 the state financial corporations ( amendment) bill, 1956- (as introduced in loic sabra)  the state~financial corporations (amendment) bill,1956 (as introduced in los: sabha) a billfurther to amend the state financial corporations act, 1951 be it enacted by parliament in the seventh year of the republic of india as follows:-1 (1) this act may be called the state financial corporations short title (amendment) act, 1956 :!~:;nt s (2) it shall come into force on such date as the central government may, by notification in the official gazette, appoint 2 in section 2 of the state financial corporations act, 1951 amen~ent (hel'einafter referred to as the principal act) ,_ ofsec:tlon a (i) for clause (b), the following clause shall be substituted, 10 namely:-" (b) 'financial corporation' means a financial corporation established under section 3 and includes a joint financial corporation established under section 3aj"; (ii) to clause (c), the following e3:j)zanation shall be added, is namely:-"explanation-the expression 'processing of goods' includes any art or process for producing, preparing or making an article by subjecting any material to a manual, mechanical, chemical, electrical or any other like operation;" amendment of section 3· insertion of new aec:tion 3a establishment of joint finanaat corporationa (iii) after clause (i), the following clause shall be inserted, namely:-"(ff) 'state government' in relation to a part c state, means the lieutenant governor, or as the case may be the chief commissioner;" , 3 in sub-section (2) of section 3 of the principal act, for the words "acquire and to hold", the words "acquire, hold and dispose of" shall be substituted 4 after section 3 of the principal act, the followmg section shall be inserted, namely:-10 "3a (1) notwithstanding anything contained in section 3, two or more states may, after consultation with the reserve bank, enter into an agreement that there shall be one financial corporation for the group of states participating in· the agreement and if the agreement is published in the official gazette 15 of each of those states, the central government may, by notification in the official gazette, establish to joint financial corporation to serve the needs of those states under such name as may be specified in the notification (2) an inter-state agreement under sub-section (1) among 20 the participating states may-(a) provide for the fixation of the authorised capital of the joint financial corporation, the number of fully paid up 'shares into which it shall be divided, and the allocation among the participating states of the shares to be distri- 25 buted under clause (a) of sub-section (3) of section 4; (b) provide for the sharing of the liability for the guarantee under section 6 or section 7; (c) provide for the number of directors to be nominated to the board by each participating state government; 30 (d) provide for the apportionment among the participating states of expenditure in connection with the joint financial corporation; (e) provide for the division among the participating states of the surplus profits payable by the joint financial 3' corporation under sub-section (8) of section 35; (f) determine which of the participating state governments shall exercise the several functions of the state government under this act, and references in this act to the state government, in relation to the joint financial cor- 40 poration, shall save as oth~ise expressly provided, be construed accordingly; (g) provide for consultation among the participating states either generally or with reference to particular matters arising under this act; s 10 (h) make such incidental and consequential provisions, not inconsistent with this act, as may be deemed necessary or expedient for giving effect to the agreement (3) the joint financial corporation shall be a body corporate by the name notified under sub-section (1), having perpetual succession and a common seal, with power, subject to the provisions of this act, to acquire, hold and dispose of property and shall by the said name sue and be sued (4) any reference in this act to 'state' in relation to a joint financial corporation established for two or more states, shall be construed as a reference to each such state", is 5 in sub-section (1) of section 5 of the principal act, after the words ~:nt "financial institution", the words "or class of financial institutions"~ - on shall be inserted 6 in section 7 of the principal act, after sub-section (2), the amcndm~t following sub-section shah be inserted, namely: _ ~~ 8ectlon 20 "(3) the financial corporation may, for the purpose of carrying out its functions under this act, borrow money from the reserve bank, repayable on demand or on the expiry of fixed periods not exceeding ninty days froixl the date on which the money is so borrowed, against securities of the central 2s government or of any state government" 1 in section 10 of the principal act,-(i) to clause (a), the following proviso shall be added, namely:-"provided that in the case of a joint financial corporation, the number of directors shall be such as the state governments of the participating states may, by agreement among themselves, think fit to nominate,each participating state government nominating not more than two directors"; 3s (ii) in clause (d), the words "from among themselves" shall be omitted 8 in section 14 of the principal act, after sub-section (i), the amendment following sub-section shall be inserted, namely: -of 8ection "(la) if the managing director is by infirmity or otherwise 1+ rl!ndered incapable of carrying out his duties or is absent on leave or otherwise in circumstances not involving the vacation of his appointment, the state government may, after consultation with the board, appoint another person to aet in his place during his absence" amendmt,dt 9 section 17 of the