CHAP POWER TO PROVIDE RELIEF TO CERTAIN INDUSTRIAL UNDERTAKINGS

CHAPTER IIIAB POWER TO PROVIDE RELIEF TO CERTAIN INDUSTRIAL UNDERTAKINGS

18FB Power of Central Government to make certain declarations in relationto industrial undertakings, the management or control of which hasbeen taken over under section 18A, section 18AA or section 1

18FB. Power of Central Government to make certain declarations in relation to industrial undertakings, the management or control of which has been taken over under section 18A, section 18AA or section 18FA. (1) The Central Government may, if it is satisfied, in relation to an industrial undertaking or any part thereof, the management or control of which has been taken over under section 18A, whether before or after the commencement of the Industries (Development and Regulation) Amendment Act, 1971, or under section 18AA or section 18FA, that it is necessary so to do in the interests of the general public with a view to preventing fall in the volume of production of any scheduled industry, it may, by notified order, declare that-- (a) all or any of the enactments specified in the Third Schedule shall not apply or shall apply with such adaptations, whether by way of modification, addition or omission (which does not, however, affect the policy of the said enactments) to such industrial undertaking, as may be specified in such notified order, or (b) the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force (to which such industrial undertaking or the company owning such undertaking is a party or which may be applicable to such industrial undertaking or 107D company) immediately before the date of issue of such notified order shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified in the notified order. (2) The notified order made under sub-section (1) shall remain in force in the first instance, for a period of one year, but the duration of such notified order may be extended from time to time by a further notified order by a period not exceeding one year at a time: Provided that no such notified order shall, in any case, remain in force-- (a) after the expiry of the period for which the management of the industrial undertaking was taken over under section 18A, section 18AA or section 18FA, or (b) for more than 1*[eight years] in the aggregate from the date of issue of the first notified order, whichever is earlier. (3) Any notified order made under sub-section (1) shall have effect notwithstanding anything to the contrary contained in any other law, agreement or instrument or any decree or order of a court, tribunal, officer or other authority or of any submission, settlement or standing order. (4) Any remedy for the enforcement of any right, privilege, obligation or liability referred to in clause (b) of sub-section (1) and suspended or modified by a notified order made under that sub- section shall, in accordance with the terms of the notified order, remain suspended or modified, and all proceedings relating thereto pending before any court, tribunal, officer or other authority shall accordingly remain stayed or be continued subject to such adaptations, so, however, that on the notified order ceasing to have effect-- (a) any right, privilege, obligation or liability so remaining suspended or modified shall become revived and enforceable as if the notified order had never been made; (b) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed. ---------------------------------------------------------------------- 1. Subs. by Act 17 of 1979, s. 2 (w.e.f. 30-12-1978). 107E (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability referred to in clause (b) of sub-section (1), the period during which it or the remedy for the enforcement thereof remained suspended shall be excluded.

18FC Power of Central Government to call for report on the affairs andworking of managed company.

18FC. Power of Central Government to call for report on the affairs and working of managed company. Where the management or control of an industrial undertaking has been taken over under section 18A, whether before or after the commencement of the Industries (Development and Regulation) Amendment Act, 1971 (72 of 1971), or under section 18AA or section 18FA, the central Government may, at any time during the continuance of such management or control, call for a report from the authorised person on the affairs and working of the industrial undertaking and in submitting the report the authorised person shall take into account the inventory and the lists of members and creditors prepared under section 18FG. 18FD Decision of Central Government in relation to managed company. 18FD. Decision of Central Government in relation to managed company. (1) If, on receipt of the report submitted by the authorised person, the Central Government is satisfied,-- (a) in relation to the company owning the industrial undertaking, which is not being wound up by the High Court, that the financial condition and other circumstances of the company are such that it is not in a position to meet its current liabilities out of its current assets, that Government may, if it considers necessary or expedient in the interests of the general public so to do, by order, decide that the industrial undertaking should be sold as a running concern as provided in section 18FE and proceedings should simultaneously be started for the winding up, by the High Court, of the company; (b) in relation to the company, owning the industrial undertaking, which is being wound up by the High Court, that its assets and liabilities are such that in the interests of its creditors and contributories the industrial undertaking should be sold as a running concern as provided in section 18FE, it may, by order, decide accordingly. 107F (2) Notwithstanding anything contained in sub-section (1), if on receipt of the report submitted by the authorized person the Central Government is satisfied that-- (a) in the interests of the general public, or (b) in the interests of the shareholders, or (c) to secure the proper management of the company owning the industrial undertaking, it is necessary so to do, that Government may, by order, decide to prepare a scheme for the reconstruction of the company owning the industrial undertaking: Provided that no such scheme shall be prepared in relation to a company which is being wound up by or under the supervision of the High Court, except with the previous permission of that Court. (3) The powers exercisable by the Central Government under section 18F, in relation to an undertaking taken over under section 18A, shall also be exercisable in relation to an undertaking taken over section 18AA or section 18FA, but such powers shall not be exercised after the making of an order under sub-section (1) or, as the case may be, under sub-section (2) of this section.

18FE Provisions where Government decides to follow the course of actionspecified in section 18FD (1).

