'ire :;'tdusmial re01ns'jru(l?ion bank ofind~ bill, 19r4 (to bel ~,3 intro duced in 10 k sabha) 1 pa ge (ii), 3gnin;:;t clause 32,-!gj: ,"corpora tion" ~ ''preparation'' 2 page (11), against'"clause 41,-m "transfer" ~ "primary or" 3 page (iii), :again~,clause 64,-0jii11 "under this act" 4 page 3, line 27,-ru '~regulations" ~ "regulation" 5 page 4, lin,e 19,-!su: ''reconstructions'' ~ ''reconstruction'' 6 page 4, line 20,-after "section 5," insert "of" 7 pa~ it, line 26,-!ol: "capitas" ~ "capital" 8 p9ge ~, lh aft el' "0 r " in s er t "in" 9 page~, lil'e 38,-!cl: "ovserves" ~ "observes" 10 page, 7, line 4,-after "provident" wsert "or" 11 - pa ge 7, lide 12, -tb+ "0 r th e!' r ea "! "0 f th e " 12 page 7, line 31,-after "wlere" om1i "a" 13 page 7, l1ne 45,-before ''amount " insert "the" 14 page ;,-against clause 11, insert the marginal headlllg -hdisqualificat10ns of membership of the board" 15 page 9, line ~7,-m - lipar_ time"  ~ "part- time" 16 page 10, in the marginal heading to c'~e1l3e ·14,-lb1: "meet~ng of th e boards " ~ "meetings of the board " 17 pa ge 10, lin e 15,-~ ''nbard'' ~ "board" page 10, line 19,-18 !cr "sub- section ()" ~ "sub- section (3) '! 19 pa ge 10, in th e marginal heading to clause 15, -    !ci "executive committees" ~ "executive committee" 20 page 10, line "11,-!qi "a fer wards " ~ "afterwards" 21 - page 1 0, lin e 41,-!cl: ''act'' ~ "act" 22 page 11, in the marginal heading to clause 17,- -!or ila 110 wan ce dir e c to r s " ~ "allowances of directors" 23 page 11, in the marg1pal heading to cla use 18,  !cl: 'reconstruc-" ~ ''reconstruction'' 2+ - p!\ ge 11, lin e 1 a, -after "assist" insert "and" r,'; 25 page 11, line 20,-!cr "business" ~ "businesse:::" 2~ page 12, line 8,-after "managing" insert "industrial -ooncerns" 27 page 12, line 1j,- om;lt "or undertaking" •• 28 page 12, line 22,-fb!: "p\!rpo se fi ~ lip urpo sa s " 29 page 13, lin\ 20,-m ''holds'' ~ ''hold'' 30 page 13, against line 32, in;2ert the marginal citation,-"1 0 f 195"" 31 page 14, against line 24, in the mrgina'l: citation,-nu: "2 of 1984" ~ "2 of -1934 " 32 page 14, against line' 3}, insert tile ~rginal citation,-"2 0 f 1882" 33 page 18, line 4,  $fter "fund" insert "to" 34 page 20, une 13,- after "discharge" insert "its" 35' page 2j, line 43,':" am1:t "a stile ca se f_' y be, " ji't page 22, line 4,-~ 'recorfstrua tion" r~ "reconstruction" 37 pag~ 23, line 2,-~ ~   om1t ''0 f clause (b) if 38 page 23" line 11,-!oi: ''p 1 ed ge " ~ ''p 1 ed ged " :51 pa ge 23, line 20 ,-m "shally th,e" read "shall apply the" i 1'0 page 24, line 4,-' after "shall" in ser t "apply" 41 page 24,against'line 2j, jj1sert th,e'ma~g1nal c1tatlon,-"5 of 1908" 42 page 24, against line 31, ins,art the marginal citat:lon~-"5 0 f 1908" 4 3 p? ~e 25, in th e mar gina 1 h ea01n g to cl1\~se 41,-i ' •• tj:ll: "co llacteral" ~ "colla te-ral" '  , i 44 page 25', line 25~-1bj: "·",ith the" ~  "wi tb hi;" 45 page 25, against line 33,-fo r th e mar ginal ci ta tipn  iij,j o,f 19 56:ti ~ "4 of 1882,',' ,,4'' pa,g9 25" in the aarginal·heading to clause 42,-,:1 1lu: ttconcen" ~ , 'ooncern" ,  , " 4-7 ~age 2", in the marginal hea,,~g to, clause 44,-!oj: "tn d rt ~ "an d " f48 page 28, line 13,-- ror "obligation" ~ ''obligat~nsrt ' y 49 page 2b, lin e 33,-,  isji "aoapa t1ons" ~ "adap,~ tien,s" 50 pc 69 29, line 15,-om! t ,1'z d1 t1o!} t:f1 " 51 page 30, line 35,-!ol: ''bark'' ~ "bank" 52 page 31, line 13,-''i wi ''0 f tho se ,~ 53 pa ge 32, in th e !!j8r gina,~, h eatung to· <¥a'lse 50,-!al: ''11 cb ur t" x:ead'" cb ur t,,,   ~   " 54 page 33, _in the ·narginal ha3d1ng to: c~~uge 51,-" '  ,~  !2! "d1s~rict ma'hst~atg" ,~''n1:str1ct mi!i~a~ate" ~ 55 page 33,11oe 41,-tp1:, "rules· or schemes" ~ "rule or scheme", , 5~ fage 34, line 17,--1bi: "1981" ~ "1891, ii 57 page 36, in the rrarginal heading to clause '4,  ~ "under this act" 58 page 37, line 18,-,!q,r "he ii road "the" 59 pa ge 37, in til e ma,'rgj,j"lal h 00 din g to clause 68,_ for ''po\·rers''·~ "power" 60 pal;e 37, line 40,-a ft ex- ''ban k" in ser t "a 9 " 61 page:j3,- lin~ 3) ,-!qr ''member "- ~ ''members'' 62 pa ge 3), line14,-" , !ql: '1house" ~ ''houses'' h"', p~ ge ,3), lin e 18,-!al: "m an y" i:e9:d "m the" 64 page 41, line 16,-l'ei'ore "industrial" ;lnsert "the" 65 page 41, line 43,-fqr "sub-clause (c) l' ~ "sub-clause(1i) of clause (c)" 66 page 42, line 28;-(i) 'fqi "id-" read "in" (ii) ~ ii( lause" ~ ,"clause" 67 page 42, line 37,-!or "wor-cds" ~ "words fi 68 page 48, lines 16 and 17,-om1t "colla teral" 69 - page 48, lines 20 and 21,-ru!11:t " co 119 te ra 1 " 70 page 50, line b,-!cu: "tra tit l:!illid ntha t n ~ _________ _ 71 page 50, line 24,-after "unit" insert "vilich" 72 pago 50, line 33,-ru "i ts" <r~ "an" 73 page 51, line 3,-fqr "on d" ~ "an d " 74 page 51, line 3frombottom,-m "corpora tinons" ~ "corpo~t:lons" 75 'pa~e 55, line 4 from bottom,':' !q1: "occurence" ~ ''occurrenoe tt  o ' new dellii; lyh 30  ___ -1984~---;-~_ f;ravana 8, 1909' (saka)  bill no 55 of 1984 the industrir\l reconstruction bank of india bill, 1984 i arrangement of clauses chaprer i preliminary clauses1 short title and commencement 2 definitions  chaprer ii establishment of the industrial rmcons1'ruction bank oi~' india3 establishment of the reconstruction bank 4 authorised capital  chapter iii acquisition and transfer of the undertaking of the industrial recons'truction corporatlon of india limrrj:d5 undertaking of the corporation to be transferred to the reconstruction bank 6 power of central government to authorise a person to take over the management of the corporation 7 transfer of the services of 'the officers and other employees of the corporation to the reconstruction bank 8 dissolution of the corporation  chapter ivmanage1!vfent of the reconstruction bank 9 management 10 board of directors ] 1 disqualifications of membership of the board 12 term of office, salaries and allowances of chairman 13 disclosure of interest 14 meetings of the board 15 executive committee and other committees 16 existence of vacancy in or defect in the constitution of the board or defect or disqualification of a meinber not io invalidate the proceedings of the board 17 fees and allowances of directors and members of committees (i)  clauses18 objects ;nd business of the reconstruction bank 19 prolifbited business tl loans by central qovernment 21 borrowing and acceptance of deposits by the recollstruction bank 22 power to transfer rights 23 loans in foreign currency 24 grants, donations, etc, to the :reconstruction bank  chapter vi rd:!onstruction assistance fuim25 reconstruction assistance fund 26 credits to the reconstruction assistance fund 27 utilisation (1f reconstruction assistance fund 28 debits to reconstruction assistance fund 29 accounts 'and audit of reconstruction assistance fund 30 liquidation of reconstruction assistance fund  chapter vii genbral fund accounts and atj'dit31 general fund 32 corporation of accounts and balance-sheet 33 disposal of profits accruing to general fund 34 audit 35 saving  chapter viii special powers of the reconstruction bank36 power to impose conditions for assistance 37 assistance to industrial concern when to operate as a charge i)n the property offered as security 38 power to call for repayment before agreea period 39 rights of reconstruction bank in case of default 40 enforcement of claims by the reconstruction bank 41 power of reconstruction bank relating to property offered as transfer  collateral security 42 power of reconstruction bank to appoint directors or administrators of an industrial concern when management thereof is taken over 43 effect 01 notified order under section 42  clauses44 powers and· duties of directors and administrators 45 no right to compensation for termination of contract of managing director, etc    'application of act 1 of 1956  - 7 restriction on filing of suits for dissolution, ~tc, of ~ industrial concern not being a company wben its management is taken over ~8 ooidal assignee or receiver not to be appointed without the consent of the reconstruction bank 49 power of central government to grant relief in the case of certain assisted industrial concerns 50 power of high court to authorise reconstruction bank to prepare scheme for reconstruction, etc, of industrial concern 5! chief metropolitan magistrate and district magistrate to assist reconstruction bank in taking charge of property  chapter ix miscellaneous52 effect of the act on other laws 53 act 43 of 1961, act 7 of 1964 and act 45 of 1974 not to apply to reconstruction bank 54 law relating to winding up not to apply to the reconstruction bank 55 act 18 of 1891 to apply to the books of the reconstruction bank 56 certain provisions of act 10 of 1949 not to apply to reconstruction bank  57 act 54 of 1969 not to apply to the expansion or amalgamation of certain undertakings 58 returns 59 delegation of powers 60 staff of the reconstruction bank 61 obligations as to fidelity and secrecy 62 provident fund 63 indemnity of directors 64 protection of action taken in good faith under this act 65 chairman, director, etc, to be public servants 66 penalty for making false statement in applications lor loans and advances 67 oftences by companies 68 power to make rules  clauses69 power of reconstruction bank to make regulations 70 power to remove difficulties 71 amendmt'"ot of certain enactments 72 substitutio:c in acts, rules or regulations of the reconstruction bank in place of the corporation the first schedule the second schedule the third schedule  billto provide for the estabzishment of the industrial reconstruction bank of india, and for the transfer to, and vesting in, the igid reconstruction ban1e, of the uncfertaking of the corporation 1mo1dn c&3 the industrial reconrtntction corporation of india limited, with a view to enabling the said reconstruction bank to function as the principal credit and reconstruction agency for industtial reviwl and to coordi?tgte similar 'work of the other institutions engaged therein and to assist and promote industrial development, and to rehabilit4te industrial cotlcerns and for matter, connected therewith or incidental thereto be it enacted by parliament in the thirty-ftfth year of the republic of india as follows:- chapter i preuminuyr 1 (1) this act may be called the industrial reconstruction bank ,j of india act, 1984 short title and commencement (2) it shall come into force on such date as the central government may, by notification in the oft1clal gazette, appoint, and dift'erent dates may be appointed for dift'erent provisions of this act 2 in this act unless the context otherwise requires,-l)eftni· tiona (a) "appointed day", in relation to any provision of this act, means the date on which such provision comes into force and any reference to the appointed day in any provision of this act shall be construed as a reference to the commeneement o~ that provision; 5 (b) "assistance" means any direct or indirect financial, managerial or technical assistance granted by the reconstruction bank in pursuance of any business referred to in section 18; (c) "assisted industrial concern" means any industrial concern to which any assistance has been given by the reconstruction bank; 10 (d) "board" means the board of directors ot the reconstruction bank; (e) "charge" includes a charge referred to in section 37; <i) "corporation" means the industrial reconstruction corporation of india limited, a company formed and registered under the '5 companies act, 1956, and having its registered office in the state of 1 of 1956 west bengal; (g) "development bank" means the industrial development ,';·bank of ulia, established under section 3 of the industrial development bank of india act, 1964; 20 18 of 1964 (h) "dues" means any dues payable by any person to the reconstruction bank in relation to any assistance given by, or any bond or debenture issued to, the reconstruction bank, and includes interest, rent, costs, charges and coinmission payable in relation , thereto· ', , 25 (i) -"industrial concel'll"- (1)  means any, concern en&apd, or to be ~ged,in-(i) ih~ ~an':liacture, preservation or process~g of joods; (ii) shipllli\g;· (iii)" mi~g; (it,) the hotel industry;  (v) tl;le trans~rt of ~engers or goods ~y toad or hy water or by air or by ropeway or by lift; (vi) the generation or distribution of electricity or any other form of power;   35 (vii) the maintenance,· re~ir, testing or servicing of machinery of any description or vehicles or vessels or motor boats' or trailers or tractors;   (viii) assembling, repairing or packing any· article with ~e aid of ~acbineiy or power;   4d (ix)the development of any contiguous -area of land bi an industrial estate;   (x) fishing or prov\ding shore facilities for fishing or maintenanee thereof;  (xi) providing special or technical knowledge or other services for the promotion of industrial growth; or (xii) the research and development of any process or product in relation to any of the matters aforesaid, (2) and includes-5 (i) an undertaking owned, controlled or managed by a company, finn or other body corporate, which is, or is to be, so engaged, (ii) such other concern as the central government may, by notification in the oftlcial gaiette, specify in this behalf explrmation-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; 15 (j) ~nationalised bank" means a corresponding new bank as defined in section 2 of the-(i) banking companies (acquisition and tranrfer of undertakings) act, 1970; 5 of 1970 20 40 of 1980 (ii) banking companies (acquisition and transfer of undertakings) act, 1980; (k) "prescribed" means prescribed by rules made under this act; 1 of 1956 (l) "public financial institution" means a public financial institution specified in, or under, section 4a of the companies act, 1956; (m) ccreconstruction bank" means the industrial reconstruction bank of india, established under section 3; (n) ccregulations" means a regulation made un4er this act; (0) "reserve bank" means the reserve bank of india constituted under section 3 of the reserve bank of india act, 1934; 2 of 1934 (p) "share" means a share in the capital of the corporation; 30 (q) "shareholder" means a person registered l:ry' the corporation as the holder of a share; 2011984 (r) "scheduled bank" means a bank for the time being included in the second schedule to the reserve bank of india act, 1934; 35 23 of 1955 (8) "state bank" means the state bank of india constituted under section 3 of the statl:" bank of india act, 19&&; i( (t) "state co-operative bank" means the principal co-operative society in a state, the primary object· of which is the financing of other co-operative societies in the state; (u) "state financial corporation" means a financial corporation established under section 3 or section sa or an institution noufted under section 46, of the state financial corpor~tions act, 1961; 4~ of 19"l (v) "state level agency" means such institution or agency, operating in any state or union territory, as may be specifted as its agency by the reconstruction bank 45  chapter ii establishment oj' the industrial reconstruction bank of indiaestabliabment of there_ 3 (1) with effect from such date as the central government may, by notification in the official gazette, appoint, there shall be established, for the purposes of this act, a corporation, to be known as the industrial reconstruction bank of india  ') ~onstruc­tion bank (2) the reconstruction bank shall be a body corporate with the name aforesaid, having perpetual succession and a common seal with power, subject to the provisions of this act, to acquire, hold :jnd dispose of property, and to contract, and may, by that name, sue and be sued 10 (3) the head office of the reconstruction bank shall be at calcutta, and the reconstruction bank may establish offices, branches or agencies at any other place, whether in or outside, india 4 (1) the authoriled ("alltal or the r~on!itrudiob bak shall he rupees two hulldred crores 15 authorised capihit (2) 1be initial paid-up capital of the reconstruction bank shall be rupees fifty crores which shall be obaained,-(0) by the appropriation, oat of die usets of· tb~ corporation which staad transferred to tile reeomauetioas bak by virtue of die prowons of sectioa 5, a sam of rupees twenty crores, heidg an 20 diiioddt equal to the amount paid-lip on the shares of tb~ corporation: (b) by the coiiversioa, to the eut of rupees twenty c:rores, of the 108115 gnated by the central goftrdment to tbf! corporation mto the capital of die rec:odstnlc:tion baak: and (c) by the subsc:ripdod, by the central goverdmeat, to die paid- 2:) up capitas of tile rec:oastruction 8adk, of a sum of rupees ~a nores (3) the rec:oastmdioa bak may '-crease its paid-up capital b~' -killa furdler isiue of  of sach iiblouilt as it may tlaink expedieat bu in doing 80, die rec:cmstruction 8adk ibaii ensure that its total c:apltftl does not, in any c:a,e exceed its authorised capital 3() (4) the eatire paid-up capital of the rec:odstructiod bank shall be wholly subscribed by and allotted to, the central govemmert  chapter litacquisition and transfer of the undertaking of the industria': reconstruct;on corporation of india limited 35 5 (1) on :'ll~h date as the central government may, by notit1cation in the official gal,ctte, "ppoint, the undertaking of the corporation shan itand tran'ferred 10 and ~hall vest in the reconstruction bank (2) f:or the transfer to, and vestina in, the reconstruction bank uf 40 tbe und~rfaldng of the corporation, the corporation shall be' given, ill· cash, by the c~tral government ad amount equal to the amount of the lotal ~id-up capital of tbe corporation under takinlof the cnrporation to be transferred to the reconstruet:on hpilk (3) the lindc!laking of the corporation shah be deemed to inclulie  at; assets, husine:s, right" powers, authorities and privijeges and all r>ro- " perty movable and immovable, cash balances, reserve funds, investments, book-debts and all other rights and interest<; in, or ",irising out of, such property as were, immediately before the appointed day, in the ownership, possession, power or control of the corporation whether within or outside 5 india, and all books (if account, registers, records, and all other documents of whatever nature relating thereto, and shah also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the corpof,ation in relation to its undertaking (4) unless otherwise expressly provided by this  act, all contracts, 10 deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature' subsisting or having effect immediately before the appointed day and to which the corporation is  a party or which are in favour of the corporation, shall be of as full force and effect againsf or in favour of the reconstruction bank, imd may be 15 enforced or acted upon as fully and effectually as if, in theptace of the corporation, the recorutruction bank had been a party thereto or as if they had been issued in favour of the reconstruction bank (5) if, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to the business of the undertaking which has ~o been transferred under this section, is pen:ding by, or against, the corporation, the same shall not abate, be discontinued or be, in any way, prejudicially deete<! by reason of the transfer of the undertaking of the corporation or of anything contained in this act, and the suit,' appeal or other pr()oo ceeding may be c~ntinued, prosecuted apd enforced by, or against, the re-25 construction bank to (1) the central government may appoint, on or·after the appoint- eel day a suitable person to take over the management of the corporation b''t11! pui'pose of winding up of the corporation, and, where any penon is 80' 'appomted, it shall be the duty of such person to bring the operations 30 of the ~ation to a close, realise the amounts payable to the corporanor uncidr sub-section (2) of section 5 and distribute the said amount -to the sharbholdcrs in accordance with their rights and interests, and after such realisation and distribution, to obtain the order of the central giyv-ernment for the dissolution of the corporation pow of central governmentto authorl  - pel'ion to take over the manaaemeat of the corpordiod 35 (2) for the purposes of sub-section (1), the person appointed under that sub-sectionshau have such powers and duties of the official liquidator under the compallies act, 1956, as are necessary to give effect to the provisions of sub-section (1) as if the corporation were being wound up by the court and, for this purpose the provisions of the companies act, fo 1956 shall apply, subject to the modification that for the word "court", wherever it occurs, the words "central government" shall be substituted ' (3) when any person is appointed by the central government under sub-section (1), to take over the majulgement of the corporation,-(a)' die provisions of ~he companies act, 1956, or of any other law for the time being in force, or any instrument having effect by virtue of any act, or other law, shall, in so far as they are inconsistent with the provisions of this act, cense to apply to,· or in relation to, the corporation; (b) all persons holdillg office as chairman and managing 50 director and other dir~ctors, of the corporation, immediately befolw tho appointment of the person under sub-section (1), shall be qeemcd to have vacated their offices as such (4) notwithstanding anything contained in this act or any other jaw for 1he1ime being in force or  in any agreement or contract, any period iablding, immediately before the appointed day, office as the chairmlb 5 fit'director of the corporation, who vacates his office as such on the appointed day by reason or the provisions of sub-section (3) shall not be _titled to any compensation from the reconstruction bank for the loss or oidee or for the premature termination of any ~greement or contract retating to his employment, except such compensation or other benc8t 10 ~ch the reconstruction