principal act shall be renumbered as sub-~~ sectlod section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely:-ii (2) the state government may, after consulting the board, remove the managing director from office: 5 provided that no managing director shall be so removed unless he has been given an opportunity of showing cause against his removal" 10 in section 18, in sub-section (1),-amendment of section 18 (a) for the word iithree", the words "the following" shall be 10 substituted ,(b) to clause (a), the following proviso shall be added, namely:-iiprovided that in the case of a joint financial corporation, in addition to the one director elected from among the is directors nominated by the reserve bank and the industrial finance corporation of india, as many directors as there are participating states shall be elected by the nominated directors, one each from among the directors nominated by each of the participating state governments" 20 11 in section 19 of the principal act, after sub-section (3), the following sub-section shall be inserted, namely:-amendment of lection 19· u (3a) if, for any reason, a director nominated under clause (a) or clause (b) or clause (e) of section 10 is unable to attend any meeting of the board, the state government, the central 25 board ,of the reserve bank or the board of directors of the industrial finance corporation of india, as the case may be, may depute any other person to attend the said meeting and such person shall, for all purposes of the said meeting, be deemed to be a director nominated under clause (a) or clause (b) or clause 30 (e), as the case may be, of the said section u in section 25 of the principal act,-(a) in sub-section (1),-amendment of lection a, (i) the word "and" at the end of clause (e) shall be omitted; 35 (ii) after clause (e), the following clause shall be inserted, namely:-ii (ee) acting as an agent for the central government or the state government or the industrial finance corporation of india established under the industrial 40 finance corporation act, 1948, in the transaction of any i, of 1~8 business with an industrial concern in respect of loans or advances granted, or debentures subscribed, by any one of them; and"j (b) in sub-section (2), after the words "prescribed by regulations", the words uor unless it is guaranteed as to the repay-s ment of principal and the payment of interest by the state government, a scheduled bank or a state co-operative bank" shall be inserted i of j956 13 in section 27 of the principal act, in sub-section (2), for the amendment words, figures and brackets uindian companies act, 1913 (vii of ~~ section 10 1913)", the words and figures ucompanies act, 1956" shall be substituted 14 in section 29 of the principal act,-amendment of section (a) in sub-section (1), for the words uright to sell", the 29 words uright to transfer by way of lease or sale" shall be sub-is stitutedj (b) in sub-section (2)-30 (i) the words uof sale and realisation" shall be omitted (ii) for the words uas if the sale", the words uas if the transfer" shall be substituted (c) for sub-section (4), the following sub-section shall be substituted, namely:-u(4) where the management of an industrial concern is taken over by the financial 'corporation or any property is transferred and realised by it under the provisions of sub-section (1), all costs, charges and expenses properly incurred by it as incidental to such management or transfer and realisation shall be recoverable from the industrial concern and the money which is received by it from such management or transfer and realisation shall, in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the financial corporation, and the residue of the money so received shall be paid to the person entitled thereto" 35 15 in section 31 of the principal act, in sub-section (1),-amendment of section (i) after the words ufails to make such repayment", the 31 words and figures "then, without prejudice to the provisions of section 29 of this act and of section 69 of the transfer of property act, 1882" shall be inserted 4 of 1882 (ii) in clause (a), for the word "corporation", the words "financial corporation" shall be substituted amendmedt 18 'in section 32 of the principal act &iter sul>section (8) the of section 32 following sub-section shall be inserted namely:-~ s of 1908• "(ba) an order under this section transferring the management of an industrial concern to the financial corporation shall be carried into effect, as far as may be practicable, in the manner provided in the code of civil procedure, 1908, for the possession of immovable property or the delivery of movable property in execution of a decree as if the financial corporation were the decree holder" u32a (1) when the management of £111 industrial concern is taken over by the financial corporation, the financial corporation may, by order notified in the official gazette, appoint as many persons as it thinks fit,--is 1 of 19s6 insertio~ of 17 after section 32 of the principal act, the following new see- 10 new sections  32a, 32b, tions shall be inserted, namely:-32c, 32d, 32b and 32f power of financial corporation to appoint directors or 'administrators of an industrial concern when management is taken over 20 (a) in c:ny case in which the industrial concern is a company as defined in the companies act, 1956, to be directors of that industrial concern; or (b) in any other case to be administrators of that industrial concern (2) the power to appoint directors or administrators under this section includes the power to appoint any individud, firm or company to be the managing agent or manager of the industrial concern on such terms and conditions as the financial corporation may think fit 32b on the issue of a notified order under section 32a,-(a) in any case in which tfie industrial concern is a effect of notified order