, •• no 7 01 1984 - j _  the industries (development and regulation) amendment bill j984 , i  , a billfurther to amend the industries (development and regulatio~) , ; j - ac( '1951-be i~ enacted l;>y parliament in t~e rhirty-fifth year of the republic of rndia as follows: _" "  1 ', ' 1 (1) this act may be called the industries (development and regulation) amendment act '1984 '    ' " ,r' 5 (2) it shall be deemed to have come into force on the 12th day of short title and conunencement january, 1984 amendmentof section 3 of act 65 of 1951 10 2 in section 3 of the industries (development and regulation) act, 1951 (hereinafter referred to as the principal act) ,-1  , (i) clauses (oa) and (ab) shall be re-iettered as clauses (ab) and (ac) respectively and before clause (ab) as' so re-iettered, the following clause shall be inserted, namely:-, is '(00) "ancillary industrial undertaking" means an industrial undertaking which in accordance with the proviso to 'sub-section (1) i of section lib ~nd th~ requil'~merits specified under that subsection, is entitled to be regarded' as an ancillary itidustrial undertaking for the purposes of, this act;'; (ii) clause (j) shull be re-iettered as clause (k), and before clause (k) as so re-iettered the following clause shall be inserted, namely:-20 '(j) "small scale industrial und1!rtaking" means an industrial undertaking which, in accordance with the requirements specified under sub-section (1) of section 11b, is entitled to be regarded as a small scale industrial undertaking for the purposes of this act;' 3 after section 11a of the principal act, the following section shall be inserted, namely: -5 insertion of new\iec-tion lib "l1b (1) the central government may, with a view to ascertaining which ancillary and small scale industrial undertakings need s'upportive measures, exemptions or other favourable treatment under this act to enable them to maintain their viability and strength so as to be effective in-10 (a) promoting in a harmonious manner the industrial economy of the country and easing the problem of unemployment, and (b) securing that the ownershi~ and control of the material resources of the community are so distributed as best to subserve the common good, 15 power of central government to specify the require_ ments which shall be complied with by small scale industrial undertakings 'specify, having regard to the factors mentioned in su~ ~section (2), by notified order, the requirements which shall be complied with by an industrial undertaking to enable it to be regarded, for the purposes of this act, as an angillary, or a small scale, industrial undertaking and different requirements may be so specified for different purposes 20 or with respect to industrial undertakings engaged in the manufacture or production of different articles: provided that no industrial undertaking shall be regarded as an ancillary industrial undertaking unless it is, or is proposed to be, engaged in--lz5 (i) the manufacture of parts, components, sub-assemblies, toolings or intermediates; or (ii) rendering of services, or supplying or rendering, not more than fifty per cent of its production or its total services, as the case may be, to other units for production of other articles 30 (2) the factors referred to in sub-section (1) are the following, namely:-(a) the investment by the industrial undertaking in-(i) plant and machinery, or (ii) land, buildings, plant and machinery; 35 (b) the nature of ownership of the industrial undertaking; (c) the smallness of the number of workers employed in the industrial undertaking; (d) the nature, cost and quality of the product of the industrial undertaking; 40 (e) foreign exchange, if any, required for the import of any plant or machinery by the industrial undertaking; and (f) such oth~ relevant factors as may be prescribed (3) a copy of every notified order proposed to be made under lub·section (1) shall be laid in draft 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 5 if, before the expiry of the session immediately following the ~ssion or the successive sessions aforesaid" both houses agree in disapproving the issue ot the proposed notified order or both houses agree in making any modification in the proposed notified order, the notified order shall not be made, or, as the case may' be, shall be made only join such modified form as may be agreed upon hy both the houses (4) notwithstanding! anything contained in sub-section (1), an industrial undertaking which, according to the law for the time being in force, fell, immediately before the commencement of tl;le industries (development and regulation) amendment act, 1984, under the is definition of an ancillary, or small scale, industrial undertaking, shall, after such commencement, continue to be regarded as an ancillary, or small scale, industrial undertaking for the purposes of this act until the definition aforesaid is altered or superseded by ary notified ord~r made under sub-section (1) " amendment 0if section 24 20 4 in 'section 24 of the principal act, in sub-section (1), in clause (i), for the words, brackets, figures and letter "sub-section (2) of se$ion 29b", the words, brackets, figures and letters "sub-sections (2), (2a) , (2d) , (2f) and (2g) of section 29b" shall be 'substituted 5 in section 29b of the principal act, after sub-section (2), the follow-amend-25 ing sub-sections shall be inserted, namely: -ment of '3ection 