as the case may be, of the transferee industrial concern;

(ft) in the case nf amalgamation of the assisted industrial concern, the transfer to the transferee industrial concern of the business, proper- ties, assets and liabilities of the assisted industrial concern on such terms and conditions as mav be specified in the scheme;

(r) any chance in the Board of Directors, or the appointment of a new Board of Directors, of the assisted industrial concern on its re- construction, or, as the casp mav be, of the transferee Industrial con- cern and the authority by whom, the manner in which, and the other terms and conditions on which, such change or appointment shall be made and in the case of annnintment of -\ n-\v Board of Directors or of any director, the period for which such appointment shall be made;

(d) the alteration of the memorandum and articles of association of the assisted industrial concern on its reconstruction, or, as the case may be, of the transferee industrial concern for the purpose of altering the capital thereof or for such other purposes as may be necessary to give effect to the reconstruction or amalgamation;

(e) subject to the provisions of the scheme, the continuation by, or against, the assisted industrial concern on if-, reconstruction or, as the case mav be, thf transferee industrial concern of anv actions or proceed- ings nendin? npainst tlic ps-is'-^d industrial concern ''rrnyriiitciv before the date of the notified order mad? under sub-section (I)'.

(f) the reduction of the interesi or rights wHch the members- and other creditors have, in, or against, the assisted industrial concern be- fore its reconstruction or amalgamation in such extent as the Reconstruc-

tion Bank considers necessary In the interests of the reconstruction, re- vival or rehabilitation of the assisted industrial concern or for the main- tenance of the business of the assisted industrial concern;

(g) the payment in cash or otherwise to .the members and other creditors in full satisfaction of their claims—

(0 In respect of their interests or rights, in, or against, the assisted industrial concern before the reconstruction or amalgama- tion; or

(//) where their interests or rights aforesaid, in, or against, the assisted industrial concern has or have been reduced under clause (/), in respect of such interests or rights as so reduced;

(h) the vesting of controlling interest, in the reconstructed indus- trial concern, in the Central Government or its nominee either by the appointment of additional director or by the allotment of additional shares;

(0 the allotment to the members of the assisted industrial concern, for any share or shares held by them therein before its reconstruction or amalgamation [whether their interest on such shares has been reduced under clause (/) or not], of shares in the assisted industrial concern on its reconstruction, or, as the case may be, in the transferee industrial concern and where any member claims payment in cash and not allotment of "shares, or where it is not possible to allot shares to any member, the payment in cash to those members in full satisfaction of their claims,—

(i) In respect of their interest in shares in the assisted in- dustrial concern before its reconstruction or amalgamation; or

(B) where such interest has been reduced under clause (/), in respect of their interest in shares as so reduced;

(/) the continuance of the services of such of the employees of the assisted industrial concern as may be specified in the scheme, in the assisted industrial concern itself on its reconstruction, or in the trans- feree industrial concern on such terms and conditions as may be speci- fied in the scheme;

14 ol 1947.

(k) notwithstanding anything contained in clause (}), where any employees of the assisted industrial concern whose services are proposed in the draft scheme referred to in suh-section (2), have, by notice in writing givtjn to the Reconstruction Bank at any time before the expiry off one month next following the date on which the draft scheme is sent to the assisted industrial concern, intimated their intention of not becoming employees of the assisted industrial concern on its reconstruction or in the transferee industrial concern, the payment, to such employees, and to other employees whose services have not been continued in the assisted industrial concern on its reconstruction or in the transferee industrial con- cern, of compensation, if any, to which they arc entitled under the Industrial Disputes Act, 1947, and such pension, gratuity, provident fund and other retirement benefits ordinarily admissible to them under the rules or authorisations of the assisted industrial concern as in force imme- diately before the date of Its reconstruction or amalgamation;

(/) any other terms and conditions for the reconstruction or amalga- mation of the assisted industrial concern;

(m) such incidental, consequential and supplemental matters as an necessary to secure that the reconstruction or amalgamation shall bt fully and effectively carried out.

(8) (a) A copy of the scheme prepared by the Reconstructioa Ban! shall be sent, in draft, to the assisted industrial concern and also to the trans- feree industrial concern and any other industrial concern concerned in the amal- gamation for suggestions and objections, if any, within such period ad the Re- construction Bank may specify for this purpose;

(b) The Reconstruction Bank may make such modifications, if any, i" the draft scheme as it may consider necessary in the light of the suggestions and objections received from the assisted industrial concern and as also from the transferee industrial concern, and any other industrial concern concerned in the amalgamation and from any members or other creditors of such industrial concerns and the transferee industrial concern:

Provided that where the transferee industrial concern is a company, th" scheme aforesaid shall be laid before such company in the general meeting for th,e approval of the scheme by its members and no such scheme shall be pro- ceeded with unless it has been approved, with or without modification, by a special resolution passed by the members of such company,

(9) The scheme shall thereafter be placed before the Central Govern- ment for its sanction and the Central Government may sanction the scheme without any modifications or with such modifications as it may consider neces- sary, and the scheme as sanctioned by the Central Government shall come Into force on such date as the Central Government may specify in this behalf:

Provided that different dates may be specified for different provisions of the scheme.

(10) For the purpose of assisting it to exercise the powers conferred on It by sub-section (9), the Central Government may constitute an advisory com- mittee consisting of such officers of the Central Government, Reserve Bank, State Bank, public financial institutions and nationalised banks, having know- ledge of, or experience in, one or more of the following matters, namely:—

(a) industry and industrial sickness;

(ft) finance and banking;

(c) industrial relations;

(d) law,

as it may think fit.

(11) The sanction accorded by the Central Government under sub-section (9) shall be conclusive evidence that all the requirements of this scheme relating to the reconstruction, or, as the case may be, amalgamation, have been complied with and a copy of the sanctioned scheme certified in writing by an officer of the Central Government to be a true copy thereof, shall, in all legal proceedings (whether in appeal or otherwise) be admitted as evidence to the same extent as ihc original scheme.

(12) On and from such date of the coming into operation of the scheme or any provision thereof, the scheme or such provision shall be binding on the assisted industrial concern, or, as the case may be, on the transferee industrial concern, and any other industrial concern concerned in the amalgamation

&nd also on all the members and other creditors and employees of each of those assisted industrial concerns and of the transierec industrial concern, and on any other person having any right or liability In relation to any of the assisted industrial concerns or the transferee industrial concern including the trustees or other persons managing, or connected jn any other man- ner with, any proviuenl iund or other fund maintained by any of those industrial concerns or the transferee industrial concern.

{13) On and from such date as may be specified by the Central Government in this behalf, the properties, and the assets of the assisted industrial concern shall, by virtue of, and to the extent provided in the scheme, stand transferred to, and vest in, and the liabilities of the assisted industrial concern shall, by virtue of, and to the extent provided in, the scheme stand transferred to, and become the liabilities of, the transferee industrial concern.

{14) If any difficulty arises in giving effect to the provisions of the scheme, the Central Government may, by order, do anything, not inconsistent with such provisions, which appears to it to be necessary or expedient for the purpose of removing the difficulty.

{15) Copies of the scheme or of any order made under sub-section {14) shall be laid before each House of Parliament, as soon as may be? after the scheme has been sanctioned by the Central Government, or, as the case may be, the order has been made.

(76) Where the scheme is a scheme for amalgamation of the assisted indus- trial concern, any business acquired by the transferee industrial concern under the scheme or under any provisions thereof shall, after the coming into opera- tion of the scheme or such provision, be carried on by the transferee industrial concern, in accordance with the law governing the transferee industrial concern, subject to such modifications in that law or such exemptions of the transferee industrial concern from the operation of any provisions thereof as the Central ' Government, on the recommendation of the Reconstruction Bank, may, by notifi- cation in the Official Gazette, make for the purposes of giving full effect to the scheme:

Provided that no such modification or exemption shall be made so as tol have effect for a period of more than seven years from the date of the acquisition of such business.

{17) Nothing in this sub-section shall be deemed to prevent the amalgama* tion with an assisted industrial concern by a single scheme of several industrial concerns in respect of each of which an order has been made under sub-section {1) of this section.

50. (1) Where any company, being an industrial concern, is being wound up by the High Court, and the High Court is of opinion that a scheme should be made for the reconstruction, revival or rehabilitation of such industrial concern, It may, by order, authorise the Reconstruction Bank to prepare, and submit to it, a scheme for such reconstruction, revival or rehabilitation of the industrial con- cern.

(2) The Reconstruction Bank may, in pursuance of the order made by the court under sub-section (2), prepare a scheme for the reconstruction, re- vival or rehabilitation of the industrial concern referred to in sub-section (2), and the scheme so made may contain all or any of the matters specified in sub-section (7) of section 49;

Power Of High Court to autho- rise Re- construc- tion Bant to prepare scheme for recta* tructlon, etc., of Indus- trial Concern.

Provided that no such scheme shall provide for the amalgamation or merger 6t the company in liquidation or ot any undertaking owned by it with any other company, or any other undertaking owned by such other company, except on the authority 01 a special resolution passed by the members at that other com- pany.

{3) The High Court may, it it is satisfied, after considering the scheme prepared under sub-section (2), that the scheme ensures the reconstruction, revival or rehabilitation of the industrial concern which is a company ueinj; wound up by the court; and such reconstruction, revival or rehabilitation would ensure an increase in the production ot goods needed by the community, approve the scheme with or without any modification and the scheme so approv- ed shall have etiect, notwithstanding anything to the contrary contained in any other provisions of this Act or any olner law, or any agreement, award 01 other instrument for the time being in force.

51. (i) Where any property, ellects or actionable claims have been sold or leased in pursuance oi any power conferred by section 39, section 40 or section 41 or where the management oi an industrial concern is taken over by the Re- construction Bank or its nominee or an undertaking or an industrial concern is amalgamated under section 4y, Lhe Reconstruction Bank or the administrator or any director, or any other person authorised by the Reconstruction Bank may, for the purpose ot taking into custody or control any such property, effects or actionable claims, may, request in writing the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any property or books of account or other documents relating to such property or eJtects or actionable claims may be situated, or found, to take possession thereof, and the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, shall, on such request being made to him,-—

(a) take possession of such property, effects or actionable claims and

books o£ account and other documents relating thereto, and

Chief Metro- politan Magis. trate and District Magis- trate to assist Recon- struction Bank in taking charge of pro- perty.

