 the oil and natural gas commis- sion bill, 1959(as introduced in lok sabha on 7th august, 1959)  arrangement of clauses chapter i preliminary clauses1 short title, extent and commencement 2 definitions  chapter ii the oil and natural gas commission3 establishment and incorporation of the commission 4 composition of the commission 5 term of office and conditions of service of members 6 disqualifications for being appointed, or for continuing, as member of the commission 7 temporary absence of member 8 vacancies, etc, not to invalidate acts and proceedings of the commission 9 meetings of the commission 10 temporary association of persons with the commission for particular purposes 11 authentication of orders and other instruments of the commission 12 staff of the commission 13 transfer of service of existing employees to the commission  chapter iii powers and functions of the commission14 functions of the commission 15 powers of the commission  chapter iv :finance, accounts, audit and reports16 capital of the commission 17 vesting of property in the commission 18 commission to have rights, liabilities and obligations of the central government in certain cases 19 fund of the commission 20 borrowing of money 21 budget 22 annual report accounts and audit 23 returns and reports  chapter v miscellaneous24 compulsory acquisition of land for the commission 25 power of entry 26 delegation of powers and duties 27 members and employees of the commission to be public servants 28 protection of action taken under act 29 liability of commission to pay taxes and fees 30 dissolution of the commission 31 power of central government to make rules 31 power of commission to make regulations  the oil and natural gas commission bill, 1959 (as introduced in lok sabra) a billto provide for the establishment of a commission for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it and for matters connected therewith be it enacted by parliament in the tenth year of the republic of india as follows: chapter i  prelimin ary5 1 (1) this act may be called: the oil and natural gas com- short title, " a 1959 extent and mission ct,  commence- (2) it extends to the whole of india, except the state of jammu menr and kashmir (3) it shall come into force on such date as the central govern-10 ment may, by notification in the official gazette, appoint 2 in this act, unless the context otherwise requires,-defijlitiom (a) "chairman" means the chairman of the commission; (b) "commission" means the oil and natural gas commission established under section 3; is (c) "existing organisation" means the body set up in pursuance of the resolution of the government of india, no 22/28/55-ong, dated the 14th august, 1956; (d) "fund" means the fund referred to in section 19; (e) "member" means a member of the commission and 20 includes the chairman; <f) "petroleum" has the same meaning as in the petroleum act, 1934, and includes natural gas; ,0 of 1934-(g) "prescribed" means prescribed by rules made under this act  chapter ii the on and natural gas commissionestablilh-3 (1) with effect from such date as the central government ment and 1; iocorporamay, by notifica ion in the official gazette, appoint in this behalf, tion of the there shall be established a commission to be called the oil and commillioa n t i g c  a ura as ommlsslon 10 (2) the commission shall be a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property and to contract and shall by the said name sue and be sued ~~~~_n 4 the commission shall consist of a chairman and not less than is mission two other members appointed by the central government and the members may be required to render whole time or part time service, as the central government may direct: provided that one of the members shall be a whole-time finance member in charge of the financial matters relating to the commis- 20 sion provided further that the central government may, if it thinks fit, appoint one of the members as vice-chairman of the commission term of  5 (1) the term of office and conditions of service of the 25 offi~  and r chairman and other members shall be such as may be prescribed: conditions 0 aervice of provided that the central government may, if it thinks fit, members terminate the appointment of any member before the expiry of his term of office, after giving him a reasonable opportunity of showing cause against the same 30 (2) any member may resign his office by giving notice in writing to the central government, and on such resignation being notified in the official gazette by that government, shall be deemed to have vacated his office (3) a casual vacancy created by the resignation of a member 3s un~r :'iub-section (2) or for any other reason may be filled by fresh appointment 6, a person shall be disqualified for being appointed or for i?isqualificat ' , b 'f -, " tlon fof con mumg as a mem er, i he has, directly or indirectly, any interest being appoin a subsisting contract made with, or in any work being done for, inte~, ?f fof th c " continumg e ommission except as a shareholder (other than a director) in as member s an incorporated company: of the commission provided that where he is a shareholdet, he shall disclose to the central government the nature and extent of the shares held by him in such company 7, if any member is by infirmity or otherwise