Bare Acts Page 112

Payment of Wages Act

November 30, 2014

Section 1. Short title extent commencement and application

(1) This Act may be called the Payment of Wages Act 1936.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Government may by notification in the Official Gazette appoint.

(4) It applies in the first instance to the payment of wages to persons employed in any factory to persons employed (otherwise than in a factory) upon any railway by a railway administration or either directly or through a sub-contractor by a person fulfilling a contract with a railway administration and to persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii) of section 2.

(5) The State Government may after giving three months’ notice of its intention of so doing by notification in the Official Gazette extend the provisions of this Act or any of them to the payment of wages to any class of persons employed in any establishment of class of establishments specified by the Central Government or a State Government under sub-clause (h) of clause (ii) of section 2 :

Provided that in relation to any such establishment owned by the Central Government no such notification shall be issued except with the concurrence of that government.

(6) Nothing in this Act shall apply to wages payable in respect of a wage-period which over such wage-period average one thousand six hundred rupees a month or more.

Section 2. Definitions

In this Act unless there is anything repugnant in the subject or context –

(i) “employed person” includes the legal representative of a deceased employed person;

(ia) “employer” includes the legal representative of a deceased employer;

(ib) “factory” means a factory as defined in clause (m) of section 2 of the Factories Act 1948 (63 of 1948) and includes any place to which the provisions of that Act have been applied under sub-section (1) of section 85 thereof;

(ii) “industrial or other establishment” means any –

(a) tramway service or motor transport service engaged in carrying passengers or goods or both by road for hire or reward;

(aa) air transport service other than such service belonging to or exclusively employed in the military naval or air forces of the Union or the Civil Aviation Department of the Government of India;

(b) dock wharf or jetty;

(d) mine quarry or oil-field;

(e) plantation;

(f) workshop or other establishment in which articles are produced adapted or manufactured with a view to their use transport or sale;

(g) establishment in which any work relating to the construction development or maintenance of buildings roads bridges or canals or relating to operations connected with navigation irrigation or to the supply of water or relating to the generation transmission and distribution of electricity or any other form of power is being carried on;

(h) any other establishment or class of establishments which the Central Government or a State Government may having regard to the nature thereof the need for protection of persons employed therein and other relevant circumstances specify by notification in the Official Gazette.

(iia) “mine” has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines Act 1952 (35 of 1952);

(iii) “plantation” has the meaning assigned to it in clause (f) of section 2 of the Plantations Labour Act 1951 (69 of 1951);

(iv) “prescribed” means prescribed by rules made under this Act;

(v) “railway administration” has the meaning assigned to it in clause (6) of section 3 of the Indian Railways Act 1890 (9 of 1890); and

(vi) “wages” means all remuneration (whether by way of salary allowances or otherwise) expressed in terms of money or capable of being so expressed which would if the terms of employment express or implied were fulfilled by payable to a person employed in respect of his employment or of work done in such employment and includes –

(a) any remuneration payable under any award or settlement between the parties or order of a court;

(b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;

(d) any sum which by reason of the termination of employment of the person employed is payable under any law contract or instrument which provides for the payment of such sum whether with or without deductions but does not provide for the time within which the payment is to be made;

(e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force, but does not include –

(1) any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a court;

(2) the value of any house-accommodation or of the supply of light water medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;

(3) any contribution paid by the employer to any pension or provident fund and the interest which may have accrued thereon;

(4) any travelling allowance or the value of any travelling concession;

(5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or

(6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d).

Section 3. Responsibility for payment of wages

Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act:

Provided that in the case of persons employed (otherwise than by a contractor) –

(a) in factories if a person has been named as the manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act 1948 (63 of 1948) ;

(b) in industrial or other establishments if there is a person responsible to the employer for the supervision and control of the industrial or other establishments;

(c) upon railways (otherwise than in factories) if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned.

The person so named the person so responsible to the employer or the person so nominated as the case may be shall also be responsible for such payment.

Section 4. Fixation of wage-periods

(1) Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable.

(2) No wage-period shall exceed one month.

Section 5. Time of payment of wages

(1) The wages of every person employed upon or in –

(a) any railway factory or industrial or other establishment upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day,

(b) any other railway factory or industrial or other establishment shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable :

Provided that in the case of persons employed on a dock wharf or jetty or in a mine the balance of wages found due on completion of the final tonnage account of the ship or wagons loaded or unloaded as the case may be shall be paid before the expiry of the seventh day from the day of such completion.

(2) Where the employment of any person is terminated by or on behalf of the employer the wages earned by him shall be paid before the expiry of the second working day from the day on which his employment is terminated:

Provided that where the employment of any person in an establishment is terminated due to the closure of the establishment for any reason other than a weekly or other recognised holiday the wages earned by him shall be paid before the expiry of the second day from the day on which his employment is so terminated.

(3) The State Government may by general or special order exempt to such extent and subject to such conditions as may be specified in the order the person responsible for the payment of wages to persons employed upon any railway (otherwise than in a factory) or to persons employed as daily-rated workers in the Public Works Department of the Central Government or the State Government from the operation of this section in respect of wages of any such persons or class of such persons:

Provided that in the case of persons employed as daily-rated workers as aforesaid no such order shall be except in consultation with the Central Government.

(4) Save as otherwise provided in sub-section (2) all payments of wages shall be made on a working day.

Section 6. Wages to be paid in current coin or currency notes

All wages shall be in current coin or currency notes or in both :

Provided that the employer may after obtaining the written authorisation of the employed person pay him the wages either by cheque or by crediting the wages in his bank account.

Section 7. Deductions which may be made from wages

(1) Notwithstanding the provisions of sub-section (2) of section 47 of the Indian Railways Act 1890 (9 of 1890) the wages of an employed person shall be paid to him without deductions of any kind except those authorised by or under this Act.

Explanation I : Every payment made by the employed person to the employer or his agent shall for the purposes of this Act be deemed to be a deduction from wages.

Explanation II : Any loss of wages resulting from the imposition, for good and sufficient cause upon a person employed of any of the following penalties namely :-

(i) the withholding of increment or promotion (including the stoppage of increment at an efficiency bar);

(ii) the reduction to a lower post or time scale or to a lower stage in a time scale; or

(iii) suspension;

shall not be deemed to be a deduction from wages in any case where the rules framed by the employer for the imposition of any such penalty are in conformity with the requirements if any which may be specified in this behalf by the State Government by notification in the Official Gazette.

(2) Deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act and may be of the following kinds only namely :

(a) fines;

(b) deductions for absence from duty;

(c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody or for loss of money for which he is required to account where such damage or loss is directly attributable to his neglect or default;

(d) deductions for house-accommodation supplied by the employer or by government or any housing board set up under any law for the time being in force (whether the government or the board is the employer or not) or any other authority engaged in the business of subsidising house-accommodation which may be specified in this behalf by the State Government by notification in the Official Gazette;

(e) deductions for such amenities services supplied by the employer as the State Government or any officer specified by it in this behalf may by general or special order authorise.

Explanation : The word “services” in this clause does not include the supply of tools and raw materials required for the purposes of employment;

(f) deductions for recovery of advances of whatever nature (including advances for travelling allowance or conveyance allowance) and the interest due in respect thereof or for adjustment of over-payments of wages;

(ff) deductions for recovery of loans made from any fund constituted for the welfare of labour in accordance with the rules approved by the State Government and the interest due in respect thereof;

(fff) deductions for recovery of loans granted for house-building or other purposes approved by the State Government and the interest due in respect thereof;

(g) deductions of income-tax payable by the employed person;

(h) deductions required to be made by order of a court or other authority competent to make such order;

(i) deductions for subscriptions to and for repayment of advances from any provident fund to which the Provident Funds Act 1952 (19 of 1952) applies or any recognised provident funds as defined in section 58A of the Indian Income Tax Act 1922 (11 of 1922) or any provident fund approved in this behalf by the State Government during the continuance of such approval;

(j) deductions for payments to co-operative societies approved by the State Government or any officer specified by it in this behalf or to a scheme of insurance maintained by the Indian Post Office and

(k) deductions made with the written authorisation of the person employed for payment of any premium on his life insurance policy to the Life Insurance Corporation Act of India established under the Life Insurance Corporation 1956 (31 of 1956) or for the purchase of securities of the Government of India or of any State Government or for being deposited in any Post Office Saving Bank in furtherance of any savings scheme of any such government.

(kk) deductions made with the written authorisation of the employed person for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Union act 1926 (16 of 1926) for the welfare of the employed persons or the members of their families or both and approved by the State Government or any officer specified by it in this behalf during the continuance of such approval;

(kkk) deductions made with the written authorisation of the employed person for payment of the fees payable by him for the membership of any trade union registered under the Trade Union Act 1926 (16 of 1926);

(l) deductions for payment of insurance premia on Fidelity Guarantee Bonds;

(m) deductions for recovery of losses sustained by a railway administration on account of acceptance by the employed person of counterfeit or base coins or mutilated or forged currency notes;

(n) deductions for recovery of losses sustained by a railway administration on account of the failure of the employed person to invoice to bill to collect or to account for the appropriate charges due to that administration whether in respect of fares freight demurrage wharfage and cranage or in respect of sale of food in catering establishments or in respect of sale of commodities in grain shops or otherwise;

(o) deductions for recovery of losses sustained by a railway administration on account of any rebates or refunds incorrectly granted by the employed person where such loss is directly attributable to his neglect or default;

(p) deductions made with the written authorisation of the employed person for contribution to the Prime Minister’s National Relief Fund or to such other Fund as the Central Government may by notification in the Official Gazette specify;

(q) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees.

(3) Notwithstanding anything contained in this Act the total amount of deductions which may be made under sub-section (2) in any wage-period from the wages of any employed person shall not exceed –

(i) in cases where such deductions are wholly or partly made for payments to co-operative societies under clause (j) of sub-section (2) seventy-five per cent of such wages and

(ii) in any other case fifty per cent of such wages :

Provided that where the total deductions authorised under sub-section (2) exceed seventy five per cent or as the case may be, fifty per cent of the wages the excess may be recovered in such manner as may be prescribed.

(4) Nothing contained in this section shall be construed as precluding the employer from recovering from the wages of the employed person or otherwise any amount payable by such person under any law for the time being in force other than the Indian Railways Act 1890 (9 of 1890).

Section 8. Fines

(1) No fine shall be imposed on any employed person save in respect of such acts and omissions on his part as the employer with the previous approval of the State Government or of the prescribed authority may have specified by notice under sub-section (2).

(2) A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which the employment carried on or in the case of persons employed upon a railway (otherwise than in a factory) at the prescribed place or places.

(3) No fine shall be imposed on any employed person until he has been given an opportunity of showing cause against the fine or otherwise than in accordance with such procedure as may be prescribed for the imposition of fines.

(4) The total amount of fine which may be imposed in any one wage-period on any employed person shall not exceed an amount equal to three per cent of the wages payable to him in respect of that wage-period.

(5) No fine shall be imposed on any employed person who is under the age of fifteen years.

(6) No fine imposed on any employed person shall be recovered from him by installments or after the expiry of sixty days from the day on which it was imposed.

(7) Every fine shall be deemed to have been imposed on the day of the act or omission in respect of which it was imposed.

(8) All fines and all realisations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under section 3 in such form as may be prescribed; and all such realisations shall be applied only to such purposes beneficial to the persons employed in the factory or establishment as are approved by the prescribed authority.

Explanation : When the persons employed upon or in any railway, factory or industrial or other establishment are part only of a staff employed under the same management all such realisations may be credited to a common fund maintained for the staff as a whole provided that the fund shall be applied only to such purposes as are approved by the prescribed authority.

Section 9. Deductions for absence from duty

(1) Deductions may be made under clause (b) of sub-section (2) of section 7 only on account of the absence of an employed person from the place or places where by the terms of his employment , he is required to work such absence being for the whole or any part of the period during which he is so required to work.

(2) The amount of such deduction shall in no case bear to the wages payable to the employed person in respect of the wage-period for which the deduction is made in a larger proportion than the period for which he was absent bears to the total period within such wage-period during which by the terms of his employments he was required to work:

Provided that subject to any rules made in this behalf by the State Government if ten or more employed persons acting in concert absent themselves without due notice (that is to say without giving the notice which is required under the terms of their contracts of employment) and without reasonable cause such deduction from any such person may include such amount not exceeding his wages for eight days as may by any such terms be due to the employer in lieu of due notice.

Explanation : For the purposes of this section an employed person shall be deemed to be absent from the place where he is required to work if although present in such place he refuses in pursuance of a stay-in strike or for any other cause which is not reasonable in the circumstances to carry out his work.

Section 10. Deductions for damage or loss

(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7 shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employed person.

(1A) A deduction shall not be made under clause (c) or clause (m) or clause (n) or clause (o) of sub-section (2) of section 7 until the employed person has been given an opportunity of showing cause against the deduction or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions.

(2) All such deductions and all realisations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under section 3 in such form as may be prescribed.

Section 11. Deductions for services rendered

A deduction under clause (d) or clause (e) of sub-section (2) of section 7 shall not be made from the wages of an employed person, unless the house-accommodation amenity or service has been accepted by him as a term of employment or otherwise and such deduction shall not exceed an amount equivalent to the value of the house-accommodation amenity or service supplied and in the case of deduction under the said clause (e) shall be subject to such conditions as the State Government may impose.

Section 12. Deductions for recovery of advances

Deductions under clause (f) of sub-section (2) of section 7 shall be subject to the following conditions namely:

(a) recovery of an advance of money given before employment began shall be made from the first payment of wages in respect of a complete wage-period but no recovery shall be made of such advances given for traveling-expenses;

(aa) recovery of an advance of money given after employment began shall be subject to such conditions as the State Government may impose;

(b) recovery of advances of wages not already earned shall be subject to any rules made by the State Government regulating the extent to which such advances may be given and the installments by which they may be recovered.

Section 12A. Deductions for recovery of loans

Deductions for recovery of loans granted under clause (fff) of sub-section (2) of section 7 shall be subject to any rules made by the State Government regulating the extent to which such loans may be granted and the rate of interest payable thereon.

Section 13. Deductions for payments to co-operative societies and insurance schemes

Deductions under clause (j) and clause (k) of sub-section (2) of section 7 shall be subject to such conditions as the State Government may impose.

Section 13A. Maintenance of registers and records

(1) Every employer shall maintain such registers and records giving such particulars of persons employed by him the work performed by them the wages paid to them the deductions made from their wages the receipts given by them and such other particulars and in such form as may be prescribed.

(2) Every register and record required to be maintained under this section shall for the purposes of this Act be preserved for a period of three years after the date of the last entry made therein.

Section 14. Inspectors

(1) An Inspector of Factories appointed under sub-section (1) of section 8 of the Factories Act 1948 (63 of 1948) shall be an Inspector for the purposes of this Act in respect of all factories within the local limits assigned to him.

(2) The State Government may appoint Inspectors for the purposes of this Act in respect of all persons employed upon a railway (otherwise than in a factory) to whom this Act applies.

(3) The State Government may by notification in the Official Gazette appoint such other persons as it thinks fit to be Inspectors for the purposes of this Act and may define the local limits within which and the class of factories and industrial or other establishments in respect of which they shall exercise their functions.

(4) An Inspector may,

(a) make such examination and inquiry as he thinks fit in order to ascertain whether the provisions of this Act or rules made there under are being observed;

(b) with such assistance if any as he thinks fit enter inspect and search any premises of any railway factory or industrial or other establishment at any reasonable time for the purpose of carrying out the objects of this Act;

(c) supervise the payment of wages to persons employed upon any railway or in any factory or industrial or other establishment;

(d) require by a written order the production at such place as may be prescribed of any register maintained in pursuance of this Act and taken on the spot or otherwise statements of any persons which he may consider necessary for carrying out the purposes of this Act;

(e) seize or take copies of such registers or documents or portions thereof as he may consider relevant in respect of an offence under this Act which he has reason to believe has been committed by an employer;

(f) exercise such other powers as may be prescribed :

Provided that no person shall be compelled under this sub-section to answer any question or make any statement tending to incriminate himself.

(4A) The provisions of the Code of Criminal Procedure 1973 (2 of 1974) shall so far as may be apply to any search or seizure under this sub-section as they apply to any search or seizure made under the authority of a warrant issued under section 94 of the said Code.

(5) Every Inspector shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860).

Section 14A. Facilities to be afforded to Inspectors

Every employer shall afford an Inspector all reasonable facilities for making any entry inspection supervision examination or inquiry under this Act.

Section 15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims

(1) The State Government may by notification in the Official Gazette appoint a presiding officer of any Labour Court or Industrial Tribunal constituted under the Industrial Disputes Act 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State or any Commissioner for Workmen’s Compensation or other officer with experience as a Judge of a Civil Court or as a Stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of deductions from the wages or delay in payment of the wages of persons employed or paid in that area including all matters incidental to such claims :

Provided that where the State Government considers it necessary so to do it may appoint more than one authority for any specified area and may by general or special order provide for the distribution or allocation of work to be performed by them under this Act.

(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed such person himself or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act or any other person acting with the permission of the authority appointed under sub-section (1) may apply to such authority for a direction under sub-section (3) :

Provided that every such application shall be presented within twelve months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made as the case may be:

Provided Further that any application may be admitted after the said period of twelve months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.

(3) When any application under sub-section (2) is entertained the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3 or give them an opportunity of being heard and after such further inquiry (if any) as may be necessary may without prejudice to any other penalty to which such employer or other person is liable under this Act direct the refund to the employed person of the amount deducted or the payment of the delayed wages together with the payment of such compensation as the authority may think fit not exceeding ten times the amount deducted in the former case and not exceeding twenty-five rupees in the latter and even if the amount deducted or the delayed wages are paid before the disposal of the application direct the payment of such compensation as the authority may think fit not exceeding twenty-five rupees :

Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to –

(a) a bona fide error or bona fide dispute as to the amount payable to the employed person or

(b) the occurrence of an emergency or the existence of exceptional circumstances such that the person responsible for the payment of the wages was unable though exercising reasonable diligence to make prompt payment or

(4) If the authority hearing an application under this section is satisfied –

(a) that the application was either malicious or vexatious the authority may direct that a penalty not exceeding fifty rupees be paid to the employer or other person responsible for the payment of wages by the person presenting the application; or

(b) that in any case in which compensation is directed to be paid under sub-section (3) the applicant ought not to have been compelled to seek redress under this section the authority may direct that a penalty not exceeding fifty rupees be paid to the State Government by the employer or other person responsible for the payment of wages.

(4A) Where there is any dispute as to the person or persons being the legal representative or representatives of the employer or of the employed person the decision of the authority on such dispute shall be final.

(4B) Any inquiry under this section shall be deemed to be a judicial proceeding within the meaning of sections 193 219 and 228 of the Indian Penal Code (45 of 1860).

(5) Any amount directed to be paid under this section may be recovered –

(a) if the authority is a Magistrate by the authority as if it were a fine imposed by him as Magistrate and

(b) if the authority is not a Magistrate by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.

Section 16. Single application in respect of claims from unpaid group

(1) Employed persons are said to belong to the same unpaid group if they are borne on the same establishment and if deductions have been made from their wages in contravention of this Act for the same cause and during the same wage-period or periods or if their wages for the same wage-period or periods have remained unpaid after the day fixed by section 5.

(2) A single application may be presented under section 15 on behalf or in respect of any number of employed persons belonging to the same unpaid group and in such case every person on whose behalf such application is presented may be awarded maximum compensation to the extent specified in sub-section (3) of section 15.

(3) The authority may deal with any number of separate pending applications presented under section 15 in respect of persons belonging to the same unpaid group as a single application presented under sub-section (2) of this section and the provisions of that sub-section shall apply accordingly.

Section 17. Appeal

(1) An appeal against an order dismissing either wholly or in part an application made under sub-section (2) of section 15 or against a direction made under sub-section (3) or sub-section (4) of that section may be preferred within thirty days of the date on which the order or direction was made in a Presidency-town before the Court of Small Causes and elsewhere before the District Court –

(a) by the employer or other person responsible for the payment of wages under section 3 if the total sum directed to be paid by way of wages and compensation exceeds three hundred rupees or such direction has the effect of imposing on the employer or the other person a financial liability exceeding one thousand rupees or

(b) by an employed person or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act or any other person permitted by the authority to make an application under sub-section (2) of section 15 if the total amount of wages claimed to have been with held from the employed person exceeds twenty rupees or from the unpaid group to which the employed person belongs or belonged exceeds fifty rupees or

(1A) No appeal under clause (a) of sub-section (1) shall lie unless the memorandum of appeal is accompanied by a certificate by the authority to the effect that the appellant has deposited the amount payable under the direction appealed against.

(2) Save as provided in sub-section (1) any order dismissing either wholly or in part an application made under sub-section (2) of section 15 or a direction made under sub-section (3) or sub-section (4) of that section shall be final.

(3) Where an employer prefers an appeal under this section the authority against whose decision the appeal has been preferred may and if so directed by the court referred to in sub-section (1) shall pending the decision of the appeal withhold payment of any sum in deposit with it.

(4) The court referred to in sub-section (1) may if it thinks fit submit any question of law for the decision of the High Court and if it so does shall decide the question in conformity with such decision.

Section 17A. Conditional attachment of property of employer or other person responsible for payment of wages

(1) Where at any time after an application has been made under sub-section (2) of section 15 the authority or where at any time after an appeal has been filed under section 17 by an employed person or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act or any other person permitted by the authority to make an application under sub-section (2) of section 15 the Court referred to in that section is satisfied that the employer or other person responsible for the payment of wages under section 3 is likely to evade payment of any amount that may be directed to be paid under section 15 or section 17 the authority or the court as the case may be except in cases where the authority or court is of opinion that the ends of justice would be defeated by the delay after giving the employer or other person an opportunity of being heard may direct the attachment of so much of the property of the employer or other person responsible for the payment of wages as is in the opinion of the authority or court sufficient to satisfy the amount which may be payable under the direction.

(2) The provisions of the Code of Civil Procedure 1908 (5 of 1908) relating to attachment before judgment under that Code shall so far as may be apply to any order for attachment under sub-section (1).

Section 18. Powers of authorities appointed under section 15

Every authority appointed under sub-section (1) of section 15 shall have all the powers of a civil court under the Code of Civil Procedure 1908 (5 of 1908) for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents and every such authority shall be deemed to be a civil court for all the purposes of section 195 and of Chapter XXVI of the Code of Criminal Procedure 1973 (2 of 1974).

Section 19. Power to recover from employer in certain cases

[Repealed by Act 53 of 1964]

Section 20. Penalty for offences under the Act

(1) Whoever being responsible for the payment of wages to an employed person contravenes any of the provisions of any of the following sections namely section 5 except sub-section (4) thereof section 7 section 8 except sub-section (8) thereof , section 9 section 10 except sub-section (2) thereof and section 11 to 13 both inclusive shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees.

(2) Whoever contravenes the provisions of section 4 sub-section (4) of section 5 section 6 sub-section (8) of section 8 sub-section (2) of section 10 or section 25 shall be punishable with fine which may extend to five hundred rupees.

(3) Whoever being required under this Act to maintain any records or registers or to furnish any information or return –

(a) fails to maintain such register or record; or

(b) willfully refuses or without lawful excuse neglects to furnish such information or return; or

(d) refuses to answer or willfully gives a false answer to any question necessary for obtaining any information required to be furnished under this Act shall for each such offence be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees.

(4) Whoever –

(a) willfully obstructs an Inspector in the discharge of his duties under this Act; or

(b) refuse or willfully neglects to afford an Inspector any reasonable facility for making any entry inspection examination supervision or inquiry authorised by or under this Act in relation to any railway factory or industrial or other establishment; or

(c) willfully refuses to produce on the demand of an Inspector any register or other document kept in pursuance of this Act; or

(d) prevents or attempts to prevent or does anything which he has any reason to believe is likely to prevent any person from appearing before or being examined by an Inspector acting in pursuance of his duties under this Act; shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees.

(5) If any person who has been convicted of any office punishable under this Act is again guilty of an offence involving contravention of the same provision he shall be punishable on a subsequent conviction with imprisonment for a term which shall not be less than one month but which may extend to six months and with fine which shall not be less than five hundred rupees but which may extend to three thousand rupees.

Provided that for the purpose of this sub-section no cognizance shall be taken of any conviction made more than two years before the date on which the commission of the offence which is being punished came to the knowledge of the Inspector.

(6) If any person fails or willfully neglects to pay the wages of any employed person by the date fixed by the authority in this behalf he shall without prejudice to any other action that may be taken against him be punishable with an additional fine which may extend to one hundred rupees for each day for which such failure or neglect continues.

Section 21. Procedure in trial of offences

(1) No court shall take cognizance of a complaint against any person for an offence under sub-section (1) of section 20 unless an application in respect of the facts constituting the offence has been presented under section 15 and has been granted wholly or in part and the authority empowered under the latter section or the appellate Court granting such application has sanctioned the making of the complaint.

(2) Before sanctioning the making of a complaint against any person for an offence under sub-section (1) of section 20 the authority empowered under section 15 or the appellate Court as the case may be shall give such person an opportunity of showing cause against the granting of such sanction and the sanction shall not be granted if such person satisfies the authority or Court that his default was due to –

(a) a bona fide error or bona fide dispute as to the amount payable to the employed person or

(3) No Court shall take cognizance of a contravention of section 4 or of section 6 or of a contravention of any rule made under section 26 except on a complaint made by or with the sanction of an Inspector under this Act.

(3A) No Court shall take cognizance of any offence punishable under sub-section (3) or sub-section (4) of section 20 except on a complaint made by or with the sanction of an Inspector under this Act.

(4) In imposing any fine for an affiance under sub-section (1) of section 20 the court shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under section 15.

Section 22. Bar of suits

No Court shall entertain any suit for the recovery of wages or of any deduction from wages in so far as the sum so claimed –

(a) forms the subject of an application under section 15 which has been presented by the plaintiff and which is pending before the authority appointed under that section or of an appeal under section 17; or

(b) has formed the subject of a direction under section 15 in favour of the plaintiff; or

(d) could have been recovered by an application under section 15.

Section 22A. Protection of action taken in good faith

No suit prosecution or other legal proceeding shall lie against the government or any officer of the government for anything which is in good faith done or intended to be done under this Act.

Section 23. Contracting out

Any contract or agreement whether made before or after the commencement of this Act whereby an employed person relinquishes any right conferred by this Act shall be null and void in so far as it purports to deprive him of such right.

Section 24. Application of Act to railways air transport services mines and oilfields

The powers by this Act conferred upon the State Government shall, in relation to railways air transport services mines and oilfields be powers of the Central Government.

Section 25. Display by notice of abstracts of the Act

The person responsible for the payment of wages of persons employed in a factory or an industrial or other establishment shall cause to be displayed in such factory or industrial or other establishment a notice containing such abstracts of this Act and of the rules made there under in English and in the language of the majority of the persons employed in the factory, or industrial or other establishment as may be prescribed.

Section 25A. Payment of undisbursed wages in case of death of employed person

(1) Subject to the other provisions of the Act all amounts payable to an employed person as wages shall if such amounts could not or cannot be paid on account of his death before payment or on account of his whereabouts not being known –

(a) be paid to the person nominated by him in this behalf in accordance with the rules made under this Act; or

(b) where no such nomination has been made or where for any reasons such amounts cannot be paid to the person so nominated be deposited with the prescribed authority who shall deal with the amounts so deposited in such manner as may be prescribed.

(2) Where in accordance with the provisions of sub-section (1) all amounts payable to an employed person as wages –

(a) are paid by the employer to the person nominated by the employer person; or

(b) are deposited by the employer with the prescribed authority, the employer shall be discharged of his liability to pay those wages.

Section 26. Rule-making power

(1) The State Government may make rules to regulate the procedure to be followed by the authorities and courts referred to in sections 15 and 17.

(2) The State Government may by notification in the Official Gazette make rules for the purpose of carrying into effect the provisions of this Act.

(3) In particular and without prejudice to the generality of the foregoing power rules made under sub-section (2) may –

(a) require the maintenance of such records registers returns and notice as are necessary for the enforcement of the Act prescribe the form thereof and the particulars to be entered in such registers or records;

(b) require the display in a conspicuous place on premises where employment is carried on of notices specifying rates of wages payable to persons employed on such premises;

(c) Provide for the regulate inspection of the weights measures and weighing machines used by employers in checking or ascertaining the wages of persons employed by them;

(d) prescribe the manner of giving notice of the days on which wages will be paid;

(e) prescribe the authority competent to approve under sub-section (1) of section 8 acts and omissions in respect of which fines may be imposed;

(f) prescribe the procedure for the imposition of fines under section 8 and for making of the deductions referred to in section 10;

(g) prescribe the conditions subject to which deductions may be made under the proviso the sub-section (2) of section 9;

(h) prescribe the authority competent to approve the purposes on which the proceeds of fines shall be expended;

(i) prescribe the extent to which advances may be made and the installments by which they may be recovered with reference to clause (b) of section 12;

(ia) prescribe the extent to which loans may be granted and the rate of interest payable thereon with reference to section 12A;

(ib) prescribe the powers of Inspectors for the purposes of this Act;

(j) regulate the scales of costs which may allowed in proceedings under this Act;

(k) prescribe the amount of court-fees payable in respect of any proceedings under this Act

(l) prescribe the abstracts to be contained in the notices required by section 25;

(la) prescribe the form and manner in which nominations may be made for the purposes of sub-section (1) of section 25A the cancellation or variation of any such nomination or the making of any fresh nomination in the event of the nominee predeceasing the person making nomination and other matters connected with such nominations;

(lb) specify the authority with whom amounts required to be deposited under clause (b) of sub-section (1) of section 25A shall be deposited and the manner in which such authority shall deal with the amounts deposited with it under that clause;

(m) provide for any other matter which is to be or may be prescribed.

(4) In making any rule under this section the State Government may provide that a contravention of the rule shall be punishable with fine which may extend to two hundred rupees.

(5) All rules made under this section shall be subject to the condition of previous publication and the date to be specified under clause (3) of section 23 of the General Clauses Act 1897 (10 of 1897) shall not be less than three months from the date on which the draft of the proposed rules was published.

(6) Every rule made by the Central Government under this section shall be laid as soon as may be after it is made before each House of Parliament 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 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 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 rule.

Industrial Disputes Act

November 30, 2014

Section 1. Short title, extent and commencement

ACT NO. 14 OF 1947 1* [11th March, 1947.]

(1) This Act may be called the Industrial Disputes Act, 1947.

¹[(2) It extends to the whole of India].

²[* * *]

(3) It shall come into force on the first day of April, 1947.

—————

1. Subs. by Act 36 of 1956, sec. 2, for the former sub-section (w.e.f. 29-8-1956).

2. Provision omitted by Act 51 of 1970, sec. 2 and Sch. (w.e.f. 1-9-1971).

Section 2.Definitions

In this Act, unless there is anything repugnant in the subject or context, –

(a) “Appropriate Government” means-

(i) In relation to any industrial dispute concerning ¹[* * *] any industry carried on by or under the authority of the Central Government, ²[* * *] or by a railway company ³[or concerning any such controlled industry as may be specified in this behalf by the Central Government] ⁴[* * *] or in relation to an industrial dispute concerning ⁵[ ⁶[ ⁷[ ⁸[a Dock Labour Board established under section 5A of the Dock Workers (Regulation of employment) Act;

1948 (9 of 1948), or ⁹[the Industrial Finance Corporation of India Limited formed and registered under the Companies Act, 1956 (1 of 1956)] or the Employees’ State Insurance Corporation established under section 3 of the Employees State Insurance Act, 1948 (34of 1948), or the Board of Trustees constituted under section 3A of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948), or the Central Board of Trustees and the State Boards of Trustees constituted under section 5A and section 5B, respectively, of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952), ¹⁰[* * *], or the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956), or ⁹[the Oil and Natural Gas Corporation Limited registered under tile Companies Act, 1956 (1 of 1956)], or the Deposit insurance and Credit Guarantee Corporation established under section 3 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961), or the Central Warehousing Corporation established under section 3 of tile Warehousing Corporations Act, 1962 (58 of 1962), or the Unit Trust of India established under section 3 of the Unit Trust of India Act, 1963 (52 of 1963), or the Food Corporation of India established under section 3, or a Board of Management established for two or more contiguous States under section 16 of the Food Corporations Act, 1964 (37 of 1964), or ⁹[the Airports Authority of India constituted under section 3 of the Airports Authority of India Act, 1994 (55 of 1994)], or a Regional Rural Bank established under section 3 of the Regional Rural Banks Act, 1976 (21 of 1976),or the Export Credit and Guarantee Corporation Limited or the Industrial Reconstruction Bank of India Limited ], ¹¹[ the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987)], or ¹²[ ⁹[an air transport service, or a banking or an insurance company], a mine, an oil-field,] ¹³[a Cantonment Board,] or a ⁵³[“major port, any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or any corporation, not being a corporation referred to in this clause, established by or under any law made by Parliament, or the Cental public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the Central Government, the Central Government, and”]

⁵⁴[“(ii) in relation to any other industrial dispute, including the State public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government:

Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment.]

¹⁴[(aa) “Arbitrator” includes an umpire;]

¹⁵[ ¹⁶[ (aaa)] “Average pay” means the average of the wages payable to a workman-

(i) In the case of monthly paid workman, in the three complete calendar months,

(ii) In the case of weekly paid workman, in the four complete weeks,

(iii) In the case of daily paid workman, in the twelve full working days,

Preceding the date on which the average pay becomes payable if the workman had worked for three complete calendar months or four complete weeks or twelve full working days, as the case may be, and where such calculation cannot be made, the average pay shall be calculated as the average of the wages payable to a workman during the period he actually worked;]

¹⁷[ (b) ‘Award’ means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under section 10A;]

¹⁸[(bb) “Banking company” means a banking company as defined in section 5 of the Banking Companies Act, 1949, ¹⁹(10 of 1949) having branches or other establishments in more than one State, and includes ²⁰[ the Export-Import Bank of India] ²¹[the Industrial Reconstruction Bank of India,] ²²[the Industrial Development Bank of India,] ²³[the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 19891 the Reserve Bank of India, the State Bank of India, ²⁴[a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) ²⁵[a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, and any subsidiary bank], as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

²⁶[(cc) “Closure’ means the permanent closing down of a place of employ or part thereof;]

(d) “Conciliation officer” means a conciliation officer appointed under this Act;

(e) “Conciliation proceeding” means any proceeding held by a conciliation officer or Board under this Act;

²⁷[(ee) ‘Controlled industry’ means any industry the control of which by the Union has been declared by any Central Act to be expedient in the public interest;]

²⁸ [* * * * *]

(f) “Court’ means a Court of Inquiry constituted under this Act;

(g) “Employer” means-

(i) In relation to any industry carried on by or under the authority of any department of ²⁹[the Central Government or a State Government,] the authority prescribed in this behalf, or where no authority is prescribed, the head of the department;

(ii) In relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority;

³⁰ [(gg) “Executive’, in relation to a trade union, means the body, by whatever name called, to which the management of the affairs of the trade union is entrusted;]

³¹[ * * * * *]

(i) A person shall be deemed to be “independent” for the purpose of his appointment as the Chairman or other member of a Board, Court or Tribunal, if he is unconnected with the industrial dispute referred to such Board, Court or Tribunal or with any industry directly affected by such dispute:

³²[Provided that no person shall cease to be independent by reason only of the fact that he is a shareholder of-an incorporated company which is connected with, or likely to be affected by, such industrial dispute; but in such a case, he shall disclose to the appropriate Government the nature and extent of the shares held by him in such company;]

*(j) “Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;

(k) “Industrial dispute” means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any persons;

³³[(ka) ‘Industrial establishment or undertaking’ means an establishment or undertaking in which any industry is carried on:

Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then-

(a) If any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking;

(b) If the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment, or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking;]

³⁴[(kk) “Insurance company “ means an insurance company as defined in section 2 of the Insurance Act, 1938 (4 of 1938), having branches or other establishments in more than one State;]

³⁵[(kka) “Khadi” has the meaning assigned to it in clause (d) of section 2 of the Khadi and Village Industries Commission Act, 1956 (61 of 1956);] ³⁵[ ³⁶[ (kkb)] ‘Labour Court’ means a Labour Court constituted under section 7;]

³⁷[(kkk) “Lay-off” (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery ³⁸[or natural calamity or for any other connected reason] to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

Explanation.

Every workman whose name is borne on the muster rolls of the industrial establishment and who presents himself for work at the establishment at the time appointed for the purpose during normal working hours on any day and is not given employment by the employer within two hours of his so presenting himself shall be deemed to have been laid-off for that day within the meaning of this clause:

Provided that if the workman, instead of being given employment at the commencement of any shift for any day is asked to present himself for the purpose during the second half of the shift for the day and is given employment then, he shall be deemed to have been laid-off only for one-half of that day:

Provided further that if he is not given any such employment even after so presenting himself, he shall not be deemed to have been laid-off for the second half of the shift for the day and shall be entitled to full basic wages and dearness allowance for that part of the day;]

(l) “Lock-out” means the ⁴⁰[temporary closing of a place of employment], or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him;

³⁹[(la) “Major port” means a major port as defined in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908);

(lb) “Mine” means a mine as defined in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);]

⁴⁰[(ll) “National Tribunal” means a National Industrial Tribunal constituted under section 7B;l

⁴¹[(lll) “Office beater”, in relation to a trade union, includes any member of the executive thereof, but does not include an auditor;]

(m) “Prescribed” means prescribed by rules made under this Act;

(n) “Public utility service” means-

(i) Any railway service ⁴²[or any transport service for the carriage of passengers or goods by air];

⁴³[(ia) Any service in, or in connection with the working of, any major port or dock;]

(ii) Any section of an industrial establishment, on the working of which the safety of the establishment or the workmen employed therein depends;

(iii) Any postal, telegraph or telephone service;

(iv) Any industry, which supplies power, light or water to the public;

(v) Any system of public conservancy or sanitation;

(vi) Any industry specified in the ⁴⁴[First Schedule] which the appropriate Government may, if satisfied, that public emergency or public interest so requires, by notification in the Official Gazette, declared to be a public utility service for the purposes of this Act, for such period as may be specified in the notification:

Provided that the period so specified shall not, in the first instance, exceed six months but may, by a like notification, be extended from time to time, by any period not exceeding six months, at any one time if in the opinion of the appropriate Government public emergency or public interest requires such extension;

(o) “Railway company” means a railway company as defined in section 3 of the Indian Railways Act, 1890 (9 of 1890);

⁴⁵[(oo) “Retrenchment” means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include-

(a) Voluntary retirement of the workman; or

(b) Retirement of the workman on reaching the age of Superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

⁴⁶[(bb) Termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or]

⁴⁷[(p) “Settlement” means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to ⁴⁸[an officer authorised in this behalf by] the appropriate Government and the conciliation officer;]

(q) “Strike” means a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal, under a common understanding of any number of persons who are or have been so employed to continue to work or to accept employment;

⁴⁹[(qq) ‘Trade union’ means a trade union registered under the Trade Unions Act, 1926 (16 of 1926);]

⁵⁰[(r) “Tribunal” means an Industrial Tribunal constituted under section 7A and includes an Industrial Tribunal constituted before the 10th day of March, 1957, under this Act;]

⁵⁰[(ra) “Unfair labour practice” means any of the practices specified in the Fifth Schedule;

(rb) “Village industries” has the meaning assigned to it in clause (h) of section 2 of the Khadi and Village Industries Commission Act, 1956 (61 of 1956); j

⁵¹[(rr) “Wages” means a remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment of work done in such employment, and includes-

(i) Such allowances (including dearness allowance) as the workman is for the time being entitled to;

(ii) The value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;

(iii) Any travelling concession;

⁴⁹[(iv) Any commission payable on the promotion of sales or business or both;]

But does not include-

(a) Any bonus;

(b) Any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force;

⁵²[(s) “Workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-

(i) Who is subject to the Air Force Act, 1950 (45of l950),or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or

(ii) Who is employed in the police service or as an officer or other employee of a prison; or

(iii) Who is employed mainly in a managerial or administrative capacity; or

(iv) Who, being employed in a supervisory capacity, draws wages exceeding ⁵⁵[ten thousand rupees] per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.].

——————–

1. Certain words and figures inserted by Act 10 of 1963, sec. 47 and Sch. 11, Pt. 11 have been omitted by Act 36 of 1964, sec. 2 (w.e.f. 19-12-1964).

2. The words “by the Federal Railway Authority” omitted by the A.0. 1948.

3. Ins. by Act 65 of 1951, sec. 32.

4. The words “operating a Federal Railway” omitted by the A.0. 1950.

5. Ins. by Act 47 of 1961, sec. 51 and Sch. 11, Pt. III (w.e.f. 1-1-1962).

6. Subs. by Act 36 of 1964, sec. 2, for ‘the Deposit Insurance Corporation established’ (w.e.f. 19-12-1964).

7. Subs. by Act 45 of 1971, sec. 2 (w.e.f. 15-12,1971).

8. Subs. by Act 46 of 1982, sec. 2 (w.e.f. 21-8-1984).

9. Subs. by the Industrial Disputes (Amendment) Act, 1996 (w.e.f. 11-10-1995).

10. Omitted by the Industrial Disputes (Amendment) Act, 1996 (w.e.f.11-10-1995).

11. Ins. by Act 53 of 1987, sec. 56 and Second Sch., Part III (w.e.f. 9-7-1988).

12. Subs. by Act 54 of 1949, sec. 3, for “a mine, oil-field”.

13. Ins. by Act 36 of 1964, sec. 2 (w.e.f. 19-12-1964).

14. Ins. by Act 36 of 1964, sec. 2 (w.e.f. 19.12.1964).

15. Ins. by Act 43 of 1953, sec. 2 (w.e.f. 24-10-1953).

16. Clause (aa) re-lettered as “(aaa)” by Act 36 of 1964, sec. 2 (w.e.f. 19-12-1964).

17. Subs. by Act 36 of 1956, sec. 3, for cl. (b) (w.e.f. 10-3-1957).

18. Subs. by Act 38 of 1959, sec. 64 and Sch. 111, Pt. 11, for cl. (bb), which was ins. by Act 54 of 1949, sec. 3.

19. The short title now reads as “the Banking Regulation Act, 1949”.

20. Ins. by Act 28 of 1991, sec. 40 and (w.e.f. 1-1-1982) Sch. 11, Pt. 11.

21. Ins. by Act 62 of 1984, sec. 71, and Sch. III, Pt. 11 (w.e.f. 20-3-1985).

22. Ins. by Act 18 of 1964, sec. 38 and Sch. II, Pt. 11 (w.e.f. 1-7-1964).

23. Ins. by Act 39 of 1989, sec. 53 and 2nd Sch.

24. Subs. by Act 5 of 1970, sec. 20, for “and any subsidiary bank” (w.e.f. 19-7-1969).

25. Subs. by Act 40 of 1980, sec. 20, for certain words (w.e.f. 15-4-1980).

26. Ins. by Act 46 of 1982, sec. 2 (w.e.f. 21-8-1984).

27. Ins. by Act 65 of 1951, sec. 32.

28. Clause (eee) ins. by Act 43 of 1953, sec. 2, omitted by Act 36 of 1964, sec. 2 (w.e.f. 19-12-1964).

29. Subs. by the A.0. 1948, for “a Government in British India”.

30. Ins. by Act 45 of 1971, sec. 2 (w.e.f. 15-12-1971).

31. Cl. (h) omitted by the A.0. 1950.

32. Ins. by Act 18 of 1952, sec. 2.

* On the enforcement of clause (c) of sec. 2 of Act 46 of 1982, clause 0) of sec. 2 shall be stand substituted as directed in clause (c) of that Act. For the text of clause (j) of the Act, see Appendix.

33. Ins. by Act 46 of 1982, sec. 2 (w.e.f. 21-8-1964).

34. Ins. by Act 54 of 1949, sec. 3.

35. Clause (kka) re-lettered as clause (kkb) and clause (kka) ins. by Act 46 of 1982, sec. 2 (w.e.f. 21-8-1984).

36. Ins. by Act 36 of 1956, sec. 3 (w.e.f. 10-3-1957).

37. Ins. by Act 43 of 1953, sec. 2 (w.e.f. 24-10-1953).

38. Subs. by Act 46 of 1982, sec. 2 for certain words (w.e.f. 21-8-1984).

39. Ins. by Act 36 of 1964, sec. 2 (w.e.f. 19-12-1964).

40. Ins. by Act 36 of 1956, sec. 3 (w.e.f. 10-3-1957).

41. Ins. by Act 45 of 1971, sec. 2 (w.e.f. 15-12-1971).

42. Ins. by Act 36 of 1964, sec. 2 (w.e.f. 19-12-1964).

43. Ins. by Act 45 of 1971, sec. 2 (w.e.f. 15.12.1971).

44. Subs. by Act 36 of 1964, sec. 2, for “Schedule” (w.e.f. 19-12-1964).

45. Ins. by Act 43 of 1953, sec. 2 (w.e.f. 2,4-10-1953).

46. Ins. by Act 49 of 1984, sec. 2 (w.e.f. 18-8-1984).

47. Subs. by Act 36 of 1956, sec. 3 for cl. (p) (w.e.f. 7-10-1956).

48. Ins. by Act 35 of 1965, sec. 2 (w.e.f. 1-12-1965).

49. Ins. by Act 46 of 1982, sec. 2 (w.e.f. 21-8-1984).

50. Subs. by Act 18 of 1957, sec. 2 for cl. (r) (w.e.f. 10-3-1957).

51. Ins. by Act 43 of 1953, sec. 2 (w.e.f. 24-10-1953).

52. Subs. by Act 46 of 1982, sec. 2, for clause (s) (w.e.f. 21-8-1984).

53. Subs. by Act. 24 of 2010, for clause (a) w.e.f. 18-8-2010.

54. Subs. by Act. 24 of 2010, for clause (b) w.e.f. 18-8-2010.

55. Subs. by Act. 24 of 2010, for clause (s) w.e.f. 18-8-2010.

Section 2 A. Dismissal, etc., of an individual workman to be deemed to be an industrial dispute

¹[2A. Dismissal, etc., of an individual workman to be deemed to be an industrial dispute. Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.]

²[“(2) Notwithstanding anything contained in Section 10, any such workman as is specified in sub-section (1) may, make an application direct to the Labour Court or Tribunal for adjudication of the dispute referred to therein after the expiry of forty-five days from the date he has made the application to the Conciliation Officer of the appropriate Government for conciliation of the dispute, and in receipt of such application the Labour Court or Tribunal shall have powers and jurisdiction to adjudicate upon the dispute, as if it were a dispute referred to it by the appropriate Government in accordance with the provisions of this Act and all the provisions of this Act shall apply in relation to such adjudication as they apply in relation to an industrial dispute referred to it by the appropriate Government.

(3) The application referred to in sub-section (2) shall be made to the Labour Court or Tribunal before the expiry of three years from the date of discharge, dismissal, retrenchment or otherwise termination of service as specified in sub-section (1).”]

——————–

1. Ins. by Act 35 of 1965, for section 3 (w.e.f. 1-12-1965).

2. Ins. By. Act. 24 of 2010 w.e.f. 18-8-2010.

Section 3. Works Committee

(1) In the case of any industrial establishment in which one hundred or more workmen are employed or have been employed on any day in the preceding twelve months, the appropriate Government may by general or special order require the employer to constitute in the prescribed manner a Works Committee consisting of representatives of employers and workmen engaged in the establishment so however that the number of representatives of workmen on the Committee shall not be less than the number of representatives of the employer. The representatives of the workmen shall be chosen in the prescribed manner from among the workmen engaged in the establishment and in consultation with their trade union, if any, registered under the Indian Trade Unions Act, 1926 (16 of 1926).

(2) It shall be the duty of the Works Committee to promote measures for securing and preserving amity and good relations between the employer and workmen and, to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters.

Section 4. Conciliation officers

(1) The appropriate Government may, by notification in the Official Gazette, appoint such number of persons as it think–, fit, to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.

(2) A conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one or more specified industries and either permanently or for a limited period.

¹[“(f) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department, having a degree in law and at least seven years’ experience in the labour department including three years of experience as Conciliation Officer:

Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner shall be appointed unless he resigns from the service of the Central Government or State Government, as the case may be, before being appointed as the presiding officer; or

(g) he is an officer of Indian Legal Service in Grade HI with three years’ experience in the grade.”.]

——————–

1. Ins. by Act 24 of 2010 w.e.f. 18-8-2010.

Section 5. Boards of Conciliation

(1) The appropriate Government may as occasion arises by notification in the Official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute.

(2) A Board shall consist of a chairman and two or four other members, as the appropriate Government thinks fit.

(3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appointed to represent a party shall be appointed on the recommendation of that party:

Provided that, if any party fails to make a recommendation as aforesaid within the prescribed time, the appropriate Government shall appoint such persons as it thinks fit to represent that party.

(4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number:

Provided that if the appropriate Government notifies the Board that the services of the chairman or of any other member have ceased to be available, the Board shall not act until a new chairman or member, as the case may be, has been appointed.

Section 6. Courts of Inquiry

(1) The appropriate Government may as occasion arises by notification in the Official Gazette constitute a Court of Inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.

(2) A Court may consist of one independent person or of such number of independent persons as the appropriate Government may think fit and where a Court consists of two or more members, one of them shall be appointed as the chairman.

(3) A Court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number:

Provided that, if the appropriate Government notifies the Court that the services of the chairman have ceased to be available, the Court shall not act until a new chairman has been appointed.

Section 7. Labour Courts

¹[7. Labour Courts. (1) The appropriate Government may, by notification in the Official Gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing such other functions as may be assigned to then-, under this Act.

(2) A Labour Court shall consist of one person only to be appointed by the appropriate Government.

(3) A person shall not be qualified for appointment as the presiding officer of a Labour Court, unless.

²[(a) He is, or has been, a Judge of a High Court; or

(b) He has, for a period of not less than three years, been a District judge or an Additional District Judge; or

³[ * * * * *]

⁴[(d)] He has held any judicial office in India for not less than seven years; or

⁴[(e)] He has been the presiding officer of a Labour Court constituted under any provincial Act or State Act for not less than five years.

——————–

1. Subs. by Act 36 of 1956, sec. 4, for section 7 (w.e.f. 10-3-1957).

2. Ins. by Act 36 of 1964, sec. 3 (w.e.f. 19-12-1964).

3. Clause (c) omitted by Act 46 of 1982, sec. 3 (w.e.f. 21-8-1984).

4. Clauses (a) and (b) relettered as (d) and (e) respectively by Act 36 of 1964, sec. 3 (w.e.f. 19-12-1964).

Section 7A. Tribunals

(1) The appropriate Government may, by notification in the Official Gazette, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule ¹[and for performing such other functions as may be assigned to them under this Act].

(2) A Tribunal shall consist of one person only to be appointed by the appropriate Government.

(3) A person shall not be qualified for appointment as the presiding officer of a Tribunal unless-

(a) He is, or has been, a Judge of a High Court; or

²[(aa) He has, for a period of not less than three-years, been a District Judge or an Additional District Judge; ³[ * * * ]

⁵[“(b) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department, having a degree in law and at least seven years’ experience in the labour department including three years of experience as Conciliation Officer:

⁴[* * * * * *]

(4) The appropriate Government may, if it so thinks fit, appoint two persons as assessors to advise the Tribunal in the proceeding before it.

——————–

1. Ins. by Act 46 of 1982, sec. 4 (w.e.f. 21-8-1984).

2. Ins. by Act 36 of 1964, sec. 4 (w.e.f. 19-12-1964).

3. Omitted by Act 46 of 1982, sec. 4 (w.e.f. 21-8-1984).

4. Omitted by Act 46 of 1982, sec. 4 (w.e.f. 21-8-1984).

5. Ins. by Act. 24 of 2010 sec. 7A (w.e.f. 18-8-2010).

Section 7 B. National Tribunals

(1) The Central Government may, by notification in the Official Gazette, constitute one or more National Industrial Tribunals for the adjudication of industrial disputes which, in the opinion of the Central Government, involve questions of national importance or are of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such disputes.

(2) A National Tribunal shall consist of one person only to be appointed by the Central Government.

(3) A person shall not be qualified for appointment as the presiding officer of a National Tribunal ¹[ unless he is, or has been, a Judge of a High Court.]