18FE. Provisions where Government decides to follow the course of action specified in section 18FD (1). (1) The provisions hereinafter laid down shall apply where the Central Government decides that the course of action specified in sub-section (1) of section 18FD should be followed, namely:-- (a) the decision of the Central Government that the course of action specified in clause (a) of sub-section (1) of section 18FD should be followed in relation to a company owning an industrial undertaking shall be deemed to be a ground specified in section 433 of the Companies Act, 1956 (1 of 1956), on which company may be wound up by the High Court; (b) the authorised person shall, as soon as may be, after the decision specified in clause (a) of sub-section (1) of section 18FD has been taken by the Central Government, present an application to the High Court for the winding up of the company owning the industrial undertaking ; (c) when an application is made by the authorised person, under clause (b), for the winding up, by the High Court, of the company owning the industrial undertaking, the High Court shall order the winding up of the company and shall, 107G notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), appoint the authorised person as the Official Liquidator in relation to such under- taking; (d) whenever the Central Government decides under clause (b) of sub-section (1) of section 18FD that the industrial undertaking should be sold as a running concern, it shall cause a copy of its decision to be laid before the High Court; (e) until the industrial undertaking referred to in clause (a) or clause (b) of sub-section (1) of section 18FD is sold or purchased in pursuance of this section, the authorised person shall continue to function as the Official Liquidator in relation to the said undertaking in the winding up proceedings of the company, and, thereafter the Official Liquidator appointed by the Central Government under section 448 of the Companies Act, 1956 (1 of 1956), shall take over and function as the Official Liquidator in the said proceedings. (2) The authorised person shall make a report to the Central Government as to what should be the reserve price for the sale of the industrial undertaking as a running concern. (3) In making a report under sub-section (2), the authorised person shall have regard to-- (a) the financial condition of the company owning the industrial undertaking on the date on which the order under section 18FD is made-- (i) as disclosed in its books of account, (ii) as disclosed in its balance-sheet and profit and loss account during a period of five years immediately preceding the said date; (b) the condition and nature of the plant, machinery, instruments and other equipment from the point of view of their suitability for profitable use in the running of the industrial undertaking; (c) the total amount of liability on account of secured and unsecured debts including overdrafts, if any, drawn on banks, liabilities on account of terminal benefits to the employees and other borrowings and other liabilities of the company; and (d) other relevant factors including the factor that the industrial undertaking will be sold free from all incumbrances. 107H (4) Notice of the reserve price determined by the authorised person shall be given in such manner as may be prescribed to the members and creditors of the company owning such industrial undertaking to make representations within a specified time to the Central Government through the authorised person and the Central Government shall, after considering the representations received and the report of the authorised person, determine the reserve price. (5) The authorised person shall thereafter, with the permission of the High Court, invite tenders from the public in such manner as may be determined by the High Court for the sale of the industrial undertaking as a running concern subject to the condition that it will be sold to the person offering the highest price which shall not be less than the reserve price determined under sub-section (4): Provided that the High Court shall not refuse to grant such permission if it is satisfied that the company is not in a position to meet its current liabilities out of its current assets. (6) The industrial undertaking shall be sold to the highest bidder, as a running concern, only if the price offered by him therefor is not less than the reserve price. (7) Where no offer of price is equal to, or more than, the reserve price, the industrial undertaking shall be purchased by the Central Government at the reserve price. (8) (a) The amount realised from the sale of the industrial undertaking as a running concern together with any other sum which may be realised from any contributory, purchaser or any other person from whom any money is due to the company shall be utilised in accordance with the provisions of the Companies Act, 1956 (1 of 1956), in discharging the liabilities of the company and distributing the balance, if any, amongst the members of the company. (b) In other respects, the provisions of the Companies Act, 1956 (1 of 1956), relating to the winding up of a company by the High Court shall, as far as may be, apply. (9) When an industrial undertaking is sold to any person under sub-section (6), or purchased by the Central Government under sub- section (7), there shall be transferred to and vested in the purchaser, free from all incumbrances, all such assets relating to the industrial undertaking as are referred to in sub-clause (i) of clause (a) of section 18FG and existing at the time of the sale or purchase.

18FF Provisions where Government decides to follow the course of actionspecified in section 18FD(2).

