 lok sabhacorrigendum to '!he merchant shipp ing (amendment) bill, 1977 j-'ib be/as introduced in wk sabha 7 proposed page 3, in the marginal heading touection 17 a ,-after ''pay'' insert "incolne-tax and" new dwu· - , lecember 12 1977 agrahayaila 21, 11j99 ( salta) iilll no its of 18'7'7 waite the merchant shipping (amendment) bill, 19'7'7  a billfurthet to amend the metchant shipping act, 1958 bj: it enacted by parliament in the twenty-eighth year ofi the republic of india as follows:-short title 1 this act may be called the merchant shipping (amendment) act, 1977 44 of 1958 s z in section 14 of the merchant shipping act, 1958 (hereinafter referred ·to as the-principal act), after clause (b), the following clause shall be inserted, namely:-amendment of section 14 "(bb) the amounts received by the said committee an the issue and sale of bonds and debentures;" 3 in sub-section (1) of section 15 of the principal act, for the word 10 "six", the word "twelve" shall be substituted " in section 16 of the principal act,-amendment ot nc-lion 15 amend ment of nc-tion 18 (i) in sub-sectiod (1), ~r the words and 8gut\es "in any other fonn to persons of the description mentioned in section 21 for acquisition and maintenance of ships", the following shall be substi-tuted, namely:-"in any other fonn,-(a) to persons of the description mentioned in section 21-5 (i) for the acquisition and maintenance of ships, including modification, reconstruction and renovation thereof; and (ii) for meeting any short-term financial requirements; 10 (b) to indian ship-yards for the construction o~ new ships"; (ii) for sub-section (2), the following sub-sections shall be substituted, namely:-"(2) the committee shall not grant any loan or give any 15 financial assistance under sub-section (l) except on such terms and conditions as the central government may from time to time specify, and any such tenn may, if the loan or financial assistance is granted or given to a company, provide for the appointment by the committee of one or more directors of such company and 20 such provision and any apljointment of directors made in pursuance thereof shall be valid and 2fiective notwithstanding anything to the contrary conta ined in the companies act, 1956, or in any other law for the tin ie being in force or in the memorandum, articles of association or any other instrument relating to 25 1 of 1956 the company and any provision regarding share qualification, age limit, number of directorships, removal from office of director and such like conditions contained in any such law or instrument aforesaid, shall not apply to any director appointed by the committee in pursuance of the term as aforesaid 30 (2a) any director appointed in pursuance of sublection (2) shall,-(a) hold ofbce during the pleasureo~ the committee and may be removed or substituted by any person by order in writing by the committee; 35 (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 40 be taken into account for computing the number of directors liable to such retirement (2b) every director appointed by the committee shall be indemnified by the committee against all losses and expenses idcurred by him in, or in relation to, the discharge of his duties, 45 except such as are caused by his own wilful act or default (2c) no suit or other legal proceeding shall lie against any director appointed by the committee for any loss or damage caused or likely to be caused by 8nythin~ which is in good faith done or intended to be done in pursuance of this act or any sother law or provision having the :fiorce of law" 5 after section 16 of the principal act, the following section shall be inserted, namely:-insertion of new sec· tion 16a "16a (1) the committee may issue and sell bonds and deben-borrowing tures, with or without interest, for the purpose of carrying out the powers 10 objects of the fund (2) the bonds and debentures of the committee shall be guaranteed by the central government as to the repayment of thi;! prin-cipal and the payment of interest, at such rate as may be fixed by the central government on the recommendation of the committee at the is time the bonds and debentures are issued" 8 after section 17 of the principal act, the following section shall be inserted and shall be deemed always to have deen inserted, namely:-insertion of new see· lion 17a "17a notwithstanding anything contained in any enactment for the time being in force relating to income-tax or wealth-tax, the committee shall not be liable to pay-20 exempt1o~ lromllability to pay wealth ta (a) income;tax in respect of its income, profits or gains; and (b) wealth-tax in respect of its net wealth  amendment of sec· tion 18 "i in section 18 of, the pri'1cipal act, for the worns "and thereupon all 25 the property vested in the committee shall vest in the central government", the following shall be substituted, namely:-"and thereupon-(a) all the property vested in the committee shall vest in the central government; and (b) all the liabilities of the committee shall become the liabilities of the central government" 8 in sub-section (2) of section 19 of the principal act, after clause (f), the following clause shall be inserted, namely:-amend· ment of sec· ce (ff) the manner and terms of issue, sale and redemption of 1ion 19 35 bonds and debentures by the committee;"  statement of objects and reasonsthe