(4) The Central Government may, if it so thinks fit, appoint two persons as assessors to advise the National Tribunal in the proceeding before it.

——————–

1. Subs. by Act 46 of 1982, sec. 5 (w.e.f. 21-8-1984).

Section 7 C. Disqualifications for the presiding officers of Labour Courts, Tribunals and National Tribunals

No person shall be appointed to, or continue in, the office of the presiding officer of a Labour Court, Tribunal or National Tribunal, if-

(a) He is not an independent person; or

(b) He has attained the age of sixty-five years.]

Section 8. Filling of vacancies

¹[8. Filling of vacancies. If, for any reason a vacancy (other than a temporary absence) occurs in the office of the presiding officer of a Labour Court, Tribunal or National Tribunal or in the office of the Chairman or any other member of a Board or Court, then, in the case of a National Tribunal, the Central Government and in any other case, the appropriate Government, shall appoint another person in accordance with the provisions of this Act to fill the vacancy, and the proceeding may be continued before the Labour Court, Tribunal, National Tribunal, Board or Court, as the case may be, from the stage at which the vacancy is filled.

——————–

1. Subs. by Act 36 of 1956, sec. 5, for sections 8 and 9 (w.e.f. 10-3-1957).

Section 9. Finality of orders constituting Boards, etc

(1) No order of the appropriate Government or of the Central Government appointing any person as the Chairman or any other member of a Board or Court or as the presiding officer of a Labour Court, Tribunal or National Tribunal shall be called in question in any manner; and no act or proceeding before any Board or Court shall be called in question in any manner on the ground merely of the existence of any vacancy in, or defect in the constitution of, such Board or Court.

(2) No settlement arrived at in the course of a conciliation proceeding shall be invalid by reason only of the fact that such settlement was arrived at after the expiry of the period referred to in sub-section (6) of section 12 or sub-section (5) of section 13, as the case may be.

(3) Where the report of any settlement arrived at in the course of conciliation proceeding before a Board is signed by the chairman and all the other members of the Board, no such settlement shall be invalid by reason only of the casual or unforeseen absence of any of the members (including the Chairman) of the Board during any stage of the proceeding.]

¹[CHAPTER IIA

NOTICE OF CHANGE

——————–

1. Ins. by Act 36 of 1956, sec. 6 (w.e.f 10-3-1957).

Section 9 A. Notice of change

No, employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change, –

(a) Without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or

(b) Within twenty-one days of giving such notice

Provided that no notice shall be required for effecting any such change.

(a) Where the change is effected in pursuance of any ¹[settlement or award]; or

(b) Where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply

——————–

1. Subs. by Act 46 of 1982, sec. 6, for certain words, brackets and figures (w.e.f. 21-8 1984).

Section 9 B. Power of Government to exempt

Where the appropriate Government is of opinion that the application of the provisions of section 9. A to any class of industrial establishments or to any class of workmen employed in any industrial establishment affect the employers in relation thereto so prejudicially that such application may cause serious repercussion on the industry concerned and that public interest so requires, the appropriate Government may, by notification in the Official Gazette, direct that the provisions of the said section shall not apply or shall apply, subject to such conditions as may be specified in the notification, to that class of industrial establishments or to that class of workmen employed in any industrial establishment.]¹

——————–

1. On the enforcement of section 7 of Act 46 of 1982, a new chapter IIB shall stand inserted as directed in section 7 of that Act. For the Text of section 7 of that Act, see Appendix.

“Chapter II-B

GRIEVANCE REDRESSAL MACHINERY

9-C. Setting up of Grievance Redressal Machinery.

(1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.

(2) The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.

(3) The Chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.

(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:

Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members and in case the number of members are more than two, the number of women members may be increased proportionately.

(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act.

(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.

(7) The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.

(8) Nothing contained in this section shall apply to the workmen for whom there is an established Grievance Redressal Mechanism in the establishment concerned.”

Section 10. Reference of dispute to Boards, Courts or Tribunals

(1) ¹[Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time], by order in writing-

(a) Refer the dispute to a Board for promoting a settlement thereof; or

(b) Refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or

²[(c) Refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or

(d) Refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication:

Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under clause (c):]

³[Provided further that] where the dispute relates to a public utility service and a notice under section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced:

⁴[Provided also that where the dispute in the relation to which the Central Government is the appropriate Government, it shall be competent for the Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the case may be, constituted by the State Government.]

⁵[(l A) Where the Central Government is of opinion that any industrial dispute exists or is apprehended and the dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such dispute and that the dispute should be adjudicated by a National Tribunal, then, the Central Government may, whether or not it is the appropriate Government in relation to that dispute, at any time, by order in writing, refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a National Tribunal for adjudication.]

(2) Where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a reference of the dispute to a Board, Court, ⁶[Labour Court, Tribunal or National Tribunal], the appropriate Government, if satisfied that the persons applying represent the majority of each party, shall make the reference accordingly.

⁷[(2A) An order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section shall specify the period within which such Labour Court, Tribunal or National Tribunal shall submit it’s award on such dispute to the appropriate Government:

Provided that where such industrial dispute is connected with an individual workman, no such period shall exceed three months:

Provided further that where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, to the Labour Court, Tribunal or National Tribunal for extension of such period or for any other reason, and the presiding officer of such Labour Court, Tribunal or National Tribunal considers it necessary or expedient to extend such period, he may for reasons to be recorded in writing, extend such period by such further period as he may think fit:

Provided also that in computing any period specified in this sub-section, the period, if any, for which the proceedings before the Labour Court, Tribunal or National Tribunal had been stayed by any injunction or order of a Civil Court shall be excluded:

Provided also that no proceedings before a Labour Court, Tribunal or National Tribunal shall lapse merely on the ground that any period specified under this sub-section had expired without such proceedings being completed.]

(3) Where an industrial dispute has been referred to a Board, ⁶[Labour Court, Tribunal or National Tribunal] under this section, the appropriate Government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.

⁸[(4) Wherein an order referring an industrial dispute to ⁹[a Labour Court, Tribunal or National Tribunal] under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, ¹⁰[the Labour Court or the tribunal or the National Tribunal, as the case may be,] shall confine its adjudication to those points and matters incidental thereto.

(5) Where a dispute concerning any establishment or establishments has been, or is to be, referred to a ¹¹[Labour Court, Tribunal or National Tribunal] under this section and the appropriate Government is of opinion, whether on an application made to it in this behalf or otherwise, that the dispute is of such a nature that any other establishment, group or class of establishments of a similar nature is likely to be interested in, or affected by, such dispute, the appropriate Government may, at the time of making the reference or at any time thereafter but before the submission of the award, include in that reference such establishment, group or class of establishments, whether or not at the time of such inclusion any dispute exists or is apprehended in that establishment, group or class of establishments.]

¹²[(6) Where any reference has been made under sub-section (1A) to a National Tribunal then notwithstanding anything contained in this Act, no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal, and accordingly, –

(a) If the matter under adjudication before the National Tribunal is pending in a proceeding before a Labour Court or Tribunal, the proceeding before the Labour Court or the Tribunal, as the case may be, in so far as it relates to such matter, shall be deemed to have been quashed on such reference to the National Tribunal; and

(b) It shall not be lawful for the appropriate Government to refer the matter under adjudication before the National Tribunal to any Labour Court or Tribunal for adjudication during the pendency of the proceeding in relation to such matter before the National Tribunal.

¹³ [Explanation.-In this sub-section, “Labour Court” or “Tribunal” includes any Court or Tribunal or other authority constituted under any law relating to investigation and settlement of industrial disputes in force in any State.]

(7) Where any industrial dispute, in relation to which the Central Government is not the appropriate Government, is referred to a National Tribunal, then, notwithstanding anything contained in this Act, any reference in section 15, section 17, section 19, section 33A, section 33B and section 36A to the appropriate Government in relation to such dispute shall be construed as a reference to the Central Government but, save as aforesaid and as otherwise expressly provided in this Act any reference in any other provision of this Act to the appropriate Government in relation to that dispute shall mean a reference to the State Government.]

¹⁴[(8) No proceedings pending before a Labour Court, Tribunal or National Tribunal in relation to an industrial dispute shall lapse merely by reason of the death of any of the parties to the dispute being a workman, and such Labour Court, Tribunal or National Tribunal shall complete such proceedings and submit its award to the appropriate Government.]

——————–

1. Subs. by Act 18 of 1952, sec. 3, for ‘if any industrial dispute exists or is apprehended, the appropriate Government may”.

2. Subs. by Act 36 of 1956, sec. 7, for clause (c) (w.e.f. 10-3-1957).

3. Subs. by Act 36 of 1956, sec. 7, for ‘Provided that’ (w.e.f. 10-3-1957).

4. Ins. by Act 46 of 1982, sec. 8 (w.e.f. 21-8-1984).

5. Ins. by Act 36 of 1956, sec. 7 (w.e.f. 10-3-1957).

6. Subs. by Act 36 of 1956, sec. 7, for “or Tribunal” (w.e.f. 10-3-1957).

7. Ins. by Act 46 of 1982, sec. 8, (w.e.f. 21-8-1984).

8. Ins. by Act 18 of 1952, sec. 3.

9. Subs. by Act 36 of 1956, sec. 7, for “a Tribunal” (w.e.f. 10-3-1957).

10. Subs. by Act 36 of 1956, sec. 7, for the ‘Tribunal” (w.e.f. 10-3-1957).

11. Subs. by Act 36 of 1956, sec. 7, for “Tribunal’ (w.e.f. 10-3-1957).

12. Ins. by Act 36 of 1956, sec. 7 (w.e.f. 10-3-1957).

13. Ins. by Act 36 of 1964, sec. 5 w.e.f. 19-12-1964).

14. Ins. by Act 46 of 1982, sec. 8 (w.e.f. 21-8-1984).

APD1. APPENDIX

Extracts from the Industrial Disputes (Amendment) Act, 1982

(46 OF 1982)

1. Short title and commencement.

(1) x x x x

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2. Amendment of section 2.

In section 2 of the Industrial Disputes Act, 1947 (14 of 1947) (hereinafter referred to as the principal Act),-

(j) “Industry’ means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not, –

(i) Any capital has been invested for the purpose of carrying on such activity; or

(ii) Such activity is carried on, with a motive to make any gain or profit, and includes-

(a) Any activity of the Dock Labour Board established under section5A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948);

(b) Any activity relating to the promotion of sales or business or both carried on by an establishment. but does not include.

(1) Any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one.

Explanation.- For the purposes of this sub-clause, “agricultural operation” does not include any activity carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951); or

(2) Hospitals or dispensaries; or

(3) Educational, scientific, research or training institutions; or

(4) Institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service; or

(5) Khadi or village industries; or

(6) Any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or

(7) Any domestic service; or

(8) Any activity being a profession practised by an individual or body of individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten; or

(9) Any activity, being an activity carried on by a co-operative society or a club or any other like body of individuals, if the number of persons employed by the cooperative society, club or other like body of individuals in relation to such activity is less than ten;’

7. Insertion of new Chapter IIB.

After section 9B of tie principal Act, the following Chapter shall be inserted, namely

“CHAPTER IIB

REFERENCE OF CERTAIN INDIVIDUAL DISPUTES TO GRIEVANCE

SETTLEMENT AUTHORITIES

9C. Setting up of Grievance Settlement Authorities and reference of certain individual disputes to such authorities.

(1) The employer in relation to every industrial establishment in which fifty or more workmen are employed or have been employed on any day in the preceding twelve months, shall provide for in accordance with the rules made in that behalf under this Act, a Grievance Settlement Authority for the settlement of industrial disputes connected with an individual workman employed in the establishment.

(2) Where an industrial dispute connected with an individual workman arises in an establishment referred to in sub-section (1), a workman or any trade union of workmen of which such workman is a member, refer, in such manner as may be prescribed, such dispute to the Grievance Settlement Authority provided for by the employer under that sub-section for settlement.

(3) The Grievance Settlement Authority referred to in sub-section (1) shall follow such procedure and complete its proceedings within such period as may be prescribed.

(4) No reference shall be made under Chapter III with respect to any dispute referred to in this section unless such dispute has been referred to the Grievance Settlement Authority concerned and the decision of the Grievance Settlement Authority is not acceptable to any of the parties to the dispute.’

22. Amendment of section 38.

In sub-section (2) of section 38 of the principal Act, after clause (aaa), the following clause shall be inserted, namely: –

“[(ab) The constitution of Grievance Settlement Authorities referred to in section 9C, the manner in which industrial disputes may be referred to such authorities for settlement, the procedure to be followed by such authorities in the proceedings in relation to disputes referred to them and the period within which such proceedings shall be completed”.]

Section 10 A. Voluntary reference of disputes to arbitration

¹[10A. Voluntary reference of disputes to arbitration. (1) Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under section 10 to a Labour Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement.

²[(1 A) Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purpose of this Act.]

(2) An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed.

(3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and the conciliation officer and the appropriate Government shall, within ³[one month] from the date of the receipt of such copy, publish the same in the Official Gazette.

⁴[(3A) Where an industrial dispute has been referred to arbitration and the appropriate Government is satisfied that the persons making the reference represent the majority of each party, the appropriate Government may, within the time referred to in sub-section (3), issue a notification in such manner as may be prescribed; and when any such notification is issued, the employers and workmen who are not parties to the arbitration agreement but are concerned in the dispute, shall be given an opportunity of presenting their case before the arbitrator or arbitrators.]

(4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.

⁴[(4A) Where an industrial dispute has been referred to arbitration and a notification has been issued under sub-section (3A), the appropriate Government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.]

(5) Nothing in the Arbitration Act, 1940 (10 of 1940) shall apply to arbitrations under this section.]

——————–

1. Ins. by Act 36 of 1956, sec. 8 (w.e.f. 10-3-1957).

2. Ins. by Act 36 of 1964, sec. 6 (w.e.f. 19-12,1964).

3. Subs. by Act 36 of 1964, sec. 6, for “fourteen days” (w.e.f. 19-12-1964).

4. Ins. by Act 36 of 1964, sec. 6 (w.e.f 19-12-1964).

Section 11. Procedure and power of conciliation officers, Boards, Courts and Tribunals

¹[(1) Subject to any rules that may be made in this behalf, an arbitrator, a Board, Court, Labour Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit.]

(2) A conciliation officer or a member of a Board, ²[ or Court or the presiding officer of a Labour Court, Tribunal or National Tribunal] may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.

(3) Every Board, Court, ³[Labour Court, Tribunal and National Tribunal] shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit, in respect of the following matters, namely: –

(a) Enforcing the attendance of any person and examining him on oath;

(b) Compelling the production of documents and material object;

(d) In respect of such other matters as may be prescribed,

And every inquiry or investigation by a Board, Court, ⁴[Labour Court, Tribunal or National Tribunal] shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860).

(4) A conciliation officer ⁵[may enforce the attendance of any person for the purpose of examination of such person or call for] and inspect any document which he has ground for considering to be relevant to the industrial dispute ⁶[or to be necessary for the purpose of verifying the implementation of any award or carrying out any other duty imposed on him under this Act, and for the aforesaid purposes, the conciliation officer shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), ⁵[ in respect of enforcing the attendance of any person and examining him or of compelling the production of documents]].

⁷[(5) A Court, Labour Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as an assessor or assessors to advise it in the proceeding before it.

(6) All conciliation officers, members of a board or court and the presiding officers of a Labour Court, Tribunal or National Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

(7) Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a Labour Court, Tribunal or National Tribunal shall be in the discretion of that Labour Court, Tribunal or National Tribunal and the Labour Court, Tribunal or National Tribunal, as the case may be, shall have full power to determine by and to whom and to what extent and subject to what conditions, if any, such costs are to be paid, and to give all necessary directions for the purposes aforesaid and such costs may, on application made to the appropriate Government by the person entitled, be recovered by that Government in the same manner as an arrear of land revenue.]

⁸[(8) Every ⁹[Labour Court, Tribunal or National Tribunal] shall be deemed to be Civil Court for the purposes of ¹⁰[sections 345, 346 and 348 of the Code of Criminal Procedure, 1973 (2 of 1974)].]

¹¹[“(9) Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a civil court under Order 21 of the Code of Civil Procedure, 1908 (5 of 1908).

(10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a civil court having jurisdiction and such civil court shall executed the award, order or settlement as if it were a decree passed by it.”]

——————–

1. Subs. by Act 36 of 1956, sec. 9, for sub-section (1) (w.e.f. 10-3-1957).

2. Subs. by Act 36 of 1956, sec. 9, for “Court or Tribunal” (w.e.f. 10-3-1957).

3. Subs. by Act 36 of 1956, sec. 9, for ‘and Tribunal’ (w.e.f. 10-3-1957).

4. Subs. by Act 36 of 1956, sec. 9, for ‘or Tribunal” (w.e.f. 10-3-1957).

5. Subs. by Act 46 of 1982, sec. 9, for certain words (w.e.f. 21-8-1984).

6. Ins. by Act 36 of 1956, sec. 9 (w.e.f. 17-9-1956).

7. Subs. by Act 36 of 1956, sec. 9, for sub-sections (5) to (7) (w.e.f. 10-3-1957), sub-section (7) was ins. by Act 48 of 1950, sec. 34 and Sch.

8. Ins. by Act 48 of 1950, sec. 34 and Sch.

9. Subs. by Act 36 of 1956, sec. 9, for ‘Tribunal” (w.e.f. 10-3-1957).

10. Subs. by Act 46 of 1982, sec. 9, for certain words and figures (w.e.f. 21-8-1984).

11. Ins. by Act. 24 of 2010, sec. 9 & 10 (w.e.f. 18-8-2010).

Section 11 A. Powers of Labour Court, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen

¹[11A. Powers of Labour Court, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen. Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct re-instatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require :

Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.]

——————–

1. Ins. by Act 45 of 1971, sec. 3 (w.e.f. 15-12-1971).

Section 12. Duties of conciliation officers

(1) Where any industrial dispute exists or is apprehended, the conciliation officer may, or where the dispute relates to a public utility service and a notice under section 22 has been given, shall, hold conciliation proceedings in the prescribed manner.

(2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute without delay investigate the dispute and all matters affecting the merits and right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.

(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government ¹[or an officer authorised in this behalf by the appropriate Government] together with a memorandum of the settlement signed by the parties to the dispute.

(4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at.

(5) If, on a consideration of the report referred to in sub-section (4), the appropriate Government is satisfied that there is a case for reference to a Board, ²[Labour Court, Tribunal or National Tribunal], it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor.

(6) A report under this section shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government.

³[Provided that, ⁴[subject to the approval of the conciliation officer,] the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.]

——————–

1. Ins. by Act 35 of 1965, sec. 4 (w.e.f. 1-12-1965).

2. Subs. by Act 36 of 1956, sec. 10, for “or Tribunal” (w.e.f. 10-3-1957).

3. Ins. by Act 36 of 1956, sec. 10 (w.e.f. 17-9-1956).

4. Ins. by Act 36 of 1964, sec. 8 (w.e.f. 19-12-1964).

Section 13. Duties of Board

(1) Where a dispute has been referred to a Board under this Act, it shall be the duty of the Board to endeavour to bring about a settlement of the same and for this purpose the Board shall, in such manner as it thinks fit and without delay, investigate the dispute and all matters affecting the merit and the right settlement thereof and may do all such things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.

(2) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings, the Board shall send a report thereof to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute.

(3) If no such settlement is arrived at, the Board shall, as soon as practicable after the close of the investigation, send to the appropriate Government a full report setting for the proceedings and steps taken by the Board for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, its findings thereon, the reasons on account of which, in its opinion, a settlement could not be arrived at and its recommendations for the determination of the dispute.

(4) If, on the receipt of a report under sub-section (3) in respect of a dispute relating to a public utility service, the appropriate Government does not make a reference to a ¹[Labour Court, Tribunal or National Tribunal] under section 10, it shall record and communicate to the parties concerned its reasons therefor.

(5) The Board shall submit its report under this section within two months of the date ²[on which the dispute was referred to it] or within such shorter period as may be fixed by the appropriate Government:

Provided that the appropriate Government may from time to time extend the time for the submission of the report by such further periods not exceeding two months in the aggregate:

Provided further that the time for the submission of the report may be extended by such period as may be agreed on in writing by all the parties to the dispute.

——————–

1. Subs. by Act 36 of 1956, sec. 11, for ‘Tribunal’ (w.e.f. 10-3-1957).

2. Subs. by Act 40 of 1951, sec. 6, for ‘of the notice under section 22”.

Section 14. Duties of Courts

A Court shall inquire into the matters referred to it and report thereon to the appropriate Government ordinarily within a period of six months from the commencement of its inquiry.

Section 15. Duties of Labour Courts, Tribunals and National Tribunals

¹[15. Duties of Labour Courts, Tribunals and National Tribunals. Where an industrial dispute has been referred to a Labour Court, Tribunal or National Tribunal for adjudication, it shall hold its proceedings expeditiously and shal1, ²[within the period specified in the order referring such industrial dispute or the further period extended under the second proviso to sub-section (2A) of section 10], submit its award to the appropriate Government.

——————–

1. Subs. by Act 36 of 1956, sec. 12, for sections 15,16,17and 17A (w.e.f. 10-3-1957), Section 17A was ins. by Act 48 of 1950, sec. 34 and Sch.

2. Subs. by Act 46 of 1982, sec. 10, for certain words (w.e.f. 21-8-1984).

Section 16. Form of report or award

(1) The report of a Board or Court shall be in writing and shall be signed by all the members of the Board or Court, as the case may be:

Provided that nothing in this section shall be deemed to prevent any member of the Board or Court from recording any minute of dissent from a report or from any recommendation made therein.

(2) The award of a Labour Court or Tribunal or National Tribunal shall be in writing and shall be signed by its presiding officer.

Section 17. Publication of reports and awards

(1) Every report of a Board or Court together with any minute of dissent recorded therewith, every arbitration award and every award of a Labour Court, Tribunal or National Tribunal shall, within a period of thirty days from the date of its receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit.

(2) Subject to the provisions of section 17A, the award published under sub-section (1) shall be final and shall not be called in question by any Court in any manner whatsoever.

Section 17 A. Commencement of the award

(1) An award (including an arbitration award) shall become enforceable on the expiry of thirty days from the date of its publication under section 17):

Provided that-

(a) If the appropriate Government is of opinion, in any case where the award has been given by a Labour Court or Tribunal in relation to an industrial dispute to which it is a party; or

(b) If the Central Government is of opinion, in any case where the award has been given by a National Tribunal,

That it will be inexpedient on public grounds affecting national economy or social justice to give effect to the whole or any part of the award, the appropriate Government, or as the case may be, the Central Government may, by notification in the Official Gazette, declare that the award shall not become enforceable on the expiry of the said period of thirty days.

(2) Where any declaration has been made in relation to an award under the proviso to sub-section (1), the appropriate Government or the Central Government may, within ninety days from the date of publication of the award under section 17, make an order rejecting or modifying the award, and shall, on the first available opportunity, Jay the award together with a copy of the order before the Legislature of the State, if the order has been made by a State Government, or before Parliament, if the order has been made by the Central Government.

(3) Where any award as rejected or modified by an order made under subsection (2) is laid before the Legislature of a State or before Parliament, such award shall become enforceable on the expiry of fifteen days from the date on which it is so laid; and where no order under sub-section (2) is made in pursuance of a declaration under the proviso to sub-section (1), the award shall become enforceable on the expiry of the period of ninety days referred to in subsection (2).

(4) Subject to the provisions of sub-section (1) and sub-section (3) regarding the enforceability of an award, the award shall come into operation with effect from such date as may be specified therein, but where no date is so specified, it shall come into operation on the date when the award becomes enforceable under sub-section (1) or sub-section (3), as the case may be.]

Section 17 B. Payment of full wages to workman pending proceedings in higher courts

¹[17B. Payment of full wages to workman pending proceedings in higher courts. Where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court:

Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable under this section for such period or part, as the case may be.]

——————–

1. Ins. by Act 46 of 1982, sec. 11 (w.e.f. 21-8-1984).

Section 18. Persons on whom settlements and awards are binding

¹[(1) A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement.

(2) ²[Subject to the provisions of sub-section (3), an arbitration award] which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.]

³[(3)] A settlement arrived at in the course of conciliation proceedings under this Act ⁴[or an arbitration award in a case where a notification has been issued under sub-section (3A) of section IOA] or ⁵[an award ⁶[of a Labour Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on-

(a) All parties to the industrial dispute;

(b) All other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, ⁷[arbitrator] ⁸[Labour Court, Tribunal or National Tribunal], as the case may be, records the opinion that they were so summoned without proper cause;

(c) Where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;

(d) Where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.

——————–

1. Ins. by Act 36 of 1956, sec. 13 (w.e.f. 7-10-1956).

2. Subs. by Act 36 of 1964, sec. 9, for “An arbitration award” (w.e.f. 19-12-1964).

3. Section 18 re-numbered as sub-section (3) of that section by Act 36 of 1956, sec. 13 (w.e.f. 7-10-1956).

4. Ins. by Act 36 of 1964, sec. 9 (w.e.f. 19-12-1964).

5. Subs. by Act 48 of 1950, sec. 34 and Sch., for ‘an award which is declared by the appropriate Government to be binding under sub-section (2) of section 15”.

6. Ins. by Act 36 of 1956, sec. 13 (w.e.f. 10-3-1957).

7. Ins. by Act 36 of 1964, sec. 9 (w.e.f. 19-12-1964).

8. Subs. by Act 36 of 1956, sec. 13, for “or Tribunal” (w.e.f. 10-3-1957).

Section 19. Period of operation of settlements and awards

(1) A settlement ¹[* * *] shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.

(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months ²[from the date on which the memorandum of settlement is signed by the parties to the dispute], and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement.

³[(3) An award shall, subject to the provisions of this section, remain in operation for a period of one year ⁴[from the date on which the award becomes enforceable under section 17A]:

Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit:

Provided further that the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.

(4) Where the appropriate Government, whether of its own motion or on the application of any party bound by the award, considers that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it ⁵[to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal], for decision whether the period of operation should not, by reason of such change, be shortened and the decision of ⁶[Labour Court or the Tribunal, as the case may be] on such reference shall, ⁷[***] be final.

(6) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.

(7) Notwithstanding the expiry of the period of operation under subsection (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating it intention to terminate the award.

⁴[(8) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be.]

——————–

1. The words “arrived at in the course of a conciliation proceedings under this Act” omitted by Act 36 of 1956, sec. 14, (w.e.f. 7-10-1956).

2. Ins. by Act 36 of 1956, sec. 14 (w.e.f. 7-10-1956).

3. Subs. by Act 48 of 1950, sec. 34 and sch., for sub-section (3).

4. Ins. by Act 36 of 1956, sec. 14 (w.e.f. 7-10-1956).

5. Subs. by Act 36 of 1956, sec. 14, for “to a Tribunal” (w.e.f. 10-3-1957).

6. Subs. by Act 36 of 1956, sec. 14, for “the Tribunal” (w.e.f. 10-3-1957).

7. The words ‘subject to the provision for appeal’ omitted by Act 36 of 1956, sec. 14, (w.e.f. 10-3-1957).

Section 20. Commencement and conclusion of proceedings

(1) A conciliation proceeding shall be deemed to have commenced on the date on which a notice of strike or lock-out under section 22 is received by the conciliation officer or on the date of the order referring the dispute to a Board, as the case may be.

(2) A conciliation proceeding shall be deemed to have concluded.

(a) Where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the dispute;

(b) Where no settlement is arrived at, when the report of the conciliation officer is received by the appropriate Government or when the report of the Board is published under section 17, as the case may be; or

(c) When a reference is made to a Court, ¹[Labour Court, Tribunal or National Tribunal] under section 10 during the pendency of conciliation proceedings.

(3) Proceedings ²[before an arbitrator under section 10A or before a Labour Court, Tribunal or National Tribunal I shall be deemed to have commenced on the date of the ³[reference of the dispute for arbitration or adjudication, as the case may be] and such proceedings shall be deemed to have concluded ⁴[on the date on which the award becomes enforceable under section 17A].

——————–

1. Subs. by Act 36 of 19Ei6, sec. 15, for ‘or Tribunal” (w.e.f. 10-3-1957).

2. Subs. by Act 36 of 1956, sec 15, for “before a Tribunal” (w.e.f. 10-3-1957).

3. Subs. by Act 36 of 1956, sec. 15, for “reference of a dispute for adjudication (w.e.f. 10-3-1957).

4. Subs. by Act 18 of 1952, sec. 4, for certain words and figures.

Section 21. Certain matters to be kept confidential

There shall not be included in any report or award under this Act, any information obtained by a conciliation officer, Board, Court, ¹[Labour Court, Tribunal, National Tribunal or an arbitrator] in the course of any investigation or inquiry as to a trade union or as to any individual business (whether carried on by a person, firm or company) which is not available otherwise than through the evidence given before such officer, Board, Court, ¹[Labour Court, Tribunal, National Tribunal or arbitrator], if the trade union, person, firm or company, in question has made a request in writing to the conciliation officer, Board, Court ¹[Labour Court, Tribunal, National Tribunal or arbitrator], as the case may be, that such information shall be treated as confidential; nor shall such conciliation officer or any individual member of the Board , ²[ or Court or the presiding officer of the Labour Court, Tribunal or National Tribunal or the arbitrator] or any person present at or concerned in the proceedings disclose any such information without the consent in writing of the secretary of the trade union or the person, firm or company in question, as the case may be:

Provided that nothing contained in this section shall apply to a disclosure of any such information for the purposes of a prosecution under section 193 of the Indian Penal Code (45 of 1860).

——————–

1. Subs. by Act 36 of 1956, sec. 16, for “or Tribunal” (w.e.f. 10-3-1957).

2. Subs. by Act 36 of 1956, sec. 16, for ‘court or Tribunal” (w.e.f 10-3-1957).

Section 22. Prohibition of strikes and lock-outs

(1) No person employed in a public utility service shall go on strike, in breach of contract-

(a) Without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking; or

(b) Within fourteen days of giving such notice; or

(d) During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

(2) No employer carrying on any public utility service shall lock-out any of his workman-

(a) Without giving them notice of lock-out as hereinafter provided, within six weeks before locking-out ; or

(b) Within fourteen days of giving such notice; or

(d) During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

(3) The notice of lock-out or strike under this section shall not be necessary where there is already in existence a strike or, as the case may be, lock-out in the public utility service, but the employer shall send intimation of such lockout or strike on the day on which it is declared, to such authority as may be specified by the appropriate Government either generally or for a particular area or for a particular class of public utility services.

(4) The notice of strike referred to in sub-section (1) shall be given by such number of persons to such person or persons and in such manner as may be prescribed.

(5) The notice of lock-out referred to in sub-section (2) shall be given in such manner as may be prescribed.

(6) If on any day an employer receives from any person employed by him any such notices as are referred to in sub-section (1) or gives to any persons employed by him any such notices as are referred to in sub-section (2), he shall within five days, thereof report to the appropriate Government or to such authority as that Government may prescribe the number of such notices received or given on that day.

Section 23. General prohibition of strikes and lock-outs

No workman who is employed in any industrial establishment shall go on strike in breach of contract and no employer of any such workman shall declare a lock-out.

(a) During the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings;

(b) During the pendency of proceedings before ¹[a Labour Court, Tribunal or National Tribunal] and two months, after the conclusion of such proceedings; ²[* * *]

³[(bb) During the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under sub-section (3A) of section 10A; or]

(c) During any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.

——————–

1. Subs. by Act 36 of 1956, sec. 17, for ‘a Tribunal’ (w.e.f. 10-3-1957).

2. The word ‘or” omitted by Act 36 of 1964, sec. 11 (w.e.f. 19-12-1964).

3. Ins. by Act 36 of 1964, sec. 11, (w.e.f. 19-12-1964).

Section 24.Illegal strikes and lock-outs

(1) A strike or a lock-out shall be illegal if-

(i) It is commenced or declared in contravention of section 22 or section 23; or

(ii) It is continued in contravention of an order made under sub-section(3) of section 10 ¹[or sub-section (4A) of section 10 A].

(2) Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at the time of the reference of the dispute to a Board, 1[an arbitrator, a] ²[Labour Court, Tribunal or national Tribunal], the continuance of such strike or lock-out shall not be deemed to be illegal, provided that such strike or lock-out was not at its commencement in contravention of the provisions of this Act or the continuance thereof was not prohibited under sub-section (3) of section 10 1[or sub-section (4A) of section 10A].

(3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be illegal.

——————–

1. Ins. by Act 36 of 1964, sec. 12, (w.e.f 19-12-1964).

2. Subs. by Act 36 of 1956, sec. 18, for ‘or Tribunal’ (w.e.f. 10-3-1957).

Section 25. Prohibition of financial aid to illegal strikes and lock-outs

No person shall knowingly expend or apply any money in direct furtherance or support of any illegal strike or lock-out.

¹[CHAPTER VA

LAY-OFF AND RETRENCHMENT

——————–

1. Ins. by Act 43 of 1953, sec. 3 (w.e.f. 2,4-10-1953).

Section 25 A.Application of sections 25C to 25E

(1) Sections 25C to 25E inclusive shall not apply to Industrial Establishments to which Chapter VB applies, or-

(a) To industrial establishments in which less than fifty workmen on an average per working day have been employed in the preceding calendar month; or

(b) To industrial establishments which are of a seasonal character or in which work is performed only intermittently.

(2) If a question arises whether an industrial establishment is of a seasonal character or whether work is performed therein only intermittently, the decision of the appropriate Government thereon shall be final.

Explanation.

In this section and in sections 25C, 25D and 25E, “industrial establishment” means.

(i) A factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948); or

(ii) A mine as defined in clause (o) of section 2 of the Mines Act, 1952 (35 of 1952); or

(iii) A plantation as defined in clause (o) of section 2 of the Plantations Labour Act, 1951 (69 of 1951)].

Section 25 B. Definition of continuous service

¹[25B. Definition of continuous service. For the purposes of this Chapter, –

(1) A workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or as strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;

(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer.

(a) For a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-

(i) One hundred and ninety days in the case of a workman employed below ground in a mine; and

(ii) Two hundred and forty days, in any other case;

(b) For a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than.

(i) Ninety-five days, in the case of workman employed below ground in a mine; and

(ii) One hundred and twenty days, in any other case.

Explanation.

For the purposes of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which-

(i) He has been laid-off under an agreement or as permitted by standing orders made under the industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Act or under any other law applicable to the industrial establishment;

(ii) He has been on leave with full wages, earned in the previous years;

(iii) He has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(iv) In the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.]

——————–

1. Subs. by Act 36 of 1964, sec. 13, for section 25B (w.e.f. 19-12-1964).

Section 25 C. Right of workmen laid-off for compensation

¹[25C. Right of workmen laid-off for compensation. Whenever a workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid off, whether continuously or intermittently, he shall be paid by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent, of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid-off :

Provided that if during any period of twelve months, a workman is so laid-off for more than forty-five days, no such compensation shall be payable in respect of any period of the lay-off after the expiry of the first forty-five days, if there is an agreement to that effect between the workman and the employer:

Provided further that it shall be lawful for the employer in any case falling within the foregoing proviso to retrench the workman in accordance with the provisions contained in section 25F at any time after the expiry of the first forty five days of the lay-off and when he does so, any compensation paid to the workman for having been laid-off during the preceding twelve months may be set off against the compensation payable for retrenchment.

Explanation.

‘Badli workman” means a workman who is employed in an industrial establishment in the place of another workman whose name is borne on the muster rolls of the establishment, but shall cease to be regarded as such for the purposes of this section, if he has completed one year of continuous service in the establishment.]

——————–

1. Subs. by Act 35 of 1965, sec. 5, for the former section (w.e.f. 1-12-1965).

Section 25 D. Duty of an employer to maintain musters rolls of workmen

Notwithstanding that workmen in any industrial establishment have been laid-off, it shall be the duty of every employer to maintain for the purposes of this Chapter a muster roll, and to provide for the making of entries therein by workmen who may present themselves for work at the establishment at the appointed time during normal working hours.

Section 25 E. Workmen not entitled to compensation in certain cases

No compensation shall be paid to a workman who has been laid-off-

(i) If he refuses to accept any alternative employment in the same establishment from which he has been laid-off, or in any other establishment belonging to the same employer situate in the same town or village or situate within a radius of five miles from the establishment to which he belongs, if, in the opinion of the employer, such alternative employment does not call for any special skill or previous experience and can be done by the workman, provided that the wages which would normally have been paid to the workman are offered for the alternative employment also ;

(ii) If he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day;

(iii) If such laying-off is due to a strike or slowing-down of production on the part of workmen in another part of the establishment.

Section 25 F. Conditions precedent to retrenchment of workmen

No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until-

(a) The workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; ¹[* * * * *]

(b) The workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay ²[ for every completed year of continuous service] or any part thereof in excess of six months; and

(c) Notice in the prescribed manner is served on the appropriate Government ³[for such authority as may be specified by the appropriate Government by notification in the Official Gazette].

——————–

1. The proviso omitted by Act 49 of 1984, sec. 32 (w.e.f. 18-8-1984).

2. Subs. by Act 36 of 1964, sec. 14, for “for every completed year of service” (w.e.f. 19-12-1964).

3. Ins. by Act 36 of 1964, sec. 14 (w.e.f. 19-12-1964).

Section 25 FF. Compensation to workmen in case of transfer of undertakings

¹[25FF. Compensation to workmen in case of transfer of undertakings. Where the ownership of management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to or that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched :

Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if-

(a) The service of the workman has not been interrupted by such transfer;

(b) The terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and

(c) The new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.

——————–

1. Subs. by Act 18 of 1957, sec. 3, for the former section (w.e.f. 28-11-1956). Section 25FF was originally ins. by Act 41 of 1956, sec. 3.

Section 25 FFA. Sixty days’ notice to be given of intention to close down any undertaking

¹[25FFA. Sixty days’ notice to be given of intention to close down any undertaking. (1) An employer who intends to close down an undertaking shall serve, at least sixty days before the date on which the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating clearly the reasons for the intended closure of the undertaking:

Provided that nothing in this section shall apply to-

(a) An undertaking in which-

(i) Less than fifty workmen are employed, or

(ii) Less than fifty workmen were employed on an average per working day in the preceding twelve months,

(b) An undertaking set up for the construction of buildings, bridges, roads, canals, and dams or for other construction work or project.

(2) Notwithstanding anything contained in sub-section (1), the appropriate Government, may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is necessary so to do, by order, direct that provisions of sub-section (1) shall not apply in relation to such undertaking for such period as may be specified in the order.]

——————–

1. Ins. by Act 32 of 1972, sec. 2 (w.e.f. 14-6-1972).

Section 25 FFF. Compensation to workmen in case of closing down of undertakings

(1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:

Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months.

¹[Explanation.

An undertaking which is closed down by reason merely of-

(i) Financial difficulties (including financial losses); or

(ii) Accumulation of indisposed stocks; or

(iii) The expiry of the period of the lease or licence granted to it; or

(iv) In case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on,

Shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.]

²[(1A) Notwithstanding anything contained in sub-section (1), where an undertaking engaged in mining operations is closed down by reason merely of exhaustion of the minerals in the area in which such operations are carried on, no workman referred to in that sub-section shall be entitled to any notice or compensation in accordance with the provisions of section 25F, if-

(a) The employer provides the workman with alternative employment with effect from the date of closure at the same remuneration as he was entitled to receive, and on the same terms and conditions of service as were applicable to him, immediately before the closure;

(b) The service of the workman has not been interrupted by such alternative employment; and

(c) The employer is, under the terms of such alternative employment or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by such alternative employment.

(1B) For the purposes of sub-sections (1) and (IA), the expressions minerals’ and ‘mining operations” shall have the meanings respectively assigned to them in clauses (a) and (b) of section 3 of the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957).]

(2) Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or other construction work is closed down on account of the completion of the work within two years from the date on which the undertaking had been set-up, no workman employed therein shall be entitled to any compensation under clause (b) of section 25F, but if the construction work is not so completed within two years, he shall be entitled to notice and compensation under that section for every ³[completed year of continuous service] or any part thereof in excess of six months].

——————–

1. Subs. by Act 45 of 1971, sec. 4, for the original Explanation (w.e.f. 15-l2-1971).

2. Ins. by Act 45 of 1971, sec. 4 (w.e.f. 15-12-1971).

3. Subs. by Act 36 of 1964, sec. 15, for “completed year of service’ (w.e.f. 19-12-1964).

Section 25 G. Procedure for retrenchment

Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.

Section 25 H. Re-employment of retrenched workmen

Where any workmen are retrenched, and the employer proposes to take into his employ any persons he shall, in such manner as may be prescribed, give an opportunity ¹[to the retrenched workmen who are citizens of India to offer themselves for reemployment, and such retrenched workmen] who offer themselves for reemployment shall have preference over other persons,

——————–

1. Subs. by Act 36 of 1964, sec. 16, for certain words (w.e.f 19-12-1964).

Section 25 I. Recovery of moneys due from employers under this Chapter

Rep. by The Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956 (36 of 1956), sec. 19 (w.e.f. 10-3-1957).

Section 25 J. Effect of Laws inconsistent with this Chapter

(1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law [including standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946)]:

¹[Provided that where under the provisions of any other Act or rules, orders or notifications issued thereunder or under any standing orders or any award, contract of service or otherwise, a workman is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this Act; the workman shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act.]

(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this Chapter.]

——————–

1. Subs. by Act 36 of 1964, sec. 17, for the proviso (w.e.f. 19-12-1964).

¹[CHAPTER VB

SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND CLOSURE IN CERTAIN ESTABLISHMENTS

——————–

1. Chapter VB added by Act 32 of 1976, sec. 3 (w.e.f. 5-3-1976).

Section 25 K. Application of Chapter VB

(1) The provisions of the chapter shall apply to an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than ¹[one hundred] workmen were employed on an average per working day for the preceding twelve months.

——————–

1. Subs. by Act 46 of 1982, sec. 12, for the words ‘three hundred” (w.e.f. 31-8-1984).

Section 25 L. Definitions

For the purposes of this Chapter, –

(a) ‘Industrial establishment’ means-

(i) A factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948);

(ii) A mine as defined in clause (o) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952); or

(iii) A plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951);

(b) Notwithstanding anything contained in sub-clause (ii) of clause (a) of section 2,-

(i) In relation to any company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, or

(ii) In relation to any corporation not being a corporation referred to in sub-clause (i) of clause (a) of section 2 established by or under any law made by Parliament, the Central Government shall be the appropriate Government.

Section 25 M. Prohibition of lay-off

(1) No workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment to which this Chapter applies shall be laid-off by his employer except ¹[with the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority), obtained on an application made in this behalf, unless such lay-off is due to shortage of power or to natural calamity, and in the case of a mine, such layoff is due also to fire, flood, excess of inflammable gas or explosion].

²[(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended lay-off and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.

(3) Where the workmen (other than badli workmen or casual workmen) of an industrial establishment, being a mine, have been laid-off under subsection (I) for reasons of fire, flood or excess of inflammable gas or explosion, the employer, in relation to such establishment, shall, within a period of thirty days from the date of commencement of such lay-off, apply, in the prescribed manner, to the appropriate Government or the specified authority for permission to continue the lay-off.

(4) Where an application for permission under sub-section (1) or subsection (3) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such lay-off, may, having regard to the genuineness and adequacy of the reasons for such lay-off, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.

(5) Where an application for permission under sub-section (1) or subsection (3) has been made and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.

(6) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of subsection (7), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.

(7) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (4) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication :

Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.

(8) Where no application for permission under sub-section (1) is made, or where no application for permission under sub-section (3) is made within the period specified therein, or where the permission for any lay-off has been refused, such lay-off shall be deemed to be illegal from the date on which the workmen had been laid-off and the workmen shall be entitled to all the benefits under any law for the time being in force as if they had not been laid-off.

(9) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1), or, as the case may be, sub-section (3) shall not apply in relation to such establishment for such period as may be specified in the order.]

³[10] The provisions of section 25C (other than the second proviso thereto) shall apply to cases of lay-off referred to in this section.

Explanation.

For the purposes of this section, a workman shall not be deemed to be laid-off by an employer if such employer offers any alternative employment (which in the opinion of the employer does not call for any special skill or previous experience and can be done by the workman) in the same establishment from which he has been laid-off or in any other establishment belonging to the same employer, situate in the same town or village, or situate within such distance from the establishment to which he belongs that the transfer will not involve undue hardship to the workman having regard to the facts and circumstances of his case, provided that the wages which would normally have been paid to the workman are offered for the alternative appointment also.

——————–

1. Subs. by Act 49 of 1984, sec. 4, for certain words (w.e.f. 18-8-1984).

2. Subs. by Act 49 of 1984, sec. 4, for sub-sections (2) to (5) (w.e.f. 18-8-1984).

3. Sub-section (6) renumbered as sub-section (10) by Act 49 of 1984, sec. 4 (w.e.f. 18-8-1984).

Section 25 N. Conditions precedent to retrenchment of workmen

¹[25N. Conditions precedent to retrenchment of workmen. (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until, –

(a) The workman has been given three months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and

(b) The prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.

(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.

(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the person interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.

(4) Where an application for permission has been made under sub-section (1)and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.

(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of subsection (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.

(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication :

Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.

(7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.

(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such period as may be specified in the order.

(9) Where permission for retrenchment has been granted under subsection (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.]

——————–

1. Subs. by Act 49 of 1984, sec. 5, for section 25 N (w.e.f. 18-8-1984).

Section 25 O. Procedure for closing down an undertaking

¹[25O. Procedure for closing down an undertaking. (1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner:

Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, and dams or for other construction work.

(2) Where an application for permission has been made under sub-section (1) the appropriate Government, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the general public and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.

(3) Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.

(4) An order of the appropriate Government granting or refusing to grant permission shall, subject to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the date of such order.

(5) The appropriate Government may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a tribunal for adjudication:

Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.

(6) Where no application for permission under sub-section (1) is made within the period specified therein, or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down.

(7) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such undertaking for such period as may be specified in the order. (8) Where an undertaking is permitted to be closed down under sub-section (2) or where permission for closure is deemed to be granted under subsection (3), every workman who is employed in that undertaking immediately before the date of application for permission under this section, shall be entitled to receive compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.]

——————-

1. Subs. by Act 46 of 1982, sec. 14, for section 250 (w.e.f. 21-8-1984).

Section 25 P. Special provision as to restarting undertakings closed down before commencement of the Industrial Disputes (Amendment) Act, 1976

If the appropriate Government is of opinion in respect of any undertaking or an industrial establishment, to which this Chapter applies and which closed down before the commencement of the Industrial Disputes (Amendment) Act, 1976 (32 of 1976)-

(a) That such undertaking was closed down otherwise than on account of unavoidable circumstances beyond the control of the employer;

(b) That there are possibilities of restarting the undertaking;

(c) That it is necessary for the rehabilitation of the workmen employed in such undertaking before its closure or for the maintenance of supplies and services essential to the life of the community to restart the undertaking or both; and

(d) That the restarting of the undertaking will not result in hardship to the employer in relation to the undertaking,

It may, after giving an opportunity to such employer and workmen, direct, by order published in the Official Gazette, that the undertaking shall be restarted within such time (not being less than one month from the date of the order) as may be specified in the order.

Section 25 Q. Penalty for lay-off and retrenchment without previous permission

Any employer who contravenes the provisions of section 25M or ¹[* * *] of section 25N shall be punishable with imprisonment for a term, which may extend to one month, or with fine which may extend to one thousand rupees, or with both.

——————–

1. Certain words omitted by Act 49 of 1984, sec. 6 (w.e.f. 18-8-1984).

Section 25 R. Penalty for closure

(1) Any employer who closes down an undertaking without complying with the provisions of sub-section (1) of section 250 shall be punishable with imprisonment for a term, which may extend to six months, or with fine, which may extend to five thousand rupees, or with both.

(2) Any employer, who contravenes ¹[an order refusing to grant permission to close down an undertaking under sub-section (2) of section 25O or a direction given under section 25P], shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to five thousand rupees, or with both, and where the contravention is a continuing one, with a further fine which may extend to two thousand rupees for every day during which the contravention continues after the conviction.

²[* * * * *]

——————–

1. Subs. by Act 46 of 1982, sec. 15, for certain words (w.e.f. 21-8-1984).

2. Sub-section (3) omitted by Act 46 of 1982, sec. 15 (w.e.f. 21-8-1984).

Section 25 S. Certain provisions of Chapter VA to apply to industrial establishment to which this Chapter applies

The provisions of sections 25B, 25D, 25FF, 25G, 25H and 25J in Chapter VA shall, so far as may be, apply also in relation to an industrial establishment to which the provisions of this Chapter apply.]

¹[CHAPTER VC]

UNFAIR LABOUR PRACTICES

——————–

1. Ins. by Act 46 of 1982, sec. 16 (w.e.f. 21-8-1984).

Section 25 T. Prohibition of unfair labour practice

No employer or workman or a trade union, whether registered under the Trade Unions Act, 1926 (16 of 1926), or not, shall commit any unfair labour practice.

Section 25 U. Penalty for committing unfair labour practices

Any person who commits any unfair labour practice shall be punishable with imprisonment for a term, which may extend to six months or with fine which may extend to one thousand rupees or with both.

Section 26. Penalty for illegal strikes and lock-outs

(1) Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to fifty rupees, or with both.

(2) Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.

Section 27. Penalty for instigation, etc

Any person who instigates or incites others to take part in, or otherwise acts in furtherance of, a strike or lock-out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Section 28. Penalty forgiving financial aid to illegal strikes and lock-outs

Any person who knowingly expends or applies any money in direct furtherance or support of any illegal strike or lock-out shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Section 29. Penalty for breach of settlement or award

¹[29. Penalty for breach of settlement or award. Any person who commits a breach of any term of any settlement or award, which is binding on him under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both, ²[and where the breach is a continuing one, with a further fine which may extend to two hundred rupees for every day during which the breach continues after the conviction for the first] and the Court trying the offence, if it fines the offender, may direct that the whole or any part of the fine realised from him shall be paid, by way of compensation, to any person who, in its opinion has been injured by such breach.]

——————–

1. Subs. by Act 36 of 1956, sec. 20, for section 29 (w.e.f. 17-9-1956).

2. Ins. by Act 35 of 1965, sec. 6 (w.e.f. 1-12-1965).

Section 30. Penalty for disclosing confidential information

Any person who wilfully discloses any such information as is referred to in section 21 in contravention of the provisions of that section shall, on complaint made by or on behalf of the trade union or individual business affected, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Section 30 A. Penalty for closure without notice

¹[30A. Penalty for closure without notice. Any employer who closes down any undertaking without complying with the provisions of section 25FFA shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.]

——————–

1. Ins. by Act 32 of 1972, sec. 3 (w.e.f. 14-6-1972).

Section 31. Penalty for other offences

(1) Any employer who contravenes the provisions of section 33 shall be punishable with imprisonment for a term, which may extend to six months, or with fine, which may extend to one thousand rupees, or with both.

(2) Whoever contravenes any of the provisions of this act or any rule made thereunder shall, if no other penalty is elsewhere provided by or under this Act for such contravention, be punishable with fine, which may extend to one hundred rupees.

Section 32. Offence by companies, etc

Where a person committing an offence under this Act is a company, or other body corporate, or an association of persons (whether incorporated or not), every director, manager, secretary, agent or other officer or person concerned with the management thereof shall, unless he proves that the offence was committed without his knowledge or consent, be deemed to be guilty of such offence.

Section 33. Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings

¹[33. Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings. (1) During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before ²[an arbitrator or] a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall-

(a) In regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or

(b) For any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute, save with the express permission in writing of the authority before which the proceeding is pending.

(2) During the pendency any such proceeding in respect of an industrial dispute, the employer may, in accordance with standing orders applicable to a workman concerned in such dispute ²[or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman]-

(a) Alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding; or

(b) For any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman:

Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer

(3) Notwithstanding anything contained in sub-section (2), no employer shall, during the pendency of any such proceeding in respect of an industrial dispute, take any action against any protected workman concerned in such dispute-

(a) By altering, to the prejudice of such protected workman, the conditions of service applicable to him immediately before the commencement of such proceedings; or

(b) By discharging or punishing, whether by dismissal or otherwise, such protected workman, save with the express permission in writing of the authority before which the proceeding is pending.

Explanation.