bank may grant to him, bavida regari to wbi ' that penon would have 1'eceived as an officer of the corporation if tbl,a a"tt had dot been pa~sed and if he had retired from" his employment in the oramary course 7 (1)' save as otherwise provided in sub-section (3) of seotion 6 15 every officer or other employee of the corporation shall beco~ on and from the appointed day, an officer or other employee, as the case may be, of the reeonstruetton bank and shall hold his offtoe or servi'ce in that biilk on the same tenns and conditions and with the lame rights to gratuity aii'4' dtbtt matters as would have been admissible to bim, if the ~takid& !zo of'the·corporation had not been transferred to and vested'in the recona truet:hm bank, and continue to do 80 unless ann until his employment 1n the lteconstruction bank  is duly tenninated or until 9 his  remuneration, terms and conditions are duly alt'!ted by the reconstruction bank:  , '    '  eftlle   ~­ , a    011 9 &  jimii,pnmded'thbt an officer or other emtjlovee who dma not intend to 25 coiiiaue as an emolovee of the'reconstruction bank mav,widrin 1limty "';'from the iibjx>inted day, serve a notice of hii intention· to the  ~etlod·'bank and, on the expjry of the period of thirty da,'fiout,the dme of service of the notice, he shall cease to be an emplovee of die reeonstruction bank  and on such cesser,  superannuadon  and· - __ !so benefits due to him under the terms of his emolovment ihall be psidto him forthwith by the reconstruction bank as if he had retind ,from  -viae (2) any person who on the aonointed day is entitled to, or is in recemt of any superannuation or comoassionate allowance or benefit from the corporation or anv urovident ot' other fund or anv iiiut110rltv adm"\il- 35 terine: such fund shall he entitled to be "aid bv and to receive from the reconstruction ranle or anv provident or other func:! or anv authority a4:' minist!lrin2 such fund the same allowance or bf!nefit so lonq' a~ be ovlleryes the conditions on which the allowance or benefit was qt,ulted and if anv qoertion arises whether he has so observed such conditions the question 40 shan be determined bv the (",cntral government and the decision of the central government thereon shall be final (3) where, under the terms of any contract :qf service or otherwise any ~ whose service becomes transferred to the reconstruction bank bv reason of the nrovi~ions of this act is entitled to anv oavment bv wrv ·"5 of 2ratuitv ot' retirement benefit or compensation for pl1v 1e'lve i10t availed of~ or any other ~neftts su~h rerqon m'ly enfol'('~ hi~ ~laim against (,,,\ reconstruction bank (4) notwjthstandin~ anything contained in suj>section {l j or sub-"~"'ction ('2) no ap1'1icatio!'" made or rrnmotjo~ increment in s 1\1 ary 311ow- 50 anee or any other benefit granted to any person, before the awpinted day, which would not ordinarily have been made or granted or which would not ordinarily have been admissible under the rules or authorisation pf the corporation, or of any provident other fund in force prior to the appointed day, &hall have effect or be payable or claimable from the 5 reconstruction bank or from any provident, or other fund or from an authority administering such fund, unless the central government has, by general or special order, confirmed the appointment, promotion or incremealt or has directed the continued grant of such allowance or other ben~ 10 fit, as tite case may be (5) notwithstanding anything contained in the industrial disputes act, im'l, or iri any other law for the time being in force, the transfer or, the services ,of any officer or other employee of the corporation to thes re· 15 coiaitmction bank shall not entitle such officer or other employee to ~ compensation under that act or other law, and no such claim shall 'be entertained by any court, tribunal or other authority (6) ,·where any person, chairman, 0r other director, by whatever  name called, or other employee of the corporation has, before the appointed day, been pfrld a sum by way of compensation or gratuity, the r,& 20 construction bank shall be entitled to claim refund of any sum so paid, jf'the ,payriient is not confirmed by the central government by general or speeialorder -,-(7)wh,ere one or more provident funds have been established ,9r maintained, by the corporatioh or any other authority, for the benefit ,of 25 its officers and other employees, the money debitable to the oftloera and other employees whose services have become transferred, by, or under thlsact, to the reconstruction bank, shall, out of' the mpnies standing on the appointed day to the credit of such provident f'tuid, atand transferred to, and vested in, the provident fund established, b7 the" j:teconstruction bank, under section 62 (8) where a superannuation, welfare and other funds have been 30 established by the corporation for the benefit of its officers or other employees' whose services stand transferred to the reconstruction bank, the amount standing to the credit of such fund shall stand transferred on· the appointed day, to the reconstruction bank for distribution to the concerned officers or other employees in accordance with their righf6 and £~ obugations 8(1) as soon as realisation and distribution of the amount have , been made under section 6, the person appointed under sub-sect1on (1) of , that section shall submit ,his duly audited account to the central govern -to ment and shall apply to that government for orders as to the dissolution of the corporation  (2) the celltral government shall, after hearing such person as it xgay think fit, and jlpon perusing the accounts so audited, if satisfied that :~t ha~ been realised and distributed in accqrdance with the provi 45 atolls of this act, make an order that the corporation is dissolvt"d from the elate of the order and the corp~ration shall stand dissolved accordingly (3) a copy ,of the order made by the central government for the dissolution of the corporation sball be filed by the reconstruction bank 50 with the registrar of companies within thirty days from the date of ~uch order, and the registrar of companies shall give effect to the said order u if it were an order made by the court for the dissolution of the corporation  ( 4) the provlslons of this section shall' have effect, notwithstanding anything to ·the contrary contained in the companies aot, 1956, or in any other law for the time being in force  chapter iv management of the reconstruction bank5 9 (1) the general  superintendence, direction and management of the affairs and business of the reconstruction bank shall vest in a board of directors which may exercise all powers and do all acts and thin  whjch may be exercised or" done by the reconstruction bank (2) save as otherwise provided in the regulations made under this 10 act, the chairman shall also have powers of general superinteadence, direction and management of the affairs and business of the reccmstrw> tion bank and may also exercise all" powers and do all acts and thin" which may be exercised or done by the reconstruction bank (3) subject to the provisions of this act, the board, in discbarzinl 15 its functions, shall act on business princip1es with due regard to' public interest (4) in the discharge of its functions under this act, the rccodstruction bank sha11 be guided by such directions in matters of policy mvomq public interest as the central government may give to it in writing, and $i if 'any dispute arises as to wheth~ a ques~9n is or is not a questi9ll ot 0 such policy, the dispute shall be decided by the central government whose decision thereon shall be final  18 (1) the board shall consist of ihe following, namely:-(a) a chairman, to be appointed by ,the central goven1medt, who shall\ function both as the chait'll181i alftl as the" manajin !2,5 director; ' , (b) a deputy, governor of the reserve bank, to be nomiaaied by that bank ; (c) a director, to be nominated by the j:)cwlopment bank; 30 (d) not more than fifteen directors to be ~lod by the central government, of whom--(i) three shall be officials of the central govcl'didiiilt, (ii) not more than three shall be from the public finbllcia! institutions, 35 (iii) not more than five shall be from the state bank, nationalised banks and the state financial corporations, (iv) not more than four shall be from among persons who have, in the opinion of the central government, special lmowledge of, and professional experience in, science, technology, eco: nomics, industry, industrial co-operatives, law, industrial finlldce',4o investment, accountancy, marketing 01' any other matter, the specialknowledge of, or professional experience in, which would, in the opinion of the central govemment~ be useful to the reconstruction bank 45 (2) a director nominated under sub-section (1) shah hold office tluring the pleasure of the authority nommatioi him 11 no person shall be qualified to be a member of the board if-(a) he has been removed or dismissed from service of-(i) government, or (ii) reserve bank, state bank or any other bank, or 5 (iii) any public financial institution or state financial corporation, or (iv) any other corporation owned or controlled by government, on a charge cf corruption or bribery; or 10 \ (b) he is, or at any time has been, adjudicated an insolvent or b«s suspended payment of his debts or has compowlded with his creditors; or (c) he is a lunatic and stands so declared by a competent court; or 15 (d) he is or has been convicted of any offence, which in the opinio~ of the central government, involves moral turpitude 12 (1) the choirman shall, hold offtce for such term not exceedjde ftve yean as the central government may specify in this behalf and ady person so appointed shall be eligible for re-appointment ler a like term (2) notwithstantiing anything contained in sub-section (1) ,-20 :25 (a) the central govemment !ihad iaav~ the right to termiaate the term of of6c=e of the chairmau at y time before the apiry of the term specified udder sub-sectiod (1) by giving bbn d~ of dot leal dum three moatbs  writlag or three montbs salary and allowances in lieu of such notice: and the cjudnaad shad also have tile right to relinquish his ofilce at ady  before the expiry of the term specified ~ sub-aection (1) by giving, to the central govemmeat, notic:e of not less than three molltbs ia writing; (b) the central government may, at any time, remove the chainnan from office: 30 pro\< ided that, no person shall be removed from his office under this clause, unless he has been given a reasonable opportunity of showing cause against his removal'i (3) where any vacancy occurs in the oftlce of the chairman, the 35 central government shall appoint a suitable person to discharge the functions of the chairman  ,",'  (4) when the chairman is unable to discharge his function • owing to absence, illness or any other cause, the central government may appoint a suitable person to function as the chairman until the day on which the chairman resumes the charge of his functions 40 (5) the chairman shall be a whole-time officer of the reconstruction bank and shall receive such salaries, allowances and other benefits, and shall be subject to such other terms and conditions, b!'1 may be determined hy the central government: provided that the board may, if it is of opinion, that it is necessllry in 45 the public interest so to do, permit the chairman to undertake, at the request of the central government or the reserve bank, such par-time honorary work as is not likely to interfere with his duties as chairman dildosure of interest 13 norn~mber of the board shall have an intere3t, direct or iadtitd in any buainess,industry' or concern to which any assistance bas been given or is to be given by the reconstruction bank under this act and if any such mf:!mber acquires such interest at any time during the continuance of's~h 'qssi'stance,he shall immediately disclose it to the board and 5 shaie'ither· resign his me1nbership of the board or dispose of his interest in such manner and within such tjme as the board may direct meettn, of the boards if (1) the board shall meet· at such times and places and shall observe such rules of procedure in regard to the tranl>8ction of busineas at its meetings as may be provided for in the regulations 1& '! i (2) if, for any reason, the chairman is· unable to attedd ajly, ~ of the board, any uther director nominated by the chairman intbtabeba1f, and in the absence ~f such nomination, any director elected by ,the -curectors, present from amongst themselves, shall preside at the meetjd&: (3) all questions which <-'orne up before any meetiftg of the obard '5 shall bede<!ldedbya' majority of vtjtes of the directors pre8ent' ai14 voting, and in the e';ent of an equality of votes, the chairman, or, in btl ableftce, the person presiding, shall have a second or casting vote (4) $ave as otherwise provided under ~ub-section (), every director' of the board shall have one vote ~f 15 (1) the board may constitute an executive committee,eonsistinc =-of s\1ch number of directors as may be~ provid(!d for in the regujatiou other eommittees (:~) the executive committee shall discharge such fudctions asmay be provided for in the regulations, or, as may be delegated to it, };)y the board   (3) the board may constitute such other committees, ~hether, codsisting only of direckrs or only of other persons or partly of direefors"add partly d other persons, for such purpose or purpose~, as it may think fit (4) i the executive committee ar any other committee coditittlted under this sectton shull meet at such times and places and shall ~bsetve , sucih ru1esof procedure in ~jard to the transactio~ of business at its meeti~g'l as may be provi~ed for in the regulations 16 (1) no act or proceeding of the board or of any executive or  committee constituted by it shall pe invalid merely on the ground oftlae existence of any vacancy in, or any defect in the constitution ot, such &ard or conunittee, as the case m~ be 35 -(z) all acts done by a person acting in good faith as a member of the board or of any committee constftuted by it shull be vaud,riotwftb  standing that it may aferwardsbe -discovered that hisappoiutment 'wls invalid by reason of any defect or disqualification or had 18nnlnated  by;fo ~rtaeof any provision of this act or any -other law tor tbe time·betaft in force: prvvidedthat nothing in this'section shall be  deemed to' give ,v~tfdjty to any act of a member of thef board or of any committee after his a~t ment has been shown to the reconstruction bank to be invahd orto'hrie ~~~~~ 6 existence olvacancyin or detect !nthe constitution of, the board ordeted ordtl qllluftca tionofa member not toinvaudale the proceedinls oube dord if tho dire:tors and members of the committee shall be paid such ftii aad allowances as may be provided for in the regulations for attending the mcdings of the board or of any committee constituted in pursuance of thi$ ac;t or for atteqd4ti to any other work of the reconstruction bank: fee atd ~, directorw and membel- of cojq mluees 5 provided that no fees shall be payame to the chairman or to any other director or member who is an official of the government, or to a deputy ooyernor of the reserve bank or to an~cial of the development bank or reconstruction bank:  chapter v 1 oiijects of, and business to be transacted by, the reconstruction bawkobjects and buaineas of the he-colllkruc_ bank 1& (1) the reconstruction bank shall function as the principal credit aqd reconstruction agency for industrial revival by undertaking modemisadon c:p:p8dsion, re-organisation, diversification or rationalisation of indus-'5 ~; id¢ by co-ordinating similar work of other institution:- engaged ti'lenmt and sh,8ll assist promote industrial development, reconstruction and revival, and undertake rehabilitation of industrial concerns, by providing or procuring assistance and opc:rating schemes for the same, and may, for ,at4uning the said objects, carry on and trsnllact all or any of the follow-:lq in, business, namely:- \ (a): granting loans and advances (including working capital) to any industrial concern or subscribing to or purchasing ,or underwrltini the issue of stocks, shares bond~ or debentures of any indus~ trial concern or converting the dues in respect of such loans or de~ ;; bento-res into the shares cyf any industrial concern; (b) guaranteeing' counter-guaranteeing or providing indemnity, as the case may be, in respect of-(i) loans raised by an industrial concern from any scheduled bank or state co-operative bank or any public financial inlstitution or any other prescribed institution or agency in or outside, india; (ii)' deferred payments due 'from an industrial concern; (iii) the performance obligations of any contract undertaken by an industrial concern, including repayment of any a4vance obtained hy such tndustriul concern in connection with such contract; (c) subscribing to or purchasing or imderwriting the issue of stocb, shares, bonds or debenques of any institution which may be notified by the central govemm~jlt in this behalf; (d) providing credit to any state level agency or other prescribed institution or agency for grant of loans and advances to industrial concerns; (e) providing or obtaining credit from other public financial institutions scheduled banles and state co-operative banks, for grant of loans and advances to or to furnish guarantees on hehalf of the industrial concern: (f)' providing infra-structural facilities and raw materials: (g) providing machinery and other equipment on lease or hirepurchase basis;  i au":) ~vi=:~rec'!~:;c::t =;:;:'::"'oin := i industrial concern or indbstry ill general:~ (;) accepting or discounting of bills of exchange and promissory i notes, made, drawn, accepted or endorsed by any industrial concern 5 l' or by any person selling capital goods mapufactured by one indus-1: trial concern to another industrial concern; , (j) promoting, owning, taking over, managing and acting u authorised person, where so appointed by thcceatral government, to manage an industrial concern, including ancillaries; 10 (k) transferring or acquiring for consideration any instrument relating to loans and advances; (i) providing technical, legal adminjstrative and marketing assistance, promoting, assisting and financing mergers, amalpmation or reconstruction of an industrial or business concern or undertbkid&; 15 (m) providing managerial assistance to in4ustrial concerns including nationalised undertakings by deputing omccrs -from its own cadre or a separate management pool constituted for the purpose; (ii) undertuing r~ch and surveys for enaluatiag or deal"" with marketing or investments, carrying on tecbno-cconomic studies 10 in connection with reconstruction ~ development of industry and establishment of institutes for such purpose including training of pet'ioildd ; (0) granting opening, issuing confirming or cndoraing «etten of credit and negotiating or collecting bids and otber documents drawr sl5 thereunder; (p) forming, or contr~ of subsidiaries for carryida out ally of ita functions or to carry on such other activities comjucift to its businc:ss; ( q) acting as an agent of-30 (i) centra! government or state government; (il), reserve bank, state bank, scheduled bank, state cooperative bank public financial institutions, ~ate financial corporations; (iii) such other government or person as the central 35 government may authorl$e; and to appoint one or more of those institutions or ,agencies, or any other pr-ccribed person, as its agent; i (r) performing functions entrusted to or required of it by central government ullder this act or any other law; 0 (s): doing any kind of business or assignment in or out5i~ the country which the central government may authorise; (i) conceting information from all concerned agencies relating to industt"ial sickness and industria] development; (ul) preparing guidelines to assist the central government in formulating policy framework to reconstruct, revive or rehabilitate industrial concerns or any industry; (v) granting loans for housing and· other purposes to the om-5 cers and other employees (including persons employed on contract) of the reconstruction bank; - (w) generally doing such other acts and things as may be incidental to or consequential upon the exercise of its powers or of its duties under this act or any other law, including sale or transfer of 10 any o(its assets (2) the reconl)truction bank may receive in consideration of any of the services mentioned in sub-section (1), such comnussjon, brokerage, interest rent, remuneration or fees, as may be agreed upon (3) the reconstruction bank shall not grant any :(oan or advance 15 or other assistance on the security of its own bonds or debentures prohibited business 19 (1) the reconstruction bank shall not enter into any kind of business with any indu~trial concern, of which any of the directors of the reconstruction bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of the reconstruction bank together bolds substantial interest: 20 provided that this sub-section shali not apply to any indusitrial concern if any director of the reconstruction bank-(i) is nominated as a director of the board of such concern by government, or a government company, or by the reconstruction bank or by a corporation established by any other law, or (ii) is elected as a director on the board of such industrial concern by virtue of shares held in that industrial concern by government, or a1 government company, or by the reconstruction bank or by a corporation established by any other law, 30 by reason only of su~h nomination or election, as the case may be explanation '-"government company" has the meaning assigned to it in section 617 of the companies act, ) 9 5 6 1 of 1956 explanation 1i-"substantial interest" in relation to any industrial concern, means the beneficial interest held by one or more of the