. (b) forward them to the Reconstruction Bank, administrator, director

or other person, as the case may be.

(2) For the purpose of securing compliance with the provisions of sub-

section (2), tha Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken tiuch steps and use, or cause to be used, such force as may, in his opinion, be necessary.

(3) No act of the Chief Metropolitan Magistrate or the District Magis- trate done in pursuance of this section shall be called in question in any court or before any authority.

CHAPTER IX

MISCELLANEOUS

Effect of the Act on other laws. 52, The provisions of this Act and of any rule or scheme made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the memoran- dum or articles of association of on industrial concern or in any other instrument having effect by virlure of any law other than this Act.

53. Notwithstanding anything contained in the Income-tax Act, 1961, or the Companies (Profits) Surtax Act, 1964 or the Interest-tax Act, 1974, or any other enactment for the time being in force relating to tax on income, profits or gains, the Reconstruction Bank shall not be liable to pay income tax, surtax, interest-tax, or any other tax in respect of—

(a) any income, profits or gains accruing to the Reconstruction

Assistance Fund or any amount received to the credit of that Fund;

(b) any income, profits oi guins derived, or any ;imount received, by Act 43 af 1961, Act 7 ot 1964 and Act 45 of 1974 not to apply to Recon- utruction Bank.

the Reconstruction Bank; and

(c) any interest collected by, or payable to, the Reconstruction Bank

m accordance with the provisions of the Interest-tax Act, 1974.

54. No piovision of law Ielating to winding up of corporations shall apply to the Reconstruction Bank and the Reconstruction Bank shall not be placed in liquidation, save by order of the Central Government and in such manner as it may direct.

Law i elating to winding up not to apply to the . Recon- struction Bank.

55. The Reconstruction Bank shall be deemed to be a bank for the pur-

poses of the Bankers' Books Evidence Act, 1891.

Act 18 of 1891 to apply to the books of the Recon- struction Bank.

56. Nothing contained in the Banking Regulation Act, 1949, except the provisions of section 34A and section 36AD, shall apply to the Reconstruction Bank.

Certain pro- visions of Act 10 of 1949 not to apply to Recon- struction Bank.

57. No provision of the Monopolies and Restrictive Trade Practices Act, 1969, in relation to the amalgamation, merger, modernisation or expansion of any undertaking to which Part III of that Act applies, shall apply when such amalgamation, merger, modernisation or expansion of such undertaking, takes place as a result of any sale, lease, purchase, amalgamation or merger in accord- ance with the provisions of this Act.

Act 54 of 1969 not to apply to the ex- pansion oi amal- gamation of certain under- takings.

Returns.

58 The Reconstruction Bank shall furnish, from time to time, to the Cen- tral Government and the Reserve Bank such returns as the Central Government, or, as the case may be, Reserve Bank, may require.

Delegation of powers.

59. The Board may, by general or special ordei, delegate, subject to such conditions and limitations, if any, as may be specified in the said order, to the Executive Committee or any other committee constituted under this Act or to any director, officer or other employee of the Reconstruction Bank or to the directors, administrators, officers, or other persons authorised by the Recons- truction Bank to manage any assisted industrial concern or any undertaking owned by such assisted industrial concern, such of its powers nnd duties under this Aci as it may deem necessary.

Staff of the Recon- struction Bank.

60. (1) Without prejudice to the provisions of section 7, the Reconstruc- tion Bank may atppoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine their terms and conditions of appointment and service.

(?) The Reconstruction Bank may, notwithstanding anything con'ained in any other law lor the time being in force or in any contract, depute any of its officer!; or other members of its staff to, or receive on deputation from, pres- cribed institutions on such terms and conditions as may be prescribed, and may also depute any of its officers or other members of its staff to any assisted indus- trial concern:

Provided that nothing contained in this section shall be construed as em- powering the Reconstruction Bank to depute to any prescribed institution pr assisted industrial concern any officer or other member of its staff on any salary, emoluments or other terms and conditions of service which are less favourable to him than those to which he was entitled immediately before such deputation.

Obliga- tions as to fidelity and aecrtfcy.

61. (1) The Reconstruction Bank shall observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, it shall not, except as otherwise provided in sub-section (3). divulge any infor- mation relating to, or to the affairs of, the assisted industrial concern, except in circumstances in which it is, in accordance with law or practices and usages, customary amonp; bankers, necessary or appropriate for the Reconstruction Bank In diviuVe such information.

(2) Every director, auditor, adviser, officer or any other employee of the Reconstruction Bank shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the Second Schedule,

(3) The Reconstruction Bank may, for the purpose of efficient discharge of

its functions under this Act, collect from, or furnish to,—

(a) the Central Government,

(h) the Reserve Bank, (c) (K State Bank, or anv subsidiary bank within the meaning of 3" of 1959,

,1V, State B.ink of India (Subsidiiuv Banks) Act, 1959, or any nationalised bank, or any other scheduled bank, or any State co-operative bank or the Development Bank or other public financial insti'utions, or State level agencies or prescribed institutions or State Financial Corporations,

such credit information or other information as if may consider useful for the purpose, in "urh manner and at such times, as it may think fit.

7 of 1934.

Explanation.—For the purnoses of this sub-section, the exnression "credit information" shall have the same meanina as in clause (c) of section 45A of the Reserve Bank of India Act, 1934. subiect to the morti- fication that the banking company referred to therein sha"¹! mean an assisted industrial concerr},

62. (1) The Reconstruction .Bank shall constitute, for the benefit of

Provident fund

the officers and other employees appointed under section 60 (as also for the officers and other employees whose services have been transferred to it under section 7) in .such manner and subject to such conditions as may be prescribed, such insurance and piovident fund as it may deem fit.

19 of 1925.

(2) Where any such insurance or provident fund has been so constitut- ed, the Central Government may declare that the provisions of the Provident Funds Act, 1925, shall apply to such fund as if it were a Government Provident Fund.

63. (1) Every director shall be indemnified by the Reconstruction

Indemi- nity of direc- tors.

Bank against all losses and expenses ineured by him in or in relation to the discharge of his duties, except such as arc caused by his own wilful act or default.

(2) A director shall not be responsible for any other director or for any officer or other employee of the Reconstruction Bank or for any loss or expenses resulting to the Reconstruction Bank from the insufficiency or deficiency of the value of, or title 1o, any property or security acquired or taken on behalf of the Reconstruction Bank or the insolvency or wrongful acLof any debtor or any person under obligation to the Reconstruction BasK or any thing done in good faith in execution of the duties of his office or in relation thereto.

Protec- tion of action taken In good faith.

64. No suit or other legal proceeding shall lie against the Reconstruction Bank, or any director, or officer, or other employee of the Reconstruction Bank, or any other person authorised by the Reconstruction Bank to dis- charge any functions under this Act, for any loss or damage caused or is likely to be caused by anything which is in good faith done or intended to be done, in pursuance of this Act or any other law or provision having the force of law.

Chair-

65. Chairman, director, adviser and auditor and every other employee of the Reconstruction Bank shall be deemed to be public servants for the purposes of Chapter IX of the Indian Penal Code.

45 of 1860, man, direc- tor, etc., to be public Hervantsi

66. If in any application, return or statement or other document made, submitted, furnished or produced for the purpose of obtaining any loan or advance or any other assistance from the Reconstruction Bank any person makes a statement—

(a) which is false in any material particular, knowing it to be

false; or

Penalty for making false state- ment in applica- tions *°r loans and advances.

(b) which omits to state any material fact, knowing it to be

material;

he shall be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine.

Offence* by com- panies,

67. (7) Where any offence, punishable under section 66, 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 the business of the company, as well as the company, shall

be deemed to be guilty of the offence and shall be liable to be procoeded against and punished accordingly:

Provided that nothing contained in this sub-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 dili- gence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (2), when any offence punishable under section 66 has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to bf* guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purpose of this section,,—

(a) "company" means any body corporate and includes a firm or other association of individuals: and

(b) "director", in relation to a firm, means a partner in the firm.

68. (1) The Central Government may, by notification in the Official Gazette, make rules to carry out the provisions of this Act.

Power to mako rules.

(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—

(a) institutions and agencies in, and outside, India, payment oi whose loans may be guaranteed, counter- piaranteed or indemnified by the Reconstruction Bank, as may be specified under sub-section (1) of section 18;

(b) institutions and agencies which may be provided with the line of credit by the Reconstruction Bank for grant of loans nnd advances by them to industrial concerns as may be specified under clause (d) of sub-section (1) of section 18;

(c) persons who may be appointed to act as the agents of the Reconstruction Bank as required by clause (q) of sub-section (I) of section 18)

(d) borrowing of foreign currency from any source, other than the source specified in sub-section (1) of section 23;

(e) the powers which may be exercised and duties which may be performed by any director or administrator appointed under sub-section (I) of section 44;

(/) the manner in which and the conditions subject to which an in- surance or provident fund mav be constituted by the Reconstruction Bank as required by sub-section (I) of section 62;

O) any other matter which is required to be, or may be. pres- cribed.

(3) Every rule made under thi; Act shall be laid, as soon as mav be after it is made, before each House of Parliament, while it is in session, for B total period of thirty davs which mav be comprised in one session or \r\

two or more successive sessions, and if, before the expiry o[ the session im- mediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only In such modified form or be o£ no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Power of Recon- struction Btnk to make re- gulations.

69. (1) The Board may, with the previous sanction of the Central Government, make regulations, not inconsistent with the provisions of this Act and the rules made thereunder, to provide for all matters for which regulations are necessary or expedient for the purpose of giving effect to the provisions of this Act and of the rules made thereunder.