rendered tempo- temporary 10 '1' bi f ' t h' d t'  b 1 abserocc of rarl y incapa e 0 carrying ou is u les or is a sent on eave or member otherwise in circumstances not involving the vacation of his appointment, the central government may appoint another person to act in his place during his absence, 8 no act or proceeding of the commission shall be invalid by vacal'cies, , etc,not to m-is reason only of the existence of any vacancy among its members or validate acta any defect in the constitution thereof ~ proceed f th -mg80 e commission, 9 (1) the commission shall meet at such times and places and ~:ti~m~f shall, subject to the provisions of sub-sections (2) and (3), observe mission, such rules of procedure in regard to the transaction of business at 20 its meetings (including the quorum at meetings) as may be provided by regulations made under this act (2) the chairman or, in his absence, the vice-chairman, if any, or in the absence of the chairman and of the vice-<:hairman, if any, any member chosen by the members from among themselves, shall 2s preside at a meeting of the commission, (3) all questions at a meeting of the commission shall be decided by a majority of the votes of the members present and voting, and in the case of an equality of votes, the chairman or, in his absence, the person presiding, shall have a second or casting 30 vote: " '\ , '!~, provided that the person presiding may, in his discretion, reserve any matter for the consideration of the central government 10 (1) the commission may associate with itself in such tem~~ary b' , association manner and for such purposes, as may e provided by regulations of ptf80ns made under this act, any person whose assistance or advice it may with t~e 3s d ' rf' f 't f t' d th' a t commission esire in pe orming any 0 i s unc ions un er is c, for particu-(2) a person associated with it by the commission under sub- lar purposes, section (1) for any purpose shall have a right to take part in the discussions of the commission relevant to that purpose, but shall not have a right to vote at a meeting of the commission, and shall not be a member for any other purpose ~uthefnticda-11 all orders and decisions of the commission shall be authentitlon 0 or en   and other cated by the signature of the chairman or any other member inf8thrumeoci\ts authorised by the commission in this behalf, and all other instru-s o t e mission mments issued by the commission shall be authenticated by the signature of an officer of the commission authorised in like manner in this behalf seotaffofts~ 12 (1) subject to the provisions of section 15, the commission nurua  n  may, for the purpose of enabling it efficiently to perform its func- 10 tions or exercise its powers under this act, appoint such number of employees as it may consider necessary (2) the functions and the terms and conditions of service of such employees shall be such as may be provided by regulations made under this act is trarsfer of s~rvice of existing employees to the commiosio4 - 13 (1) subject to the provisions of this act, every person employed by the existing organisation immediately before the date of establishment of the commission shall, on and from such date, become an employee of the commission with such designation as the commission may determine and shall hold his office or service 20 therein by the same tenure, at the same remuneration and upon the same terms and conditions as he would have held the same on such date if the commission had not been established and shall continue to do so unless and until his employment in the commission is terminated or until such tenure, remuneration and terms and 25 conditions are duly altered by the commission: provided that-(a) the tenure, remuneration and terms and conditions of service of any such person shall not be altered to his disadvantage without the previous approval of the central government; 30 (b) any service rendered in the existing organization by any such person shall be deemed to be service under the commission; and (c) all persons employed by the commission on the date of its establishment who immediately before such date, hold, in a 3s permanent or quasi-permanent capacity, posts in connection with the affairs of the union or of any state, but not posts in the existing organisation, shall be treated ~ government servants on foreign service with the commission (2) the commission may employ any person who has become 4c' its employee under sub-section (1) in such capacity as it thinks fit, and every such employee shall be bound to discharge his functions accordingly  chapter iii powers and functions of the commission5 14 (1) subject to the provisions of this act, the functionr of functions of ~he commission shall generally be to plan, promote, organise and ~is~~­lmplement programmes for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it and to perform such functions as the central govern-10 ment may, from time to time, assign to the commission (2) in particular and without prejudice to the generality of the foregoing provision, the commission may take such steps as it thinks fit-(a) for the carrying out of geological and geophysical surveys for exploration of petroleum; 15 (b) for the carrying out of drilling and other prospecting operations to prove and estimate the reserves of