directors of the reconstruction bank or hy any relative as defined in clause· (4tt ~ 35 of section 2 of the companies aer, 1956] of such director whether singly or taken together, in the shares of the industrial concern, the aggregate amount paid-up on which either exceeds five lakhs of rupees or five per cent 0{ the paid-up share capital of the industrial concern, whichever is the  lesser 40 (2) tile provisions of sub-secti9n (1)-45 (i) shall not apply to any industrial concern as spe~ified there~n if the reconstruction bank is satisfied that it is necessary in t~e p~bhc inferest to enter into business wirth that concern, and ent~nng mto any kind of business with such industrial concern shall be 10 accord-  d l'  t' as may be ,ance with and subject to such conditions idl1 iffilta ions provided for in the regulations; (ii) shall apply only so long as the conditions precedent to such disability as set out in the said sub-section continue  20 'ike central govemment may, after due appropriatioa made by parii  t by law in thk behalf, advaace to the reconstruction bank inteftsi free loans or lonns with int,~rest on such terms and conditions, as 5 may be aweed uponloans by central government 21 (1) the reconstruction bank may for the purpose or carrying out its functions under this act-(a) issue nnd sell bonds and debentures with or without guarantee of the central government; jo (b) borrow money fwm the reserve bank-borrow_ ingand acceptanceof deposits by the reconstruction bank (i) repayable on demand or on the expiry of fixed period~, not exceeding ninety days 'from tfte date on which the money ]s so borrowect ug:ainst the security of stocks, funds a~ secul'~ties (other than immm'abh property) in which a trust~e is authons~d 15 to invest trust money by any law for the: time hemg 10 force m india: (i;) against bills of exchange or promissory notes arising out of bona fide commercial or trade transactions, bearing-two or more good signatures and maturing within five years from the 20 date of borrowing;  (iii) for any other purpose approved by the central government in accordance with the provis~ons of the reserve bank of india act, 1934; 2 of 1984 (c) borrow money from !;uch other authority, "org~njsation, insti- 25 tution or trust in india as may be generally or specially approved by the central government; (d) accept deposits repayable after the expiry of a period which shall not be less than twelve months from the date of making of the deposit on such terms as may be generally or specially  approved go by the recwerve bank (2) the central government may, on a request being made to it by the reconstruction hank, guarantee the bonds and debentures issued by that bank as to the repayment of principal and the payment of interest ht such rate as may be fix'ed by that government  35 (3) notwithstanding anything contained in any other law for the time being in force, the bonds and debentures issued or sold bv the reconstruction bank shan be approved securities for the purposes ·of the indian tr\lsts act, 1882 the lmurance act, 1938 and the banking regulation act, 4! of 1938 1949 : ; i , ~ 40 10 of 1949 power to lran~ fer rights 22 the rights 'and interests of the reconstruction bank (including any other r!ght~ incidental thereto) in relation to any loan or advance grar:tted or any amount recoverable, by it may be transferred hy the reconstruction bank, either in whole or in part, by the execution or issue of any instrument or by the transfer of any instrument by endorsement, or 45 in any other manner in which the rights and interests in· relation to such loan or advance may be lawfully transferred, and the re:::onstruction rank may notwithstanding such transfer act as the trustee of the transferee loans in foreign currency 23 (1) notwithstanding anything contained in the foreign exchange regulation act, 1973, or in any other enactment for the time being in force relating to foreign exchange, ute reconstruction bank may, tor the purpose' 01 grantmg joans ana advances under this act, borrow, with the previous consent 01 the central government, foreign currency from any bank ,or linanc131 instltutlon ill any foreign country or as otherwise prescnoed (2) the central government may, where necessary, guar,antee auy loan, taken by the reconstruction bank under sub-section ~1), or ani part thereuf, as to the repayment of principal and payment of interest an! other lllcidcntal charges ' 10 (3) all loans and advances granted by the reconstruction)3ank out of foreign currency borrowed unaer sub-section (1), shall be expressed in terms 01 (oreign currency ~ equivalent of indian currency, calculated in accordance with the rate of exchange pr,evailing i!f india at the time of grant thereof, and the ~uullt due thereunder shall be repayable in equiva-15 lent indian currency, calculated in accordance with the rale of ex::hange prevailing in lndia at the time of repayment of such loan or advance ( 4) any loss or profit in connection with any borrowing of foreign currency under sub-section (1), for the purpose of granting loans and 20 ,advances wlder this act, or' with its repayment to the concerned foreign lending agency, on account of any fluctuations in the rate of exchange accruing-(a) during the period within which the loan or advance is repayable by the industrial concern or the period of actual repayment thereof by the concern, whichever is longer, shah be reimbursed by, or paid to, , as the c,ase may ,be, the recipients 01 such loans ami advances (b) after the expiry of the period specified in clause (a),-(i) shall be borne by the reconstruction bank in respect of normal market fluctuations in foreign exc~; (ii) shall be reimbursed by, or paid to as the case may be, the central government in respect of fluctuations other than the normal market fluctuations in foreign exchange explanation-if any ques~on arises as to whether any fluctuation as aforesaid is a norlual fluctuation or not, the same ,shall be decided by the 35 central govcmment whose decision thereon shall be fin,al 24 the reconstruction bank may receive gifts grants, donations or grants, benefactions from government 01' any other source donations,  c~ervletc, to the reconstruction bank  reconstruction assistance fu!lid40 25, with effect from the appointed day, the reconstruction bank shall,· reconestablish a special fund to be called the reconstruction assistance fund struction assistance fund  28 to the reconstruction assistance fund shall be credited-credits to thereconstruction assistance fund (a) all amounts ~ived for the purposes of that fund by way of loans, gifts, grants, donations or benefactions from government or any other source;  (b) repayments or recoveries in respect of loans, advances or 5 other facilities granted from the fund; (c) income or profits from investments made from the fund; and (d) income accruing or arising to the fund by way of interest or otherwise, on account of the application of the fund in accordance with the provisions of sect~on 27 10  utilisation of reconatru:tion aasistance fund 27 (l) where the reconstruction bank considers it necessary or desirable so to do, it may, subject to the prov:sions of iub-\iections (3) and (4), disourse or spend from the reconstruction assistance fund any amount on account, or in consequence, of the grant of any loan or advance or on account, or in consequence, of entering into any arrangement, 15 under section 18: - a: provided that before granting any such loan or advance to an industrial concern or entering into any '8uch arrangement with or in relation to an industrial concern, the reconstruction bank shall obtain the prior approval of the central government 20 (2) where the reconstruction bank considers it necessary or desirable so to do, it may, subject to the provisions of 'iub-section$ (3) and (4) disburse or spend from the reconstruction assistance fund any amount for one or more of the purposes s~fied in section 18 (3) before seeking, the appr~val of the central government under 25 sub-section (1), the reconstruction bank shall satisfy itself that the banking or other financial institutions or other agencies are not likely to grant such loan or advance to the industrial concern or to enter into any such arrangement with or in relation to the industrial concern in the ordinary course of business 30 (4) the central government shall, before giving its approval, satisfy itself that such loan, advance or arrangement is necessary as a matter of priority in the interests of industrial reconstruction, revival, rehabilitation or development t (5) for the removal of doubts, it is hereby declared that nothing 35 contained in this section shall be deemed to preclude the ~onstruction bank from granting any loan or advance or· from entering into any arrangement under clause (a) or under clause (b) of sub-section (1) of section 18, without the approval of the central government, if do amount in respect thereof is to be disbursed or spent from the recon- 40 atruction assistance fund 28 (1) to the reconstruction assistance fund shall be debi-ted-(a) such amounts as may from time to tinle be disbursed or spent under section 27; debits t() r-ecoastruction assistaace fuad (b) such amounts as may be required for discharging the 5 liabilities in respect of loans received for the purposes  of that fund; (c) any loss arising on account of investment made out of that fund; and (d) such expenditure arising out of or in connection with io the administration and application of the fund as may be determined by the board (2) no amount shall be debited to the reconstruction assist~ce fund except as provided for in sub-section (1) 29 (1) the balance-sheet and accounts of the reconstruction assis-15 tance fund shall be pl"e!pared in such form and manner ;4 may be provided for in the regulations accounts and audit of reconstruction assistance fund (2) the board shall cause the hooks and accounts of the fund to be closed and balanced as on the 30th day of june each y~r (3) the reconstruction assistance fund shall be audited by one or 20 more auditors appointed by the central government under section 34, who shah make a separate report thereon (4) the provisions of sulrsections (2), (3), (4) and (6) of section 34 shall, so far as may be, apply in relation to the audit of the reconstruction assistance fund, as they apply to the audit of the accounts of 25 the reconstruction bank (5) the reconstruction bank -shall furnish to the central government, within four months from the date on which the accounts of the fund are closed and balanced, a copy of the balance-sheet and accounts together with a copy of the auditors' report and a copy of the report 30 on the operation of the fund during the relevant year and the central government shall, as soon as may be after they are received by it, cause the same to be laid before each house of parliament 30 t!te rm:onstruction assistance fund l:>hall not be closed or wound up save by the order of the central government and in such 35 manner as that gov'ernment may direct  chapter viiliquidation of reconstruction assistance fund  general fund accounts and auditgenual fund  31 all receipts of the reconstruction bank other than those which are to bc credited to the reconstruction assistance fund under this 40 act shall be credited to a fund to be called the general fund and all payments by the recon'struction bank, other than those which are to be debited to the reconstruction assistance fund, shall be made out of the general fund  32 (1) the balance-sheet and account of the reconstruction bank 45 shau be prepared in such form and manner as may be provided for in the regulations preparation of accounts and balance-ibeet (2) the board shall cause the books and accoulltli of the reconstruction tiank to be closed and balanced as on the ~oth (jay of june eaen year j:j ~1) the reconstruction bank may establish a reserve fund wlucl"l may be translerrect such sums as mat bank may deem tit out of 5 the annual prohl::; accrumg to the lzenel'al ~'und disposal of profits accruing to general fund (2) after making provision for bad and doubtful debts, depreciation of assets and lor au other matters tor which pl'ovlsion is necessary or expedient or wnich is usually provided lor by bankers and ior the l·e~erve lund reletrect to ill sub-section· v), the reconstruction bank 10 shajl tl'ansler the balance of the net profits to ,the central government audit ~ (1) the accounts of the reconstr~ction bank shall be audited , by aui1hol's duly qualil1ed to act as auditors under iiuo-sectlon (1) 01 i)ectloll ~:::b 01 tne ~ompanies act, 19;'0 who shall be appointed by the 1 of 1956 ~entral uovernment lor such ,term and on such ,remuneration as the 15 l,;entral uovernment may fix i '(z) the auditors snall be supplied with a copy of tlu~ annual balance-sheet of the reconstruction bank and it shall be their duty 10 examme it together with the accounts and vouchers relating thereto and tney shah have a !iiit delivered to' them of all books kept by the 20 lteconstructlon tiank and shall at all reasonable' times have ac("ess to the books, accounts, vouchers and other documents of the reconstruction l:wlk (3) the auditors may, in relation to such accounts, examine any director or any otlicer or other emplo~e 01 -the reconstruction bank: 25 and ijhal1 be entitled to require trom ,the board or officers or other employees of the }{econstructlon bank such information and explanawon as they may thmk necessary for the performance of their duties (4) the auditors shall make a report to the reconstruction bank upon the annual balance-sheet and accounts examined by them and in 30 every such report they shall state whethe,r in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up 80 as to exhibit a true and fair view of the state of attaas of the reconstruction bank and in case they' had called tor any explanation or information from the board or any officer 35 or other employee of the reconstruction bank whether it has been given and whether it is satinactory (5) the reconstruction bank shall furnish to the ceniral government within four months from ,the date on which itt> accounts are closed and balanced, a copy of its balance-sheet and accounts together with a copy 40 of the auditors' report and a report of the working of the reconstruction bank during the relevant year, and the central government 'shall, as soon as may be after they are ;received by it, cause the same to be laid before each hou~ of parliament (6) without prejudice to anything contained in the preceding sub- 45 sections, the central government may at any time appoint the comptroller and auditor-general of india to examine and report upon the accounts of the reconstruction bank and any expenditure incurred by him in connection with such examination and report shall be payable by the reconst,ruction bank to the comptroller and auditorqeeral of 50 india 35 save as otherwise provided in sub-section (4) of section 29; no-savin, thing contained in this chapter shall apply to the reconstruction assistance fund  chapter vill s spec'ial powers of the reconstruction bank36 (1) in entering into any arrangement under section 18 with an power to industrial concern, the reconstruction bank may impose such conditions impose conditions as it may think necessary or expedient for protecting the interests of the for assis-reconstruction bank, and securing that the assistance granted by it is' tanco 10 put to the best use by the industrial concern (2) where any arrangement en,tered into by the reconstruction bank with an industrial concem-p,rovides for the appointment by the reconstruction bank of one or more directors of such industrial concern, such provision and any appointment of directors made in pur~uance thereof is shall be valid and effective notwithstanding anything to the contrary 1 of 1956, contained in the companies act, 1956, or in any other law for the time being in force or in the memorandum, articles of association or any other instrument relating to the industrial concern" and any provision ;regard  ing share qualification, age limit, number of directorships, removal from 20 office· of directors and such like conditions contained in any such law or inst,rument aforesaid, shall not apply to any director appointed by the reconstruction bank in pursuance of the arrangement as aforesaid (3) any director appointed in pursuance of sub-section (2) sha11-(a) hold ' officeduring the pleasure of the reconstruction bank and may be removed or substituted by any person by order in writing by the reconstruction bank; (b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto; (c) not be liable to retirement by rotation and shall not be taken into account for computing 'the number of directors liable to such retirement auistance to industrial concern when to operate as a charge on the property oft'ered js lieou-dty 37 (1) where any person o,r industrial concern 'seeks any assist8nce 35 from the reconstruction bank on· the sf!curity of any immovable propel"ty belonging to him or to the industrial concern or on the security of the property of some other person whose property is offered as a collateral security for such assistance" such person or indulstrial concern or, as the case may be, such other person may execute a written declaration in the 40 form specified in the fi,rst schedule stating therein the particulars of the immovable property which is proposed to be offered as security or, a's the case may be, collateral security, for such assistance and agreeing that the dues relating to the assistance, if granted, shall be a charge on such property;, and, if, on receipt of such declaration, the reconstruction bank 45 grants any assistance to the person or the industrial concern aforesaid, the due!; relating to such assistance shall, without prejudice to the rights of any other creditor holding any prior charge or mortgage in respect of the property so specified, be, by virtue of the provisions of this section, a charge on the property specified in the declaration aforesaid (2) where any further immovable property is offered as 'security for the assistance referred to in sub-section (1), a fresh declaration shall be executed, as far as may be, in the form specified in the first schedule 5 (3) every declaration referred to in sub-section (1) or sub-section (2) shall be deemed to be a document registrable as an agreement under the provisions of the registration act, 1908, and no such declaration shall 16 of 1908 , have effect unless it is so registered power to call for repayment before agreed period 38 notwithstanding anything contained in any agreement to the fo contrary, the reconstruction bank may, by notice in writing, require any industrial concern to which it· has granted any assistance to discharge forthwith in full its entire dues and also discharge other liabilities to the reconstruction bank-- (4) if it appears to the board that false or misleading inform~tion 1-5 in any material particular was given in the application for the assistance; or ·(b) if the industrial conceu'n has faued to comply with the terms of its agreement with the reconstruction bank in the mrtter of assistance; or 20 (c) if there is a reasonable apprehension that the industrial concern is unable to pay its debts or that proceedings for liquidation has been, or may be, commend!d in respect thereof; or (d) i11he property assigned, charged, hypothecated, mortgaged or pledged to the reconstruction bank as a security for assbtance is 25 not insured and kept insured by the industrial concern to the satisfaction of the rec::onstruction barlk or if such property depreciates in value to such an extent that 'rn the opinion of the board, further security to the satisfaction of the board should be given and such security is not given; or 30 (e) if, without the permission of the board, any machinery, plant or other equipment, whether 'forming part of the security or otherwise, is removed from the premises of the undcl'taking or the industrial concern, as the case may be, without being· replaced; or (1) if for any other reason, it is necessary so to do to· protect the 35 interests of the reconstruction bank rights of recons_ truction bank tn case of default 31 (1) where an assisted industrial concern, which is' under a liability to the reconstructiqn bank under any agreement with the bank, makes any ,default in the payment of any duef\, or in meeting its obligation in relation to any other assistance given by the reconstruction bank or 40 otherwise fails to comply with the terms of the agreement with that bank, the reconstruction bank shall have the right ~ take over the management, or possession, or both, of the industrial concern as the case matr be , ,7 , as well as the right to transfer by way! of lease or sale of the· property assigned, charged, hypotheca'ted, mortgaged or pledged to the' reconstruc- 45 tion bank for the purpose of realising its dues or for the revival of the  industrial concern (2) any transfer of property made by the reconstruction bank in aercise of the powers conferred on it by sub-section (1) shall vest in the transferee the rights in or in relation to the »roperty transferred u ~ the,transfer had been made by the owner of such property 5 (3)' the reconstruction bank shall have the 'same rights and powel'l with, respect to goods manufactured or produced wholly or partly frodl goods fwming part of the securitty held by it as it had with respect to the original goods '_ (4) where any action has been taken against an industrial / /0 concern nnder the provisions of sub-section (1) , all costs, charges and expenses which, in the opinion of the reconstruction bank, have been properly incurred by it as incidental thereto, shall be recoverable from the industrial concern and the money which is received by the reconstruction bank shall, in the absence of any contract to the 15 contrary, be held by it in trust, to be