under section 32a i of 19s6 company as defined in the companies act, 1956, all persons holding office ss directors of the industrial concern and in ~ any other case, all persons holding any office having the 30 powers of superintendence, direction and control of the industrial concern, immediately before the issue of the notified order, shall be deemed to have vacated their offices as such; (b) any contract of mmagement between the indus- 35 trial concern and any managing agent or any director or manager thereof holding office as such immediately before the issue of the notified order shall be deemed to have terminated: (c) in the case of an industrial concemwhich is al com-40 pany as defined in the c~mpanies act,1956, the managing 1 of 1956 agent, if any, appointed under section 32a shall be deemed to have been duly appointed in pursuance of the said act and the memorandum and uticles of association of the industrial concern and the provisions of the said act and s the memorandum and articles shall, subject to the other provisions contained in this act, apply accordingly, but no such managing agent shc:u be removed from office except with the previous consent of the financial corporation; 10 15 (d) the directors or the administrators appointed under section 32a shall take stich steps as may be ne,cessary to take into their custody or under their control all the property, effects and ection!lble claims to which the industrial concern is, or appears to be, entitled, and all the property and effects of the industrial concern shall be deemed to be in the custody of the directors or administrators, as the case may be, as from the date of the notified order; i of 1956 (e) the directors appointed under section 32a shall, for all purposes, be the directors of the industrial concern duly constituted under the companies act, 1956, and such directors, or as the case may be, the administrators appointed under section 32a, shall alone be entitled to exercise all the powers of the directors or as the case may be, of the persons exercising powers of superintendence, direction and control, of the industrial concern, whether such powers are derived from the s~dd act or from the memorandum or articles of association of the industrial concern or from any other source whatsoever 32c (1) subject to the control of the financial corpora- powers and tion, the directors, or as the case may be, the administrators d~ties of    dlicctors appomted undersectlon 32a, shall take such steps as may be and adnecessary for the purpose of efficiently managing the business ministrato18 of the industrial concern and shall exercise such powers and have such duties as may be prescribed 35 (2) without prejudice to the generality of the powers vested in them under sub-section (1), the directors or as the case may be, the administrators appointed under section 32a, may, with the previous approval of the financial corporation, make an application to a court for the purpose of cancelling or varying any contract or agreement entered into at any time before the issue of the notified order under section 32a, between· the industrial concern and any other person and the court may, if sati~ fied after due inquiry that such contract or agreement had been entered into in bad faith and is detrimental to the interests of the industrial concern, make an order cancelling 'or varying (either unconditionally or subject to such conditions as it may think fit to impose) that contract or agreement and the contract or agreement shall have effect accordingly no right to compensation for termination of contract of managing =itn director etc 32d (1) notwithstanding anything to the contrary contained in any contract or in any law for the time being in force, 5 no managing agent, managing director or any other director or a manager or any person incharge of management of an industrid concern shall be entitled to any compensation for the loss of office or for the premature tennination under this act of any contract of management entered 10 into by him with such concern (2) nothing contained in sub-section (1) shall affect the right of any such managing agent or managing director, or any other director or manager or any such person incharge of management to recover from the in- 15 dustrial concern, moneys recoverable otherwise than by way of such compensation application of act 1 of 1956 32e (1) where the management of an industrial concern, being a company ,as defined in the companies act, 1956, is taken i of 1956 over by the financial corporation, tlien, notwithstanding any- 20 thing contained in the said act or in the memorandum or arti· cles of association of such concem,-(a) it shall not be lawful for the shareholders of such concern or any other person to nominate or appoint any person to be a director of the concern; 2, (b) no resolution passed at any meeting of the shareholders of such concern shall be given effect to unless approved by the financial corporation; (c) no proceeding for t~e winding up of such concern or for the appointment of receiver in respect thereof 30 shall lie in any court, except with the consent of the financial corporation (2) subject to the provisions contained in sub-section (1) and to the other provisions contained in this act and subject to such other exceptions, restrictions and limitations, if any, as the 35 central government in consultation with the state government may, by notification in the official gazette, specify in this behalf, the companies act, 1956, shall continue to apply to such concern 1 of 1956 in the same manner as it applied thereto before the issue of the notified order under section 32a 1 of 1956 5 10 32f (1) where the management of an industrial· coneern restril?tion  - - - on filmg of not bemg a company as defined in the companies act, 1956, 18 suits for taken over by the financial corporation, no