For the purposes of this sub-section, a “protected workman”, in relation to an establishment, means a workman who, being ³[a member of the executive or other office bearer] of a registered trade union connected with the establishment, is recognised as such in accordance with rules made in this behalf.

(4) In every establishment, the number of workmen to be recognised as protected workmen for the purposes of sub-section (3) shall be one per cent. of the total number of workmen employed therein subject to a minimum number of five protected workmen and a maximum number of one hundred protected workmen and for the aforesaid purpose, the appropriate Government may make rules providing for the distribution of such protected workmen among various trade unions, if any, connected with the establishment and the manner in which the workmen may be chosen and recognised as protected workmen.

(5) Where an employer makes an application to a conciliation officer, Board, ⁴[an arbitrator, a Labour Court, Tribunal or National Tribunal under the proviso to sub-section (2) for approval of the action taken by him, the authority concerned shall, without delay, hear such application and pass, ⁵[within a period of three months from the date of receipt of such application], such order in relation thereto as it deems fit :]

⁶[Provided that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further period as it may think fit:

Provided further that no proceedings before any such authority shall lapse merely on the ground that any period specified in this sub-section had expired without such proceedings being completed.]

——————–

1. Subs. by Act 36 of 1956, sec. 21, for section 33 (w.e.f. 10-3-1957).

2. lns. by Act 36 of 1964, sec. 18 (w.e.f. 19-12-1964).

3. Subs. by Act 45 of 1971, sec. 5, for ‘an officer’ (w.e.f. 15-12-1971).

4. Ins. by Act 36 of 1964, sec. 18 (w.e.f. 19-12-64).

5. Subs. by Act 46 of 1982, sec. 17, for certain words (w.e.f. 21-8-1984).

6. Ins. by Act 46 of 1982, sec. 17 (w.e.f. 21-8-1984).

Section 33 A. Special provision for adjudication as to whether conditions of service, etc., changed during pendency of proceeding

¹[33A. Special provision for adjudication as to whether conditions of service, etc., changed during pendency of proceeding. Where an employer contravenes the provisions of section 33 during the pendency of proceedings ²[before a conciliation officer, Board, an arbitrator, Labour Court, Tribunal or National Tribunal] any employee aggrieved by such contravention, may make a complaint in writing, ²[in the prescribed manner, –

(a) To such conciliation officer or Board, and the conciliation officer or Board shall take such complaint into account in mediating in, and promoting the settlement of, such industrial dispute; and

(b) To such arbitrator, Labour Court, Tribunal or National Tribunal and on receipt of such complaint, the arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit his or its award to the appropriate government and the provisions of this Act shall apply accordingly.]

——————–

1. Ins. by Act 48 of 1950, sec. 34 and sch.

2. Subs. by Act 46 of 1982, sec. 18 (w.e.f. 21-8-1984).

Section 33 B. Power to transfer certain proceedings

¹[33B. Power to transfer certain proceedings. (1) The appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceeding under this Act pending before a Labour Court, Tribunal or National Tribunal and transfer the same to another Labour Court, Tribunal or National Tribunal, as the case may be, for the disposal of the proceeding and the Labour Court, Tribunal or National Tribunal to which the proceeding is so transferred may, subject to special directions in the order of transfer, proceed either de novo or from the stage at which it was so transferred:

Provided that where a proceeding under section 33 or section 33A is pending before a Tribunal or National Tribunal, the proceeding may also be transferred to a Labour Court.

(2) Without prejudice to the provisions of sub-section (1), any Tribunal or National Tribunal, if so authorised by the appropriate Government, may transfer any proceeding under section 33 or section 33A pending before it to any one of the Labour Courts specified for the disposal of such proceedings by the appropriate Government by notification in the Official Gazette and the Labour Court to which the proceeding is so transferred shall dispose of the same.]

——————–

1. Ins. by Act 36 of 1956, sec. 23 (w.e.f. 10-3-1957).

Section 33 C. Recovery of Money Due from an Employer

¹[33C. Recovery of Money Due from an Employer. (1) Where any money is due to a workman from an employer under a settlement or an award or under the provisions of ²[Chapter VA or Chapter VB] the workman himself or any other person authorised by him in writing in this behalf, or, in the case of the death of the workman, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue :

Provided that every such application shall be made within one year from the date on which the money became due to the workman from the employer:

Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period.

(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government ³[within a period not exceeding three months.]

⁴[Provided that where the presiding officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit.]

(3) For the purposes of computing the money value of a benefit, the Labour Court may, if it so thinks fit, appoint a Commissioner who shall, after taking such evidence as may be necessary, submit a report to the Labour Court and the Labour Court shall determine the amount after considering the report of the Commissioner and other circumstances of the case.

(4) The decision of the Labour Court shall be forwarded by it to the appropriate Government and any amount found due by the Labour Court may be recovered in the manner provided for in sub-section (1).

(5) Where workmen employed under the same employer are entitled to receive from him any money or any benefit capable of being computed in terms of money, then, subject to such rules as may be made in this behalf, a single application for the recovery of the amount due may be made on behalf of or in respect of any number of such workmen.

Explanation.

In this section ‘Labour Court’ includes any court constituted under any law relating to investigation and settlement of industrial disputes in force in any State.]

——————–

1. Subs. by Act 36 of 1964, sec. 19, for the former section (w.e.f. 19-12,1964).

2. Subs. by Act 32 of 1976, sec. 4 (w.e.f. 5-3-1976).

3. Ins. by Act 46 of 1982, sec. 19 (w.e.f. 21-8-1984).

4. Added by Act 46 of 1982, sec. 19 (w.e.f. 21-8-1984).

Section 34. Cognizance of offences

(1) No Court shall take cognizance of any offence punishable under this Act or of the abetment of any such offence, save on complaint made by or under the authority of the appropriate Government.

(2) No Court inferior to that of ¹[a Metropolitan Magistrate or a judicial Magistrate of the first class] shall try any offence punishable under this Act.

——————-

1. Subs. by Act 46 of 1982, sec. 20, for certain words (w.e.f. 21-8-1984).

Section 35. Protection of persons

(1) No person refusing to take part or to continue to take part in any strike or lock-out which is illegal under this Act shall, by reason of such refusal or by reason of any action taken by him under this section, be subject to expulsion from any trade union or society, or to any fine or penalty, or to deprivation of any right or benefit to which he or his legal representatives would otherwise be entitled, or be liable to be placed in any respect, either directly or indirectly, under any disability or at any disadvantage as compared with other members of the union or society, anything to the contrary in the rules of a trade union or society notwithstanding.

(2) Nothing in the rules of a trade union or society requiring the settlement of disputes in any manner shall apply to any proceeding for enforcing any right or exemption secured by this section, and in any such proceeding the Civil Court may, in lieu of ordering a person who has been expelled from membership of a trade union or society to be restored to membership, order that he be paid out of the funds of the trade union or society such sum by way of compensation or damages as that Court thinks just.

Section 36. Representation of parties

¹[36.Representation of parties. (1) A workman who is a party to dispute shall be entitled to be represented in any proceeding under this Act by-

(a) ²[Any member of the executive or other office bearer] of a registered trade union of which he is a member;

(b) ²[Any member of the executive or other office bearer] of a federation of trade unions to which the trade union referred to in clause (a) is affiliated;

(c) Where the worker is not a member of any trade union, by ²[any member of the executive or other office bearer] of any trade union connected with, or by any other workman employed in, the Industry in which the worker is employed and authorised in such manner as may be prescribed.

(2) An employer who is a party to a dispute shall be entitled to be represented in any proceeding under this Act by-

(a) An officer of an association of employers of which he is a member;

(b) An officer of a federation of association of employers to which the association referred to in clause (a) is affiliated-

(c) Where the employer is not a member of any association of employers, by an officer of any association of employers connected with, or by any other employer engaged in, the industry in which the employer is engaged and authorised in such manner as may be prescribed.

(3) No party to a dispute shall be entitled to be represented by a legal practitioner in any conciliation proceedings under this Act or in any proceedings before a Court.

(4) In any proceeding ³[before a Labour Court, Tribunal or National Tribunal], a party to a dispute may be represented by a legal practitioner with the consent of the other parties to the proceeding and ⁴[with the leave of the Labour Court, Tribunal or National Tribunal, as the case may be].]

——————–

1. Subs. by Act 48 of 1950, sec. 34 and Sch., for the original section.

2. Subs. by Act 45 of 1971, sec. 6, for ‘an officer” (w.e.f. 15-12-1971).

3. Subs. by Act 36 of 1956, sec. 24, for “before a Tribunal” (w.e.f. 10-3-1957).

4. Subs. by Act 36 of 1956, sec. 24, for “with the leave of the Tribunal” (w.e.f. 10-3-1957).

Section 36 A. Power to remove difficulties

¹[36A. Power to remove difficulties. (1) If, in the opinion of the appropriate Government, any difficulty or doubt arises as to the interpretation of any provision of an award or settlement, it may refer the question to such Labour Court, Tribunal or National Tribunal as it may think fit.

(2) The Labour Court, Tribunal or National Tribunal to which such question is referred shall, after giving the parties an opportunity of being heard, decide such question and its decision shall be final and binding on all such parties.]

——————–

1. Ins. by Act 36 of 1956, sec. 25, (w.e.f. 10-3-1957).

Section 36 B. Power to exempt

¹[36B. Power to exempt. Where the appropriate government is satisfied in relation to any industrial establishment or undertaking or any class of industrial establishments or undertakings carried on by a department of that Government that adequate provisions exist for the investigation and settlement of industrial disputes in respect of workmen employed in such establishment or undertaking or class of establishments or undertakings, it may by notification in the Official Gazette, exempt, conditionally or unconditionally such establishment or undertaking or class of establishments or undertakings from all or any of the provisions of this Act.].

——————–

1. Ins. by Act 46 of 1982, sec.21 (w.e.f. 21-8-1984).

Section 37. Protection of action taken under the Act

No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of this Act or any rules made thereunder.

Section 38. Power to make rules

¹38. Power to make rules. (1) The appropriate Government may, subject to the condition of previous publication, make rules for the purpose of giving effect to the provisions of this Act.

(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.

[¹(a)¹⁰[***]

(b) [***]]

⁴[¹¹“(c) the salaries and allowances and the terms and conditions for appointment of the presiding officers of the Labour Court, Tribunal and the National Tribunal including the allowances admissible to members of courts, Boards and to assessors and witnesses;”]

(d) The ministerial establishment which may be allotted to a Court, Board, ⁴[Labour Court, Tribunal or National Tribunal] and the salaries and allowances payable to members of such establishment;

(e) The manner in which and the persons by and to whom notice of strike or lock-out may be given and the manner in which such notices shall be communicated;

(f) The conditions subject to which parties may be represented by legal practitioners in proceedings under this Act before a Court, ⁵[Labour Court, Tribunal or National Tribunal];

(g) Any other matter which is to be or may be prescribed.

(3) Rules made under this section may provide that a contravention thereof shall be punishable with fine not exceeding fifty rupees.

⁶[(4) All rules made under this section shall, as soon as possible after they are made, be laid before the State Legislature or, where the appropriate Government is the Central Government, before both Houses of Parliament.]

⁷[(5) Every rule made by the Central Government under this section shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in ⁸[two or more 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 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 rule.]

——————–

1. Subs. by Act 36 of 1956, sec. 26, for ‘and Tribunal” (w.e.f. 10-3-1957).

2. Ins. by Act 36 of 1956, sec. 26 (w.e.f. 10-3-1957).

3. Ins. by Act 36 of 1964, sec. 20 (w.e.f. 19-12-1964).

4. Subs. by Act 36 of 1956, sec. 26, for “Boards and Tribunals” (w.e.f. 10-3-1957).

5. Subs. by Act 36 of 1956, sec. 26, for “or Tribunal” (w.e.f. 10-3-1957).

6. Ins. by Act 36 of 1956, sec. 26 (w.e.f. 10-3-1957).

7. Ins. by Act 36 of 1964, sec, 20 (w.e.f. 19-12-64).

8. Subs. by Act 32 of 1976, sec. 5 (w.e.f. 5-3-1976).

9. On the enforcement of section22 of Act 46of l982, a new Clause (ab) shall stand inserted in section 38 as directed in section 22 of that Act. For the text of section, 22 of that Act see Appendix.

10. Omitted by Act 24 of 2010 w.e.f. 18-8-2010.

11. Subs. by Act 24 of 2010 w.e.f. 18-8-2010.

Section 39. Delegation of powers

¹[39. Delegation of powers. The appropriate Government may, by notification in the official Gazette, direct that any power exercisable by it under this Act or rules made thereunder shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also,-

(a) Where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government, or by such officer or authority subordinate to the State Government, as may be specified in the notification; and

(b) Where the appropriate Government is a State Government, by such officer or authority subordinate to the State Government as may be specified in the notification.]

——————–

1. Subs. by Act 36 of 1956, sec. 27, for section 39 ( w.e.f. 17-9-1956).

Section 40. Power to amend Schedules

¹[40. Power to amend Schedules. (1) The appropriate Government may, if it is of opinion that it is expedient or necessary in the public interest so to do, by notification in the Official Gazette, add to the First Schedule any industry, and on any such notification being issued, the First Schedule shall be deemed to be amended accordingly.

(2) The Central Government may, by notification in the Official Gazette, add to or alter or amend the Second Schedule or the Third Schedule and on any such notification being issued, the Second Schedule or the Third Schedule, as the case may be, shall be deemed to be amended accordingly

(3) Every such notification shall, as soon as possible after it is issued, be laid before the Legislature of the State, if the notification has been issued by a State Government, or before Parliament, if the notification has been issued by the Central Government.]

——————–

1. Subs. by Act 36 of 1964, sec. 21, for sec. 40 (w.e.f. 19-12-1964) which was ins. by Act 36 of 1956, sec. 28, original section 40 was rep. by Act 35 of 1950, sec. 2 and Sch. I.

SCH1. THE FIRST SCHEDULE

¹[THE FIRST SCHEDULE

[See Section 2 (n) (vi)]

Industries which may be declared to be Public Utility Services under sub-clause (vi) of clause (n) of section 2

1 . Transport (other than railways) for the carriage of passengers or good S, ²[by land or water];

2. Banking;

3. Cement;

4. Coal;

5. Cotton textiles;

6. Food stuffs;

7. Iron and Steel;

8. Defence establishments;

9. Service in hospitals and dispensaries;

10. Fire Brigade Service;

³[11. India Government Mints;

12. India Security Press;]

⁴[13. Copper Mining;

14. Lead Mining;

15. Zinc Mining;]

⁵[16. Iron Ore Mining;]

⁶[17. Service in any oilfield;]

⁷[*** ]

⁸[19. Service in the Uranium Industry;]

⁹[20 Pyrites Mining;]

21. Security Paper Mill, Hoshangabad;

¹⁰[22. Services in the Bank Note Press, Dewas;]

¹¹[23. Phosphorite Mining;]

¹²[24. Magnesite Mining;]

¹³[ 25. Currency Note Press;]

¹⁴[26. Manufacture or production of mineral oil (crude oil), motor and aviation spirit, diesel oil, kerosene oil, fuel oil, diverse hydrocarbon oils and their blends including synthetic fuels, lubricating oils and the like;]

¹⁵[27. Service in the International Airports Authority of India.]

——————–

1. Subs. by Act 36 of 1956, sec. 29, for the original Sch. (w.e.f. 10-3-1957).

2. Subs. by Act 36 of 1964, sec. 22, for “by land, water or air” (w.e.f. 19-12-1964).

3. Ins. by Notification No. S.O. 2193, dated 30th June 1965, published in Gazette of India, pt. 11, sec. 3(ii), dated 10th July 1965, and p. 2340.

4. Items, 13 to 15 added by Notification No. 1444 (w.e.f. 3-5-1966).

5. Ins. by Notification No. S.O. 726, published in Gazette of India, pt. 11, sec. 3 (ii), dated 4th March 1967.

6. Ins. by Notification No. 1776, dated 10th May 1967.

7. Entry 18 omitted by Act 45 of 1971, sec. 7 (w.e.f. 15-12-1971).

8. Ins. by Notification No. S.O. 1471 published in Gazette of India, dated 27th April, 1968, pt. 11, sec. 3 (ii), p. 2004.

9. Ins. by Notification No. S.O. 2061, dated 30th May, 1970, published in Gazette of India, dated 6th June, 1970, pt. 11, sec. 3 (ii), and p. 2616.

10. Ins. by Notification No. S.,C). 4697, dated 26th November, 1976, published in Gazette of India, dated 11th December, 1976, pt. 11, sec. 3 (ii), p. 4286.

11. Ins. by Notification No. S.O. 47, dated 17thDecember, 1976, published in Gazette of India, dated lst January, 1977, pt. 11, sec. 3 (ii), p. 69.

12. Ins. by Notification No. S.C). 2474, published in Gazette of India, pt. 11, sec. 3 (ii), dated 4th September, 1980.

13. Ins. by Notification No. S.C). 946, dated 7th March, 1981.

14. Ins. by Notification No. S.C). 4207, dated 20th November, 1984.

15. Ins. by Notification No. S.O. 1919, dated 8th July, 1987.

SCH2. THE SECOND SCHEDULE

(See Section 7)

Matters within the jurisdiction of Labour Courts

1. The propriety or legality of an order passed by an employer under the standing orders;

2. The application and interpretation of standing order;

3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed;

4. Withdrawal of any customary concession or privilege;

5. Illegality or otherwise of a strike or lock-out; and

6. All matters other than those specified in the Third Schedule.

SCH3. THE THIRD SCHEDULE

(See Section 7A)

Matters within the jurisdiction of Industrial Tribunals

1. Wages, including the period and mode of payment;

2. Compensatory and other allowances;

3. Hours of work and rest intervals;

4. Leave with wages and holidays;

5. Bonus, profit sharing, provident fund and gratuity;

6. Shift working otherwise than in accordance with standing orders;

7. Classification by grades;

8. Rules of discipline;

9. Rationalisation;

10. Retrenchment of workmen and closure of establishment; and

11. Any other matter that may be prescribed.

SCH4. THE FOURTH SCHEDULE

(See Section 9A)

Conditions of Service for Change of which Notice is to be given

1. Wages, including the period and mode of payment;

2. Contribution paid, or payable, by the employer to any provident fund or pension fund or for the benefit of the workmen under any law for the time being in force;

3. Compensatory and other allowances;

4. Hours of work and rest intervals;

5. Leave with wages and holidays;

6. Starting alteration or discontinuance of shift working otherwise than in accordance with standing orders;

7. Classification by grades;

8. Withdrawal of any customary concession or privilege or change in usage;

9. Introduction of new rules of discipline, or alteration of existing rules, except in so far as they are provided in standing orders;

10. Rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment of workmen;

11. Any increases or reduction (other than casual) in the number of persons employed or to be employed in any occupation or process or department or shift, ¹[not occasioned by circumstances over which the employer has no control].]

——————–

1. Subs. by Act No. 36 of 1964, sec. 2,3, for ‘not due to forced matters’ (w.e.f. 19-12-1964).

SCH5. THE FIFTH SCHEDULE

¹[THE FIFTH SCHEDULE

[See Section 2(ra)]

Unfair Labour Practices

I. On the part of employers and trade unions of employers

1. To interfere with, restrain from, or coerce, workmen in the exercise of their right to organise, form, join or assist a trade union or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, that is to say :-

(a) Threatening workmen with discharge or dismissal, if they join a trade union;

(b) Threatening a lock-out or closure, if a trade union is organised;

(c) Granting wage increase to workmen at crucial periods of trade union Organisations, with a view to undermining the efforts of the trade union Organisations.

2. To dominate, interfere with or contribute support, financial or otherwise, to any trade union, that is to say :-

(a) An employer taking an active interest in organising a trade union of his workmen; and

(b) An employer showing partiality or granting favour to one of several trade unions attempting to organise his workmen or to its members, where such a trade union is not a recognised trade union.

3. To establish employer sponsored trade unions of workmen.

4. To encourage or discourage membership in any trade union by discriminating against any workman, that is to say :-

(a) Discharging or punishing a workman, because he urged other workmen to join or organise a trade union;

(b) Discharging or dismissing a workman for taking part in any strike (not being a strike which is deemed to be an illegal strike under this Act);

(d) Refusing to promote workmen to higher posts on account of their trade union activities;

(e) Giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to undermine the strength of their trade union;

(f) Discharging office-bearers or active members of the trade union on account of their trade union activities.

5. To discharge or dismiss workmen-

(a) By way of victimisation;

(b) Not in good faith, but in the colourable exercise of the employer’s rights;

(d) For patently false reasons;

(e) On untrue or trumped up allegations of absence without leave;

(f) In utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;

(g) For misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record or service of the workman, thereby leading to a disproportionate punishment.

6. To abolish the work of a regular nature being done by workmen, and to give such work to contractors as a measure of breaking a strike.

7. To transfer a workman mala fide from one place to another, under the guise of following management policy

8. To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a pre-condition to allowing them to resume work.

9. To show favouritism or partiality to one set of workers regardless of merit.

10. To employ workmen as ‘badlis”, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen.

11. To discharge or discriminate against any workman for filing charges or testifying against an employer in any enquiry or proceeding relating to any industrial dispute.

12. To recruit workmen during a strike which is not an illegal strike.

13. Failure to implement award, settlement or agreement.

14. To indulge in act,, of force or violence.

15. To refuse to bargain collectively, in good faith with the recognised trade unions.

16. Proposing or continuing a lock-out deemed to be illegal under this Act.

——————–

1. Ins. by Act No. 46 of 1982, sec. 23 (w.e.f. 21-8-1984).

II.-On the part of workmen and trade unions of workmen

1. To advise or actively support or instigate any strike deemed to be illegal under this Act.

2. To coerce workmen in the exercise of their right to self-organisations or to join a trade union or refrain from joining any trade union, that is to say :-

(a) For a trade union or its members to picketing in such a manner that non-striking workmen are physically debarred from entering the work places;

(b) To indulge in acts of force or violence or to hold out threats of intimidation in connection with a strike against non-striking workmen or against managerial staff.

3. For a recognised union to refuse to bargain collectively in good faith with the employer.

4. To indulge in coercive activities against certification of a bar-gaining representative.

5. To stage, encourage or instigate such forms of coercive actions as wilful go slow”, squatting on the work premises after working hours or ‘gherao’ of any of the members of the managerial or other staff.

6. To stage demonstrations at the residences of the employers or the managerial staff members.

7. To incite or indulge in wilful damage to employer’s property connected with the industry.

8. To indulge in acts of force or violence or to hold out threats of intimidation against any workman with a view to prevent him from attending work.]

Arms Act

November 30, 2014

Section 1. Short title, extent and commencement

(1) This Act may be called the Arms Act, 1959.

(2). It extends to the whole of India.

(3). It shall come into force on such date [ Note: 1st October, 1962, vide Notification No. G.S.R. 992, dated 13-7-1962, see Gazette of India, Pt. II, sec. 3(i) p. 1092. ] as the Central Government may, by notification in the Official Gazette, appoint.

———————————

1. Came into force on 1-10-1962 vide G.S.R. 992, dated 13th July, 1962.

Section 2. Definition and interpretation

(1) In this Act, unless the context otherwise requires,—

(a) “acquisition” with its grammatical variations and cognate expressions, includes hiring, borrowing, or accepting as a gift;

(b) “ammunition” means ammunition for any firearm, and includes—

(i) rockets, bombs, grenades, shells ¹[and other missiles],

(ii) articles designed for torpedo service and submarine mining,

(iii) other articles containing, or designed or adapted to contain, explosive, fulminating or fissionable material or noxious liquid, gas or other such thing, whether capable of use with firearms or not,

(iv) charges for firearms and accessories for such charges,

(v) fuses and friction tubes,

(vi) parts of, and machinery for manufacturing, ammunition, and

(vii) such ingredients of ammunition as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(c) “arms” means articles of any description designed or adapted as weapons for offences, or defence, and includes firearms, sharp-edged and other deadly weapons, and parts of, and machinery for manufacturing arms, but does not include articles designed solely for domestic or agricultural uses such as a lathi or an ordinary walking stick and weapons incapable of being used otherwise than as toys or of being converted into serviceable weapons;

²[(d) “district magistrate” in relation to any area for which a Commissioner of Police has been appointed, means the Commissioner of Police thereof and includes any such Deputy Commissioner of Police, exercising jurisdiction over the whole or any part of such area, as may be specified by the State Government in this behalf in relation to such area or parts;]

(e) “firearms” means arms of any description designed or adapted to discharge a projectile or projectiles of any kind by the action of any explosive or other forms of energy, and includes,—

(i) artillery, hand-grenades, riot-pistols or weapons of any kind designed or adapted for the discharge of any noxious liquid, gas or other such things,

(ii) accessories for any such firearm designed or adapted to diminish the noise or flash caused by the firing thereof,

(iii) parts of, and machinery for manufacturing, firearms, and

(iv) carriages, platforms and appliances for mounting, transporting and serving artillery;

(f) “licensing authority” means an officer or authority empowered to grant or renew licences under rules made under the Act, and includes, the Government;

³[(ff) “magistrate” means an Executive Magistrate under the Code of Criminal Procedure, 1973 (2 of 1974);]

(g) “prescribed” means prescribed by rules made under this Act;

(h) “prohibited ammunition” means any ammunition, containing, or designed or adapted to contain, any noxious liquid, gas or other such thing, and includes rockets, bombs, grenades, shells, ⁴[missiles] articles designed for torpedo service and submarine mining and such other articles as the Central Government may, by notification in the Official Gazette, specify to be prohibited ammunition;

(i) “prohibited arms” means—

(i) firearms so designed or adapted that, if pressure is applied to the trigger, missiles continue to be discharged until pressure is removed from the trigger or the magazine containing the missiles is empty, or

(ii) weapons of any description designed or adapted for the discharge of any noxious liquid, gas or other such thing,

and includes artillery, anti-aircraft and anti-tank firearms and such other arms as the Central Government may, by notification in the Official Gazette, specify to be prohibited arms;

(j) “public servant” has the same meaning as in section 21 of the Indian Penal Code (45 of 1860);

(k) “transfer” with its grammatical variations and cognate expressions, includes letting on hire, lending, giving and parting with possession.

(2) For the purposes of this Act, the length of the barrel of a firearm shall be measured from the muzzle to the point at which the charge is exploded on firing.

(3) Any reference in the Act to any law which is not in force in any area shall, in relation to that area, be construed as a reference to the corresponding law, if any, in force in that area.

(4) Any reference in this Act to any officer or authority shall, in relation to any area in which there is no officer or authority with the same designation, be construed as a reference to such officer or authority as may be specified by the Central Government by notification in the Official Gazette.

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1. Subs. by Act 42 of 1988, sec. 2, for “and other like missiles” (w.r.e.f. 27-5-1988).

2. Subs. by Act 55 of 1971, sec. 2, for clause (d) (w.e.f. 13-12-1971).

3. Ins. by Act 25 of 1983, sec. 2 (w.r.e.f. 22-6-1983).

4. Ins. by Act 42 of 1988, sec. 2 (w.r.e.f. 27-5-1988).

Chapter II – ACQUISITION, POSSESSION, MANUFACTURE, SALE, IMPORT, EXPORT AND TRANSPORT OF ARMS AND AMMUNITION

Section 3. Licence for acquisition and possession of firearms and ammunition

[ Note: S. 3 renumbered as sub section (1) thereof by Act 25 of 1983, s. 3 (w.e.f. 22-6-1983) ] (1) No person shall acquire, have in his possession, or carry any firearm or ammunition unless he holds in this behalf a licence issued in accordance with the provisions of this Act and the rules made there under :

Provided that a person may, without himself holding a licence carry any firearms or ammunition in the presence, or under the written authority, of the holder of the licence for repair or for renewal of the licence or for use by such holder.

(2) [ Note: Ins. by s. 3., ibid., (w.e.f. 22-6-1983) ] Notwithstanding anything contained in sub-section (1), no person, other than a person referred to in sub-section (3), shall acquire, have in his possession to carry, at any time, more than three firearms:

Provided that a person who has in his possession more firearms than three at the commencement of the Arms (Amendment) Act, 1983, may retain with him any three of such firearms and shall deposit, within ninety days from such, commencement the remaining firearms with the officer in charge of the nearest police station or, subject to the conditions prescribed for the purposes of sub-section(1) of section 21, with a licensed dealer or, where such person is a member of the armed forces of the Union, in a unit armoury referred to in that sub-section.

(3) Nothing contained in sub-section (2) shall apply to any dealer in firearms or to any member of a rifle club or rifle association licensed or recognised by the Central Government using a point 22 bore rifle or an air rifle for target practice.

(4) The provisions of sub-section (2) to (6) (both inclusive) of section 21 shall apply in relation to any deposit of firearms under the proviso to sub-section(2) as they apply in relation to the deposit of any arms or ammunition under sub-section (1) of that section.]

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1. Section 3 re-numbered as sub-section (1) thereof by Act 25 of 1983, sec. 3 (w.r.e.f. 22-6-1983).

2. Ins. by Act 25 of 1983, sec. 3 (w.r.e.f. 22-6-19830).

*. 22nd day of June, 1983.

Section 4. Licence for acquisition and possession of arms of specified description in certain cases

If the Central Government is of opinion that having regard to the circumstances prevailing in any area it is necessary or expedient in the public interest that the acquisition, possession or carrying of arms other than firearms should also be regulated, it may, by notification in the Official Gazette, direct that this section shall apply to the area specified in the notification and thereupon no person shall acquire, have in his possession or carry in that area arms of such class or description as may be specified in that notification unless he holds in this behalf a licence issued in accordance with the provisions of this Act and the rules made there under.

Section 5. Licence for manufacture, sale, etc., of arms and ammunition

¹[(1)] No person shall—

(a) ²[use, manufacture], sell, transfer, convert, repair, test or prove, or

(b) expose or offer for sale or transfer or have in his possession for sale, transfer, conversion, repair, test or proof,

any firearms or any other arms of such class or description as may be prescribed or any ammunition unless he holds in this behalf a licence issued in accordance with the provisions of this Act and the rules made thereunder.

³[***]

⁴[(2) Notwithstanding anything contained in sub-section (1), a person may, without holding a licence in this behalf, sell or transfer any arms or ammunition which he lawfully possesses for his own private use to another person who is entitled by virtue of this Act, or any other law for the time being in force to have, or is not prohibited by this Act or such other law from having in his possession such arms or ammunition:

Provided that no firearm or ammunition in respect of which a licence is required under section 3 and no arms in respect of which a licence is required under section 4 shall be sold or transferred by any person unless—

(a) he has informed in writing the district magistrate having jurisdiction or the officer in charge of the nearest police station of his intention to sell or transfer such firearms, ammunition or other arms and the name and address of the person to whom he intends to sell or transfer such firearms, ammunition or the other arms, and

(b) a period of not less than forty-five days has expired after the giving of such information.]

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1. Section 5 re-numbered as sub-section (1) thereof by Act 25 of 1983, sec. 4 (w.r.e.f. 22-6-1983).

2. Subs. by Act 42 of 1988, sec. 3, for “manufacture” (w.r.e.f. 27-5-1988).

3. Proviso omitted by Act 25 of 1983, sec. 4 (w.r.e.f. 22-6-1983).

4. Ins. by Act 25 of 1983, sec. 4 (w.r.e.f. 22-6-1983).

Section 6. Licence for the shortening of guns or conversion of imitation firearms into firearms

No person shall shorten the barrel of a firearm or convert an imitation firearm into a firearm unless he holds in this behalf a licence issued in accordance with the provisions of this Act and the rules made there under.

Explanation – In this section, the expression ‘imitation firearms” means anything which has the appearance of being a firearm, whether it is capable of discharging any shot, bullet or other missile or not.

Section 7. Prohibition of acquisition or possession, or of manufacture or sale, or prohibited arms or prohibited ammunition

No person shall –

(a) acquire, have in his possession or carry; or

(b) ¹[ Note: Subs. by Act 42 of 1988, s. 4 (w.e.f. 27-5-1988) ] use, manufacture,] sell, transfer, convert, repair, test or prove ; or

(c) expose or offer for sale or transfer or have in his possession for sale, transfer, conversion, repair test for proof,

any prohibited arms or prohibited ammunition unless he has been specially authorised by the Central Government in this behalf.

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1. Subs. by Act 42 of 1988, sec. 4, for “manufacture” (w.r.e.f. 27-5-1988).

Section 8. Prohibition of sale or transfer of firearms not bearing identification marks

(1) No person, shall obliterate, remove, alter or forge any name, number or other identification mark stamped or otherwise shown on a firearm.

(2) No person shall sell or transfer any firearm which does not bear the name of the maker, manufacturer’s number or other identification mark stamped or otherwise shown thereon in a manner approved by the Central Government.

(3) Whenever any person has in his possession any firearms without such name, number or other identification mark on which such name, number or other identification mark has been obliterated, removed, altered or forged, it shall be presumed unless the contrary is proved, that he has obliterated, removed, altered or forged that name, number or other identification mark ;

Provided that in relation to a person who has in his possession at the commencement of this Act any firearms without such name, number or other identification mark stamped or otherwise shown thereon, the provisions of this sub-section shall not take effect until after the expiration of one year from such commencement.

Section 9. Prohibition of acquisition or possession by, or of sale or transfer to young persons and certain other persons of fire arms, etc,

(1) Notwithstanding anything in the foregoing provisions of this Act –

(a) No person,-

(i) Who has not completed the age of ¹[twenty-one years], or

(ii) Who has been sentenced on conviction of any offence involving

violence or moral turpitude to imprisonment for ²any terms] at any time during a period of five years after the expiration of the sentence, or

(iii) Who has been ordered to execute under Chapter VIII of the³ Code of Criminal Procedure, 1973 (2of 1974)] a bond for keeping the peace or for good behavior, at any time during the term of the bond.

Shall acquire, have in his possession or carry any firearm or ammunition;

(b) No person shall sell or transfer any firearm or ammunition to , or convert, repair, test or prove any firearm or ammunition for, any other person whom he knows, or has reason to believe—

(i) To be prohibited under clause (a) from acquiring, having in his possession or carrying any firearm or ammunition, or

(ii) To be of unsound mind at the time of such sale or transfer, or such conversion, repair, test of proof.

(2) Notwithstanding anything in sub-clause (I) of clause (a) of sub-section (1), a person who has attained the prescribed age – limit may use under prescribed condition such firearms as may be prescribed in the course of his training in the use of such firearms:

Provided that different age –limits may be prescribed in relation to different types of firearms.

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1. Subs. by Act 25 of 1983, sec. 5, for “sixteen years” (w.e.f. 22-6-1983).

2. Subs. by Act 25 of 1983, sec. 5, for “a term of not less than six months” (w.r.e.f. 22-6-1983).

3. Subs. by Act 25 of 1983, sec. 5, for “Code of Criminal Procedure, 1898 (5 of 1898)” (w.r.e.f. 22-6-1983).

Section 10. Licence for import and export of arms , etc.

(1) No person shall bring into, or take out of India by sea, land or air any arms or ammunition unless he holds in this behalf a licence issued in accordance with the provisions of this Act and the rules made there under:

Provided that –

(a) a person who is entitled by virtue of this Act or any other law for the time being in force to have, or is not prohibited by this Act or such other law from having , in his possession any arms or ammunition, may without a licence in this behalf bring into, or take out of, India such arms or ammunition in reasonable quantities for his own private use;

(b) a person being a bona fide tourist belonging to any such country as the Central Government may, by notification in the Official Gazette, specify, who is not prohibited by the laws of that country from having in his possession any arms or ammunition, may, without a licence under this section but in accordance with such conditions as may be prescribed, bring with him into India arms and ammunition in reasonable quantities for use by him for purposes only of sport and for no other purpose.

Explanation-For purpose of clause (b) of this proviso, word “tourist” means a person who not being a citizen of India visits India for a period not exceeding six months with no other object than recreation, sight-seeing, or participation in a representative capacity in meetings convened by the Central Government or in international conferences, associations or other bodies.

(2) Notwithstanding anything contained in the proviso to subsection (1) where the collector of customs or any other officer empowered by the Central Government in this behalf has any doubt as to the applicability of clause (a) or clause (b) of that proviso to any person who claims that such clause is applicable to him or as to the reasonableness of the quantities of arms or ammunition in the possession of any person referred to in such clause, or as to the use to which such arms or ammunition in the possession of such person until he receives the orders of the Central Government in relation thereto.

(3) Arms and ammunition taken from one part of India to another by sea or air or across any intervening territory not forming a part of India, are taken out of, and brought into, India within the meaning of this section.

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1. Subs. by Act 22 of 1995, sec. 89, for “Collector of Customs” (w.e.f. 26-5-1995).

Section 11. Power to prohibit import or export of arms, etc.

The Central Government may, by notification in the Official Gazette prohibit the bringing into, or the taking out of, India, arms or ammunition of such classes and descriptions as may be specified in the notification.

Section 12. Power to restrict or prohibit transport of arms

(1) The Central Government may, by notification if the Official Gazette, –

(a) Direct that no person shall transport over India or any part thereof arms or ammunition of such classes and descriptions as may be specified in the notification unless he holds in this behalf a licence issued a accordance with provisions of this Act, and rules made there under; or

(b) Prohibit such transport altogether.

(2) Arms or ammunition trans-shipped at a seaport or an airport in India are transported within the meaning of this section.

Chapter III – PROVISIONS RELATING TO LICENCES

Section 13. Grant of licences

(1) An application for the grant of a licence under Chapter II shall be made to the licensing authority and shall be in such form, contain such particulars and be accompanied by such fee, if any, as may be prescribed.

(2) [ Note: Subs. by Act 25 of 1983, s. 6 (w.e.f. 22-6-1983) ] On receipt of an application, the licensing authority shall call for the report of the officer in charge of the nearest police station on that application, and such officer shall send his report within the prescribed time.

(2A) The licensing authority, after such inquiry, if any, as it may, consider necessary, and after considering the report received under sub-section(2), shall, subject to the other provisions of this Chapter, by order in writing either grant the licence or refuse to grant the same.

Provided that where the officer in charge of the nearest police station does not send his report on the application within the prescribed time, the licensing authority may, if it deem fit, make such order, after the expiry of the prescribed time, without further waiting for the report].

(3) The licensing authority shall grant –

(a) A licence under section 3 where the licence is required –

(i) By a citizen of India in respect of a smooth bore gun having a barrel of not less than twenty inches in length to be used for protection or sport or in respect of muzzle loading gun to be used for bona fide crop protection:

Provided that where having regard to the circumstances of any case, the licensing authority is satisfied that in muzzle loading gun will not be sufficient for crop protection, the licensing authority may grant a licence in respect of any other smooth bore gun a aforesaid for such protection, or

(ii) In respect of a point 22 bore rifle or an air rifle to be used for target practice by a member of rifle club or rifle association licensed or recognised by the Central Government ;

(b) A licence under section 3 in any other case or licence under section 4, section 5, section 6, section 10 or section 12, if the licensing authority is satisfied that the person by whom the licence is required has a good reason for obtaining the same.

Section 14. Refusal of licences

(1) Notwithstanding anything in section 13, licensing authority shall refuse to grant –

(a) a licence under section 3, section 4, or section 5 where such licence is required in respect of any prohibited arms or prohibited ammunition:

(b) A licence in any other case under Chapter II,-

(i) where such licence is required by a person whom then licensing authority has reason to believe-

(1) to be prohibited by this Act or by any other law for the time being in force from acquiring, having in his possession or carrying any arms or ammunition, or

(2) to be of unsound mind, or

(3) to be for any reason unfit for a licence under this Act, or

(ii) where the licensing authority deems it necessary for the sec

urity of the public peace or for public safety to refuse to grant such licence.

(2) The licensing authority shall not refuse to grant any licence to any person merely on the ground that such person does not own or possess sufficient property.

(3) Where the licensing authority refuses to grant a licence to any person it shall record in writing the reasons for such refusal and furnish to that person on demand a brief statement of the same unless in any case the licensing authority is of the opinion that it will not be in the public interest to furnish such statement.

Section 15. Duration and renewal of licence

(1) A licence under section3 shall, unless revoked earlier, continue in force for a period of three years from the dare on which it is granted:

Provided that such a licence may be granted for a shorter period if the person by whom the licence is required so desires or if the licensing authority for reasons to be recorded in writing considers in any case that the licence should be granted for a shorter period.

(2) A licence under any other provision of Chapter II shall, unless revoked earlier, continue in force for such period from the dare on which it is granted as the licensing authority may in each case determine.

(3) Every licence shall, unless the licensing authority for reasons to be recorded in writing otherwise decides in any case, be renewable for the same period for which the licence was originally granted and shall be so renewable from time to time, and the provisions of section 13 and 14 shall apply to the renewal of a licence as they apply to the grant thereof.

Section 16. Fees, etc., for licence

The fees on payment of which, the condition subject to which and the form in which a licence shall be granted or renewed shall be such as may be prescribed:

Provided that different fee, different conditions and different forms may be prescribed for different types of licences:

Provided further that a licence may contain in addition to prescribed conditions such other conditions as may be considered necessary by the licensing authority in any particular case.

Section 17. Variation, suspension and revocation of licences

(1) The licensing authority may very the conditions subject to which a licence has been granted except such of them as have been prescribed and may for that purpose require the licence holder by notice in writing to deliver-up the licence to it within such time as may be specified in the notice.

(2) The licensing authority may, on the application of the holder of a licence, also vary the conditions of the licence except such of them as have been prescribed.

(3) The licensing authority may by order in writing suspend a licence for such periods it thinks fit or revoke a licence –

(a) if the licensing authority is satisfied that the holder of the licence is prohibited by this Act or by any other law for the time being in force, from acquiring, having in his possession or carrying any arms or ammunition, or is of unsound mind, or is for any reason unfit for a licence under this Act; or

(b) if the licensing authority deems it necessary for the security of the public peace or for public safety to suspend or revoke the licence; or

(c) if the licence was obtained by the suppression of material information or on the basis of wrong information provided by the holder of the licence or any other person on his behalf at the time of applying for it; or

(d) if any of the conditions of the licence has been contravened; or

(e) if the holder of the licence has failed to comply with a notice under sub-section (1) requiring him to deliver-up the licence.

(4) The licensing authority may also revoke a licence on the application of the holder thereof.

(5) Where the licensing authority makes an order varying a licence under sub-section (1) or an order suspending or revoking a licence under sub-section (3), it shall record in writing the reasons therefor and furnish tot he holder of the licence on demand a brief statement of the same unless in any case the licensing authority is of the opinion that it will not be in the public interest to furnish such statement.

(6) The authority to whom the licensing authority is subordinate may by order in writing suspend for revoke a licence on any ground on which it may be suspended or revoked by the licensing authority; and the foregoing provisions of this section shall, as far as may be, apply in relation to the suspension or revocation of a licence by such authority.

(7) A court conviction the holder of a licence of any offence under this Act or the rules made there under may also suspend or revoke the licence :

Provided that if the conviction is set aside on appeal or otherwise, the suspension or revocation shall become void.

(8) An order of suspension or revocation under sub-section (7) may also be made by an appellate court or by the High Court when exercising its powers of revision.

(9) The Central Government may, by order in the Official Gazette, suspend or revoke or direct any licensing authority to suspend or revoke all or any licences granted under this Act throughout India or any part thereof.

(10) On the suspension or revocation of a licence under this section the holder thereof shall without delay surrender the licence to the authority by whom it has been suspended or revoked or to such other authority as may be specified in this behalf in the order of suspension or revocation.

Section 18. Appeals

(1) Any person aggrieved by an order of the licensing authority refusing to grant a licence or varying the conditions of a licence or by an order of the licensing authority is subordinate, suspending or revoking a licence may prefer an appeal against that order to such authority (hereinafter referred to as the appellate authority) and within such period as may be prescribed:

Provided that no appeal shall lie against any order made by, or under the direction of the Government. (1) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefore:

Provided that an appeal may be admitted after the expiry of the period prescribed therefore if the appellant satisfies the appellate authority that he had sufficient cause for not preferring the appeal within that period.

(3) The period prescribed for an appeal shall be computer in accordance with the provision of the Indian Limitation Act, 1908 (9 of 1908), with respect to the computation of periods of limitation there under .

(4) Every appeal under this section shall be made by a petition in writing ahs shall be accompanied by a brief statement of the reasons for the order appealed against where such statement has been furnished to the appellant and by such fee as may be prescribed.

(5) In disposing of an appeal the appellate authority shall follow such procedure as may be prescribed :

Provided that no appeal shall be disposed of unless the appellant has been given a reasonable opportunity of being heard.

(6) The order appealed against shall, unless the appellate authority conditionally or unconditionally directs otherwise, be in force pending the disposal of the appeal against such order.

(7) Every order of the appellate authority confirming, modifying or reversing the order appealed against shall be final.

Chapter IV – POWERS AND PROCEDURE

Section 19. Power to demand production of licence, etc.

(1) Any police officer or any other officer specially empowered in this behalf by the Central Government may demand the production of his licence from any person who is carrying any arms or ammunition.

(2) If the person upon whom a demand is made refuses for fails to produce the licence or to show that he is entitled by virtue of this Act or any other law for the time being in force to carry such arms or ammunition without a licence, the officer concerned may require him to give his name and address and if such officer considers it necessary, seize from t hat person the arms or ammunition which he is carrying.

(3) If that person refuses to give his name and address or if the officer concerned suspects that person of giving a false name or address or of intending to abscond, such officer may arrest him without warrant

Section 20. Arrest of persons conveying arms, etc., under suspicious circumstances

Where any person found carrying or conveying any arms or ammunition whether covered by a licence or not, in such manner or under such circumstances as to afford just grounds of suspicion that the same are or is being carried by him with intent to use them, or that the same may be used, for any unlawful purpose any magistrate, any police officer or any other public officer or any other public servant or any person employed or working, upon a railway, aircraft, vessel, vehicle or any other means of conveyance, may arrest him without warrant and seize from him such arms or ammunition.

Section 21. Deposit of arms, etc., on possession ceasing to be lawful

(1) Any person having in his possession any arms or ammunition the possession whereof has, in consequence of the expiration of the duration of a licence or of the suspension or revocation of a licence or by the issue of a notification under section 4 or by any reason whatever, ceased to be lawful, shall without unnecessary delay deposit the same either with the officer in charge of the nearest police station or subject to such conditions as may be prescribed, with a licensed dealer or where such person is a member of the armed force of the Union, in a unit armory.

Explanation –In this sub-section “unitarmoury” includes and armory in a ship or establishment of the Indian Navy.

(2) Where arms or ammunition have or has been deposited under sub-section (1) the depositor or in the case of his death, his legal representative, shall, at any time before the expiry of such period as may be prescribed, be entitled-

(a) to receive back anything so deposited on his becoming entitled by virtue of this Act or any other law for the time being in force to have the same in his possession, or

(b) to dispose, or authorise the disposal, of anything so deposited by sale or otherwise to any person entitled by virtue of this Act or any other law for the time being in force to have, or not prohibited by this Act or such other law from having, the same in his possession and to receive the proceeds of any such disposal :

Provided that nothing in this sub-section be deemed to authorise the return or disposal of anything of which confiscation has been directed under section 32.

(3) All things deposited and not received back or disposed of under sub-section (2) within the period therein referred to shall be forfeited to Government by order of the district magistrate :

Provided that in the case of suspension of a licence no such forfeiture shall be ordered in respect of a thing covered by the licence during the period of suspension.

(4) Before making an order sub-section (3) the district magistrate shall by notice in writing to be served upon the depositor or in the case of his death, upon his legal representative, in the prescribed manner, require him to show cause within thirty days from the service of the notice why the things specified in the notice should not be forfeited.

(5) After considering the cause, if any, shown by the depositor or as the case may be, his legal representative, district magistrate shall pass such order as he thinks fit.

(6) The Government may any time return to the depositor or his legal representative things forfeited to it or the proceeds of disposal thereof wholly or in part.

Section 22. Search and seizure by magistrate

(1) Whenever any magistrate has reason to believe –

(a) That any person residing within the local limits of his jurisdiction has in his possession any arms or ammunition for any unlawful purpose, or

(b) That such person cannot be left in the possession of any arms or ammunition without danger to the public peace or safety, the magistrate may, after having recorded the reasons for his belief, cause a search to be made of the house or premises occupied by such arms or ammunition are or is to be found and may have such arms or ammunition, if any, seized and detain the same in sate custody for such period as he thinks necessary, although that person may be entitled by virtue of this Act or any other law for the time being in force to have the same in his possession.

(2) Every search under this section shall be conducted by or in the presence of a magistrate or by or in the presence of some officer specially empowered in this behalf by the Central Government.

Section 23. Search of vessels, vehicles for arms, etc.

Any magistrate, any police officer or any other officer specially empowered in this behalf by the Central Government, may for the purpose of ascertaining whether any contravention of this Act or the rules made there under is being or is likely to be committed, stop and search any vessel, vehicle or other means of conveyance and seize any arms or ammunition that may be found therein along with such vessel, vehicle or other means of conveyance.

Section 24. Seizure and detention under orders of the Central Government

The Central Government may at any time order the seizure of any arms or ammunition in the possession of any person, notwithstanding that such person is entitled by virtue of this Act or any other law for the time being in force to have the same in his possession, any may detain the same for such period as it thinks necessary for the public peace and safety.

Section 24 A. Prohibition as to possession of notified arms in disturbed areas, etc.

[ Note: Ss. 24A and 24B Ins. by Act 25 of 1983, s. 7 (w.e.f 22-6-1983) ] (1) Where the Central Government is satisfied that there is extensive disturbance of public peace and tranquility or imminent danger of such disturbance in any area and that for the prevention of offences involving the use or arms in such area, it is necessary or expedient so to do, it may by notification in the Official Gazette-

(a) Specify the limits of such area;

(b) Direct that before the commencement for the period specified in the notification (which period shall be a period commencing from a date not earlier than the fourth day after the date of publication of the notification in the Official Gazette), every person having in his possession in such area any arms of such description as may be specified in the notification (the arms so specified being hereafter in this section referred to as notified arms), shall deposit the same before such commencement in accordance with the provision of section 21 and for this purpose the possession by such person of any notified arms, shall, notwithstanding anything contained in any other provision of this Act (except section 41) or in any other law for the time being in force, as from the date of publication such notification in the Official Gazette be deemed to have ceased to be lawful;

(c) Declare that as from the commencement of, and until the expiry of, the period specified in the notification, it shall not be lawful for any person to have in his possession in such area any notified arms;

(d) Authorise any such office subordinate to the Central Government or a State Government may be specified in the notification.-

(i) To search at any time during the period specified in the notification any person in, or passing through, or any premises in, or any animal or vessel or vehicle or other conveyance of whatever nature in or passing through, or any receptacle or other container of whatever nature in or passing through in, such area if such officer has been to believe that any notified arms are secreted by such person or in such premises or on such animal or in such vessel, vehicle or other conveyance or in such receptacle or other container;

(ii) To seize at any time during the period specified in the notification any notified arms in the possession of any person in such area or discovered through a search under sub-clause (I), and detain the same during the period specified in the notification.

(2) The period specified in a notification issued under sub-section (1) in respect of any area shall not, in the first instance, exceed ninety days, but in the Central Government may amend such notification to extend such period from time to time by any period not exceeding ninety days at any one time if, in the opinion of that Government, there continues to be in such area such disturbance of public peace and tranquility as if referred to in sub-section (1) or imminent danger thereof and that for the prevention of offences involving the sue of arms in such area it is necessary or expedient so to do.

(3) The provision of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizures shall, so far as may be, apply to any search or seizure made under sub-section.-(1).

(4) For the purposes of this section,-

(a) “Arms” includes ammunition;

(b) Where the period specified in a notification, as originally issued under sub-section (1), is extended under sub-section (2), then, in relation to such notification, reference in sub-section (1) to “the period of specified in the notification” shall be construed as references to the period as so extended.

Section 24 B. Prohibition as to carrying of notified arms in or through public places in disturbed areas, etc.