petroleum; (c) to undertake, encourage and promote ruch other activities as may lead to the establishment of such reserves; 20 (d) to undertake, assist or encourage and promote the production of petroleum from such reserves and its refining; (e) for the transport and disposal of natural gas and refinery gases produced by the commission: provided that no industry, which will use any of these gases as a raw material, shall be set up by the commission without the previous approval of the central government; (f) to undertake, encourage and promote geological, chemical and other scientific investigations whether in or outside the laboratory; 30 (g) to undertake, assist or encourage the collection, maintenance and publication of statistics, bulletins and monographs; (h) to perform any other function which is supplemental, incidental or consequential to any of the functions aforesaid or which may be prescribed (3) in the discharge of its functions under this act, the commis-35 sion shall be bound by such directions as the central government may, for reasons to be stated in writing, give to it from time to time 15 the commission may exercise all such powers as may be powen of necessary or expedient for the purpose of carrying out its functions ~~:=-40 h' a under t is ct: its powers in respect of the the previous approval of the provided that before exercising following matters, it shall obtain central government, namely:-(a) the creation of any post the salary or honorarium of which would be rupees two thousand a month or more or s would be on a scale the maximum of which is rupees two thousand a month or more, and the appointment of any person to any such post; (b) the implementation of any scheme or proposal which will involve a capital expenditure exceeding thirty lakhs of 10 rupees; (c) the disposal of any property, right or privilege, the original or book value of which exceeds ten lakhs of rupees  chapter iv finance, accounts, audit and reportsis 16 (1) all non-recurring expenditure incurred by the central government for or in connection with the existing organisation up capital of the commission to the date of establislunent of the commission and declared to be capital expenditure by that government, shall be treated as capital expenditure provided by that government to the commission, and 20 shall be brought into the books of the commission (2) the central government may, after due appropriation matle by parliament in this behalf, provide any further capital that may be required by the commission for the carrying on of the business of the commission or for any purpose connected therewith on such 25 tenns and conditions as that government may determine vesting of property in the commission 17 all property acquired and all works constructed or under construction by or on behalf of the central government for the purposes of the existing organisation up to the date of establishment of the commission shall, on such date, vest in the commission 30 and all income derived and all expenditure incurred in this behalf shall be brought into the books of the commission commission 18 all rights, liabilities and obligations of the central govem-: hts l~t~~ ment which, whether arising out of any contract or otherwise, were li~c:s ' and acquired or incurred by it "in connection with the existing organi- 35 ~~hgau~he sation or for any of the purposes referred to in this act, before the central go- date of establishment of the commission shall be deemed to have v:rni?ent in been acquired or incurred by the commission and shall be the rights, ccrtam cases  liabilities and obligations respectively of the commission it (1) the commission shall have its own fund and all receipts ~~( the of the commission shall be carried thereto and au payments by the ,u,on commission made therefrom (2) the commission may expend such sums as it thinks fit for s performing its functions under this act and such sums shall be treated as expenditure payable out of the fund (3) all monies of the commission shall be deposited in the reserve bank of india or with the agents of that bank or where there is neither an office of that bank, nor an agent of that bank, 10 in a government treasury, or be invested in such securities as may be approved by the central government zoo the commission may, with the previous approval of the borrowiul central government, borrow money in the open market or otherwise of morley for the purposes of carrying out its functions under this act is 21 (1) (a) the commission shall, by such date in each year as budget may be prescribed, submit to the central government for approval a budget in the prescribed form for the next financial year, showing the estimated receipts and expenditure, and the sums which would be required from the central government, during that financial 20 year (b) if any sum granted by the central government remains wholly or partly unspent in any financial year, the unspent sum may be carried forward to the next financial year and taken into account in determining the sum to be provided by the central government 25 for that year (2) subject to the provisi ;os of sub-section (3), no sum shall be expended by or on behalf of the commission unless the expenditure is covered by provision in the budget approved by the central government 30 provided that, except with