suit or proceedings dissolution, - etc, of an for dissolution or for partition shall, m 80 far 81 it relates to that industrial industrial concem, lie in any court or before any tribunal or cob ~cem not clog a other authority except with the consent of the financial cor- company poration when its management is (2) no proceeding for the appointment of any official taken over assignee or receiver in relation to any industrial eoncem the management of which has been taken over by the financial corporation shall lie in any court except with consent of the financial corporation" 18 in section 33 of the principal act, in sub-section (2), for the amendment words ccor in a scheduled bank in consultation with the reserve ~~ section is bank", the words "or, in consultation with the reserve bank in a scheduled bank or a state co-operative bank", shall be substituted 18 in sub-section (1) of section 36 of the principal act, for the amendment , words "two months", the words  three months" shall be substituted of6 section 3  zoo in section 37 of the principal act,-amendment of section 37· 20 (a) in sub-section (1) ,-1 of 1956 (0 for the words, figures and brackets "section 144 of the indian companies act, 1913 (vu of 1913)" the word, and figures "section 226 of the companies act, 1956" shall be substituted; 2$ (ii) for the words'  the other", the words "the other auditor or auditors" shall be substituted; (b) after sub-section (1), the following proviso shall be inserted, namely:-"provided that where such other auditor or auditors are to be elected· for· the ftrat time after the establishment of' the f1nadeial corporation, the board may appoint such auditor' or auditora who shall hold ofilce until the election is held" 11 after section 37 of the principal act, the following section shall be inserted, name1y:-insertion of new section 37a inspection "37a (1) the central government my direct the reserve bank to inspect the working of any financial corporation, and if 80 directed, the reserve bank shall cause an inspection to be s made by one or more of its officers, of the financial corporation and its books and accounts; and the reserve bank shall send the report of such inspection to the central government and to the state government and shall supply a copy thereof to the financial corporation 10 (2) it shall be the duty of every director or every officer of the financial corporation to produce to any oftlcer making an inspection under sub-section (1) all such books, accounts and other documents in his custody or power and to furnish him with any statement and information relating to the aftairs of is the financial corporation as the said officer may require of him within such time as the said oftlcer may specify (3) notwithstanding anything contained in the indian evidence act, 1872, or in any other law for the time being in 1 of 1872 force, no court, tribunal or other authority shall have power· to ao require the reserve bank or any of its officers to produce before such court, tribtmal or other authority the report of the inspection made by it under sub-section (1) or any copy thereof (4) the state government may, after considerine any report, sent to it under sub-section (1) give such instructions 25 to the board as it considers necessary and it shall be the duty of the board to comply with such instructions" 22 in sub-section (3) of section 38 of the principal act, for the words "three months", the words "four months" shall be substituted amendment of section 38 30 23 in section 39 of the principal ad,-amendment of section 39· (a) in sub-section (1) after the words "the state government", the words "in consultation with the reserve bank" shall be inserted; (b) in sub-section (3), after the words "laid down by th~ state government", the words, brackets, flgures and letter 35 "under sub-section (1) of this section or the instructions given to the board under sub-section (4) of tec:tion 37a" shall be inserted 24 after section 46 of the principal act, the following sections shall be inserted, namely:-s (0 "46a (1) where a financial corporation has been estab- ~~en~i~n of   jurisdiction hshed for any state and any other state desires that the finan- of the fincial corporation should serve its needs, and the states, after aneia! cor-i·  h th r bank' porataon to consu tation wit e eserve , enter mto an agreement other states which is published in the official gazettes of each of those states, by agreethen the financial corporation shall, on the issue of a notiftca- ment tion in the official gazette by the central government, serve the needs of those states in terms of the agreement (2) an inter-state agreement among the particlpating states may, as far as may be, make all such provisions as are referred to in sub-section (2) of section 3a is 20 46b the provisions of this act and of any rules or orders effect made thereunder shall have effect notwithstanding anything of act on inconsistent therewith contained in any other law for the time other aws being in force or in the memorandum or articles of association of an industria,1 concern or in any other instrument having effect by virtue of any law other than this act, but save as aforesaid, the provisions of this act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern" 25 in sub-section (2) of section 48 in clause (m) after the words afmc:n~c:nt - 0 "this act", the words "fees for attending meetings thereof and the 4r section 2s conduct of business thereat" shall be inserted  statement of objects and reasonsthe working of the state financial corporations act, 1951, during the last few years brought to light certain difficulties these were considered on oftlcial levels by the representatives of the state financial corporations and of the reserve bank of india in august, 1954 and november, 1955, and, certain amendments to the act were suggested as a result of