shipping development fund was formed in march 1959 und~ section 14 of the merchant shipping art, 1958, with the object of facilitating the growth of indian shipping tonnage through grant of loans and financial assistance to indian shipping companies for the acquisij tion and maintenance of ships 'the fund vests in the shipping deve--lopment thnd commntee which was constituted under section 15 of the said act this committee consists wholly of government officers the committee inter alia charges a documentation fee in respect of loans and guarantees given by it the committee is a non-profit making organisation ,and the earnings made by it are incidental to the work connected with '~he development of shipping in india it is, therefore, felt that the committee should be exempted fram the payment of incometax, wealth-tax and any other tax on income, profits or gains on its earnings retrospectively from the date of its constitution 2 section 15 of the act states tha't the shipping development fund committee shall consist of a cha~rman and such number of other\ members, not exceeding six, as the central government may think fit to appoint ·thereto the activities of the commi'~tee have since increased it has become necessary, therefore, to provide for additional members it is proposed to increase the number of members from six to twelve 3 the corpus of the shipping development fund mainly consists of amounts granted as loans by the central government it has been ob-, served that such loans have not always been adequate to meet the entire requirements of the shipping industry for the expansion of maritime fleet it is, therefore, proposed to empower the shipping development fund committee to resort to public borrowings through the issue and sale of bonds and debentures 4 at present the shipping cnmpanies which obtain loans from the committee nre ret']uired to accept nominees of the committee to serve on their board!'! as directors hitherto, the nomination of such directors was being made by mutual agreement it is proposed to provide for making such nominations in the act itself and that such directors will be granted immunity from legal proceedings in respect of acts done by them in good faith 5 loans from the shipping development fund are granted to shipowners who satisfy the requirements of s~tion 21 of the act indigenous shiphuilding capacity has been e"panding and it is felt that provision may be made in the act to enable loans being granoted to indian shipyards also for the construction of new ship'3 6 the shipping industry is going through a difficult period all the world over due to a !;evere and prolonged depression in the ~ght market indian !':hipping companies are also experiencin~ financial dift\-culttee it is felt that provision should be made for the gnun of loans to shipping companies to rehabilitate them from temporaryftnancial difficulties caused l:-y circumstances beyond t~eir control 7 the other amendments proposed in the bul are minor and consequential in nature 8 the bill seeks to achieve the above objects new dam; chand ram the 5th decembe,, 1977 clause '8 of 'the bill seeks to insert a new alause (if) in sub-secttion (2) of section 19 of the merchant shipping act, 1958, to empower the central government to specify by rules the manner and terms of issue, sale and redemption of bonds and debentures by the shipping development fund committee the matters in respect of which rules may be made under this provision are matters of detail and it ishardlypracticable to provide for them in the bill itself the delegation of legis-irtive power is, therefore, normal in character  extracts  nom the ml:rchant smpping ac:r, 1958(44 of 1958) - - - - formation of shipping development fund 140 there shall b~ formed a fund to be called the shipping development fund (hereinafter in this part referred to as the fund) and there shall be credited therf!to-- - - - shippin, develop· mentfund committee 15 (1) the central government shall constitute a committee to be called the shipping development fund committee (hereinafter in this part referred to as the committee) consisting of a chairman and such number of other members, not exceeding six, as the central government may think fit to appoint thereto - - - 1a (1) the fund shall vest in the committee and 'shall be applied towards meeting the expenses of the committee and for granting loans and financial assistance in any other form to persons of the description mentioned in section 21 for acquisition and maintenance of ships applica_ tion of the shipping developmentfund (2) the committee shall not grant any loan or give any financial assistance to any person referred to in sub-section (1) except on such terms and conditions as the central government may from time to time specify - - - - dissolution of the committee 18 the central government may by notification in the official gazette declare that, with effect from such date as may be specified in the notification, the committee shall be dissolved, and thereupon all the property vested in the committee shall vest in the central government it (1) - - - - power to makerulea in respect to mattera in thill part (2) in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: - •• - - a bill further to amemd the merchant shipping act 1958 (shri chand ram, minister of state in charge of the min18try of shipping and transport) 