applied, firstly, in payment of such costs, charges and expemes, and, secondly, in discharge of the d1,1es of the reconstruction bank and the residue of the money so leceived shall be paid to the person entitled thereto in accordance with his rights and interests  20 (5)  where the reconstruction bank takes over the management ot possession of any industrial cone ern under sub-section (1), such industrial ,concern may sue, and be sued, in its name 40 (l) (a) where an assisted industrial concern makes any default in the payment of any dues to, or in meeting its obligation in relation to 25 any other assistance given by the reconstruction bank or otherwise fails to comply with the terms of agreement with that bank, or enforcement of claims by the reconstruction bank (b) where the reconstruction bank makes an order under section 38 requiring the assisted industrial concern to make immediate repay  ment of any assistance granted to it and the industrial concern fails to 30 make such repayment," { of 1882 then, without prejudice to the provisions of section 3i1 of this act and of section 69 of the transfer of property act, 1882, any officer of the reconstruction bank generally or specially authorised by the board in this behalf, may apply to the concerned high court for one or more of 35 the following reliefs, namely:-(i) for an order for the sale or lease of the property ~igned, charged, hypothecated, mortgaged or pledged to the reconstruction bank as security for the assistance granted to it, or for the sale or lease oe any other property, of the industrial concern; or 40 (i,i) for transferring the management of the industrial concern to the reconstruction b8nk or to its nominee; or 45 (iii) fer an ad interim injunction restraining the industrial concern ,from transferring or removing its machinery, plant or  equipment from the premises of the industrial concern without the previous peril1ission of the boaru, where lluch transfer ot removal is apprehended; or (i'v) for an order for the appointment 9f a receiver where there is apprehension of the machinery, equipment or any other property ot substantial value which has been assigned, charged, hypothecated, mortgaged or pledged to the reconstruation bank, being removed from the premises of the industrial concern or of being transferred , without the previous permission of the reconstruction bank (2) an application under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the reconstruction bank, the ground on which it is made and such other particulars as may be necessary for obtaining the relief prayed for  10 (3) where an application is for any relief mentioned in sub-clause (i) of suljsection (1), the high court may,-(4) by an order, authorise the reconstruction bank to grant lease of such property to such person and on such terms and condi tions as may be specified in the said order; or is (b) pass an order calling upon the person whose property bat been assigned, charged, hypothecated, mortgaged or pledged to the reconstruction bank to show cause, on a date to be specified in the notice, as to why an order for the sale of such property or so muehi of such property as would, on being sold, realise in its estimation, \lo an amount equivalent in value to the outstanding dues of the ind~­trial concern to the reconstruction bank, together with costs of the proceedings taken under this section, shall not be made; or (c) pass an ad interim order attaching any property of the industrial concern which has not been assigned, charged, hypoth~ 25 cated, mortgaged or pledged to the ~construction bank, or so mucb of such property, as would, on being sold, realise in its estimation an amount equivalent in value to the outstanding dues of the industrial ~oncern to the reconstruction bank, together with costa of the proceedings taken under this section, and pass an order so calling upon the industrial concern to show cause on a date to be specified in the notice as to wby such order of ad interim attach· ment shall not be made absolute (4) where an applicatioj) is for the relief mentioned in sub-clause (ii) of sub-section (1), the high court shall issue a notice calling upon 3s the industrial concern to show cause, on a date to be specified in the notice, as to why the management of the industrial concern shall not be transferred to the ri'construction bank or to its nominee (5) where an application is for the relief mentioned in sub-clause (iii) of sub-section (1), the high court shall grant an ad interim 40 injunction restraining the industrial concern from transferring or removing its machinery or other equipment and issue a notice calling upon the industrial concern to show cause, on a date to be speclfted in the notice, as to why such ad interim injunction shall not be made abaolute (6) where an application is for the: relief mentioned in sub-claum (iv) of clause (b) of sub-section (1), the high court shall put an ad interim order appointing a receiver in respect of the property autgll ed, charged, hypothecated, mortgaged or pledged and shall issue a notice 5 calling upon the industrial concern to show cause, on a date to be specifted in the notice, as to why the ad interim order appointing the receiver shall not be made absolute (7) if no cause is shown, on or before the date speciiled in the notice iuued by the high court, the court shall forthwith-10 (a) make an order for the sale of the property which haa been assigned, clarged, hypothecated, mortgaged or· pledge to the reconstruction bank or so much of such property, as would, on being sold, realise in its estimation, an amount equivalent in value to the outstanding dues of the industrial coneern to the reconstruct5 tion bank, together with costs of the proceedings taken under thii sectio~ (b) direct the lale of the attaehed property or the trantfer of the management of the industrial concern to the reconatructfon bani or to its nominee; and shally the proceeds of such sale for the discharge of the dues to the reconstruction bank and the residue of such proceed, if any, shall be made over to the person entitled thereto in accorc:ladce with his rights and interests; ! ' (c) make the ad interim injunction made under sub-section (5), and the ad interim order of appointment of the receiver made under sub-section (6), as the case may be, absolute (8) if cause is shown, the high court shall proceed to investigate the 'of 1908 claim of the reconstruction bank and the provisions· of the code ot --civil ~rocedure, 1908, shall, as far as practicable, apply to uch pro-30 ceedings '  ~ (9) on an investigation made under sub-8ection (8), the high court may pass an order,- (a) for t~ sale of the property which has been assigned, charged, hypothecated mortgaged or pledged to the reconstruction 35 bank or so much of such property, as would, on being !old, real1se, in its estimation, an amount equivalent in value to the outstanding dues of the assisted industrial concern to the reconstructfon bank, together with costs of the proceedings taken under this section; or (b) con1\rming the order of attachment and directing the sale 40 of the attached property, or the transfer of the management of the asslsted industrial eoncem to the reconstruction bank or to its nominee; or (c) varying the order of attachment so s to release  a ~ortion of the property from attachment  and directing the sale - of the remainder of the attach,d propertyi and shall the proceeds of such sale for the discharge of the dues to the reconstruction bank and the residue of such proceeds, ·if any t 5~ shall be made over to the person entitled ·thereto, in accordance with his rights and interests; (d) releasing the property fro~ attachment, if it is satlifted, that it is not necessaty in the interests· of the reconstruction bam;-or (e) confirming or vacating the injunction or the order for the 10 appointment of the receiver: provided that when making any order under clause '(d), the high court may maire such further orders as it thinks nec;eesary to protect the interest of the &!construction bank, and may apportion the costs of the proceedings in such manner a's it thinks fit: /j 15 provided further that unless the reconstruction bank intimates to the high court that it will not prefer an appeal against any order releasing any property from any attachment, such order shall not be given effect to until the expiry of the period fixed under sub-section· (12) within which an appeal may ~ preferred, or if an appeal is preferred, unless the ao court empowered to hear appeals from the decisions of the said' high court othetwi~e directs untn the appeal is disposed of : (10) an or~er of attarhment or !lllle of property under this section shall be carripd into effect as far as l>racticable in the manner provided in the code of civil procedure, 1908 for the attachment or sale of 25 propet"tv in 'the ex~ht;on of a derree a~ 'f the reconstruction bank werp the de~holder ill' an order undf'l' thio:; )';ection tran~e",fn~ th~ manal!e~ent of any ~ndu~trial cotl(~m tl') thp 'reron!:l+rtlction bank n1' to ;ts nominee shall be earried into effe~t ~!! fa1' it';; may be '01"aeticable in the mannerprovtded 30 in the code of civil procedure, 1908 fnl' thl'! "ossession of immovable pl'~rtv or the deliverv of movable l>l'onertv in the execution of a decree, as if the reconstruction bank or its nominee were the decreeholder ',  ,-,_, r , ! (u) anv party ae~rie~ by an order un~er sub-section (3) sub- 35 seetlon (7) 01' sub-section (9) mav within thl1'tv davs from the date of the order prefer an appeal to the court empowered to hear appeals from the decisfonc:; of the 'hicyh court which tlafl<lt'!d the o1"der and the appeuate court may, after hearinrt the parties pass such orders as it thtnksproper (13) nothin~ in this section shall be constrned where proceedings for4o uquidatfon in respect of an industrial eonce,"" hhve commenced before an application is made uniter sub-seetion (1) a~ \7,lvin9' to the reconstruction bank any preference over the other creditors of ,tbe fndustr:liil ~c8m not conferred on it by mly other law  , 41 (1) where a person has offered any property as 'security, '\yhether primary or collateral, for any assistance given by the reconstruction bank to any industrial concern, or to such person, and a default has been committed by the industrial concern 5 or by such person in the payment of any dues of the reconstruction bank or in meeting any obligation in relation to the assistance given by the reconstruction bank to the industrial concern aforesaid, the reconstruction bank shall have the right to take over the management, or possession, or both, of the property so offered as security, and 10 shall have the right to transfer by lease or sale the property aforesaid for the purpose of realising its dues power at beconstrw:-·tion bank relatin, to property offered as primary or collacteral security (2) any transfer of property made by the reconstruction bank, in exercise of the powers conferred on it by sub-section (1), shall vest in the transferee, the rights in or in relation to the property transferred is as if the 'transfer had heen made by the owner of such property (3) where any action has been taken t1',der the provisions of subsection (1), costs, charp,es and expense!! which in the opinion of the reconstruction bank, h!lve been properly incurr",d hy it als incidental lzo them!to shall be recoverable out of the money received by the reconstruction bank by the sale or lease of the property referred to in subsection (1), and· shall in the absence of any contract to the contrary, be held by it in trust, to be applied, firstly, in paymept of· such com, charges and expenses and secondly in the discharge of the dues 85 of the reconstruction bank and the residue· of the money so received shall' be paid to the '''person entitled thereto in accordance with the rights and interests   _' 1 of 1956 (4) the reconstruction bank mav fnstead of exercisin~ the powers conferred on it bv sub-section (1) ap-olv for the sale or lease of the -or'opertv"referred to in sub-section (1) or for anv other relief to the so hieh court within the local limits of whose jurisdiction the property aforesaid is situated snd, thereupon the provisions of section 4{) shan without preiudice to the p:r:ovisfons of section 69 of the transfer of property act, 1882 apply thereto as if the property aforesaid were the 35 properly referred to fn section 40, and powers shall be exercisable by the hi~h court accordingly 42 (n when the manallement of an industrial concern fs taken over by the reconstt1lction bank, that bank mav bv order, notified in the official gazette appoint as many persons as it thinks ftt-1 of 1956 (a) in anv case in which the industrial concern is a company, as defined in the companies act, 1956, to be the directors of that industrial concern; or (b) in any other case, to be the admini!ftrator of thsat indmrtrial concen'n 45  (2) the power to apooint  directors or adminf':'!trators under thfs section inc!ludes the power to apnoint any fndividwll finn or body rorpora~ to be the man8~r of tlle industrial conrpm on such terms and cotlditionsa~ the re"onstruction bank may think fit poorei' of recon b!udion baot to ~t ciirecton or admldjatratorso( an industrial concen when ~ meat thereo:i :fa taken over  (3) for the removnl of doubts it is hereby declared that tht! power' to mmoint directors administrators or manager~ includes the power to so remove or' replace the person 9(", br'pofnted (4) nothing in the companies act, 1956 or in any other law for 1 of 1956 the time being in force or in any instrument relating to the 0 indljbtrial concern shall, in so far as it makes, in relation to a direct~r, any provision for the holding of any share qualification, age limit, restriction on tht" number (if directorships, retirement by rotation or removal 5 from office, apply to any director appointed by the reconstruction bank under this section  43 on the issue of a notified order under section 42-meet of notified order under section 42 (a) if the industrial concern is a company as defined in the companies act, 1956, all persons holding office 88 directors of the 10 1 of 1918 industrial concern, anod in any otheu' case, all persons holding any office having the 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 oftlces as such; (b) any contract of management between the industrial concern 15 and any director or manager thereof holding office as such immediately bt"fore the issue of the notified order shall be deemed to have terminated: (e) the directors or administrators, appointed under section 42, shall take 'such steps as may be necessary to take into their custody 20 or under their control, the property, effects and actionable 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 ot' the notified order; 25 (d) the directors appointed under section 42 shall, for all purposes, be the directors of the industrial concern, duly constituted und~r the companies act 1956, and such directors, or, as the case 1 of 1956 may be, the administrators, appointed under section 42, shall alone be entitled to exercise -all the powers of the directors, or, as go the ca9p mlly be of the persons exercising powers of superintendence direction and control of the industrial concern, whether such powers are derived from the said act or from the memorandum or articles of association of the industrial concern or from, any other source whatsoever 35 44 '(1) subject to the control of the reconstruction bank the directors or as the case may be, the administrators appointed under section 42, shall take such steps as may be necessary for the purpose of efticientlv managing the busfne'ss of the industrial concern and shall exercise such power" an~ have such duties as may be prescribed powers and dutiee of directors tnd administrators (2) without preiudice to the generality of the powers vested in th'?m under sub-section (1) the directors, or as the case may be, the administrators appointed under section 42, may, with the previous approval of the reconstruction bank, make an app1ication to a court far the purpose of cancelling or varying any con4:ract or agreement entered 4, into, at any time before the issue of the notifierl order under liection 42, between the industrial concern and any other penon, and the court may, if satisfied after due inquiry that such contract or agreement had been entered into in bad faith and is detrimental to the interests ot' the ~ indust:rlal concern, make an order cancelling or varying (either uncan- 50 ditionally or subject to such conditions as it may think ftt to impose) tbatcontract oraareement and the contract or agreement shall have eftect accordingly )lu right to 45 (1) notwithstanding anything to the contrary contained in any 5 contract or in any law for the time being in force, no  managing or whole~time director or any other director or a manager or any person in charge of management of an industrial concern shall be entitled to any compensation for the loss of office or for the premature termination, under this act, of any contract of management entered into by him 10 with such concern compen~ sation [or tel1niution of contract ot managing director, etc (2) nothing contained in sub~section (1) shall affect the right of any such managing or whole-time director, or any-other director or manager or any such person in charge of management to recover from the industrial concern, moneys recoverable otherwise than by way of 15 such compensation applica  tion of act 1 of 1956 u (l) where the managem~nt of an industrial concern, beini a company as defined in the companies act, 1956, is taken over by the reconstruction bank, then, notwithstanding anything  contained in the said act or in the memorandum or articles of association of such con- ao cern,-(0) 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; (b) no resolution passed at any meeting of the shareholders of such concern shall be given effect to unless approved by the recon~ struction bank; (c) no proceeding for the winding up of such concern or for the appointment of a receiver in respect thereof shall lie ill any cclurt, except with the consent of the reconstruction bank 30 (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 central government may, by notification in the official gazette, specify in this behalf, the of 1916 companies act, 1956, shall continu~ to -apply to such concern in the s5 same manner as it applied thereto before the issue of the notified order under section 42 t 41 where the management of an industrial concern not being a of 196fl company as defined in the companies act, 1956, is taken over by the reconstruction bank, no suit or proceedings for dissolution or for 40 partition shall, in so far as it relates to that industrial concern, lie in any court or before any tribunal or other authority except with the consent of the reconstruction bank restriction on filing of suits for dissolution, etc, of an industrial cooccrn notbeinc a com pany when ita mana,  ment is taken  48 no proceeding for the appointment of any official 'uai&dee ' or receiver in relation to any industrial concern the management of which has been taken over by the reconstruction bank shall lie in 'any coun except with the consent of' the reconsu-uction bank ofttcial assi&ijoi orr&-ceiverncn to be appointed without the coil88jlt oube ~ struction bank power olcentral governmentto ii'8llt relief in the cue of certain uslated indul_ trial concend 49 (1) the central government may, 1f it is satisfied on 'an application 5 made to it by the reconstruction bank thllt it is necessary so to do for the purpose of reconstructing, reviving or rehabilitating any assistediadustrial coa  cern, declare by notitication in the official gazette, that the operation of an or any of the contracts, assurances of property, agreements,' settlemcots, awards, standing orders or other instruments in force (to which such assisted 10 industrial concern is a party, or which may be applicable to such assisted industrial concern) immediately before the issue of such notified order, shall remain suspended or any rights, privileges, obligation and liabilities accruina or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such maj:lilcr as may be specified in 15 the notified order (2) the notified order made under sub-section (1) shall remain intocce, in the first instance, for a period of two years, but the duration of such order may be ,e~tended from, time to time by a· further notified order by a period, not exceeding two years at a time: ~o provided that no such order shall in any case remain in force for more than eight years in the aggregate from the date of issue of the first notified order (3) any notified order made under sub-section (1) shall have effect, notwithstanding anything to the contrary contained in any other law, bjcee- 25 mentor instrument or any decree or order of a co\lit, tribunal, officer or other aut40rity or of any submission, settlement or standing order (4) any remedy for the enforcement of any right, privilege, obligation or liability referred to in ~tion (1) and suspended or modified by notified order made under that sub-section shall, in accordance with the terms so of that notified order, remain suspended, or modified, and all proceedinp relating thereto pending before any court, tribunal, officer or other authotity sh811 accordingly remain stayed or be continuedsubject to such adapations, so, however, that on the notified orders ceasing to' b,ave effect-')'   (a) any right, privilege, obligation or liability so remaining sus· 35 pended or modified shall become revived and enforeeable as if the notified order had never been made; (b) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceeding became stayed (5) in computing the period of limitation for the enforcement of any right, privilege, obligation or liability referred to in sub~ection (1), the period during which it