(2) In particular, and without prejudice to the generality of the fore-

going power, such regulations may provide for all or any of th© following matters, namely:—

(a) restrictions relating to the powers which may be exercised

toy the Chairman, in pursuance of the provisions of sub-section (2) of section 9;

(b) the time and place at which the Board shall meet and the fu'Ies of procedure (including quorum) Which shall be observed by the Board in regard to the transaction of business at its meetings, as required by sub-section (1) of section 14;

(c) (/) the constitution of the Exocutive Committee or other committees

and the functions thereof;

(ft) th" time and place at which such committees shall meet; and

(Hi) the rules of procedure (including quorum) which shall be

observed by each Committee in relation to the transaction of business

at its meetings, as required by section 15;

(d) fees and allowances which may be paid to the directors and

members of the committee, as required by section 17;

(e) conditions and limitations, subject to which an industrial concern may enter into any kind of business, as required by clause (0 of "ub-&ection (2) of section 19;

(;/) the form and manner in which the balance sheet and ac- counts of the Reconstruction Assistance Fund shall be prepared, as required by sub-section (1) of section 29;

(g) the form and the manner in which the balance sheet and

accounts of the Reconstruction Bank shall be prepared, a,*, required by sub- qpction (1) of sectfop 32;

(ft) the duties, conduct, salaries, allowances and conditions of

service of officers and other employees (whether employed on regular basis or on contract) of the Reconstruction Bank and all those who ate appointed for the management of any undertaking, the manage- ment of which has been taken over; and

(0 any other matter which is requiied to be, or may be, pro-

vided for by regulations,

(3) Ihe Central Government shall cause every regulation made under this

Act to be laid, as soon as may be after it is made, before each House of Parlia- ment, while it is in session, for a total period of thirty days which may be com- prised in one session or in two or more successive sessions, and if, before th" expiry of the session immediately following the session or the successive iM- sions aforesaid, both Houses agree in making any modification In the regulation, or both Houses agree that the regulation should not "be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.

70. If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by notification in the Official Gazette, remove the difficulty:

Power to remov* difficul- ties

Provided that no such notification shall be made after the expiry of a

period of two years from the appointed day.

71. The enactments specified in Parts I to III of the Third Schedule to

this Act shall be amended in the manner directed in the first column thereof and such amendments shall take effect on the dates specified in the second column of that Schedule.

Amend- ment of certain enact- ments.

72. In every Act, rule or regulation in force on the appointed day, for the

words "Industrial Reconstruction Corporation of India Limited", wherever they occur, the words "Industrial Reconstruction Bank of India" shall be substituted.

Substitur tion in Acti, rules or regula- tions of the Recon- struction Bank In place of the Cor-

poratioK.

THE FIRST SCHEDULE

(See section 37)

DECLARATION REFERRED TO IN SECTION 37 OF THE INDUSTRIAL RECONSTRUCTION

BANK OF INDIA ACT, 1984

I/We hereby declare that in consideration of the

assistance given to mc/us or at my/our request, by the Industrial Reconstruction

Bank of India, as specified in the Annexure hereto, I|wc agree that the immov-

able properties specified in the said Annexure shall form a security for

the said assistance and I/We agree that the dues arising out of such

assistance shall, on and from the date of execution of these presents,

be a charge on the said properties for the recovery of the dues of the

said Reconstruction Bank.

Execution by the parties.

1. Signed and delivered by

(party receiving the assistance^

2. Signed and delivered by

(the concerned person I'urnishiiifr guarantee/collateral security)

3. Signed by the duly authorised official of Reconstruction Bank.

(NOTE:—Strike oul whichever is not applicable.)

THE SECOND SCHEDULE

(See section 61)

DECLARATION OF FIDELITY AND SECRECY

I, , do hereby declare that I will faithfully, truly and to

the best of my 3ki]l and ability, execute and perform the duties required

of me as the Chairman, Director, member of committee,

auditor, adviser, officer or other employee of the Reconstruction Bank

of India and which properly relate to the office or position held by me in or in

relation to the said Reconstruction Bank.

I further declare that I will not communicate or allow to be com-

municated to any person not legally entitled thereto any information

relating to the affairs of the Industrial Reconstruction Bank of India

or to the affairs of any person having any dealing with the said Recon-

struction Bank, nor will I allow any such person to inspect or have

access to any books or documents belonging to or in possession of the

said Reconstruction Bank and relating to the business of the said Recon-

struction Bank or the business of. any person having any dealing with

the said Reconstruction Bank.

(Signature)

Signed before me.

THE THIRD SCHEDULE

(See section 71)

Amendments of certain enactments

PART I

AMENDMENTS TO THE RESERVE BANfc OF INDIA ACT, 1934

(2 or 1934)

Amendments

Date on which amendments shall take effect

(2)

(1)

1. In section 2, after clause (civ), insert the following '

clause, namely:—,

The date of establish- ment of the Recons- truction Bank.

'(cv) "Reconstruction Bank" means the Industrial Reconstruction Bank of India established under section 3 of the Industrial Reconstruction Bank of India Act, 1984.'.

2. In section 17,—

(a) in clause (4G), after the words "the Exim Bank¹',

Do.

insert the words "or the Reconstruction Bank";

(b) in clause (4-!), after the words "Exim Bank",

Do.

insert the words "or Reconstruction Bank";

(c) after clause (4J), insert the following clause,

Do.

namely:—

"(4K) the making to the Reconstruction Bank of

loans and advances—

(a) repayable on demand or on the expiry of a fixed period not exceeding ninety days, from the date of such loan or advance against the security of stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India; or

(b) against the security of bills of exchange or promissory notes, arising out of bona fide commercial or trade transactions bearing two or more good signatures and ma- turing within five years from the date of such loan or advance;";

Do.

(d) in clause (12B), after the words "the Exim Bank", insert the words "or the Reconstruction Bank".

Do.

3. In section 42, in sub-clause ("i) of clause (c) of the Explanation below the proviso to sub-section (1), after the words "or from the Exim Bank", insert the words "or from the I ^construction Bank".

Amendments

Date on which amendments shall take effect

(2)

(1)

The date of establishment of ihi Rcconnruc- lion Bank.

4. In section 46C, in clauses (c) and (d) of sub-section (3), after the words "Exim Bank" wherever they occur, insert the words "or the Reconstruction Bank, as the case may be,".

P A RT II

AMENDMENT TO THE INDUSTRIAL DISPUTES A C T, 1947

(14 OF 1947)

Amendment

Date on which amendment shall

take effect

(2)

(1)

Tn section 2, in clause (bb), after the words "Export- Import Bank of India", insert the words ". the Industrial Reconstruction Bank of India,".

The date of estab- lishment of the Industrial Recons- truction Bank of India.

PART III

AMENDMENTS TO THE BANKING REGULATION ACT, 3949

(10 OF 1949)

Amendments

Date on which amendments shall

take effect

(1)

(2)

i. In section 5, .ifccr clmse [jfb), insert the following

clause, namely: —

The date of est- ablishment of Reconstruction Bank.

(jfc) "Reconstruction Bank" means tho Industrial Reconstruction Bank of Indi.i established under section 3 of the Industrial Reconstruction Bank of India Act, 1984;"•

Do.

2. In section 18, in the Explanation, in sub-clause (ii) of clause ("), after the word-? "or from the Exim Bank", insert the words "or from the Reconstruction Bank".

Do.

3. In section 34A, in sub-section (5), after the words ''the Exim Bank", insert the words ", the Reconstruction Bank".

Do.

4. In section 36AR, in sub-section (3), after the words "the Exim Bank", insert the words ", the Reconstruction Bank".

5. In section 56, in sub-clause (ii) of clause (a) of the Ex-

Do.

planation under clause (j), after the words "the Exim Bank", insert the words ", the Reconstruction Bank".

STATEMENT OF OBJECTS AND REASONS

The Bill seeks to convert the Tndustria¹ Reconstruction Corporation of India Limited (which was established as a company under the Companies Act, on 12th April, 1971, for the purpose of rehabilitating and reconstructing ailing industrial concerns) into a statutory corporation, ,0 be known as the Industrial Reconstruction Bank of India (hereafter referred to as the Reconstruction Bank). The conversion of the said company into a statutory corporation has become necessary—

(i) in order to overcome the inherent difficulties which have been faced by the company during the last twelve years of its existence, which have tended to inhibit its efforts to rehabilitate and reconstruct sick industrial concerns, and

(ii) to invest the Reconstruction Bank with effective powers to tackle and contain the growing malaise of industrial sickness.

2. The salient features of the Bill are—

(i) The establishment of the Industrial Reconstruction Bank ol India which shall be wholly owned by the Central Government, and the transfer thereto of the undertaking of the company known as the Industrial Reconstruction Corporation of India Limited;

(ii) The Chairman of the Industrial Reconstruction Bank of India (who shall also function as the managing director thereof) shall be appointed by the Central Government;

(ni) The Reconstruction Bank will function aa the principal credit and reconstruction agency for industrial revival and will co- ordinate the work of other institutions engaged in industrial revival activities. Besides the Reconstruction Bank will also assist and promote industrial development and rehabilitation of industrial concerns;

(iv) In regard to assisted sick industrial units, the Reconstruc- tion Bank shall have powers 1o take over the management; lease out or sell the undertakings as a running concern; prepare schemes for reconstruction by scaling dovrii the liabilitv and submit such schemes oi mer^pr or nmalternation for approval of the Central Government and 1o applv to the Central Government for the sus- pension of all or ony contracls, agreements, settlements, awards, etc. The Reconstruction Bink wi'l also have the power, if directed so to do by the High Court, to submit schemes for reconstruction of the companies in liquidation or for their amalgamation with hfiithv con- cerm and to submit such schemes to the High Court for approval:

(v) The Central Government shall have powers to give to the Reconstruction Bank such directions in matters of policy involving public interest -aa it may think fit.

3. The notes on clauses appended to the Bill explain in detail the various provisions of the Bill.

The 2nd July, 1984.

NEW DELHI;

PRANAB MUKHERJEE

PRESIDENT'S RECOMMENDATIONS UNDER ARTICLES 117 AND 274 OF THE CONSTITUTION OF INDIA

[Copy of letter No. F.I (13)IF-11/81, dated 2nd July, 1984 from Shri Pranab Kumar Mukherjee, Minister of Finance to the Secretary- General, Lok Sabha.]

