 bill no 32 of  2007 the trust corporations bill, 2007 by shri mohan singh, mp a billto provide for the creation of trust corporations for further development of enterprises with social obligation and for matters connected therewith be it enacted by parliament in the fifty-eighth year of the republic of india as follows:—1 (1) this act may be called the trust corporations act, 2007(2) it extends to the whole of indiashort title, extent and commencement5(3) it shall come into force on such date as the central government may, by notificationin the official gazette, appoint2 in this act unless the context otherwise requires,—definitions(a)  "business" means and includes industries, plantations, banks, trade, transport or any other activity carried on for profit;(c) "company panchayat" means the organ of management of a trust corporation constituted in the manner provided in this act; and(d) "trust corporation" means any public or private limited company which has declared itself a trust corporation under this act53 the provisions of this act shall have effect notwithstanding anything to the contrarycontained in any law for the time being in forceprovisions to have effect nothwithstanding any law in force4 a company may, by a resolution passed by a majority of shareholders present andvoting at its general meeting, declare itself to be a trust corporationformation of trust corporationinformationto register105 immediately after the passing of the resolution referred to in section 4, the manageror the secretary of the company shall notify the same to the registrar of joint stock companies in whose jurisdiction the head office of the company is situatedinterim management6 the registrar, on receiving such notice, shall direct the manager or the secretary, asthe case may be, to carry on the day to day business of the company as an interim managing trustee15company panchayat of trustees7 the registrar shall, as soon as possible, arrange to take stock of the assests andliabilities of the company and shall constitute a company panchayat of trustees consisting of not more than sixteen members, in  the following manner, to supervise, control and direct the managing trustee:(a) not more than five trustees to be nominated by the shareholders of thecompany in its general meeting;20(b) not more than five trustees to be elected by the trade union of the employeesof the company of whom at least one shall be from the managerial staff, one from the workers and the rest from any section of the employees;25(c) five trustees, to be nominated by the registrar of joint stock companies, asexperts, representing the ministries/departments of the central government dealing with planning, industry, commerce, company law, and the department of labour of the state government concerned and a nominee of municipality or panchayat of the locality in which the head office of the company is situated;(d) the interim managing trustee shall be an ex-officio member of the companypanchayat308 every worker who has been in the employment of the company for not less than sixmonths shall have the right to vote in the election of the trusteesright of workers to vote qualification for election as trustees359 no representative of workers shall be included in the company panchayat unless hebelongs to a united trade union which makes an active demand for responsible participation in the management of the trust corporationfunctions of company panchayat4010 the company panchayat shall decide all major questions relating to the managementof the business of the trust corporation and, in particular, frame rules for the efficient management of the trust corporation, approve its annual production, trade or business plans and annual accounts, construction and development programme, purchases, sales, loans, credits, wages, salaries, bonus to employees and interest, if any, to shareholdersprofits to be credited  to government of india11 the profits of the trust corporation after due provision being made for depreciationsand provident funds, shall be credited to the income tax folio of the ministry of finance, government of india for being allocated to the different states according to the recommendations of the finance commissionwages of employees12 the employees of the trust corporation shall not demand any rise in wages, whichis not commensurate with the earnings of an average villager or the uniform scales of wages determined by the ministry of labour of the government of indiapayment of bonus13 the  company panchayat  may sanction payment of general bonus or individualmerit bonus for surpassing the annual production targets fixed for the trust corporation5works committees14 works committees of employees shall be formed in every department of the trustcorporation and they shall be entrusted with  the job of explaining the decisions of the trust panchayat  to the employees, maintenance of the discipline and execution of welfare schemes of the trust corporation10managing trustees15 the manager  and the secretary of the company, which has declared itself to betrust corporation, shall become the ex-officio managing trustees of the corporation16 the first managing trustee shall continue  to hold  office, unless removed earlier,for five years or till he attains the age of sixty years, whichever  is laterterm ofoffice of managing trustee1517  the managing trustee shall be liable to be removed from office by the companypanchayat on the ground of breach of trust or mismanagementremoval of managing trustee18 (1) the remuneration of the first managing trustee shall be fixed by a contractbetween him and the company panchayatremuneration of managing trustee20(2) in case  of a dispute regarding the remuneration of the first managing trustee, theregistrar of joint stock companies shall fix the same after taking into consideration the standard of life to which the first managing trustee is accustomed and the financial health of the corporation19 the first managing trustee may recommend a successor to his office but the finalappointment shall be made by the company panchayatsuccessor of managing trustees salaries2520 the salaries of subsequent managing trustees and other supervisory or technicalstaff  shall  be fixed by the company panchayat21 the company panchayat shall elect a chairman from among its members, whoshall summon its  meetings from time  to time and shall preside over the samechairman of company panchayat3022 the company panchayat shall supervise the work of the managing trustee, examinehis reports and give him instructions in regard to the day to day administration  as also the policies and programme of the trust corporationcompany panchayat to act through managing trustee control over employees23 all employees of the trust corporation shall be subject to the authority of themanaging  trustee in performing their duties24 the managing trustee shall be empowered to impose disciplinary penalties  ondefaulting employeespower of managing trustee35audit25 