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IRDA
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IDRA 1951
PRESENTED BY ARGULA
POOSARLAKONDAPARTHI
IDRA
ESTABLISHMENT
MINISTRY OF INDUSTRIES AND COMMERCE
DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION
IDRA
OBJECT TO EMPOWER GOVT
IMPLIMENT INDUSTRIAL POLICY .
PROVIDE DEVELOPMENT AND REGULATION PATTERN.
ENVISAGES BALANCED GROWTH BY EVADING THE TECHNICAL AND OPERATIONAL DEFECTS.
IRDA
CONSTITUTIONAL BACKGROUND
ONLY THE DEFENCE AND PROSECUTION OF WAR.
UNDER ENTRY 7 OF LIST 1 OF 7 SCHEDULE GIVES POWER TO THE GOVT TO CONTROL THE
INDUSTRIES EXPEDIENT IN THE INTEREST OF PUBLIC
IDRA
INDUSTRIES (DEVELOPMENT AND REGULATION) ACT WAS PASSED TO CURB THE STIFLING
ECONOMIC GROWTH INSTEAD OF PROMOTION INDUSTRIES AT A HIGHER RATE WHICH IS A MAJOR DETERMINANT OF OVER ALL ECONOMIC DEVELOPMENT OF THE NATION.
IDRA
ACT CAN BE DEVIDED IN TO FOLLOWING MAJOR HEADS :
1)LICENSING AND REGISTRATION (SEC/1 TO 18) 2)CONTROL AND MANAGEMENT OF
INDUSTRIES (SEC/18A TO 18FH,18G) 3)POWERS AND DIRECTIONS BY CENTRAL
GOVERNMENT.(SEC 19 TO 32)
IDRA
THIS ACT DECLARES THE EXPEDIENCY BY UNION TO CONTROL THE INDUSTRIES SPECIFIED IN THE FIRST SCHEDULE .
FIRST SCHEDULE:• IRON AND STEEL• FUELS• PRIME MOVERS• ELECTRICAL EQUIPMENT• FERMENTATION• FOOD PROCESSING• SUGAR • LEATHER
IDRA• TELECOMMUNICATION• TRANSPORTATION• MACHINERY INDUSTRIAL AGRICULTURAL EARTH MOVING• FERTILIZERS• CHEMICAL• MEDICAL AND SURGICAL• DRUGS AND PHARMACEUTICALS• TEXTILES • TIMBER• DEFENCE
IDRA
ESTABLISHMENT OF CENTRAL ADVISORY COUNCIL IS FOR THE PURPOSE OF ADVISING THE CENTRAL GOVERNMENT ON MATTERS CONCERNING DEVELOPMENT OF INDUSTRIES AND ANY OTHER ASPECT REGARDING THE ADMINISTRATION OF THE ACT WHICH SHALL CONSIST OF REPRESENTATIVES OF OWNERS,EMPLOYEES,CONSUMERS,SUPPLIERS UNDER SEC/5
IDRA
ESTABLISHMENT OF DEVELOPMENT COUNCIL IS FOR THE PURPOSE OF ANY SCHEDULED INDUSTRY OR GROUP OF INDUSTRIES WHICH CONSTITUTES THE MEMBERS REPRESENTING THE INTERESTS OF THE OWNERS, EMPLOYEES,CONSUMERS AND PERSONS HAVING SPECIAL KNOWLEDGE WITH RESPECT TO TECHNICAL ASPECTS OF THE INDUSTRIES UNDER SECTION/6
IDRA
FUNCTIONS OF DC: SCHEDULE 21)RECOMMENDING PRODUCTION TARGETS.2)SUGGESTING NORMS OF EFFICIENCY.3)RECOMMENDS WORKING OF INDUSTRIES
EFFICIENTLY SPECIALLY LESS EFFICIENT UNITS.4)PROMOTES ARRANGEMENTS THOURGH
DISTRIBUTION ,MARKETING BY WHICH CONSUMER IS SATISFIED.
IDRA
DEVELOPMENT COUNCIL SHALL PREPARE AND SUBMITT TO THE CENTRAL GOVERNMENT AND THE ADVISORY COUNCIL ANUALLY SETTING OUT THE FUNCTIONS IT HAS BEEN DISCHARGED DURING THE LAST YEAR ALONG WITH REPORT OF AUDITORS ON THE ACOUNTS UNDER SEC/7.