(1) Where the Central Government is satisfied that there is extensive disturbance in any area and that for the prevention of offences involving the sue of arms in such area and that for the prevention of offences involving the use of arms in such area it is necessary or expedient so to do –

It may, by notification in the Official Gazette,-

(a) Specify the limits of such area;

(b) Direct that during the period specified in the notification (which period commencing from a date not earlier than the second day after the date of publication of the notification in the Official Gazette), no person shall carry or otherwise have in his possession any arms of such description as may be specified in the notification (the arms so specified being hereafter in this section referred to as notified arms) through or in any public place in such area;

(c) Authorise any such officer subordinate to the Central Government or a State Government as may be specified in the notification,-

(i) To search at any time during the period specified in the notification any person in or passing through, or any premises in or forming part of, of any animal or vessel or vehicle or other conveyance of whatever nature, in or passing through, or any receptacle or other container of whatever nature in, any public place in such area if such officer has reason to believe that any notified arms are secreted by such person or in such premises or on such animal or in such person or in such premises or on such animal or in such vessel, vehicle or other conveyance or in such receptacle or other container;

(ii) To seize at any time during the period specified in the notification any notified arms being carried by or otherwise in the possession of any person, through a search under such-clause (I), and detain the same during the period specified in the notification.

(2) The period specified in a notification issued under sub-section (1) in respect of any area shall not, in the first instance, exceed ninety days, but the Central Government may amend such notification to extend such period from time to time by any period not exceeding ninety days at any one time if, in the opinion of that Government, there continues to be in such area such disturbance of public peace and tranquility as is referred to in sub-section (1) or imminent danger thereof and that for the prevention of offences involving the use of arms in such area it is necessary or expedient so to do.

(3) The provisions of the Code of Criminal Procedure, 1973, (2 of 1974), relating to searches and seizures shall, so far as may be, apply to any search or seizure made under sub-section (1).

(4) For the purposes of this section,-

(a) “Arms” includes ammunition;

(b) “Public place” means any place intended for use by, or accessible to, the public or any section of the public ; and

(c) Where the period specified in a notification, as originally issued under sub-section (1), is extended under sub-section (2), then, in relation to such notification, reference in sub-section (I) to “the period specified in the notification” shall be construed as reference to the period as so extended.]

Chapter V – OFFENCES AND PENALTIES

Section 25. Punishment for certain offences- [Note: Subs. by Act 25 of 1983, s. 8 (w.e.f. 22-6-1983) ]

(1) Whoever –

(a) Manufactures sells, transfers, converts, repairs, tests or proves, or exposes or offers for sale or transfer, or has in his possession for sale, transfer, conversion, repair ,test or proof, any arms or ammunition in contravention of section 5; or

(b) Shortens the barrel of a firearm or converts an imitation firearm into a firearm in contravention of section 6; or

(d) Bring into, or takes out of India, any arms or ammunition of any class or description in contravention of section 11, shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

[ (1A) [ Note: Renumbered and Ins. by s. 5, ibid. (w.e.f. 27-5-1988) Whoever acquires, has in his possession or carries any prohibited arms or prohibited ammunition in contravention of section 7 shall be punishable with imprisonment for a term which shall not be less than five years, but which may extend to ten years and shall also be liable to fine.

[(1AA) Whoever manufactures, sells, transfers, converts, repairs, tests or proves, or exposes or offers for sale or transfer or has in his possession for sale, transfer, conversion, repair, test or proof, any prohibited arms or prohibited ammunition in contravention of section 7 shall be punishable with imprisonment for life and shall also be liable to fine.]

[(1AAA)] [ Note: Renumbered and Ins. by s. 5, ibid. (w.e.f. 27-5-1988) Whoever has in contravention of a notification issued under section 24A in his possession or in contravention of a notification issued under section 24B carries or otherwise has in his possession, any arms or ammunition shall be punishable with imprisonment for a term whish shall not be less than [ [Note: Subs. by Act 39 of 1985, s. 2 for certain words.] three years, but which may extend to seven years] shall also be liable to fine.

(IB) Whoever-

(a) Acquires, has in his possession or carries any firearm or ammunition in contravention of section3, or

(b) Shortens the barrel of a firearm or converts an imitation firearm in any place specified by notification under section 4 any arms of such class or description as has been specified in that notification in contravention of that section ; or

(c) Sells or transfer any firearm which does not bear the name of the maker stamped or otherwise shown thereon as required by sub-section (2) of section 8 or does any act in contravention of sub-section (1) of that section; or

(d) Being a person to whom sub-clause (ii) or sub-section (iii) of clause (a) of sub-section (1) of section 9 applies, acquires, has in his possession or carries any firearms or ammunition contravention of that section;

(e) Sells or transfers, or converts, repairs, tests or proves any firearm or ammunition in contravention of clause (b) of sub-section (1) of section 9; or

(f) Brings into, or takes out of, India, any arms or ammunition in contravention of section 10; or

(g) Transport any arms or ammunition in contravention of section 12; or

(h) Fails to deposit arms or ammunition as required by sub-section (2) of section 3, or sub-section (1) of section 21; or

(i) Being a manufacturer of, or dealer in, arms or ammunition, fails, on being required to do so by rules made under section 44, to maintain a record or account or to make therein all such entries as are required by such rules or intentionally makes a false entry therein or prevents or obstructs the inspection of such record or account or the making of copies of entries therefrom or prevents or obstructs the entry into any premises or other place where arms or ammunition are or is manufactured or kept or intentionally fails to exhibit or conceals such arms or ammunition or refuses to point out where the same are or is manufactured or kept,

Shall be punishable with imprisonment for a term which shall not be less than [ [Note: Subs. by Act 39 of 1985, s. 2 for “six months”.] one year] but which may extend to three years and shall also be liable to fine:

Provided that Court may for any adequate and special reasons to be recorded in the judgment impose a sentence of imprisonment for a term of less than [one year]

(IC) [ Note : Ins. by s. 2, ibid.] Notwithstanding anything contained in sub-section (1B), whoever commits an offence punishable under that sub-section in any disturbed are shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

Explanation –For the purposes of this sub-section, :”disturbed area” means any area declared to be a disturbed area under any enactment, for the time being in force, making provision for the suppression of disorder and restoration and maintenance of public order, and includes any areas specified by notification under section 24A or section 24B.]

(2) Whoever being a person to whom sub-clause (I) of clause (a) of sub-section (1) of section 9 applies, acquires, has in his possession or carries any firearm or ammunition in contravention of that section shall be punishable with imprisonment for term which may extend to one year, or with fine or with both.

(3) [ Note: Subs. by Act 25 of 1983, s. 8 (w.e.f. 22-6-1983) ] Whoever sells or transfers any firearm, ammunition or other arms –

(i) Without informing the district magistrate having jurisdiction or the officer in charge of the nearest police station, of the intended sale or transfer of the firearm, ammunition or other arms; or

(ii) Before the expiration of the period of forty five days from the date of giving such information to such district magistrate or the officer in charge of the police station.

In contravention of the provisions of clause (a) or clause (b) of the proviso to sub-section (2) of section 5, shall be punishable with imprisonment for a term which may extend to five hundred rupees, or with both].

(4) Whoever fails to deliver-up a licence when so required by the licensing authority under sub-section (1) of section 17 for the purpose of varying the conditions specified in the licence or fails to surrender a licence to the appropriate authority under sub-section (10) of that section on its suspension or revocation shall be punishable with imprisonment for a term which may extend to six months, or with fine of an amount which may extend to five hundred rupees, or with both.

(5) Whoever, when required under section 19 to give his name and address, rupees, refuses to give such name and address to gives a name or address which subsequently transpires to be false shall be punishable with imprisonment for a term which may extend to six months, or with fine of an amount which may extend to two hundred rupees, or with both.

Section 26. Secret contraventions

[ Note: Subs. by Act 25 of 1983, s.9 (w.e.f. 22-6-1983) ] (1) Whoever does any act in contravention of any of the provisions of section 3,4,10 or 12 in such manner as to indicate an intention that such act may not be known to any public servant or to any person employed or working upon a railway, aircraft, vessel, vehicle or any other means or conveyance, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to seven years and also with fine.

(2) Whoever does any act in contravention of any of the provisions of section 5,6,7 or 11 in such manner as to indicate an intention that such act may not be known to any public servant or to any person employed or working upon a railway, aircraft, vessel, vehicle or any other means of conveyance, shall be punishable with imprisonment for a term which shall not less than five years but which may extend to ten years and also with fine.

(3 ) Whoever on any search being made under section 22 conceals or attempts to conceal any arms or ammunition, shall be punishable with imprisonment for a term which may extend to ten years and also with fine.

Section 27. Punishment for using arms, etc.

[ Note: Subs. by Act 42 of 1988, s. 6 (w.e.f. 27-5-1988) ] (1) Whoever uses any arms or ammunition in contravention of section 5 shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

(2) Whoever uses any prohibited arms or prohibited ammunition in contravention of section 7 shall be punishable with imprisonment for a term which shall not be less than seven years but which may extend to imprisonment for life and shall also be liable to fine.

(3) [Whoever uses any prohibited arms or prohibited ammunition or does any act in contravention of section 7 and such use or act results in the death of any other person, shall be punishable with death.]

Section 28. punishment for use and possession of firearms of limitation firearms in certain cases

Whoever makes or attempts to make any use whatsoever or a firearm or an imitation firearm with intent to resist or prevent the lawful arrest or detention of himself or any other person shall be punishable with imprisonment for a term which may extend to seven years [ [ Note: Subs. by Act 25 of 1983, s. 10 (w.e.f 22-6-1983). ] and with fine].

Explanation-In this section the expression “imitation firearm” has the same meaning as in section 6.

Section 29. Punishment for knowingly purchasing arms, etc., from unlicensed person or for delivering arms, etc., to person not entitled to possess the same

Whoever –

(a) Purchase any firearms or any other arms of such class or description as may be prescribed or any ammunition from any other person knowing that such other person is not licensed or authorised under section 5; or

(b) Delivers any arms or ammunition into the possession of another person is entitled by virtue of this Act or any other law for the time being in force to have, and is not prohibited by this Act or such other law from having, in his possession the same, shall be punishable with imprisonment for a term which may extend to[ [ Note: Subs. by s. 11, ibid., (w.e.f. 22-6-1983) ] three years, or with fine, or with both].

Section 30. Punishment for contravention of licence or rule

Whoever contravenes any condition of a licence or any provision of this Act or any rule made there under, for which no punishment is porvide4d elsewhere in this Act shall be punishable with imprisonment for a term which may extend to [ [ Note: Subs. by Act 25 of 1983, s. 12 (w.e.f. 22-6-1983) ] six months], or with fine which may extend to [ [ Note: Subs. by Act 25 of 1983, s. 12 (w.e.f. 22-6-1983) two thousand] rupees, or with both.

Section 31. Punishment for subsequent offences

Whoever having been convicted of an offence under this Act is again convicted of an offence under this Act shall be punishable with double the penalty provided for the letter offence.

Section 32. Power to confiscate

(1) When any person is convicted under this Act of any offence committed by him in respect of any arms or ammunition, it shall be in the discretion of the convicting Court further to direct that the whole or any portion of such arms or ammunition, and any vessel, vehicle or other means of conveyance and any receptacle shall be confiscated:

Provided that if the conviction is set aside on appeal or otherwise, the order of confiscation shall become void.

(2) An order of confiscation may also be made by the appellate Court or by the High Court when exercising its powers of revision.

Section 33. Offence by companies

(1) Whenever an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, or was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment under this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such office.

(2) Notwithstanding anything contained in sub-section (1) where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer or the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Explanation – For the purposes of this section –

(a) “Company” means any body corporate, and includes a firm or other association or individuals; and

(b) “Director”, in relation to a firm, means a partner in the firm.

Chapter VI – MISCELLANEOUS

Section 34. Sanction of the Central Government for Warehousing of Arms

Notwithstanding anything contained in the [ [ Note: Subs. by Act 25 of 1983, s. 13 (w.e.f. 22-6-1983) ] Customs Act, 1962, (52 of 1962)] no arms or ammunition shall be deposited in any warehouse licensed under [[ Note: Subs. by Act 25 of 1983, s. 13 (w.e.f. 22-6-1983) ] section 58] of that Act without the sanction of the Central Government.

Section 35. Criminal responsibility of person in occupation of premises in certain cases

Where any arms or ammunition in respect of which any offences under this Act has been or is being committed are or is found in any premises, vehicle or other place in the joint occupation or under the joint control of several persons, each of such persons in respect of whom there is reason to believe that he was aware of the existence of the arms or ammunition in the premises, vehicle or other place shall, unless the contrary is proved, be liable for that offence in the same manner as if it has been or is being committed by him alone.

Section 36. Information to be given regarding certain offences

(1) Every person aware of the commission of any offence under this Act shall, in the absence of reasonable excuse the burden of proving which shall lie upon such person, give information of the same to the officer in charge of the nearest police station or the magistrate having jurisdiction.

(2) Every person employed or working upon any railway, aircraft, vessel, vehicle or other means of conveyance shall, in the absence of reasonable excuse the burden of proving which shall, in the absence of reasonable excuse the burden of proving which shall lie upon such person, give information to the officer in charge of the nearest police station regarding any box, package or bale in transit which he may have reason to suspect contains arms or ammunition in respect of which an offence under this Act has been or is being committed.

Section 37. Arrest and searches- Save as otherwise provided in this Act,

(a) All arrests and searches made under this act or under any rules made there under shall be carried out in accordance with the provisions of the [ [Note: Subs. by Act 25 of 1983, s. 14, (w.e.f. 22-6-1983) ] Code of Criminal Procedure, 1973 (2 of 1974)], relating respectively to arrests and searches made under that Code;

(b) Any person arrested and any arms or ammunition seized under this Act by a person not being a magistrate or a police officer shall be delivered without delay to the officer in charge of the nearest police station and that officer shall-

(i) Either release that person on his executing a bond with or without sureties to appear before a magistrate and keep the things seized in the custody till the appearance of that person before the magistrate, or

(ii) Should that person fail to execute the bond and to furnish, if so required, sufficient sureties, produce that person and those things without delay before the magistrate.

Section 38. Offences to be cognizable

Every offence under this Act shall be cognizable within the meaning of the [ [ Note: Subs. by Act 25 of 1983, s. 14 (w.e.f. 22-6-1983) ] Code of Criminal Procedure, 1973 (2 of 1974)].

Section 39. Previous sanction of the district magistrate necessary in certain case

No prosecution shall be instituted against any person in respect of any offence under section 3 without the previous sanction of the district magistrate.

Section 40. Protection of action taken in good faith

No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act.

Section 41. Power to exempt

Where the Central Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in he Official Gazette and subject to such conditions, if any, as it any specify in the notification,-

(a) [ Note: Subs. by Act 25 of 1983, s. 13 (w.e.f. 22-6-1983) ] [exempt any person or class of person (either generally or in relation to such description of arms and ammunition as may be specified in the notification)], or exclude any description of arms or ammunition, or withdraw any part of India, from the operation of all or any or the provisions of this Act; and

(b) As often as may be, cancel any such notification and again the subject, by a like notification, the person or class or persons or the description of arms and ammunition or the part of India to the operation of such provisions.

Section 42. Power to take census of fire-arms

(1) The Central Government may, by notification in the Official Gazette, direct a census to be taken of all firearms in any area and empower any officer of Government to take such census.

(2) On the issue of any such notification all persons having in their possession any firearms in that area shall furnish to the officer concerned such information as he may require in relation thereto and shall produce before him such firearms if he so requires.

Section 43. Power to delegate

(1) The Central Government may, by notification in the Official Gazette, direct that any power or function which may be exercised or performed by it under this Act other than the power under Section 41 or the power under section 44 may, in relation to such matters and subject to such conditions, if any, as it may specify in the notification, be exercised or performed also by –

(a) Such officer or authority subordinate to the Central Government, or

(b) Such State Government or such officer or authority subordinate to the State Government as may be specified in the notification.

(2) Any rules made by the Central Government under this Act may confer powers or impose duties or authorise the conferring of powers or imposition of duties upon any State Government or any officer or authority subordinate thereto.

Section 44. Power to make rules

(1) The Central government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.

(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) The appointment, jurisdiction, control and functions of licensing authorities ¹ including the areas and the categories of arms and ammunition for which they may grant licences] ;

(b) The form and particulars of application for the grant or renewal of a licence and where the application is for the renewal of a licence, the time within which it shall be made ;

(c) The form in which and the conditions subject to which any licence may be granted or refused, renewed, varied, suspended or revoked ;

(d) Where no period has been specified in this Act, the period for which any licence shall continue to be in force ;

(e) The fees payable in respect of any application for the grant or renewal of a licence and in respect of any licence granted or renewed and the manner of paying the same ;

(f) The manner in which the maker’s name, the manufacturer’s number or other identification mark of a firearm shall be stamped or otherwise shown thereon ;

(g) The procedure for the test or proof of any firearms ;

(h) The firearms that may be used in the course of training, the age limits of persons who may use them and the conditions for their use by such persons ;

(i) The authority to whom appeals may be preferred under section 18, the procedure to be followed by such authority and the period within which appeals shall be preferred, the fees to be paid in respect of such appeals and the refund of such fees ;

(j) The maintenance of records or accounts of anything done under a licence other than a licence under section 3 or section 4, the form of, and the entries ot be made in, such records or accounts and the exhibition of such records or accounts to any police officer or to any officer of Government empowered in this behalf ;

(k) The entry and inspection by any police officer or by any officer of Government empowered in this behalf of any premises or other place in which arms or ammunition are or is manufactured or in which arms or ammunition are or is kept by a manufacturer of or dealer in such arms or ammunition and the exhibition of the same to such officer ;

(l) The conditions subject to which arms or ammunition may be deposited with a licensed dealer or in a unit armory as required by sub-section (1) of section 21 and the period on the expiry of which the things so deposited may be forfeited.

(m) Any other matter is to be, or may be, prescribed.

(3) Every rule made under this section shall be laid as soon as may be after it is made before each house of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in ²two or more 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 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 rule.

————————————–

1. Ins. by Act 25 of 1983, sec. 16 (w.r.e.f. 22-6-1983).

2. Subs. by Act 25 of 1983, sec. 16, for certain words (w.r.e.f. 22-6-1983).

Section 45. Act not to apply in certain cases

Nothing in this Act shall apply to –

(a) Arms or ammunition on board any sea-going vessel or any aircraft and forming part of the ordinary armament or equipment of such vessel or aircraft ;

(b) The acquisition, possession or carrying, the manufacture, repair, conversion, test or proof, the sale or transfer or the import, export or transport of arms or ammunition –

(i) By or under orders of the Central Government, or

(ii) By a public servant in the course of his duty as such public servant, or

(iii) By a member of the National Cadet Corps raised and maintained under the National Cadet Corps Act, 1948 (31 of 1948), or by any officer, enrolled person of the Territorial Army raised and maintained under the Territorial Army Act, 1948 (56 of 1948) or by any member of any other forces raised and maintained or that may hereafter be raised and maintained under any Central Act, or by any member of such other forces as the Central Government may, by notification in the Official Gazette, specify, in the course of his duty as such member, officer or enrolled persons.

(c) Any weapon of an obsolete pattern or of antiquarian value or in disrepair which is not capable of being used as a firearm either with or without repair ;

(d) The acquisition, possession or carrying by a person of minor parts of arms or ammunition which are not intended to be used along with complementary parts acquired or possessed by that or any other person.

Section 46. Repeal of Act 11 of 1878.

(1) The Indian Arms Act, 1878, is hereby repealed.

(2) Notwithstanding the repeal of the Indian Arms Act, 1878 (11 of 1878), and without prejudice to the provisions of sections 6 and 24 of the General Clauses Act, 1897 (10 of 1897), every licence granted or renewed under the first mentioned Act and in force immediately before the commencement of this Act shall, unless sooner revoked, continue in force after such commencement for the unexpired portion of the period for which it has been granted or renewed.

Central Vigilance Commission Act

November 30, 2014

Chapter I – Preliminary

The following Act of Parliament received the assent of the President on the 11th September, 2003, and is hereby published for general information: –

(ACT NO. 45 OF 2003)

[11th September, 2003]

An Act to provide for the constitution of a Central Vigilance Commission to inquire or cause inquiries to be conducted into offences alleged to have been committed under the Prevention of Corruption Act, 1988 by certain categories of public servants of the Central Government, corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by the Central Government and for matters connected therewith or incdental thereto.

Be it enacted by Parliament in the Fifty – fourth year of the Republic of India as follows:-

Section 1. Short title.

This Act may be called the Central Vigilance Commission Act, 2003.

Section 2. Definitions.

In This Act, unless the context otherwise requirs,:-

(a) “Central Vigilance Commissioner” means the Central Vigilance Commissioner appointed under sub-section (1) of section 4;

(b) “Commission” means the Central Vigilance Commission constituted under sub-section (1) of section 3;

(c) “Delhi Special Police Establishment” means the Delhi Special Police Establishment constituted under sub-section (1) of section 2 of the Delhi Special Police Establishment Act, 1946; (25 of 1946)

(d) “Government company” means a Government company within the meaning of the Companies Act, 1956; (1 of 1956)

(e) “prescribed” means prescribed by rules made under this Act;

(f) “Vigilance Commissioner” means a Vigilance Commissioner appointed under sub-section (1) of section 4.

Chapter II – THE CENTRAL VIGILANCE COMMISSION

Section 3. Constitution of Central Vigilance Commission.

(1) There shall be constituted a body to be known as the Central Vigilance Commission to exercise the powers conferred upon, and to perform the functions assigned to it under this Act and the Central Vigilance Commission constituted under sub-section (1) of section 3 of the Central Vigilance Commission Ordinance, 1999 which ceased to operate, and continued under the Government of India in the Ministry of Personnel, Public Grievances and Pensions (Department of Personnel and Training) Resolution No. 371/20/99-AVD. III, dated the 4th April, 1999 as amended vide Resolution of even number, dated the 13th August, 2002 shall be deemed to be the Commission constituted under this Act. (Ord. 4 of 1999).

(2) The Commission shall consist of—

(a) a Central Vigilance Commissioner — Chairperson;

(b) not more than two Vigilance Commissioners — Members.

(3) The Central Vigilance Commissioner and the Vigilance Commissioners shall be appointed from amongst persons—

(a) who have been or are in an All-India Service or in any civil service of the Union or in a civil post under the Union having knowledge and experience in the matters relating to vigilance, policy making and administration including police administration; or

(b) who have held office or are holding office in a corporation established by or under any Central Act or a Government company owned or controlled by the Central Government and persons who have expertise and experience in finance including insurance and banking, law, vigilance and investigations:

Provided that, from amongst the Central Vigilance Commissioner and the Vigilance Commissioners, not more than two persons shall belong to the category of persons referred to either in clause (a) or clause (b):

(4) The Central Government shall appoint a Secretary to the Commission on such terms and conditions as it deems fit to exercise such powers and discharge such duties as the Commission may by regulations specify in this behalf.

(5) The Central Vigilance Commissioner, the other Vigilance Commissioners and the Secretary to the Commission appointed under the Central Vigilance Commission Ordinance, 1999 or the Resolution of the Government of India in the Ministry of Personnel, Public Grievances and Pensions (Department of Personnel and Training) Resolution No. 371/20/99-AVD. III, dated the 4th April, 1999 as amended vide Resolution of even number, dated the 13th August, 2002 shall be deemed to have been appointed under this Act on the same terms and conditions including the term of office subject to which they were so appointed under the said Ordinance or the Resolution, as the case may be. (Ord. 4 of 1999).

Explanation.- For the purposes of this sub-section, the expression “term of office” shall be construed as the term of office with effect from the date the Central Vigilance Commissioner or any Vigilance Commissioner has entered upon his office and continued as such under this Act.

(6) The headquarters of the Commission shall be at New Delhi.

Section 4. Appointment of Central Vigilance Commissioner and Vigilance Commissioners.

(1) The Central Vigilance Commissioner and the Vigilance Commissioners shall be appointed by the President by warrant under his hand and seal:

Provided that every appointment under this sub-section shall be made after obtaining the recommendation of a Committee consisting of—

(a) the Prime Minister — Chairperson;

(b) the Minister of Home Affairs — Member;

Explanation.- For the purposes of this sub-section, “the Leader of the Opposition in the House of the People” shall, when no such Leader has been so recognised, include the Leader of the single largest group in opposition of the Government in the House of the People.

(2) No appointment of a Central Vigilance Commissioner or a Vigilance Commissioner shall be invalid merely by reason of any vacancy in the Committe.

Section 4A. Superintendence and administration of Special Police Establishment.

(1) The superintendence of the Delhi Special Police Establishment in so far as it relates to investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988, shall vest in the Commission. (49 of 1988)

(2) Save as otherwise provided in sub-section (1), the superintendence of the said police establishment in all other matters shall vest in the Central Government.

(3) The administration of the said police establishment shall vest in an officer appointed in this behalf by the Central Government (hereinafter referred to as the Director) who shall exercise in respect of that police establishment such of the powers exercisable by an Inspector-General of Police in respect of the police force in a State as the Central Government may specify in this behalf.

Section 4B. Committee for appointment of Director.

(1) The Central Government shall appoint the Director on the

recommendation of the Committee consisting of—

(a) the Central Vigilance Commissioner — Chairperson;

(b) Vigilance Commissioners — Members;

(c) Secretary to the Government of India incharge of the Ministry of Home Affairs in the Central Government — Member;

(d) Secretary (Coordination and Public Grievances) in the Cabinet Secretariat — Member.

(2) While making any recommendation under sub-section (1), the

Committee shall take into consideration the views of the outgoing Director.

(3) The Committee shall recommend a panel of officers—

(a) on the basis of seniority, integrity and experience in the investigation of anti-corruption cases; and

(b) chosen from amongst officers belonging to the Indian Police Service constituted under the All-India Services Act, 1951, for being considered for appointment as the Director. (61 of 1951).

Section 4C. Terms and conditions of service of Director.

(1) The Director shall, notwithstanding anything to the contrary contained in the rules relating to his conditions of service, continue to hold office for a period of not less than two years from the date on which he

assumes office.

(2) The Director shall not be transferred except with the previous consent of the Committee referred to in sub-section (1) of section 4A.

Section 4D. Appointment for posts of Superintendent of Police and above, extension and curtailment of their tenure, etc.

(1) The Committee referred to in section 4A shall, after consulting the Director, recommend officers for appointment to the posts of the level of Superintendent of Police and above and also recommend the extension or curtailment of the tenure of such officers in the Delhi Special Police Establishment.

(2) On receipt of the recommendation under sub-section (1), the Central Government shall pass such orders as it thinks fit to give effect to the said recommendation.”;

Section 5. Terms and other conditions of service of Central Vigilance Commissioner.

(1) Subject to the provisions of sub-sections (3) and (4), the Central Vigilance Commissioner shall hold office for a term of four years from the date on which he enters upon his office or till he attains the age of sixty-five years, whichever is earlier. The Central Vigilance Commissioner, on ceasing to hold the office, shall be ineligible for reappointment in the Commission.

(2) Subject to the provisions of sub-sections (3) and (4), every Vigilance Commissioner shall hold office for a term of four years from the date on which he enters upon his office or till he attains the age of sixty-five years, whichever is earlier:

Provided that every Vigilance Commissioner, on ceasing to hold the office, shall be eligible for appointment as the Central Vigilance Commissioner in the manner specified in sub-section (1) of section 4:

Provided further that the term of the Vigilance Commissioner, if appointed as the Central Vigilance Commissioner, shall not be more than four years in aggregate as the Vigilance Commissioner and the Central Vigilance Commissioner.

(3) The Central Vigilance Commissioner or a Vigilance Commissioner shall, before he enters upon his office, make and subscribe before the President, or some other person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in Schedule to this Act.

(4) The Central Vigilance Commissioner or a Vigilance Commissioner may, by writing under his hand addressed to the President, resign his office.

(5) The Central Vigilance Commissioner or a Vigilance Commissioner may be removed from his office in the manner provided in section 6.

(6) On ceasing to hold office, the Central Vigilance Commissioner and every other Vigilance Commissioner shall be ineligible for—

(a) any diplomatic assignment, appointment as administrator of a Union territory and such other assignment or appointment which is required by law to be made by the President by warrant under his hand and seal.

(b) further employment to any office of profit under the Government of India or the Government of a State.

(7) The salary and allowances payable to and the other conditions of service of—

(a) the Central Vigilance Commissioner shall be the same as those of the Chairman of the Union Public Service Commission;

(b) the Vigilance Commissioner shall be the same as those of a Member of the Union Public Service Commission:

Provided that if the Central Vigilance Commissioner or any Vigilance Commissioner is, at the time of his appointment, in receipt of a pension (other than a disability or wound pension) in respect of any previous service under the Government of India or under the Government of a State, his salary in respect of the service as the Central Vigilance Commissioner or any Vigilance Commissioner shall be reduced by the amount of that

pension including any portion of pension which was commuted and pension equivalent of other forms of retirement benefits excluding pension equivalent of retirement gratuity:

Provided further that if the Central Vigilance Commissioner or any Vigilance Commissioner is, at the time of his appointment, in receipt of retirement benefits in respect of any previous service rendered in a corporation established by or under any Central Act or a Government company owned or controlled by the Central Government, his salary in respect of the service as the Central Vigilance Commissioner or, as the case may be, the Vigilance Commissioner shall be reduced by the amount of pension equivalent to the retirement benefits:

Provided also that the salary, allowances and pension payable to, and the other conditions of service of, the Central Vigilance Commissioner or any Vigilance Commissioner shall not be varied to his disadvantage after his appointment.

Section 6. Removal of Central Vigilance Commissioner and Vigilance Commissioner.

(1) Subject to the provisions of sub-section (3), the Central Vigilance Commissioner or any Vigilance Commissioner shall be removed from his office only by order of the President on the ground of proved misbehaviour or incapacity after the Supreme Court, on a reference made to it by the President, has, on inquiry, reported that the Central Vigilance Commissioner or any Vigilance Commissioner, as the case may be, ought on such ground be removed.

(2) The President may suspend from office, and if deem necessary prohibit also from attending the office during inquiry, the Central Vigilance Commissioner or any Vigilance Commissioner in respect of whom a reference has been made to the Supreme Court under sub-section (1) until the President has passed orders on receipt of the report of the Supreme Court on such reference.

(3) Notwithstanding anything contained in sub-section (1), the President may by order remove from office the Central Vigilance Commissioner or any Vigilance Commissioner if the Central Vigilance Commissioner or such Vigilance Commissioner, as the case may be,—

(a) is adjudged an insolvent; or

(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or

(d) is, in the opinion of the President, unfit to continue in office by reason of infirmity of mind or body; or

(e) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Central Vigilance Commissioner or a Vigilance Commissioner.

(4) If the Central Vigilance Commissioner or any Vigilance Commissioner is or becomes in any way, concerned or interested in any contract or agreement made by or on behalf of the Government of India or participates in any way in the profit thereof or in any benefit or emolument arising therefrom otherwise than as a member and in common with the other members of an incorporated company, he shall, for the purposes of sub-section (1), be deemed to be guilty of misbehaviour.

Section 6A. Approval of Central Government to conduct inquiry or investigation.

(1) The Delhi Special Police Establishment shall not conduct any inquiry or investigation into any offence alleged to have been committed under the Prevention of Corruption Act, 1988 except with the previous approval of the Central Government where such allegation relates to— (49 fo 1988).

(a) the employees of the Central Government of the level of Joint Secretary and above; and

(b) such officers as are appointed by the Central Government in corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by that Government.

(2) Notwithstanding anything contained in sub-section (1), no such approval shall be necessary for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept any gratification other than legal remuneration referred to in clause (c) of the Explanation to section 7 of the Prevention of Corruption Act, 1988.”.

Section 7. Power to make rules by Central Government for staff.

The Central Government may, in consultation with the Commission, make rules with respect to the number of members of the staff of the Commission and their conditions of service.

Chapter III – FUNCTIONS AND POWERS OF THE CENTRAL VIGILANCE COMMISSION

Section 8. Functions and powers of Central Vigilance Commission.

(1) The functions and powers of the Commission shall be to—

(a) exercise superintendence over the functioning of the Delhi Special Police Establishment in so far as it relates to the investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988 or an offence with which a public servant specified in sub-section (2) may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (49 of 1988 & 2 of 1974).

(b) give directions to the Delhi Special Police Establishment for the purpose of discharging the responsibility entrusted to it under sub-section (1) of section 4 of the Delhi Special Police Establishment Act, 1946: (25 of 1946).

Provided that while exercising the powers of superintendence under clause (a) or giving directions under this clause, the Commission shall not exercise powers in such a manner so as to require the Delhi Special Police Establishment to investigate or dispose of any case in a particular manner;

(c) inquire or cause an inquiry or investigation to be made on a reference made by the Central Government wherein it is alleged that a public servant being an employee of the Central Government or a corporation established by or under any Central Act, Government company, society and any local authority owned or controlled by that Government, has committed an offence under the Prevention of Corruption Act, 1988 or an offence with which a public servant may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (49 of 1988 & 2 of 1974).

(d) inquire or cause an inquiry or investigation to be made into any complaint against any official belonging to such category of officials specified in sub-section (2) wherein it is alleged that he has committed an offence under the Prevention of Corruption Act, 1988 and an offence with which a public servant specified in subsection (2) may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (49 of 1988 & 2 of 1974).

(e) review the progress of investigations conducted by the Delhi Special Police Establishment into offences alleged to have been committed under the Prevention of Corruption Act, 1988 or the public servant may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (49 of 1988 & 2 of 1974).

(f) review the progress of applications pending with the competent authorities for sanction of prosecution under the Prevention of Corruption Act, 1988; (49 of 1988).

(g) tender advice to the Central Government, corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by the Central Government on such matters as may be referred to it by that Government, said Government companies, societies and local authorities owned or controlled by the Central Government or otherwise;

(h) exercise superintendence over the vigilance administration of the various Ministries of the Central Government or corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by that Government:.

Provided that nothing contained in this clause shall be deemed to authorise the Commission to exercise superintendence over the Vigilance administration in a manner not consistent with the directions relating to vigilance matters issued by the Government and to confer power upon the Commission to issue directions relating to any policy matters;

(2) The persons referred to in clause (d) of sub-section (1) are as follows:—

(a) members of All-India Services serving in connection with the affairs of the Union and Group ‘A’ officers of the Central Government;

(b) such level of officers of the corporations established by or under any Central Act, Government companies, societies and other local authorities, owned or controlled by the Central Government, as that Government may, by notification in the Official Gazette, specify in this behalf:

Provided that till such time a notification is issued under this clause, all officers of the said corporations, companies, societies and local authorities shall be deemed to be the persons referred to in clause (d) of sub-section (1).

Section 9. Proceedings of Commission.

(1) The proceedings of the Commission shall be conducted at its headquarters.

(2) The Commission may, by unanimous decision, regulate the procedure for transaction of its business as also allocation of its business amongst the Central Vigilance Commissioner and other Vigilance Commissioners.

(3) Save as provided in sub-section (2), all business of the Commission shall, as far as possible, be transacted unanimously.

(4) Subject to the provisions of sub-section (3), if the Central Vigilance Commissioner and other Vigilance Commissioners differ in opinion on any matter, such matter shall be decided according to the opinion of the majority.

(5) The Central Vigilance Commissioner, or, if for any reason he is unable to attend any meeting of the Commission, the senior-most Vigilance Commissioner present at the meeting, shall preside at the meeting.

(6) No act or proceeding of the Commission shall be invalid merely by reason of—

(a) any vacancy in, or any defect in the constitution of, the Commission; or

(b) any defect in the appointment of a person acting as the Central Vigilance Commissioner or as a Vigilance Commissioner; or

Section 10. Vigilance Commissioner to act as Central Vigilance Commissioner in certain circumstances.

(1) In the event of the occurrence of any vacancy in the office of the Central Vigilance Commissioner by reason of his death, resignation or otherwise, the President may, by notification, authorise one of the Vigilance Commissioners to act as the Central Vigilance Commissioner until the appointment of a new Central Vigilance Commissioner to fill such vacancy.

(2) When the Central Vigilance Commissioner is unable to discharge his functions owing to absence on leave or otherwise, such one of the Vigilance Commissioners as the President may, by notification, authorise in this behalf, shall discharge the functions of the Central Vigilance Commissioner until the date on which the Central Vigilance Commissioner resumes his duties..

Section 11. Power relating to inquiries.

The Commission shall, while conducting any inquiry referred to in clauses (b) and (c) of sub-section (1) of section 8, have all the powers of a civil court trying a suit under the Code of Civil Procedure, 1908 and in particular, in respect of the following matters, namely:— (5 of 1908).

(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath;

b) requiring the discovery and production of any document;

(d) requisitioning any public record or copy thereof from any court or office;

(e) issuing commissions for the examination of witnesses or other documents; and

(f) any other matter which may be prescribed.

Section 12. Proceedings before Commission to be judicial proceedings.

The Commission shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 and every proceeding before the Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code. (2 of 1974 & 45 of 1860).

Chapter IV – EXPENSES AND ANNUAL REPORT

Section 13. Expences of Commission to be charged on the Consolidated Fund of India.

The expenses of the Commission, including any salaries, allowances and pensions payable to or in respect of the Central Vigilance Commissioner, the Vigilance Commissioners, Secretary and the staff of the Commission, shall be charged on the Consolidated Fund of India.

Section 14. Annual report.

(1) It shall be the duty of the Commission to present annually to the President a report as to the work done by the Commission within six months of the close of the year under report.

(2) The report referred to in sub-section (1) shall contain a separate part on the functioning of the Delhi Special Police Establishment in so far as it relates to sub-section (1) of section 4 of the Delhi Special Police Establishment Act, 1946. (25 of 1946)

(3) On receipt of such report, the President shall cause the same to be laid before each House of Parliament.

Chapter V – MISCELLANEOUS

Section 15. Protection of action taken in good faith.

No suit, prosecution or other legal proceeding shall lie against the Commission, the Central Vigilance Commissioner, any Vigilance Commissioner, the Secretary or against any staff of the Commission in respect of anything which is in good faith done or intended to be done under this Act.

Section 16. Central Vigilance Commissioner, Vigilance Commissioner and staff to be public servants.

The Central Vigilance Commissioner, every Vigilance Commissioner, the Secretary and every staff of the Commission shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.

( 45 of 1860).

Section 17. Report of any inquiry made on reference by Commission to be forwarded to that Commission.

(1) The report of the inquiry undertaken by any agency on a reference made by the Commission shall be forwarded to the Commission.

(2) The Commission shall, on receipt of such report and after taking into consideration any other factors relevant thereto, advise the Central Government and corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by that Government, as the case may be, as to the further course of action.

(3) The Central Government and the corporations established by or under any Central Act, Government companies, societies and other local authorities owned or controlled by that Government, as the case may be, shall consider the advice of the Commission and take appropriate action:

Provided that where the Central Government, any corporation established by or under any Central Act, Government company, society or local authority owned or controlled by the Central Government, as the case may be, does not agree with the advice of the Commission, it shall, for reasons to be recorded in writing, communicate the same to the Commission.

Section 18. Power to call for information.

The Commission may call for reports, returns and statements from the Central Government or corporations established by or under any Central Act, Government companies, societies and other local authorities owned or controlled by that Government so as to enable it to exercise general supervision over the vigilance and anti-corruption work in that Government and in the said corporations, Government companies, societies

and local authorities.

Section 19. Consultation with Commission in certain matters.

The Central Government shall, in making any rules or regulations governing the vigilance or disciplinary matters relating to persons appointed to public services and posts in connection with the affairs of the Union or to members of the All-India Services, consult the Commission.

Section 20. Power to make rules.

(1) The Central Government may, by notification in the Official Gazette, make rules for the purpose of carrying out the provisions of this Act.

(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) the number of members of the staff and their conditions of service under section 7;

(b) any other power of the civil court to be prescribed under clause (f) of section 11; and

Section 21. Power to make regulations.

(1) The Commission may, with the previous approval of the Central Government, by notification in the Official Gazette, make regulations not inconsistent with this Act and the rules made thereunder to provide for all matters for which provision is expedient for the purposes of giving effect to the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:—

(a) the duties and the powers of the Secretary under sub-section (4) of section 3; and

(b) the procedure to be followed by the Commission under sub-section (2) of section 9.

Section 22. Notification, rule, etc., to be laid before Parliament.

Every notification issued under clause (b) of sub-section (2) of section 8 and every rule made by the Central Government and every regulation made by the Commission under this Act shall be laid, as soon as may be after it is issued or made, before each House of Parliament, 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 successive sessions aforesaid, both Houses agree in making any modification in the notification or the rule or the regulation, or both Houses agree that the notification or the rule or the regulation should not be made, the notification or the rule or the regulation shall 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 notification or rule or regulation.

Section 23. Power to remove difficulties.

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 24. Provisions relating to existing Vigilance Commission.

With effect from the constitution of the Commission under sub-section (1) of section 3, the Central Vigilance Commission set up by the Resolution of the Government of India in the Ministry of Home Affairs No. 24/7/64-AVD, dated the 11th February, 1964 (hereafter referred to in this section as the existing Vigilance Commission) shall, in so far as its functions are not inconsistent with the provisions of this Act, continue to discharge the said functions and—

(a) all actions and decisions taken by the Vigilance Commission insofar as such actions and decisions are relatable to the functions of the Commission constituted under this Act shall be deemed to have been taken by the Commission;

(b) all proceedings pending before the Vigilance Commission, insofar as such proceedings relate to the functions of the Commission, shall be deemed to be transferred to the Commission and shall be dealt with in accordance with the provisions of this Act;

(c) the employees of the Vigilance Commission shall be deemed to have become the employees of the Commission on the same terms and conditions;

(d) all the assets and liabilities of the Vigilance Commission shall be transferred to the Commission.

Section 25. Appointments, etc., of officers of Directorate of Enforcement.

Notwithstanding anything contained in the Foreign Exchange Management Act, 1999 or any other law for the time being in force,— (42 of 1999).

(a) the Central Government shall appoint a Director of Enforcement in the Directorate of Enforcement in the Ministry of Finance on the recommendation of the Committee consisting of—

(i) the Central Vigilance Commissioner — Chairperson;

(ii) Vigilance Commissioners — Members;

(iii) Secretary to the Government of India in-charge of the Ministry of Home Affairs in the Central Government — Member;

(iv) Secretary to the Government of India in-charge of the Ministry of Personnel in the Central Government — Member;

(v) Secretary to the Government of India in-charge of the Department of Revenue, Ministry of Finance in the Central Government — Member;

(b) while making a recommendation, the Committee shall take into consideration the integrity and experience of the officers eligible for appointment;

(c) no person below the rank of Additional Secretary to the Government of India shall be eligible for appointment as a Director of Enforcement;

(d) a Director of Enforcement shall continue to hold office for a period of not less than two years from the date on which he assumes office;

(e) a Director of Enforcement shall not be transferred except with the previous consent of the Committee referred to in clause (a);

(f) the Committee referred to in clause (a) shall, in consultation with the Director of Enforcement, recommend officers for appointment to the posts above the level of the Deputy Director of Enforcement and also recommend the extension or curtailment of the tenure of such officers in the Directorate of Enforcement;

(g) on receipt of the recommendation under clause (f), the Central Government shall pass such orders as it thinks fit to give effect to the said recommendation.

Section 26. Amendment of Act 25 of 1946. Interpretation section.

In the Delhi Special Police Establishment Act, 1946,—

(a) after section 1, the following section shall be inserted, namely:— “1A. Words and expressions used herein and not defined but defined in the Central Vigilance Commission Act, 2003, shall have the meanings,

respectively, assigned to them in that Act.”;

(b) for section 4, the following sections shall be substituted, namely:—

Section 27. Repeal and saving.

(1) The Government of India in the Ministry of Personnel, Public Grievances and Pensions (Department of Personnel and Training) Resolution No. 371/20/99-AVD. III, dated the 4th April, 1999 as amended vide Resolution of even number, dated the 13th August, 2002 is hereby repealed. (Ord. 4 of 1999).

(2) Notwithstanding such repeal and the cesser of operation of the Central Vigilance Commission Ordinance, 1999, anything done or any action taken under the said Resolution and the said Ordinance including the appointments made and other actions taken or anything done or any action taken or any appointment made under the Delhi Special Police Establishment Act, 1946 and the Foreign Exchange Regulation Act, 1973 as amended by the said Ordinance shall be deemed to have been made or done or taken under this Act or the Delhi Special Police Establishment Act, 1946 and the Foreign Exchange Regulation Act, 1973 as if the amendments made in those Acts by this Act were in force at all material times. (25 of 1946 & 46 of 1973).

Schedule

[See section 5(3)]

Form of oath or affirmation to be made by the Central Vigilance Commissioner or Vigilance Commissioner:—

“I, A. B., having been appointed Central Vigilance Commissioner (or Vigilance Commissioner) of the Central Vigilance Commission do that

swear in the name of God

————————————— I will bear true faith and allegiance to the

solemnly affirm

Constitution of India as by law established, that I will uphold the sovereignty and integrity of India, that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the constitution and the laws.”.

SUBHASH C. JAIN,

Secy. to the Govt. of India.

Reserve Bank of India Act

November 30, 2014

Preamble

An Act to constitute a Reserve Bank of India

Whereas it is expedient to constitute a Reserve Bank for India to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency any credit system of the country to its advantage;

And whereas in the present disorganisation of the monetary systems of the world it is not possible to determine what will be suitable as a permanent basis for the Indian monetary system;

But whereas it is expedient to make temporary provision on the basis of the existing monetary system, and to leave the question of the monetary standard best suited to India to be considered when the international monetary position has become sufficiently clear and stable to make it possible to frame permanent measures;

It is hereby enacted as follows: –

Section 1. Short title, extent and commencement

(1) This Act may be called the Reserve Bank of India Act, 1934.

(2) It extends to the whole of India.

(3) This section shall come into force at once, and the remaining provisions of this Act shall came into force on such date or dates as the Central Government may, by notification in the Gazette of India, appoint.

Section 2. Definitions

In this Act, unless there is anything repugnant in the subject or context, –

(a) ¹[***]

(ai) ¹[***]

(aii) “The Bank” means the Reserve Bank of India constituted by this Act;

(aiii) “Bank for International Settlements”, means the body corporate established with the said name under the law of Switzerland in pursuance of an agreement, dated the 20th January, 1930, signed at the Hague;

(b) “The Central Board” means the Central Board of Directors of the Bank;

(bi) ¹[***]

(bii) ¹[***]

(biii) ¹[***]

(biv) ¹[***]

(bv) ¹[***]

(bvi) “Deposit Insurance Corporation” means the Deposit Insurance Corporation established under section 3 of the Deposit Insurance Corporation Act, 1961 (47 of 1961);

(bvii) “Development Bank” means the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);

(bviii) ¹[***]

²[(bviiia) “Exim Bank” means the Export-Import Bank of India established under the Export – Import Bank of India Act, 1981 (28 of 1981);]

(bix) “Foreign currency” and “foreign exchange” have the meanings respectively assigned to them in the Foreign Exchange Regulation Act, 1973 (46 of 1973);

(c) “Industrial Finance Corporation” means the Industrial Finance Corporation of India established under the Industrial Finance Corporation Act, 1948 (15 of 1948);

(ca) “International Development Association” means the “Association” referred to in the International Development Association (Status, Immunities and Privileges) Act, 1960 (32 of 1960);

(cb) “International Finance Corporation” means the “Corporation” referred to in the International Finance Corporation (Status, Immunities and Privileges) Act, 1958 (42 of 1958);

(cc) “International Monetary Fund” and “International Bank for Reconstruction and Development” means respectively the “International Fund” and the “International Bank”, referred to in the International Monetary Fund and Bank Act, 1945;

¹[(ccc) “National Bank” means the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981);]

³[(cccc) “National Housing Bank” means the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987);]

(ci)-(civ) ¹[***]

⁴[(cv) “Reconstruction Bank” means the Industrial Reconstruction Bank of India established under section 3 of the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984);]

(d) “Rupee coin” means rupees which are legal tender in India under the provisions of the Indian Coinage Act, 1906 (3 of 1906);

(e) “Scheduled bank” means a bank included in the Second Scheduled;

⁵[(e1) “Small Industries Bank” means the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989;]

(ea) “Sponsor Bank” means a Sponsor Bank as defined in the Regional Rural Banks Act, 1976 (21 of 1976);

(eb) “State Bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955);

(f) ¹[***]

(f1) “State Financial Corporation” means any State Financial Corporation established under the State Financial Corporations Act, 1951 (63 of 1951);

(g) “Unit Trust” means the Unit Trust of India established under section 3 of the Unit Trust of India Act, 1963 (25 of 1963);

⁶[(h) “Agricultural operations”, “central co-operative bank”, “co-operative society”, “crops”, “marketing of crops”, “pisciculture”, “regional rural bank” and “State co-operative bank” shall have the meanings respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981);

(i) “Co -operative bank”, “co-operative credit society”, “director”, “primary agricultural credit society”, “primary co-operative bank” and “primary credit society” shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949).]

——————–

1. Omitted by Act No. 61 of 1981, w.e.f. 1/5/1982.

2. Inserted by Act No. 28 of 1981, w.e.f. 1/1/1982.

3. Inserted by Act No. 53 of 1987, w.e.f. 9/7/1988.

4. Inserted by Act No. 62 of 1984, w.e.f. 20/3/1985.

5. Inserted by Act No. 39 of 1989, w.e.f. 7/3/1990.

6. Inserted by Act No. 61 of 1981, w.e.f. 1/5/1982.

Section 3. Establishment and incorporation of Reserve Bank

(1) A bank to be called the Reserve Bank of India shall be constituted for the purposes of taking over the management of the currency from the Central Government and of carrying on the business of banking in accordance with the provisions of this Act.

(2) The Bank shall be a body corporate by the name of the Reserve Bank of India, having perpetual succession and a common seal, and shall by the said name sue and be sued.

Section 4. Capital of the Bank

The capital of the bank shall be five crores of rupees.

Section 5. Section

[Section 5. repealed by Act No. 62 of 1948, w.e.f. 1st January, 1949]

Section 6. Offices, branches and agencies

The Bank shall as soon as may be, establish offices in Bombay, Calcutta, Delhi and Madras and may establish branches or agencies in any other place in India or, with the previous sanction of the Central Government elsewhere.

Section 7. Management

(1) The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interests.

(2) Subject to any such directions, the general superintendence and direction of the affairs and business of the Bank shall be entrusted to a Central Board of Directors which may exercise all powers and do all acts and things which may be exercised or done by the Bank.

(3) Save as otherwise provided in regulations made by the Central Board, the Governor and in his absence the Deputy Governor nominated by him in his behalf, shall also have powers of general superintendence and direction of the affairs and the business of the Bank, and may exercise all powers and do all acts and things which may be exercised or done by the Bank.

Reserve Bank of India Act, 1934

Section 8. Composition of the Central Board, and term of office of directors

(1) The Central Board shall consist of the following Directors, namely: –

(a) A Governor and not more than four Deputy Governors to be appointed by the Central Government;

(b) Four Directors to be nominated by the Central Government, one from each of the four Local Boards as constituted by section 9;

(d) One Government official to be nominated by the Central Government.

(2) The Governor and Deputy Governors shall devote their whole time to the affairs of the Bank, and shall receive such salaries and allowances as may be determined by the Central Board, with the approval of the Central Government:

PROVIDED that the Central Board may, if in its opinion it is necessary in the public interest so to do, permit the Governor or a Deputy Governor to undertake, at the request of the Central Government or any State Government, such part-time honorary work, whether related to the purposes of this Act or not, as is not likely to interfere with his duties as Governor or Deputy Governor, as the case may be:

¹[PROVIDED FURTHER that the Central Government may, in consultation with the Bank, appoint a Deputy Governor as the Chairman of the National Bank, on such terms and conditions as that Government may specify.]

(3) A Deputy Governor and the Director nominated under clause (d) of sub-section (1) may attend any meeting of the Central Board and take part in its deliberations but shall not be entitled to vote:

PROVIDED that when the Governor is, for any reason, unable to attend any such meeting, a Deputy Governor authorised by him in this behalf in writing may vote for him at that meeting.

(4) The Governor and a Deputy Governor shall hold office for such term not exceeding five years as the Central Government may fix when appointing them, and shall be eligible for re-appointment.

A Director nominated under clause (c) of sub-section (1) shall hold office for a period of four years and thereafter until his successor shall have been nominated.

A Director nominated under clause (d) of sub-section (1) shall hold office during the pleasure of the Central Government.

(5) No act or proceeding of the Board shall be questioned on the ground merely of the existence of any vacancy in, or any defect in the constitution, of the board.