The President, having been informed of the subject matter of the proposed Industrial Reconstruction Bank of India Bill, 1984, recommends under clause (1) of article 117 read with clause (1) of article 274 of the Constitution, the introduction of the Bill in Lok Sabha and also recommends to Lok Sabha under clause (3) of article 117 of the Consti- tution the consideration of the Bill.

Notes on Clauses

Clause 1.—-This clause deals with the extent and commencement of the Act.

Clause 2.—This clause seeks to define certain expression in the Bill. Special mention may be made about the defintion of the expression indus- trial concern. The said expression has been so defined as to ensure that almost all types of industries fall within the purview of the Bill.

Clause 3.—This clause seeks to provide for the establishment of the Industrial Reconstruction Bank of India (to be known as the Reconstruc- tion Bank) with Head Office at Calcutta and also for the establishment of its ofncea and branches in and outside India.

Clause 4.—This clause deals with the share capital and the owner- ship of the Reconstruction Bank. It provides for an authorised capital of Rs. 200 crores with initial paid up capital of Rs. 50 crores. Further, the issued capital shall be wholly subscribed by the Central Government.

Clauses 5 to 8.—These clauses provide for the transfer of business of Industrial Reconstruction Corporation of India Limited (IRCI) to the Reconstruction Bank and other consequential provisions.

Clauses 9 and 10—These clauses provide for the management of the Reconstruction Bank.

Clause 11.—This clause deals with the disqualification of membership of the Board of Directors.

Clause 12.—This clause deals with the terms of office, salaries and allowances of the Chairman.

Clause 13.—This clause deals with the disclosure of interest, direct of Indirect, of the Directors.

Clause, 14.—This clause deals with the time and place of the meetings of the Board of Reconstruction Bank and the rules and procedures in regard to transaction of business of the meetings.

Clause 15.—This clause empowers the Board to constitute Executive Committee or other Committees for such purpose as- it may think fit.

Clause 16.—This clause provides that no act or proceeding of the Board or of any Executive Committee or other Committees shall be invalid on the ground of existence of any vacancy or difficulty in the constitution of the Board or difficulty or disqualification of a member of the Board of Executive or other Committee.

Clause 17.—This clause seeks to provide for the payment of fees and allowances to Directors and members of the Executive Committee or othel Committees,

Clause 18.—This clause deals with the object and business of the Eeconstruction Bank and gives details of the functions which may be undertaken by the Reconstruction Bank.

Apart from its normal function, viz., to act as the principal credit and reconstruction agency for industrial revival by undertaking modernisation, expansion, rc-organisation. diversification or rationalisation of industries find by coordinating similar work of other institutions, the Reconstruction Bank shall also assist and promote industrial development and undertake rehabilitation of industrial concerns bv providing or procuring assistance find operating schemes for the same and for attaining the said objectives granting loans and advances (including working capital) to any industrial Concern or subscribing to or purchasing or underwriting the issue of stocks, ihares, bonds or debentures of any industrial concern or converting the dues in respect of such loans or debentures into shares of industrial con- cerns, to Issue guarantee, counter guarantee in respect of:

(0 loans raise by industrial concerns from banks, public finan- cial institutions or any other prescribed institution or agency in or outside India;

(ii) deferred payments due from an industrial concern;

(Hi) the purpose of obligation to any contract undertaken by the industrial) concern.

A number of other functions are proposed to be entrusted to the Reconstruction Bank, such as (a) subscribing to or purchasing or under- writing the issue of stocks, shares, bonds or debentures to any Institution; (b) providing credit to any state level agency or other institution for grant of loans and advances to industrial"concerns; (c) providing or obtaining credit from other public institutions or banks; (d) grant of loans to, or to furnish guarantees on behalf of, industrial concerns; (e) providing in- frastructural facilities and raw-materials; (f) providing machinery or other equipments on lease or hire purchase basis; (g) providing consultancy and bank services in or outside India related to reconstruction and development of any industrial concern; (h) providing technical, managerial, legal, administrative and marketing assistance; (i) to provide schemes for merger, amalgamation or reconstruction of industrial or busi- ness concerns or undertakings; (j) undertaking research and survey for evluating or dealing with marketing or investment and (k) acting as an agent to the Central or State Government. Reserve Bank, State Bank, scheduled bank, etc.

Clause 19.—This clause prohibits Reconstruction Bank for entering into any kind of business with any industrial concern of which any of the directors of Reconstruction Bank Is a proprietor, partner, director, etc., or one or more directors of Reconstruction Bank together hold substantial interest. However, the restriction is not applicable to a director nominat- ed by Government, Government Company. Reconstruction Bank or by a Corporation established by any law or is elected by the aforesaid bodies pursuant to shares held by any of them.

Clauses 20 and 21.—While clause .20 seeks to provide for loans by the Central Government, clause 21 provides for borrowings and accep- tance of deposits by the Reconstruction Bank, Like other financial insti*

tutions, Reconstruction Bank would be able to borrow from the open market through the issue of bonds and debentures. Besides, it will also enjoy ttie requisite accommodation from the Reserve Bank agafyist trus- tee securities and lodgment of bills and promissory notes arising out of bona fide commercial or trade transactions. In addition to the above, Re- construction Bank may borrow from such other authority, organisation, institutions or trusts in India as approved by the Central Government as also may accept deposit repayable after the expiry of not less than one year with the approval of Reserve Bank.

Clause 22.—This clause deals with the power of the Reconstruction Bank to transfer its rights and interest in respect of any loan or advance granted or any amount recoverable by it.

Clauses 23 and 24.—Clause 23 enables the Reconstruction Bank to borrow foreign currency for the purpose of granting loans and advances with the consent of Central Government from bank or financial institu- tions in any foreign country and clause 24 enables it to raise resources by acceptance of gifts, grants, donations, etc., either from Government or from any other source.

Clauses 25 to 30.—-These clauses inter alia deal with the establish- ment of a special fund to be called the Reconstruction Assistance Fund which would be utilised mainly for financing of ajny loan or advance or entering into any arrangement under clause 18 which are unlikely to be supported by the Reserve Bank, scheduled banks and financial institu- tions. The account of the Reconstruction Assistance Fund would be maintained separately and would also be audtied by the statutory audi- tors and an annual report on its operations would be submitted to the Central Government. These provisions are similar to the provisions under Industrial Development Bank of Ijndia Act, 1964.

Clause 31.—This clause seeks to provide for the maintenance of general fund to which all other income earned by the Reconstruction Bank would be credited. The general fund will be utilised by the Re- construction Bank for its normal operatiotms.

Clquse 32.—This clause seeks to provide for the preparation of Balance-sheet and Profit & Loss Account of the Reconstruction Bank and closure of Books and Accounts as on 30th June each year.

Clause 33.—This clause provides that the Reconstruction Bank may establish a Reserve Fund to which may be transferred such funds as it may deem fit out of the annual profit accruing to the General Fund, It further provides that Reconstruction Bank shall after making the pro- visions for bad and doubtful debts, depreciation of assets and for all other matters which are usually provided for by the bankers and for the transfer of the balance of the net profits to the Central Government.

Clause 34.—This clause provides for the accounts of the Reconstruc- tion Bank being audited by the Auditors duly qualified to act aa such under the Companies Act, 1956, to be appointed by the Central Govern- ment. The Central Government may also, at any time appoint the Comptroller a!nd Auditor General of India to examine and report upon the accounts of the Reconstruction Bank,

Clause 35.—This clause makes a saving provision to ensure that the provisions contained in Chapter VII [except as otherwise provided in sub- sec tioa (4)] of section 29, shall not apply to the Reconstruction Assistance Fund.

Clause 36.—This clause deals with the power of the Reconstruction Bank lo impose conditions on industrial concerns for granting assistance for the purpose of protecting the interest of the Reconstruction Bank and for securing that the assistance granted is put to the best use by the indus- trial concern. This clause furlher enables the Reconstruction Bank to appoint one ojr more nominee non-ratational director on the Board of such industrial concern. Any provision regarding qualification age limit, number of directorships, removal from office of directors and such like conditions contained in the memorandum, articles of association of the industrial concern or in any other law relating to industrial concern, shall nut apply to such directors appointed by the Reconstruction Bank.

Clause 37.—This clause deals with the creation of a charge on the property of the industrial concern or the person offering immovable pro- perties as security to secure assistance from the Reconstruction Bank. This clause enables the Reconstruction Bank to have a charge both as primary security and as collateral security for the assistance sanctioned to the industrial concern. The person seeking the assistance or offering any immovable property as security for such assistance will be required to make a written declaration which will be registered with the concern- ed Registrar of Assurances. Such declaration shall, inter alia, contain the particulars of the assistance granted and the particulars of he pro- perties offered as security or ceUaterai security for such assistance. In case any fresh security ot immovable property is offered for the assistance, fresh declaration shall be executed by the industrial concern or the person offering such property as collateral security, as the case may be.

Clause 38.—This clause deals with the power of the Reconstruction Bank to call for repayment before the agreed period if false or misleading information in any material particular have been given in the application for the assistance or if the industrial concern had failed to comply with the terms of its agreement with the Reconstruction Bank or if there is reasonable apprehension that the industrial concern is unable to pay its debts or that proceedings for liquidation have been or may be commenced against the industrial concern or if the property assigned, charged, hypo- thecated, mortaged or pledged to the Reconstruction Bank as security for the assistance is not insured and kept insured to the satisfaction of the Reconstruction Bank or if such property has depreciated in value to such an extent that further security to he satisfaction of the Reconstruc- tion Bank should be given and such security has not been furnished or any machinery, plant and other equipment whether, forming part of the security or otherwise, is removed without the permission of the Recons- truction Bank from the premises of the industrial concern or for any other reason to protect the interest of the Reconstruction Bank.

Clause 39.—This clause deals with the rights of the Reconstruction Bank in case of default. It enables the Reconstruction Bank to take over the management, or possession, or boh, of the industrial concern as well as the right to transfer by way of lease or sale of the property assigned, charged, hypothecated, mortgaged or pledged to Reconstruction Bank for the pur- pose of realising its dues or for the revival of the industrial concern. Any such transfer of property made by Reconstruction Bank shall vest in the transferee the right in relation to the property transferred as if the ran*-

fer has been made by the owner of such property. The same power is also extended to the Reconstruction Bank in regard to goods manufactured or produced annually or partly from the goods forming part of the security held by the Reconstruction Bank as it had with the receipt of the original goods. The cost incidental to the aforesaid shall also be recovered from the industrial concern.