18FF. Provisions where Government decides to follow the course of action specified in section 18FD(2). (1) Where in any case the Central Government decides that the course of action specified in sub-section (2) of section 18FD should be followed, it shall, subject to the provisions of that sub-section, cause to be prepared, by the authorised person, a scheme for the reconstruction of the company, owning the industrial undertaking, in accordance with the provisions hereinafter contained and the authorised person shall submit the same for the approval of that Government. (2) The scheme for the reconstruction of the company owning the industrial undertaking 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 company on its reconstruction; (b) any change in the Board of directors, or the appointment of a new Board of directors of the company on its reconstruction 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 appointment of a new Board of directors or of any director, the period for which such appointment shall be made; (c) the vesting of controlling interest, in the reconstructed company, in the Central Government either by the appointment of additional directors or by the allotment of additional shares; (d) the alteration of the memorandum and articles of associations of the company, on its reconstruction, to give effect to such reconstruction; (e) subject to the provisions of the scheme, the continuation by or against the company, on its reconstruction, of any action or proceedings pending against the company immediately before the date of its reconstruction; (f) the reduction of the interest or rights which the members and creditors have in or against the company before its reconstruction to such extent as the Central Government may consider necessary in the interests of the general public or in the interests of the members and creditors or for the maintenance of the business of the company: Provided that nothing contained in this clause shall be deemed to authorise the reduction of the interest or rights of any creditor (including Government) in respect of any loan or advance made by that creditor to the company after the date on which the management of the industrial undertaking of the company has been taken over under section 18A, section 18AA, or section 18FA: (g) the payment in cash or otherwise to the creditors in full satisfaction of their claim-- (i) in respect of their interest or rights in or against the company before its reconstruction ; or (ii) where their interest or rights in or against the company has or have been reduced under clause (f), in respect of such interest, or rights as so reduced; (h) the allotment to the members of the company for shares held by them therein before its reconstruction [whether their interest in such shares has been reduced under clause (f) or not], of shares in the company on its reconstruction and where it is not possible to allot shares to any members, the payment in cash to those members in full satisfaction of their claim-- (1) in respect of their interest in shares in the company before its reconstruction; or (2) where such interest has been reduced under clause (f), in respect of their interest in shares as so reduced; (i) the offer by the Central Government to acquire by negotiations with the members of the company their respective shares on payment in cash to those members who may volunteer to sell their shares to the Central Government in full satisfaction of their claim-- (1) in respect of their interest in shares in the company before its reconstruction; or (2) where such interest has been reduced under clause (f), in respect of their interest in shares as so reduced; (j) the conversion of any debentures issued by the company after the taking over of the management of the company under section 18A or section 18AA or section 18FA or of any loans obtained by the company after that date or of any part of such debentures or loans, into shares in the company and the allotment of those shares to such debenture-holders or creditors, as the case may be ; (k) the increase of the capital of the company by the issue of new shares and the allotment of such new shares to the Central Government; (l) the continuance of the services of such of the employees of the company as the Central Government may specify in the scheme in the company itself, on its reconstruction, on such terms and conditions as the Central Government thinks fit; (m) notwithstanding anything contained in clause (l), where any employees of the company whose services have been continued under clause (l) have, by notice in writing given to the company at any time before the expiry of one month next following the date on which the scheme is sanctioned by the High Court, intimated their intention of not becoming employees of the company, on its reconstruction, the payment to such employees and to other employees whose services have not been continued on the reconstruction of the company, of compensation, if any, to which they are entitled under the Industrial Disputes Act, 1947 (14 of 1947), and such pension, gratuity, provident fund and other retirement benefits ordinarily admissible to them under the rules or authorisations of the company immediately before the date of its reconstruction; (n) any other terms and conditions for the reconstruction of the company; (o) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction of the company shall be fully and effectively carried out. (3) (a) A copy of the scheme, as approved by the Central Government, shall be sent in draft to the company, to the registered trade unions, if any, of which the employees of the company are members and to the creditors thereof for suggestions and objections, if any, within such period as the Central Government may specify for this purpose. (b) The Central Government may make such modifications, if any, in the draft scheme as it may consider necessary in the light of the suggestions and objections received from the company, from the registered trade unions of which the employees of the company are members and from any members or creditors of the company. (4) The scheme shall thereafter be placed before the High Court for its sanction and the High Court, if satisfied that the scheme is in the interests of the general public or in the interests of the shareholders or for securing 107L the proper management of the company and that the scheme is designed to be fair and reasonable to the members and creditors of the company, may, after giving a reasonable opportunity to the company and to its members and creditors of showing cause, sanction the scheme without any modification or with such modifications as it may consider necessary. (5) The scheme, as so sanctioned by the High Court, shall come into force on such date as that Court may specify in this behalf: Provided that different dates may be specified for different provisions of the scheme. (6) The sanction accorded by the High Court under sub-section (4) shall be conclusive evidence that all the requirements of this section relating to the reconstruction of the company have been complied with, and a copy of the sanctioned scheme certified by the High Court to be a true copy thereof, shall, in all legal proceedings (whether original or in appeal or otherwise), be admitted as evidence to the same extent as the original scheme. (7) On and from the date of the coming into operation of the scheme or any provision thereof, the scheme or such provision shall be binding on the company and also on all the members and other creditors and employees of the company and on any other person having any right or liability in relation to the company. (8) On the coming into operation of the scheme or any provision thereof, the authorised person shall cease to function, and the management of the reconstructed company shall be assumed by the Board of directors as provided in the scheme. (9) Copies of the scheme shall be laid before each House of Parliament, as soon as may be, after the scheme has been sanctioned by the Court. (10) The provisions of this section and of any scheme made there- under shall have effect notwithstanding anything contained in sections 391 to 394A (both inclusive) of the Companies Act, 1956 (1 of 1956).

18FG Preparation of inventory of assets and liabilities and list of membersand creditors of managed company.

18FG. Preparation of inventory of assets and liabilities and list of members and creditors of managed company. For the purposes of this Act, the authorised person shall, as soon as may be, after taking over the management of the industrial undertaking of a company under section 18A or section 18AA or section 18FA,-- (a) prepare a complete inventory of-- (i) all properties, movable and immovable, including lands, buildings, works, workshops, stores, instruments, plant, machinery, automobiles and other vehicles, stocks of materials in the course of production, storage or transit. 107M raw materials, cash balances, cash in hand, deposits in bank or with any other person or body or on loan, reserve funds, investments and book debts and all other rights and interests arising out of such property as were immediately before the date of taking over of the industrial undertaking in the ownership, possession, power or control of the company, whether within or without India ; and all books of account, registers, maps, plans, sections, drawings, records, documents or titles of ownership of property, and all other documents of whatever nature relating thereto; and (ii) all borrowings, liabilities and obligations of what-ever kind of the company including liability on account of terminal benefits to its employees subsisting immediately before the said date; (b) prepare separately a list of members, and a list of creditors, of such company as on the date of taking over of the management of the industrial undertaking showing separately in the list of creditors, the secured creditors and the unsecured creditors: Provided that where the management of the industrial undertaking of a company has been taken over under the said section 18A before the commencement of the Industries (Development and Regulation) Amendment Act, 1971, the aforesaid functions shall be performed by the authorised person within six months from such commencement.

18FH. Stay of suits and other proceedings. In the case of a company in respect of which an order under section 18FD has been made, no suit or other legal proceeding shall be instituted or continued against the company except with the previous permission of the Central Government or any officer or authority authorised by that Government in this behalf.]

CHAP CONTROL OF SUPPLY, DISTRIBUTION, PRICE, ETC., OF CERTAIN ARTICLES

CHAPTER IIIB CONTROL OF SUPPLY, DISTRIBUTION, PRICE, ETC., OF CERTAIN ARTICLES

18G. Power to control supply, distribution, price, etc., of certainarticles.