(6) ²[***]

(7) A retiring director shall be eligible for re-nomination.

——————–

1. Inserted by Act No. 61 of 1981, w.e.f. 1/5/1982.

2. Omitted by Act No. 18 of 1964, w.e.f. 1/7/1964.

Section 9. Local Boards, their constitution and functions

(1) A Local Board shall be constituted for each of the four areas specified in Schedule I and shall consist of five members to be appointed by the Central Government to represent, as far as possible, territorial and economic interests and the interests of co-operative and indigenous banks.

(2) The members of the Local Board shall elect from amongst themselves one person to be the Chairman of the Board.

(3) Every member of a Local Board shall hold office for a term of four years and thereafter until his successor shall have been appointed and shall be eligible for re-appointment.

(4) A Local Board shall advise the Central Board on such matters as may be generally or specifically referred to it and shall perform such duties as the Central Board may delegate to it.

Section 10. Disqualifications of directors and members of Local Boards

(1) No person may be a Director or a member of a Local Board who-

(a) Is a salaried Government official; or

(b) Is, or at any time has been, adjudicated an insolvent, or has suspended payment or has compounded with his creditors; or

(d) Is an officer or employee of any bank; or

(e) Is a Director of banking company within the meaning of clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), or of a co-operative bank.

(2) No two persons who are partners of the same mercantile firm, or are Directors of the same private company, or one of whom is the general agent of or holds a power of procuration from the other, or from a mercantile firm of which the other is a partner, may be Directors or members of the same Local Board at the same time.

(3) Nothing in clause (a), clause (d) or clause (e) of sub-section (1) shall apply to the Governor, or to a Deputy Governor or to the Director nominated under clause (d) of sub-section (1) of section 8.

Section 11. Removal from and vacation of office

(1) The Central Government may remove from office the Governor, or a Deputy Governor or any other Director or any member of a Local Board.

(2) A Director nominated under clause (b) or clause (c) of sub-section (1) of section 8 shall cease to hold office if without leave from the Central Board he absents himself from three consecutive meetings of the Board convened under sub-section (1) of section 13.

(3) The Central Government shall remove from office any Director, and the Central Board shall remove from office any member of a Local Board, if such Director or member becomes subject to any of the disqualifications specified in sub-section (1) or sub-section (2) of section 10.

(4) A director or member of Local Board removed or ceasing to hold office under the foregoing sub-sections shall not be eligible for re-appointment either as Director or as member of a Local Board until the expiry of the term for which his appointment was made.

(5) The nomination as Director or member of a Local Board of any person who is a Member of Parliament or the Legislature of any State shall be void, unless within two months of the date of his nomination he ceases to be such member, and if any Director or member of a Local Board is elected or nominated as a member at Parliament or any such Legislature, he shall cease to be a Director or member of the Local Board as from the date of such election or nomination, as the case may be.

(6) A director may resign his office to the Central Government, and a member of a Local Board may resign his office to the Central Board, and on the acceptance of the resignation the office shall become vacant.

Section 12. Casual vacancies and absences

(1) If the Governor or a Deputy Governor by infirmity or otherwise is rendered incapable of executing his duties or is absent on leave or otherwise in circumstances not involving the vacation of his appointment, the Central Government may, after consideration of the recommendations made by the Central Board in this behalf, appoint another person to officiate for him, and such person may, notwithstanding anything contained in clause (d) of sub-section (1) of section 10, be an officer of the Bank.

(2) ¹[***]

(3) Where any casual vacancy in the office of any member of a Local Board occurs, the Central Board may nominate thereto any person recommended by the other members of the Local Board.

(4) Where any casual vacancy occurs in the office of a Director other than the vacancies provided for in sub-section (1), the vacancy shall be filled by the Central Government.

(5) A person nominated under this section to fill a casual vacancy shall hold office for the unexpired portion of the term of his predecessor.

——————–

1. Omitted by Act No. 62 of 1948, w.e.f. 1/1/1949.

Section 13. Meetings of the Central Board

(1) Meetings of the Central Board shall be convened by the Governor at least six times in each year and at least once in each quarter.

(2) Any four Directors may require the Governor to convene a meeting of the Central Board at any time and the Governor shall forthwith convene a meeting accordingly.

(3) The Governor or if for any reason, he is unable to attend, the Deputy Governor authorised by the Governor under the proviso to sub-section (3) of Section 8 to vote for him, shall preside at meetings of the Central Board, and, in the event of an equality of voter, shall have a second or casting vote.

Section 14. General meetings

¹ [General meetings]

——————–

1. Omitted by Act No. 62 of 1948, w.e.f. 1/1/1949.

Section 15. First constitution of the Central Board

¹[First constitution of the Central Board]

——————–

1. Omitted by Act No. 62 of 1948, w.e.f. 1/1/1949.

Section 16. First constitution of Local Boards

¹[First constitution of Local Boards]

——————–

1. Omitted by Act No. 62 of 1948, w.e.f. 1/1/1949.

Section 17. Business which the Bank may transact

The Bank shall be authorised to carry on and transact the several kinds of business hereinafter specified, namely:-

(1) The accepting of money on deposit without interest from, and the collection of money for, the Central Government, the State Governments, local authorities, banks and any other persons;

(2)

(a) The purchase, sale and rediscount of bills of exchange and promissory notes, drawn on and payable in India and arising out of bona fide commercial or trade transactions bearing two or more good signatures, one of which shall be that of a scheduled bank or a State co-operative bank or any financial institution, which is predominantly engaged in the acceptance or discounting of bills of exchange and promissory notes and which is approved by the Bank in this behalf and maturing-

(i) In the case of bills of exchange and promissory notes arising out of any such transaction relating to the export of goods from India, within one hundred and eighty days, and

(ii) In any other case, within ninety days,

From the date of such purchase or rediscount exclusive of days of grace;

(b) The purchase, sale and rediscount of bills of exchange and promissory notes, drawn and payable in India and bearing two or more good signatures, one of which shall be that of a scheduled bank or a State co-operative bank or any financial institution, which is predominantly engaged in the acceptance or discounting of bills of exchange and promissory notes and which is approved by the Bank in this behalf and drawn or issued for the purpose of financing agricultural operations or the marketing of crops, and maturing within fifteen months from the date of such purchase or rediscount, exclusive of days of grace;

¹[***]

(bb) The purchase, sale and rediscount of bills of exchange and promissory notes drawn and payable in India and bearing two or more good signatures, one of which shall be that of a State co-operative bank or a State financial corporation or any financial institution, which is predominantly engaged in the acceptance or discounting of bills of exchange and promissory notes and which is approved by the Bank in this behalf, and drawn or issued for the purpose of financing the production or marketing activities of cottage and small scale industries approved by the Bank and maturing within twelve months from the date of such purchase or rediscount, exclusive of days of grace, provided that the payment of the principal and interest of such bills of exchange or promissory notes is fully guaranteed by the State Government;

(c) The purchase, sale and rediscount of bills of exchange and promissory notes drawn and payable in India and bearing the signature of a scheduled bank, and issued or drawn for the purpose of holding or trading in securities of the Central Government or a State Government, and maturing within ninety days from the date of such purchase or rediscount, exclusive of days of grace;

(3)

(a) The purchase from and sale to scheduled banks of foreign exchange;

(b) The purchase, sale and rediscount of bills of exchange (including treasury bills) drawn in or on any place in any country outside India which is a member of the International Monetary Fund and maturing: –

(i) In the case of bills of exchange arising out of any bona fide transaction relating to the export of goods from India, within one hundred and eighty days, and

(ii) In any other case, within ninety days,

From the date of such purchase or rediscount:

PROVIDED that no such purchase, sale or rediscount shall be made in India except with a scheduled bank or a State co-operative bank;

¹[***]

(3A) The making to any scheduled bank or State co-operative bank, of loans and advances, against promissory notes of such bank, repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days:

PROVIDED that the borrowing bank furnishes a declaration in writing, to the effect that-

(i) It holds bills of exchange arising out of any transaction relating to the export of goods from India, of a value not less than the amount of such loans or advances: –

(a) Drawn in India and on any place in any country outside India which is a member of the International Monetary Fund or in any other country notified in this behalf by the Bank in the Gazette of India, and

(b) Maturing not later than one hundred and eighty days from the date of the loan or advance, and it will, so long as any part of such loans and advances remains unpaid, continue to hold such bills of exchange of a value not less than the amount of such loans or advances outstanding for the time being; or

(ii) It has granted a pre-shipment loan or advance to an exporter or any other person in India in order to enable him to export goods from India, the amount of the loan or advance drawn and outstanding at any time being not less than the outstanding amount of the loan or advance obtained by the borrowing bank from the bank;

(3B) The making to any scheduled bank or State co-operative bank of loans and advances repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days against promissory notes of such bank:

PROVIDED that the borrowing bank furnishes a declaration in writing to the effect that it has made loans and advances for bona fide commercial or trade transactions or for financing agricultural operations or the marketing of crops or for other agricultural purposes as set out in the declaration and the said declaration includes such other particulars as may be required by the bank;

(4) The making to local authorities, scheduled banks, State co-operative banks and State Financial Corporations of loans and advances, repayable on demand or on the expiry of fixed periods not exceeding ninety days, against the security of-

(a) Stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any Act of Parliament of the United Kingdom or by any law for the time being in force in India;

(b) Gold or silver or documents of title to the same;

(c) Such bills of exchange and promissory notes as are eligible for purchase or rediscount by the bank or as are fully guaranteed as to the repayment of the principal and payment of interest by a State Government;

(d) Promissory notes of any scheduled bank or State co-operative bank, supported by documents of title to goods such documents having been transferred, assigned, or pledged to any such bank as security for a loan or advance made for bona fide commercial or trade transactions, or for the purpose of financing agricultural operations or the marketing of crops:

PROVIDED that loans and advances made against the security of bills of exchange and promissory notes arising out of any transaction relating to the export of goods from India shall be repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days;

(4A) The making to any State Financial Corporation, of loans and advances repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the Central Government or of any State Government, of any maturity, or against bonds and debentures issued by that Corporation and guaranteed by the State Government concerned and maturing within a period not exceeding eighteen months from the date of such loan or advance:

PROVIDED that the previous approval of the State Government shall be obtained for the borrowing by the State Financial Corporation and the amount of loans and advances granted to that Corporation under this clause shall not, at any time, exceed in the aggregate twice the paid-up share capital thereof;

²[(4AA) The making of annual contributions to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981;]

(4B) The making to the Industrial Finance Corporation of India of loans and advances-

(a) Repayable on demand or on the expiry of fixed periods not exceeding ninety days from the date of such loan or advance. against securities of the Central Government or of any State Government; or

(b) Repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the Central Government or of any maturity, or against bonds and debentures issued by the said corporation and guaranteed by the Central Government and maturing within a period not exceeding eighteen months from the date of such loan or advance.

³[***]

(4BB) The making to any financial institution notified by the Central Government in this behalf, of loans and advances: –

(a) Repayable on demand or on the expiry of fixed periods not exceeding ninety days from the date of such loan or advance, against the securities of the Central Government or of any State Government; or

(b) Repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the Central Government or of any State Government, of any maturity, or against bonds and debentures issued by that financial institution and guaranteed by the Central Government or any State Government, and maturing within a period not exceeding eighteen months from the date of such loan or advance:

PROVIDED that the amount of loans and advances granted to a financial institution under sub-clause (b) shall not, at any time, exceed in the aggregate sixty per cent of the paid-up share capital thereof;

(4BBB) The making to the Unit Trust of loans and advances-

(i) 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 than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India;

(ii) Repayable on demand or within a period of eighteen months from the date of such loan or advance against the security of the bonds of the Unit Trust issued with the approval of and guaranteed by the Central Government;

(iii) For the purpose of any scheme other than the first unit scheme under the Unit Trust of India Act, 1963 (52 of 1963) on such terms and conditions and against the security of such other property of the Unit Trust as may be specified in this behalf by the Bank;

(4C) The making to a Warehousing Corporation established under the Agricultural Produce (Development and Warehousing) Corporations Act, 1956 (28 of 1956), of loans and advances: –

(a) Repayable on demand or on the expiry of fixed periods not exceeding ninety days, from the date of such loan or advance, against securities of the Central Government or of any State Government; or

(b) Repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the Central Government or of any State Government, of any maturity, or against bonds and debentures issued by the Corporation to which the loan or advance is made, and guaranteed by the Central or a State Government, and maturing within a period not exceeding eighteen months from the date of such loan or advance:

PROVIDED that the amount of loans and advances granted under clause (b) shall not at any time exceed, in the aggregate, three crores of rupees in the case of the Central Warehousing Corporation and fifty lakhs of rupees in the case of a State Warehousing Corporation;

(4D) The making to the Deposit Insurance Corporation of loans and advances; and generally assisting the Corporation in such manner and on such terms as may be determined by the Central Board;

⁴[(4DD) The making to the National Housing Bank of loans and advances and generally assisting the National Housing Bank in such manner and on such terms as may be determined by the Central Board;]

⁵[(4E) The making to the National Bank of loans and advances repayable on demand or on the expiry of fixed period not exceeding eighteen months from the date of making of the loan or advance, either-

(i) Against the security of stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India; or

(ii) On such other terms and conditions as the Bank may specify;

(4F) Contributing to the initial capital of the Unit Trust;

(4G) The making of loans and advances to, and the purchasing of bonds and debentures of, the Development Bank ²[or the Exim Bank] ⁴[or the Reconstruction Bank] ⁵[or the Small Industries Bank] out of the National Industrial Credit (Long Term Operations) Fund established under section 46C;

⁶[(4GG) The making of loans and advances to, and the purchasing of bonds and debentures of, the National Housing Bank out of the National Housing Credit (Long Term Operations) Fund established under section 46D;

(4H) The making to the Development Bank ³[or the Small Industries Bank] of loans and advances-

(a) Repayable on demand or on the expiry of fixed periods not exceeding ninety days, from the date of such loan or advance against the security of stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India; or

(b) Against the security of 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 date of such loan or advance;

(4-I) The making to scheduled banks, the Development Bank, the Exim Bank, ⁷[the Reconstruction Bank or the Small Industries 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 loans and advances repayable on demand or otherwise 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 purpose of financing the import of capital goods or for such other purposes as may be approved by the Central Government;

(4J) The making to the Exim Bank of loans and advances-

(a) 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 than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India; or

(4K) The making to the Reconstruction Bank of loans and advances-

(5) The making to the Central Government and State Governments of advances repayable in each case not later than three months from the date of the making of the advance;

(6) The issue of demand drafts, telegraphic transfers and other kinds of remittances made payable at its own offices or agencies, the purchase of telegraphic transfers, and the making, issue and circulation of bank post bills;

¹¹[(6-A) dealing in derivatives, and, with the approval of the Central Board, in any other financial instrument.

Explanation.-For the purposes of this clause, “derivative” means an instrument, to be settled at a future date, whose value is derived from change in one or a combination of more than one of the following underlying, namely:-

(a) interest rate,

(b) price of securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government,

(d) foreign exchange rate, index of rates of prices,

(e) credit rating or credit index,

(g) price of gold or silver coins, or gold or silver bullion, or

(h) any other variable of similar nature;]

(7) ⁸[***]

(8) The purchase and sale of securities of the Central Government or a State Government of any maturity or of such securities of a local authority as may be specified in this behalf by the Central Government on the recommendation of the Central Board:

PROVIDED that securities fully guaranteed as to principal and interest by any such Government or authority shall be deemed for the purposes of this clause to be securities of such Government or authority;

⁹[***]

Central Government in this behalf;

(9) The custody of monies, securities and other articles of value, and the collection of the proceeds, whether principal, interest or dividends, of any such securities;

(10) The sale and realisation of all property, whether movable or immovable, which may in any way come into the possession of the Bank in satisfaction, or part satisfaction, of any of its claims;

(11) The acting as agent for the Central Government or any State Government or any local authority or the Industrial Finance Corporation of India or any other body corporate which is established or constituted by or under any other law or the government of any such country outside India or any such person or authority as may be approved in this behalf by the Central Government in the transaction or any of the following kinds of business, namely: –

(a) The purchase and sale of gold or silver or foreign exchange;

(b) The purchase, sale, transfer and custody of bills of exchange, securities or shares in any company;

(d) The remittance of such proceeds, at the risk of the principal, by bills of exchange payable either in India or elsewhere;

(e) The management of public debt;

(f) The issue and management of bonds and debentures;

(11A) The acting as agent for the Central Government: –

(a) In guaranteeing the due performance by any small scale industrial concern, approved by the Central Government, of its obligations to any bank or other financial institution in respect of loans and advances made, or other credit facilities provided, to it by such bank or other financial institution and the making as such agent of payments in connection with such guarantee, and

(b) In administering any scheme for subsidising the rate of interest or other charges in relation to any loans or advances made, or other credit facilities provided, by banks or other financial institutions for the purpose of financing or facilitating any export from India and the making as such agent of payment on behalf of the Central Government;

(12) The purchase and sale of gold or silver coins and gold and silver bullion and foreign exchange and the opening of a gold account with the principal currency authority of any foreign country or the Bank for International. Settlement or any international or regional bank or financial institution formed by such principal currency authority or authorities or by the government of any foreign country;

(12A) The purchase and sale of securities issued by the government of any country outside India or by any institution or body corporate established outside India and expressed to be payable in a foreign currency or any international or composite currency unit, being in the case of purchase by the Bank securities maturing within a period of ten years from the date of purchase:

PROVIDED that in the case of securities of an institution or body corporate, the repayment of principal and payment of interest in respect of such securities shall be guaranteed by the government of the country concerned;

¹²[(12-AA) lending or borrowing of securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities;

(12-AB) dealing in repo or reverse repo:

Provided that lending or borrowing of funds by way of repo or reverse repo shall not be subject to any limitation contained in this section.

Explanation.- For the purposes of this clause,-

(a) “repo” means an instrument for borrowing funds by selling securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to repurchase the said securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed;

(b) “reverse repo” means an instrument for lending funds by purchasing securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to resell the said securities on a mutually agreed future date at an agreed price which includes interest for the funds lent;]

(12B) The making of loans and advances in foreign currencies to scheduled banks, the Development Bank, the Exim Bank,] 6[the Reconstruction Bank or the Small Industries Bank,] the Industrial Finance Corporation, any State Financial Corporation and any other financial institution as may, on the recommendation of the Bank, be approved by the Central Government and on such terms and conditions as may be specified by the Central Board in this behalf, against promissory notes of such 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 effect that-

(a) It has made loans and advances in foreign currencies for financing international trade or for the import of 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 outstanding amount of the loans or advances obtained by it from the Bank;

(13) The opening of an account with an office outside India of any bank, including a bank incorporated in India or the making of an agency agreement with, and the acting as an agent or correspondent of any bank incorporated outside India, or the principal currency authority of any country under the law for the time being in force in that country or any international or regional bank or financial institution formed by such principal currency authorities or foreign governments, and the investing of the funds of the Bank in the shares and securities of any such international or regional bank or financial institution or of any other foreign institution as may be approved by the Central Board in this behalf;

(13A) Participation in any arrangement for the clearing and settlement of any amounts due from, or to any person or authority on account of the external trade of India with any other country or group of countries or of any remittances to, or from, that country or group of countries, including the advancing, or receiving of any amount in any currency in connection therewith, and, for that purpose, becoming, with the approval of the Central Government, a member of any international or regional clearing union of central banks, monetary or other authorities, or being associated with any such clearing arrangements, or becoming a member of any body or association formed by central banks, monetary or other similar authorities, or being associated with the same in any manner;

(14) The borrowing of money for a period not exceeding one month for the purposes of the business of the Bank, and the giving of security for money so borrowed:

PROVIDED that no money shall be borrowed under this clause from any person in India other than a scheduled bank or from any person outside India other than a bank which is the principal currency authority of any country under the law for the time being in force in that country:

PROVIDED FURTHER that the total amount of such borrowings from persons in India shall not at any time exceed the amount of the capital of the Bank;

(15) The making and issue of bank notes subject to the provisions of this Act;

(15A) The exercise of powers and functions and the performance of duties entrusted to the Bank under this Act or under any other law for the time being in force;

(15B) The providing of facilities for training in banking and for the promotion of research, where, in the opinion of the Bank, such provision may facilitate the exercise by the Bank of its powers and functions, or the discharge of its duties;

(16) Generally, the doing of all such matters and things as may be incidental to or consequential upon the exercise of its powers or the discharge of its duties under this Act.

——————–

1. Omitted by Act No. 62 of 1948, w.e.f. 1/1/1949.

2. Substituted by Act No. 81 of 1985, w.e.f. 1/5/1986.

3. Earlier Proviso omitted by Act No. 66 of 1988, w.e.f. 30/12/1988.

4. Inserted by Act No. 53 of 1987, w.e.f. 9/7/1988.

6. Substituted by Act No. 61 of 1981, w.e.f. 1/5/1982.

7. Substituted for the words “or the Reconstruction Bank”, by Act No. 39 of 1989, w.e.f. 7/3/1990.

8. Omitted by Act No. 2 of 1948.

9. Second proviso omitted by Act No. 32 of 1951.

10. Inserted by Act No. 53 of 1987, w.e.f. 9/7/1988.

11. Inserted by Act No. 26 of 2006 w.e.f. 12-6-2006.

12. Inserted by Act No. 26 of 2006 w.e.f. 12-6-2006.

Section 18. Power of direct discounts

When, in the opinion of the Bank, a special occasion has arisen making it necessary or expedient that action should be taken under this section for the purpose of regulating credit in the interests of Indian trade, commerce, industry and agricultural, the Bank may, notwithstanding any limitation contained in section 17: –

(1) Purchase, sell or discount any bill of exchange or promissory note though such bill or promissory note is not eligible for purchase or discount by the Bank under that section; or

(2) ¹[***]

(3) Make loans or advances to-

(a) A State Co-operative bank; or

(b) On the recommendation of a State co-operative bank, to a co-operative society registered within the area in which the State co-operative bank operates; or

Repayable on demand or on the expiry of the fixed periods, not exceeding ninety days, on such terms and conditions as the Bank may consider to be sufficient.

——————–

1. Clause (2) omitted Act No. 24 of 1978.

Section 18 A. Validity of loan or advance not to be questioned

Notwithstanding anything to the contrary contained in any other law for the time being in force-

(a) The validity of any loan or advance granted by the Bank in pursuance of the provisions of this Act shall not be called in question merely on the ground of non-compliance with the requirements of such other law as aforesaid or of any resolution, contract, memorandum, and articles of association or other instrument:

PROVIDED that nothing in this clause shall render valid any loan or advance obtained by any company or co-operative society where such company or co-operative society is not empowered by its memorandum to obtain loans or advances;

(b) Where a loan or advance has been granted under clause (3A) or under clause (3B) of section 17 or a loan or advance granted under clause (3) of section 18 by the Bank to any person has been applied by such person, wholly or in part, in making a loan or advance to any borrower, any sum received-

(i) By the borrowing bank on account of bills of exchange in respect of which the declaration under clause (i) of the proviso to clause (3A) of section 17 has been furnished or in repayment or realisation of the outstanding loans and advances referred to in clause (ii) of the said proviso or in the proviso to clause (3B) of the said section, or

(ii) By the borrowing bank or any other person in repayment or realisation of loans and advances granted to a borrower out of funds obtained by it or by him from the Bank under section 18,

Shall be utilised only for the repayment by the borrowing bank or other person, as the case may be, of the amounts due to be repaid by it or by him to the Bank, and shall be held by it or by him in trust for the Bank, until such time as the amounts are so repaid.

Section 19. Business which the bank may not transact

Save as otherwise provided in sections 17,18, 42 and 45, the bank may not-

(1) Engage in trade or otherwise have a direct interest in any commercial, industrial, or other undertaking except such interest as it may in any way acquire in the course of the satisfaction of any of its claims:

PROVIDED that all such interests shall be disposed of at the earliest possible moment;

(2) Purchase the shares of any banking company or of any other company, or grant loans upon the security of any such shares;

(3) Advance money on mortgage of, or otherwise on the security of, immovable property or documents of title relating thereto, or become the owner of immovable property, except so far as is necessary for its own business premises and residences for its officers and servants;

(4) Make loans or advances;

(5) Draw or accept bills payable otherwise than on demand;

(6) Allow interest on deposits or current amounts.

Reserve Bank of India Act, 1934

Section 20. Obligation of the Bank to transact government business

The Bank shall undertake to accept monies for account of the Central Government and to make payments up to the amount standing to the credit of its account, and to carry out its exchange, remittance and other banking operations, including the management of the public debt of the Union.

Section 21. Bank to have the right to transact government business in India

(1) The Central Government shall entrust the Bank, on such conditions as may be agreed upon, with all its money, remittance, exchange and banking transactions in India, and, in particular, shall deposit free of interest all its cash balances with the Bank:

PROVIDED that nothing in this sub-section shall prevent the Central Government from carrying on money transactions at places where the Bank has no branches or agencies, and the Central Government may hold at such places such balances as it may require.

(2) The Central Government shall entrust the Bank, on such conditions as may be agreed upon, with the management of the public debt and with the issue of any new loans.

(3) In the event of any failure to reach agreement on the conditions referred to in this section the Central Government shall decide what the conditions shall be.

(4) Any agreement made under this section shall be laid, as soon as may be after it is made, before Parliament. ¹[***]

——————–

1. Clause (5) omitted by Act No. 24 of 1978.

Section 21. Bank to have the right to transact government business in India

(2) The Central Government shall entrust the Bank, on such conditions as may be agreed upon, with the management of the public debt and with the issue of any new loans.

(3) In the event of any failure to reach agreement on the conditions referred to in this section the Central Government shall decide what the conditions shall be.

(4) Any agreement made under this section shall be laid, as soon as may be after it is made, before Parliament. ¹[***]

——————–

1. Clause (5) omitted by Act No. 24 of 1978.

Section 21 A. Bank to transact government business of States on agreement

(1) The Bank may by agreement with the government of any state undertake-

(a) All its money, remittance, exchange and banking transactions in India, including in particular, the deposit, free of interest, of all its cash balances with the Bank; and

(b) The management of the public debt of, and the issue of any new loans by, that State.

(2) Any agreement made under this section shall be laid, as soon as may be after it is made, before Parliament.

Section 21 B. Effect of agreements made between the Bank and certain States before the 1st November, 1956

(1) Any agreement made under section 21 or section 21A between the Bank and the government of a State specified in the Explanation below and in force immediately before the lst day of November, 1956, shall, as from that day have effect as if it were an agreement made on that day under section 21A between the Bank and the government of the corresponding State subject to such modifications, if and being of a character not affecting the general operation of the agreement, as may be agreed upon between the Bank and the government of the corresponding State, or in default of such agreement, as may be made therein by order of the Central Government.

Explanation: In this sub-section “corresponding State” means: –

(a) In relation to the agreement between the Bank and the State of Andhra, the State of Andhra Pradesh;

(b) In relation to the agreement between the Bank and any other Part A State as it existed before the 1st day of November, 1956, the State with the same name; and

(c) In relation to the agreement between the Bank and the Part B State of Mysore or Travancore-Cochin as it existed before the 1st day of November, 1956, the State of Mysore or Kerala respectively.

(2) Any agreement made under section 21A between the Bank and the government of the part B State of Hyderabad, Madhya Bharat or Saurashtra shall be deemed to have terminated on the 31st day of October, 1956.

Section 22. Right to issue bank notes

(1) The bank shall have the sole right to issue bank notes in India, and may, for a period which shall be fixed by the Central Government on the recommendation of the Central Board, issue currency notes of the Government of India supplied to it by the Central Government, and the provisions of this Act applicable to bank notes shall, unless a contrary intention appears, apply to all currency notes of the Government of India issued either by the Central Government or by the Bank in like manner as if such currency notes were bank notes, and references in this Act to bank notes shall be construed accordingly.

(2) On and from the date on which this chapter comes into force the Central Government shall not issue any currency notes.

Section 23. Issue department

(1) The issue of bank notes shall be conducted by the Bank in an issue department which shall be separated and kept wholly distinct from the banking department, and the assets of the issue department shall not be subject to any liability other than the liabilities of the issue department as hereinafter defined in section 34.

(2) The issue department shall not issue bank notes to the banking department or to any other person except in exchange for other bank notes or for such coin, bullion or securities as are permitted by this Act to form part of the Reserve.

¹[***]

——————–

1. Sub-section (3) omitted by Act No. 24 of 1978.

Reserve Bank of India Act, 1934

Section 24. Denominations of notes

(1) Subject to the provisions of sub-section (2), bank notes shall be of the denominational values of two rupees, five rupees, ten rupees, twenty rupees, fifty rupees, one hundred rupees, five hundred rupees, one thousand rupees, five thousand rupees and ten thousand rupees or of such other denominational values, not exceeding ten thousand rupees, as the Central Government may, on the recommendation of the Central Board, specify in this behalf.

(2) The Central Government may, on the recommendation of the Central Board, direct the non-issue or the discontinuance of issue of bank notes of such denominational values as it may specify in this behalf.

Section 25. Form of bank notes

The design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Central Board.

Section 26. Legal tender character of notes

(1) Subject to the provisions of sub-section (2), every bank note shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government.

(2) On recommendation of the Central Board the Central Government may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender save at such office or agency of the Bank and to such extent as may be specified in the notification.

Section 26 A. Certain bank notes to cease to be legal tender

Notwithstanding anything contained in section 26, no bank note of the denominational value of five hundred rupees, one thousand rupees or ten thousand rupees issued before the 13th day of January, 1946, shall be legal tender in payment or on account for the amount expressed therein.

Section 27. Re-issue of notes

The Bank shall not re-issue bank notes, which are torn, defaced or excessively spoiled.

Section 28. Recovery of notes lost, stolen, mutilated or imperfect

Notwithstanding anything contained in any enactment or rule of law to the contrary, no person shall of right be entitled to recover from the Central Government or the Bank, the value of any lost, stolen, mutilated or imperfect currency note of the Government of India or bank note:

PROVIDED that the Bank may, with the previous sanction of the Central Government, prescribe the circumstances in and the conditions and limitations subject to which the value of such currency notes or bank notes may be refunded as of grace and the rules made under this proviso shall be laid on the table of Parliament. ¹[***]

——————–

1. Omitted by Act No. 24 of 1978.

Section 28 A. Issue of special bank notes and special one rupee notes in certain cases

(1) For the purpose of controlling the circulation of bank notes without India, the Bank may, notwithstanding anything contained in any other provision of this Act, issue bank notes of such design, form and material as may be approved under sub-section (3) (hereinafter in this section referred to as special bank notes) of the denominational values of five rupees, ten rupees and one hundred rupees.

(2) For the purpose of controlling the circulation of Government of India one rupee notes without India, the Central Government may, notwithstanding anything contained in any other provision of this Act or in the Currency Ordinance, 1940 (Ordinance 4 of 1940), issue Government of India notes of the denominational value of one rupee of such design, form and material as may be adopted under sub-section (3) (hereinafter in this section referred to as special one rupee notes).

(3) The design, form and material of the special bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Governor and of the special one rupee notes shall be such as the Central Government may think fit to adopt.

(4) Neither the special bank notes nor the special one rupee notes shall be legal tender in India.

(5) The special one rupee note shall be deemed to be included in the expression “rupee coin” for all the purposes of this Act except section 39, but shall be deemed not to be a currency note for any of the purposes of this Act.

(6) Where a special bank note is on its face expressed to be payable at a specified office or branch of the Bank, obligation imposed by section 39 shall be only on the specified office or branch and, further, shall be subject to such regulations as may be made under this section.

(7) The Bank may, with the previous sanction of the Central Government make regulations to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provisions of this section, and, in particular, the manner in which, and the conditions or limitations subject to which-

(i) Bank notes and one rupee notes in circulation in any country outside India may be replaced by special notes issued under this section;

(ii) Any such special notes may be exchanged for any other bank notes or one rupee notes.

Section 29. Bank exempt from stamp duty on bank notes

The Bank shall not be liable to the payment of any stamp duty under the Indian Stamp Act, 1899 (2 of 1899), in respect of bank notes issued by it.

Section 30. Powers of Central Government to supersede Central Board

(1) If in the opinion of the Central Government the Bank fails to carry out any of the obligations imposed on it by or under this Act the Central Government may, by notification in the Gazette of India, declare the Central Board to be superseded, and thereafter the general superintendence and direction of the affairs of the Bank shall be entrusted to such agency at the Central Government may determine, and such agency may exercise the powers and do all acts and things which may be exercised or done by the Central Board under this Act.

(2) When action is taken under this section the Central Government shall cause a full report of the circumstances leading to such action and of the action taken to be laid before Parliament at the earliest possible opportunity and in any case within three months from the issue of the notification superseding the Board.

Section 31. Issue of demand bills and notes

(1) No person in India other than the Bank, or, as expressly authorised by this Act the Central Government shall draw, accept, make or issue any bill of exchange, hundi, promissory note or engagement for the payment of money payable to bearer on demand, or borrow, owe or take up any sum or sums of money on the bills, hundis or notes payable to bearer on demand of any such person:

PROVIDED that cheques or drafts, including hundis, payable to bearer on demand or otherwise may be drawn on a person’s account with a banker, shroff or agent.

(2) Notwithstanding anything contained in the Negotiable Instrument Act, 1881 (26 of 1881), no person in India other than the Bank or, as expressly authorised by this Act, the Central Government shall make or issue any promissory note expressed to be payable to the bearer of the instrument.

Section 32. Section

[Section 32 repealed by the Reserve Bank of India (Amendment) Act, 1974]

Section 33. Assets of the issue department

(1) The assets of the issue department shall consist of gold coin, gold bullion, foreign securities, rupee coin and rupee securities to such aggregate amount as is not less than the total of the liabilities of the issue department as hereinafter defined.

(2) The aggregate value of the gold coin, gold bullion and foreign securities held as assets and the aggregate value of the gold coin and gold bullion so held shall not at any time be less than two hundred crores of rupees and one hundred and fifteen crores of rupees, respectively.

¹[(3) The remainder of the assets shall be held in rupee coin, Government of India rupee securities of any maturity, promissory notes drawn by the National Bank for any loans or advances under clause (4E) of section 17 and such bills of exchange and promissory notes payable in India as are eligible for purchase by the Bank under sub-clause (a) or sub-clause (b) or sub-clause (bb) of clause (2) of section 17 or under clause (1) of section 18.]

(4) For the purposes of this section, gold coin and gold bullion shall be valued at ²[a price not exceeding the international market price for the time being obtaining,] rupee coin shall be valued at its face value, and securities shall be valued at rates not exceeding the market rates for the time being obtaining.

(5) Of the gold coin and gold bullion held as assets, not less than seventeen-twentieths shall be held in India, and all gold coin and gold bullion held as assets shall be held in the custody of the Bank or its agencies:

PROVIDED that gold belonging to the Bank which is in any other bank or in any mint or treasury or in transit may be reckoned as part of the assets.

(6) For the purposes of this section, the foreign securities which may be held as part of the assets shall be-

(i) Securities of the following kinds payable in the currency of any foreign country which is a member of the International Monetary Fund, namely: –

(a) Balances with the bank which is the principal currency authority of that foreign country and any other balances or securities in foreign

Currency maintained with or issued by the International Monetary Fund, the International Bank for Reconstruction and Development, the International Development Association or the International Finance Corporation or Asian Development Bank or the Bank for International Settlements or any banking or financial institution ³[approved] by the Central Government in this behalf, provided that they are repayable within a period of ten years;

(b) Bills of exchange bearing two or more good signatures and drawn on and payable at any place in that foreign country and having a maturity not exceeding ninety days; and (c) Government securities of that foreign country maturing within ten years;

(ii) Any drawing rights representing a liability of the International Monetary Fund.

——————–

1. Substituted for the figures and words “0.118489 grammes of fine gold per rupee” by Act No. 8 of 1991, w.r.e.f. 15/10/1990.

2. Substituted by Act No. 1 of 1984, w.e.f. 15/2/1984.

3. Substituted by Act No. 61 of 1981, w.e.f. 1/5/1982.

Section 34. Liabilities of the issue department

(1) The liabilities of the issue department shall be an amount equal to the total of the amount of the currency notes of the Government of India and bank notes for the time being in circulation. ¹[***]

——————–

1. Sub-sections (2) & (3) omitted.

Section 35. Section

[Section 35 repealed by Act No. 62 of 1948, w.e.f. 1st. January, 1949]

Section 36. Section

[Section 36 repealed by Act No. 55 of 1963, w.e.f. 1st. February, 1964]

Section 37. Suspension of assets requirements as to foreign securities

Notwithstanding anything contained in the foregoing provisions, the Bank may, with the previous sanction of the Central Government, for periods not exceeding six months in the first instance, which may, with the like sanction, be extended from time to time by periods not exceeding three months at a time, hold as assets foreign securities of less amount in value than that required by sub-section (2) of section 33.

Section 38. Obligations of government and the Bank in respect of rupee coin

The Central Government shall undertake not to put into circulation any rupees, except through the Bank, and Bank shall undertake not to dispose of rupee coin otherwise than for the purposes of circulation.

Section 39. Obligation to supply different forms of currency

(1) The Bank shall issue rupee coin on demand in exchange for bank notes and currency notes of the Government of India, and shall issue currency notes or bank notes on demand in exchange for coin which is legal tender under the Indian Coinage Act, 1906 (3 of 1906).

(2) The Bank shall, in exchange for currency notes or bank notes of two rupees or upwards, supply currency notes or bank notes of lower value or other coins which are legal tender under the Indian Coinage Act, 1906 (3 of 1906), in such quantities as may, in the opinion of the Bank, be required for circulation; and the Central Government shall supply such coins to the Bank on demand. If the Central Government at any time fails to supply such coins, the Bank shall be released from its obligations to supply them to the public.

Section 40. Transactions in foreign exchange

²[Transactions in foreign exchange. The Bank shall sell to or buy from any authorised person who makes a demand in that behalf at its office in Bombay, Calcutta, Delhi or Madras or at such of its branches as the Central Government may, by order, determine, foreign exchange at such rates of exchange and on such conditions as the Central Government may from time to time by general or special order determine, having regard so far as rates of exchange are concerned to its obligations to the International Monetary Fund:

PROVIDED that no person shall be entitled to demand to buy or sell foreign exchange of a value less than two lakhs of rupees.

Explanation: In this section “authorised person” means a person who is entitled by or under the Foreign Exchange Regulation Act, ¹[1973 (46 of 1973)] to buy, or as the case may be, sell, the foreign exchange to which his demand relates.]

——————–

1. Substituted by Act No. 1 of 1984, w.e.f. 15/2/1984.

2. Substituted for sections 40 and 41 by Act No. 23 of 1947.

Section 41 A. Section

[Section 41A. Obligation to provide remittance between India and Burma: repealed by Act No. 11 of 1947, w.e.f. 1st. April, 1947]

Section 42. Cash reserves of scheduled banks to be kept with the Bank

(1) Every bank included in Scheduled II shall maintain with the Bank an average daily balance the amount of which shall not be less than ¹¹[such per cent of the total of the demand and time liabilities in India of such bank as shown in the return referred to in sub-section (2), as the Bank may from time to time, having regard to the needs of securing the monetary stability in the country, notify in the Gazette of India]

PROVIDED that the Bank may, by notification in the Gazette of India, increase the said rate to such higher rate as may be specified in the notification so however that the rate shall not be more than ¹[twenty per cent] of the total of the demand and time liabilities.

Explanation: For the purposes of this section-

(a) “Average daily balance” shall mean the average of the balances held at the close of business on each day of a ²[fortnight;]

²[(b) “Fortnight” shall mean the period from Saturday to the second following Friday, both days inclusive;]

(i) The paid-up capital or the reserves or any credit balance in the profit and loss account of the bank;

(ii) The amount of any loan taken from the bank or from the Development Bank ⁵[or from the Exim Bank] ⁷[or from the Reconstruction Bank] ⁶[or from the National Housing Bank] or from the ¹⁰[National Bank] ⁸[or from the Small Industries Bank;]

(iii) In the case of a State co-operative bank, also any loan taken by such bank from a State Government ³[or from the National Co-operative Development Corporation established under the National Co-operative Development Corporation Act, 1962 (26 of 1962)] and any deposit of money with such bank representing the reserve fund or any part thereof maintained with it by any co-operative society within its area of operation;

(iv) In the case of a State co-operative bank, which has granted an advance against any balance maintained with it, such balance to the extent of the amount outstanding in respect of such advance;

³[(v) In the case of a Regional Rural Bank, also any loan taken by such bank from its Sponsor Bank;

(d) The aggregate of the “liabilities” of a scheduled bank, which is not a State co-operative bank, to-

(i) The State Bank;

(ii) A subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);

³[(iiia) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);]

(iv) A banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(v) A co-operative Bank; or

(vi) Any other financial institution notified by the Central Government in this behalf.

Shall be reduced by the aggregate of the liabilities of all such banks and institutions to the scheduled bank;

(e) The aggregate of the “liabilities” of a scheduled bank, which is a State co-operative bank, to-

(i) The State Bank;

(ii) A subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);

³[(iiia) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);

(iv) A banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); or . (v) Any other financial institution notified by the Central Government in this behalf,

Shall be reduced by the aggregate of the liabilities of all such banks and institutions to the State co-operative bank.

(1A) Notwithstanding anything contained in sub-section (1), the bank may, by notification in the Gazette of India, direct that every scheduled bank shall, with effect from such date as may be specified in the notification, maintain with the bank, in addition to the balance prescribed by or under sub-section (1), an additional average daily balance the amount of which shall not be less than the rate specified in the notification, such additional balance being calculated with reference to the excess of the total of the demand and time liabilities of the bank as shows in the return referred to in sub-section (2) over the total of its demand and time liabilities at the close of business on the date specified in the notification as shown by such return so however, that the additional balance shall, in no case, be more than such excess:

³[PROVIDED that the bank may, by a separate notification in the Gazette of India, specify different dates in respect of a bank subsequently, included in the Schedule II.]

⁴[(1AA) ****]

⁴[(1B) *****]

³[(1C) The bank may, for the purposes of this section, specify from time to time with reference to any transaction or class of transactions that such transaction or transactions shall be regarded as liability in India of a scheduled bank, and if any question arises as to whether any transaction or class of transactions shall be regarded, for the purposes of this section, as liability in India of a scheduled bank, the decision of the Bank thereon shall be final.]

(2) Every scheduled bank shall send to the bank a return signed by two responsible officers of such bank showing-

(a) The amount of its demand and time liabilities and the amount of its borrowings from banks in India, classifying them into demand and time liabilities,

(b) The total amount of legal tender notes and coins held by it in India,

(d) The balances held by it at other banks in current account and the money at call and short notice in India,

(e) The investments (at book value) in Central and State Government securities including treasury bills and treasury deposit receipts,

(f) The amount of advances in India,

(g) The inland bills purchased and discounted in India and foreign bills purchased and discounted,

²[At the close of business on each alternate Friday, and every such return shall be sent not later than seven days after the date to which it relates:]

PROVIDED that the bank may, by notification in the Gazette of India, delete or modify or add to any of the particulars specified in the foregoing clauses:

PROVIDED FURTHER that where ³[such alternate] Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), for one or more offices of a scheduled bank, the return shall give the preceding working day’s figures in respect of such office or offices, but shall nevertheless be deemed to relate to that Friday:

²[PROVIDED ALSO that where the bank is satisfied that the furnishing of a fortnightly return under his sub-section is impracticable in the case of any scheduled bank by reason of the geographical position of the bank and its branches, the Bank may allow such bank-

(i) To furnish a provisional return for the fortnight within the period aforesaid to be followed by a final return not later than twenty days after the date to which it relates, or

(ii) To furnish in lieu of a fortnightly return a monthly return to be sent not later than twenty days after the end of the month to which it relates giving the details specified in this sub-section in respect of such bank at the close of business for the month.]

³[(2A) Where the last Friday of a month is not an alternate Friday for the purpose of sub-section (2), every scheduled bank shall send to the bank, a special return giving the details specified in sub-section (2) as at the close of business on such last Friday or where such last Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), as at the close of business on the preceding working day and such return shall be sent not later than seven days after the date to which it relates.]

(3) If the average daily balance held at the bank by a scheduled bank during any ²[fortnight] is below the minimum prescribed by or under sub-section (1) or sub-section (1A), such scheduled bank shall be liable to pay to the bank in respect of that ²[fortnight] penal interest at a rate of three per cent above the bank rate on the amount by which such balance with the bank falls short of the prescribed minimum, and if during the next succeeding ²[fortnight] such average daily balance is still below the prescribed minimum, the rates of penal interest shall be increased to a rate of five per cent above the bank rate in respect of that ²[fortnight] and each subsequent ²[fortnight] during which the default continues on the amount by which such balance at the bank falls short of the prescribed minimum.

(3A) Where under the provisions of sub-section (3) penal interest at the increased rate of five per cent above the bank rate has become payable by a scheduled bank, if thereafter the average daily balance held at the Bank during the next succeeding ²[fortnight] is still below the prescribed minimum: –

(a) Every director, manager or secretary of the scheduled bank, who is knowingly and wilfully a party to the default, shall be punishable with fine which may extend to five hundred rupees and with a further fine which may extend to five hundred rupees for each subsequent ²[fortnight] during which the default continues, and

(b) The Bank may prohibit the scheduled bank from receiving after the said ²[fortnight] any fresh deposit,

And, if default is made by the scheduled bank in complying with the prohibition referred to in clause (b), every director and officer of the schedule bank who is knowingly and wilfully a party to such default or who through negligence or otherwise contributes to such default shall in respect of each such default be punishable with fine which may extend to five hundred rupees and with a further fine which may extend to five hundred rupees for each day after the first on which a deposit received in contravention of such prohibition is retained by the scheduled bank.

Explanation: In this sub-section “officer” includes a manager, secretary, branch manager, and branch secretary.

(4) Any scheduled bank failing to comply with the provisions of sub-section (2) shall be liable to pay to the Bank a penalty of one hundred rupees for each day during which the failure continues.

(5)

(a) The penalties imposed by sub-sections (3) and (4) shall be payable within a period of fourteen days from the date on which a notice issued by the Bank demanding the payment of the same is served by the scheduled bank, and in the event of failure of the scheduled bank to pay the same within such period, may be levied by a direction of the principal civil court having jurisdiction in the area where an office of the defaulting bank is situated, such direction to be made only upon an application made in this behalf to the court by the Bank;

(b) When the court makes a direction under clause (a), it shall issue a certificate specifying the sum payable by the scheduled bank and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a suit;

(c) Notwithstanding anything contained in this section, if the Bank is satisfied that the defaulting bank had sufficient cause for its failure to comply with the provisions of sub-sections (1), (1A) or (2), it may not demand the payment of the penal interest of the penalty, as the case may be.

(6) The Bank shall, save as hereinafter provided, by notification in the Gazette of India;

(a) Direct the inclusion in Schedule II of any bank not already so included which carries on the business of banking in India and which-

(i) Has a paid-up capital and reserves of an aggregate value of not less than five lakhs of rupees, and

(ii) Satisfies the Bank that its affairs are not being conducted in a manner detrimental to the interests of its depositors, and

(iii) Is a State co-operative bank or a company as defined in section 3 of the Companies Act, 1956 (1 of 1956), or an institution notified by the Central Government in this behalf or a corporation or a company incorporated by or under any law in force in any place outside India;

(b) Direct the exclusion from that Schedule of any scheduled bank: –

(i) The aggregate value of whose paid-up capital and reserves becomes at any time less than five lakhs of rupees, or

(ii) Which is, in the opinion of the Bank after making an inspection under section 35 of the Banking Regulation Act, 1949 (10 of 1949), conducting its affairs to the detriment of the interests of its depositors, or

(iii) Which goes into liquidation or otherwise ceases to carry on banking business:

PROVIDED that the Bank may, on application of the scheduled bank concerned and subject to such conditions, if any, as it may, impose, defer the making of a direction under sub-clause (i) or sub-clause (ii) of clause (b) for such period as the Bank considers reasonable to give the scheduled bank an opportunity of increasing the aggregate value of its paid-up capital and reserves to not less than five lakhs of rupees or, as the case may be, of removing the defects in the conduct of its affairs;

Explanation: In this sub-section the expression “value” means the real or exchangeable value and not the nominal value which may be shown in the books of the bank concerned; and if any dispute arises in computing the aggregate value of the paid-up capital and reserves of a bank, a determination thereof by the Bank shall be final for the purposes of this sub-section.

⁹[(6A) In considering whether a State co-operative bank or a regional rural bank should be included in or excluded from Schedule II, it shall be competent for the Bank to act on a certificate from the National Bank on the question whether or not a State co-operative bank or a regional rural bank, as the case may be, satisfies the requirements as to paid-up capital and reserves or whether its affairs are not being conducted in a manner detrimental to the interests of its depositors.]

(7) The Bank may, for such period and subject to such conditions as may be specified, grant to any scheduled bank such exemptions from the provisions of this section as it thinks fit with reference to all or any of its offices or with reference to the whole or any part of its assets and liabilities.

——————–

1. Substituted by Act No. 9 of 1991, for the words “fifteen per cent”.

2. Substituted by Act No. 1 of 1984, w.e.f. 29/3/1985.

3. Inserted by Act No. 1 of 1984, w.e.f. 29/3/1985.

4. Sub-section (1-AA) and (1-B) Omitted by Act No. 26 of 2006 w.e.f. 12-6-2006.

5. Inserted by Act No. 28 of 1981, w.e.f. 1/1/1982.

6. Inserted by Act No. 53 of 1987, w.e.f. 9/7/1988.

7. Inserted by Act No. 62 of 1984, w.e.f. 20/3/1985.

8. Inserted by Act No. 39 of 1989, w.e.f. 7/3/1990.

9. Inserted by Act No. 61 of 1981, w.e.f. 1/5/1982.

10. Substituted by Act No. 61 of 1981, w.e.f. 1/5/1982.

11. Subs. by Act No. 26 of 2006 w.e.f. 12-6-2006.

Section 43. Publication of consolidated statement by the bank

The Bank shall cause to be published each ¹[fortnight] a consolidated statement showing the aggregate liabilities and assets of all the scheduled banks together, based on the returns and information received under this Act or any other law for the time being in force.

——————–

1. Substituted by Act No. 1 of 1984, w.e.f. 29/3/1985.

Section 43 A. Protection of action taken in good faith

(1) No suit or other legal proceeding shall lie against the bank or any of its officers for anything which is in good faith done or intended to be done in pursuance of section 42 or section 43 or in pursuance of the provision of chapter IIIA.

(2) No suit or other legal proceeding shall lie against the bank or any of its officers for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of section 42 or section 43 or in pursuance of the provisions of chapter III-A.

Section 44. Section

[Section 44. Power to require returns from co-operative banks :repealed by the Banking Laws (Application to Co-operative Societies) Act, 1965, w.e.f. 1st. March 1966]

Section 45. Appointment of agents

¹[Appointment of agents. (1) Unless otherwise directed by the Central Government with reference to any place, the bank may, having regard to public interest, convenience of banking, banking development and such other factors which in its opinion are relevant in this regard, appoint the National Bank, or the State Bank, or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), as its agent at all places, or at any place in India for such purposes as the Bank may specify.

(2) When any bank is appointed by the bank as its agent under sub-section (1) to receive on behalf of the Bank any payment required to be made into the Bank, or any bill, hundies or other securities required to be delivered into the Bank, under any law or rule, regulations or other instructions having the force of law, the same may be paid or delivered into the bank so appointed as the agent of the bank.]

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1. Substituted by Act No. 61 of 1981, w.e.f. 1/5/1982.

Section 45 A. Definitions

In this chapter, unless the context otherwise requires: –

(a) “Banking company” means a banking company as defined in section 5 of the Banking Regulation Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), any corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), and any other financial institution notified by the Central Government in this behalf;

(b) “Borrower” means any person to whom any credit limit has been sanctioned by any banking company, whether availed of or not, and includes-

(i) In the case of a company or corporation, as subsidiaries;

(ii) In the case of a Hindu undivided family, any member thereof or any firm in which such member is a partner;

(iii) In the case of a firm, any partner thereof or any other firm in which such partner is a partner; and

(iv) In the case of an individual, any firm in which such individual is a partner;

(i) The amounts and the nature of loans or advances and other credit facilities granted by a banking company to any borrower or class of borrowers;

(ii) The nature of security taken from any borrower or class of borrowers for credit facilities granted to him or to such class;

(iii) The guarantee furnished by a banking company for any of its customers or any class of its customers;

(iv) The means, antecedents, history of financial transactions and the credit worthiness of any borrower or class of borrowers;

(v) Any other information which the Bank may consider to be relevant for the more orderly regulation of credit or credit policy.