Clause 40.—This clause deals with the enforcement of claims by the Reconstruction Bank where an assisted industrial concern makes default in payment of any of the dues or in meeting its obligations in relation t< any other industrial assistance given by the Reconstruction Bank or other wise fails to comply with the terms of agreement with the Reconstruction Bank, through concerned High Court for an order of sale or lease of the property assigned, charged, hypothecated, mortgaged or pledged to Re- construction Bank as primary or collateral security for the assistance granted by it or for transfer of the management of the industrial concern to the Reconstruction Bank or its or its nominee or for ad interim in- junction or for order for appointment of receiver, by an application stating the nature and extent of liability of the industrial concern to the Recon- struction Bank and the grounds thereof and the procedure to be adopted by the High Court in this regard.

Clause 41.—This clause deals with the powers of Reconstruction Bank to take over the management or possession or both of the property offered, as collateral security and shall also have the right to transfer by lease or sale of the said property for the purpose of realising its dues. The clause also enables Reconstruction Bank to recover the incidental cost out of the money received by way of sale or lease of the property mentioned afore- said. Reconstruction Bank shall also have the right to apply to High Court for sale or lease of the aforesaid property and the provisions will be similar to that of clause 40.

Clause 42.—This clause deals with the power of the Reconstruction Bank to appoint a director or administrator of an industrial concern by notified order "when the management of the industrial concern is taken over. The provisions of the Companies Act, 1956 or any other law for timely enforcement relating to industrial concern in so far as it relates to the holding of any share qualification, age limit, restriction on the number of directorships, retirement by rotation or removal from office shall not apply to such directors as appointed by the Reconstruction Bank] under this clause.

Clause 43.—This clause deals with the effect of notified order issued under clause 42. On the issue of such notified order, all persons holding office as directors of the industrial concern and all the persons holding office having the power of superintendence, direction or control of the industrial concern which is not a company before the issuance of notified order, shall be deemed to have vacated their offices as such and any con- tract of management between any other industrial concern and any director or manager thereof, shall be deemed to have terminated. The directors or administrators, appointed for the purpose, shall take such steps as may be necessary to take into their custody or control, all the properties and assets of the industrial concern. From the date of notified order the directors or administrators, as the case may be, shall alone be entitled to exercise the powers- of the directors or all the powers of superintendence, direction or control, as the case may be.

Clause 44.—This clause deals with the powers and duties of directors and administrators appointed under clause 42 subject to the control of the Reconstruction Bank for the purpose of efficiently managing the business of industrial concern and shall also have powers to make an application to court for cancellation of any contract or agreement entered into before the issue of notified order and the court may make an order cancelling of such contracts or agreements.

Clause 45.—This clause provides that the managing or whole-time dir- ector or any other director or manager or any person in charge of manage- ment of the industrial concern shall not be entitled to any compensation in the loss of office or for premature retirement or for the termination of any contract of management by him with the industrial concern.

Clause 46.—This clause deals with the non-application of certain pro- visions of the Companies Act where the management of a company has been taken over by the Reconstruction Bank. It restricts nomination or appointment of a director by the shareholders and passing of any resolu- tions in the shareholders' meeting and no proceedings for winding up or for appointment of receiver of such industrial concern shall lie in any court except with the consent of the Reconstruction Bank. Except the above restrictions and the exceptions, restrictions and eliminations, if any, as the Central Government by notified order specify, all other provisions ,pf the Companies Act shall apply to the industrial concern.

Clause 47,—This clause deals with the restriction on filling of suits for dissolution or for partition of an industrial concern (unit which is not a company) when its management is taken over by the Reconstruction Bank, before any court or tribunal or other party except with tue consent of Reconstruction Bank.

Clause 48.—This clause seeks to provide that no proceeding for the appointment of any official assignee or receiver shall lie in any court in relation to any industrial concern the management of which has been taken over by the Reconstruction Bank without its consent.

Clause 49.—This clause gives power to the Central Government, by notified order, to grant relief to an assisted industrial concern, on an application, to suspend the operation of all or any of the contracts, assur- ances of property, agreements, settlements and awards or standing orders, etc., or any rights, privileges, obligations and liabilities arising or accru- ing thereunder before the date of notified order. The [notified order shall not be made for more than two years at a time, so, however, that such notified order shall not remain in force for more than eight years in the aggregate. The period of limitation will not run for the period during which the notified order will be in force.

During the period of operation of the notified order, the Central Gov- ernment, if satisfied, that it is necessary so to do in the public interest, may authorised the Reconstruction Bank to prepare a scheme for recon- struction, revival or rehabilitation of the assisted industrial concern or for scaling down the liabilities of the assisted industrial concern or for the amalgamation of the assisted industrial concern with any other industrial concern. A copy of the draft of the scheme is to be sent to the assisted industrial concern concerned in the amalgamation, for suggestions and objections and the consent of the transferee Industrial

concern, if It is a company, has to be obtained by special resolution of such company. The scheme as approved shall be placed before the Central Government for sanction and if sanctioned the same shall come into force on such date as the Central Government may specify in this behalf.

fhe Central Government may constitute an advisory committee con- sisting of officers of the Central Government, Reserve Bank, State Bank, Nationalised Banks and public financial institutions for the purpose of assisting it in this regard.

The scheme shall when comes into force, be binding on the assisted concern, transferee industrial concern or any other industrial concern and also on all the membeis and othev creditors and employees and on any other person having any right or liability thereto including the trus- tees or other persons managing or connected with provident fund or other funds maintained by any of those industrial concern or the trans- feree industrial concerns. The copies of the schemes or any other order made under sub-section (14) shall be laid before both the Houses of Parliament after the scheme has been sanctioned by the Central Govern- ment or, as the case may be,, the order has been made.

Clause 50.—This c^use enables the concerned High Court to authorise the Reconstruction Bank to prepare scheme for reconstruction, revival or rehabilitation of industrial concern which is being wound up by the High Court. The High Court may, after considering the scheme, approve the scheme with or without modification and the scheme so approved shall become effective.

Claure 51.—This clause seeks to enable the Chief Metropolitan Magis- trate or District Magistrate to extend help to the Reconstruction Bank Jr the administrator," any directors or any other person authorised by the Reconstruction Bank in taking charge of or possession of the property of the industrial concern or of any other person offered that security which nas been sold or leased in pursuance of any of the power conferred by clause 39, 40 or 41 or where the management of any industrial concern \s taken over or when an undertaking or an industrial concern is amal- gamated under clause 49.

Clause 52.—This clause deals with the effect of this Act on other laws.

Clams 53.—This clause provides for the exemption of the Reconstruc- tion Bank from payment of income-tax or cpniDanies (profits) surtax End of other taxes on income, profits, or gains and is on the lines of simi- lar exemptions given to Industrial Development Bank of India and Ex- port Import Bank of India. This clause further exempts Reconstruction Bank from the payment of interest-tax on its income under the Interest- tax Act, 1974.

Clause 54.—This clause ensures that no provision of any law relating to the winding up of companies or corporations shan apply to the Recon- struction Bank which shall not be placed in liquidation except by an order of the Central Government.

Clauses 55 and 56.—These two clauses seek to extend the application of the Bankers' Books Evidence Act, 1891, and to a limited extent, of the Banking Regulation Act, 1949 to the Reconstruction Bank.

Clause 57.—This clause provides that Part III of the Monopolies and Restrictive Trade Practices Act, 1969, shall not apply to any amalgama- tion effected under this Act.

Clause 58.—This clause makes it obligatory for the Reconstruction Bank to furnish from time to time returns to the Central Government.

Clause 59.—This clause provides for the delegation of powers and functions of the Board under the Act.

Clause 60.—This clause provides for the appointment of the staff by the Reconstruction Bank for the efficient performance of its functioning. It a"¹ so enables the Reconstruction Bank to depute or to receive on depu- tation from the prescribed institutions any of its officers or other mem- bers of its staff on such terms and conditions as may be prescribed in- cluding deputation of Us officers or other members to any assisted indus- trial concern.

Clause 61.—This clause seeks to impose on the Reconstruction Bank obligation not to divulge any information relating to or to the affairs of itg constituents except in the circumstances stated in that clause. It also provides for a declaration of fidelity and secrecy by every director, audi- tor, adviser, officer or other employee of the Reconstruction Bank.

Clause 62.—-This clause deals with the establishment of the Provident Fund for the benefit of its officers and emp'oyees.

Clause 63.—This clause seeks to indemnify the directors of the Re- construction Bank against all losses and expenses incurred by him in or in relation to the discharge of his duties other than those caused by his own wilful act or default.

Clause 64.—This clause is the usual provision relating to protection of action taken in good faith.

Clause 65.—This clause provides that the Chairman, Adviser and Auditor and every other employee of the Reconstruction Bank shall be deemed to be a public servant for the purpose of Chapter IX of the Indian Penal Code.

Clauses 66 and 67.—These two clauses provide for penalty for making false statement in applications for loans or advances or any other assist- ance from the Reconstruction Bank.

Clause 68.—This clause provides for the power of the Central Gov- ernment to make rules for the purpose of giving effect to the provisions of the Act and in particular in respect of the matters specified in that clause.

Clause 69.—This c^use seeks to empower the Board of Directors of Reconstruction Bank, with the approval of the Central Government, to make, regulations, not inconsistent with the Act and the rules made thereunder, for the purpose of giving effect to the provisions of the Act and in particular in respect of the matters specified in that clause.

Clause 70.—This clause gives power to Central Government to remove

defects in giving effect to any of the provisions of this Act.

Clause 71.—This clause provides for certain amendments of the Reserve Bank of India Act, 1934, th" Industrial Disputes Act, 1947 and the Banking Regulation Act, 1949.

The amendments to the Reserve Bank of India Act, 1934 are mainly

consequential. This will enable the Reserve Bank to grant accommoda- tion to the Reconstiuction Bank against trustee securities, loans and advances and purchase of foreign exchange from the Reserve Bank of India for the purpose of its financing activities. The Reserve Bank of India is also being empowered to grant ^hort-tcrm loans to the Recon- struction Bank.