29b 30 - 35 '(2a) in particular, and without prejudice to the generality oil the provisions of sub-tlection (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 c1as~ 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 resel'v'ed 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 45 (2c) the advisory coiiuiuttee" 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 econoniically by the ancillary,' or small scale, indus-trial undf'ttakings;" (b) the level of employment likely to be generated by the production of such article or class of articles by the ancillary, or small scrle, industriai 'undertakings; (c) the ~sibility of enco~raging ~d di1f~~ing entrepreneurship in industry; 5 ,/ (d) tpc prev~ntiqn of, concen~ration of economic power to the common detriment; and (e) such other matters as the advisory committee may think fit (2d) the productioq of, any reserved article or class of reserved 10 articles by any ind'lstrial, ~dertaking (not being an allcillary, or small s~ale, industri,al undert~king) which, on the date of reservation, is engjlged in, or has taken effective steps for, the production of any res~rvedarticle or class of reserved articles" shall, after the com-~e~ceme,ntof the, iruiustries (development and regulation) 15 amendment act, 1984, or as the case may be, the date of reservation, whichever i later, be subject to such conditions as the central government may, by notified order, specify (2e) while specifyoing any condition under sub~section (2d) , the central government may take into consideration the level of 20 production of any reserved article or class of reserved articles achieved, immediately before the date of reservation, by the industrial undertaking refelted to in sub-section (2d), and such other factors as may be relevant (2f) e~ery person or authority, not being th~ central govern- 25 ment, who, or which, is registered under section 10 or to whom, or to which, a licence has been issued or permission has been granted unde~ s~cti~n 11 for ~he p;rod;uction of any, article or c~ass of articles which has, or have, been ~ubsequently reserved for the ancillary, or sma~l s~ale, industrial unde,r~akings, shall produce, such registration 30 - c~ltificate, ~~cence or permis~ol\, as the case may be, ,within ~uch period as the central government may, by notified order, specify in this behalf, and the ~ntral government may enter t~rein all or ~y of the tonditions specified by it under su~section (2d), including th~ productive capacity of the industrial undertakings and other 35 prt!scribed particulars (2g) the owner of every industrial undertaking (not being an ancillary, or small scale industrial undertaking) which, immedlately , befor~ the commencement of the industries (deyelopment and regulation) amendm~nt act 1964, or the date of reservation, which~ 40 ever 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), bad before s!-u;h c,ommencement or before the date of 45 8~h, rese,rvation ~" the case may be, taken etlective steps :for commencing the production of such reserved article or class of reserved articles, i,,: i  ~itju>~t being, registered under section 10 '01' in, resp~~t of which a llcence or permission has not been i'ssued under section 11, shall so refrain from the production of such, ~'eserved 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, whiche~r is later 5 (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 session immediately follow-10 ing the session or the 'successive sessions aforesaid, both houses agree in making any modificauon 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 15 annulment shall he without prejudice to the valid'ty of anything previous!y' done under that notified order' ,6 notwithstanding anything contained in any judgment, decree or valiorder of a~y court, tribunal or other authority and notwithstanding any- dation thing contained in any other law,agreement or other instrument for the 20 time being in force, every notification made or purporting to have been made by the central government under the principal act, on or after the 19th day of februa,ry, 1970, reserving any article or class of articles for production by any ancillary, or small scale industrial undertaking or any class of ancillary, or i>mall scale indul"trial undertakings shall, for all 25 pu,rposes, be, and shall be deemed, always, to have been, as valid and effective as if the amendments made to the principal act by this act had been in force at all materi~l times and such notification had been made in fun compliance with the provisions made by such amendments and accordingly any reservation made or purporting to have been made 30 by such notification shall in accordance with the tenor thereof, have, and be deemed always to have had, eft'ect on and from the date of such reservation and shall until it is altered or superseded by any fresll notification under the' princi~l act as amended by this act, continue to have effect 35 explanat'ion-for the ,removal of doubt~ it is hereby provided that il9 ac~ or omission on the part of any person shall be ,punishable as an off~nce  which would not have been so punishable if this section had not corne into force 1 of 1984 7 (1) the industries (development and regulation) 40 ordinance, ]984, is hereby repealed amendment repeal and saving (2) notwithstanding such repeal, anything done or any action taken under the principal act, as amended by the said ordinance, shall be