these discussions 2 some of the states including part c states are experiencing some difficulty in establishing separate financial corporations for their states in order to remove such difficulty, it is proposed to make a provision which would enable a group of two or more states to establish, by agreement among themselves, a joint financial corporation for those states it also seems desirable to provide for the extension of the jurisdiction of an existing financial corporation of a state to another state by agreement as it is often difficult f()r the central government, a state government or the industrial finance corporation of india to transact business directly with an industrial concern in respect of loans or advances to be granted to it, it is proposed to empower the state financial corporations to undertake agency functions on their behalf it is also proposed to amend section 25 of the act so that industrial concerns engaged in small scale' and cottage industries, not having auftlclent tangible assets, may avail themselves of the financial accommodation from state financial corporations 3 when the management of an industrial concern is taken over by a state financial corporation under section 29 or section 32 of the act, it is necessary to vest the corporation with certain powers for the eftlcient management of the concern it is proposed to insert in the act new sections 32a to 32f for the purpose and these provisions follow closely those of the industrial finance corporation act, 1948 it seems desirable to provide for a machinery for the inspection of the working of state financial corporations accordingly, it is proposed to empower the reserve bank to make such inspection at the inltance of the central govemmmt 4 the bill seeks to achieve these objects opportunity has also been taken to introduce in the act some other amendments of a consequential or procedural nature keeping in view the amendments made from time to time in the industrial finance corporation act, 1948 a c guha new delhi,' the 10th july, 1956 the bill envisages formation of joint financial corporations by two or more states as some of the smaller states, particularly part c states, are not in a position to establish independent financial corporations of their own it is not possible at this stage to estimate the expenditure to be incurred out of the consolidated fund of india in connection with the formation of joint financial corporations by part c states as the number of such states which would avail of the pennissive provisions of the bill are not known further, the share capital of such joint financial corporations would be fixed only at the time of their establishment after taking into account of the needs of the states forming them the contribution which the central government would be required to make towards the share capital of part c states, which is in the nature of a contingent liability, cannot be estimated at this stage further, clause 4 of the bill pertaining to the inter-state agreement provides for the sharing of the liability for the guarantee to be given under section 6 or 7 the financial liability in respect of the guarantee under section 6 or 7 is also a contingent liability and it is not possi'ble to estimate the ej5penditure involved from the consolidated fund of india  extracts from the state fin~ncial corporations act, 1951 (no 63 of 1951) - • - •defipitions 2 in this act, unless the context otherwise requires,-- - - - (ib) ''financial corporation" means the financial corporation established for the state under section 3; - - - -  chapter ii incorporation of state financial corporations, their capital and management3 (1) - - - - establishment of state financial corporatiqns (2) the financial corporation shall be a body corporate by the name notified under sub-section (1), having perpetual succession and a common seal, with power, subject to the provisions of this act, to acquire and to hold property and shall by the said name sue and be sued - - - - 5 (1) the shares of the financial corporation shall not be trans- restriction8 ferable except to the state government, the reserve bank or any on transfer other financial institution recognised in this behalf by the state of sharell, '; government: provided that the shares subscribed for by the parties referred to in clause (d) of sub-section (3) of section 4 shall be freely transferable (2) nothing contained in this section shall effect the provisions of sub-section (5) of section 4 - - - - board or directors 10 the board of cmectors shall consist of the following, namely:-- - - - (d) three directors elected in the prescribed manner from among themselves by the parties referred to in clause (c) of sub-section (3) of section 4, one of whom shall be elected to represent scheduled banks, another to represent co-operative banks and the third to represent the remaining financial institutions; - - - - executive committee 18 (1) the executive committee shall consist of the managing director who shall be the chairman of the committee, and three other directors, chosen as follows:-(a) two directors elected by the nominated directors, one from among the directors nominated by the state government, and one from among the directors nominated by the reserve bank and the industrial finance corporation of india established under the industrial finance corporation act, 1948 (xv of 1948); (b) one director elected by the elected directors - - - - 25 (1) the financial corporation may, subject to the provisions of this act, carryon and transact any of the following kinds of business, namely:-balideil which pia-8dcial corporadodl maytran-1iict - • - - - (e) the granting of loans or advances to, or the subscribing to debentures of, industrial concerns, repayable within a period not exceeding twenty years from the date on which they are granted or subscribed to, as