The amendment to the Industrial Disputes Act, 1947 is to clarify that the appropriate Government in relation to any industrial dispute, involv- ing the Reconstruction Bank, will be the Central Government.

The amendment to the Banking Regulation Act, 1949 is for the purpose

of extending the Recon,'ruction Ejnk the protection against any demand by any tribunal or authority under the Industrial Disputes Act, 1947 for disclosure of information regarding its inner reserves. The other amend- ments prohibits the holding of jny agitation by the staff of the Recor*- stru^tion Bank within the premises,

Clause 72,—This clause deals with substitution in Acts, rules and re-

gulations of the Rceonstruction Bank in place of Industrial Reconstruc- tion Corporation of India Limited.

FINANCIAL MEMORANDUM

Clause 4(1) provides that the Industrial Reconstruction Bank of India shall have an authorised capital of two hundred crores of rupees. Clause 4(2) pro- vides that the initial paid up capital of the Reconstruction Bank shall be fifty crores of rupees obtained by acquiring the present paid up capital of twenty crores of rupees of the Industrial Reconstruction Corporation of India Limited; conversion into equity of Central Government loans to the Reconstruction Cor- poration to the extent of twenty crores of rupees and direct subscription by the Central Government of the remaining ten croues of rupees. Clause 4(3) pro- vides that the Reconstruction Bank m.iy increase its paid up capital by making further issue of shares of such amount as it may think expedient within the au- thorised capital of two hundred crores of rupees. Clause 4(4) provides that the entire paid up capital of the Reconstruction Bank shall be wholly subscrib- ed by and allotted to the Central Government. Thus, it would be necessary to make available a sum of twenty crores of rupees for acquiring the slharcs of the Industrial Reconstruction Corporation of India and a sum of ten crores of rupees for subscribing to the share capital of the Industrial Reconstruction Bank of India during the lye-ar 1984-85. It would also be necessary to convert the outstanding Central Government loans to the extent of twenty crores of rupees to the Industrial Reconstruction Corporation of India into equity of the Reconstruction Bank during the year 1984-85. The implication of conversion of twenty crores of loan into equity of the Reconstruction Bank will be that after such conversion the interest payable on the sum of twenty crores of rupees shall cease to be paid. The loss of Interest amount may to some extent be ioffset by the dividend payable on this amount by the Reconstruction Bank. The extent of dividend that may be pai

2. Clause 5(2) provides for payment by the Central Government to the In- dustrial Reconstruction Corporation oF Tndia Ltd, an amount equal to the amount of the total paid ut> capital of the Corporation for being disbursed to the existing shareholders of the Corporation in terms of clause 6 ( 1 ). The amount payable to the shareholders, being twentv crores oF rupees, is the same amount indicated in clause 4(2) for acquiring shares oF the Reconstruction Corporation. Thus, there is no additional expenditure either in terms of clause 5(2) of clause 6(1)'except to the extent of twenty crores of rurecs contemplated to be mid for acquiring the shares of the Reconstruction Corporation under clause 4 ( 2 ).

3 Clause 12C2)(a) provides that in the event of the Central Government deciding to terminate the services of the Chiinnan before the eyorrv of his •term, it shall cither rive him notice of not less than three month or three months' salary and allowances in lieu of such notice. The salaries ind allo-

wances of the Chairman of the Reconstruction Bank shall be the same a3 presently emjoyed by him, as the Chairman of the Reconstruction Corpora- tion. The Chairman of the Industrial Reconstruction Corporation is pre- sently drawing a salary of three thousand live hundred rupees in the pay scale oi Rs. 3n0'J-1^5-iUO0. Thus in the event of the Central Government deciding to terminate the services of the Chairman, of the Reconstruction Bank without three months' notice, the Central Government may have to pay an amount ranging from ten thousand five hundred rupees to twelve thousand rupees plus three months' allowances as admissible to the Chair- man at the time of such termination.

4. Clause 20 provides that the Central Government may, after due appro- priation made by law, advance to the Reconstruction Bank, interest free loans or interest bearing loans, on such terms and conditions as may be agreed upon. It may be necessary for the Central Government from the year 1984-85 onwards to grant loans ranging from forty crores of rupees to eighty crores of rupees every year depending upon the magnitude of the operations of the Reconstruc- tion Bank, on such terms and conditions as may be agreed upon.

5. Clause 21 provides that the Industrial Reconstruction Bank of India may issue and sell bonds and debentures with or without the guarantee of the Cen- tral Government. Clause 21(2) provides that the Central Government may on a request being made to it by the Reconstruction Bank guarantee the bonds and debentures issued by that bank as to the repayment of principal and payment ol interest at such rate as may be fixed by that Government. The extent c the contingent liability arising out of the Central Government guarantee in respect of bonds and debentures issued by the Reconstruction Bank will depend upon the size of the market borrowings of the Reconstruction Bank, the exact quan- tum of which would be known only after the bank has started functioning.

6. Clause 23(2), read with clause 23(1), provides that the Central Govern- ment may, where necessary, guarantee the foreign currency loans taken by the Reconstruction Bank with the previous consent of the Central Government from any bank or financial institution or other prescribed sources in any for- eign country. The extent of the contingent liability arising out of such guaran- tee will depend upon the extent of the foreign currency borrowings by the Re- construction Bank which would be known only after the bank has started func- tioning. Clause 23(4) provides that any loss or profit arising from fluctuations In the rate of exchange relating to borrowings in foreign currency will be borno by or accrue to the Central Government as the case may be, if such fluctuation is not related to normal market fluctuations in foreign exchange and occurred after the period with which the foreign currency loan is repayable by the in- dustrial concern or the period of actual repayment by the concern, whichever is longer. The extent of this contingent liability will depend not only upon the extent of foreign exchange fluctuations but also the nature and the time of occurrence of such fluctuation. Further, the loss on account of depreciation, in the value of the rupee at any point of time will be offset to some extent by the profit accruing from appreciation of the value of the rupee at other points of time.

7. Clause 24 provides that the Reconstruction Bank may receive gifts, grants, donations or benefactions from the Central Government. It is not pro posed at this stage to make any contributions to the Reconstruction Bank under this provision.

8. Clause 53 provides that the Reconstruction Bank shall not be liable to pay income-tax, companies (profits) surtax, interest-tax or any other tax in respect of any income, profit or gains accruing to the Reconstruction Assistance Fund or any amount received to the credit of that Fund as also on any income, profit or gains or any amount received by the Reconstruction Bank including any interest collected by or payable to the Reconstruction Bank in accordance with the provisions of the Interest-tax A<_t, 1974. The extent of the contingent liability on account of loss of income-tax, companies (profits) surtax, in- terest-tax or any other tax in terms of the provision of this clause will depend upon the extent of the operation of the Reconstruction Bank, the exact quantum of which will vary from year to year, and would be known Only after the bank has become fully functional.

9, No other provision of the Bill, would, if enacted, involve any other ex- penditure of a recurring or a non-recurring nature from and out oi. ihe Consoli- dated Fund of India.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Sub-clause (6) o[ clause 49 empowers the Central Government to authorise the Reconstruction Bank to prepare a scheme for the recons- tiuction, revival or rehabilitation of the assisted industrial concern; for scaling down liabilities of such a concern or for the amalgamation of such a concern with any other industrial concern. If any difficulty arises in giving eifect to the provisions of the scheme, the Central Government may by order do anything;, not inconsistent with such provisions, which appears to it to be necessary or expedient for the purpose of removing the difficulty [vide sub-clause (14)]. It is ;L.>O provided that the scheme or any order issued for removing the dih^Jty shall be laid before both Houses of Parliament [vide sub-clause (15)].

2. Clause 68 of. the Bill empowers the Central Government, by notification in the Official Gazette, to make rules for carrying out the provisions of the pro- posed legislation. Sub-clause (2) thereof enumerates in detail the matters in respect of which rules may be made under that clause. These matters relate to the institutions and agencies in and outside India, the payment of whose loans to industrial concerns niay be guaranteed, counter-guaranteed or indemnified by the Reconstruction Bank, the institutions and agencies which may be provided with line ol credit by the Reconstruction Bank for grant by them of loans and advances to industrial concerns, the persons who may be appointed to act as agents of the Reconstruction Bank and the manner in which and the conditions subject to which insuiancc or provident fund may be constituted by the Reconstruction Bank.

3. Clause 69 of the Bill empowers the Board of Directors of the Reconstruction Bank, with the previous sanction of the Central Government, to make, by notification in the Official Gazette, regulations not inconsistent with the provisions of the Bill and the rules made thereunder, to provide for all matters for which regulations are necessary or expedient for the purpose of giving effect to the provisions of the Bill and of the rules made thereunder. The matters in respect of which such regulations may be made are specified in sub- clause (2) of that clause. Ttkese matters, inter alia, relate to the restrictions relating to the powers which may be exercised by the Chairman of the Board of Directors, the time and place at which the Board of Directors shall meet and the rules of procedure (including quorum) which shall be observed by the Board in regard to the transaction of business at its meetings, the conditions and limita- tions subject to which an industrial concern may enter into any kind of business and the form and manner in which the balance-sheet and accounts of the Re- construction Assistance Fund shall be prepared.

4. The matters with respect to which the rules and regulations may be made are matters of procedure or detail and as such the delegation of legislative power is of a normal character.

5. Clause 70 of the Bill empowers the Central Government, by notification in the Official Gazette, to remove any difficulty which may arise in giving effect to any of the provisions of the Bill. As all the problems which may aiise cannot be envisaged, this provision has been included by way of abundant caution. It is also made clear in Ihc rtause that no such notification shall be made after the expiry of a period of two years from the commencement of that clause.

BILL NO. 68 OF 1984

A Bill to authorise payment and appropriation of certain sums from, and

out of the Consolidated Fund of the State of Punjab for the services

of the financial year 198-485.

BE it enacted by Parliament in the Thirty-fifth Year of the Republic

of India as follows: —

1. This Act may be called the Punjab Appropriation (No. 2) Act, Short title.

1984.