18G. Power to control supply, distribution, price, etc., of certain articles. (1) The Central Government, so far as it appears to it to be necessary or expedient for securing the equitable distribution 108 and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), a notified order made thereunder may provide-- (a) for controlling the prices at which any such article or class thereof may be bought or sold; (b) for regulating by licences, permits or otherwise the distribution, transport, disposal, acquisition, possession, use or consumption of any such article or class thereof; (c) for prohibiting the withholding from sale of any such article or class thereof ordinarily kept for sale; (d) for requiring any person manufacturing, producing or holding in stock any such article or class thereof to sell the whole or part of the articles so manufactured or produced during a specified period or to sell the whole or a part of the articles so held in stock to such person or class of persons and in such circumstances as may be specified in the order; (e) for regulating or prohibiting any class of commercial or financial transactions relating to such article or class thereof which in the opinion of the authority making the order are, or if unregulated are likely to be, detrimental to public interest; (f) for requiring persons engaged in the distribution and trade and commerce in any such article or class thereof to mark the articles exposed or intended for sale with the sale price or to exhibit at some easily accessible place on the premises the price-lists of articles held for sale and also to similarly exhibit on the first day of every month, or at such other time as may be prescribed, a statement of the total quantities of any such articles in stock; (g) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters; and (h) for any incidental or supplementary matters, including, in particular, the grant or issue of licences, permits or other documents and the charging of fees therefor. (3) Where, in pursuance of any order made with reference to clause (d) of sub-section (2), any person sells any article, there shall be paid to him the price therefor-- (a) where the price can consistently with the controlled price if any, be fixed by agreement, the price so agreed upon; (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any, fixed under this section; (c) where neither clause (a) nor clause (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale. (4) No order made in exercise of any power conferred by this section shall be called in question in any Court. (5) Where an order purports to have been made and signed by an authority in exercise of any power conferred by this section. a Court shall, within the meaning of the Indian Evidence Act, 1872 (1 of 1872), presume that such order was so made by that authority. Explanation.--In this section, the expression 'article or class of articles' relatable to any scheduled industry includes any article or class of articles imported into India which is of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry.]

19. Powers of inspection. (1) For the purpose of ascertaining the position or working of any industrial undertaking or for any other purpose mentioned in this Act or the rules made thereunder, any person authorized by the Central Government in this behalf shall have the right-- (a) to enter and inspect any premises; (b) to order the production of any document, book, register or record in the possession or power of any person having the control of, or employed in connection with, any industrial undertaking; and (c) to examine any person having the control of, or employed in connection with, any industrial undertaking. (2) Any person authorized by the Central Government under sub- section (1) shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (45 of 1860).

20. General prohibition of taking over management or control of industrialundertakings. 20. General prohibition of taking over management or control of industrial undertakings. After the commencement of this Act, it shall not be competent for any State Government or a local authority to take over the management or control of any industrial undertaking under any law for the time being in force which authorizes any such Government or local authority so to do.

21. Certain administrative expenses of Development Councils to be paidfrom moneys provided by Parliament.

21. Certain administrative expenses of Development Councils to be paid from moneys provided by Parliament. Such administrative expenses as relate to the emoluments of officers of a Development Council who are appointed by or with the approval of the Central Government, shall be defrayed out of moneys provided by Parliament.

22. Power of the Central Government to issue directions to DevelopmentCouncils.

22. Power of the Central Government to issue directions to Development Councils. In the exercise of its functions under this Act, every Development Council shall be guided by such instructions as may be given to it by the Central Government and such instructions may include directions relating to the manner in which, and the purpose for which, any proceeds of the cess levied under section 9 which may have been handed over to it, shall be expended.

23. Decision of Central Government final respecting certain matters.

1*[23. Decision of Central Government final respecting certain matters. If, for the purposes of this Act, any question arises as to whether-- (a) there has been a substantial expansion of an industrial undertaking, or (b) an industrial undertaking is producing or manufacturing any new article, the decision of the Central Government thereon shall be final.]

24. Penalties. 2*[(1) If any person contravenes or attempts to contravene or abets the contravention of-- (i) the provisions of sub-section (1) 3*[or sub-section (4)] of section 10 or of sub-section (1) of section 11 or of section 11A or of sub-section (1) of section 13 4*[or of 5*[sub-sections (2), (2A), (2D), (2F) and (2G) of section 29B], or (ii) any direction issued under section 16 or sub-section (3) of section 18B, or (iii) any order made under section 18G, or (iv) any rule the contravention of which is made punishable under this section, he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to five thousand rupees, or ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1953, s. 14, for the original section. 2. Subs. by s. 15, ibid., for the original sub-section. 3. Ins. by Act 67 of 1973, s. 3 (w.e.f. 7-2-1974). 4. Ins. by Act 71 of 1956, s. 4 (w.e.f. 1-3-1957). 5. Subs. by Act 4 of 1984, s. 4 (w.e.f. 12-1-1984). with both, and, in the case of a continuing contravention, with an additional fine which may extend to five hundred rupees for every day during which such contravention continues after conviction for the first such contravention.] (2) If the person contravening any of the said provisions is 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 contravention and shall be liable to be proceeded against and punished accordingly : Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (3) Notwithstanding anything contained in sub-section (2), where an offence under this Act 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 or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.--For the purposes 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.

1*[24A. Penalty for false statements. If any person,-- (a) when required by this Act or by any order under this Act to make any statement or furnish any information, makes any statement or furnishes any information which is false in any material particular and which he knows or has reasonable cause to believe to be false or does not believe to be true; or (b) makes any such statement as aforesaid in any book, account, record, declaration, return or other document which he is required by any order made under this Act to maintain or furnish; ---------------------------------------------------------------------- 1. Ins. by Act 26 of 1953, s. 16. 112 he shall be punishable with imprisonment which may extend to three months, or with fine which may extend to two thousand rupees, or with both.]

1*[25. Delegation of powers. (1) The Central Government may, by notified order, direct that any power exercisable by it under this Act (other than the power given to it by sections 16 2*[18A, 18AA and 18FA]) shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by such officer or authority (including in the said expressions any Development Council, State Government or officer or authority subordinate to the Central Government) as may be specified in the direction. (2) Any power exercisable by a State Government by virtue of a direction under sub-section (1) may, unless otherwise provided in such direction, be exercised also by such officer or authority subordinate to that State Government as it may, by notified order, specify in this behalf.