IDRA
SEC/9 IMPOSITION OF CESS ON SCHEDULED
INDUSTRIES.COMMISSIONER OF CENTRAL EXCISE
VTELCO
IDRA
THE OWNER OF EVERY INDUSTRIAL UNDERTAKING SHALL WITH IN THE PERIOD SPECIFIED BY CENTRAL GOVERNMENT, BY NOTIFICATION IN THE OFFICIAL GAZZETTE,MUST REGISTER IN THE PRESCRIBED MANNER ACCORDING TO SEC/ 10 AND IT CAN BE REVOKED UNDER SEC/10A IF THE CENTRAL GOVERNMENT IS SATISFIED THAT IT HAS BEEN OBTAINED BY MISREPRESENTING THE ESSENCIAL FACTS AND ANY UNDERTAKING HAS CEASED TO BE REGISTRABLE UNDER THE ACT.
IDRA
INDUSTRIAL UNDERTAKING (SEC/3(d)): ANY UNDERTAKING PERTAINING TO A
SCHEDULED INDUSTRY CARRIED BY ANY PERSON OR AUTHORITY INCLUDING THE GOVERNMENT.
IDRA
ACCORDING TO SEC/11 THIS ACT EMPOWERS THE CENTRAL GOVERNMENT TO REGULATE THE DEVELOPMENT OF INDUSTIRES BY MEANS OF LICENSING WITH SUITABLE EXEMPTIONS DECIDED BY GOVERNMENT
LICENSING: A WRITTEN STATEMENT FROM THE GOVERNMENT TO AN INDUSTRIAL UNDERTAKING TO MANUFACTURE SPECIFIED ARTICLES INCLUDED IN THE SCHEDULE TO THE ACT
IDRA
AFTER THE COMMENCEMENT OF THIS ACT NO
AUTHORITY OR PERSON SHALL ESTABLISH A NEW INDUSTRIAL UNDERTAKING WITH OUT THE LICENSE ISSUED BY CENTRAL GOVERNMENT ACCORDING TO SEC/11
IDRA
AN INDUSTRIAL UNDERTAKING REGISTERED
UNDER SEC/10 AND OBTAINED LICENSE UNDER SEC/11 SHALL NOT COMMENCE THE PRODUCTION OR MANUFACTURING OF NEW ARTICLE WITH OUT LICENSE ACCORDING TO SEC/11A.
IDRA
NEW ARTICLE: ANY ARTICLE SPECIFIED UNDER THE FIRST
SCHEDULE OF THE ACT AND ANY ARTICLE WHICH BEARS THE TRADE MARK DEFINED UNDER THE TRADE MARKS ACT 1940.
IDRA
ABTAINED LICENSE CAN BE AMENDED AND REVOCKED BY THE CENTRAL GOVERNMENT AFTER IT HAS BEEN SATISFIED THAT REGISTERED UNDERTAKING HAS FAILED TO ESTABLISH OR TAKE EFFECTIVE STEPS IN RESPECT OF LICENSE AQUIRED BUT THIS CANNOT BE EXECUTED IF IN CASE THE UNDERTAKING HAS TAKEN EFFECTIVE STEPS TO ESTABLISH IN ACCORDANCE WITH LICENSE ISSUED UNDER SEC/12.
IDRA
INVESTIGATION: (SEC/14&15) BEFORE THE GRANT OF LICENSE OR
PERMISSION BY CENTRAL GOVERNMENT IT SHALL APPOINT AN OFFICER OR AUTHORITY TO MAKE FULL AND COMPLETE INVESTIGATION IN RESPECT OF APPLICATIONS RECEIVED .
IDRA
IF IT IS OF THE OPINION THAT THE SCHEDULED INDUSTRY OR UNDERTAKING THAT:
1)THERE HAS BEEN A SUBSTANCIAL FALL IN THE VOLUME OF PRODUCTION
2)THERE IS A DETORIATION IN THE QUALITY OF THE PRODUCT 3)THERE HAS BEEN UNJUSTIFIABLE RISE IN THE PRICE OF THE
OUTPUT AND 4)ANY UNDERTAKING IS BEING MANAGED IN A MANNER
HIGHLY DETRIMENTAL TO THE SCHEDULED INDUSTRY OR TO THE PUBLIC INTEREST.
IDRAUNDER THE SEC/16:
BY THE RESULT OF SUCH INVESTIGATION GOVERNMENT IS EMPOWERED TO ISSUE DIRECTIONS TO THE INDUSTRY OR UNDERTAKING :
1) TO REGULATE THE PRODUCTION OF OUTPUT AND FIX THE STANDARDS OF PRODUCTION.
2) REQUIRING THE INDUSTRY TO TAKE STEPS WHICH IT FEELS NECESSARY FOR THE DEVELOPMENT
3)PROHIBITING THE INDUSTRY OR UNDERTAKING TO ACT OR PRACTICE WHICH MIGHT REDUCE PRODUCTION,CAPACITY OR ECONOMIC VALUE
IDRA
SEC/13 FURTHER PROVISIONS FOR LICENSING.SEC/18 CALL FOR ASSISTANCE.SEC/14,17.