14 of 1984.

2. Ftrom and out of the Consolidated Fund of the State¹ of Punjab there may be paid and applied sums not exceeding those specified In column 3 of the Schedule amounting in the aggregate [inclusive of the sums specified in column 3 of the Schedule to, the Punjab Appropriation (Vote on Account) Act, 1984] to the sum of two thousand seven hundred forty-two crores, ninety-seven lakhs and ninety-three thousand rupees towards defraying the several charges which will come in course of payment during the financial year 1984-85, in respect of the -services specified in column 2 of the Schedule.

Issue of Rs. 2742,"7, 93,000 out of the Consoli- dated Fund of the State of Punjab for the financial year 1984-85.

Appro- priation.

3. The sums authorised to be paid and applied from and out of the Consolidated Fund of the State of Punjab by this Act shall be appro- priated for the services and purposes expressed in the Schedule in relation to the said year.

THE SCHEDULE

(See sections 2 and 3)

I

2

3

Sums not exceeding

Total

Voted by

Pailiamcnt

Services and purposes

Charged on Ihe Consolidated Fund

No. of Vote/ Ap- pro- prla- tion

Rs.

Rs.

Rs.

1,07,000 I, I 1,93,IX>O

1,10,85,000

1 Stair Legislature . Revenue

20,67,000

20,67,000

Staff, Household and Allowances of the Governor • - Revenue

87,65,000

87,65,000

2 Council of Ministers . Revenue

• •

Administi ation of

3

93,00,000

Justice . . Revenue

4,5°,37,l)O°

5,43,37.°°°

1,32,39,000

Elections . . . Revenue

".13.39.°°°

4

10,87,08,000

40,000

10,87,48,000

Revenue , . . Revenue

5

64,000

5,76,04,000

Excise and Taxation . Revenue

6

5,75:4°.°°°

1 45.63,53,000

63,000

Financf . . . Revenue

45,64,i5,°°o

7

Public Service Com-

8

32,06,000

18,65,000

13,41,006

mission . . . Revenue

4,85,11,000

4,81,91,000

Civil Secretaiiat . Revenue

20,000

9

10

81,000

6,66,57,000

6,65,76,000

District Administration Revenue

2,83,000

49,^9,76,000

•14.86,93,000

11 Police , , . Revenue

3,95,25,000

3,0,5,25,000

12 Jails . . . Revenue

Stationery and Printing Revenue

6,4S,ooo

13

4,39,53,°°°

4,45,9°,°°°

18,40,000

18,40,000

Capital

14 Miscellaneous Services Revenue

5,°5,73,°°°

5,°5,73,°°°

Rehabilitation, Relief

"5

61,19,000

61,19,000

and Resettlement . Revenue

182,88,33,000

16

2,64,43 ,eoo

Education . . Revenue

185,32,66,000

Technical Education,

17

0,02,63,000

Science and Techno- logy . . Revenue

2,02,63,000

10,50,000

10,50,000

Capital

18 Medical and Public

71,46,46,000

i.ooiooo

Health . . . Revenue

71,47,46,000

1,00,00,000

1,00,00,000

Capital

Housing and Urban

19

5,000

2,46,76,000

Development . Revenue

3,46,81,000

V

Capital

7,63,93,ooo

7.63,93.°°°

¹

a

3

Sums not exceeding

Total

Servic 1, and puipoaes

Voted by

ParlinmenL

Charged on the Couioliddted Fund

No. of Vote/ App- rop- rU- tion

Rn.

Rs.

Rs.

Informal ioti and

ao

Publicity . , R( vi tuie

1,03JCK))()(KJ

1,Hi,00,000

21 Tourism and Gultuial

Affaiis . . , Revenue

58,13,000

sS.is.oiX)

dxpital

25,110,000

35,00,000

33 Labour, Employment and Industrial Training . . Revenue 8,53,86,000

10,000

8)53.96,000

Cdpit.il

16,83,000

16,83,000

Social Srcurity and

"3

Wolfare . . Rrvenur 26,37,28,000

56,000

afi>37.84,oou

Capital

I,64,

1,64,00,000

Planning and

ffl4

Statistics . . Revenue

1,000

1,41,38,000

1,41,39,000

Go-operation . , Revenue

fi,53.7a,ooo

30,000

6,56,03,000

Capital

9,39,66,000

9,39,66,000

Agiiculture . . Rcvpnue 28,87,33,000

47,ooo

a6

28.87,79,000

Capital

3,08,00,000

3,08,00,000

Soil and Water

3, g i, 50,000

Conservation . . Revenue

5,000

3.9'.55>°°o

a8 Pood . . . Revenue i,47,ia,ooo

i,47,ia,ooo

Capital 436,14,30,000

1,80,000

436,16,00,000

Animal Husbandry . Rrvenur 1 j, 51^24,000

So,000

ag

Dairy Development . Revenue 1 59.o9.°oo

3°

59.°9,°°o

Fisheries . . , Revenue

ga,8r,ooo

93j'3,rioo 3¹

Forenti . . . Revenue

Community Develop-

33

ment . . , Rr venue

43.59.Ri/'oo

4S.59.77.0 0"

Industries . . Revenue 34

Capital

Civil Aviation . . Revenue

35

Gapil.il

Roads and Bridgei . Revenue 36

Road Tranipoit . Revenue

37

Capital

Multi-purpose River

38

Projects . . Revenue Capital

I

a

3

Sums not exceeding

Services and purposes

Total

Voted by 1

Parliament

No. of Vote/ Ap- prop- riation

Charged on the Consolidated Fund

R s.

R3.

Rs.

Irrigation. Drainage dull

39

Go,59,66,000

Flood Control , Revenue

G°,59,6G,(.)oo

42,69,51,000

Capital

4².69.5',°oo

Buildings . . . Revenue 51,46,62,000

9,00,000

51,55,63,000 40

Capital

i3)85.9G,ooo

Pvbltc Diibt . . Capital

1022,38,21,000

1022,38,21,000

Interest Payments mid

Servicing of Debt . Revenue

91,88,46,000

0,1,8(1,46,1)00

41 Loans and Advances by

the State Government Capital 260,33,33,000

^Go, 33,33,000

1634,40,81,000

TOTAL .

1118,57,12,000

2743i97,93,°°°

STATEMENT OF OBJECTS AND REASONS

This Bill is introduced in pursuance of article 204(1) of the Consti- tution read with the Proclamation issued under article 356 of the Constitution in respect of the State of Punjab on the 6th October, 1983, to provide for the appropriation out of the Consolidated Fund of the State of Punjab of the moneys required to meet the expenditure charged on the Consolidated Fund of the State of Punjab and the grakits made by the Lok Sabha for the expenditure of the Government of Pun- jab for the financial year 1984-85.

PRANAB MUKHERJEE.

PRESIDENT'S RECOMMENDATION UNDER ARTICLE 207 OF THE CONSTITUTION OF INDIA

[Copy of letter No. F. 2(123)-B(S)/84, daated the 23rd July, 1984 from Shri Pranab Kumar Mukherjec, Minister of Finance to the Secretary- General, Lok Sabha.]

The President, having been informed of the subject matter of the proposed Bill to authorise payment and appropriation of certain sums from and out of the Consolidated Fund of the State of Punjab for the services of the financial year 1984-85 recommends under clauses (1) and (3) of article 207 of the Constitution of India read with the Proclamation dated the 6th October, 1983 issued under article 356 of the Constitution, the introduction of the Punjab Anpropriation (No. 2) Bill, 1984 in, and the consideration of the Bill by Lok Sabha.

2. The Bill will be introduced in Lok Sabha immediately after the Demands for Grants for the; expenditure of the Government of the State Of Punjab for the year 1984-85 have been voted.

BILL NO. 69 OF 1984

A Bill to authorise paymenit and appropriation, of certain, sums from ",nd out of the Consolidated Fund of thei Union territory of Pondichertyi for the services of the financial year 1984-85.

BE it enacted by Parliament in the Thirty-fifth Year of the Republic

of India as follows: —

1. This Act may be called the Pondicherry Appropriation (No. 2) Short title.

Act, 1984.

Issue of Rs. 77,U, 83,000 out

of the

12 of 1984.

2. From and out of the Consolidated Fund of the Union territory of Pondicherry there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the aggregate [inclusive of the sums specified in column 3 of the Schedule to the Pondicherry Appropriation (Vote on Account) Act, 1984] to the sum of seventy-seven crores, eleven lakhs and eighty-three thousand rupees towards defraying the several charges which will come in course of payment during the financial year 1984-85; in respect of the services specified in column 2 of the Schedule.

Consoli- dated F u nd of t he Union territory of Pondi- cherry for the financial year 1984-85.

Appro- priation.

3. The sums authorised to be paid and applied from and out of the Consolidated Fund of the Union territory of Pondicherry by this Act shall be appropriated for the services and purposes expressed in the Schedule in relation to the said year.

THE SCHEDULE

(See sections 2 and 3)

3

3

Sums not exceeding

Services and purposes

Total

Gh;n ged on the Consolidated Fund

Voted by

Parliament

No. of Vote/ App- rop- riation

R?.

Rs.

Rs.

21,30,000

20,69,000

Legislative Assembly . Revenue

i

61,000

13,73,000

Administrator . , Revenue

3

20,000

12,58,000

    Council of  Ministers  .   Revenue       14,04,000                           14,04,000
3
4   Administration  of  Justice Revenue      35,29,000                           35,39,000
5   Elections   .    .     ,   Revenue        6,37,000                            6,37,000
    Revenue and  Food     .    Revenue                                         1,92,53,000

1,91,52,000

6

1,00,000

22,000

33,000

Capital

2 17,80,000

Sale* Tax . . . Revenue 17,80,000 A

7

Transport . . . Revenue

aa,6i,ooo

32,6l,OO0

8

64,63,000

G4,G3,ooo

Serretai iat . . Revenue

9

3,18,85,000

IO Di°trict Admuiistiation Revrnue 3,iH,fl5,ooo

22,50,000

32,50,000

Capital

Treasury and Accounts

it

40,25,000

Administration , Revenue 40,25,000

2.'3,33,oo<'

2,] 3,33,000

Police . . . Revenue

13

8,75,000

.l!,75,rnK-)

Jails . . .. Revenue

13

51,71,000

51,71,001-.