or the remedy for the enforcement thereof, remained iui~nded ahall be excluded (6) durias me pcriog ot operation of the notified order maoe uddor :$uboaction (l ),  the central government may, if satisfied that it isneceasuy 80 to do in the public interest,- --(a) lor the r~onstructiod,revivalor rehabilitation of an assisted 5 industrial concern; or (b) for the proper management of the assisted industrial concern; or (e) for sealing down the liabilities oj the assisted industrial concern, -0 the financial condition and other circumstances of the assisted in-10 dutriaj concern are such that such scaling down is necessary, authorise the reconstruction bank to prepare a 9cheme- ' (;) for, the reconstruction, revival or rehabilitation of the a~sisted industrial concern; or (ii) for scaling down the liabilities of the assisted industrial concern; i 5 or z dition tft (iii) for the amalgamation of the assisted industrial concern with any other industrial concern (refetted to in this section as the 4'tr~eree' industrial concern"), i: (7) the scheme referred to in sub-section (6) may contain, provisiodj for 20 all or any of the following matters, namcly:-(a) the constitution, name and registered office, the capital, assets, powers, rights, interests, authorities and privileges, the liabilities, duties and oblig~tions of the assisted industrial concern on its r~onstruction, or, as the case may be, of the transferee industrial concern; (b) in the case of amalgamation of the assisted industrial concern, the transfer to the tran9f~ree indusfrial concern of the business, properties, assets and liabilities of the assisted industrial concern on such terms and conditions as mny be specified in the scheme; 30 35 (e) any change in the board of director9, or the appointment of a new board of directors, of the assisted industrial concern on its reconstruction, or, as the case may be, of the transferee industrial concern and the authority by whom, the manner in which, and the other terms and conditions on which,  such change or appoihtment shall be made and in the case of appointment of a new board of directors or' of any di~tor, the period for which such appointment shall be made; (d) the alteration elf the memorandum und articles of association of the assisted industrial concernod its reconstruction, or, as the case may qe, of the transferee  industrial concern for the purpo$e of altering the c;apitai thereof or for such other purposes as may be necessary to give e1fect to the reconstruction or amalgamation;  (e) subject to the provisions of the scheme, the continuation by or against, ·the· assisted industrial concern on its reconstruction or, as the case may be, the ttansferee industrial concern of any actions or proceedings pending ag~inst the assisted industrial concern immediately before the date of the notified order made under sub-section (1); 45 (f) the reduction of the interest or rights which the members and otber creditors have, in, or against,' the assisted industrial concern before its reconstruction or amalgamation to such extent as the reconstructioo babk considers rlecestary in the interest of the recoliatruction, ~ •• viva! or rehabilitation' of the assisted iddustrial concern or for themald~ tenance of the business of the assisted industrial conccrn; , (g) the payment in cash or otherwise to the members and other creditors in full satisfaction of their claims-5 (i) in respect of their interests or rights, in, or against, the assisted industrial ~oncern before the reconstruction or amalgamation; or (ii) where their interests or rights aforesaid, in, or against, the assisted industrial concern has or have been reduced under 10 clause (f) , in respect of such interests or rights as so reduced; (h) the vesting of controlling interest, in the reconstructed industrial concern, in the central government or its nominee either by the appointment of additional director or by the allotment of additional shares; (i) the allotment to the members of the assisted industrial concern, 15 for any share or shares held by them therein before its reconstruction or amalgamation [whether their interest on such shares has been reduced undcrclause (i) or not], of shares in the assisted industrial concern art its reconstruction, or, as the case may be, in the transferee industrial concern and where any member claims payment in cfth and not auotment izo of shares, or where it is not possjble to allot shares to any member, the payment in cash to those members in, full satisfaction of their claims,-(i) in respect of their interest in shares in the assisted industrial concern before its reconstruction or amalgamation; or (ii) where such interest has bcen reduced under clause (j), in 25 respect of their interest in shares as so -reduced; (j) the continuance of the services of such of the employees of the assisted industrial co_ncern as may, be specified in the scheme, in the assisted industrial concern itself on its reconstruction, or in the transferee iudustrial concern on such terms and conditions as may be speci- 30 fled in the scheme; (k) notwithstandinj anything contained in clause (j), where any employees of theassisfed industrial concern wl10se services are proposed in the draft scheme referred to in sub-section (2), have, by notice in writing given to the reconstruction bark at any time before the expiry of 35 one month next following the date on which the draft scheme is sent to the assisted industrial concern, intimated their intention of not becoming employees of the assisted industrial concern on its reconstruction or' in the trallsferee industrial concern, the payment, to such employees,  and to ?ther ~mployees whos~ services h!1~e not been continued in the assisted 40 iddustrtal concern on lis reconstructton or in the transferee industrial concern, of compensation, if any, to which they are entitled under the industriajdisputes act 1947, and such pension, gratuity, provident fund and other retirement benefits ordinarily admissible to them under the rules or authorisations of the assisted industrial concern as in force imme- 45 diately before the date of its reconstruction or amalgamation; (l) any other terans and conditions for the reconstruc"tion or amalgamation of the assisted industrialconcerp; (m) such incidental, consequential and supplemental mattera ii  necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out ( 8) (a) a copy of the scheme prepared by the reconstruction bank 5 shall be sent, in draft, ,to the assisted industrial concern and also to the transferee industrial concern and any other industrial concern concerned in the amalgamation for suggestions and objections, if any within such period as the reconstruction bank may specify for this purpose; (b) the reconstruction bank may make such modifications, if any, in 10 tho draft scheme as it may consider necessary in the light of the suggestions and objections received from the assisted industrial concern and as also from the transferee industrial concern, and any' other industrial concern' concerned in the amalgamation and from any members or other creditors of such of those industrial concerns and the transferee industrial concern: 15 provided that where the transferee industrial concern is a company, the scheme aforesaid shall be laid before such company in the general meeting for the approval of the scheme by its members and no such scheme shall be proceeded with unless it has been approved, with or without modification, by a special resolution passed by the members of such company 20 (9) the scheme shall thereafter be placad before the central government for its sanction and the central government may sanction the scheme without any modifications or with such modifications as it may consider necessary, and the scheme as sanctioned by the central government shall come into force on sucb date as the central government may specify in this behalf: 25 provided that different dates may be specified for different provisions of the scheme (10) for the purpose of assisting it to exercise the powers conferred on it by sub-section (9), the central government may constitute an advisory committee consisting of such officers of ,the central government, reserve bank, go state bank, public financial institutions and n,ationaiised banks, having knowledge of, or experience in, one or more of the following matters,namely:-(a) -industry and industrial sickness; (b) finance and banking; (c) industrial relations; (d) law,  ' 35 as it may think fit (11) the sanction accorded by the central government under $ub-section (9) shall be conclusive evidence that all the requirements of this scheme relating to the reconstruction, or, as the case may be, amalgamation, have been complied 40 with and a copy of the sanctioned scheme certified in writing by an officer ot the central government to be a true copy thereof, shall, in all legal proceedings (whether in appeal' or otherwise) be admitted as evidence to the same extent as the original scheme (12) on and from such date of tbe coming into operation of the scheme or 45 any provision thereof, the scheme or such provision shaji be binding on the assisted industrial concern or as the case may be, on the transferee induatrial concern, and any other i~du;trial concern concerned in the amalpmation and ,also on illl the, members and oilier creditors and employees of each of those assisted industrial concerns and of the transferee industrial concern, and on any other person having any right or liability in rciution to any of the assisted industrial c()dcerns or the transferee industrial concern including the trustees or· ether persons managing, or connected in any other manner with, any provident fund 5 or other fund maintained by any of those industrial concerns or the transfcre~ industrial concern (13) on and from such date as may be specified by the central government in tbis behalf, the properties, and the assets of the assisted industrial concern shall, by virtue of, and to the extcnt provided in the scheme, stand transferred 10 to, and vest in, and the liabilities of the assisted indu~trial concern shall, by virtue of, and to the extent provided in, the scheme stand transferred to and become the liabilities of, the transferee industrial concern (14) if any difficulty arises in giving effc:t [0 the provisions of the scheme, jhe central government may, by order, do anything not inconsistent with such 15 ,,-provisions, which appears to it to be ncces9ary or expedient for the purpose or reriloving the difficulty (15) copies of the scheme or of any order nlade under sub-section (14) shalj be laid before each house of parliament, as soon as may be, after the  scheme has been sanctioned hy the central government or, as the case maybe :lo the order has been ,made, (16) where the scheme is a scheme for amalgamation of the assisted industrial concern, any ~usiness acquired by the transferee industrial concern under the rcheme or under any previsions thereof shall, after the coming into operation of the scheme or such provision, be carried on by the transferee industrial ~5 concern, in accordance with the law governing the transferee industrial concern, subject to such modifications in that law or such exemptions of the 'transferee industrial concern from the operation of any provisions th~reof as the central , government, on the recommendation of the reconstruction bank, may, by notification iw'the official gazettc make for the purposes of giving full effect to the 30 scheme: provided  that no such modification or exemption shall be made so as to have effect for a period d more than seven years from the date of the acquisition of such business , (17) nothing in this sub-section shall be deemed to prevent the amalgama~ 35 tion with an assisted industrial concern by a single scheme of several industrial concerns in respect of each of which an order has been made under sub-section (1) of thi!l section power of high \i court to nu~ho­rise re-so (1) where any company, being an industrial concern, is being wound up by the high court, and the high court is of opinion that a scheme should be 40 'made for the reconstruction, revival or rehabilitation of such industrial concern, it may, by order, authorise the reconstruction bank to prepare, and submit to h, a scheme for such reconstruction,' reviva1 or rehabilitation of the industrial concern con8trll~_ lion bank to prepare s-:heme for reconstruction, etc, of (2) the reconstruction bank may, in pursuance of the order made by the 45 court under sub--section (1), prepare a scheme for the reconstruction, revival or rehabilitation of the industrial concern referred to in sub-section (1), and 'the s~heme so made may cootain all or any of the matters specified in sub--' rettion (7) of section 49: :'1du~1-trial concern· provided that no such scheme shall provide for the amalgamation or merger of the company in liquidation or of any undertaking owned by it with any other company or any other undertltking owned by such other company, except o'n the authority ofa special resolution passed by the members of that other com-5 pany (3) the· high court may if it is satisfied after considering the scheme prepared under sub-section (2), that the scheme ensures the reconstruction revival or rehabilitation of till? industrial concern which is a company being wound· up by ~e court; and such reconstruction, revival or rehabilitation 10 would ensure an increase in the production of goods needed by the community, approve the scheme with or without any modification and the scheme so approv  cd shall have effect, notwithstanding anything to the contrary contained in any other provisions of this act or any other law, or any agreement, award ,or other instrument for the time being in force 15 51 (1) where any pro~rty effects or actionable claims have been sold or leue4 in pursuance of any power conferred by section 39, section 40 or section 41 or where the management of an industrial concern is taken ovel by the reconstruction bank or its nominee or an undertaking or an industrial concern is amalgamated under section 49, the reconstruction bank or the administrator 20 or any director, or any other person authorised by the re~onstruction bank may, fof the purpose of taking into custody or control any such property, effects or actionable claims, may, request in writing the chief metropolitan magistrate or the district magistrate within whose jurisdiction any property or books of account or other documents relating to such property of effects or actionable 25 claims may be situated, or found, to take possession thereof, and the chief metropolitan magistrate or the district magistrate, as the case may be, shall, on such request being made to him,~ (a) take possession of such property effects or actionable claims and books of account and other documents relating thereto, and chief metropolitan magistrate and district magistrats to'bssist reconstruction bank in taking charge of property 30 (b) forward them to the reconstruction bank, administrator, director or other person, 8s the case may be (2) for the purpose of securing compliance with the provisions of subsection (1), the chief metropolitan magistrate or the district magistrate may take or cause to be taken such steps and use, or cause to be used, 9uch' f~rce as 35 may in his opinion, be necessary (3) no act of the chief metropolitan magistrate or the district magistrate don~ in pursuance of this section shall be called in question in any court or bef~re any authority  chapter ix miscellaneouseffect otthe acton other laws 52 the provisions of this act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained ~ any other law for the time being in fofce or in the memorandum or artlc1es of assoellrtfoa of in indu8trial eonc:elioor in any other instrumedt having 54 effect by virtue of any law other 'than this act 53, notwithstanding anything contained in the income-tax act, 1961, or the companies (profits) surtax act, 1964 or the interest-tax act, 1974, or any other enactment for the time being in force relating to tax on income, profits or gains, the reconstruction bank shan not be liable to pay income-tax, surtax, interest-tax, or any other tax in respect of-(a) any income, profits or gains accruing to the reconstruction assistance fund or any amount received to the credit of that fund; act 43 of 1961, act 7 of 19i14: and act 45 of 1974 not to apply to reconstruction bank (b) aily inc~e, profits or gains derived, or any amount received, by the reconstruction bank; and , (c) any interest collected by, or payable to, the reconstruction bank 10 in accordance with the provisions of the interest-tax act, 1974 54 no provision of law relating to winding up of corporations shall apply to the reconstruction bank and the reconstruction bank shall not be placed in liquidation, save by order of the central government and in such manner as it 15 may direct law relating to winding up not to apply to the , reconstruction bank 55 the reconstruction bank shall be deemed to be it bank for the purposes of the bankers' /books evidence act, 1981 act 180f 1891 to apply to the books  of the reconstruction bank 56 nothing contained in the banking regulation act, 1949, except the _prpvi9ions of section 34a and section 36ad, shall apply to the reconstruction bank certain provisions of act loof 1949 not to apply to reconstruction bank 57 no provision of the monopolies and restrictive trade practices act, 1969, in relation to the amalgamation, merger, modernisation or expansion of any undertaking to which part iii of that act applies, shall apply when such amalgamation, merger, modernisation or expansion of such undertaking takes place as a result of any sale, lease, purchase, amalgamation or merger in ilccord- 25 ance with the provisions of this act act 54 of 1969 not to apply' to the expansionor amalgamation of certain undertakings returns 58 the reconstruction bank shall ,furnish, from time to time, to the central government and the reserve bank such returns as the central government, or as the case may ~ reserve bank, may require delegation ot powers 39 thl board may, by general or special order, delegate, subject to such mditiolls and limitations, if any, as may be specified in the said order, to the executive committee or any other committee constituted under this act or to any director, officer or other employee of the reconstruction bank or to the 5 directors, administrators, officers, or other perftons authorised by the reconstruction bank to manage any assisted industrial concern or any undertaking owned by such assisted industrial concern, such of its powers and duties under this act as it may deem necessary 00, (1) without prejudice to the provisions of section 7, the reconstruclotion bank may appoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine their terms and conditions of appointment and service staff of the reconstruction bank (2} the reconstruction bank may, notwithstanding anything contained in any other law for the time being in force or in any contract, depute any of its 15 officers or other members of its staff to, or receive on deputation from, prescribed institutions on such terms and conditions as may be prescribed, and may also depute any of its officers or other members of its staff to any assisted industrial concern: provided that nothing contained in this section shall be construed as em-30 powering the reconstruction bank to depute to any prescribed institution or assisted industlial concern any officer or other member of its staff on any salary, emoluments or other terms and conditions of service which are less favourable to him than those to which he was entitled immediately before such deputation obligations as to fidelity and secrejcy 25 61 (1) the reconstruction bank shall observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, it shall not, except as otherwise provided in sub-section (3), divulge any information relating to, or to the affairs of, the assisted industrial concern, except in circumstances in which it is, in accordance with law or practices and usages, 30 customary among bankers, necessary or appropriate for the reconstruction bank to divulge such information  (2) every director, auditor, adviser, officer or any other employee of the reconstruction bank shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the second schedule 35 (3) the reconstruction bank may, for the purpose of efficient discharge of its fudctions under this act, collect from, or furnish to,-(a) the centra) government, 3801 1939 (b) the reserve bank (c) the stute bank, or any subsidiary bank within the meaning of 40 the state bank of india (subsidiary banks) act, 1959, or any nationalised bank, or any other scheduled bank, or any state cooperative bank or the development bank or other public financial institutions, or state level agencies or prescribed institutions or state financial corporations, such credit information or other information as it may consider useful for the 45 purpose, in such manner and at such times, as it· may think fit explanat;on-for the purposes of this sub-section the expression "credit information" shall have the same meaning as in clause (c) of section 45a of the reserve bank of india act, 1934, subject to the modification that the banking company referred to therein shah menn an 50 assisted industrial concern   < provident fund 61(1) the reconstruction bank shall constitute, for thebeneftt ot the omcers and other employees appointed under section 50 (as also for the officers and other employees whose services have been transferred to it under section 7) in such manner and subject to such conditions as may be '  prescribed, such insurance and provident fuhd as it may deem fit 5 (2) where any such insurance or provident fund·qqsbeen soconstitvted, the central government may declare that the provisions of' the pldvident funds act, 1925, shall apply to such fund as if it were a