deemed to have been done or taken under the principal act, as amended by this act  statement of objects and reasonsone of the important policy measures adopted by the government to improve the competitive strength of industrial undertakings in the small scale sector, is to reserve selected items for exclusive prod'uction by such undertakings under this policy, 8·72 items are presently so reserved the government has been making such reservations since 19th february, 1970 through the exercise of powers under section 29b of the industries (development and regulation) act, 1951 which provides that the central government, having regard to the smallness of the number of workers employed or the amount invested in the industrial undertaking or to the desirability of encouraging small undertaldngs generally or to the stage of development of any scheduled industry, may exempt any undertaking from the operation of all or any of the provisions of the act as there is no specific mention in section 29b of the act about reservation of items for exclusive production by small scale undertakings, doubts have been raised about the competence of the government to take such action with a view to placing the matter beyond doubt, the president has promulgated the industries (development and regulation) amendment ordinance, 1984 (no1 of 1984) making'specific provision in the indu':--tries (development and regulation) act, 1951, empowering the government to: ':~: (a) specify the requirements to be complied with by an industrial undertaking to enable it to be regarded as an ancillary or a small scale industrial undertaking; (b) make reservation of any article or class of articles for exclusive production by an ancillary or small scale industrial undertaking; (c) fix the productive capacity of large and medium scale units, already producing such reserved items on the date of reservation; and (d) provide for all other matters incidental thereto the bill seeks to replace the said ordinance -no financial commitment oj'! expenditure from the consolidated fund of india is likely to be involved if the proposed bill is enacted the notifications whereby small scale or ancillary industrial undertakings were defined and the notifications whereby articles were reserved for production by small scale ql' ancillary industrial undertakings, which are proposed to be validated by the bill, are being laid on the table of each house of parliament narayan datt tiwari new d!:lm; the mh february, 1984 clause 31 of the bill seeks to insert new section ub in the industries (development and regulation) act, 1951 sub-sect:on (1) of that section empowers the central government to specify, by notified order, the requirements which 'shall be complied with by an industrial undertaking in order to be regarded as an ancilla,ry, or small scale, industrial undertaking, and sub-section (2) thereof empowers the central government to prescribe by rules such other relevant factors which have to be taken into consideration in specifying the requirements aforesaid sub-section (3) of the said section 11b provides that the draft of the notified order proposed to be made under sub~ection (1) shall be laid before each house of parliament for thirty days and such notified order shall not be made i~ it is disapproved hy both houses of parliament or if it is modified by both houses of parliament, it shall be made only in such modified fonn clause 5 of the bill seeks to insert new sub-sections (2a) to (2h) in section 29b, of which-(i) sub-section (2a) empowers the central government to direct, by notified order, that any article or class of articles specified in the first schedule may be rese,rved for exclusive production by the ancillary, or small scale, industrial undertakin~, (ii) sub-section (2d) empowers the central government to 5pecify, by notified order, the conditions subject to which the reserved articles -shall be produced by large scale industrial undertakings which are already producing such rese,rved articles or have taken effective steps for the production of such reserved articles, (iii) sub-section (2f) empo~rs ,the central government to specify, by notified order, the period within which every industrial undertaking which is registered under section 10 or to which a   l1cence or permission has been granted under section 11 for the production of any articles which has subsequently been reserved for production by ancillary or small scale industrial undertakings, to produce such registration certificate, licence or permission to enable the central government to  enter therein all or any of the conditions, specified by it under sub-section (20) and the productive capacity or other prescribed particulars - the matters in relation to which the legislative power has been so delegated, are matters of detail the delegation of legislative power is, therefore, of a normal character ,  act, 1951(65 of 19:)1) - - - - definitions 3 in this act unless the context otherwise requires,-- - - - - penalties 24 (1) if any person contravenes or attempts to contravene or abe1;s the "contravention of- ' (i) the provisions of sub-section (1) or sub-section (4) of section 10 or of sub-section (1) of section 11 or of section ua or of subsection (1) of sectftm 13 or of sub-section (2) of section 29b, or    -   a billfurther to amend the industries (development and regulation) act, 1951 (shri narayan datt tiwari, minister of industry) 