Stationery and Printing Rrvi'nut

14

1,06,98,000,

Retirement Benefits . Revenue 1,06,98,000

'5

G.7<>)i9,ooo

Public Works . . Revenue

20,000

16

6,75.99.°">

Capital

5.75.9',ooo

5.75.91. txx>

Education . . . Revenue ",30,59,000

¹1,36,59,000

I

17

Capital

40,000

40,000

5.49,f3.ooo

Medical . . . Revenue

18

5.i9,83,°""

48,08,000

Information and Publicity Revenue

48,08,000

19

58,68,000

t58,68,000

Labour and Employment Revenue

80

3,45,64,000

Social Welfare . . Revenue 3,45.64>ooo

21

I>"6j37,0O0

Go-operation . . Revenue 1,06,27,000

33

1,32,08,000

Capital 1,33,08,000

12,03,000

Statistics . , . Revenue

12,03,000

as

M'"97>ooo

2,4i*97)O00

04   Agriculture      .    .   Revenue                              ••
                                Capital       2,68,000                         |  2,68,000
"5   Animal Husbandry      .   Revenue       71,75,000                          71,73,000

I

a

I

3

ms not exceeding

No. of

Su

Charged on the

Services and purposes

Voted by

Parliament

Total

Consolidated Fund

Appro- pria- tion

Rs.

Rs.

Rs.

81,75,000

81,75,000

36 Fisheries . . • Revenue

53.73.000

Capital

53.73.ooo

26,90,000

Community Development Revenue

37

36,90,000

12,00,000

Capita]

13,00,000

98 Industries . . . Revenue

1,13.58,000

Capital

60,00,000

6o,oo,ooa

7,08,76,000

Electricitv . . . Revenue

7,08,76,000

"9

7,04,0a, 000

Capital

7,04,02,000

Ports and Pilotage . Revenue

9,44.000

..

9.44iOOO

3°

35,00,000

Capital

93,00,000

Public Debt . . Revenue

3,50,34,000

3.5O/34,°<"

Capital

3,27,41,000

3,37,41,000

Loans to Government

3i

Servants . . . Capital

1,30,88,000

(,30,88,000

TOTAL

70,19,69,000

6,92,14,000

77" it,83,00*

STATEMENT OF OBJECTS AND REASONS

This Bill is introduced in pursuance of section 29(1) of the Govern- ment of Union Territories Act, 1963 and the Order of the President made on the 24th June, 1983 under section 51 of that Act to provide for the appropriation out of the Consolidated Fund of the Union territory of Pondicherry of the moneys required to meet the expenditure charged on the Consolidated Fund of the Union, territory of Pondicherry and the grants made by the Lok Sabha for the expenditure of the Government of Pondicherry for the financial year 1984-85.

PRANAB MUKHERJEE.

PRESIDENT'S RECOMMENDATION UNDER SECTION 23 OF THE GOVERNMENT OF UNION TERRITORIES ACT, 1963

[Copy of letter No. F. 2(124)-B(S)/84, dated the 23rd July, 1984 from Shri Pranab Kumar Mukherjee, Minister of Finance to the Secretary- General, Lok Sabha.]

The President, having boon informed of the subject matter of the proposed Bill to authorise payment and appropriation of certain sums fiom and out of the Consolidated Fund of the Union territory of Pondi- cherry for the services of the financial year 1984-85 recommends under sub-sections (1) and (3) of section 23 of the Government of Union Terri- tories Act, 1963 read with the Order made by him on the 24th June, 1983 under section 51 of the said Act, the introduction of the Pondicherry Appropriation (No. 2) Bill, 1984 in and the consideration of the Bill by Lok Sabha.

2. The Bill will be introduced in Lok Sabha immediately after the Demands for Grants for the expenditure of the Government of the Unien territory of Pondicherry for the year 1984-85 have been voted.

BILL NO. 70 OF 1984

A Bill to authorise payment and appropriation of ccftain further sums jrom and out of the Consolidated Fund of India for the $ervides vo/f the finaTioial year 1984-85.

BE it enacted by Parliament in the Thirty-fifth Year of the Republic

of India as follows: —

1. This Act may be called the Appropriation (No. 4) Act, 1984.

Short title.

2. From and out of the Consolidated Fund of India there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the aggregate to the sum of nine hundred and sixty- three crores, sixty-nine lakhs and thirty-three thousand rupees towards defraying the several charges which will come in course of payment during the financial year 1984-85, in respect of the services specified in column 2 of the Schedule.

Issue of Bs. 963JJ&, 33,000 out of the Consolidat Fund of India for the year 1984-85.

Appro- priatioiu 3. The sums authorised to be paid and applied from and out of the Consolidated Fund of India by this Act shall be appropriated for the services and purposes expressed in the Schedule in relation to the said year.

THE SCHEDULE

[See sections a and 3)

I

2

3

Seiviceg and purposes

Sums not exceeding

No. of Vote

Voted by Parliament

Total

Charged on the Consoli- dated Fund

t 1

R J.

Rs.

Ri.

I Department of Agriculture

1,00,000

and Go-opeiation . . Revenue

1,00,000

Agriculture . . . Revenue

a

103,99,00,000

'O3,99)0o,ooo

Capital

60,00,00,000

60,00,00,000

Forest . . . Revenue

1,000

1,000

5

Co-operation . . . Gapital

5,00,00,000

6

5,00,00,000

Ministry of Chemicals

9

2,48,25,000

and Feitiliiers . . Revenue

3,48,25,000

Gapital

3,23,00,000

3,23,00,000

Foreign Trade and Export

ti

60,00,000

Production . . . Revenue

60,00,000

ia,75,oo,ooo

Gapital

15,75,00,000

Textiles, Handloom and

ia

Handicrafts . . . Gapital 60,00,00,000

60,00,00,000-

10,00,00,000

Education . . . Revenue

10,00,00,000

23

98

1 a,00,00,000

Department of Petroleum Revenue ia,oo,oo,ooo

••

3,00,00,000

Department of Power . Revenue

2,00,00,000

29

Gapital

2,00,00,000 11,00,00,000 13,00,00,000

Department of Non-Gon-

3'

30,00,00,000

venlionat Energy Somcea Revenue

30,00,00,000

••

Gapital

'4.75,99,000

i4.75.99,⁰⁰⁰

Currency, Coinage and

39

18,25,00,000

Mint . . .. Revenuo

18,25,00,000

••

Gapital 54,75,oo,ooo

54.75,00,000

Cither Expenditure of the

43

1,20,00,000

Ministry of Finance- , CapUal i48,74,94.ooo

¹49.94.94>"JO-

Department of Civil Sup-

46

6,00,000

plies . . .. Revenue

6,00,000

••

1,57,68,000

Gapital

1,57,68,000

60,50,000

50,000

Policn . . .. Revenue

61,00,000

53

Other Administrative and

54

1,00,000

General Services . Revenue

1,00,000

30,55,00,000

Industiics . . . Revenue

30,55,00,000

6a

23,86,53,000

Capital

33,86,53,000

••

I

2 !

3

Sfivic.es and puipowi

Sumi not exceeding

No. of Vote

Voted by

Pailiamenl

Tot.d

Charged on the Consoli- dated Fund

1

|

Jti

Rs

Rs.

6') Village and Small Indus-

150,00,00,000

150,00,00,000 ttiei . . .. Revenue

1,000

I^,H^,OOO 66

13,05,000

Broadcasting . . . Capital

13,00,00,000

13,10,00,000 67 Ministiy 1 if Irrigation . Revenue

70 Dfpattment of Rrhabilita-

2,67,00,000

5 67,00,000 tion . • . Capital

Mitiistiy of Rmal Drvelop-

76

1,000

1,000 rnent . . . Revenue

Poitt, Lighthouses and

79

1,90,00,000

Shipping . . . Capital

i,gn,ue,coo

80 Road and Inland Watri

45,00,00,000

43,00,00,000 Ti amport . . Capital

40,00,00,000

40,00,00,000 DcpaUment of Minei . Capital

83

5,48,00,000

5,48,00,000 Aviation • • • Revenue

8fi

i,oon

1,000 Public Woiks . • • Gapilal

Water Supply and

9°

50,00,00,000

50,00,00,000 S'JWOI age . . . Revenue

Homing and TJrb in

91

10,00,00,000

10,00,00,000 Development . . Revenue

S3,01,00,000

33,01,00,000 Department ofElccti onics Gapitil

96

Dopiitmcnt of Scirncr and

99

50,00,000

30,00,000

Tech™ >li Ry • • Revenue

i

511,0(1,000

Gapital

50/10,000

Depaitment of Patliamen-

1 08

5.85,000

t a iy A W L U IS

. • R c v i n ue

3,85,000

883,11,78,000 So, 57,55,000

TOTAL

STATEMENT OF OBJECTS AND REASONS

This Bill is introduced in pursuance of article 114(1) of the Constitu- tion of India, read with article 115 thereof, to provide for the appropria- tion out of the Consolidated Fund of India of the moneys required to meet the supplementary expenditure charged on the Consolidated Fund of India and the grants made by the Lok Sabha for expenditure of the Central Government, excluding Railways, for the financial year 1984-85.

PRANAB MUKHERJEE.

PRESIDENT'S RECOMMENDATION UNDER ARTICLE 117 OF THE CONSTITUTION OF INDIA

[Copy of letter No. F. 4(65) -B (SE) /84, dated the 27th July, 1984 from Shri Pranab Kumar Mukherjee, Minister of Finance to the Secre- tary-General, Lok Sabha.]

The President, having been informed of the subject matter of th

2. The Bill will be introduced in Lok Sabha after all the Supplemen- tary Demands for Grants for 1984-85 have been voted.

SUBHASH C. KASHYAP, Secretary-General.

HBNTUD BT THB GENERAL MAKAOBR, GOVERNMENT OBI INDIA PHESS, MJSTO ROAD,

NEW DELHI AND PUBLISHED BY THE CONTROLLER OP PUBLICATIONS, DELHI, 1 9 84