Section 45 B. Power of bank to collect credit information

The bank may-

(a) Collect, in such manner as it may think fit, credit information from banking companies; and

(b) Furnish such information to any banking company in accordance with the provisions of section 45D.

Section 45 C. Power to call for returns containing credit information

(1) For the purpose of enabling the bank to discharge its functions under this chapter, it may at any time direct any banking company to submit to it such statements relating to such credit information and in such form and within such time as may be specified by the Bank from time to time.

(2) A banking company shall, notwithstanding anything to the contrary contained in any law for time being in force or in any instrument regulating the constitution thereof or in any agreement executed by it, relating to the secrecy of its dealings with its constituents, be bound to comply with any direction issued under sub-section (1).

Section 45 D. Procedure for furnishing credit information to banking companies

(1) A banking company may, in connection with any financial arrangement entered into or proposed to be entered into by it, with any person, make an application to the Bank in such form as the Bank may specify requesting it to furnish the applicant with such credit information as may be specified in the application.

(2) On receipt of an application under sub-section (1), the bank shall, as soon as may be, furnish the applicant with such credit information relating to the matters specified in the application, as may be in its possession:

PROVIDED that the information so furnished shall not disclose the names of the banking companies which have submitted such information to the Bank.

(3) The bank may in respect of each application levy such fees, not exceeding twenty-five rupees, as it may deem fit for furnishing credit information.

Section 45 E. Disclosure of information prohibited

(1) Any credit information contained in any statement submitted by a banking company under section 45C or furnished by the bank to any banking company under section 45D, shall be treated as confidential and shall not, except for the purposes of this chapter, be published or otherwise disclosed.

(2) Nothing in this section shall apply to-

(a) The disclosure by any banking company, with the previous permission of the Bank, of any information furnished to the Bank under section 45C;

(b) The publication by the Bank, if it considers necessary in the public interest so to do, of any information collected by it under section 45C, in such consolidated form as it may think fit without disclosing the name of any banking company or its borrowers;

(c) The disclosure or publication by the banking company or by the bank of any credit information to any other banking company or in accordance with the practice and usage customary among bankers or as permitted or required under any other law:

¹[(d) the disclosures of any credit information under the Credit Information Companies (Regulation) Act, 2005.]

PROVIDED that any credit information received by a banking company under this clause shall not be published except in accordance with the practice and usage customary among bankers or as permitted or required under any other law.

(3) Notwithstanding anything contained in any law for the time being in force, no court, tribunal or other authority shall compel the Bank or any banking company to produce or to give inspection of any statement submitted by that banking company under section 45C or to disclose any credit information furnished by the Bank to that banking company under section 45D.

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1. Clause (d) Inserted by Act No. 30 of 2005 w.e.f. 23-6-2005.

Section 45 F. Certain claims for compensation barred

No person shall have any right, whether in contract or otherwise, to any compensation for any loss incurred by reason of the operation of any of the provisions of this chapter.

Section 45 G. Section

[Section 45G. Penalties: repealed by the Reserve Bank of India (Amendment) Act, 1974]

Section 45 H. Chapter III-B not to apply in certain cases

CHAPTER III-B

The provisions of this chapter shall not apply to the State Bank or banking company as defined in section 5 of the Banking Regulation Act, 1949 (10 of 1949) or ¹[a corresponding new bank as defined in clause (da) of section 5 of that Act or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959)] or a Regional Rural Bank or a co-operative bank or a primary agricultural credit society or a primary credit society:

PROVIDED that for the purposes of this chapter, the Tamil Nadu Industrial Investment Corporation Limited shall not be deemed to be a banking company.

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1. Substituted by Act No. 1 of 1984, w.e.f. 15/2/1984.

Section 45 I. Definitions

In this chapter, unless the context otherwise requires-

²[(a) “Business of a non-banking financial institution” means carrying on of the business of a financial institution referred to in clause (c) and includes business of a non-banking financial company referred to in clause (f);]

³[(aa)] “Company” means a company as defined in section 3 of the Companies Act, 1956 (1 of 1956) and includes a foreign company within the meaning of section 591 of that Act;

(b) “Corporation” means a corporation incorporated by an Act of any Legislature;

¹[(bb) “Deposit” includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form, but does not include: –

(i) Amounts raised by way of share capital;

(ii) Amounts contributed as capital by partners of a firm;

(iii) Amounts received from a scheduled bank or a co-operative bank or any other banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(iv) Any amount received from: –

(a) The Development Bank,

(b) A State Financial Corporation,

(c) Any financial institution specified in or under section 6A of the Industrial Development Bank of India Act, 1964 (18 of 1964), or

(d) Any other institution that may be specified by the Bank in this behalf;

(v) Amounts received in the ordinary course of business, by way of-

(a) Security deposit,

(b) Dealership deposit,

(d) Advance against orders for goods, properties or services;

(vi) Any amount received from an individual or a firm or an association of individuals not being a body corporate, registered under any enactment relating to money lending which is for the time being in force in any State; and

(vii) Any amount received by way of subscriptions in respect of a chit.

Explanation I: “Chit” has the meaning assigned to it in clause (b) of section 2 of the Chit Funds Act, 1982 (40 of 1982).

Explanation II: Any credit given by a seller to a buyer on the sale of any property (whether movable or immovable) shall not be deemed to be deposit for the purposes of this clause;

(c) “Financial institution” means any non-banking institution which carries on as its business or part of its business any of the following activities, namely: –

(i) The financing, whether by way of making loans or advances or otherwise, of any activity other than its own;

(ii) The acquisition of shares, stock, bonds, debentures or securities issued by a government or local authority or other marketable securities of a like nature;

(iii) Letting or delivering of any goods to a hirer under a hire-purchase agreement as defined in clause (c) of section 2 of the Hire-Purchase Act, 1972 (26 of 1972);

(iv) The carrying on of any class of insurance business;

(v) Managing, conducting or supervising, as foreman, agent or in any other capacity, of chits or kuries as defined in any law which is for the time being in force in any State, or any business, which is similar thereto;

(vi) Collecting, for any purpose or under any scheme or arrangement by whatever name called monies in lump sum or otherwise, by way of subscriptions or by sale of units, or other instruments or in any other manner and awarding prizes or gifts, whether in cash or kind, or disbursing monies in any other way, to persons from whom monies are collected or to any other person,

⁴[But does not include any institution, which carries on as its principal business: –

(a) Agricultural operations; or

(aa) Industrial activity; or;]

(b) The purchase or sale of any goods (other than securities) or the providing of any services; or

(c) The purchase, construction or sale of immovable property, so, however, that no portion of the income of the institution is derived from the financing of purchases, constructions or sales of immovable property by other persons;

²[Explanation : For the purposes of this clause, “industrial activity” means any activity specified in sub-clauses (i) to (xviii) of clause (c) of section 2 of the Industrial Development Bank of India Act, 1964 (18 of 1964)];

(d) “Firm” means a firm as defined in the Indian Partnership Act, 1932 (9 of 1932);

(e) “Non-banking institution” means a company, corporation or co-operative society.

²[(f) “non-banking financial company” means-

(i) A financial institution which is a company;

(ii) A non banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending Tiny manner;

(iii) Such other non-banking institution or class of such institutions, as the bank may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.]

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1. Substituted by Act No. 1 of 1984, w.e.f. 15/2/1984.

2. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

3. Earlier clause (a) renumbered to (aa) by Reserve Bank of India (Amendment) Act, 1997, w.e.f. 9/1/1997.

4. Substituted by Reserve Bank of India (Amendment) Act, 1997, w.e.f. 9/1/1997.

Section 45 IA. Requirement of registration and net owned fund

¹[Requirement of registration and net owned fund. (1) Notwithstanding anything contained in this Chapter or in any other law for the time being in force, no non-banking financial company shall commence or carry on the business of a non-banking financial institution without-

(a) Obtaining a certificate of registration issued under this Chapter; and

(b) Having the net owned fund of twenty five lakh rupees or such other amount, not exceeding two hundred lakhs, as the bank may, be notification in the Official Gazette, specify.

(2) Every non-banking financial company shall make an application for registration to the bank in such form as the bank may specify:

PROVIDED that a non-banking financial company in existence on the commencement of the Reserve Bank of India (Amendment) Act, 1997 shall make an application for registration to the bank before the expiry of six months from such commencement and notwithstanding anything contained in sub-section (1) may continue to carry on the business of a non-banking financial institution until a certificate of registration is issued to it or rejection of application for registration is communicated to it.

(3) Notwithstanding anything contained in sub-section (1), a non-banking financial company in existence on the commencement of the Reserve Bank of India (Amendment) Act, 1997 and having a net owned fund of less than twenty five lakh rupees may, for the purpose of enabling such company to fulfil the requirement of the net owned fund, continue to carry on the business of a non-banking financial institution-

(i) For a period of three years from such commencement; or

(ii) For such further period as the bank may, after recording the reasons in writing for so doing, extend, subject to the condition that such company shall, within three months of fulfilling the requirement of the net owned fund, inform the bank about such fulfilment:

PROVIDED that the period allowed to continue business under this sub-section shall in no case exceed six years in the aggregate.

(4) The bank may, for the purpose of considering the application for registration, require to be satisfied by an inspection of the books of the non-banking financial company or otherwise that the following conditions are fulfilled: –

(a) That the non-banking financial company is or shall be in a position to pay its present or future depositors in full as and when their claims accrue;

(b) That the affairs of the non-banking financial company are not being or are not likely to be conducted in a manner detrimental to the interest of its present or future depositors;

(c) That the general character of the management or the proposed management of the non-banking financial company shall not be prejudicial to the public interest or the interests of its depositors;

(d) That the non-banking financial company has adequate capital structure and earning prospects;

(e) That the public interest shall be served by the grant of certificate of registration to the non-banking financial company to commence or to carry on the business in India;

(f) That the grant of certificate of registration shall not be prejudicial to the operation and consolidation of the financial sector consistent with monetary stability and economic growth considering such other relevant factors which the bank may, by notification in the Official Gazette, specify; and

(g) Any other condition, fulfilment of which in the opinion of the bank, shall be necessary to ensure that the commencement of or carrying on of the business in India by a non-banking financial company shall not be prejudicial to the public interest or in the interest of the depositors.

(5) The bank may, after being satisfied that the conditions specified in sub-section (4) are fulfilled, grant a certificate of registration subject to such conditions which it may consider fit to impose.

(6) The bank may cancel a certificate of registration granted to a non-banking financial company under this section if such company-

(i) Ceases to carry on the business of a non-banking financial institution in India; or

(ii) Has failed to comply with any condition subject to which the certificate of registration had been issued to it; or

(iii) At any time fails to fulfil any of the conditions referred to in clauses (a) to (g) of sub-section (4); or

(iv) Fails-

(a) To comply with any direction issued by the bank under the provisions of this Chapter; or

(b) To maintain accounts in accordance with the requirements of any law or any direction or order issued by the bank under the provisions of this Chapter; or

(c) To submit or offer for inspection its books of accounts and other relevant documents when so demanded by an inspecting authority of the bank; or

(v) Has been prohibited from accepting deposit by an order made by the bank under the provisions of this Chapter and such order has been in force for a period of not less than three months:

PROVIDED that before cancelling a certificate of registration on the ground that the non-banking financial company has failed to comply with the provisions of clause (ii) or has failed to fulfil any of the conditions referred to in clause (iii) the bank, unless it is of the opinion that the delay in cancelling the certificate of registration shall be prejudicial to public interest or the interest of the depositors or the non-banking financial company, shall give an opportunity to such company on such terms as the bank may specify for taking necessary steps to comply with such provisions or fulfilment of such condition:

PROVIDED FURTHER that before making any order of cancellation of certificate of registration, such company shall be given a reasonable opportunity of being heard.

(7) A company aggrieved by the order of rejection of application for registration or cancellation of certificate of registration may prefer an appeal, within a period of thirty days from the date on which such order of rejection or cancellation is communicated to it, to the Central Government and the decision of the Central Government where an appeal has been preferred to it, or of the bank where no appeal has been preferred, shall be final:

PROVIDED that before making any order of rejection of appeal, such company shall be given a reasonable opportunity of being heard.

Explanation: For the purposes of this section-

(I) “Net owned fund” means-

(a) The aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance sheet of the company after deducting therefrom-

(i) Accumulated balance of loss;

(ii) Deferred revenue expenditure; and

(iii) Other intangible assets; and

(b) Further reduced by the amounts representing-

(1) Investments of such company in shares of-

(i) Its subsidiaries;

(ii) Companies in the same group;

(iii) All other non-banking financial companies; and

(2) The book value of debentures, bonds, outstanding loans and advances (including hire-purchase and lease finance) made to, and deposits with-

(i) Subsidiaries of such company; and

(ii) Companies in the same group,

To the extent such amount exceeds ten per cent, of (a) above.

(II) “Subsidiaries” and “companies in the same group” shall have the same meanings assigned to them in the Companies Act, 1956 (1 of 1956).]

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

Section 45 IB. Maintenance of percentage of assets

¹Maintenance of percentage of assets. (1) Every non-banking financial company shall invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than five per cent or such higher percentage not exceeding twenty five per cent, as the bank may, from time to time and by notification in the Official Gazette, specify, of the deposits outstanding at the close of business on the last working day of the second preceding quarter:

PROVIDED that the bank may specify different percentages of investment in respect of different classes of non-banking financial companies.

(2) For the purpose of ensuring compliance with the provisions of this section, the bank may require every non-banking financial company to furnish a return to it in such form, in such manner and for such period as may be specified by the bank.

(3) If the amount invested by a non-banking financial company at the close of business on any day falls below the rate specified under sub-section (1), such company shall be liable to pay to the bank, in respect of such shortfall, a penal interest at a rate of three per cent per annum above the bank rate on such amount by which the amount actually invested falls short of the specified percentage, and where the shortfall continues in the subsequent quarters, the rate of penal interest shall be five per cent per annum above the bank rate on such shortfall for each subsequent quarter.

(4)

(a) The penal interest payable under sub-section (3) shall be payable within a period of fourteen days from the date on which a notice issued by the bank demanding payment of the same is served on the non-banking financial company and, in the event of a failure of the non-banking financial company to pay the same within such period, penalty may be levied by a direction of the principal civil court having jurisdiction in the area where an office of the defaulting non-banking financial company is situated and such direction shall be made only upon an application made in this behalf to the court by the bank; and

(b) When the court makes a direction under clause (a), it shall issue a certificate specifying the sum payable by the non-banking financial company and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a suit.

(5) Notwithstanding anything contained in this section, if the bank is satisfied that the defaulting non-banking financial company had sufficient cause for its failure to comply with the provisions of sub-section (1), it may not demand the payment of the penal interest.

Explanation: For the purposes of this section: –

(i) “Approved securities” means securities of any State Government or of the Central Government and such bonds, both the principal whereof and the interest whereon shall have been fully and unconditionally guaranteed by any such government;

(ii) “Unencumbered approved securities” includes the approved securities lodged by the non-banking financial company with another institution for an advance or any other arrangement to the extent to which such securities have not been drawn against or availed of or encumbered in any manner;

(iii) “Quarter” means the period of three months, ending on the last day of March, June, September or December.

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

Section 45 IC. Reserve fund

(1) Every non-banking financial company shall create a reserve fund and transfer therein a sum not less than twenty per cent of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.

(2) No appropriation of any sum from the reserve fund shall be made by the non-banking financial company except for the purpose as may be specified by the bank from time to time and every such appropriation shall be reported to the bank within twenty-one days from the date of such withdrawal:

PROVIDED that the bank may, in any particular case and for sufficient cause being shown, extend the period of twenty-one days by such further period as it thinks fit or condone any delay in making such report.

(3) Notwithstanding anything contained in sub-section (1), the Central Government may, on the recommendation of the bank and having regard to the adequacy of the paid-up capital and reserves of a non-banking financial company in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section (1) shall not be applicable to the non-banking financial company for such period as may be specified in the order:

PROVIDED that no such order shall be made unless the amount in the reserve fund under sub-section (1) together with the amount in the share premium account is not less than the paid-up capital of the non-banking financial company.]

Section 45 J. Section

Bank to regulate or prohibit issue of prospectus or advertisement soliciting deposits of money.

]

The bank may, if it considers necessary in the public interest so to do, by general or special order-

(a) Regulate or prohibit the issue by any non-banking institution of any prospectus or advertisement soliciting deposits of money from the public; and

(b) Specify the conditions subject to which any such prospectus or advertisement, if not prohibited, may be issued.

Section 45 JA. Power of bank to determine policy and issue directions

¹[Power of bank to determine policy and issue directions. (1) If the bank is satisfied that, in the public interest or to regulate the financial system of the country to its advantage or to prevent the affairs of any non-banking financial company being conducted in a manner detrimental to the interest of the depositors or in a manner prejudicial to the interest of the non-banking financial company, it is necessary or expedient so to do, it may determine the policy and give directions to all or any of the non-banking financial companies relating to income recognition, accounting standards, making of proper provision for bad and doubtful debts, capital adequacy based on risk weights for assets and credit conversion factors for off balance-sheet items and also relating to deployment of funds by a non-banking financial company or a class of non-banking financial companies or non-banking financial companies generally, as the case may be, and such non-banking financial companies shall be bound to follow the policy so determined and the directions so issued.

(2) Without prejudice to the generality of the powers vested under sub-section (1), the bank may give directions to non-banking financial companies generally or to a class of non-banking financial companies or to any non-banking financial company in particular as to-

(a) The purpose for which advances or other fund based or non-fund based accommodation may not be made; and . (b) The maximum amount of advances or other financial accommodation or investment in shares and other securities which, having regard to the paid-up capital, reserves and deposits of the non-banking financial company and other relevant considerations, may be made by that non-banking financial company to any person or a company or to a group of companies.]

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

Section 45 K. Power of bank to collect information from non-banking institutions as to deposits and to give directions

(1) The bank may at any time direct that every non-banking institution shall furnish to the bank, in such form, at such intervals and within such time, such statements, information or particulars relating to or connected with deposits received by the non-banking institution, as may be specified by the bank by general or special order.

(2) Without prejudice to the generality of the power vested in the bank under sub-section (1), the statements, information or particulars to be furnished under sub-section (1), may relate to all or any of the following matters, namely, the amount of the deposits, the purposes and periods for which, and the rates of interest and other terms and conditions on which, they are received.

(3) The bank may, if it considers necessary in the public interest so to do, give directions to non-banking institutions either generally or to any non-banking institution or group of non-banking institutions in particular, in respect of any matters relating to or connected with the receipt of deposits, including the rates of interest payable on such deposits, and the periods for which deposits may be received.

(4) If any non-banking institution fails to comply with any direction given by the bank under sub-section (3), the bank may prohibit the acceptance of deposits by that non-banking institution.

(5) ¹[***]

(6) Every non-banking institution receiving deposits shall, if so required by the bank and within such time as the bank may specify, cause to be sent at the cost of the non-banking institution a copy of its annual balance-sheet and profit and loss account or other annual accounts to every person from whom the non-banking institution holds, as on the last day of the year to which the accounts relate, deposits higher than such sum as may be specified by the bank.

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1. Omitted by Act No. 51 of 1974.

Section 45 L. Power of bank to call for information from financial institutions and to give directions

(1) If the bank is satisfied for the purpose of enabling it to regulate the credit system of the country to its advantage it is necessary so to do, it may-

(a) Require financial institutions either generally or any group of financial institutions or financial institution in particular, to furnish to the Bank in such form, at such intervals and within such time, such statements, information or particulars relating to the business of such financial institutions or institution, as may be specified by the bank by general or special order;

(b) Give to such institutions either generally or to any such institution in particular, directions relating to the conduct of business by them or by it as financial institutions or institution.

(2) Without prejudice to the generality of the power vested in the bank under clause (a) of sub-section (1), the statements, information or particulars to be furnished by a financial institution may relate to all or any of the following matters, namely, the paid-up capital, reserves or other liabilities, the investments whether in government securities or otherwise, the persons to whom, and the purposes and periods for which, finance is provided and the terms and conditions, including the rate of interest, on which it is provided.

(3) In issuing directions to any financial institution under clause (b) of sub-section (1), the bank shall have due regard to the conditions in which, and the objects for which, the institution has been established, its statutory responsibilities, if any, and the effect the business of such financial institution is likely to have on trends in the money and capital markets.

Section 45 M. Duty of non-banking institutions to furnish statements, etc., required by bank

It shall be the duty of every non-banking institution to furnish the statements, information or particulars called for, and to comply with any direction given to it, under the provisions of this chapter.

Section 45 MA. Powers and duties of auditors

(1) It shall be the duty of an auditor of a non-banking institution to inquire whether or not the non-banking institution has furnished to the bank such statements, information or particulars relating to or connected with deposits received by it, as are required to be furnished under this chapter, and the auditor shall, except where he is satisfied on such inquiry that the non-banking institution has furnished such statements, information or particulars, make a report to the bank giving the aggregate amount of such deposits held by the non-banking institution.

¹[(1A) The bank may, on being satisfied that it is necessary so to do, in the public interest or in the interest of the depositors or for the purpose of proper assessment of the books of accounts, issue directions to any non-banking financial company or any class of non-banking financial companies or non-banking financial companies generally or to the auditors of such non-banking financial company or companies relating to balance sheet, profit and loss account, disclosure of liabilities in the books of accounts or any matter relating thereto.]

(2) Where, in the case of ²[a non-banking financial company] the auditor has made, or intends to make, a report to the bank under sub-section (1), he shall include in his report under sub-section (2) of section 227 of the Companies Act, 1956 (1 of 1956), the contents of the report which he has made, or intends to make, to the bank.

¹[(3) Where the bank is of the opinion that it is necessary so to do in the public interest or in the interest of the non-banking financial company, or in the interest of depositors of such company it may at any time by order direct that a special audit of the accounts of the non-banking financial company in relation to any such transaction or class of transactions or for such period or periods, as may be specified in the order, shall be conducted and the bank may appoint an auditor or auditors to conduct such special audit and direct the auditor or the auditors to submit the report to it.

(4) The remuneration of the auditors as may be fixed by the bank, having regard to the nature and volume of work involved in the audit and the expenses of or incidental to the audit, shall be borne by the non-banking financial company so audited.]

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

2. Substituted for words “a non-banking institution, being a company” by Reserve Bank of India (Amendment) Act, 1997, w.e.f. 9/1/1997.

Section 45 MB. Power of bank to prohibit acceptance of deposit and alienation of assets

¹[Power of bank to prohibit acceptance of deposit and alienation of assets. (1) If any non-banking financial company violates the provisions of any section or fails to comply with any direction or order given by the bank under any of the provisions of this Chapter, the bank may prohibit the non-banking financial company from accepting any deposit.

(2) Notwithstanding anything to the contrary contained in any agreement or instrument or any law for the time being in force, the bank, on being satisfied that it is necessary so to do in the public interest or in the interest of the depositors, may direct, the non-banking financial company against which an order prohibiting from accepting deposit has been issued, not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of the bank for such period not exceeding six months from the date of the order.

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

Section 45 MC. Power of bank to file winding up petition

(1) The bank, on being satisfied that a non-banking financial company-

(a) Is unable to pay its debt; or

(b) Has by virtue of the provisions of section 45-IA become disqualified to carry on the business of a non-banking financial institution; or

(c) Has been prohibited by the bank from receiving deposit by an order and such order has been in force for a period of not less than three months; or

(d) The continuance of the non-banking financial company is detrimental to the public interest or to the interest of depositors of the company,

May file an application for winding up of such non-banking financial company under the Companies Act, 1956 (1 of 1956).

(2) A non-banking financial company shall be deemed to be unable to pay its debt if it has refused or has failed to meet within five working days any lawful demand made at any of its offices or branches and the bank certifies in writing that such company is unable to pay its debt.

(3) A copy of every application made by the bank under sub-section (1) shall be sent to the Registrar of Companies.

(4) All the provisions of the Companies Act, 1956 (1 of 1956) relating to winding up of a company shall apply to a winding up proceeding initiated on the application, made by the bank under this provision.]

Section 45 N. Inspection

(1) The bank may, at any time, cause an inspection to be made by one or more of its officers or employees or other persons (hereinafter in this section referred to as the inspecting authority)-

(i) Of any non-banking institution, including a financial institution, for the purposes of verifying the correctness or completeness of any statement, information or particulars furnished to the bank or for the purpose of obtaining any information or particulars which the non-banking institution has failed to furnished on being called upon to do so; or

(ii) Of any non-banking institution being a financial institution, if the bank considers it necessary or expedient to inspect that institution.

(2) It shall be the duty of every director or member of any committee or other body for the time being vested with the management of the affairs of the non-banking institution or other officer or employee thereof to produce to the inspecting authority all such books, accounts and other documents in his custody or power and to furnish that authority with any statements and information relating to the business of the institution as that authority may require of him, within such time as may be specified by that authority

(3) The inspection authority may examine on oath director or member of any committee or body for the time being vested with the management of the affairs of the non-banking institution or other officer or employee thereof, in relation to its business and may administer an oath accordingly.

Section 45 NA. Deposits not to be solicited by unauthorised persons

No person shall solicit on behalf of any non-banking institution either by publishing or causing to be published any prospectus or advertisement or in any other manner deposits of money from the public unless-

(a) He has been authorised in writing by the said non-banking institution to do so and specifies the name of the institution which has so authorised him, and

(b) The prospectus or advertisement complies with any order made by the bank under section 45J and with any other provision of law for the time being in force, applicable to the publication of such prospectus or advertisement.

Section 45 NB. Disclosure of information

¹[Disclosure of information. (1) Any information relating to a non-banking financial company-

(i) Contained in any statement or return submitted by such company under the provisions of this Chapter; or

(ii) Obtained through audit or inspection or otherwise by the bank,

Shall be treated as confidential and shall not, except otherwise provided in this section, be disclosed.

(2) Nothing in this section shall apply to-

(a) The disclosure by any non-banking financial company, with the previous permission of the bank, of any information furnished to the bank under sub-section (1);

(b) The publication by the bank, if it considers necessary in the public interest so to do, of any information collected by it under sub-section (1) in such consolidated form as it may think fit without disclosing the name of any non-banking financial company or its borrowers;

(c) The disclosure or publication by the non-banking financial company or by the bank of any such information to any other non-banking financial company or in accordance with the practice and usage customary amongst such companies or as permitted or required under any other law:

PROVIDED that any such information received by a non-banking financial company under this clause shall not be published except in accordance with the practice and usage customary amongst companies or as permitted or required under any other law.

(3) Notwithstanding anything contained in this Act or in any other law for the time being in force, the bank, if it is satisfied that, in the public interest or in the interest of the depositors or the non-banking financial company or to prevent the affairs of any non-banking financial company being conducted in a manner detrimental to the interest of the depositors, it is expedient so to do, may, either on its own motion or on being requested, furnish or communicate any information relating to the conduct of business by any non-banking financial company to any authority constituted under any law.

(4) Notwithstanding anything contained in any law for the time being in force, no court or Tribunal or other authority shall compel the bank to produce or to give for inspection of any statement or other material obtained by the bank under any provisions of this Chapter.

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

Section 45 NC. Power of bank to exempt

The bank, on being satisfied that it is necessary so to do, may declare by notification in the Official Gazette that any or all of the provisions of this Chapter shall not apply to a non-banking institution or a class of non-banking institutions or a non-banking financial company or to any class or non-banking financial companies either generally or for such period as may be specified, subject to, such condition, limitations or restrictions as it may think fit to impose.]

Section 45 O. Section

[Section 45-O. Penalties: repealed by the Reserve Bank of India (Amendment) Act, 1974]

Section 45 P. Section

[Section 45P. Cognizance of offences: repealed by the Reserve Bank of India (Amendment) Act, 1974]

Section 45 Q. Chapter III B to override other laws

The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.

Section 45 QA. Power of Company Law Board to order repayment of deposit

¹[Power of Company Law Board to order repayment of deposit. (1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid in accordance with the terms and conditions of such deposit.

(2) Where a non-banking financial company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board constituted under section 10E of the Companies Act, 1956 (1 of 1956), may, if it is satisfied, either on its own motion or on an application of the depositor, that it is necessary so to do to safeguard the interests of the company, the depositors or in the public interest, direct, by order, the non-banking financial company to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the order:

PROVIDED that the Company Law Board may, before making any order under this sub-section, give a reasonable opportunity of being heard to the non-banking financial company and the other persons interested in the matter.

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1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

Section 45 QB. Nomination by depositors

(1) Where a deposit is held by a non-banking financial institution to the credit of one or more persons, the depositor or, as the case may be, all the depositors together may nominate, in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949), one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be returned by the non-banking financial institution.

(2) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made purports to confer on any person the right to receive the amount of deposit from the non-banking financial institution, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors, in relation to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949).

(3) Where the nominee is a minor, it shall be lawful for the depositor making the nomination to appoint, in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949), any person to receive the amount of deposit in the event of his death during the minority of the nominee.

(4) Payment by a non-banking financial institution in accordance with the provisions of this section shall constitute a full discharge to the non-banking financial institution of its liability in respect of the deposit:

PROVIDED that nothing contained in this sub-section shall affect the right or claim which any person may have against the person to whom any payment is made under this section.

(5) No notice of the claim of any person, other than the person or persons in whose name a deposit is held by a non-banking financial institution, shall be receivable by the non-banking institution, nor shall the non-banking financial institution be bound by any such notice even though expressly given to it:

PROVIDED that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such deposit is produced before a non-banking institution, the non-banking institution shall take due note of such decree, order, certificate or other authority.]

Section 45 R. Interpretation

¹[CHAPTER III-C

PROHIBITION OF ACCEPTANCE OF DEPOSITS BY UNINCORPORATED BODIES

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1. Inserted by Act No. 1 of 1984, w.e.f. 15/2/1984.

45R. Interpretation.

The words and expressions used in this Chapter and defined in Chapter IIIB shall have the meanings respectively assigned to them therein.

Section 45 S. Deposits not to be accepted in certain cases

¹[Deposits not to be accepted in certain cases. (1) No person, being an individual or a firm or an unincorporated association of individuals shall, accept any deposit-

(i) If his or its business wholly or partly includes any of the activities specified in clause (c) of section 45-I; or

(ii) If his or its principal business is that of receiving of deposits under any scheme or arrangement or in any other manner, or lending in any manner:

PROVIDED that nothing contained in this sub-section shall apply to the receipt of money by an individual by way of loan from any of his relatives or to the receipt of money by a firm by way of loan from the relative or relatives of any of the partners.

(2) Where any person referred to in sub-section (1) holds any deposit on the lst day of April, 1997 which is not in accordance with sub-section (1), such deposit shall be repaid by that person immediately after such deposit becomes due for repayment or within three years from the date of such commencement, whichever is earlier:

PROVIDED that if the bank is satisfied on an application made by any person to the bank that such person is unable to pay a part of the deposits for reasons beyond his control or such repayment shall cause extreme hardship to him, it may, by an order in writing, extend such period by a period not exceeding one year subject to such conditions as may be specified in the order.

(3) On and from the lst day of April, 1997, no person referred to in sub-section (1) shall issue or cause to be issued any advertisement in any form for soliciting deposit.

Explanation: For the purposes of this section, a person shall be deemed to be a relative of another if, and only if-

(i) They are members of a Hindu undivided family; or

(ii) They are husband and wife; or

(iii) The one is related to the other in the manner indicated in the List of relatives below:

List of relatives

1. Father, 2. Mother (including step-mother), 3. Son (including step-son), 4. Son’s wife, 5. Daughter (including step-daughter), 6. Father’s father, 7. Father’s mother,8. Mother’s mother,9. Mother’s father,10. Son’s son, 11. Son’s son’s wife, 12. Son’s daughter, 13. Son’s daughter’s husband, 14. Daughter’s husband, 15. Daughter’s son, 16. Daughter’s son’s wife, 17. Daughter’s daughter, 18. Daughter’s daughter’s husband, 19. Brother (including step-brother), 20. Brother’s wife, 21, Sister (including step-sister), 22. Sister’s husband.]

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1. Substituted by Reserve Bank of India (Amendment) Act, 1997, w.e.f. 1/4/1997.

Section 45 T. Power to issue search warrants

(1) Any court having jurisdiction to issue a search warrant under the Code of Criminal Procedure, 1973 (2 of 1974) may, on an application by an officer of the bank or of the State Government authorised in this behalf stating his belief that certain documents relating to acceptance of deposits in contravention of the provisions of section 45S are secreted in any place within the local limits of the jurisdiction of such court, issue a warrant to search for such documents.

(2) A warrant issued under sub-section (1) shall be executed in the same manner and shall have the same effect as a search warrant issued under the Code of Criminal Procedure, 1973.

Section 45 U. Definitions

¹[Definitions.

¹[CHAPTER III-D

REGULATION OF TRANSACTIONS IN DERIVATIVES, MONEY MARKET INSTRUMENTS, SECURITIES, ETC.

For the purpose of this Chapter,-

(a) “derivative” means an instrument, to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, credit rating or credit index, price of securities (also called “underlying”), or a combination of more than one of them and includes interest rate swaps, forward rate arrangements, foreign currency swaps, foreign currency-rupee swaps, foreign currency options, foreign currency-rupee options or such other instruments as may be specified by the Bank from time to time;

(b) “money market instruments” include call or notice money, term money, repo, reverse repo, certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity up to one year as the Bank may specify from time to time;

(c) “repo” means an agreement for borrowing funds by selling securities with an agreement to repurchase the securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed;

(d) “reverse repo” means an instrument for lending funds by purchasing securities with an agreement to resell the securities on a mutually agreed future date at an agreed price which includes interest for the funds lent;

(e) “securities” means securities of the Central Government or a State Government or such securities of a local au thority as may be specified in this behalf by the Central Government and, for the purposes of repo” or “reverse repo”, includes corporate bonds and debentures.]

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1. Ins. by Act No. 26 of 2006 w.e.f. 12-6-2006.

Section 45 V. Transactions in derivatives

¹[Transactions in derivatives. (1) Notwithstanding anything contained in the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or any other law for the time being in force, transactions in such derivatives, as may be specified by the Bank from time to time, shall be valid, if at least one of the parties to the transactions is the Bank, a scheduled bank, or such other agency falling under the regulatory purview of the Bank under the Act, the Banking Regulation Act, 1949 (10 of 1949), the Foreign Exchange Management Act, 1999 (42 of 1999), or any other Act or instrument having the force of law, as may be specified by the Bank from time to time.

(2) Transactions in such derivatives, as had been specified by the Bank from time to time, shall be deemed always to have been valid, as if the provisions of subsection (1) were in force at all material times.]

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1. Ins. by Act No. 26 of 2006 w.e.f. 12-6-2006.

Section 45 W. Power to regulate transactions in derivatives, money market instruments, etc

¹[Power to regulate transactions in derivatives, money market instruments, etc. (1) The Bank may, in public interest, or to regulate the financial system of the country to its advantage, determine the policy relating to interest rates or interest rate products and give directions in that behalf to all agencies or any of them, dealing in securities, money market instruments, foreign exchange, derivatives, or other instruments of like nature as the Bank may specify from time to time:

Provided that the directions issued under this sub-section shall not relate to the procedure for execution or settlement of the trades in respect of the transactions mentioned therein, on the Stock Exchanges recognised under Section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).

(2) The Bank may, for the purpose of enabling it to regulate agencies referred to in sub-section (1), call for any information, statement or other particular from them, or cause an inspection of such agencies to be made.]

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1. Ins. by Act No. 26 of 2006 w.e.f. 12-6-2006.

Section 45 X. Duty to comply with directions and furnish information

¹[Duty to comply with directions and furnish information. It shall be the duty of every director or member or other body for the time being vested with the management of the affairs of the agencies referred to in Section 45-W to comply with the directions given by the Bank and to submit the information or statement or particulars called for under that section.]

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1. Ins. by Act No. 26 of 2006 w.e.f. 12-6-2006.

Section 46. Contribution by Central Government to the reserve fund

The Central Government shall transfer to the bank rupee securities of the value of five crores of rupees to be allocated by the bank to the reserve fund.

Section 46 A. Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund

¹[Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund. The bank shall contribute every year such sums of money as it may consider necessary and feasible to do so, to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established and maintained by the National Bank under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981.

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1. Earlier sections 46A and 46B substituted by Act No. 61 of 1981, w.e.f. 12/7/1982.

Section 46 B. Section

[Section 46B: Repealed]

Section 46 C. National Industrial Credit (Long Term Operations) Fund

(1) The bank shall establish and maintain a fund to be known as the national industrial credit (long term operations) fund to which shall be credited-

(a) An initial sum of ten crores of rupees by the bank;

(b) Such further sums of money as the bank may contribute every year:

PROVIDED that the annual contribution during each of the five years commencing with the year ending on the 30th day of June, 1965 shall not be less than five crores of rupees:

PROVIDED FURTHER that the Central Government may, if the circumstances so require, authorise the bank to reduce the said sum of five crores of rupees in any year.

(2) The amount in the said fund shall be applied by the bank only to the following objects, namely: –

(a) The making to the Development Bank of loans and advances for the purpose of the purchase of, or subscription to, stocks, shares, bonds or debentures issued by the Industrial Finance Corporation of India, a State Financial Corporation or any other financial institution which may be notified by the Central Government in this behalf, or for the purposes of any other business of the Development Bank;

(b) The purchasing of bonds and debentures issued by the Development Bank;

¹[(c) The making to the Exim Bank or the Reconstruction Bank [or the Small Industries Bank], as the case may be, of loans and advances for the purposes of any business of the Exim Bank or the Reconstruction Bank ²[or the Small Industries Bank],

(d) The purchasing of bonds and debentures issued by the Exim Bank or the Reconstruction Bank [or the Small Industries Bank, as the case may be.

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1. Inserted by Act No. 28 of 1981, w.e.f. 1/1/1982.

2. Inserted by Act No. 39 of 1989, w.e.f. 7/3/1990.

Section 46 D. National Housing Credit (Long Term Operations) Fund

¹[National Housing Credit (Long Term Operations) Fund. (1) The Bank shall establish and maintain a Fund to be known as the National Housing Credit (Long Term Operations) Fund to which shall be credited every year such sums of money as it may consider necessary.

(2) The amount in the said fund shall be applied by the Bank only to the following objects, namely: –

(a) The making to the National Housing Bank of loans and advances for the purpose of any business of the National Housing Bank;

(b) The purchasing of bonds and debentures issued by the National Housing Bank.

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1. Inserted by Act No. 53 of 1987, w.e.f. 9/7/1988.

Section 47. Allocation of surplus profits

After making provisions for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and for all other matters for which provision is to be made by or under this Act or which are usually provided for by bankers, the balance of the profits shall be paid to the Central Government.

Section 48. Exemption of bank from income-tax and super-tax

Notwithstanding anything contained in the Income Tax Act, 1961 (43 of 1961), or any other enactment for the time being in force relating to income-tax or super-tax, the bank shall not be liable to pay income-tax or super-tax on any of income, profits or gains.

Section 49. Publication of bank rate

The bank shall make public from time to time the standard rate at which it is prepared to buy or re-discount bills of exchange or other commercial paper eligible for purchase under this Act.

Section 50. Auditors

(1) Not less than two auditors shall be appointed, and their remuneration fixed, by the Central Government.

(2) The auditors shall hold office for such term not exceeding one year as the Central Government may fix while appointing them, and shall be eligible for reappointment.

Section 51. Appointment of special auditors by government

Without prejudice to anything contained in section 50, the Central Government may at any time appoint the Comptroller and Auditor-General to examine and report upon the accounts of the bank.

Section 52. Powers and duties of auditors

(1) Every auditor shall be supplied with a copy of the annual balance-sheet, and it shall be his duty to examine the same, together with the accounts and vouchers relating thereto; and every auditor shall have a list delivered to him of all books kept by the bank, and shall at all reasonable times have access to the books, accounts and other documents of the bank, and may, at the expense of the bank, employ accountants or other person to assist him in investigating such accounts and may, in relation to such accounts, examine any director or officer of the bank.

(2) The auditors shall make a report to the Central Government upon the annual balance-sheet and accounts, and in every such report they shall state whether, in their opinion, the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the state of the bank’s affairs, and, in case they have called for any explanation or information from the Central Board, whether it has been given and whether it is satisfactory.

Section 53. Returns

(1) The bank shall prepare and transmit to the Central Government a weekly accounts of the Issue Department and of the Banking Department in such form as the Central Government may, by notification in the Gazette of India, prescribe. The Central Government shall cause these accounts to be published in the Gazette of India at such intervals and in such modified form as it may deem fit.

(2) The bank shall also, within two months from the date on which the annual accounts of the bank are closed, transmit to the Central Government a copy of the annual accounts signed by the Governor, the Deputy Governors and the Chief Accounting Officer of the bank and certified by the auditor, together with a report by the Central Board on the working of the bank throughout the year, and the Central Government shall cause such accounts and report to be published in the Gazette of India.

Section 54. Rural credit and development

¹[Rural credit and development. The bank may maintain expert staff to study various aspects of rural credit and development and in particular it may: –

(a) Tender expert guidance and assistance to the National Bank;

(b) Conduct special studies in such areas as it may consider necessary to do so for promoting integrated rural development.]

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1. Substituted by Act No. 61 of 1981, w.e.f. 1/5/1982.

Section 54 A. Delegation of powers

(1) The Governor may, by general or special order, delegate to a Deputy Governor, subject to such conditions and limitations, if any, as may be specified in the order, such of the powers and functions exercisable by him under this Act or under any other law for the time being in force as he may deem necessary for the efficient administration of the functions of the bank.

(2) The fact that a Deputy Governor exercises any power or does any act or thing in pursuance of this Act shall be conclusive proof of his authority to do so.

Section 54 AA. Power of bank to depute its employees to other institutions

(1) The bank may, notwithstanding anything contained in any law, or in any agreement, for the time being in force, depute any member of its staff for such period as it may thinks fit-

(a) To any institution which is wholly or substantially owned by the bank;

(b) To the Development Bank, so, however, that no such deputation shall continue after the expiration of thirty months from the commencement of section 5 of the Public Financial Institutions Laws (Amendment) Act, 1975;

(c) To the Unit Trust, so, however, that no such deputation shall continue after the expiration of thirty months from the date notified by the Central Government under sub-section (1) of section 4A of the Unit Trust of India Act, 1963 (52 of 1963);

And thereupon the person so deputed shall, during the period of his deputation, render such service to the institution to which he is so deputed as that institution may require.

(2) Where a person has been deputed to an institution under sub-section (1), he shall not be entitled to claim any salary, emoluments and other terms and conditions of service, which he would not have been entitled to claim if he had not been so deputed.

(3) Nothing contained in this section shall empower the bank to depute any member of its staff to any institution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled immediately before such deputation.

(4) For the purposes of this section, an institution shall be deemed to substantially owned by the bank if in the capital of the institution the bank has not less than forty per cent share.

Explanation: The word “capital” means, in relation to the Unit Trust, the initial capital of that Trust.

Section 55. Section

[Section 55. Reports by the bank: repealed by Act No. 62 of l948, w.e.f. 1st. January, 1949]

Section 56. Section

[Section 56. Power to require declaration as to ownership of registered shares: repealed by Act No. 62 of l948, w.e.f. 1st. January, 1949]

Section 57. Liquidation of the Bank

(1) Nothing in the Companies Act, 1956 (1 of 1956) shall apply to the bank and the bank shall not be placed in liquidation save by order of the Central Government and in such manner as it may direct.

(2) [Omitted]

Section 58. Power of the Central Board to make regulations

(1) The Central Board may, with the previous sanction of the Central Government, ³[by notification in the Official Gazette make regulations consistent with this Act to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provisions of this Act.

(2) In particular and without prejudice to the generality of the foregoing provision, such regulations may provide for all or any of the following matters, namely: –

[Clauses

(a) to (e) omitted]

(f) The manner in which the business of the Central Board shall be transacted, and the procedure to be followed at meetings thereof;

(g) The conduct of business of Local Boards and the delegation to such Boards of powers and functions;

(h) The delegation of powers and functions of the Central Board to Deputy Governors, Directors or officers of the Bank;

(i) The formation of Committees of the Central Board, the delegation of powers and functions of the Central Board to such Committees, and the conduct of business in such Committees;

(j) The constitution and management of staff and superannuation funds for the officers and servants of the bank;

(k) The manner and form in which contracts binding on the bank may be executed;

(l) The provision of an official seal of the bank and the manner and effect of its use;

(m) The manner and form in which the balance-sheet of the Bank shall be drawn up, and in which the accounts shall be maintained;

(n) The remuneration of Directors of the bank;

(o) The relations of the scheduled banks with the Bank and the returns to be submitted by the scheduled banks to the bank;

(p) The regulation of clearing-houses for ¹[banks (including post office savings banks);]

²[(pp) The regulation of fund transfer through electronic means between the banks or between the banks and other financial institutions referred to in clause (c) of section 45-I, including the laying down of the conditions subject to which banks and other financial institutions shall participate in such fund transfers, the manner of such fund transfers and the right and obligations of the participants in such fund transfers.]

(q) The circumstances in which, and the conditions and limitations subject to which, the value of any lost, stolen, mutilated or imperfect currency note of the Government of India or bank note may be refunded; and

(r) Generally, for the efficient conduct of the business of the bank.

(3) Any regulation made under this section shall have effect from such earlier or later date as may be specified in the regulation.

(4) Every regulation shall, as soon as may be after it is made by the Central Board, be forwarded to the Central Government and that government shall cause a copy of the same to be laid before each House of Parliament, 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 successive sessions aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation should not be made, the regulation shall, 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.

(5) Copies of all regulations made under this section shall be available to the public on payment.

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1. Substituted by Act No. 66 of 1988, w.e.f. 30/12/1988.

2. Inserted by the Information Technology Act, 2000, w.e.f. 9th. June, 2000.

3. Inserted by Act No. 66 of 1988, w.e.f. 30/12/1988.

Section 58 A. Protection of action taken in good faith

(1) No suit, prosecution or other legal proceeding shall lie against the Central Government or the bank or any other person in respect of anything which is in good faith done or intended to be done under this Act or in pursuance of any order, regulation or direction made or given thereunder.

(2) No suit or other legal proceeding shall lie against the Central Government or the bank for an damage caused or likely to be caused by anything which is in good faith done or intended to be done under this Act or in pursuance of any order, regulation or direction made or given thereunder.

Section 58 B. Penalties

(1) Whoever in any application, declaration, return, statement, information or particulars made, required or furnished by or under or for the purposes of any provisions of this Act, or any order, regulation or direction made or given thereunder or in any prospectus or advertisement issued for or in connection with the invitation by any person, of deposits of money from the public wilfully makes a statement which is false in any material particular knowing it to be false or wilfully omits to make a material statement shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.

(2) If any person fails to produce any book, account or other document or to furnish any statement, information or particulars which, under this Act or any order, regulation or direction made or given thereunder, it is his duty to produce or furnish or to answer any question put to him in pursuance of the provisions of this Act or of any order, regulation or direction made or given thereunder, he shall be punishable with fine which may extend to two thousand rupees in respect of each offence and if he persists in such failure or refusal, with further fine which may extend to one hundred rupees for every day, after the first during which the offence continues.

(3) If any person contravenes the provisions of section 31, he shall be punishable with fine, which may extend to the amount of the bill of exchange, hundi, promissory note or engagement for payment of money in respect whereof the offence is committed.

(4) If any person discloses any credit information, the disclosure of which is prohibited under section 45E, he shall be punishable with imprisonment for a term, which may extend to six months, or with fine, which may extend to one thousand rupees, or with both.

¹[(4A) If any person contravenes the provisions of sub-section (1) of section 45-IA, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

(4AA) If any auditor fails to comply with any direction given or order made by the bank under section 45MA, he shall be punishable with fine, which may extend to five thousand rupees.

(4AAA) Whoever fails to comply with any order made by the Company Law Board under sub-section (2) of section 45QA, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to a fine of not less than rupees fifty for every day during which such non-compliance continues.]

(5) ²[If any person other than an auditor]-

(a) Receives any deposit in contravention of any direction given or order made under Chapter IIIB; or

³[(aa) Fails to comply with any direction given or order made by the bank under any of the provisions of Chapter III B; or]

(b) Issues any prospectus or advertisement otherwise than in accordance with section 45NA or any order made under section 45J, as the case may be,

He shall be punishable with imprisonment for a term, which may extend to three years and shall also be liable to fine which may extend-

(i) In the case of a contravention falling under clause (a), to twice the amount of the deposit received; and

(ii) In the case of a contravention falling under clause (b), to twice the amount of the deposit called for by the prospectus or advertisement.

³[(5A) If any person contravenes any provision of section 45S, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of deposit received by such person in contravention of that section, or two thousand rupees, whichever is more, or with both:

PROVIDED that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees.

(5B) Notwithstanding anything contained in section 29 of the Code of Criminal Procedure, 1973 (2 of 1974), it shall be lawful for a Metropolitan Magistrate or a Judicial Magistrate of the first class to impose a sentence of fine in excess of the limit specified in that section on any person convicted under sub-section (5A).]

(6) If any other provision of this Act is contravened or if any default is made in complying with any other requirement of this Act or of any order, regulation or direction made or given or condition imposed thereunder, any person guilty of such contravention or default shall be punishable with fine which may extend to two thousand rupees and where a contravention or default is a continuing one, with further fine which may extend to one hundred rupees for every day, after the first, during which the contravention or default continues.

——————–

1. Inserted by Reserve Bank of India (Amendment) Act, 1997, w.r.e.f. 9/1/1997.

2. Substituted for the words “If any person” by Reserve Bank of India (Amendment) Act, 1997, w.e.f. 9/1/1997.

3. Inserted by Act No. 1 of 1984, w.e.f. 15/2/1984.

Section 58 C. Offences by companies

(1) Where a person committing a contravention or default referred to in section 58B is a company, every person who, at the time the contravention or default was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the contravention or default and shall be liable to be proceeded against and punished accordingly:

PROVIDED that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention of default was committed without his knowledge or that he had exercised all due diligence to prevent the contravention or default.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the same was committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary, or other officer or employee of the company, such director, manager, secretary, other officer or employee shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Explanation I: Any offence punishable under this Act shall be deemed to have been committed at the place where the registered office or the principal place of business, as the case may be, in India, of the company is situated.

Explanation II: For the purpose of this section: –

(a) “A company” means any body corporate and includes a corporation, a non-banking institution, a firm, a co-operative society or other association of individuals;

(b) “Director”, in relation to a firm, means a partner in the firm.

Section 58 D. Application of section 58B barred

Nothing contained in section 58B shall apply to, or in respect of, any matter dealt with in section 42.

Section 58 E. Cognizance of offences

(1) No court shall take cognizance of any offence punishable under this Act except upon a complaint in writing made by an officer of the Bank, generally or specially authorised in writing in this behalf by the Bank, and no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or a court superior thereto shall try any such offence:

¹[PROVIDED that in respect of any offence punishable under sub-section (5A) of section 58B, a complaint in writing may also be made by an officer of the State Government, generally or specially authorised in writing in this behalf by that government.

(2) Notwithstanding any thing contained in the Code of Criminal Procedure, 1973 (2 of 1974) a Magistrate may, if he sees reason so to do, dispense with the personal attendance of the officer of the Bank filing the complaint, but the Magistrate may in his discretion, at any stage of the proceedings, direct the personal attendance of the complainant.

——————–

1. Inserted by Act No. 1 of 1984, w.e.f. 15/2/1984.

Section 58 F. Application of fine

A court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in, or towards payment of, the costs of the proceedings.

Section 58 G. Power of bank to impose fine

¹[Power of bank to impose fine. (1) Notwithstanding anything contained in section 58B, if the contravention or default of the nature referred to in section 58B is committed by a non-banking financial company, the bank may impose on such non-banking financial company-

(a) A penalty not exceeding five thousand rupees; or

(b) Where the contravention or default is under sub-section (4A) or clause (a) or clause (aa) of sub-section (5) of section 58B, a penalty of five lakh rupees or twice the amount involved in such contravention or default, where the amount is quantifiable, whichever is more; and where such contravention or default is a continuing one, further penalty which may extend to twenty-five thousand rupees for every day, after the first, during which the contravention or default continues.