governm(f~t provident fund indeminity of 'directors 63 (1) every director shall be indemnified by the reconstruction 10 nank against all losses and expenses incurred by him in or in relation, to the discharge of his duties, except such as are caused by his ow:!l wilful act or default (2) a director shall not be responsible for any other director or for any officer or other employee of the reconstruction bank or for any loss 15 or expenses resulting to the reconstruction bank from the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the reconstruction bank or the insolvency or wrongful act of any debtor or any person under obligation to the reqonstructioo bank or any' thing done in good faith in execution of the duties of his 20 office or in relation thereto protection of actior taken in good faith under this act 64 no suit or other jegal proceeding shall lie against the recons~on bank, or any director, or officer, or other employee of the reconstructl(m bank or any other person authorised by the reconstruction bank, to discharge any functions under this act, for any loss or damage oaused or is 25 likely to be caused by anything which is in good faith done or intended to be done in pursuance of this act or any other law or provision having the force of law 65 chairmad, director, adviser and auditor and every other employee of the reconstruction bank shall be deemed to be public servants for the 30 purposes of chapter ix of the indian penal code 45 l'f 1860 chairman director, etc, to !be public servants 66 if in any application, return or statement or othet document made, submitted, furnished or produced for the purpose of obtaining any loan or advance or any other assistance from the reconstrucq9n ,bank any person makes a statement-35 (0) which is false in any material particular, knbwing it to !be false; or penalty for making false statement in applications for loans abel advances (b) which omits to &tate any material fact, knowing it to be materi~l; ,  , be shall be punishable with imprisonment for a term which may extend 40 to two years, and shan also be liab'le to fine offence by companies 67 (1) where any offence, punishab~e under section 66, has been ccmmltled by a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company' for the conduct of the business of the company, as well astbe company, sbad be deemed to be guilty of the offence and shall be liable to be proceeded against 'add punished accordingly: i ' provided that nothing contained in this sub-section shall render' any/ sueb person liable to any punishment, if he proves that the offence: was , committed without his knowledge or that he had exercised all due diligence to prevent the codlidission of such offence (2) notwithstanding anything contained in sub-section (1), when any offence punishable under section 66 has been committed by a company and it is proved that the offence has been committed with the consent 10 or connivance of, or is attributable to any neglect on tbepart ot, any director, manager, secretary or othet officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that oifemce and shall be liable to be proceeded against and punished accordingly , explanation-for the purpose of this section,-(a) "company" means any body corporate and incudes a firm or other association of individuals; and (b) "director", in relation to a firm means a partner in he firm 68 (1) the central government may, by notification in the official pow'e1'll ~o gazette, make rules to carry out the provisions' of· this act ' ~ate i (2) without prejudice to the generality of the foregoing power, such rules may provide for all or any ot the following matters, di!1lely:-lz5 (a) institutions and agencies in, and outside, india, payment of whose loans may be guaranteed, counter-guaranteed or indemnified by tho reconstruction bank as may be specjfied under sub-section (1) of section 18; - (b) institutions and agencies which may, be provided with the line 01 credit by the reconstruction bank for grant of loans and advances by them to industrial concerns as may be specified under clause (d) of sub-section (1) of section 18; (c) persons who may be appointed to act as the agents of the reconstruction bank as required by clause (q) of sub-section (1) of section 181 ,:;: i (d) borrowing of foreign currency from any sotp'ce, other than the source specified in sub-section (1) of section 23; 35 (e) the powers which may be exercised and duties which may 'be performed by any director or· administrator appointed' under , ub-section (1) of iection 44; (f) the manner in which and the conditions subject to which an insurance or provident fund may be constituted by the reconstruction bank required by sub-lection (1) of section 62; (g) any other matter which is required to be or may be prescribed (3) every rule made under this act shall be laid, as soon as may be after it is made, before each house of parhament while it is in session, for 45 a total period of thirty days which may be comprised in one session or in two or morc; successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the rule or both houses agree that the rule should not be made, the rule shall thereafter have dlcet only in luch modified form or be of no effect, as the case may be; 10, however, 5 that any luch modification or annulment shall be without prejudice to the validity of anything prev~ously done under that rule power of reconatruction bank to make rep1auods " (1) the board may, with the previous sanction of the central government, make regulations, not inconsistent with the provisions of this act and the rules made thereunder, to provide for au matters for which 10 regulations are necessary or expedient for the purpose of giving effect to the provisions of this act and of the rules made thereunder (2) in particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or- any of the fohowing ,matters, nllj!lcly:-15 (0) restrictions relating to the powers which may be exercised by the chairman in pursuance of the provisions of sub-section (2) of section 9; (b) the time and place at which the board shall meet and the rules of procedure (including quorum) which shall be observed by 20 the board in regard to the transaction of business at its meetings 8s required by bub-section (1) of section 14;   (c) (i) the constitution of the executive committee or other comuiittees and the functions thereof; (ii) the time and place at which such committees shall meet; and 25 (iii) the rules of procedure (including quorum) which shall be observed by each committee in relation to the transaction of business at ita meetings ~ required by section is; (d) fees and allowances which may be paid to the directors and member of 111e commi~ a~ required by sec1ion 17; so (e) conditions and limitations, subject to \yhich an industrial eoncern may enter into 1ldy kind of business as required by clause (f)of iu~on (,%) of section 19: l (1) the form and manner in which the oolance sheet and accounts of the reconstruction assistance fund shall be prepared as required 35 by sub:section (1) of section 29; (g) the form and the manner in which the balance sheet and accoun~ of 1he reconstruction bank shall be preplred as required by su~ section (1~ of section 32; (h) the duties, conduct, ~alaries, allowances and conditions of service of officere and other employees (whether employed on re~ basis or on contract) of the reconstruction bank and all those who are appointed for the management of any undertaking, the mana  5 ment of which has been taken over; and (i) any other matter which is required to be, or may be, provided for by regulations " (9) the central government shall cause every regulation made under this act to be laid, as soon as may be after it is made, befl)fe each houle of parha-10 ment, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the suc<:e8sive seisions aforesaid, both houses agree in making any modification in the regulation, or both house agree that the regulation should not be made, oe regulation shall 15 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 regulation 70 if any difficulty arises in giving effect to any provisions of this act, the central government may, by notification in the official gazette 80 remove the difficulty: provided that no such notification shall be made after the' expiry of - period of two years from the appointed day 71 the enactments specified in parts i to iii of the third schedule to this act shall be am~ded in the manner directed in the first column thereof a5 and such amendments shall take effect on the dates specified in the second column of that schedule amead ment of certahl enaetmenta " 71 in every act,rule or regulation in fdrce on the appointed day, for the words "industrial reconstruction corporation of india limited", wherever they· occur, the words "industrial reconstruction bank of india" shall , so substituted  '  <"-'t~ subetitu· tionm acta, ru1ea or ftiula· tloiii of dio recoil-iti'uctiod bantta plaae of die cor pcnuciil  the first schedule (see section 37)·d!x:laration rill"erred to in sec'1'ion 'n or thij imtnrs'i'rial ridoomltrttcl'ioif bank 01' india act, 19m bank of india, as specified in the annexure hereto i/we agr~ that the immovable properties specified in the said annexure shall form a security for 'the said assistance and iiwe agree that ·the dues arising out of such assistance  shall, on and from the date of execution of' these presents, be a cbarge on the said properties for the recovery of the dues of, the 5 ibid reconstruction bank execution by the parties « \ 1 signed and delivered by • ~ -  • (party recciwg the assistance ) 2 signed and delivered by • (the concerned person fumilh- 10 ing guarimtee / collateral security ) 3 sign~ by the duly authorised official of reconstruction bank ' ,  , '(note:-&rike out whichever is not applicable)  'the second schedule , (see section 61) declaration of fidelity and secrecyi,  ~, do hereby declare that i will faithfully, truly and to the best of my skill and ability, execute and perform the dutiel required of me as the chairman, director, member of  committee, auditor, adviser, officer or other employee of the reconstruction bank ~o of india and which properly relate to the office or position held by me in or in " rela~on to the said reconstruction bank i further declare that i will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the industrial' reconstruction bank of india:l5 or to the affairs of any person having any dealing with the said racon- struction bank, nor will i allow any such person to inspect or have access to any books or documents belonging to or in possession of the aaid reconstruction bank and relating to the business of the said recon-ittuction bank or the busine~ of any person having any dealing with so the said reconstruction bank , (signature) signed before me '-- the third schedule (see section 71) amendments of certain enactmentspart i "~', ,  5 amendments ronre resbrve banlc of indla act; 1934 (2 0, 1934)ameudmcmta 10 (1) date on which amendme n ts shall take effect (2) 1 in section 2, after clause (elli), insert the following th e date of establishclause, namely:-ment of !be recons-'(cll) "reconstruction bank" means the industrial truction bank reconstruction bank of india establbhed under 15 section 30£ industrial reconstruction bank: of india act, 1984' 2 in tection 17,-do (0) in clause (40), after the worda ·,the exim bank", insert the worda "or the reconstruction bank'~; 20 do (b) in clause (4-1), after the words "exim bank", insert the worda "of' reconstruction bank"; do (c) after clau~c (41), insert the following clause, namely:-"(410 the making to the reconstruction bank of loans and advabccs-(0) repayable on demand or on the expiry of a fixed period not exceeding ninety days, from the date of such loan or advance against the security of stocks, funds and securities (other thad immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in india; or  35 (b) against the security of bills of exchange or promissory notes, arising out of bona flu commercial or trade transactions bearing two or more good signatures and maturing within five years from the date of luch loan or advance"; do (d) in clause (i~b), after the words "the exim bank", insert the word$ "or the recoditruc tion bank"; 3 in section 42, in sub-clausci (e) of the explanotion do below the proviso to sub-section (r), after th, words "or from the exim bank", msert the 'words "or from the recons-45 truction bank" -- -- ------------------------ ------------date on which amendments shall t~ke effect (2) | the             ||-----------------|| establishment   || of              || the reconstruc- || tion            || bank           |4 in section 46c, in clauses (e) and (d) ofsub-section (ii), after the words "&tim banku wherever they oa;ur, insert the worda "or the reconstruction bank, as the case may be,"  part ii amendment to nle industlual disputes act, 1947 (14 of 1947)amendment date on which amendment shall take effect in section 2 'ojn clause (bb), after the words "export-import bank of india, u insert the words uthe industrial reconstruction bank of india," the date of establishment of the industrial reconstruction bank of india  partm amjcndments to the banking regulation n:rl 1949 (10 or 1949)amendments 25 (1) date on which amendments shall take effect (2) so the date of establishment of the reconstruction bank i id section 5, after [lause (1ft), buert the following clause, namely:-(i,) "reconatructlon bank" means the industrial reconstruction bank of india established under ectlon s or the industrial rccoditructioll bank or india act, 1984,", do s in lectlon 18, in the &pl_,,,,, in bub-clause (ia") of clau,e (ii), ' af\er tlle words "or from the exim bank", insert the worda "ortiom the reconstruction bank" s5 do 3, in section ma, in lub  cction (,), after the words "the exim badk" insert the worcda "the reconstruction bank", 4 in section s6ad, in sub ection (3), after the words "the eldm do bank" idlert the words ''the reconstruction dauk" 5 in section ,56, in ub-cl  e (ii) of clause (ii) of the &,iiimfidji do under clause u), after the words "the edm bank", insert the words "the recomtructlon bank", the bill seeks to convert the industrial reconatruction corporatioa of india limited (which was established 81 a company under the companies aot, on 12th apru, 1971, for tl}e purpose of rehabilitating and reconstructing ailing industrial concerns) into a statutory corporation, to be known as the industrial reconstruction bank of lddia (hereafter referred to as the reconstruction bank) the conversion of the said company into a statutory corporation has become necessarx-(i) in order to overcome the inherent difilcultiea which have been faced by the company during the last twelve yeara of ita existence, which have tended to inhibit its efforta to rebabilitate and reconstruct sick industrial concerna, and  1 (ii) to invest the reconstruction bank with eftective power to tackle and contain the growing malaise of indust~81 sickness 2 the salient features of the bill at'6-(i) the establishment of the industrial reconstruction bank of india which shall be wholly: owned 1:>y the central government, and the transfer thereto of the wldertaking of the company known sa ,the industrial reconstruction corporation of india limited; : , (ii) the chairman of the industrial reconstruction bank of india  (who shall also fwlction as the managing director thereof) shall be appointed by': the central government; (iii) the reconstnlction bank will function 88 the principal credit and reconstruction agency' for industrial revival and w1ll coordinate the work of other institutions engaged in industrial revival activities besides, the recopstruction bank will also assist and promote industrial development and rehabilitation of ind\j8trial concel'ils ; ,  (iv) in regard ,to assisted sick industrial units, the jteconstruction bank shall have powers to take over the management; lease out or sell the undertaking as a running concern; prepare schemes for reconstruction by scaling down the liability and submit such schemes of merger or amalgamation fal' approval of the central government and to apply to the central government for the sub-pension of all or any contracts, agreements, settlements, awards, etc the reconstruction bank will also have the power, if directed 80 to do by the high court, to submit schemes for recoditruction of the companies in liquidation or, for their amalgamation with healthy concenu and to submit such schemes to the high court for approval; (v) the central oovemmen( ~an have powers to give to the reconstruction bank such directions in matters of policy invo}ying public interest as it may think fit 3 the notes on c~usea appended to the bill explain in detail the various provisions of the bill pranab mukherjee nbw del~; the 2"d j1!ly, 19&4  president's recommendation under articles 117 and 274 of  the constitution of india[copy of letter no fl (13)if-ll/81, dated 2nd july, 1984 from shri pranab kumar mukherjee, minister of finance to the secretary-general, lok' sabha] the president, having been informed of the subject matter of the proposed industrial reconstruction bank of india bill, 1984, recommends  under clause (1) of article 117 read with clause (1) of article 274 of the constitution, 'the intro'cluction of the bill in lok sabha and also ,ecommends to lok sabha under clause (3) of article 117 of the constli tution the consideration of the bill clause i-this clause deals with the extent and commencement 01 the act t::lause 2:-this clause seeks to define certain expressions in the bill speclal mention may be made about the definition of the expression industrial concern the said expression has been so defined as to ensure that almost all types of industries fall within the purview of the bill clause 3-this clause seeks to provide for the establishment of the industrial reconstruction bank of india (to be known as the reconstruction bank) with head office at calcutta and also for the establishlllent of its office'i and branches in and outside india claw ie 4-' this clause deals with the share capital and the owner-5hip of the reconstruction bank jt provides for an authorbed capital of rs 200 crores with initial paid up capital of rs 50 crores further, the issued capital shall be wholly subscribed by the central government clauses 5 to 8-these clauses provide for the trallsfer of business of jndustrial reconstruction co~poration of india limited (irel) to the reconstruction bank and other consequential provisions clauses 9 and 10-these clauses provide for the management of the reconstruction bank clause l1-this clause deal  with the disqualification of membership of the board of directors clause 12-this clause deals with the terms of office, salaries and allowances of the, chainnan  clause l3-this clause deals with the disclosure of interest direct or indirect, of the directors clause 14-this clause deals with the time and place of the meetings of the board of reconstruction bank and the rules and procedures in regard to transaction of business of the meetings clause is-this clause empowers the board to constitute executive committee nr other committees for such purpose as it may think fit clame 16-this clause provides that no act or proceeding of the -board or of any executive committee or other committees shall be invalid on the ground of existence of any vacancy or difficulty in the constitution of the board or difficulty or di"qualification of a member of the board of executive or other committee  clause 17-this clause seeks to provide for the payment of fees and allowances to directors and members of the executive committee or other  committees clause 18-this clause deals with the object and business of the reconstruction bank and gives details of the functions which may be undertaken by the reconstruction bank apart from its normal function, 1,iz:, to act as the principal credit and reconstruction agency for industrial revival by undertaking modernisation expansion re-organisation, diversification or rationalisation of industries and by coordinating similar work of other institutions, the reconstruction bank shall a]so assist and promote industrial development and undertake rehabilitation of industrial concerns by providing or procuring assistance and operating schemes for the same and for attaining the said objectives granting loans and advances (including working capita]) to any industrial concern or subscribing to or purchasing or underwriting the issue of stocks, shares, bonds or debentures of any industrial concern or converting the dues in rc!spect of such loans or debentures into shares of industrial concerns, to i~sue guarantee, counter guarantee in respect of: (i) loans raised by industrial concerns from banks, public fin-,incial institutions or any other prescribed institution or agency in or outside india; (ii) deferred payments due from an industrial concern; (iii) the purpose of obligation to any contract undertaken by the incjustrial concern a number of other functions are proposed to be entrusted to the reconstruction bank, such as (a) subscribing to or purchasing or underwriting the issue of stocks, shares, bonds or debentures to any institution; (b) providibg credit to any state level agency or other institution for grant or loans and advances to industrial concerns; (c) providmg or obtaining credit from other public institutions or banks; (d) grant of loans to, or to furnish guarantees on behalf of industrial concerns: (e) providing infrac;tructural facilities and raw-materials; (f) providing machinery or other equipments on lease or hire iurchase basis; (g) providing eonsultancy and bank services in or outside india related to reconstruction and development of any industrial concern; (h) providing technical, managerial, legal, administr-ative and marketing assistance; (i) to provide schem~ for merger ama]gamation or