26. Power to issue directions. The Central Government may give directions to any State Government as to the carrying into execution in the State of any of the provisions of this Act or of any order or direction made thereunder.

27. Cognizance of offences. No Court shall take cognizance of any offence punishable under this Act except on a report in writing of the facts constituting such offence made by a person who is a public servant as defined in section 21 of the Indian Penal Code (45 of 1860). 28. Burden of proof in certain cases. 28. Burden of proof in certain cases. Where any person is prosecuted for contravening any order made under section 18G which prohibits him from doing an act or being in possession of a thing without lawful authority or without a permit, licence or other document, the burden of proving that he has such authority, permit, licence or other document shall be on him.

29. Jurisdiction of Courts. (1) Subject to the provisions of sub- section (2), no Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence punishable under this Act. (2) Any Magistrate or bench of Magistrates empowered, for the time being, to try in a summary way the offences specified in sub- section (1) of section 260 of the Code of Criminal Procedure, 1898 (5 of 1898), may, on application in this behalf being made by the prosecution, try, in accordance with the ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1953, s. 17, for original sections 25 to 29. 2. Subs. by Act 72 of 1971, s. 7, for "and 18A" (w.e.f. 1-11-1971). 113 provisions contained in sections 262 to 265 of the said Code any offence which consists of a contravention of an order made under section 18G.

29A. Special provision regarding fines. Notwithstanding anything contained in section 32 of the Code of Criminal Procedure, 1898 (5 of 1898), it shall be lawful for any Magistrate of the first class and for any Presidency Magistrate to pass a sentence of fine exceeding one thousand rupees on any person convicted of any offence under this Act.

29B. Power to exempt in special cases. 1*[(1)] If the Central Government is of opinion, having regard to the smallness of the number of workers employed or to the amount invested in any industrial undertaking or to the desirability of encouraging small undertakings generally or to the stage of development of any scheduled industry, that it would not be in public interest to apply all or any of the provisions of this Act thereto, it may, by notification in the Official Gazette, exempt, subject to such conditions as it may think fit to impose, any industrial undertaking or class of industrial undertakings or any scheduled industry or class of scheduled industries as it may specify in the notification from the operation of all or any of the provisions of this Act or of any rule or order made thereunder. 2*[(2) Where any notification under sub-section (1) granting any exemption is cancelled, no owner of any industrial undertaking to which the provisions of section 10, section 11, section 11A or clause (d) of sub-section (1) of section 13 would have applied, if the notification under sub-section (1) had not been issued, shall carry on the business of the undertaking after the expiry of such period as may be specified in the notification cancelling the exemption except under and in accordance with a licence issued in this behalf by the Central Government and, in the case of a State Government, except under and in accordance with the previous permission of the Central Government. 3*[(2A) In particular, and without prejudice to the generality of the provisions of sub-section (1), the Central Government may, if it is satisfied, after considering the recommendations made to it by the Advisory Committee constituted under sub-section (2B), that it is necessary so to do for the development and expansion of ancillary, or small scale, industrial undertakings, by notified order, direct that any article or class of articles specified in the First Schedule shall, on and from such date as may be specified in the notified order (hereafter in this section referred to as the "date of reservation"), be reserved for exclusive production by the ancillary, or small scale, industrial undertakings (hereafter in this section referred to as "reserved article"). (2B) The Central Government shall, with a view to determining the nature of any article or class of articles that may be reserved for production by the ancillary, or small scale, industrial undertakings, constitute an Advisory Committee consisting of such persons as have, in the opinion of that Government, the necessary expertise to give advice on the matter. (2C) The Advisory Committee shall, after considering the following matters, communicate its recommendations to the Central Government, namely:-- (a) the nature of any article or class of articles which may be produced economically by the ancillary, or small scale, industrial undertakings; (b) the level of employment likely to be generated by the production of such article or class of articles by the ancillary, or small scale, industrial undertakings; (c) the possibility of encouraging and diffusing entrepreneurship in industry; (d) the prevention of concentration of economic power to the common detriment; and (e) such other matters as the Advisory Committee may think fit. (2D) The production of any reserved article or class of reserved articles by any industrial undertaking (not being an ancillary, or small scale, industrial undertaking) which, on the date of reservation, is engaged in, or has taken effective steps for, the production of any reserved article or class of reserved articles, shall, after the commencement of the Industries (Development and Regulation) Amendment Act, 1984, or, as the case may be, the date of reservation, whichever is later, be subject to such conditions as the Central Government may, by notified order, specify. (2E) While specifying any condition under sub-section (2D), the Central Government may take into consideration the level of production of any reserved article or class of reserved articles achieved, immediately before the date of reservation, by the industrial undertaking referred to in sub-section (2D), and such other factors as may be relevant. (2F) Every person or authority, not being the Central Government, who, or which, is registered under section 10 or to whom, or to which, a licence has been issued or permission has been granted under section 11 for the production of any article or class of articles which has, or have, been subsequently reserved for the ancillary, or small scale, industrial undertakings, shall produce, such registration certificate, licence or permission, as the case may be, within such period as the Central Government may, by notified order, specify in this behalf, and the Central Government may enter therein all or any of the conditions specified by it under sub-section (2D), including the productive capacity of the industrial undertakings and other prescribed particulars. (2G) The owner of every industrial undertaking (not being an ancillary, or small scale, industrial undertaking) which, immediately before the commencement of the Industries (Development and Regulation) Amendment Act, 1984, or the date of reservation, whichever is later,-- (a) was engaged in the production of any article or class of articles, which has, or have, been reserved for the ancillary, or small scale, industrial undertakings, or (b) had before such commencement or before the date of such reservation, as the case may be, taken effective steps for commencing the production of such reserved article or class of reserved articles, without being registered under section 10 or in respect of which a licence or permission has not been issued under section 11, shall refrain from the production of such reserved article or class of reserved articles, on and from the date of expiry of three months from such commencement or from the date of such reservation, whichever is later. (2H) Every notified order made under sub-section (2A) shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days, which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the sessions immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notified order or both Houses agree that the notified order should not be made, the notified order 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 notified order.'. (3) The provisions of this Act shall apply, so far as may be, in relation the issue of a licence or permission to any industrial undertaking referred in sub-section (2) as they apply in relation to the issue of a licence or permission to a new industrial undertaking.]