the previous approval of the central governmen t-35 (a) no re-appropriation from the head "loan" to another head of expenditure and vice versa in the budget shall be sanctioned by the commission;  (b) no re-appropriation which has the effect of augmentm, the provision under any head of expenditure u approved by the central government by more than ten per cent or ftve lakhs of rupees, whichever is less, shall be made \nnull reports, accounts i11d ludit 22 (1) the commission shall maintain proper accounts and other relevant records and prepare an annual statement of accounts, including the profit and loss account and balance sheet in accordance with such general directions as may be issued, and in such form as may be prescribed, by the central government in consultation with s the comptroller and auditor-general of india (2) the accounts of the commission shall be audited annually by the comptroller and auditor-general of india and any expenditure incurred by him in connection with such audit shall be payable by the commission to the comptroller and auditor-general of india 10 (3) the comptroller and auditor-general of india and any person appointed by him in connection with the audit of the accounts of the commission shall have the same rights and privileges and authority in connection with such audit as the comptroller and auditor-general has in conne ction with the audit of government 15 accounts, and in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the commission (4) the accounts of the commission as certified by the comptroller and auditor-general of india or any other person appointed 20 by him in this behalf, together with the audit report thereon, shall be forwarded ~nnually to the central government and that government shall cause the same to be laid before each house of parhament jtetu~ ind reports 23 (1) the commission shall furnish to the central government 25 at such time and in such form and in such manner, as may be prescribed or as the central government may direct, such returns and statements and such particulars in regard to any proposed or existing programme for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by 30 the commiasion as~e central government may, from time to time, require (2) without prejudice to the provisions of sub-section (1), the commission shall, as soon as possible after the commencement of each financial year, submit to the central government a report in such 3' form and before such date as may be prescribed, giving a true and full account of its activities, policy and programme during the previous financial year and an account of the activities likely to be undertaken during the current financial year (3) a copy of the report received under sub-section (2) shall be 4a laid before each house of parliament  chapter vmiscellaneous 24 any land required by the commission for carrying out its compul- functions under this act shall be deemed to be needed for a public '?~ acqw-  sitlod of land s purpose and such land shall be acquired for the commission as if the for the comprovisions of part vii of the land acquisition act, 1894, were appli- million cable to it and the commission were a company within the meaning of clause (e) of section 3 of the said act 25 any employee of the commission, generally or specially power of 10 authorised by it, may at all reasonable times enter upon any land enfry or premises and there do such things as may be reasonably necessary for the purpose of lawfully carrying out any of its works or of making any survey, examination or investigation preliminary or incidental to the exercise of powers or the performance of functions 15 by the commission under this act 26 the commission may, by general or special order in writing, delegation direct that all or any of the powers or duties which may be exercised ofdpowd e~   h b' h 11  d d an utles or elise arged y it sa, in such circumstances an un er such condition~, if any, as may be specified in the order, be exercised or dis-20 charged also by any person specified in this behalf in the order 27 all members and employees of the commission, shall, when members acting or purporting to act in pursuance of the provisions of this act, :! ~fp~he or of any rule or regulation made thereunder, be deemed to be public commission servants within the meaning of section 21 of the indian penal code :~:!t:blie 25 28 no suit, prosecution or other legal proceeding shall lie against protection of the commission or any member or employee of the com-::on ~ed mission for anything which is in good faith done or intended to be er t done in pursuance of this act or of any rule or regulation made thereunder 30 29 the commission shall be deemed to be a company within the liabili ty of meaning of any enactment for the time being in force providing for ~::~: the levy of any tax or fee by the central government or a state and feu government and shall be liable to pay such tax or fee accordingly 30 (1) the central gowrnment may, by notification in the di8solution 35 official gazette, direct that the commission shall be dissolved from ~!!i~~­such date as may be specified in the notification and thereupon the commission shall be deemed to be dissolved accordingly (2) on and from the said date-(a) all assets, liabilities and obligations acquired or incurred by the commission