Sections 18A to 18G• Chapter- IIIA Direct Management Or Control Of
Industrial Undertakings By Central Government In Certain Cases)
• Chapter- IIIAA Management Or Control Of Industrial Undertakings Owned By Companies In Liquidation)
• Chapter- IIIAB Power To Provide Relief To Certain Industrial Undertakings)
• Chapter- IIIAC Liquidation Or Reconstruction Of Companies)
• Chapter- IIIB Control Of Supply, Distribution, Price Etc., Of Certain Articles)
Direct Management Or Control Of Industrial Undertakings(IU) By Central Government(CG)
Sec.18A• With investigation.• If CG is of the opinion that,
– IU have failed to follow directions under Sec.16; or
– Report under Sec.15, shows that affairs are being conducted in detrimental manner (to the scheduled industry concerned or the public)
Sec.18AA• Without investigation.• If CG is satisfied (by evidence in its
possession) that,– Persons in-charge of the IU, by their
actions brought a situation which is likely to affect the production (immediate action is necessary to prevent it); or
– Closed for a period not less than 3 months & • Such closure is prejudicial to the
scheduled industry concerned; or• restarting is necessary for the
general interests of the public.
By a notified order, can authorise person or body of persons to take over the management of IU, in whole or in part.Order initially valid for 5 years.
Can be extended time to time by 2 years, to a maximum of 12 years.
Sec. 18B- Effect of order
• Viz, persons holding office as managers or directors of the IU
• Shall be deemed to have vacated their offices.
All persons in charge of the management
•Between the IU and any managing agent or any director,•Shall be deemed to have terminated
Any contract of
management
•Along with the provisions of Companies Act,1956•Are subject to the provisions of this Act.
MOA & AOA
Sec. 18B- Effect of order (Contd.)
Managing agent (Now not in use)
•If any appointed under section 18A, shall be deemed to have been duly appointed in pursuance of the Companies Act, 1956•Removal from office with the previous consent of the Central Government
Property, effects and actionable
claims..etc of the IU
• The authorised person or the body should take effective steps to get those into their custody.
• Custody is deemed.
Authorised persons = Directors
• The authorised person(s) will be deemed to be the directors.
• All the powers exercisable by directors under the MOA and AOA, shall alone be exercisable by authorised person(s).
Sec.18C- Contracts in Bad faith
The authorised person or the body,
With the prior
approval of CG
For varying or cancelling any contract or agreement
Between the IU
and any other
person
That it is detrimental to
The IU and therefore be,
Sec.18D- No compensation for termination of office or contract
Notwithstanding anything contained in any law for the time being in force
No person who ceases to hold any office by reason of the provisions
Sec. 18B (a) or (b)
shall be entitled to any compensation for the loss of office or for the premature termination
of his contract of management
Provided that nothing contained in this section shall affect the right of any such person to recover from the IU moneys recoverable otherwise than by way of such compensation.
Sec.18E- Application Act 7 of 1913
Where the Management of the IU
taken over is a company
As defined under Indian Companies Act,1913
(Now Companies Act,1956)
Notwithstanding anything contained in
the Act, the MOA & the AOA
it shall not be lawful for the shareholders of such IU or any
other person to nominate or appoint any person to be a
director of the IU
no resolution passed at any meeting of the shareholders of such undertaking shall be given effect to unless approved by the
CG
no proceeding for the WU of such IU or for the appointment of a receiver in respect thereof
shall lie in any court except with the consent of the CG.
Sec.18F- Power of CG to cancel notified order
If at any time it appears to the CG on the application
of the owner of the IU or
otherwise
that the purpose of the order made under section 18A has been fulfilled
or
that for any other reason it is not
necessary that the order should
remain in force,
the CG may, by notified order,
cancel such order and
on the cancellation of any such order
the management or the control, as the case may be,
of the IU
shall vest in the owner of
the undertaking.
Other Chapters
Chapter- IIIAA Management Or Control Of Industrial Undertakings Owned By Companies In Liquidation)Chapter- IIIAB Power To Provide Relief To Certain Industrial Undertakings)Chapter- IIIAC Liquidation Or Reconstruction Of Companies)
Powers and Directions by Central Government
Sections 19 to 32 of Industries Act 1951
Power of Inspection S/19
Why inspection ? To ascertain the position or working of industrial
undertaking This section confers rights upon a person
appointed by the CG (a) to enter and inspect any premises; (b) to order the production of any document, book,
register or record in the possession (c) to examine persons related to any industrial
undertaking. A person authorized by the CG under sub-section
(1) shall be deemed to be a public servant.
General Prohibition S/20
Express prohibition on taking over the management or control of any industrial undertaking by the state government or any local authority.