29C. Protection of action taken under the Act. (1) No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act or any rule or order made thereunder. ---------------------------------------------------------------------- 1. S. 29B re-numbered as sub-section (1) of that section by Act 71 of 1956, s. 5 (w.e.f. 1-3-1957). 2. Ins. by s. 5, ibid (w.e.f. 1-3-1957). 3. Ins. by Act 4 of 1984, s. 5 (w.e.f. 12-1-1984). 114 (2) No suit or other legal proceeding shall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.]

29D. Debts incurred by the authorised person to have priority.

1*[29D. Debts incurred by the authorised person to have priority. Every debt arising out of any loan obtained by the authorised person for carrying on the management of, or exercising functions of control in relation to an industrial undertaking or part thereof, the management of which has been taken over under section 18A or section 18AA or section 18FA,-- (a) shall have priority over all other debts, whether secured or unsecured, incurred before the management of such industrial undertaking was taken over; (b) shall be a preferential debt within the meaning of section 530 of the Companies Act, 1956 (1 of 1956), and such debts shall rank equally among themselves and be paid in full out of the assets of the industrial undertaking unless such assets are insufficient to meet them, in which case they shall abate in equal proportions.]

30. Power to make rules. (1) The Central Government may, subject to the condition of previous publication, make rules 2* for carrying out the purposes of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-- (a) the constitution of the Advisory Council and Development Councils, the term of office and other conditions of service of, the procedure to be followed by, and the manner of filling casual vacancies among, members of the Advisory Council or a Development Council; (b) the form of the statement of account to be furnished by a Development Council; (c) the intervals at which, the time within which, and the manner in which, the cess leviable under section 9 shall be payable and the rebate for the prompt payment of such cess; ---------------------------------------------------------------------- 1. Ins. by Act 72 of 1971, s. 8 (w.e.f. 1-11-1971). 2. See the Central Advisory Council (Procedural) Rules, 1952, Gazette of India, 1952, Extraordinary, Pt. II, See. 3, p. 540; the Registration and Licensing of Industrial Undertakings Rules, 1952, ibid., p. 617 and the Development Councils (Procedural) Rules, 1952, ibid., 1953, p. 467. (d) the expenses which a Development Council may meet from the proceeds of the cess levied under section 9 which may have been handed over to it; (e) the appointment by or with the approval of the Central Government of any officers of a Development Council; (f) the facilities to be provided by any industrial undertaking for the training of technicians and labour; (g) the collection of any information or statistics in respect of any scheduled industry; (h) the manner in which industrial undertakings may be registered under section 10 and the levy of a fee therefor; (i) the procedure for the grant or issue of licences and permissions under 1*[section 11, section 11A, 2*[section 13 or section 29B]], the time within which such licences or permissions shall be granted or issued including, in particular, the publication of notices calling for applications and the holding of such public inquiry in relation thereto as may be necessary in the circumstances; (j) the fees to be levied in respect of licences and permissions issued under this Act; (k) the matters which may be taken into account in the granting or issuing of licences and permissions, including in particular, the previous consultation by the Central Government with the Advisory Council or any Development Council or both in regard to the grant or issue of any such licences or permissions; (l) the procedure to be followed in making any investigation under this Act; (m) the conditions which may be included in any licences and permission; (n) the conditions on which licences and permissions may be varied or amended under section 12; (o) the maintenance of books, accounts and records relating to an industrial undertaking; (p) the submission of special or periodical returns relating to an industrial undertaking by persons having the control of, or employed in connection with, such undertaking, and the ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1953, s. 18, for "section 11 or section 13". 2. Subs. by Act 71 of 1956, s. 6, for "or section 13" (w.e.f. 1-3- 1957). 116 forms in which, and the authorities to which such returns and reports shall be submitted; 1*[(pp) any matter which is to be or may be prescribed for giving effect to the provisions of Chapter IIIAA or Chapter IIIAC;] (q) any other matter which is to be or may be prescribed under this Act. (3) Any rule made under this section may provide that a contravention thereof shall be punishable under section 24. 2*[(4) Every rule made under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately 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 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 rule.]

31. Application of other laws not barred. The provisions of this Act shall be in addition to and not, save as otherwise expressly provided in this Act, in derogation of any other Central Act for the time being in force, relating to any of the scheduled industries. 32. Amendment of section 2 of Act 14 of 1947. 32. [Amendment of section 2 of Act 14 of 1947.] Rep. by the Repealing and Amending Act, 1957 (36 of 1957), s. 2 and Sch. 1. SCHE See sections 2 and 3 (i)

3*[THE FIRST SCHEDULE [See sections 2 and 3 (i)] Any industry engaged in the manufacture or production of any of the articles mentioned under each of the following headings or sub- headings, namely:-- 1.

METALLURGICAL INDUSTRIES : A. Ferrous : (1) Iron and steel (Metal). (2) Ferro-alloys. (3) Iron and Steel castings and forgings. (4) Iron and Steel structurals. (5) Iron and Steel pipes. (6) Special steels. (7) Other products of iron and steel. ---------------------------------------------------------------------- 1. Ins. by Act 72 of 1971, s. 9 (w.e.f. 1-11-1971). 2. Subs. by Act 4 of 1986, s. 2 and Sch. (w.e.f. 15-5-1986). 3. Subs. by Act 71 of 1956, s. 7, for the original Schedule (w.e.f. 1-3-1957). 116A B. Non-ferrous: 1*[(1) Precious metals, including gold and silver, and their alloys. (1A) Other non-ferrous metals and their alloys.] (2) Semi-manufactures and manufactures. 2. FUELS: (1) Coal, lignite, coke and their derivatives. (2) Mineral oil (crude oil), motor and aviation spirit, diesel oil, kerosene oil, fuel oil, diverse hydrocarbon oils and their blends including synthetic fuels, lubricating oils and the like. (3) Fuel gases--(coal gas, natural gas and the like).