reconstruction of industrial or busines's concerns or undertakings: (j) undertaking research and survey for evaluating or dealing with marketing or investment and, (k) acting as an agent to the central or state government, reserve bank, state bank • scheduled bank, etc cla11se 19-this clause rrohibits re('onstruction bank from entering into any kind of business with any industrial concern of which any of the directors of reconstruction bank is a proprietor, partner, director etc or one or more 'directors (if reconstruction bank together hold subatantial interest however, the restriction is not applicable to a directornominated by government, government company, reconstruction bank or by a corporation established by any law or is elected by the aforeljaid bodies pursuant to shares beld by any of them clauses 20 and 21-while clause 20 seeks to provide for loans by' the central government, clause 21 provides for borrowings and accepmnce of deposits by the reconstruction bank like other financial institutiods, reconstruction bank would be abl~, to borrow from the open market throub'h the issue of bonds and debentures besides it will also enjoy the requisite ,accommodation from the reserve bank against trustee securities and lodgment of bill!! and promissory notes arisins out of bolul fide ~rcial or trwe transactions in addition to the above, reconstruction bank may borrow from such other authority,'organisation institutions or trusts in india as approved by the central government as also may accept deposit repayable after the expiry of not less than one year with the approval of reserve bank cliluse 22-this clause deals with the power of the reconstructioa bank to transfer its rights and interest in respect of any loan or advance granted or any adlount recoverable by it clauses 23 and 24-clause 23 enables the reconstruction bank to borrow foreign currency for the purpose of granting loans and advances with the consent of central government from bank or financial institutiona in any foreign country and clause 24 enables it to raise resources by acceptance of gifts, grants, donations, etc either from government qr from any" other source clauses 25 to 30-these clause,s inter alia deal with the establishment of a special fund to be called the reconstruction assistance fund which would be utilised mainly for financing of any loan or advance or entering into any arrangement under clause 18 which are unlikely to be supported by the reserve bank, scheduled banks and financial institutions the account of the reconstruction assistance fund would be maintained separately and· would also be audited by the statutory auditors and an annual report on its operations would be submitted to the central government these provisions are similar to the provisions udder industrial development bank of india act, 1964 clause 31-this clause seeks to provide for the maintenance ai peral fund to which au other income earned by the reconstruction bank would be aredited the general fund will be uti1i!led by the reconstruction bank for its normal operations clause 32-this clause seeks to provide for the preparation of balance sheet and profit & los'\ account of the reconstruction bank and closure or books and accounts as on 30th june each year clause 33-this clause provides that the reconstruction bank may est  lish a reserve fund to which may be transferred such funds  as it may deem fit out of the annual profit acct jing to the general fund it further provides that reconstruction banle: shall after making the provisions for bad and doubtful debts, depreciation of assets a:nd for all other matters which are usually provided for by the bankers and for the transfer of the balance of the net profits to the central government clause 34-this clause provides for the accounts of the reconstruction sank being audited by the auditors duly qualified to act u such under the companies act, 1956, to be appointed by the central government the central government may also, at any time appoint the comptroller and auditor ~ rat of india to examine and report upon the accounts of the reconstruction bank  c'ai~ie 3s  this clau'se makes a saving provjslon to ensure that the provi  sions contained in chapter vii [except as otherwise provided in sub-sectioa ( 4)] of section 29 shall not apply to the reconstruction assistance fund cuuue 36-this clause deals with the power of the reconstruction bank to impose conditions on industrial concerns for grantin, assistance for the purpose of protecting the interest of the reconstruction bank and for securing that the assistance granted is put to the best use by the industrial concem this clause further enables the reconstruction bank to appoint one or more aominee non-rotational director on the board of such industrial concern any provision regarding qualification, age limit, number of directorships\ removal from office of directors and such like conditions contained in the memorandum, articles of association of the industrial concern or in any <>ther law relating to industrial concern, shall not apply to such directors appointed by the reconstruction bank clause 37-this clause deals with the creation of a charge on the property of the industrial concern or'thc person offering immovable properties as collatetal security to secure assistance from the reconstruction bank this clause enables the reconstruction bank to have a charge both as primary security and as collateral security for the assistance sanctioned to the industrial concern the person seeking th~ assistance or offering any immovable property as collateral security for such assistance will be required to make a written declaration which wijl be registered with the concerned registrar of assurances such liec1aration shall, inter alia, contain the particulars of the assistance granted and the particulars of the properties offered as security or collateral security lor such assistance in case any fresh security qf immovable property is offered for the assistance, fresh decjaration shan be executed by the industrial concern or the person offering suc'l property as collateral security, as the case may be cl4use 38-this clause deals with the power of the reconstruction bank to call for repayment before the agreed period if false or misleading information ift any material particular have been given in the application for the assistance or it the 'industrial concern had failed to comply with the terms of its agreement with the reconstruction bank or if there is r~asonable apprehension that the industrial concern is unable to pay its debts or that proceedings for liquidation have been or may be commenced against the industrial concern or if the property assigned, charged, hypothecated, mortgaged or pledged to the reconstruction bank as security for the assistance is not insured and kept insured to the satisfaction of tlte reconstruction bank or if such property ms depreciated in value to suchan extent that further security to the satisfaction of the reconstruction bank should be given and such security has not been furnished or any machinery, plant and10ther equipment whether, forming part lof the security or otherwise, is removed without the permission of the reconstruction bank from the premises of the industrial concern or for any otber reason to protect the interest of the reconstruction bank  clause 39-this clause deals with the rights of the recodstruction bank in case of default it enables the reconstruction bank to take over the management, or possession, or both, of the industrial concern as well as the right to transfer by way of lease or sale of the property assigned, charged, hypothecated, mortgaged or pledged to reconstruction bank for the purpose of realising its ~ or for the remal of the industrial concern any such transfer of property made by reconstrictiqj1 bank shall vcst in the transferee the rights in relation to the property transferred as jf th~ transfer has been made' by the owner, of such p!opcrty~ the same powe'r is 'llso extended to the reconstmctionbank in regard to goods manufactured or produ:ed atinually or partly from the goods forming part of the security held by the reconstruction bank as it had with the 'receipt or the origin a' !!o<)d<;, the cost incidental to the aforesaid shall also be recovered from the industrial concern clause 40-this clause deals with the enforcement of claims by the reconstruction bank w~ete an assisted industrial concem makes default in payment of any of the dues or in meeting its obligations in relajion to any other industrial a<;sistance given by the reconstruction bank or otherwise fails to comply with the term  of agreement with the reconstruction bank through concerned high court for an order of sale or lease of the property a~signed, charged hypothecated mortgaged or pledged to re· cuni>truction bank as primary or coj1ateraj security for the assistance  granted by it or for transfer of the management of the industrial concern to the reconstructi()1\ bank or its or its nominee or for ad interim injunction or f(}t' order for appointment of receiver, by an application stating the nature and extont of liability of the industrial concern to  the reconstruction bank and the grounds thereof and the procedure to be ad1pted by the high court in this regard clause 41-this clause deals with the powers of'reconstruction bank to take over the management or possession or both of the property offered as collateral security and shall also have the right to transfer by lease or sale of the said property for the purpose of realising its dues the clause also enab!es reconstruction bank to recover the incidental cost out of the money received by way of sale or jease of the property mentioned aforesaid, reconstruction bank shall also have the right to appjy to high court for sale or leac;eof the aforesaid property and the provisions will he similar to that of clause 40 clause 42-this c1ause deals wjth the power of the reconstruction rank to appoint a director oradministratot of an industrial concern by llolitled order when the ~a2ement of the industrial concern is taken over the provisions of the companies act, 1956 or any other la~ for timely enforccmentretating to industrial concern in so far as it relates to the holding of any share qualification, age limit, restriction on the number of directorship\ j;'etirement by rotation or removal from office shall not apply to such directors as appointed by the reconstruction bank under this tltlll:e clawe 43-1'his clause deals with the effect of nolified order issued under clause 42 on the issue of such notified order, all persons holding "tnee as directors of the industrw concern and all the persons homing any office having the power of superintendence, direction or control of the industrial concern whiclt is not· a company before the issuance of notified order shall be deemed to have vacated their offices as such and any contract or management between any other jndustrial concern and any director or manager thereof, 'lihall be deemed, to have terminated the directors or administrators, appointed 'for the purpose, shall take suc!1 steps as may be neeessary to take into their custody or control all the properties and assets of the industrial coacem from the date of notified order the direc--rors  or administrators, as the case may be shall alone be entitled to exercise ·tbe powers of the directors or au the powers of superintendence, direction or control as the case may be ' clause 44-this clause deals with the powers and duties of directors and administrators appointed under clause 42 subject to the control of the reconstruction ~ank for the purpose of efficiently managing the business of industrial concern and shall also have powers to make an application to court for cancellation of any contract or agreement entered into before the issue of notified order and the court may make an order cancelling of such contracts or agreements clawe 45-this clause povides trat the managing or whole-time director' or any other director or manager or any person in charge of management of the industrial concern shall not be entitled to any compensation in the loss of office or for premature retirement or for the termination of any contract of management by him with the industrial concern clause 46-this clause deals with the non-application of certain provisions of the companies act where the management of ~ company has been taken over by the reconstruction bank it restricts nomination or appointment of a director by the shareholders and passing of any resolutions in the shareholders'meeting and no proceedings for winding up or for appointment of receiver of such industrial concern shall lie in any court except with the consent of the reconstruction bank except the above re- strict ions and the exceptions, restrictions and eliminations, if any, at; the central government by notified order specify, all other provifoions of the companies act shall apply to the industrial concern clause 47 -this clause deals with the restriction on filing of suits for disso·lution or for partition of an industrial concer9 (unit is not a company) when its management is taken over by the reconstruction bank, before any court or tribunal or other party except with the consent of reconstruction bank clause 48-this clause seeks to "provide that no proceeding for the arl)ointment of ~y official assignee or receiver shall lie in any court in retion to any indu'itrial concern the management of which has been taken over by the reconstruction bank without its consent clawe 49-this clause gives power to the central government, by notified oreier, to grant relief to im assisted industrial concern, on its application, to suspend the operation of all or any of the contracts, ,assurances of property, agreem~nts, settlements and awards or standing brders, etc, or any rights, privileges, obligations and liabilities arising or accruing thereunder before the date of notified order the notified order shall not be made for more than two years at a time, so, however, that such notified order shall not remain in force for more than eight years in the aggregate, the period of limitation will not run for the period during which the notified order will be in force during the period of operation of the notified order, the central government, if satisfied, that it is necessary 80 to do in the public interest, may authorise the reconstruction bank to prepare a scheme for reconstruction, revival or rehabilitation of the assisted industrial concern or for scaling down the liabilities of the assisted industrial concern or f9r / the amalgamation of the a'ssisted industrial concern with any other indl1strial concern, a copy of the draft of the scheme is to be sent to the assls~ed industrial concern concerned in the amalgamation, for sl1ggestions and objections and the consent of the  transferee industrial concern, if it is a company, has to be obtained by special resolution of l:iuch company the scheme as approved shall be placed before the central government for si\!lction ond if sanctioned the same shall come inlo force on such date as the central government may specify in this behalf the central government may constitute an advisory committee consisting of officers of the central government, reserve bank, state bank, nationalised banks and public financial institutions for the purpose of assisting it in this regard the scheme shall when comes into force, be binding on the assisted concern, transferee !jldustrial concern or any other indu8~al concern and also on all the'membel'll and other creditors and employees and on any other person having any right or liability thereto including the trpstees or other persons managing or connected with provident fund ' or other funds maintained by any of those industrial concern or the transferee industrial concerns the copies of the schemes or any other order made under sub-section (14) shall be laid before both the houses of parliament after the scheme has been sanctioned by the central government or, as the case may be, the order has been made cllluse 50-this clause enables the concerned high court to authorise the reconstruction bank to prepare scheme for reconstruction, revival or rehabilitation of industrial concern which is being wound up by the high court the high court may, alter considering the scheme, approve the scheme with or without modification and the scheme so approved shall become effective clause 51-this clause seeks to enable the chief metropolitan magistrate or district magistrate to extend help to the reconstruction bank or the administrator, any directors or any other person authorised by the re::onstruction bank in taking charge of or possession of the property of the industrial concern or of any other person offered that security which has been sold or leased in pursuance of any of the power conferred by clause 39, 40 or 41 or where the managementl of any industrial concern is taken over or when an und':!rtaking or an industrial concern is amalgamated under clause 49 clause 5·2-this clause deals with the effect of this act on other laws clause 53-this clause provides for the exemption of the reconstruction bank from payment of income-tax or companies (profits) surtax and of other taxes on income, profits, or gains and is on the lines ot similar exemptions given to industrial development bank of india and export import bank of india this clause further exempts reconstruction bank from the payment of interest-tax on its income under the interesttax act, 1974 clause 54-this clause ensures that no provision of any law relating to the winding up of companies or corporatinons shall apply to the reconstruction bank which shall not be placed in liquidafion except by 1'\n order of the central government clauses 55 and 56-these two clauses seek to extend the application of the bankers' books evidence act, 1891, and to a limited extent, of the banking regulation act, 1949 to the reconstruction bank clfluse 57-this 'clause provides that part iii of the monopolies ani restrictive trade practices act, 1969, shall not apply to any amalgamation effected under this act clause 58-this clause makes it obligatory for the reconstructioa bank to furnish from time to time returns to the central gov~rnment olause 59-this clause provides for the delegation of powers and functions of tilt! board under the act clause 6o-this clause provides for the appointment of the staft by the reconstruction bank for the efficient performance of its functioning it also enables the reconstruction bartk to depute or to receive on deputation lrom the prescribed institutions any of its ofticers or other memohers of its staff on such terms and conditions as may be prescribed including deputation of its officers or other members to any assisted industrial concern clause 6l-this clause s~eks to impose on the reconstruction bank obligation not to divulge any information relating to or to the affairs of its constituents except in the circumstanc~ stated in that clause it also provides ff}r a declaration of fidelity and secrecy by every director, auditor, adviser, officer or other employee of the reconstruction bank clause 62-this clause deals with the establishment of the provideat fund for the benefit of its officers and employees clause 63-this clause seeks to indemnify the directors of the reconstruction bank against all losses and expenses incurred by hun in or in relation to the discharge of his duties other than those caused by his own wilful act or default clause 6~-this clause is the usual provision rela!ing to protection of a-::tion taken in good faith clause 65-this clause provides that the chairman, adviser and auditor and every other employee of the reconstruction bank shall be d:emcd to be a public servant for the purpose of chapter ix of the indian penal code clauses os and 67-these two clauses provide for penalty for making hlse statoment in applications for loans or arlvances or any other assistance from the reconstruction bank ~  clause 68-this clau~e provides for the power of the central government to make rules for the purpose of giving et!ect to the provisions 0( thp act and in particular in respect of the matters specified in ·that clause clause 69-this clause seeks to empower the board of directors of "reconstruction bank, with the approval of the central govej,'dment,  to make regulations not inconsistent with the act and the rules mst-de th~reunder, for the purpose of giving etlect to tbeprovtsions of the' act and in p'1rticular in respect of the matters specified in that clause czavse 70-this clause gives power to central government to remove defects in iiving eft'ect to any of the provisions of this act clause 71-this clause provides for certain amendments of the reserve bank of india act, 1934, the industrial disputes act, 1947 and the banking regulation' act, 1949  the amendments to the reserve bank of india act, 1934 arc mainl)t consequential this will enable the ,reserve bank to grant accommoda  tion to the reconstruction bank against trustee securities, loans and advances and purchase of foreign exchange from the reserve bank of indi:l for the purpose of its financing activities the reserve bank of india is also being empowered to grant short-term loans to the recon- struction bank the amendment to the industrial disputes act, 1947 is to clarify that the appropriate government in relation to any industrial dispute, involv  ing the reconstruction bank, will be the central government the amendment to the banking regulation act 1949 is for the purpose of extending the reconstruction bank the protection against any demand by any tribunal or authority under the industrial disputes act, 1947 for disclosure of information regarding its inner reserves the other amed4-ments prohibits the holding of arty agitation by the staff of the reeor· struction bank wi£hin the premises clcru8e 72-this clause deals with substitution in acts, rules anti  gulations of the reconstruction bank in place of industrial recon~t1'uc~ tion corporation of india limited clause 4(1) provides tbat the ird~trial 'recodstructiolil bank of india shall have an authorised capital of two hundred crores of rupees gause 4(2) provides that the· initial paid up capital of 'the reconstruction bank shall be ~ crores of rupees obtained by acquiring the present paid up capital of twedty crores of rupees of the industrial reconstruction corporation of india limited; conversion into equity of central government loans to the reconstruction carporation to the extent of twenty crores of rupees and direct su~1l by, the central government of the remaining ten crores of rupees aause 4(3) povid~ that the reconstruction bank may incrc:8se its paid up capital by makin •• furthe~ iss~e of shares of such amount as it may think expedient within the ad-thorised capital of two hundred crores of rupees clause 4(4) provides ~ the entire paid up capital of the reconstruction bank shall be wholly subscn"bed by and allotted to the central government- thus, it would be necessary to make available a sum of twenty crores of rupees for acquiring the shares of the iikiustrial reconstruction coqx>ration of india and a sum of tea crores of rupees for subscribing to the share capital of tbe industrial reconstru'ction bank of india during the year 1984-85 it would also be necessary to coilvert the outstanding central government loans to the extent of twenty crorea of rupees to the industrial reconstruction corporation of india into equity of the reconstruction bank during the year 1984-85 the imp]ica~on of conversion of twenty crores of loan into equity df the reconstruction b'ank will be that after slich conversion the interest payable on the sum of twenty crore!r of' n:rpeei shall cease to be paid tile loss of interest amount may to lome extent btw offset by the dividend payable on this amount by the reconstruction baqk the extent of dividend that may be paid by the recon'truction bank, each year, on the ~um at twenty crores of rupees and the extent to which such payment of dividend "ould offset the loss of interest cannot be envisaged at thi~ stage ja regard to subscriptions beyond the initial paid up capital of fifty crofes of rupees th", central government may have to provide funds to the extent of one hun· dred and fifty crores of rupe~ over a period of time as and when the paid up capital of the reconstruction bank is proposed to be enhanced untu the paid up capital reaches the level of the authorised capital of ~wo hundred crofes of ruptes 2 c'iause 5(2) provides for payment by the central government to the in dustrial reconstruction corporation of jndia ltd an amount equal to the amount of fhe total paid up capital ()f the corporation for being disbursed to the existing !'hareholder!