Payment of Expenses S/21
Administrative Expenses incurred towards emoluments (wages) of officers of DC and such other are to be defrayed(paid) from the moneys provided by parliament.
Power of CG to Issue Directions S/22
The DC shall be guided by the instructions of the CG and such instructions may include directions relating to the manner in which, and the purpose for which, any proceeds of the cess levied under section 9 shall be expanded.
Decision of CG Final S/23
Decision of CG shall be final where a question arises as to whether (a) there has been a substantial
expansion of an industrial undertaking, or
(b) an industrial undertaking is producing or manufacturing any new article,
Penalties S/24
24(1) if any person contravenes or attempts to contravene or abets the contravention of
i) Any the following provisions S 10(1) or 10(4) or S 11(1) or 11(A) 0r S 13(1) or S 29B , 29B(2) , 29B(2A) , 29B(2D) , 29B(2F) and 29B(2G)
(ii) any direction issued under section 17 or sub-section (3) of section 18B, or(iii) any order made under section 18G, or(iv) any rule the contravention of which is made punishable under this section Shall be punishable with imprisonment for 5 years or with fine upto rupees 5000 or both. Rupees 500 for continuing contravention.
24(2) If the person contravening is a company then Every person who was in charge of company, and Was responsible for the conduct of the business
At the time of offence shall be deemed to be guilty of contravention and liable for punishment.Exception 1: No person shall be held liable if he can prove that(i) He exercised all due diligence to prevent commission of offence or(ii) He had no knowledge of the offence
24(3) Notwithstanding anything in S.24(2)
Where an Offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any director or manager secretary or other officer of the companySuch office holder shall be deemed to be guilty and punishable.
Penalty for False Statements S/24A
Any person when required by this act or by any order under this act Makes any statement or Furnishes any informationWhich is false and he/she reasonably believes to be false or doesn’t believe to be true shall be punishable with 3 months of imprisonment or with a fine of 2 thousand rupees or both.
Power Delegation S/25
The CG may by a notified order direct that any power exercised by it(except under sections 16, 18A, 18AA and 18FA), may be exercised by any other directed specified authority which is sub-ordinate to the CG.
S/26- The CG may give directions to state governments for execution of any of the provisions of the Act or any order or direction made.
Cognizance of Offence S/27 This act expressly bars the Courts to take
cognizance of any offence punishable under this act, until and unless there is a report of facts constituting such offence made by a person who is a public servant.(u/s 21 of IPC)
S/28 : Where a person is prosecuted for contravening any
order under S/18G which prohibits him from doing an act or being in possession of a thing without lawful authority, burden of proof lies on him.
s/29 :No court inferior to first class magistrate shall try any offence punishable under this act.
Power to Exempt in Special Cases s/29B
29(B)(1)If the CG thinks fit, having regard of smallness of no. of workers or amount invested, can exempt through a notification any industrial undertaking or class of
industrial undertakings or any schedule industry or class of scheduled industries
From all or any provision of this act and any rule or order which is made under this act.
S/29B(2A) The CG, after considering the
recommendations made to it by the Advisory Committee(constituted under 2B considering aspects under 2C), for the purpose of development and expansion of small scale industrial undertakings, direct that such article or class of articles specified in the First Schedule be reserved for exclusive production.
S29B(2C) The advisory committee may make recommendations
after considering the following (a) the nature of any article or class of articles which may be
produced economically by the ancillary, or small scale, industrial undertakings;
(b) the level of employment likely to be generated by the production of such article or class of articles by the ancillary, or small scale, industrial undertakings;
(c) the possibility of encouraging and diffusing entrepreneurship in industry;
(d) the prevention of concentration of economic power to the common detriment; and
(e) such other matters as the Advisory Committee may think fit.
S29(B)2D Any industry(other than ancillary)
carrying on the production of any reserved article or class of reserved articles on the date of reservation, shall be subject to conditions through orders notified by CG
While specifying conditions under 2D, the CG shall take into consideration the level of production.(section 2E)
Section 2F requires (every person or authority
registered under s/10) for production of registration certificate, permission 0r license before the CG, which is producing reserved articles.
Owner of every industrial undertaking, other than ancillary or small scale, who is in production of reserved article or has taken steps for production, without being registered under s/10, shall refrain from production.(2G)
Immunity
S/29(C) No suit shall lie against the govt. or any person acting in
good faith in pursuance of the act. S/30 Provides for power to make rules regarding various
aspects like Constitution of DC & AC, members, terms of office etc. Intervals, time, manner in which cess can be levied facilities to be provided for training of technicians and labor by
IU Collection of stats or info reg. IU Manner of registration u/s 10 Procedure for grant of licenses u/s 11, 11A, 13, 29B Matters to be considered for granting licences maintenance of books, accounts and records