(2) For the purpose of imposing penalty under sub-section (1), the bank shall serve a notice on the non-banking financial company requiring it to show cause why the amount specified in the notice should not be imposed as a penalty and a reasonable opportunity of being heard shall also be given to such non-banking financial company.

(3) Any penalty imposed by the bank under this section shall be payable within a period of thirty days from the date on which notice issued by the bank demanding payment of the sum is served on the non-banking financial company and, in the event of failure of the non-banking financial company to pay the sum within such period, may be levied on a direction made by the principal civil court having jurisdiction in the area where the registered office or the head office of the non-banking financial company is situated :

PROVIDED that no such direction shall be made, except on an application made by an officer of the bank authorised in this behalf, to by the principal civil court.

(4) The court, which makes a direction under sub-section (3), shall issue a certificate specifying the sum payable by the non-banking financial company and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a civil suit.

(5) Non complaint shall be filed against any non-banking financial company in any court of law pertaining to any contravention or default in respect of which the bank under this section has imposed any penalty.

(6) Where any complaint has been filed against a non-banking financial company in a court in respect of contravention or default of the nature referred to in section 58B, no proceedings for imposition of penalty against that non-banking financial company shall be taken under this section.]

——————–

1. Inserted by Act No. 1 of 1984, w.e.f. 15/2/1984.

Section 59-61. Sections

[Sections 59 to 61: repealed by Act No. 20 of 1937]

Schedule 1

SCHEDULE I

[Section 9]

¹[1. The Western Area shall consist of the States of Goa, Gujarat, Madhya Pradesh and Maharashtra and the Union Territories of Dadra and Nagar Haveli, and Daman and Diu.

2. The Eastern Area shall consist of the States of Arunachal Pradesh, Assam, Bihar, Manipur, Meghalaya, Mizoram, Nagaland, Orissa, Sikkim, Tripura and West Bengal and the Union Territories of Andaman and Nicobar Islands.]

3. The Northern Area shall consist of the States of Jammu and Kashmir, Punjab, Haryana, Himachal Pradesh, Rajasthan and Uttar Pradesh and the Union territories of Chandigarh and Delhi.

4. The Southern Area shall consist of the States of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala and the Union territories of Pondicherry and Lakshadweep.

——————–

1. Substituted by Reserve Bank of India (Amendment) Act, 1997, w.e.f. 9/1/1997.

Schedule 2

SCHEDULE II

SCHEDULED BANKS

[Sections 2(e) and 42]

Abhyudaya Co-operative Bank Ltd., Bombay (18/8/1988 w.e.f. 19/1/1988)

ABN Amro Bank N.V. (11/10/1991)

Adhiyaman Grama Bank, Dharmapuri (Tamil Nadu) (27/12/1985)

Ajgemene bank Nederland N.V.

Akola Gramin Bank, Akola (Maharashtra) (16/10/1983)

Alaknanda Gramin Bank, Pauri (U.P.) (31/8/1985)

Aligarh Gramin Bank, Aligarh (U.P.) (22/3/1981)

Allahabad Bank

Allahabad Kshetriya Gramin Bank, Allahabad (U.P.) (23/8/1980)

Alwar-Bharatpur Anchalik Gramin Bank, Bharatpur (Rajasthan)

(21/2/1981)

Ambala-Kurukshetra Gramin Bank, Ambala City (Haryana) (18/1/1985)

American Express International Banking Corporation

Andhra Bank, Masulipatam (A.P.)

Andhra Pradesh State Co-operative Bank Ltd., Hyderabad (A.P.) (2/7/1966)

ANZ Grindlays Bank p.l.c. (25/1/1990)

Arab Bangladesh Bank Ltd.

Aravali Kshetriya Gramin Bank, Sawaimadhopur (Rajasthan) (2/10/1981)

Arunachal Pradesh Rural Bank, Pasighat (Arunachal Pradesh) (30/11/1983)

Aurangabad-Jalna Gramin Bank, Aurangabad (Maharashtra) (6/12/1982)

Baitarani Gramya Bank, Baripada (Orissa) (23/6/1980)

Balasore Gramya Bank, Balasore (Orissa) (6/8/1980)

Ballia Kshetriya Gramin Bank, Ballia (U.P.) (25/12/1976)

Banaskantha-Mehsana Gramin Bank, Patan (Gujarat) (29/11/1981)

Bank International Indonesia

Bank of America National Trust and Savings Association (29/5/1964)

Bank of Bahrain and Kuwait B.S.C. (14/7/1986)

Bank of Baroda

Bank of Ceylon

Bank of Cochin Ltd., Ernakulam

Bank of Credit and Commerce International (Overseas) Ltd.

Bank of India

Bank of Karad Ltd., Karad (5/6/1968)

Bank of Madura Ltd., Madurai (T.N.)

Bank of Maharashtra

Bank of Nova Scotia, Toronto (Canada) (31/5/1984)

Bank of Oman Ltd.

Bank of Punjab Ltd. (19/4/1995)

Bank of Rajasthan Ltd., Udaipur (Rajasthan)

Bank of Tamilnad Ltd. (22/11/1979)

Bank of Thanjaur Ltd.

1[The Bank of Tokyo-Mitsubishi UFJ Ltd.]

Banque de I’ Indochine et de Suez (INDOSUEZ) (2/10/1981)

Banque Nationale de Paris (1/7/1966)

Barabanki Gramin Bank, Barabanki (U.P.)

Bardhaman Gramin Bank, Burdwan (W.B.) (25/11/1980)

Bareilly Corporation Bank Ltd., Bareilly (U.P.)

Bareilly Kshetriya Gramin Bank, Bareilly (U.P.) (27/9/1980)

Bassein Catholic Co-operative Bank Ltd., Papdy Vasai (Town) Thane District, Maharashtra (1/11/1990)

Bastar Kshetriya Gramin Bank, Jagdalpur (M.P.) (15/12/1979)

Basti Gramin Bank, Basti (U.P.) (1/8/1980)

Begusarai Kshetriya Gramin Bank, Begusarai (Bihar) (23/3/1985)

Benares State Bank

Bhagalpur-Banka Kshetriya Gramin Bank, Bhagalpur (Bihar) (22/3/1985)

Bhagirath Gramin Bank, Sitapur (U.P.) (19/9/1976)

Bhandara Gramin Bank, Bhandara (Maharashtra)

Bharat Overseas Bank Ltd., Madras

Bhilwara-Ajmer Kshetriya Gramin Bank, Bhilwara (Rajasthan) (24/3/1984)

Bhojpur Rohtas Gramin Bank, Arrah (Bihar) (26/12/1975)

Bidur Gramin Bank, Bijnor (U.P.) (18/1/1983)

Bihar State Co-operative Bank Ltd., Patna (Bihar) (2/7/1966)

Bijapur Grameena Bank, Bijapur (Karnataka) (31/3/1983)

Bikaner Kshetriya Gramin Bank, Bikaner (Rajasthan) (25/3/1985)

Bilaspur-Raipur Kshetriya Gramin Bank, Bilaspur (M.P.) (20/10/1976)

Bolangir Anchalik Gramya Bank, Bolangir (10/4/1976)

Bombay Mercantile Co-operative Bank Ltd., Bombay (18/8/1988 w.e.f. 1/9/1988)

British Bank of the Middle East

Buldhana Gramin Bank, Buldhana (Maharashtra) (17/10/1985)

Bundelkhand Kshetriya Gramin Bank, Tikkamgarh (M.P.)

Bundi-Chittorgarh Kshetriya Gramin Bank, Bundi (Rajasthan) (23/3/1984)

Cachar Gramin Bank, Silchar (Assam) (31/3/1981)

Canara Bank

Catholic Syrian Bank Ltd., Trichur (18/8/1969)

Cauvery Grameena Bank, Mysore (2/10/1976)

Central Bank of India

Centurion Bank Ltd. (27/1/1995)

Chaitanya Grameena Bank, Tenali (Guntur) (A.P.) (25/3/1983)

Chambal Kshetriya Gramin Bank, Morena (M.P.) (11/2/1984)

Champaran Kshetriya Gramin Bank, Motihari (Bihar) (21/3/1976)

Chandrapur Gadchiroli Gramin Bank, Chandrapur (Maharashtra)

(4/2/1983)

Chartered Bank

Chase Manhattan Bank N.A. (7/12/1994)

Chhatrasal Gramin Bank, Orai (U.P.) (30/3/1982)

Chhindwara-Seoni Kshetriya Gramin Bank, Chhindwara (M.P.)

(20/1/1983)

Chikmagalur-Kodaga Grameena Bank, Chikmagalur (Karnataka) (28/4/1984)

Chitradurga Gramin Bank, Chitradurga (Karnataka) (5/8/1981)

Citibank N.A.

City Union Bank Ltd.

Commercial Bank of Korea Ltd.

Corporation Bank Ltd.

Cosmos Co-operative Bank Ltd., Pune (Maharashtra) (1/11/1990)

Credit Agricole Indosuez

Credit Lyonnais (28/12/1989)

Cuttack Gramya Bank, Cuttack (Orissa) (11/10/1976)

Damoh-Panna-Sagar Kshetriya Gramin Bank, Damoh (M.P.) (30/3/1981)

Dena Bank

Deutsche Bank A.G. (15/11/1980) (13/12/1986) (5/4/1988)

Development Bank of Singapore Ltd.

Development Co-operative Bank Ltd., Bombay (18/8/1988 w.e.f. 1/9/1988)

Development Credit Bank Ltd.

Devipatan Kshetriya Gramin Bank, Gonda (U.P.) (17/1/1981)

Dewas Shajapur Kshetriya Gramin Bank, Dewas (M.P.) (30/3/1982)

Dhanalakshmi Bank Ltd., Trichur (Kerala)

Dhenkanal Gramya Bank, Dhenkanal (Orissa) (12/8/1981)

Dresdner Bank AG

Dungarpur-Banswara Kshetriya Gramin Bank, Dungarpur (Rajasthan) (25/3/1984)

Durg-Rajnandgaon Gramin Bank, Rajnandgaon (M.P.) (12/3/1980)

Ellaquai Dehati Bank, Srinagar (J&K) (10/7/1979)

Emirates Commercial Bank Ltd. (6/3/1981)

Etah Gramin Bank, Etah (U.P.) (29/3/1981)

Etawah Kshetriya Gramin Bank, Etawah (U.P.) (18/3/1980)

European Asian Bank

Faizabad Kshetriya Gramin Bank, Faizabad (U.P.) (5/9/1980)

Faridkot Bhatinda Kshetriya Gramin Bank, Bhatinda (Punjab) (22/3/1986)

Farrukhabad Gramin Bank, Farrukhabad (U.P.) (29/3/1976)

Fatehpur Kshetriya Gramin Bank, Fatehpur (U.P.) (6/9/1980)

Federal Bank Ltd., Alwaye (Kerala)

Ganga Yamuna Gramin Bank, Dehradun (U.P.) (29/3/1985)

Gaur Gramin Bank, Malda (W.B.)

Giridih Kshetriya Gramin Bank, Giridih (Bihar) (30/6/1984)

Global Trust Bank Ltd. (11/10/1994)

Goa State Co-operative Bank Ltd. (15/12/1994)

Godavari Grameena Bank, Rajahmundry (A.P.) (11/4/1987)

Golconda Grameen Bank, Hyderabad (A.P.) (15/2/1985)

Gomti Gramin Bank, Jaunpur (U.P.) (30/3/1981)

Gopalganj Kshetriya Gramin Bank, Gopalganj (Bihar) (27/3/1981)

Gorakhpur Kshetriya Gramin Bank, Gorakhpur (U.P.) (30/9/1975)

Grindlays Bank P.L.C.

Gujarat State Co-operative Bank Ltd., Ahmedabad (Gujarat) (2/7/1966)

Gurdaspur Amritsar Kshetriya Gramin Vikas Bank, Gurdaspur (Punjab)

(31/3/1983)

Gurgaon Gramin Bank, Gurgaon (Haryana) (28/3/1976)

Gwalior Datia Kshetriya Gramin Bank, Datia (M.P.) (19/9/1985)

HDFC Bank Ltd. (23/1/1995)

Habib Bank Ltd.

Hadoti Kshetriya Gramin Bank, Kotah (Rajasthan) (14/10/1982)

Hanil Bank

Hardoi-Unnao Gramin Bank, Hardoi (U.P.) (7/6/1977)

Haryana Kshetriya Gramin Bank, Bhiwani (Haryana)

Haryana State Co-operative Apex Bank Ltd., Ambala at Chandigarh

Hazaribagh Kshetriya Gramin Bank, Hazaribagh (Bihar) (19/11/1984)

Himachal Gramin Bank, Mandi (H.P.) (23/12/1976)

Hindon Gramin Bank, Ghaziabad (U.P.) (28/3/1987)

Hindustan Commercial Bank Ltd., Kanpur (UP)

Hissar-Sirsa Kshetriya Gramin Bank, Hissar (Haryana) (2/10/1984)

Hongkong and Shanghai Banking Corporation Ltd. (25/1/1990)

Howrah Grameen Bank, Howrah (W.B.) (12/6/1982)

IDBI Bank Ltd.

Indian Bank

Indian Overseas Bank

Indore-Ujjain Kshetriya Gramin Bank, Ujjain (M.P.) (19/11/1984)

ING Bank N.V.

Jaipur Nagaur Aanchalik Gramin Bank, Jaipur (Rajasthan)

Jammu and Kashmir Bank Ltd., Srinagar (11/8/1971)

Jammu Rural Bank, Jammu (12/3/1976)

Jamnagar Gramin Bank, Jamnagar (Gujarat) (26/12/1978)

Jamuna Gramin Bank, Agra (U.P.) (2/12/1983)

Janata Sahakari Bank Ltd., Pune (Maharashtra) (18/8/1988 w.e.f. 1/9/1988)

Jhabua-Dhar Kshetriya Gramin Bank, Jhabua (M.P.) (20/6/1980)

Junagadh Amreli Gramin Bank, Junagadh (Gujarat)

Ka Bank Nangkyndong Ri Khasi Jaintia (Meghalaya) (29/12/1981)

Kakathiya Grameena Bank, Warangal (A.P.) (28/6/1982)

Kalahandi Anchalika Gramya Bank, Bhawanipatna (Orissa) (26/5/1980)

Kalpatharu Grameena Bank, Tumkur (Karnataka) (31/3/1982)

Kalupur Commercial Co-operative Bank Ltd., Ahmedabad (Gujarat) (18/8/1988 w.e.f. 1/9/1988)

Kamraj Rural Bank, Sopore (J&K) (16/6/1981)

Kanakadurga Grameena Bank, Gudivada (A.P.) (28/3/1986)

Kanpur Kshetriya Gramin Bank, Kanpur (U.P.) (27/2/1980)

Kapurthala Firozpur Kshetriya Gramin Bank, Kapurthala (Punjab) (30/3/1983)

Karbi N.C. Rural Bank, Diphu (Assam) (27/1/1982)

Karnataka Bank Ltd., Mangalore (Karnataka)

Karnataka State Co-operative Apex Bank Ltd., Bangalore (Karnataka) (2/7/1966)

Karur Vysya Bank

Kashi Gramin Bank, Varanasi (U.P.) (28/7/1980)

Kerala State Co-operative Bank Ltd., Trivandrum (2/7/1966)

Khasi Jaintia Rural Bank, Shillong (Meghalaya)

Kisan Gramin Bank, Budaun (U.P.) (19/5/1980)

Kolar Gramin Bank, Kolar (Karnataka) (16/2/1983)

Koraput-Panchabati Gramya Bank, Jeypore (Orissa) (13/11/1976)

Kosi Kshetriya Gramin Bank, Purnea (Bihar) (23/12/1976)

Krishna Grameena Bank, Gulbarga (Karnataka) (1/12/1978)

Krung Thai Bank Public Company Ltd.

Kshetriya Gramin Bank, Hoshangabad (20/1/1976)

Kshetriya Kisan Gramin Bank, Mainpuri (U.P.) (20/5/1980)

Kumbakon City Union Bank Ltd.

Kutch Gramin Bank, Bhuj (Gujarat) (23/12/1978)

Lakhimi Gaonlia Bank, Golaghat (Assam) (29/7/1980)

Lakshmi Commercial Bank Ltd.

Lakshmi Vilas Bank Ltd. Karur

Langpi Dehangi Rural Bank, Dhipu (Assam)

Lord Krishna Bank Ltd., Kodungallur (16/4/1971)

Madhubani Kshetriya Gramin Bank, Madhubani (Bihar) (31/3/1979)

Madhya Pradesh (Rajya Sahakari Bank Maryadit), Jabalpur (M.P.)

Madhya Pradesh State Co-operative Bank Ltd., Madras (2/7/1966)

Madras State Co-operative Bank Ltd., Madras (2/7/1966)

Magadh Gramin Bank, Gaya (Bihar) (10/11/1976)

Mahakaushal Kshetriya Gramin Bank, Narsinghpur (M.P.) (1/4/1984)

Maharashtra Co-operative Bank Ltd., Mumbai

Maharashtra State Co-operative Bank Ltd., Bombay (Incorporating the Vidarbha Co-operative Bank Ltd.) (2/7/1966)

Malaprabha Grameena Bank, Dharwar (13/8/1976)

Mallabhum Gramin Bank, Bankura (9/4/1976)

Malwa Gramin Bank, Sangrur (Punjab) (27/2/1986)

Mandla-Balaghat Kshetriya Gramin Bank, Mandia (M.P.) (14/11/1982)

Manipur Rural Bank, Imphal (Manipur) (28/5/1981)

Manjira Grameena Bank, Sangareddy, Medak, (A.P.) (31/3/1982)

Mapura Urban Co-operative Bank of Goa Ltd., Goa

Marathwada Gramin Bank, Nanded (Maharashtra) (26/8/1976)

Marudhar Kshetriya Gramin Bank, Churu (Rajasthan) (29/3/1979)

Marwar Gramin Bank, Pali (6/9/1976)

Mayurakshi Gramin Bank, Suri (West Bengal) (16/10/1976)

Mercantile Bank Ltd.

Mewar Aanchalik Gramin Bank, Udaipur (Rajasthan) (25/1/1983)

Miraj State Bank Ltd.

Mithila Kshetriya Gramin Bank, Darbhanga (Bihar) (14/3/1980)

Mitsui Taiyo Kobe Bank Ltd.

Mizoram Rural Bank, Aizawl (Mizoram) (27/9/1983)

Monghyr Kshetriya Gramin Bank, Monghyr (Bihar) (12/3/1977)

Murshidabad Gramin Bank, Berhampore (W.B.) (17/11/1984)

Muzaffarnagar Kshetriya Gramin Bank, Muzaffarnagar (U.P.) (27/7/1984)

Mysore State Co-operative Apex Bank Ltd., Bangalore (2/7/1966)

Nadia Gramin Bank, Krishnagar (W.B.) (27/8/1980)

Nagaland Rural Bank, Kohima (Nagaland) (30/3/1983)

Nagarjuna Gramin Bank, Khammam (30/4/1976)

Nalanda Gramin Bank, Biharshariff (Bihar) (31/3/1979)

Nainital Almora Kshetriya Grameen Bank, Nainital (U.P.) (26/3/1983)

Nainital Bank Ltd., Nainital (U.P.)

Nedungadi Bank Ltd., Calicut (Orissa)

Netravati Grameena Bank, Mangalore (Karnataka) (11/10/1984)

New Bank of India

New India Co-operative Bank Ltd., Bombay, Maharashtra (1/9/1990)

Nimar Kshetriya Gramin Bank, Khargone (M.P.) (26/6/1982)

North Malabar Gramin Bank, Cannanore (Kerala) (12/12/1976)

Oman International Bank S.A.O.G. (25/1/1990)

Oriental Bank of Commerce

Orissa State Co-operative Bank Ltd., Cuttack (2/7/1966)

Overseas Chinese Banking Corporation Ltd.

Palamau Kshetriya Gramin Bank, Daltonganj (Bihar) (15/5/1980)

Panchmahal Gramin Bank, Godhra (Gujarat) (30/3/1982)

Pandyan Grameen Bank, Sattur (T.N.) (9/3/1977)

Parvatiya Gramin Bank, Chamba (H.P.) (2/11/1985)

Parur Central Bank Ltd.

Patliputra Gramin Bank, Patna (Bihar) (27/11/1984)

Pinakini Grameena Bank, Nellore (A.P.)

Pithoragarh Kshetriya Gramin Bank, Pithoragarh (U.P.) (27/3/1985)

Pragjyotish Gaonlia Bank, Nalbari (Assam) (6/7/1976)

Pratapgarh Kshetriya Gramin Bank, Pratapgarh (U.P.) (25/8/1980)

Prathama Bank, Moradabad (30/9/1975)

Punjab and Sind Bank, Amritsar

Punjab Co-operative Bank, Amritsar

Punjab National Bank

Punjab State Co-operative Bank Ltd., Chandigarh

Purbanchal Bank Ltd., Gauhati

Puri Gramya Bank, Pipli (Orissa) (25/2/1976)

Rae Bareli Kshetriya Gramin Bank, Rae Bareli (U.P.) (29/3/1976)

Raigarh Kshetriya Gramin Bank, Raigarh (M.P.) (31/1/1981)

Rajasthan State Co-operative Bank Ltd., Jaipur (Rajasthan) (2/7/1966)

Rajgarh Kshetriya Gramin Bank, Rajgarh (M.P.)

Rajgarh Sehore Kshetriya Gramin Bank, Biaora (Rajgarh) (M.P.)

(23/3/1983)

Rajkot Nagrik Sahakari Bank Ltd., Bombay (18/8/1988 w.e.f. 1/9/1988)

Ranchi Kshetriya Gramin Bank, Ranchi (Bihar) (21/6/1980)

Rani Lakshmi Bai Kshetriya Gramin Bank, Jhansi (U.P.) (31/3/1982)

Ratlam Mandsaur Kshetriya Gramin Bank, Mandsaur (M.P.)

Ratnagiri Sindudurg Gramin Bank, Ratnagiri (Maharashtra) (19/11/1983)

Ratnakar Bank Ltd., Kolhapur

Rayalaseema Grameena Bank, Cuddapah (6/8/1976)

Rewa-Sidhi Gramin Bank, Rewa (M.P.) (20/12/1976)

Rupee Co-operative Bank Ltd., Pune (Maharashtra) (18/8/1988 w.e.f.

1/9/1988)

Rushikulya Gramya Bank, Berhampur (Orissa) (14/2/1981)

SBI Commercial and International Bank Ltd. (30/11/1993)

Sabarkantha-Gandhinagar Gramin Bank, Himatnagar (Gujarat) (9/8/1984)

Sagar Gramin Bank, Amtala (West Bengal), (24/9/1980)

Sahyadri Gramin Bank, Shimoga (Karnataka) (6/9/1984)

Samastipur Kshetriya Gramin Bank, Samastipur (Bihar) (12/5/1980)

Samyut Kshetriya Gramin Bank, Azamgarh (U.P.) (6/1/1976)

Sangameshwara Grameena Bank, Mahboobnagar (A.P.) (31/3/1982)

Sangli Bank

Sangli Urban Co-operative Bank Ltd., Sangli (18/8/1988 w.e.f. 1/9/1988)

Santhal Pargannas Gramin Bank, Dumka (Bihar) (30/3/1977)

Saran Kshetriya Gramin Bank, Chapra (Bihar) (28/3/1981)

Saraswat Co-operative Bank Ltd., Bombay (18/8/1988 w.e.f. 1/9/1988)

Sarayu Gramin Bank, Lakhimpur-Kheri (U.P.) (9/8/1983)

Sarda Gramin Bank, Satna (M.P.)

Satar Bank of Mysore (Karnataka)

Shahadol Kshetriya Gramin Bank, Shahadol (M.P.)

Shahjahanpur Kshetriya Gramin Bank, Shahjahanpur (U.P.) (24/3/1983)

Shamrao Vithal Co-operative Bank Ltd., Bombay (18/8/1988 w.e.f. 1/9/1988)

Sharda Gramin Bank, Satna (31/3/1979)

Shekhawati Gramin Bank, Sikar (Rajasthan) (7/10/1976)

Shivalik Kshetriya Gramin Bank, Hoshiarpur, (Punjab) (30/3/1983)

Shivpuri-Guna Kshetriya Gramin Bank, Shivpuri (M.P.) (28/3/1981)

Shri Venkateswara Grameena Bank, Chittoor (A.P.) (22/3/1981)

Singhbhum Kshetriya Gramin Bank, Chaibasa (Bihar) (31/3/1979)

Siwan Kshetriya Gramin Bank, Siwan (Bihar) (31/3/1981)

Solapur Gramin Bank, Solapur (Maharashtra) (21/1/1984)

Sonali Bank

South Indian Bank Ltd., Trichur (Kerala)

South Malabar Gramin Bank, Malappuram (Kerala) (11/12/1976)

Sravasthi Gramin Bank, Bahraich (U.P.) (4/3/1980)

Sree Anantha Grameena Bank, Anantapur (A.P.) (1/11/1979)

Sri Saraswati Grameena Bank, Adilabad (A.P.) (30/3/1982)

Sri Sathavahana Grameena Bank, Karimnagar (A.P.) (28/3/1983)

Sri Visakha Grameena Bank, Srikakulam (A.P.) (30/9/1976)

Sriganganagar Kshetriya Gramin Bank, Sriganganagar (Rajasthan)

(31/3/1984)

Srirama Grameena Bank, Nizamabad (A.P.) (21/2/1985)

Standard Chartered Bank

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore

State Bank of Mauritius Ltd. (12/12/1994)

State Bank of Mysore

State Bank of Patiala

State Bank of Saurashtra, Bhavnagar

State Bank of Travancore

Subansiri Gaonlia Bank, North Lakhimpur (Assam) (30/3/1982)

Sultanpur Kshetriya Gramin Bank, Sultanpur (U.P.) (8/2/1977)

Sumitomo Bank Ltd.

Surat Peoples Co-operative Bank Ltd., Surat (Gujarat) (18/8/1988 w.e.f. 1/9/1988)

Surat-Bharuch Gramin Bank, Bharuch (Gujarat) (28/2/1984)

Surendranagar-Bhavnagar Gramin Bank, Surendranagar (Gujarat) (15/12/1983)

Surguja Kshetriya Gramin Bank, Ambikapur (M.P.) (24/10/1979)

Syndicate Bank

Tamil Nadu Mercantile Bank Ltd.

Tamil Nadu State Apex Co-operative Bank Ltd., Madras (25/5/1989)

Thane Gramin Bank, Thane (Maharashtra) (30/3/1986)

Thar Aanchalik Gramin Bank, Jodhpur (Rajasthan) (31/1/1983)

Toronto-Dominion Bank

Traders’ Bank Ltd.

Tripura Gramin Bank, Agartala (21/12/1976)

Tulsi Gramin Bank, Banda (U.P.) (26/3/1981)

Tungabhadra Gramin Bank, Bellary (25/1/1976)

UCO Bank

Union Bank of India

United Bank of India

United Commercial Bank

United Industrial Bank Ltd., Calcutta

United Western Bank Ltd., Bangalore City

Uttar Banga Kshetriya Gramin Bank, Cooch-Behar (W.B.) (7/3/1977)

Uttar Pradesh Co-operative Bank Ltd., Lucknow (2/7/1966)

Vaishali Kshetriya Gramin Bank, Muzaffarpur (Bihar) (10/3/1977)

Vallalar Grama Bank, Cuddalore (Tamil Nadu) (19/6/1986)

Valsad-Dangs Gramin Bank, Bulsar (Gujarat) (23/2/1984)

Varada Grameena Bank, Kumta (Karnataka) (12/10/1984)

Vidisha-Bhopal Kshetriya Gramin Bank, Vidisha (M.P.) (31/3/1986)

Vidur Gramin Bank, Bijnor (U.P.)

Vijaya Bank Ltd., Mangalore (Karnataka)

Vindhyavasini Gramin Bank, Mirzapur (U.P.) (30/3/1983)

Visveshwaraya Grameen Bank, Mandya (Karnataka) (27/3/1985)

Vysya Bank Ltd., Bangalore City

West Bengal Provincial Co-operative Bank Ltd., Calcutta (2/7/1966)

West Bengal State Co-operative Bank Ltd., Calcutta

Yavatmal Gramin Bank, Yavatmal (Maharashtra) (29/1/1985)

——————–

1. Subs. by Noti. No. DBOD No. IBD. 937/23.3.007/2005-06 , dated 26-12-2005 (w.e.f. 1-1-2006.)

Schedule 3

SCHEDULE III

[Repealed by Act No. 23 of 1955, w.e.f. 1/7/1955]

Schedule 4

SCHEDULE IV

[Repealed by Act No. 62 of 1948, w.e.f. 1/1/1949]

Schedule 5

SCHEDULE V

[Repealed by the M.O. 1937]

“CHAPTER III-E

JOINT MECHANISM

45-Y. Joint Mechanism.—

(1) Notwithstanding anything contained in this Act or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or any other law for the time being in force, if any difference of opinion arises as to whether—

(i) any instrument, being derivative referred to in clause (a) or money market instrument referred to in clause (b) or repo referred to in clause (c) or reverse repo referred to in clause (d) or securities referred to in clause (e) of Section 45-U of this Act; or

(ii) any instrument, being policy of life insurance under the Insurance Act, 1938 (4 of 1938) or the rules or regulations made thereunder, or, scrips or any other securities referred to in sub-clauses (i), (ia), (ib), (ic), (id), (ie), (ii), (iia) and (iii) of clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956),

is hybrid or composite instrument, having a component of money market investment or securities market instrument or a component of insurance or any other instrument referred to in clause (i) or clause (ii) and falls within the jurisdiction of the Reserve Bank of India or the Securities and Exchange Board of India established under Section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Insurance Regulatory and Development Authority established under Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) or the Pension Fund Regulatory and Development Authority constituted by the Resolution of the Government of India Number F.No. 1(6) 2007-PR, dated the 14th November, 2008, such difference of opinion shall be referred to a Joint Committee consisting of the following, namely—

(a) the Union Finance Minister	ex officio Chairperson
(b) the Governor, Reserve Bank of India	ex officio Vice-Chairperson
(c) the Secretary, Department of Economic Affairs in the Ministry of Finance, Government of India	ex officio Member;
(d) the Secretary, Department of Financial Services in the Ministry of Finance, Government of India	ex officio Member;
(e) the Chairperson, Insurance Regulatory and Development Authority	ex officio Member
(f) the Chairman, Securities and Exchange Board of India	ex officio Member;
(g) the Chairperson, Pension Fund Regulatory and Development Authority	ex officio Member;

(2) The Secretary, Department of Financial Services in the Ministry of Finance, Government of India shall be the convener of the meetings of the Joint Committee referred to in sub-section (1).

(3) In case of any difference of opinion referred to in sub-section (1), any Member of the Joint Committee referred to in clauses (&), (e), if) or (g) of that sub-section may make a reference to the Joint Committee.

(4) The Joint Committee shall follow such procedure as it may consider expedient and give, within a period of three months from the date of reference made under sub¬section (3), its decisions thereon to the Central Government.

(5) The decision of the Joint Committee shall be binding on the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority and the Pension Fund Regulatory and Development Authority.”

Partnership Act

November 30, 2014

Section 1. SHORT TITLE EXTENT AND COMMENCEMENT.

[IX OF 1932]

(IN ITS APPLICATION TO THE STATE OF MAHARASHTRA)

(Received the assent of the Governor-General on 8th April, 1932)

AMENDED BY MAH. 29 OF 1984 (1-1-1985) 1

AN ACT TO DEFINE AND AMEND THE LAW RELATING TO PARTNERSHIP.

WHEREAS it is expedient to define and amend the law relating to partnership; It is hereby enacted as follows :

(1) This Act may be called the Indian Partnership Act, 1932.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on the 1st day of October, 1932, except section 69 which shall come into force on the 1st day of October, 1933.

Section 2. DEFINITIONS.

In the Act, unless there is anything repugnant in the subject or context,

(a) an “act of a firm” means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm;

(b) “business” includes every trade, occupation and profession;

(c-1) “Registrar” means the Registrar of Firms appointed under sub-section (1) of section 57 and includes the Deputy Registrar of Firms and Assistant Registrar of Firms appointed under sub-section (2) of that section;

(d) “third party” used in relation to a firm or to a partner therein means any person who is not a partner in the firm; and

(e) expressions used but not defined in this Act and defined in the Indian Contract Act, 1872, shall have the meanings assigned to them in that Act.

Section 3. APPLICATION OF PROVISIONS OF ACT IX OF 1872.

The unrepealed provisions of the Indian Contract Act, 1872, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to firms.

Section 4. DEFINITION OF “PARTNERSHIP”, “PARTNER”, “FIRM” AND “FIRM-NAME”.

“Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

Persons who have entered into partnership with one another are called individually, “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm-name”.

Section 5. PARTNERSHIP NOT CREATED BY STATUS.

The relation of partnership arises from contract and not from status; and, in particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business.

Section 6. MODE OF DETERMINING EXISTENCE OF PARTNERSHIP.

In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.

Explanation I : The sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not of itself make such persons partners.

Explanation II : The receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not itself make him a partner with the persons carrying on the business; and, in particular, the receipt of such share or payment –

(a) by a lender of money to persons engaged or about to engage in any business

(b) by a servant or agent as remuneration,

(d) by a previous owner or part-owner of the business, as consideration for the sale of the goodwill or share thereof, does not of itself make the receiver a partner with the persons carrying on the business.

Section 7. PARTNERSHIP-AT-WILL.

Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership-at-will”.

Section 8. PARTICULAR PARTNERSHIP.

A person may become a partner with another person in particular adventures or undertakings.

Section 9. GENERAL DUTIES OF PARTNERS.

Partners are bound to carry on the business of the firm to greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner, his heir or legal representative.

Section 10. DUTY TO INDEMNIFY FOR LOSS CAUSED BY FRAUD.

Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

Section 11. DETERMINATION OF RIGHTS AND DUTIES OF PARTNERS BY CONTRACT BETWEEN THE PARTNERS.

(1) Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may be determined by contract between the partners, and such contract may be express or may be implied by a course of dealing.

Such contract may be varied by consent of all the partners, and such consent may be express or may be implied by a course of dealing.

(2) AGREEMENTS IN RESTRAINT OF TRADE.

Notwithstanding anything contained in section 27 of the Indian Contract Act, 1872, such contracts may provide that a partner shall not carry on any business other than that of the firm while he is a partner.

Section 12. THE CONDUCT OF THE BUSINESS.

Subject to contract between the partners –

(a) every partner has a right to take part in the conduct of the business;

(b) every partner is bound to attend diligently to his duties in the conduct of the business;

(c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners;

(d) every partner has a right to have access to and to inspect and copy any of the books of the firm;

(e) in the event of the death of a partner, his heirs or legal representatives or their duly authorised agents shall have a right of access to and to inspect and copy any of the books of the firm.

Section 13. MUTUAL RIGHT AND LIABILITIES.

Subject to contract between the partners –

(a) a partner is not entitled to receive remuneration for taking part in the conduct of the business;

(b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm;

(c) where a partner is entitled to interest on the capital subscribed by him, such interest shall be payable only out of profits;

(d) a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent. per annum;

(e) the firm shall indemnify a partner in respect of payments made and liabilities incurred by him

(i) in the ordinary and proper conduct of the business; and

(ii) in doing such act, in an emergency, for the purpose of protecting the firm from loss, as would be done by a person of ordinary prudence, in his own case, under similar circumstances; and

(f) a partner shall indemnify the firm for any loss caused to it by his willful neglect in the conduct of the business of the firm.

Section 14. THE PROPERTY OF THE FIRM.

Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.

Unless the contrary intention appears, property and rights and interest in property acquired with money belonging to the firm are deemed to have been acquired for the firm.

Section 15. APPLICATION OF THE PROPERTY OF THE FIRM.

Subject to the contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purposes of the business.

Section 16. PERSONAL PROFITS EARNED BY PARTNERS.

Subject to the contract between the partners, –

(a) if a partner derives any profits for himself from any transaction of the firm, or from the use of the property or business connection of the firm or the firm-name, he shall account for that profit and pay it to the firm;

(b) if a partner carries on any business of the same nature as and competing with that of the firm, he shall account for and pay to the firm all profits made by him in that business.

Section 17. RIGHTS AND DUTIES OF PARTNERS AFTER A CHANGE IN THE FIRM.

Subject to contract between the partners, –

(a) where a change occurs in the constitution of a firm, the mutual rights and duties of the partners in the reconstituted firm remain the same as they were immediately before the change, as far as may be;

(b) AFTER THE EXPIRY OF THE TERM OF THE FIRM.

where a firm constituted for a fixed term continues to carry on business after the expiry of that term, the mutual rights and duties of the partners remain the same as they were before the expiry, and so far as they may be consistent with the incidents of partnership-at-will; and

where a firm constituted to carry out one or more adventures or undertakings carries out other adventures or undertakings, the mutual rights and duties of the partners in respect of the other adventures or undertakings are the same as those in respect of the original adventures or undertakings.

Section 18. PARTNER TO BE AGENT OF THE FIRM.

Subject to the provisions of this Act, a partner is the agent of the firm for the purposes of the business of the firm.

Section 19. IMPLIED AUTHORITY OF PARTNER AS AGENT OF THE FIRM.

(1) Subject to the provisions of section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm.

The authority of a partner to bind the firm conferred by this section is called his “implied authority”.

(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to –

(a) submit a dispute relating to the business of the firm to arbitration,

(b) open a banking account on behalf of the firm in his own name,

(d) withdraw a suit or proceeding filed on behalf of the firm,

(e) admit any liability in a suit or proceeding against the firm,

(f) acquire immovable property on behalf of the firm,

(g) transfer immovable property belonging to the firm, or

(h) enter into partnership on behalf of the firm.

Section 20. EXTENSION AND RESTRICTION OF PARTNER’S IMPLIED AUTHORITY.

The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner.

Notwithstanding any such restriction, any act done by a partner on behalf of the firm which falls within his implied authority binds the firm, unless the person with whom he is dealing knows of the restriction or does not know or believe that partner to be a partner.

Section 21. PARTNER’S AUTHORITY IN AN EMERGENCY.

A partner has authority, in an emergency, to do all such acts for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence, in his own case, acting under similar circumstances, and such acts bind the firm.

Section 22. MODE OF DOING ACT TO BIND FIRM.

In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm-name, or in any other manner expressing or implying an intention to bind the firm.

Section 23. EFFECT OF ADMISSION BY A PARTNER.

An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, it is made in the ordinary course of business.

Section 24. EFFECT OF NOTICE TO ACTING PARTNER.

Notice to a partner who habitually acts in the business of the firm of any matter relating to the affairs of the firm operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner.

Section 25. LIABILITY OF A PARTNER FOR ACTS OF THE FIRM.

Every partner is liable jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.

Section 26. LIABILITY OF THE FIRM FOR WRONGFUL ACTS OF A PARTNER.

Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefore to the same extent as the partner.

Section 27. LIABILITY OF FIRM FOR MISAPPLICATION BY PARTNERS.

Where –

(a) a partner acting within his apparent authority receives money or property from a third party and misapplies it, or

(b) a firm in the course of its business receives money or property from a third party, and the money or property is misapplied by any of the partners while it is in the custody of the firm, the firm is liable to make good the loss.

Section 28. HOLDING OUT.

(1) Anyone who by words spoken or written or by conduct represent himself, or knowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in that firm to anyone who has on the faith of any such representation given credit to the firm, whether the person representing himself or represented to be a partner does or does not know that the representation has reached the person so giving credit.

(2) Where after partner’s death the business continued in the old firm-name, the continued use of that name or of the deceased partner’s name as a part thereof shall not of itself make his legal representative or his estate liable for any act of the firm done after his death.

Section 27. LIABILITY OF FIRM FOR MISAPPLICATION BY PARTNERS.

Where –

(a) a partner acting within his apparent authority receives money or property from a third party and misapplies it, or

Section 29. RIGHTS OF TRANSFEREE OF A PARTNER’S INTEREST.

(1) A transfer by a partner of his interest in the firm, either absolute or by mortgage, or, by the creation by him of a charge on such interest, does not entitle the transferee, during the continuance of the firm, to interfere in the conduct of the business or to require accounts or to inspect the books of the firm, but entitles the transferee only to receive the share of profits of the transferring partner, and the transferee shall accept the account of profits agreed to by the partners.

(2) If the firm is dissolved or if the transferring partner ceases to be a partner, the transferee is entitled as against the remaining partners, to receive the share of the assets of the firm to which the transferring partner is entitled and, for the purpose of ascertaining that share, to an account as from the date of the dissolution.

Section 29A. DELETION OF ENTRIES RELATING TO CERTAIN FIRMS BY REASON OF FORMATION OF GUJARAT STATE.

of the formation of the State of Gujarat by the Bombay Reorganisation Act, 1960, ceased to be situated in the State of Maharashtra : Provided that the Registrar shall, before passing any order under this sub-section, make such inquiry as he deems necessary and give notice to the firm and the Registrar of the State of Gujarat.

(2) After such amendment, the Registrar shall cease to perform the functions of a Registrar in respect of any firm the entries relating to which have been deleted as aforesaid.

(3) Any person aggrieved by an order under sub-section (1) may appeal to such authority and within such time, as may be specified in this behalf by the Government of Maharashtra, by notification in the Official Gazette and such authority shall pass such order on the appeal as it thinks fit.

(4) An order of a Registrar under sub-section (1), or where an appeal has been preferred against it under sub-section (3), the order of the appellate authority shall be final.

Section 30. MINORS ADMITTED TO THE BENEFITS OF PARTNERSHIP.

(1) A person who is a minor according to the law to which he is subject may not be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.

(2) Such minor has a right to such share of the property and of the profits of the firm as may be agreed upon, and he may have access to and inspect and copy any of the accounts of the firm.

(3) Such minor’s share is liable for the acts of the firm but the minor is not personally liable for any such act.

(4) Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm, save when severing his connection with the firm, and in such case the amount of his share shall be determined by a valuation made as far as possible in accordance with the rules contained in section 48 :

Provided that all the partners acting together or any partner entitled to dissolve the firm upon notice to other partners may elect in such suit to dissolve the firm, and thereupon the Court shall proceed with the suit as one for dissolution and for settling accounts between the partners and the amount of the share of the minor shall be determined along with the shares of the partners.

(5) At any time within six months of his attaining majority, or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, such person may give public notice that he has elected to become or that he has elected not to become a partner in the firm, and such notice shall determine his position as regards the firm :

Provided that, if he fails to give such notice, he shall become a partner in the firm on the expiry of the said six months.

(6) Where any person has been admitted as a minor to the benefits of partnership in a firm, the burden of proving the fact that such person had no knowledge of such admission until a particular date after the expiry of six months of his attaining majority shall lie on the person asserting that fact.

(7) Where such person becomes a partner –

(a) his rights and liabilities as a minor continue upto the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and

(b) his share in the property and profits of the firm shall be the share to which he was entitled as a minor.

(8) Where such person elects not be to become a partner, –

(a) his rights and liabilities shall continue to be those of a minor under the section upto the date on which he gives public notice;

(b) his share shall not be liable for any acts for the firm done after the date of the notice; and

(c) he shall be entitled to sue the partners for his share of the property and profits in accordance with sub-section (4).

(9) Nothing in sub-sections (7) and (8) shall affect the provisions of section 28.

CHAPTER V INCOMING AND OUTGOING PARTNERS.

Section 31. INTRODUCTION OF A PARTNER.

(1) Subject to contract between the partners and to the provisions of section 30, no person shall be introduced as a partner into a firm without the consent of all the existing partners.

(2) Subject to the provisions of section 80, a person who is introduced as a partner into a firm does not thereby become liable for any act of the firm done before he became a partner.

Section 32. RETIREMENT OF A PARTNER.

(1) A partner may retire –

(a) with the consent of all the otter partners,

(b) in accordance with an express agreement by the partners, or

(2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement.

(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement

Provided that a retired partner is not liable to any third party who deals with the firm without knowing that he was a party.

(4) Notices under sub-section (3) may be given by the retired partner or by any partner of the reconstituted firm.

Section 33. EXPULSION OF A PARTNER.

(1) A partner may not be expelled from a firm by any majority of the partners, save in the exercise in good faith or powers conferred by contract between the partners.

(2) The provisions of sub-sections (2), (3) and (4) of section 32 shall apply to an expelled partner as if he were a retired partner.

Section 34. INSOLVENCY OF A PARTNER.

(1) Where a partner in a firm is adjudicated an insolvent, he ceases to be a partner on the date on which the order of adjudication is made, whether or not the firm is thereby dissolved.

(2) Where under a contract between the partners the firm is not dissolved by the adjudication of a partner as an insolvent, the estate of a partner so adjudicated is not liable for any act of the firm and the firm is not liable for any act of the insolvent, done after the date on which the order of adjudication is made.

Section 35. LIABILITY OF ESTATE OF DECEASED PARTNER.

Where under a contract between the partners the firm is not dissolved by the death of a partner, the estate of a deceased partner is not liable for any act of the firm done after his death

Section 36. RIGHTS OF OUTGOING PARTNER TO CARRY ON COMPETING BUSINESS.

(1) An outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but subject, to contract to the contrary, he may not

(a) use the firm-name,

(b) represent himself as carrying on the business of the firm, or

(2) AGREEMENT IN RESTRAINT OF TRADE.

A partner may make an agreement with his partners that on ceasing to be a partner he will not carry on any business similar to that of the firm within a specified period or within specified local limits; and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872, such agreement shall be valid if the restrictions imposed are reasonable.

Section 37. RIGHT OF OUTGOING PARTNER IN CERTAIN CASES TO SHARE SUBSEQUENT PROFITS.

Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six per cent. per annum on the amount of his share in the property of the firm :

Provided that where by contract between the partners an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is duly exercised, the estate of the deceased partner, or the outgoing partner of his estate, as the case may be, is not entitled to any further or other share of profits, but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms thereof, he is liable to account under the foregoing provisions of this section.

Section 38. REVOCATION OF CONTINUING GUARANTEE BY CHANGE IN FIRM.

A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is in the absence of agreement to the contrary, revoked as to future transactions from the date of any change in the constitution of the firm.

Section 39. DISSOLUTION OF A FIRM.

The dissolution of a partnership between all the partners of a firm is called the “dissolution of the firm”.

Section 40. DISSOLUTION BY AGREEMENT.

A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.

Section 41. COMPULSORY DISSOLUTION.

A firm is dissolved

(a) by the adjudication of all the partners or of all the partners but one as insolvent, or

(b) by the happening of any event which makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership :

Provided that, where more than one separate adventure or undertaking is carried on by the firm, the illegality of one or more shall not of itself cause the dissolution of the firm in respect of its lawful adventures and undertakings.

Section 42. DISSOLUTION ON THE HAPPENING OF CERTAIN CONTINGENCIES.

Subject to contract between the partners a firm is dissolved

(a) if constituted for a fixed term, by the expiry of that term;

(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;

(d) by the adjudication of a partner as an insolvent.

Section 43. DISSOLUTION BY NOTICE OF PARTNERSHIP AT WILL.

(1) Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.

(2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice.

Section 44. DISSOLUTION BY THE COURT.

At the suit of a partner, the Court may dissolve a firm on any of the following grounds, namely :-

(a) that a partner has become of unsound mind, in which case the suit may be brought as well by the next friend of the partner who has become of unsound mind as by any other partner;

(b) that a partner, other than the partner suing, has become in any way permanently incapable of performing his duties as partner;

(c) that a partner, other than the partner suing, is guilty of conduct which is likely to affect prejudicially the carrying on of the business regard being had to the nature of the business;

(d) that a partner, other than the partner suing, willfully or persistently commits breach of agreements relating to the management of the affairs of the firm of the conduct of its business; or otherwise so conducts himself in matters relating to the business that it is not reasonably practicable for the other partners to carry on the business in partnership with him;

(e) that a partner, other than the partner suing, has in any way transferred the whole of his interest in the firm to a third party, or has allowed his share to be charged under the provisions of rule 49 of Order XXI of the First Schedule to the Code of Civil Procedure, 1908, or has allowed it to be sold in the recovery of arrears of land revenue or of any dues recoverable as arrears of land revenue due by the partner;

(f) that the business of the firm cannot be carried on save at a loss; or

(g) on any other ground which renders it just and equitable that the firm should be dissolved.

Section 45. LIABILITY FOR ACTS OF PARTNERS DONE AFTER DISSOLUTION.

(1) Notwithstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm, if done before the dissolution, until public notice is given of the dissolution :

Provided that the estate of a partner who dies, or who is adjudicated an insolvent, or of a partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable under this section for acts done after the date on which he ceases to be a partner.

(2) Notices under sub-section (1) may be given by any partner.

Section 46. RIGHT OF PARTNERS TO HAVE BUSINESS WOUND UP AFTER DISSOLUTION.

On the dissolution of a firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or which representatives according to their rights.

Section 47. CONTINUING AUTHORITY OF PARTNERS FOR PURPOSES OF WINDING UP.

After the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the firm and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise :

Provided that the firm is in no case bound by the acts of a partner who had been adjudicated insolvent, but this proviso does not affect the liability of any person who has after the adjudication represented himself or knowingly permitted himself to be represented as a partner of the insolvent.

Section 48. MODE OF SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS.

In settling the accounts of a firm after dissolution, the following rules shall, subject to agreement by the partners, be observed :

(a) Losses, including deficiencies of capital, shall be paid first out of profits, next out of capital, and, lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits;

(b) the assets of the firm, including any sums contributed by the partners to make up deficiencies of capital, shall be applied in the following manner and order :

(i) in paying the debts of the firm to third parties;

(ii) in paying to each partner ratably what is due to him from the firm for advances as distinguished from capital;

(iii) in paying to each partner ratably what is due to him on account of capital; and

(iv) the residue, if any, shall be divided among the partners in the proportions in which they were entitled to share profits.

Section 49. PAYMENT OF FIRM’S DEBTS AND OF SEPARATE DEBTS.

Where there are joint debts due from the firm, and also separate debts due from any partner, the property of the firm shall be applied in the first instance in payment of the debts of the firm, and, if there is any surplus, then the share of each partner shall be applied in payment of his separate debts or paid to him. The separate property of any partner shall he applied first in the payment of his separate debts, and the surplus (if any) in payment of the debts of the firm.

Section 50. PERSONAL PROFITS EARNED AFTER DISSOLUTION.

Subject to contract between the partners, the provisions of clause (a) of section 16 shall apply to transactions by any surviving partner or by the representatives of deceased partner, undertaken after the firm is dissolved on account of the death of a partner and before its affairs have been completely wound up :

Provided that where any partner or his representative has bought the good will of the firm, nothing in the section shall affect his right to use the firm-name.

Section 51. RETURN OF PREMIUM ON PREMATURE DISSOLUTION.

Where a partner has paid a premium on entering into partnership for a fixed term, and the firm is dissolved before the expiration of that term otherwise than by the death of a partner, he shall be entitled to repayment of the premium or of such part thereof as may be reasonable, regard being had to the terms upon which he became a partner, and to the length of time during which he was a partner, unless –

(a) the dissolution is mainly due to his own misconduct, or

(b) the dissolution is in pursuance of an agreement containing no provision for the return of the premium or any part of it.

Section 52. RIGHTS WHERE PARTNERSHIP CONTRACT IS RESCINDED FOR FRAUD OR MISREPRESENTATION.

Where a contract creating partnership is rescinded on the ground of fraud or misrepresentation of any of the parties thereto, the party entitled to rescind is, without prejudice to any other right, entitle –

(a) to a lien on, or right of retention of, the surplus of the assets of the firm remaining after the debts of the firm have been paid, for any sum paid by him for the purchase of a share in the firm and for any capital contributed by him;

(b) to rank as a creditor of the firm in respect of any payment made by him towards the debts of the firm; and

Section 53. RIGHT TO RESTRAIN FROM USE OF FIRM-NAME OR FIRM-PROPERTY.

After a firm is dissolved, every partner or his representative may, in the absence of a contract between the partners to the contrary, restrain any other partner or his representative from carrying on a similar business in the firm-name or from using any of the property of the firm for his own benefit, until the affairs of the firm have been completely wound up :

Provided that where any partner or his representative has brought the goodwill of the firm, nothing in this section shall affect his right to use the firm-name.