the accounts of the trust corporation shall be  audited by the comptroller andauditor general of india and/or his nomineescrutiny of accounts26 statements of income and expenditure, balance-sheets and statement of assetsand liabilities  shall be placed before a joint annual general meeting of  all employees of the trust corporation and the  share holders of the company4027 the registrar of joint stock companies, on being satisfied on the basis of theaudit report that the affairs of the trust corporation are being conducted in a manner harmful to the interests of the society, may, after consulting the company panchayat, recommend to the central government to take over the assets of the corporation and dispose them of in any manner it deems fitgovernment to acquire trust corporation in certain casescoordination with national plans28 the coordination of the industrial or commercial activities of the trust corporationwith the national plans for economic developments shall be the responsibility of the representative of the planning commission on the company panchayat, whose decisions in this regard shall be finalacquired undertakings65 of 1951 529 any industry or undertaking whose management has been taken over by thegovernment  under the industries (development and regulation) act, 1951, may be treated as a trust corporation for the purposes of this actnew trust corporations1030 new trust corporations may be floated by an individual entrepreneur investingfifty percent of the subscribed capital, provided that the central or the state government concerned agreed to contribute the other half of the subscribed capital; so, however, that the total equity capital does not exceed rupees one croreapplication ofrules31  a trust corporation formed under section 30 shall be subject to the same rules asare applicable to any other trust corporation formed under this act1532 the terms agreed to between the managing trustee of a corporation formed undersection 30 and the government in respect of remuneration shall be valid during the active service of the original managing trusteemanaging trustee of new trust corporation power to make rules33 (1) the central government may, by notification in the official gazette, make rulesfor carrying out the purposes of this act2025(2) 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 successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following, 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 statement of objects and reasons production of 'wealth' or 'capital' is possible only in 'society' and not in isolationhence an obligation not only to sustain that society but also to promote its welfare and to improve quantitatively the quality of life of all individuals constituting the whole society is cast on those who happen to own or possess the wealth created therein this social obligation is referred to as the principle of 'trusteeship'it has been the experience of humanity through the ages that ownership of 'capital'whether in private or public, if bereft of social obligation, has always tended to concentrate power in few hands and reserved the privileges of creativity and production for those already rich and powerful -multinationals, tycoons, bureaucrats, commissars and the likes and leaves behind the major segment of the society undeveloped or underdeveloped leading to class, caste or group conflicts and disarray in social orderours is a socialist republic in the context of the present day controversy about liberalisation, privatisation and globalisation it is appropriate that state regulated trusteeship system  is introduced in the country for rapid development of economic and social life of its peoplethe present bill seeks to provide an opportunity to the owners of large companies to convert them into trust corporations and proposes necessary provisions for the democratic management of such trust corporations the provisions of the bill are intended to usher peacefully an era of a socialist society, which will be built not solely on monetary incentives but on ideas of service to societythe provisions of the bill are expected to promote increased productivity by giving the workers a sense of full and intelligent participation in the process of production, purchases, sales and investment of the trust corporationsthe bill is not a compulsory measure but a premissive one enabling the present owners of large companies to transform their existing titles based on absolute rights into trust ownershipnew delhi;mohan singhdecember 13, 2006 president's  recommendation  under  articles  117(1), 274 (1) and  117(3)  of  the  constitution ————[copy of do no 4/44/2006/clv, dated 2 march, 2007 from shri prem chand gupta, minister of company affairs to the secretary-general, lok sabha]the president, having been informed of the subject matter of the trust corporations bill, 2007 by shri mohan singh,  member of parliament, recommends its introduction under articles 117(1) and 274(1) and consideration under article 117(3) of the constitution in lok sabha financial memorandumclause 30 of the bill provides that the central government may invest fifty per cent of the authorized capital of a new trust corporation that may be set up by any entrepreneurs the bill, therefore, if enacted, is likely to involve a recurring expenditure of about rupees fifty lakh from the consolidated fund of indiano non-recurring expenditure is likely to be involved memorandum  regarding  delegated  legislationclause 33 of the bill seeks to empower the central government to make rules for carrying out the purposes of the bill the delegation of legislation power is of a normal character————abillto provide for the creation of trust corporations for further development of enterprises with social obligation and for matters connected therewith————(shri mohan singh, mp)mgipmrnd—25ls(s-5)—07-03-2007the trust corporations bill, 2007by shri mohan singh, mparrangement of clausesclauses1 short title, extent and commencement 2 definitions 3 provisions to have effect notwithstanding any law in force 4 formation of a trust corporation 5 information to registrar 6 interim management 7 company panchayat of trustees 8 right of workers to vote 9 qualification for election as trustees10 functions of company panchayat 11 profits to be credited to government of india 12 wages of employees 13 payment of bonus 14 works committees 15 managing trustees 16 term of office of managing trustee 17 removal of managing trustee 18 remuneration of managing trustee 19 successor of managing trustees 20 salaries 21 chairman of company panchayat 22 company panchayat to act through the managing trustee23 control over employees 24 power of managing trustee 25 audit 26 scrutiny of accounts 27 government to acquire trust corporation in certain cases 28 coordination with national plans 29 acquired undertakings 30 new trust corporations 31 application of rules 32 managing trustee of a new trust corporation 33 power to make rules