3. BOILERS AND STEAM GENERATING PLANTS: Boilers and steam generating plants. ---------------------------------------------------------------------- 1. Subs. by Act 37 of 1962, s. 2, for item (1).

4. PRIME MOVERS (OTHER THAN ELECTRICAL GENERATORS) (1) Steam engines and turbines. (2) Internal combustion engines.

5. ELECTRICAL EQUIPMENT: (1) Equipment for generation, transmission and distribution of electricity including transformers. (2) Electrical motors. (3) Electrical fans. (4) Electrical lamps. (5) Electrical furnaces. (6) Electrical cables and wires. (7) X-ray equipment. (8) Electronic equipment. (9) Household appliances such as electric irons, heaters and the like. (10) Storage batteries. (11) Dry cells.

6. TELECOMMUNICATIONS: (1) Telephones. (2) Telegraph equipment. (3) Wireless communication apparatus. (4) Radio receivers, including amplifying and public address equipment. (5) Television sets. (6) Teleprinters.

7. TRANSPORTATION: (1) Aircraft. (2) Ships and other vessels drawn by power. (3) Railway locomotives. (4) Railway rolling stock. (5) Automobiles (motor cars, buses, trucks, motor cycles, scooters and the like). (6) Bicycles. (7) Others, such as fork lift trucks and the like.

8. INDUSTRIAL MACHINERY: A. Major items of specialised equipment used in specific industries:-- (1) Textile machinery (such as spinning frames, carding machines, powerlooms and the like) including textile accessories. (2) Jute machinery. (3) Rayon machinery. (4) Sugar machinery. (5) Tea machinery. (6) Mining machinery. (7) Metallurgical machinery. (8) Cement machinery. (9) Chemical machinery. (10) Pharmaceuticals machinery. (11) Paper machinery. B. General items of machinery used in several industries, such as the equipment required for various 'unit processes: (1) size reduction equipment--crushers, ball mills and the like. (2) Conveying equipment--bucket elevators, skip hoists, cranes, derricks and the like. (3) Size separation units--screens, classifiers and the like. (4) Mixers and reactors--kneading mills, turbo mixers and the like. (5) Filtration equipment--filter presses, rotary filters and the like. (6) Centrifugal machines. (7) Evaporators. (8) Distillation equipment. (9) Crystallisers. (10) Driers. (11) Power driven pumps--reciprocating, centrifugal and the like. (12) Air and gas compressors and vacuum pipes (excluding electrical furnaces). (13) Refrigeration plants for industrial use. 118A. (14) Fire fighting equipment and appliances including Fire engines. C. Other items of industrial Machinery: (1) Ball, roller and tapered bearings. (2) Speed reduction units. (3) Grinding wheels and abrasives.

10. AGRICULTURAL MACHINERY: (1) Tractors, harvestors and the like. (2) Agricultural implements.

11. EARTH-MOVING MACHINERY: Bulldozers, dumpers, scrapers, loaders, shovels, drag lines, bucket wheel excavators, road rollers and the like.

12. MISCELLANEOUS MECHANICAL AND ENGINEERING INDUSTRIES: (1) Plastic moulded goods. (2) Hand tools, small tools and the like. (3) Razor blades. 1*[(4) Pressure Cookers. (5) Cutlery. (6) Steel furniture.]

13. COMMERCIAL, OFFICE AND HOUSEHOLD EQUIPMENT: (1) Typewriters. (2) Calculating machines. (3) Air conditioners and refrigerators. (4) Vacuum cleaners. (5) Sewing and knitting machines. (6) Hurricane lanterns.

14. MEDICAL AND SURGICAL APPLIANCES: Surgical instruments--sterilisers, incubators and the like.

15. INDUSTRIAL INSTRUMENTS: (1) Water meters, steam meters, electricity meters and the like. (2) Indicating, recording and regulating devices for pressure, temperature, rate of flow, weights, levels and the like. (3) Weighing machines. ---------------------------------------------------------------------- 1. Ins. by Act 17 of 1979, s. 3 (w.e.f. 30-12-1978).

17. MATHEMATICAL, SURVEYING AND DRAWING INSTRUMENTS: Mathematical, surveying and drawing instruments.

18. FERTILISERS: (1) Inorganic fertilisers. (2) Organic fertilisers. (3) Mixed fertilisers. 19. CHEMICALS (OTHER THAN FERTILISERS): (1) Inorganic heavy chemicals. (2) Organic heavy chemicals. (3) Fine chemicals including photographic chemicals. (4) Synthetic resins and plastics. (5) Paints, varnishes and enamels. (6) Synthetic rubbers. (7) Man-made fibres including regenerated cellulose-rayon, nylon and the like. (8) Coke oven by-products. (9) Coal tar distillation products like nephathalene, anthracene and the like. (10) Explosives including gun powder and safety fuses. (11) Insecticides, fungicides, weedicides and the like. (12) Textile auxiliaries. (13) Sizing materials including starch. (14) Miscellaneous chemicals.

20. PHOTOGRAPHIC RAW FILM AND PAPER: (1) Cinema film. (2) Photographic amateur film. (3) Photographic printing paper.

22. DRUGS AND PHARMACEUTICALS: Drugs and pharmaceuticals. 118C 23. TEXTILES (INCLUDING THOSE DYED, PRINTED OR OTHERWISE PROCESSED): (1) made wholly or in part of cotton, including cotton yarn, hosiery and rope. (2) made wholly or in part of jute, including jute twine and rope. (3) made wholly or in part of wool, including wool tops, woollen yarn, hosiery, carpets and druggets. (4) made wholly or in part of silk, including silk yarn and hosiery. (5) made wholly or in part of synthetic, artificial (man- made) fibres, including yarn and hosiery of such fibres.