> of the corporation in terms of clause 6(1) the amount payable to the shilreholders being twenty crores of rupees, is the same amount indicated inc1ause 4(2) for acquiring sharc~ of the reconstruction corporation thus, there is no ildditional expenditure either in terms of clause 5(2) or clause 6(1) except to the extent of twenty crores of rupecfi contemplated to be paid fo, acquiring the shares of the reconstruction corporation under clause 4(2)   tr:~----'"  ,';j" 3 clause 12(2)(61) provides that ia the event of the central governmeat deciding to terminate the liervices of the chairman before the expiry of bis term; it shall either give him notice of not less than three months or three q10jltbs' salary and allowance in lieu of  uch notice the salaries and auowancs of the chairman of the reconstruction bank shall be the same lots presently njoyed by him, as the chairman of the 'reconstruction corporation the chairman ot the iildustrial reconstructioa corporation is presently drawinj a salary of three thousand five hundred rupees in the pay scale of rs 35()()125-4000 thus in the event of the central government deciding to temlinate the services of the chairman of the reconstruction b~mk without three months' notice the central government may have to pay an amount ronging from ten thousand five hundred rupees to twelve thousand rupees plus three months' allowances a~ admissible to the chuirman at the time of sllch termination 4 clause 20 provides that the central government may, after due appropriation made by law, advance to the reconstruction bank, interest free loans or interest bearing loans, on such terms and conditions as may be agreed upon it may be necessary for the central government from the year 1984-85 onwardi to grant loans ranging from forty crores of rupees to eighty cron's of rupees every year depending upon the magnitude of the operations of the reconstruction bank, 011 such terms and conditions lls may be agreed upon 5 clauie 21 provides that the industrial reconstruction bank of india may iisue and sell bonds and debentures with or without the guarantee of the ('~n­iral government cause 21(2) provides that the central government may on a request being made to it by the reconstruction bank guarantee the bonds and debentures issued by that bank as to the repayment of principal and payment of interest at such' rate as may be fixed by that government the extent of the contingent liability arising out of the central government guarantee in respect of bonds and debentures issued by the reconstruction bank will depend upon the size of the market borrowings of the reconstruction bank, the exact quantum of which would be known only at'1er the bank has ~tarled fw'lctioning 6 clause 23 (2), read with clause 23 (1 ), provides that the centrlll govern-melit may, where necessary,qtjarantce the foreign currency loans taken by the reconstruction bank with thepreviou~ consent of the central government from any bank or financial institution or other prescribed sources in any foreign country the extent of the contingent liability arisinl!; out of such guarantee will depend upon the extent of the foreign currency borrowings by the reeonstnu:tion bank which would be known only after the bank bas started fwtetioning clause 23(4) provides that any loss or profit arising from ftuctuation~ in the rate of exchange relating to borrowings in foreign currency will be borne by or accrue to the central government as the case may be if such fluctuation is not related to nonnal market fluctu:!tion~ in foreign elrchan'!e and occurred after the period within which the forci,," currency loan i'l reoavhh1, mr the industrial concern or the period of actunl repavm~nt by tbe concern whichever is longer the extent of this con!ingent liability will depend not onlv udon the extent of foreign exchange fluctuations but also the nature and the time of occurencc of such fluctuation further the los  on 1c:coun' of depreciation in the value of the rupee at any poidt of ti~e will be offset to some e)[tent by the p-roftt accruing from appreciation of the value ~ the rupee at other point~ rl time, 7 clause 24 provides· that the recodsttuction bank may i'ccoive gifts, jl'3iltl, donations or benefactions from the ceotral government it is dot pr0-posed at this stage to make any contributions to the reconstruction bank under this provision s cause 53 provides that the reconstruction bank shall not be liable to pay income-tax, companies (profits) surtax, i!ltcrest~ax or any other tax in respect of any income, profit or gains accruing to the reconstruction asslsteed fund or any amount received to the credit of that fund as also on any income, profit or gains or any amount received by the reconstruction bank including any interest collected by or payable to the reconstruction bank in accordanco with the provisions of the interest-tax act, 1974 the extent of the contingent liability on account of loss of income-tax, companies (profits) sunax, interest tax or any other tax in terms of the provision o1f this clause will depend upon the extent of tbe operation of the reconstruction bank, the exact quantum ot 19hich will vary from year to year, and would be known only after the bank has become fully functional 9 no other provision of tbe bill, would, if enacted, involve any other expenditure of a recurring or a non-recurring nature from and out of the coasolidated fund of india sub-clause (6) of clause 49 empowers the central government to authorise the reconstruction bank to prepare a scheme for the reconstluction, revival or rehabilitation of the assisted industrial concern; for scaling down liabilities of such a concern or for the amalgamation of such a concern with any other industrial concern if any difficulty arises in giving effect to the provisions of the scheme~ the central government may by order do anything, not inconsistent with such provilsions, which appears to it to be necessary or expedient for the purpose of removing the difficulty [vide sub-clause (14) j it is also provided that the scheme or any order !ssued for removing the djfficulty shall be laid before both houses of parliament [vide sub-clause (15)] 2 qause 68 of the bill empowers the central government, by notification in the official gazette, to make rules for carrying out the provisions of the proposed legislation sub-clause (2) thereof enumerates in detail the matters in respect pf which rules may be made under that clause these matters relate to the institutions and agencies in and outside india, the payment of whose loans to industrial concerns may be guaranteed, counter-guaranteed or indemnified by the reconstruction bank, the institutions and agencie~ which may be provided with line of credit by the reconstruction, bank for grant by them of loans and advances to industrial concerns, the persons who may be appointed to act as agents of the reconstruction bank and the manner in which and the conditions subject to which insurance or provident fund may be constituted by the reconstruction bank 3 cause 69 of the bill empowers the board of directors of tho reconstruction bank with the previous sanction of the central government, to make by notification in the official gazette, regulations not inconsistent with the provisions of thebill and the rules made thereunder, to provide for all matters for which regulations are necessary or expedient for the purpose of giving effect to the provisions of the bill and of the rules made thereunder the matters in respoe't of which such regulations may be made are specified in sqbclause (2) of that clause 'jihese matters, inter alia, relate to the restrictiods relar;n~ to the "owen; which mav be exrrci!ied bv the chairman of the board of directors, the time jnd place at which the board of directors shall meet aud the rules of procedure (inc1udin/! quorum) which shall be observed by the board in regard to the transaction of hl1sine~s at its meetin2s the conditions and limitations subject to which an industrial concern may enter into any kind of business and the form and manner in which the balance-sheet and acco~ts of the reconstruction assistance fund shall be prepared 4 the matters with respect' to which the rules and regujation~ may be made are matters of procedure or detail and as such the delegation or legislative power is of a normal character i s cause 70 of the bill empowers the central government, by notification in the official gazette, to remove any difficulty which may arise in giving effect to any of the provisions ·of the biu as all the problems which may arise cannot be envisaged, this provision has been included by way of abundant caution it is also made clear in the clause that no such notification shall be made after the expiry of a period of two years from the commen~ment of that claube  extmc'l's from the reserve bank of india ar:r, 1934 (2 of 1934)    - 17 the bank shall be authorisedto carry on and transact the bliilseveral kinds of business hereinafter specified, namaly:-nem wbicb the   til  bank (4g) the making of loans and advances to, and the purchasing idaj of bonds land debentures of, the development bank or the exim transact bank out of the national indusirial credit (long term operations) fund establfshed under section 46c;     (4-1) the making to scheduled banks, the development bank, the exim bank, the industrial finance corporation and any other financial institution as may, on the recommendation of the bank, be approved in this behalf by the central government of 10anj and advances repayable on demand or otherwtise and against such security and on such other terms and conditions as may be approved in this behalf by the central board for the purpose of enabling such banks, or financial institution, as the case may be, to purchase foreign exchange from the bank for the purpoee of financing the import of capital goods or for auch other - purpole8 as may be approved by the central government;     - (12b) the making of loans and advances in foreign currencies to scheduled banks, the development bank, the exim bank, the industrial finance corporation, any state financial corporation and any other financial institution may, on the recommendation of the bank, be approved by the central government and on iuch terms and conditions as may be specified by the central board in this behalf, against promisbory notes of suc~ bank or financial institution, as the case may be: provided that the borrowing bank or financial institution, as the case may be furnishes a declaration in writing to the effeet tha~ (a) it has made loans and advances in foreign currencies for~ini international trade or for the import ()f capital goods or for such other purposes as may be approved by the central· government; and (b) that the amount of loans or advances so made and outstanding at any time will not be less than the outstandmg amount of the loans or advancn obtained by it from the bank;  - - - u (1) tvery bank included in the second schedule shall maintala with the bank an average daily balance the amount of which shall not be leu than three per cent of the total of the demand and time liabili· ties in india of such bank as shown in the return referred to in sub--section (2): a,nk provided that the bank may, by notification in the gazette of india, increue the said rate to such hlgher rate as may be specified in the notification so however that the rate shall not be more than fifteen per cent 01 the total of the demand and time liabilities e:cplanation-for the purposes of this section,~ '" '" '" (c) "liabilities" shall not include-'"  :' '" '" - it; (ii) the amount of any loan taken from the bank or from the development bank or from the exim bank or from the national bank, '" '"  '"   48c (1) - -    (2) the amount in the said fund shall be applied by the "bank oniy to the following objects, namely:-ii<                                                   '"                                                                                                     '"                                                                                                                                                      '"                                                                                                                                                                                                         - national ldclurdal crecut (lon, term opera-tiodl) j'und      (r) tne making to the exirn bank of loans and advances for the purposes' of any business of the exim bank;      (d) the purchasing of bonds and debentures                                                                issued by the exim bank '" '"                              '"                                                           '"                                                                                        '"  bx'l'ra(:t from the industrial disputes act, 1947 (14: of 1947)'"  •• - 2 in this act, unless there is anything repugnant in the subject ot conb!xt,-j - " - '"   - (bb) "banking company" means a banking' company as defined in section 5 of the banking companies act, 1949, having branches 10 of 1940 or other establishments in more than one state, and includes- the export-import bank of india, the industrial development bank of " incua, the reserve bank of india, the state bank of india, a corresponding new bank constituted under section 3 of the banking com- panies (acquisition and transfer of undertakings) act, 1970, a 5 of 1970, corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1980, 40 ot 1980 and any subsidiary bank as defined in the state bank of india (subsidiary banks) act, 1969; 38 of 1081 -   , - - - ii'  extracts from the banking reculation aj:r 1949(10 of 1949) - - - - - 26 of 1881 18 every banking company, not being a scheduled bank, shall maintain in india, by way of cash reserve with itself or in current account reserve opened wi~h the reserve bank or the state bank'of india or any other bank notified by the central government in this behalf or partly in cash with itself and partiy in such account or accounts, a sum equivalent to at least three per cent of the total of its time and demand liabilities in india, and shall submit to the reserve bank before the tifteentb day of every month a return showing the amount so held on friday of each week of the preceding month with particulars of its time blui demand liabilities in india on each such friday, or, 1f any such friday is a public holiday under _ the negotjable instruments act, 1881, at the close of business on the preceding working day explanation  ·-in this section and in section 24, "liabilities in india" shall not include-- - - - 2 of j934 (b) any advance taken from the reserve bank or from the state bank of india or from the industrial development bank of india or from the export-import bank of india or from the national bank or from any -bank notified by the central government under clause (c) of the explanation to sub-section (1) of section 42 of the reserve bank of india act, 1934 - - - - - ma (1)          -                   -                           -                                    -                                            -                                                    - production of document ofconftdential nature is of 1970 21 of 1978 40 of 1980 (3) for the purposes of this section, "banking company" in<:judes the export-import bank of india, the industrial devel09ment bank of india, the national bank, the reserve bank, the state bank of india a corresponding new bank c;onstituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970, a regional rural bank established under section 3 of the regional rural banks act, 1976, a corresponding new bank constituted under section '3 of the banking companies (acquisition and transfer of undertakings) act, 1980, and any subsidiary bank - - - -   36ad (1) - - - - - - punishments for certain activities 1d reiatlon to bank-ine compame 5011970 21 of 1978 (3) for the purposes of this section, "banking compan," includes the export-import bank of india, the reserve bank, the industrial development bank of india, the national bank, the stare bank of india, a eorresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970, a regional rural bank estabushed under ff'ction 3 of the regionl rural banks act, 19'16, a corresponding new bank constituted under section 3 of the banjpng companies (acquisition and transfer of undertakings) act, 1980, and any subsidiary bank / 40 of 1980 - - - - - 56 the provisions of this aet, as in force for the time being, shall apply to, or in relation to, co-operative societies as they apply to, or in relation to, banking companies subject to the following modifications, namely: -i ::~ ij - - - - - act to apply to cc-opers_ tive societies subject to modiftc:atiors (j) for section 18, the following section shall be substituted, namely:-cash reserve 2 of 1934 28 of 1881 '18 every co-operative bank, not being a state ~o-operatlve bank for the time being included in the second schedule to the reserve bank of india act, 1934, shall maintain in india, by way of cash reserve with itself or in current account opened with the ~serve bank or the state bank of india or the state co-operative bank of' the state concerned or with any other bank notified by the central government in this behalf or, in the case of a primary co-operative bank, with· the central ~o­operative bank of the district concerned or partly in cash with itself and partly in such account or accounts, a sum equivalent to at least three per cent of the total of its time and demand liabilities in india, and shall submit to the reserve bank before the 15th day of every month a return showing the amount so held on friday of each week of the preceding month with particulars of its time ~d demand liabilities in india on each such friday, or, if any such friday is a public holiday under the negotiable instruments act, 1881, at the close of business on the preceding working day explanatioo-in this section and section 24, "liabilities in india" shall not include,-- - - - - (b) any advance taken from a state government, the reserve bank, the state bank of india, the industrial development bank of india, the export-import bank of india, the national bank or any b~ notified by the central government under clause (c) of the exp14nation to subsection (1) of section 42 of the reserve bank of india aet, 1934:; 2 of 1934  - - - - -  a billto provide for the establishment of the industrial reconstruction bank of india, and for the transfer to, and vesting in, the said reconstruction bank, of the undertaking of the corporation known as the industrial reconstruction corporation of india limited, with a view to enabling the said reconstruction bank to function as the principal credit and reconstruction agency for industrial revival and to co-ordinate similar work of the other institutions engaged therein and to assist and promote industrial development, arid to rehabilitate industrial concerns, and for matters connected therewith or incidebtal thereto (shri pranab kumar mukhet'jee, minibte7' 0/ finance) 