the case may be; and - - - - d (1) - - - - power to impose codditiona for ac:commociatfou (2) where one of the conditions imposed under sub-section (1) is that a director shall be appointed by the financial corporation on the board of directors of the industrial concern to protect the interests of the financial corporation, such condition shall be a valid condition notwithstanding anything contained in the lndian companies act, 1913 (vii of 1913), or in any other law for the time being in force or in any instrument relating to the industrial concern  - - - - 29 (1) where any industrial concern, which is under a liability r!ghts ,of to the financial corporation under an agreement, makes any default ~~;:'~a~l in repayment of any loan or advance or any instalment thereof or tion in calc otherwise fails to comply with the terms of its agreement with the of default financial corporation, the financial corporation shall have the right to take over the management of the industrial concern, as well as the right to sell and realise the property pledged, mortgaged, hypothecated or assigned to the financial corporation   (2) any transfer of property made by the financial corporation, in exercise of its powers of sale and realisation under sub-section (1), shall vest in the transferee all rights in or to the property transferred as if the sale had been made by the owner of the property  - - •• - (4) where any property is sold or realised by the financial corporation under the provisions of this section, the money which is received by it from such sale or realisation shall, in the absence of any contract to the contrary, be held by the financial corporation in trust to be applied, first, in payment of all costs, charges and expenses properly incurred by it as incident to the said sale or realisation and, secondly, in discharge of the debt due to the financial corporation, and the residue of the money 80 received shall be paid to the person entitled thereto - - - - 31 (1) where an industrial concern, in breach of any agreement, specia,l makes any default in repayment of any loan or advance or any f~~v!::fur~ instalment thereof or otherwise fails to comply with the terms- of its cc~ent of agreement with the financial corporation or where the financial ~r~=cfj corporation requires an industrial concern to make immediate re- c;:orporapayment of any loan or advance under section 30 and the industrial tlon, concern fails to make s\lch repayment, any officer of the financial corporation, generally or specially authorised by the board in this behalf, may apply to the district judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following relief$, namely:-(a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the corporation as security for the loan or advance; or· - - - - funds of the financial corporation 33 (1) - - - - - (2) all moneys belonging to the fund shall be deposited in the reserve bank or with any agency of the reserve bank other than a government treasury or in a scheduled bank in consultation with the reserve bank - - - - - general 38 (1) a general meeting (hereinafter referred to as the annual meetidp general meeting) shall be held annually at· a place in the state where there is an office of the financial corporation within two months from the date on which the andlual accounts of the financial corporation are closed, and a general meeting may be convened by the board at any other time  - - - - - audit 3'1 (1) the affairs of the financial corporation shall be audited by not less than two auditors duly qualified to act as auditors of companies under sub-section (1) of section 144 of the indian companies act, 1913 (vn of 1913), one of whom shall be appointed by the state government in consultation with the comptroller and auditor-general of india and the other elected in the prescribed manner by the parties mentioned in clauses (c) and (d) of subsection (3) of section 4, and such remuneration as the state government may fix shall be paid to the auditors by the financial corporation returns 38 (1) - - - - - (3) the financial corporation shall furnish to the state government and to the reserve bank within three months of the close ot each financial year a statement in the prescribed form of its assets and liabilities as at the close of that year, together with a profit and loss account for the year, the auditors' report and a report of the working of the financial corporation during the year and copies of the said statement, acco~nt and reports shall be pub· lished in the official gazette and sliall also be laid before the legislature of the state  'chapter v' miscellaneous38 (1) in the discharge of its functions, the board shall be guided power to by such instructiols on questions of policy as may be given to it f::i~:'" by the state government financial corporation on - - - - questiodl of policy (3) if the board faus to carry out the instructions on the question of policy laid down by the state government, the state government shall have the power to supersede the board and appoint a new board in its place to fundion until a properly constituted board is set up, and the decision of the state government as to the grounds for superseding the board shall not be questioned in any court - - -  48 (1) - - - power of board to (2) in particular, and without prejudice to the generality of the make, reforegoing power, such regulations may provide for-julataons - - - - - - (m) the appointment of advisory committees for technical and other advice for the purposes of this act; and - - - - - a bill further to amend the state financial corporcltions act, ]951 the president bas, in pursuance of clauses (i) and (3) of article i 17 of the constitution of india, recommended to lok sabha the introduction and consideration of the bill mn kaul, secretary (s~ri a c gu/uj, minister of refjenut and defence expenditure) 