24. PAPER AND PULP INCLUDING PAPER PRODUCTS: (1) Paper--writing, printing and wrapping. (2) Newsprint. (3) Paper board and straw board. (4) Paper for packaging (corrugated paper, kraft paper, paper bags, paper containers and the like). (5) Pulp-wood pulp, mechanical, chemical, including dissolving pulp.

26. FERMENTATION INDUSTRIES: (1) Alcohol. (2) Other products of fermentation industries.

27. FOOD PROCESSING INDUSTRIES: (1) Canned fruits and fruit products. (2) Milk foods. (3) Malted foods. (4) Flour. (5) Other processed foods.

28. VEGETABLE OILS AND VANASPATHI: (1) Vegetable oils, including solvent extracted oils. (2) Vanaspathi.

29. SOAPS, COSMETICS AND TOILET PREPARATIONS: (1) Soaps. (2) Glycerine. (3) Cosmetics. (4) Perfumery. (5) Toilet preparations.

30. RUBBER GOODS: (1) Tyres and tubes. (2) Surgical and medicinal products including prophylactics. (3) Footwear. (4) Other rubber goods.

31. LEATHER, LEATHER GOODS AND PICKERS: Leather, leather goods and pickers. 32. GLUE AND GELATIN: Glue and gelatin.

33. GLASS: (1) Hollow ware. (2) Sheet and plate glass. (3) Optical glass. (4) Glass wool. (5) Laboratory ware. (6) Miscellaneous ware.

34. CERAMICS: (1) Fire bricks. (2) Refractories. (3) Furnace lining bricks--acidic, basic and neutral. (4) China ware and pottery. (5) Sanitary ware. (6) Insulators. (7) Tiles. 1*[(8) Graphite Crucibles.] 35. CEMENT AND GYPSUM PRODUCTS: (1) Portland cement. (2) Asbestos cement. (3) Insulating boards. (4) Gypsum board, wall boards and the like. ---------------------------------------------------------------------- 1. Ins. by Act 17 of 1979, s. 3 (w.e.f. 30-12-1978). 118E 36. TIMBER PRODUCTS: (1) Plywood (2) Hardboard, including fibre-board, chip-board and the like. (3) Matches. (4) Miscellaneous (furniture components, bobbins, shuttles and the like).

38. MISCELLANEOUS INDUSTRIES: 1*[(1)] Cigarettes. 2*[(2) Linoleum, whether felt based or jute based.] 3*[(3) Zip fasteners (metallic and non-metallic). (4) Oil stoves. (5) Printing, including litho printing industry.] Explanation 1.--The articles specified under each of the headings Nos. 3, 4, 5, 6, 7, 8, 10, 11 and 13 shall include their component parts and accessories. Explanation 2.--The articles specified under each of the headings Nos. 18, 19, 21 and 22 shall include the intermediates required for their manufacture.]

THE SECOND SCHEDULE [See section 6(4)] Functions which may be assigned to Development Councils:-- (1) Recommending targets for production, co-ordinating production programmes and reviewing progress from time to time. (2) Suggesting norms of efficiency with a view to eliminating waste, obtaining maximum production, improving quality and reducing costs. (3) Recommending measures for securing the fuller utilisation of the installed capacity and for improving the working of the industry, particularly of the less efficient units. (4) Promoting arrangements for better marketing and helping in the devising of a system of distribution and sale of the produce of the industry which would be satisfactory to the consumer. ---------------------------------------------------------------------- 1. Numbered by Act 67 of 1973, s. 4 (w.e.f. 7-2-1974). 2. Ins. by s. 4, ibid, (w.e.f. 7-2-1974). 3. Ins. by Act 17 of 1979, s. 3 (w.e.f. 30-12-1978). 118F (5) Promoting standardisation of products. (6) Assisting in the distribution of controlled materials and promoting arrangements for obtaining materials for the industry. (7) Promoting or undertaking inquiry as to materials and equipment and as to methods of production, management and labour utilisation, including the discovery and development of new materials, equipment and methods and of improvements in those already in use, the assessment of the advantages of different alternatives and the conduct of experimental establishments and of tests on a commercial scale. (8) Promoting the training of persons engaged or proposing engagement in the industry and their education in technical or artistic subjects relevant thereto. (9) Promoting the retraining in alternative occupations of personnel engaged in or retrenched from the industry. 119 (10) Promoting or undertaking scientific and industrial research, research into matters affecting industrial psychology and research into matters relating to production and to the consumption or use of goods and services supplied by the industry. (11) Promoting improvements and standardisation of accounting and costing methods and practice. (12) Promoting or undertaking the collection and formulation of statistics. (13) Investigating possibilities of decentralizing stages and processes of production with a view to encouraging the growth of allied small scale and cottage industries. (14) Promoting the adoption of measures for increasing the productivity of labour, including measures for securing safer and better working conditions and the provision and improvement of amenities and incentives for workers. (15) Advising on any matters relating to the industry (other than remuneration and conditions of employment) as to which the Central Government may request the Development Council to advise and undertaking inquiries for the purpose of enabling the Development Council so to advise; and (16) Undertaking arrangements for making available to the industry information obtained and for advising on matters with which the Development Councils are concerned in the exercise of any of their functions.

1*[THE THIRD SCHEDULE (See section 18FB) 1. The Industrial Employment (Standing Orders) Act, 1946 (20 of 1946). 2. The Industrial Disputes Act, 1947 (14 of 1947). 3. The Minimum Wages Act, 1948 (11 of 1948). ---------------------------------------------------------------------- 1 Ins. by Act 72 of 1971, s. 10 (w.e.f. 1-11-1971).