for purposes of the commission or for any of the purposes referred to in this act shall vest in the central government, and (b) all members shall vacate their oftices as members of the commission 31 (1) the central government may,by notification in the otllcial gazette, make rules to give effect to the provisions of this act (2) in particular and without prejudice to the generality of the s foregoing provision, such rules may provide for all or any of the following matters, namely:-(a) the term of office of, and the manner of filling casual vacancies among, the members, and their conditions of lervice including the salaries, remuneration and allowances to be paid to 10 them and the travelling and daily allowances to be drawn by them when they are on tour; (b) the disqualifications for membership of the commission and the procedure to be followed in removing a member who is or becomes subject to any disqualification; 15 (c) the procedure to be followed in the discharge of functions by members; (d) the date by which, and the form in which, the budget shall be submitted in each year under sub-section (1) of section 21; 20 (e) the procedure to be fol1owed for placing the commission in possession of funds; (f) the procedure to be followed and the conditions to be observed in borrowing moneys or in granting loans; (g) the conditions subject to which, and the mode in which, 25 contracts may be entered into by or on behalf of the commission; (h) the form and manner in which the accounts of the commission shall be maintained under sub-section (l) of section 22; (i) the form and manner in which returns, reports or statements shall be submitted under section 23; w any other matter which has to be, or may be, prescribed (3) 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 il!l 35 in session for a total period of thirty days which may be comprised m one session or in two successive l!iessions, blld if before the expiry of the lesbion in which it is so laid or the session immediately following, both houses agree in making any modiftcation in the rule or both houses agree tlwt the rule should not be made, the rule shallfo thereafter have effect only in such modified fono or be of no e1!eet, 18 the ease may be; so however that any such modification or alu1ulment shall be without prejudice to the validity of anythin, previou-iy done under that rule s 32 (1) the commission may, with the previous approval of pow« of the central government, by notification in the official gazette, make ~"ioq regulations, not inconsistent with this act and the rules made ;r~caa thereunder, for enabling it to discharge its functions under this act (z)in particular and without prejudice to the generality of the foregoing provision, such reguletions may provide for all or any of ze the following matters, namely:-(a) the terms and conditions of appointment and service and the scales of pay of employees of the commission, including payment of travelling and daily allowances in respect of journeys undertaken by such employees for the purposes of this 1, aet; (b) the time and place of meetings of the commission, the procedure to be followed in regard to the transaction of business at such meetings and the quorum necessary for the transaction of business at a meeting; 20 (c) the maintenance of minutes of meetings of the commission and the transmission of copies thereof to the central government; (d) the persons by whom, end the manner in which payments, deposits and investments may be made on behalf of the zs commission; (e) the custody of moneys required for the current expenditure of the commission and the investment of moneys not so required; (f) the maintenance of accounts 10 (3) the central government may, by notification in the official gazette, amend vary or rescind any regulation which it has approved; and thereupon the regulation shall have effect accordingly but without prejudice to the exercise of the powers of the conimiasion under sub-section (1) the establishment of the oil and natural gas commission in august, 1956, was the first concrete step taken by government to carry out inter alia geological and geophysical surveys for discovering petroleum resources in the country and developing them in the public sector the commission was organized, in the first instance, as an ordinary government departmentj but even within this short period of less than three years, the size of this organisation and the volume of work handled by it have increased very rapidly the magnitude of its programmes and activities is likely to increase further in the near future in the light of the experience gained so far, it is felt that the powers already delegated to the commission or a mere amplification of these powers would not suffice exploration work in the public sector has reached a stage where for efficient and expeditious progress much more autonomy and elasticity are required tl1an would be possible if the commission continued to work as a government department oil industry being a highly integrated one, exploration work and exploitation should more appropriately be entrusted to an agency which can function more or less as a commercial agency in the private sector the bill accordingly proposes to convert the existing organisation into a statutory corporate body with the same nomenclature under the bill the commission will consist of not less than three members including the chairman and one of these members will be exclusively in charge of the finances of that body the commission's main functions will be-(i) to organise and implement programmes for the development of petroleum resourcesj (ii) to carry out necessary surveys for the exploration of such resources and the drilling and other prospecting operations required for this purpose; (iii) to promote the production of petroleum and its refinement and the sale of petroleum and petroleum products produced by it; and (iv) to advise government as and when advice is sought the commission will generally have full powers to carry out its functions under the bill ' the bill makes adequate provision for the exercise of suitable control over the commission it has been provided that the previous approval of the government should be obtained by the commission before exercising its powers in respect of certain specific matters the commission will also be subject to the directions of government in the discharge of its functions provision has also been made for ftnanciai control over the commission the submission of an annual statement of the programme and activities undertaken and likely to be undertaken by the commission, and of financial estimates in respect thereof has been made obligatory in addition, the funds of the commission are required to be deposited in the reserve bank or a government treasury or to be invested in securities approved by government; and the scrutiny of the accounts of the commission by the comptroller and auditor",general of india has been ensured parliament also will be kept in touch with the working of the commission as the bill requires copies of its annual report and the comptroller and auditor-general's audit report to be laid before both houses of parliament the bill also contains ancillary provisions in respect of various other matters like the transfer of staff, the vesting of properties in the commission, etc new delhi; the 1st august, 1959 k d mala viya  financial memoranbtimthe bill provides for non-recurring and recurring expenditure by the central government on the following items:-non-recurring expenditure-after the commission is established, it may be necessary for the central government to make payments to the commission to finance any approved schemes involving capital outlay these will be submitted to parliament in the normal course as budget demands recurring expenditure-the bill provides that each year the central government may pay to the commission such sums as may be considered necessary for the performance of the functions of the commission under the bill all property acquired and all works constructed or under construction for the purposes of the existing organisation up to the date of establishment of the commission shall vest in the commission and all income derived and expenditure incurred in this behalf shall be brought into the books of the commission the expenditure incurred by and for the oil and natural gas commission up to the end of 1958-59 amounts to about rs 562 lakhs on the basis of the schemes approved by the planning commission, the total expenditure on capital account of the existing organisation and the commission may be about rs 23 crores durini the years 1~59-60 and 1960-61  memorandum regarding delegated legislationclause 31 of the bill empowers the central government to make rules to give effect to its provisions the matters in respect of which such rules may be made relate inter alia to the term of office and the conditions of service of the members of the commission, the disqualifications for such membership, the date by which and the form in which the budget is to be submitted, the procedure to be followed for placing the commission in' possession of funds, the procedure and conditions to be observed in borrowing money or granting loans, the conditions and mode in which contracts may be entered into by the commission, the maintenance of accounts and the submission of returns; etc, by the commission all these matters are comparatively ofa minor importance and are normally the subjectmatter of delegated legislation these rules will also be laid before parliament 2 clause 32 of the bill empowers the commission to make regulations not inconsistent with the provisions of the bill and the rules made thereunder the power of making regulations is confined mainly to procedural matters, such as the calling of meetings, the maintenance of the minutes thereof, the custody, payment, deposit and investment of the moneys of the commission, etc regulations may also be made in respect of the terms and conditions of service of the employees of the commission thus, the power of making regulations is confined to matters of detail only ancpall such regulations will be made 'with the previous approval of the central government y  ,  ,  a billto provide for the establishment of a commission for the develop_ ment of petroleum resources and the production' and sale 'atpetroleum and petroleum products produced by it and fur matters connected therewith the president has, in pursuance of clause (3) of article 117 of the constitution, recommended to lok sabha the cmsideratkm of the bill m n kaul, secrelqry  (sirr; keshead(jfj(l malaf)iya, ; minister of ms" oil), 