Section 54. AGREEMENTS IN RESTRAINT OF TRADE.

Partners may, upon or in anticipation of the dissolution of the firm, make an agreement that some or all of them will not carry on a business similar to that of the firm within a specified period or within specified local limits and notwithstanding anything contained in section 27, of the Indian Contract Act, 1872, such agreement shall be valid if the restrictions imposed are reasonable.

Section 55. SALE OF GOODWILL AFTER DISSOLUTION.

(1) In settling the accounts of a firm after dissolution, the goodwill shall, subject to contract between the partners, be included in the assets, and it may be sold either separately or along with other property of the firm.

(2) RIGHTS OF BUYER AND SELLER OF GOODWILL.

Where the goodwill of a firm is sold after dissolution, a partner may carry on a business competing with that of the buyer and he may advertise such business, but, subject to agreement between him and the buyer, he may not

(a) use the firm-name,

(b) represent himself as carrying on the business of the firm, or

(3) AGREEMENTS IN RESTRAINT OF TRADE.

Any partner may upon the sale of the goodwill of a firm, make an agreement with the buyer that such partner will not carry on any business similar to that of the firm within a specified period or within specified local limits, and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 such agreement shall be valid if the restrictions are reasonable.

Section 56. POWER TO EXEMPT FROM APPLICATION OF THIS CHAPTER.

The State Government of any State may, by notification in the Official Gazette, direct that the provisions of this Chapter shall not apply to that State or to any part thereof specified in the notification.

Section 57. APPOINTMENT OF REGISTRAR OF FIRMS AND DEPUTY AND ASSISTANT REGISTRARS OF FIRMS.

(1) The State Government may, by notification in the Official Gazette, appoint a Registrar of Firms who shall exercise, perform and discharge the powers, functions and duties of the Register under this Act throughout the State of Maharashtra.

(2) The State Government may likewise appoint one or more Deputy Registrars of Firms and Assistant Registrars of Firms who shall exercise, perform and discharge all or such of the powers, functions and duties of the Registrar and in such areas as the State Government may, by notification in the Official Gazette, specify.

(3) The officers appointed under sub-section (1) and sub-section (2) shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.

Section 58. APPLICATION FOR REGISTRATION.

(1) Subject to the provisions of sub-section of sub-section (1A), the registration of a firm effected by sending by post or delivering to the Registrar of the area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee and a true copy of the deed of partnership stating :

(a) the firm-name,

(aa) the nature of business of the firm;

(b) the place or principal place of business of the firm,

(d) the date when each partner joined the firm,

(e) the names in full and permanent addresses of the partners, and

(f) the duration of the firm.

The statement shall be signed by all the partners, or by their agents specially authorised in this behalf.

(1A) The statement under sub-section (1) shall be sent or delivered to the Registrar within a period of one year from the date of constitution of the firm :

Provided that in the case of any firm carrying on business on or before the date of commencement of the Indian Partnership (Maharashtra Amendment) Act, 1984, such statement shall be sent or delivered to the Registrar within a period of one year firm such date.

(2) Each person signing the statement shall also verify it in the manner prescribed.

(3) A firm shall not have any of the names or emblems specified in the Schedule to the Emblems and Names (Prevention of Improper Use) Act, 1950, or any colourable imitation thereof, unless permitted so to do under that Act, or any name which is likely to be associated by the public with the name of any other firm on account of similarity, or any name which, in the opinion of the Registrar, for reasons to be recorded in writing, is undesirable:

Provided that nothing in this sub-section shall apply to any firm registered under any such name before the date of the commencement of the Indian Partnership (Maharashtra Amendment) Act, 1984.

(4) Any person aggrieved by an order of the Registrar under sub-section (3), may, within 30 days from the date of communication of such order, appeal to the officer not below the rank of Deputy Secretary to Government authorised by the State Government in this behalf, in such manner, and on payment of such fee, as may be prescribed. On receipt of any such appeal, the authorised officer shall, after giving an opportunity of being heard to the appellant, decide the appeal, and his decision shall be final.

Section 59. REGISTRATION.

(1) When the Registrar is satisfied that the provisions of section 58 have been duly complied with, he shall record an entry of the statement in a register called the Register of Firms, and shall file the statement. [19 On the date such entry is recorded and such statement is filed, the firm shall be deemed to be registered.

(2) The firm, which is registered, shall use the brackets and word (Registered) immediately after its name.

Section 59A. DELETION AND ADDITION OF CERTAIN ENTRIES RELATING TO CERTAIN FIRMS, BY REASON OF REORGANISATION OF STATES.

(1) Notwithstanding anything contained in this Chapter, a Registrar of Firms appointed for any area by the Government of Bombay may, by order in writing, amend the Register of Firms maintained by him by deleting there from the entries relating to any firm, whose place of business has, by reason of the reorganisation of States under the States Reorganisation Act, 1956, ceased to be situated in the State of Bombay. The Registrar may likewise and without any charge or fee therefor amend the Register by adding thereto the entries relating to any firm included in the Register of another State but whose place of business has, by reason of such reorganisation, become part of the area within his jurisdiction in the State of Bombay :

Provided that the Registrar shall, before passing any order under this sub-section, make such inquiry as he deems necessary and give notice to the firm and the Registrar of the State concerned.

(2) After such amendment, the Registrar shall cease to perform the functions of a Registrar in respect of any firm the entries relating to which have been deleted as aforesaid and shall perform all the functions of a Registrar in respect of any firm the entries relating to which are added as aforesaid.

(3) Any person aggrieved by an order under sub-section (1) may appeal to such authority, and within such time, as may be specified in this behalf by the Government of Bombay notification in the Official Gazette; and such authority shall pass such order on the appeal as it thinks fit.

(4) An order of a Registrar under sub-section (1), or when an appeal has been preferred against it under sub-section (3), the order of the appellate authority, shall be final.

(5) The provisions of this section shall cease to be in force from such date as the Government of Bombay may, by notification in the Official Gazette, appoint.

Section 59A-1. LATE REGISTRATION ON PAYMENT OF PENALTY.

If the statement in respect of any firm is not sent or delivered to the Registrar within the time specified in sub-section (1A) of section 58, then the firm may be registered on payment, to the Registrar, of a penalty of one hundred rupees per year of delay or a part thereof.

Section 59B. DELETION OF ENTRIES RELATING TO CERTAIN FIRMS BY REASON OF FORMATION OF GUJARAT STATE.

(1) Notwithstanding anything contained in this Chapter, a Registrar of Firms appointed for any area by the Government of Maharashtra may, by order in writing, amend the Register of Firms maintained by him by deleting there from the entries relating to any firm, whose place of business has, by reason of the formation of the State of Gujarat by the Bombay Reorganisation Act, 1960, ceased to be situated in the State of Maharashtra :

Provided that the Registrar shall, before passing any order under this sub-section, make such inquiry as he deems necessary and give notice to the firm and the Registrar of the State of Gujarat.

(2) After such amendment, the Registrar shall cease to perform the functions of a Registrar in respect of any firm the entries relating to which have been deleted as aforesaid.

(4) An order of a Registrar under sub-section (1), or where an appeal has been preferred against it under sub-section (3), the order of the appellate authority shall be final.

Section 60. RECORDING OF ALTERATIONS IN FIRM-NAME, NATURE OF BUSINESS AND PRINCIPAL PLACE OF BUSINESS.

(1) When an alteration is made in the firm name or in the nature of business of a firm or in the location of the principal place of business of a registered firm, a statement shall be sent to the Registrar, within a period of 90 days from the date of making such alteration, accompanied by the prescribed fee, specifying the alteration and signed and verified in the manner required under section 58.

(2) When the Registrar is satisfied that the provisions of sub-section (1) have been duly complied with, he shall amend the entry relating to the firm in the Register of Firms in accordance with the statement, and shall file it along with the statement relating to the firm filed under section 59.

Section 61. NOTING OF CLOSING AND OPENING OF BRANCHES.

When a registered firm discontinues business at any place or begins to carry on business at any place, such place not being its principal place of business, any partner or agent of the firm shall send intimation thereof to the Registrar, within a period of 90 days from the date of such discontinuance or, as the case may be, from the date on which the firm begins to carry on business at such place. The Registrar shall then make a note of such intimation in the entry relating to the firm in the Register of Firms, and shall file the intimation along with the statement relating to the firm filed under section 59.

Section 62. NOTING OF CHANGES IN NAMES AND ADDRESSES OF PARTNERS.

When any partner in a registered firm alters his name or permanent address, an intimation of the alteration’ shall be sent, within a period of 90 days from the date of making such alteration, by any partner or agent of the firm to the Registrar, who shall deal with it in the manner provided in section 61.

Section 63. RECORDING OF CHANGES IN AND DISSOLUTION OF A FIRM.

When a change occurs in the constitution of a registered firm, every incoming, continuing or outgoing partner, and when a registered firm is dissolved, every person who was a partner immediately before the dissolution, or the agent of every such partner or person specially authorised in this behalf shall, within a period of 90 days from the date of such change or dissolution, given notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall a record of the notice in the entry relating to the firm in the Registrar of Firms and shall file the notice along with statement relating to the firm filed under section 59.

(1A) Where a change occurs in the constitution of a registered firm, all persons, who after such change are partners of the firm, shall jointly send an intimation of such change duly signed by them, to the Registrar, within a period of 90 days from the date of occurrence of such change and the Registrar shall deal with it in the manner provided by section 61.

(2) RECORDING OF WITHDRAWAL OF A MINOR.

When a minor who has been admitted to the benefits of partnership in a firm attains majority and elects to become or not to become a partner, and the firm is then a registered firm, he, or his agent specially authorised in this behalf, shall within a period of 90 days from the date of his election, give notice to the Registrar that he has or has not become a partner, and the Registrar shall deal with the notice in the manner provided in sub-section (1).

Section 64. RECTIFICATION OF MISTAKES.

(1) The Registrar shall have power at all time to rectify any mistake in order to bring the entry in the Register of Firms relating to any firm into conformity with into documents relating to that firm filed under this Chapter.

(2) On application made by the all parties who have signed any document relating to a firm filed under this Chapter, the Registrar may rectify any mistake in such document or in the record of note thereof made in the Register of Firms.

Section 65. AMENDMENT OF REGISTER BY ORDER OF COURT.

A Court deciding any matter relating to a registered firm may direct that the Registrar shall make any amendment in the entry in the Register of Firms relating to such firm which is consequential upon its decision; and the Registrar shall amend the entry accordingly.

Section 66. INSPECTION OF REGISTER AND FILED DOCUMENTS.

(1) The Registrar of Firms shall be open to inspection by any person on payment of such fee as may be prescribed.

(2) All statements, notices and intimations filed under this Chapter shall be open to inspection, subject to such conditions and on payment of such fee as may be prescribed.

Section 67. GRANT OF COPIES.

The Registrar shall on application, furnish to any person, on payment of such fee as may be prescribed, a copy, certified under his hand, of any entry or portion thereof in the Register of Firms.

Section 68. RULES OF EVIDENCE.

(1) Any statement, intimation or notice recorded or noted in Register of Firms shall, as against any person by whom or on whose behalf such statement, intimation or notice was signed, be conclusive proof of any fact therein stated.

(2) A certified copy of an entry relating to a firm in the Register of Firms may be produced in proof of the fact of the registration of such firm, and of the contents of any statement, intimation or notice recorded or noted therein.

Section 69. EFFECT OF NON-REGISTRATION.

(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on a behalf of any persons suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm :

Provided that the requirement of registration of firm under this sub-section shall not apply to the suits or proceedings instituted by the heirs or legal representatives of the deceased partner of a firm for accounts of the firm or to realise the property of the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

(2A) No suit to enforce any right for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or have been a partner in the firm, unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm :

(3) The provisions of sub-sections (1), (2) and (2A) shall apply also to a claim of set-off or other proceedings to enforce a right arising from a contract but shall not affect

(a) the firms constituted for a duration upto six months or with a capital upto two thousand rupees; or;

(b) the powers of an official assigned, receiver or Court under the Presidency Towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of an insolvent partner.

(4) This section shall not apply

(a) to firms or partners in firm which have no place of business in the territories to which this Act extends, or whose places of business in the said territories are situated in areas to which, by notification under section 56 this Chapter does not apply, or

(b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the presidency towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882, or outside the Presidency towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887, or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim.

Section 69A. PENALTY FOR CONTRAVENTION OF SECTION 60, 61, 62, OR 63.

If any statement, intimation or notice under sections 60, 61, 62 or 63 in respect of any registered firm is not sent or given to the Registrar, within the period specified in that section, the Registrar may, after giving notice to the partners of the firm and after giving them a reasonable opportunity of being heard, refuse to make the suitable amendments in the records relating to the firm, until the partners of the firm pay such penalty, not exceeding ten rupees per day, as the Registrar may determine in respect of the period between the date of expiry of the period specified in sections 60, 61, 62 or as the case may be, 63 and the date of making the amendments in the entries relating to the firm.

Section 70. PENALTY FOR FURNISHING FALSE PARTICULARS.

Any person who signs any statement, amending statement, notice or intimation under this Chapter containing any particulars which he knows to be false or does not believe to be true, or containing particulars which he knows to be incomplete or does not believe to be complete, shall, on conviction, be punished with imprisonment for a term which may extend to one year, or with fine, or with both :

Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgement of the Court, the fine shall not be less than one thousand rupees.

Section 70A. MAXIMUM FEES AND POWER TO AMEND SCHEDULE I.

(1) The fees payable under this Act and the rules made there under shall not exceed the maximum fees as specified in Schedule I.

(2) Subject to the provisions of this section, the State Government may, having regard to the expenditure incurred or to be incurred for carrying out the purposes of this Act, from time to time, by notification in the Official Gazette, vary any of the amounts of maximum fees and other particulars specified in Schedule I, and, thereupon, the said Schedule shall be deemed to be amended accordingly.

(3) Every notification issued under sub-section (2) shall take effect from the date of its publication in the Official Gazette, unless some other date is specified therein for this purpose.

(4) Every notification issued by the State Government under sub-section (2) shall be laid, as soon as may be after it is issued, before each House of the State Legislature, while it is in session, for a total period of thirty days, which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the notification or both Houses agree that the notification should not be issued, and notify such decision in the Official Gazette, the notification shall, from the date of publication of such decision, 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 or omitted to be done in pursuance of that notification.

Section 71. POWER TO MAKE RULES.

(1) Subject to the provisions of section 70A, the State Government may, by notification in the Official Gazette, make rules prescribing the fees which shall accompany documents sent to the Registrar or which shall be paid in respect of any intimation, notice or application given to the Registrar or which shall be payable for the inspection of documents in the custody of the Registrar or for copies from the Register of Firms or which shall be paid for supply of any prescribed forms.

(2) The State Government may also make rules

(a) prescribing the form of statement submitted under sub-section (1) of section 58 and of the verification thereof;

(aa) prescribing the manner of filing an appeal under sub-section (4) of section 58;

(b) requiring statements, intimations and notices under sections 60, 61, 62 and 63 to be in prescribed form, and prescribed the form thereof;

(c) prescribing the form of the Register of Firms, and the mode in which entries relating to firms are to be made therein, and the mode in which such entries are to be amended or notes made therein;

(d) regulating the procedure of the Registrar when dispute arises;

(e) regulating the filing of documents received by the Registrar;

(f) prescribing conditions for the inspection of original documents;

(g) regulating the grant of copies;

(h) regulating the elimination of registers and documents;

(i) providing for the maintenance and form of an Index to the Register of Firms

(j) generally, to carry out the purposes of this Chapter.

(3) All rules made under this section shall be subject to the condition of previous publication.

(4) Every rule made under this section shall be laid, as soon as may be after it is made, before each House of the State Legislature, while it is in session, for a total period of thirty days, which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, and notify such decision in the Official Gazette, the rule shall, from the date of publication of such decision, 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 or omitted to be done in pursuance of that rule.

Section 72. MODE OF GIVING PUBLIC NOTICE.

A public notice under this Act is given

(a) Where it relates to the retirement or expulsion of a partner from a registered firm, or to the dissolution of a registered firm, or to the election to become or not to become a partner in a registered firm by a person attaining majority who was admitted as a minor to the benefits of partnership, by notice to the Registrar of Firms under section 63, and by publication in the Official Gazette and in at least one vernacular newspaper circulating in the district where the firm to which it relates, has its place or principal place of business, and

(b) in any other case, publication in the Official Gazette, and in at least one vernacular newspaper circulating in the district where the firm to which it relates has its place or principal place of business.

Section 73. REPEALS.

Repealed by the Repealing Act, 1938, (1 of 1938), s. 2 and Sch.

Section 74. SAVINGS.

Nothing in this Act or any repeal affected thereby shall affect or be deemed to affect –

(a) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or

(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation or liability, or anything done or suffered before the commencement of this Act, or

(d) any enactment relating to partnership not expressly repealed by this Act, or

(e) any rule of insolvency relating to partnership, or

(f) any rule of law not inconsistent with this Act.

Schedule- I

I MAXIMUM FEES.

Document or act in respect of which the fee is payable,	Maximum fee
(1) Statement under section 58(1)	Fifty rupees.
(2) Memorandum of appeal under section (4)	Twenty-five rupees.
(3) Statement under section 60	Fifteen rupees.
(4) Intimation under section 61	Fifteen rupees.
(5) Intimation under section 62	Fifteen rupees.
(6) Notice under section 63(1)	Fifteen rupees.
(7) Intimation under section 63(1A)	Fifteen rupees.
(8) Notice under section 63(2)	Fifteen rupees.
(9) Application under section 64	Fifteen rupees.
(10) Inspection of the Register of Firms under sub-section (1) of section 66, for inspection of one volume of the Register of Firms	Seven rupees and fifty paise.
(11) Inspection of documents relating to a firm under sub-section I(2)D of section 66, for the inspection of all documents relating to one firm	Seven rupees and fifty paise.
(12) Copies from the Register of Firms under section 67, for each hundred words or part thereof.	Two rupees.
(13) Price of Forms prescribed under the rules	One rupee per Form.

Schedule II -ENACTMENTS REPEALED –

BY REPEALING ACT, 1938 (1 OF 1938) SECTION 2 AND SCHEDULE.

Drugs and Cosmetics Act

November 30, 2014

Section 1. Short title, extent and commencement

(1) This Act may be called the Drugs ¹[and Cosmetics] Act, 1940.

(2) It extends to the whole of India ²[***].

(3) It shall come into force at once; but Chapter III shall take effect only from such date³ as the Central Government may, by notification in the Official Gazette, appoint in this behalf, and Chapter IV shall take effect in a particular State only from such date3 as the State Government may, by like notification, appoint in this behalf:

⁴[Provided that in relation to the State of Jammu and Kashmir, Chapter III shall take effect only from such date⁵ after the commencement of the Drugs and Cosmetics (Amendment) Act, 1972 (19 of 1972), as the Central Government may, by notification in the Official Gazette, appoint in this behalf.]

————————————–

1. Ins. by Act 21 of 1962, sec. 3 (w.e.f. 27-7-1964).

2. The words “except the State of Jammu and Kashmir” omitted by Act 19 of 1972, sec. 2 (w.e.f. 31-5-1972).

3. 1st April, 1947; see Notification No.F. 28(10) (3) 45H(I), dated 2nd September, 1946, Gazette of India, 1946, Pt. I, p. 1349.

Chapter IV came into force in the States of Delhi, Ajmer and Coorg on 1st April, 1947, see Notification No. F. 28 (10)(3) 45H(I), Chapters III and IV came into force in the States of Himachal Pradesh, Bilaspur, Kutch, Bhopal, Tripura, Vindhya Pradesh and Manipur on 1st April, 1953, vide Notification No. S.R.O. 663, dated 30th March, 1953, Gazette of India, Pt. II, Sec. 3, p. 451.

Chapter IV came into force in the Union Territory of Dadra and Nagar Haveli w.e.f. 1st August, 1968, see Notification No. ADM/Law/117(74), dated 20th July, 1968, Gazette of India, Pt. III, Sec. 3, p. 128. The Act is extended to Dadra and Nagar Haveli by Reg. 6 of 1963, sec. 2 and Sch. I; to Pondicherry by Reg. 7 of 1963, sec. 3 and Sch. I; to Goa, Daman and Diu by Reg. 11 of 1963, sec. 3 and Sch. and to Laccadive, Minicoy and Amindivi Islands by Reg. 8 of 1965, sec. 3 and Sch.

4. Added by Act 19 of 1972, sec. 2 (w.e.f. 31-5-1972).

5. 24th August, 1974, vide Notification No. S.O. 2185, dated 9th August, 1974, published in the Gazette of India, 1974, Pt. II, Sec. 3(ii), p. 2331.

Section 2. Application of other laws not barred.

The provisions of this Act shall be in addition to, and not in derogation of, the Dangerous Drugs Act, 1930, and any other law for the time being in force.

Section 3. Definitions.

¹[(a)“²[Ayurvedic, Siddha or Unani] drug” includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of ³[disease or disorder in human beings or animals, and manufactured] exclusively in accordance with the formulae described in, the authoritative books of ⁴[Ayurvedic, Siddha and Unani Tibb systems of medicine], specified in the First Schedule;]

⁵[(aa)] “the Board” means—

(i) in relation to ²[Ayurvedic, Siddha or Unani] drug, the ⁶[Ayurvedic, Siddha and Unani Drugs Technical Advisory Board] constituted under section 33C; and

(ii) in relation to any other drug or cosmetic, the Drugs Technical Advisory Board constituted under section 5;]

⁵[⁷[(aaa)] “cosmetic” means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic ⁸[***];]

⁹[(b) “drug” includes—

¹⁰[(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes;]

(ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of ¹¹[vermin] or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette;]

¹²[(iii) all substances intended for use as components of a drug including empty gelatin capsules; and

(iv) such devices* intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board;]

¹³[(c) “Government Analyst” means—

(i) in relation to ¹⁴[Ayurvedic, Siddha or Unani] drug, a Government Analyst appointed by the Central Government or a State Government under section 33F; and

(ii) in relation to any other drug or cosmetic, a Government Analyst appointed by the Central Government or a State Government under section 20;]

¹⁵[***]

¹⁶[(e) “Inspector” means—

(i) in relation to ¹⁴[Ayurvedic, Siddha or Unani] drug, an Inspector appointed by the Central Government or a State Government under section 33G; and

(ii) in relation to any other drug or cosmetic, an Inspector appointed by the Central Government or a State Government under section 21;]

¹⁷[(f) “manufacture” in relation to any drug ¹⁸[or cosmetic] includes any process or part of a process for making, altering, ornamenting, finishing, packing, labelling, breaking up or otherwise treating or adopting any drug ¹³[or cosmetic] with a view to its ¹⁹[sale or distribution] but does not include the compounding or dispensing ²⁰[of any drug, or the packing of any drug or cosmetic,] in the ordinary course of retail business; and “to manufacture” shall be construed accordingly;]

²¹[(g)] “to import”, with its grammatical variations and cognate expressions means to bring into ²²[India];

²³[(h) “patent or proprietary medicine” means,—

(i) in relation to Ayurvedic, Siddha or Unani Tibb systems of medicine all formulations containing only such ingredients mentioned in the formulae described in the authoritative books of Ayurveda, Siddha or Unani Tibb systems of medicine specified in the First Schedule, but does not include a medicine which is administered by parenteral route and also a formulation included in the authoritative books as specified in clause (a);

(ii) in relation to any other systems of medicine, a drug which is a remedy or prescription presented in a form ready for internal or external administration of human beings or animals and which is not included in the edition of the Indian Pharmacopoeia for the time being or any other Pharmacopoeia authorised in this behalf by the Central Government after consultation with the Drugs Technical Advisory Board constituted under section 5;]

²⁴[(i) “prescribed” means prescribed by rules made under this Act.]

²⁵[***]

————————

1.Ins. by Act 13 of 1964, sec. 2 (w.e.f. 15-9-1964)

2.Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

3.Subs. by Act 68 of 1982, sec. 3, for “disease in human beings, mentioned in, and processed and manufactured” (w.e.f. 1-2-1983).

4.Subs. by Act 68 of 1982, sec. 3, for “Ayurvedic (including Siddha) and Unani (Tibb) system of medicine” (w.e.f. 1-2-1983).

5.Original clause (a) relettered as clause (aa) and subs. by Act 13 of 1964, sec. 2 (w.e.f. 15-9-1964).

6.Subs. by Act 68 of 1982, sec. 3, for “Ayurvedic and Unani Drugs Technical Advisory Board” (w.e.f. 1-2-1983)

7.Clause (aa) ins. by Act 21 of 1962, sec. 4 (w.e.f. 27-7-1964) and relettered as clause (aaa) by Act 13 of 1964, sec. 2 (w.e.f. 15-9-1964).

8.The words “, but does not include soap” omitted by Act 68 of 1982, sec. 3 (w.e.f. 1-2-1983).

9.Subs. by Act 11 of 1955, sec. 2, for clause (b) (w.e.f. 15-4-1955).

10.Subs. by Act 68 of 1982, sec. 3, for sub-clause (i) (w.e.f. 1-2-1983).

11.Subs. by Act 13 of 1964, sec. 2, for “vermins” (w.e.f. 15-9-1964).

12.Ins. by Act 68 of 1982, sec. 3 (w.e.f. 1-2-1983).

13.Subs. by Act 13 of 1964, sec. 2, for clause (c) (w.e.f. 15-9-1964).

14.Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

15.Clause (d) omitted by Act 19 of 1972, sec. 3 (w.e.f. 31-5-1972).

16.Subs. by Act 13 of 1964, sec. 2, for clause (e) (w.e.f. 15-9-1964).

17.Clause (bbb) ins. by Act 11 of 1955, sec. 2 (w.e.f. 15-4-1955) and relettered as clause (f) by Act 35 of 1960, sec. 2 (w.e.f. 16-3-1961)

18.Ins. by Act 21 of 1962, sec. 4 (w.e.f. 27-7-1964).

19.Subs. by Act 68 of 1982, sec. 3, for “sale and distribution” (w.e.f. 1-2-1983)

20.Subs. by Act 21 of 1962, sec. 4, for “or packing of any drug”.

21.Clauses (c), (d) and (e) relettered as clauses (g), (h) and (i) respectively by Act 35 of 1960, sec. 2 (w.e.f. 16-3-1961).

22.Subs. by Act 3 of 1951, sec. 3 and Sch., for “the States”.

23.Clause (d) relettered as clause (h) by Act 35 of 1960, sec. 2 (w.e.f. 16-3-1961) and subs. by Act 68 of 1982, sec. 3 (w.e.f. 1-2-1983).

24.Clause (e) subs. by Act 11 of 1955, sec. 2 (w.e.f. 15-4-1955) and relettered as clause (i) by Act 35 of 1960, sec. 2 (w.e.f. 16-3-1961).

25.Clause (f) ins. by the A.O. 1950 and omitted by Act 3 of 1951, sec. 3 and Sch.

* The Central Government has specified (vide S.O. 1468(E), dated 6th October, 2005) the following devices intended for external or internal use in human beings or drugs with immediate effect, namely:—

(i) Cardiac Stents (vi) Bone Cements

(ii) Drug Eluding Stents (vii) Heart Valves

(iii) Catheters (viii) Sclap Vein Set

(iv) Intra Ocular Lenses (ix) Orthopaedic Implants

(v) I.V. Cannulac (x) Internal Prosthetic Replacements.

Section 3A. Constitution of references to any law not in force or any functionary not in existence in the State of Jammu and Kashmir.

¹[3A. Construction of references to any law not in force or any functionary not in existence in the State of Jammu and Kashmir.

Any reference in this Act to any law which is not in force, or any functionary not in existence, in the State of Jammu and Kashmir, shall, in relation to that State, be construed as a reference to the corresponding law in force, or to the corresponding functionary in existence, in that State.

————————

1. Ins. by Act 19 of 1972, sec. 4 (w.e.f. 31-5-1972).

Section 4. Presumption as to poisonous substances.

Any substance specified as poisonous by rule made under Chapter III or Chapter IV ¹[or Chapter IVA] shall be deemed to be a poisonous substance for the purpose of Chapter III or Chapter IV 1[or Chapter IVA], as the case may be.

———————–

Section 5.The Drugs Technical Advisory Board.

¹[(2) The Board shall consist of the following members, namely:—

(i) the Director General of Health Services, ex officio, who shall be Chairman;

(ii) the Drugs Controller, India, ex officio;

(iii) the Director of the Central Drugs Laboratory, Calcutta, ex officio;

(iv) the Director of the Central Research Institute, Kasauli, ex officio;

(v) the Director of the Indian Veterinary Research Institute, Izatnagar, ex officio;

(vi) the President of the Medical Council of India, ex officio;

(vii) the President of the Pharmacy Council of India, ex officio;

(viii) the Director of the Central Drug Research Institute, Lucknow, ex officio;

(ix) two persons to be nominated by the Central Government from among persons who are in charge of drugs control in the States;

(x) one person, to be elected by the Executive Committee of the Pharmacy Council of India, from among teachers in pharmacy or pharmaceutical chemistry or pharmacognosy on the staff of an Indian University or a college affiliated thereto;

(xi) one person, to be elected by the Executive Committee of the Medical Council of India, from among teachers in medicine or therapeutics on the staff of an Indian University or a college affiliated thereto;

(xii) one person to be nominated by the Central Government from the pharmaceutical industry;

(xiii) one pharmacologist to be elected by the Governing Body of the Indian Council of Medical Research;

(xiv) one person to be elected by the Central Council of the Indian Medical Association;

(xv) one person to be elected by the Council of the Indian Pharmaceutical Association;

(xvi) two persons holding the appointment of Government Analyst under this Act, to be nominated by the Central Government.]

(3) The nominated and elected members of the Board shall hold office for three years, but shall be eligible for re-nomination and re-election:

²[Provided that the person nominated or elected, as the case may be, under clause (ix) or clause (x) or clause (xi) or clause (xvi) of sub-section (2) shall hold office for so long as he holds the appointment of the office by virtue of which he was nominated or elected to the Board.]

(4) The Board may, subject to the previous approval of the Central Government, make bye-laws fixing a quorum and regulating its own procedure and the conduct of all business to be transacted by it.

(5) The Board may constitute sub-committees and may appoint to such sub-committees for such periods, not exceeding three years, as it may decide, or temporarily for the consideration of particular matters, persons who are not members of the Board.

(6) The functions of the Board may be exercised notwithstanding any vacancy therein.

(7) The Central Government shall appoint a person to be Secretary of the Board and shall provide the Board with such clerical and other staff as the Central Government considers necessary.

—————————–

1. Subs. by Act 13 of 1964, sec. 4, for sub-section (2) (w.e.f. 15-9-1964).

2. Subs. by Act 13 of 1964, sec. 4, for the Proviso (w.e.f. 15-9-1964).

Section 6. The Central Drugs Laboratory.

(1) The Central Government shall, as soon as may be, establish a Central Drugs Laboratory under the control of a Director to be appointed by the Central Government, to carry out the functions entrusted to it by this Act or any rules made under this Chapter :

Provided that, if the Central Government so prescribes, the functions of the Central Drugs Laboratory in respect of any drug or class of drugs ¹[or cosmetic or class of cosmetics] shall be carried out at the Central Research Institute, Kasauli, or at any other prescribed Laboratory and the functions of the Director of the Central Drugs Laboratory in respect of such drug or class of drugs ¹[or such cosmetic or class of cosmetics] shall be exercised by the Director of that Institute or of that other Laboratory, as the case may be.

(2) The Central Government may, after consultation with the Board, make rules prescribing—

(a) the functions of the Central Drugs Laboratory;

²[***]

(d) the procedure for the submission of the said Laboratory ³[under Chapter IV or Chapter IVA] of samples of drugs ²[or cosmetics] for analysis or test, the forms of the Laboratory’s reports thereon and the fees payable in respect of such reports;

(e) such other matters as may be necessary or expedient to enable the said Laboratory to carry out its functions;

(f) the matters necessary to be prescribed for the purposes of the proviso to sub-section (1).

—————————-

1. Ins. by Act 21 of 1962, sec. 5 (w.e.f. 27-7-1964).

2. Clauses (b) and (c) omitted by Act 11 of 1955, sec. 4 (w.e.f. 15-4-1955).

3. Subs. by Act 13 of 1964, sec. 5, for “under Chapter IV” (w.e.f. 15-9-964).

Section 7. The Drugs Consultative Committee.

(1) The Central Government may constitute an advisory committee to be called “the Drugs Consultative Committee” to advise the Central Government, the State Governments and the Drugs Technical Advisory Board on any matter tending to secure uniformity throughout ¹[ India] in the administration of this Act.

(2) The Drugs Consultative Committee shall consist of two representatives of the Central Government to be nominated by that Government and one representative of each State Government to be nominated by the State Government concerned.

(3) The Drugs Consultative Committee shall meet when required to do so by the Central Government and shall have power to regulate its own procedure.

—————————

1. Ins. by Act 3 of 1951, sec. 3 and Sch., for “the States”.

Section 7 A. Section 5 and 7 not to apply to Ayurvedic, Siddha or Unani drugs.

¹[7A. Sections 5 and 7 not to apply to Ayurvedic, Siddha or Unani drugs.—

Nothing contained in sections 5 and 7 shall apply to 2[Ayurvedic, Siddha or Unani] drugs.]

———————————

1. Ins. by Act 13 of 1964, sec. 6 (w.e.f. 15-9-1964).

2. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

Section 8. Standards of quality.

¹[(1) For the purposes of this Chapter, the expression “standard quality” means—

(a) in relation to a drug, that the drug complies with the standard set out in ²[the Second Schedule], and

(b) in relation to a cosmetic, that the cosmetic complies with such standard as may be prescribed.]

(2) The Central Government, after consultation with the Board and after giving by notification in the Official Gazette not less than three months’ notice of its intention so to do, may by a like notification add to or otherwise amend ²[the Second Schedule], for the purposes of this Chapter, and thereupon ²[the Second Schedule] shall be deemed to be amended accordingly.

—————————–

1. Subs. by Act 21 of 1962, sec. 6, for sub-section (1) (w.e.f. 27-7-1964).

2. Subs. by Act 13 of 1964, sec. 7, for “the Schedule” (w.e.f. 15-9-1964).

Section 9. Misbranded drugs.

¹[9. Misbranded drugs. For the purposes of this Chapter, a drug shall be deemed to be misbranded, –

(a) If it is so coloured, coated, powdered or polished that damage is concealed or if it is made to appear of better or greater therapeutic value than it really is ; or

(b) If it is not labeled in the prescribed manner ; or

(c) If its label or contained or anything accompanying the drug bears any statement, design or device which is false or misleading in any particular.]

—————————

1. Subs. by Act 68 of 1982, sec. 5, for section 9 (w.e.f. 1-2-1983).

Section 9 A. Adulterated drugs.

¹[9A. Adulterated drugs. For the purposes of this Chapter, a drug shall be deemed to be adulterated, –

(a) If it consists, in whole or in part, of any filthy, putrid or decomposed substance ; or

(b) If it has been prepared, packed or stored under insanitary conditions whereby it may have been contaminated with filth or whereby it may have been rendered injurious to health ; or

(c) If its contained is composed in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health; or

(d) If it bears or contains, for purposes of colouring only, a colour other than one which is prescribed ; or

(e) If it contains any harmful or toxic substance which may render it injurious to health ; or

(f) If any substance has been mixed therewith so as to reduce its quality or strength.

————————

1. Section 9A ins. by Act 21 of 1962, sec. 7 and subs. by Act 68 of 1982, sec. 6 (w.e.f. 1-2-1983).

Section 9 B. Spurious drugs.

¹9B. Spurious drugs. –For the purposes of this Chapter, a drug shall be deemed to be spurious, –

(a) If it is imported under a name which belongs to another drug ; or

(b) If it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive or bears upon it or upon its label or contained the name of another drug unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug ; or

(c) If the label or container bears the name of an individual or company purporting to be the manufacturer of the drug, which individual or company is fictitious or does not exist ; or

(d) If it has been substituted wholly or in part by another drug or substance ; or

(e) If it purports to be the product of a manufacturer of whom it is only truly a product.

————————-

1. Section 9B ins. by Act 13 of 1964, sec. 8 (w.e.f. 15-9-1964) and subs. by Act 68 of 1982, sec. 6 (w.e.f. 1-2-1983).

Section 9 C. Misbranded Cosmetics.

¹9C. Misbranded Cosmetics.

For the purposes of this Chapter, a cosmetic shall be deemed to be misbranded –

(a) If it contains a colour which is not prescribed ; or

(b) If it is not labeled in the prescribed manner ; or

(c) If the label or container or anything accompanying the cosmetic bears any statement, which is false or misleading in any particular.

—————————-

1. Ins. by Act 68 of 1982, sec. 6 (w.e.f. 1-2-1983).

Section 9 D. Spurious cosmetics.

¹[9D. Spurious cosmetics.

For the purposes of this Chapter, a cosmetic shall be deemed to be spurious, –

(a) If it is imported under a name which belongs to another cosmetic ; or

(b) If it is an imitation of, or is a substitute for, another cosmetic or resembles another cosmetic in a manner likely to deceive or bears upon it or upon its label or container the name of another cosmetic, unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other cosmetic ; or

(c) If the label or container bears the name of an individual or a company purporting to be the manufacturer of the cosmetic which individual or company is fictitious or does not exist ; or

(d) If it purports to be the product of a manufacturer of whom it is.]

———————-

1. Ins. by Act 68 of 1982, sec. 6 (w.e.f. 1-2-1983).

Section 10. Prohibition of import of certain drugs or cosmetics.

From such date¹ as may be fixed by the Central Government by notification in the Official Gazette in this behalf, no person shall import—

(a) any drug ²[or cosmetic] which is not of standard quality;

³[(b) any misbranded drug ⁴[or misbranded or spurious cosmetic];]

⁵[(bb) any ⁶[adulterated or spurious] drug;]

(c) any drug ²[or cosmetic] for the import of which a licence is prescribed, otherwise than under, and in accordance with, such licence;

⁷[(d) any patent or proprietary medicine, unless there is displayed in the prescribed manner on the label or container thereof ⁸[the true formula or list of active ingredients contained in it together with the quantities thereof];]

(e) any drug which by means of any statement, design or device accompanying it or by any other means, purports or claims to cure or mitigate any such disease or ailment, or to have any such other effect, as may be prescribed;

⁹[(ee) any cosmetic containing any ingredient which may render it unsafe or harmful or use under the directions indicated or recommended;]

(f) any drug ¹[or cosmetic] the import of which is prohibited by rule made under this Chapter:

Provided that nothing in this section shall apply to the import, subject to prescribed conditions, of small quantities of any drug for the purpose of examination, test or analysis or for personal use:

Provided further that the Central Government may, after consultation with the Board, by notification in the Official Gazette, permit, subject to any conditions specified in the notification, the import of any drug or class of drugs not being of standard quality.

¹⁰[***]

————————

1.1st April, 1947, for clauses (a), (b), (c), (e) and (f) and 1st April, 1949, for clause (d), see Notification No. 18-12-46-D.I., dated 11th February, 1947, Gazette of India, 1947, Pt. I, p. 189 as amended by Notification No. F-1-2/48-D(I), dated 29th September, 1948. 1st April, 1953, for the States of Himachal Pradesh, Bilaspur, Kutch, Bhopal, Tripura, Vindhya Pradesh and Manipur vide Notification No. S.R.O. 666, dated 30th March, 1953, Gazette of India, 1953, Pt. II. Sec. 3, p. 451

2.Ins. by Act 21 of 1962, sec. 8 (w.e.f. 27-7-1964).

3.Subs. by Act 21 of 1962, sec. 8, for clause (b) (w.e.f. 27-7-1964).

4.Subs. by Act 68 of 1982, sec. 7, for “or misbranded cosmetic” (w.e.f. 1-2-1983).

5.Ins. by Act 13 of 1964, sec. 9 (w.e.f. 15-9-1964).

6.Subs. by Act 68 of 1982, sec. 7, for “adulterated” (w.e.f. 1-2-1983).

7.Subs. by Act 11 of 1955, sec. 5, for clause (d) (w.e.f. 15-4-1955).

8.Subs. by Act 68 of 1982, sec. 7, for certain words (w.e.f. 1-2-1983).

9.Ins. by Act 21 of 1962, sec. 8 (w.e.f. 27-7-1964).

10.Explanation omitted by Act 68 of 1982, sec. 7 (w.e.f. 1-2-1983).

Section 10 A. Power of Central Government to prohibit import of drugs and cosmetics in public interest.

¹[10A. Power of Central Government to prohibit import of drugs and cosmetics in public interest.

Without prejudice to any other provision contained in this Chapter, if the Central Government is satisfied that the use of any drug or cosmetic is likely to involve any risk to human beings or animals or that any drug does not have the therapeutic value claimed for it or contains ingredients and in such quantity for which there is no therapeutic justification and that in the public interest it is necessary or expedient so to do then, that Government may, by notification in the Official Gazette, prohibit the import of such drug or cosmetic.

————————

1. Ins. by Act 68 of 1982, sec. 8 (w.e.f. 1-2-1983).

Section 11. Application of law relating to sea customs and powers of Customs Officers.

(1) The law for the time being in force relating to sea customs and to goods, the import of which is prohibited by section 18 of the Sea Customs Act, 1878 (8 of 1878)¹ shall, subject to the provisions of section 13 of this Act, apply in respect of drugs ²[and cosmetics] the import of which is prohibited under this Chapter, and officers of Customs and officers empowered under that Act to perform the duties imposed thereby on a ³[Commissioner of Customs] and other officers of Customs, shall have the same powers in respect of such drugs ⁴[and cosmetics] as they have for the time being in respect of such goods as aforesaid.

⁵[(2) Without prejudice to the provisions of sub-section (1), the ⁶[Commissioner of Customs] or any officer of the Government authorised by the Central Government in this behalf, may detain any imported package which he suspects to contain any drug ⁷[or cosmetic] the import of which is prohibited under this Chapter and shall forthwith report such detention to the Drugs Controller, India, and if necessary, forward the package or sample of any suspected drug ⁷[or cosmetic] found therein to the Central Drugs Laboratory.]

————————

1. Now see the Customs Act, 1962 (52 of 1962).

2. Ins. by Act 21 of 1962, sec. 9 (w.e.f. 27-7-1964).

3. Subs. by Act 22 of 1995, sec. 83, for “Customs Collector” (w.e.f. 26-5-1995).

4. Ins. by Act 21 of 1962, sec. 9 (w.e.f. 27-7-1964).

5. Subs. by Act 11 of 1955, sec. 6, for sub-section (2) (w.e.f. 15-4-1955).

6. Subs. by Act 22 of 1995, sec. 83, for “Customs Collector” (w.e.f. 26-5-1995).

7. Ins. by Act 21 of 1962, sec. 9 (w.e.f. 27-7-1964).

Section 12. Power of Central Government to make rules.

(1) The Central Government may, ¹[after consultation with or on the recommendation of the Board] and after previous publication by notification in the Official Gazette, make rules for the purpose of giving effect to the provisions of this Chapter:

²[Provided that consultation with the Board may be dispensed with if the Central Government is of opinion that circumstances have arisen which render it necessary to make rules without such consultation, but in such a case the Board shall be consulted within six months of the making of the rules and the Central Government shall take into consideration any suggestions which the Board may make in relation to the amendment of the said rules.]

(2) Without prejudice to the generality of the foregoing power, such rules may—

(a) specify the drugs or classes of drugs ³[or cosmetics or classes of cosmetics] for the import of which a licence is required, ⁴[and prescribe the form and conditions of such licences, the authority empowered to issue the same, the fees payable therefor and provide for the cancellation, or suspension of such licence in any case where any provision of this Chapter or the rules made thereunder is contravened or any of the conditions subject to which the licence is issued is not complied with];

(b) prescribe the methods of test or analysis to be employed in determining whether a drug ³[or cosmetic] is of standard quality;

⁵[(cc) prescribe under clause (d) of 6[section 9A] the colour or colours which a drug may bear or contain for purposes of colouring;]

(d) specify the diseases or ailments which an imported drug may not purport or claim ⁷[to prevent, cure or mitigate] and such other effects which such drug may not purport or claim to have;

(e) prescribe the conditions subject to which small quantities of drugs, the import of which is otherwise prohibited under this Chapter, may be imported for the purpose of examination, test or analysis or for personal use;

(f) prescribe the places at which drugs 8[or cosmetics] may be imported, and prohibit their import at any other place;

(g) require the date of manufacture and the date of expiry of potency to be clearly and truly stated on the label or container of any specified imported drug or class of such drug, and prohibit the import of the said drug or class of drug after the expiry of a specified period from the date of manufacture;

(h) regulate the submission by importers, and the securing, of samples of drugs ⁸[or cosmetics] for examination, test or analysis by the Central Drugs Laboratory, and prescribe the fees, if any, payable for such examination, test or analysis;

(i) prescribe the evidence to be supplied, whether by accompanying documents or otherwise, of the quality of drugs 8[or cosmetics] sought to be imported, the procedure of officers of Customs in dealing with such evidence, and the manner of storage at places of import of drugs 8[or cosmetics] detained pending admission;

(j) provide for the exemption, conditionally or otherwise, from all or any of the provisions of this Chapter and the rules made thereunder of drugs 8[or cosmetics] imported for the purpose only of transport through, and export from, ⁹[India];

(k) prescribe the conditions to be observed in the packing in bottles, packages or other containers, of imported drugs ⁸[or cosmetics] ¹⁰[including the use of packing material which comes into direct contact with the drugs];

(l) regulate the mode of labelling drugs ⁸[or cosmetics] imported for sale in packages, and prescribe the matters which shall or shall not be included in such labels;

(m) prescribe the maximum proportion of any poisonous substance which may be added to or contained in any imported drug, prohibit the import of any drug in which that proportion is exceeded, and specify substances which shall be deemed to be poisonous for the purposes of this Chapter and the rules made thereunder;

(n) require that the accepted scientific name of any specified drug shall be displayed in the prescribed manner on the label or wrapper of any imported, patent or proprietary medicine containing such drug;

(o) provide for the exemption, conditionally or otherwise, from all or any of the provisions of this Chapter or the rules made thereunder of any specified drug or class of drugs ¹¹[or cosmetics or class of cosmetics].

————————

1. Subs. by Act 68 of 1982, sec. 9, for “after consultation with the Board” (w.e.f. 1-2-1983).

2. Ins. by Act 11 of 1955, sec. 7 (w.e.f. 15-4-1955).

3. Ins. by Act 21 of 1962, sec. 10 (w.e.f. 27-7-1964).

4. Subs. by Act 68 of 1982, sec. 9, for certain words (w.e.f. 1-2-1983).

5. Ins. by Act 13 of 1964, sec. 10 (w.e.f. 15-9-1964).

6. Subs. by Act 68 of 1982, sec. 9 for “section 9B” (w.e.f. 1-2-1983).

7. Subs. by Act 11 of 1955, sec. 7, for “to cure or mitigate” (w.e.f. 15-4-1955).

8. Ins. by Act 21 of 1962, sec. 10 (w.e.f. 27-7-1964).

9. Subs. by Act 3 of 1951, sec. 3 and Sch., for “the States”.

10. Ins. by Act 68 of 1982, sec. 9 (w.e.f. 1-2-1983).

11. Ins. by Act 21 of 1962, sec. 10 (w.e.f. 27-7-1964).

Section 13. Offences.

13. Offences. – (1) Whoever himself or by any other person on his behalf imports,

(a) Any drug deemed to be adulterated under section 9A or deemed to be a spurious drug under section 9B or any spurious cosmetic referred to in section 9D or any cosmetic of the nature referred to in clause (ee) of section 10 shall be punishable with imprisonment for a term which may extend to three years and a fine which may extend to five thousand rupees .

(b) Any drug or cosmetic other than a drug or cosmetic referred to in clause (a), the import of which is prohibited under section 10, or any rule made under this Chapter, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both ;

(c) Any drug or cosmetic in contravention of the provisions of any notification issued under section 10A, shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both.

(2) Whoever having been convicted of an offence –

(a) Under clause (a) or clause (c) of sub-section (1), is again convicted of an offence under that clause, shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to ten thousand rupees, or with both ;

(b) Under clause (b) of sub-section (1), is again convicted of an offence under that clause, shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both.

(3) The punishment provided by this section shall be in addition to any penalty to which the offender may be liable under the provisions of section 11.

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1. Subs. by Act 68 of 1982, sec. 10, for section 13 (w.e.f. 1-2-1983).

Section 14. Confiscation.

Where any offence punishable under section 13 has been committed, the consignment of the drugs ¹or cosmetics] in respect of which the offence has been committed shall be liable to confiscation.

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1. Ins. by Act 21 of 1962, sec. 11 (w.e.f. 27-7-1964).

Section 15. Jurisdiction.

No Court inferior to that ¹[of a Metropolitan Magistrate or of a Judicial Magistrate of the first class] shall try an offence punishable under section 13.

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1. Subs. by Act 68 of 1982, sec. 11, for certain words (w.e.f. 1-2-1983).

Section 16. Standards of quality.

¹[(1) For the purposes of this Chapter, the expression “standard quality” means—

(a) in relation to a drug, that the drug complies with the standard set out in ²[the Second Schedule], and

(b) in relation to a cosmetic, that the cosmetic complies with such standard as may be prescribed.]

(2) The ³[Central Government], after consultation with the Board and after giving by notification in the Official Gazette not less than three months’ notice of its intention so to do, may by a like notification add to or otherwise amend ²[the Second Schedule] for the purposes of this Chapter, and thereupon ²[the Second Schedule] shall be deemed to be amended accordingly.

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1. Subs. by Act 21 of 1962, sec. 12, for sub-section (1) (w.e.f. 27-7-1964).

2. Subs. by Act 13 of 1964, sec. 11, for “the Schedule” (w.e.f. 15-9-1964).

3. Subs. by Act 11 of 1955, sec. 8, for “State Government” (w.e.f. 15-4-1955).

Section 17. Misbranded drugs.

¹17. Misbranded drugs. For the purposes of this Chapter, a drug shall be deemed to be misbranded, –

(a) If it is so coloured, coated, powdered or polished that damage is concealed or if it is made to appear of better or greater therapeutic value than it really is ; or

(b) If it is not labeled in the prescribed manner ; or

(c) If its label or container or anything accompanying the drug bears any statement, design or device which makes any false claim for the drug or which is false or misleading in any particular.

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1. Subs. by Act 68 of 1982, sec. 13, for section 17 (w.e.f. 1-2-1983).

Section 17 A. Adulterated drugs.

For the purposes of this Chapter, a drug shall be deemed to be adulterated, –

(a) If it consists in whole or in part, of any filthy, putrid or decomposed substance ; or

(b) If it has been prepared, packed or stored under unsanitary conditions whereby it may have been contaminated with filth or whereby it may have been rendered injurious to health ; or

(c) If its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health ; or

(d) If it bears or contains, for purposes of colouring only, a colour other than one which is prescribed ; or

(e) If it contains any harmful or toxic substance which may render it injurious to health ; or

(f) If any substance has been mixed therewith so as to reduce its quality or strength.

Section 17 B. Spurious drugs.

For the purposes of this Chapter, a drug shall be deemed to be spurious, –

(a) If it is manufactured under a name which belongs to another drug; or

(b) If it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive or bears upon it or upon its label or container the name of another drug unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug ; or

(c) If the label or container bears the name of an individual or company purporting to be the manufacturer of the drug, which individual or company is fictitious or does not exist ; or

(d) If it has been substituted wholly or in part by another drug or substance ; or

(e) If it purports to be the product of a manufacturer of whom it is not truly a product.

Section 17 C. Misbranded cosmetics.

For the purposes of this Chapter, a cosmetic shall be deemed to be misbranded, –

(a) If it contains a colour which is not prescribed ; or

(b) If it is not labeled in the prescribed manner ; or

(c) If the label or container or anything accompanying the cosmetic bears any statement which is false or misleading in any particular.

Section 17 D. Spurious cosmetics.

For the purposes of this Chapter, a cosmetic shall be deemed to be spurious, —

(a) If it is manufactured under a name which belongs to another cosmetic ; or

(b) If it is an imitation of, or a substitute for, another cosmetic or resembles another cosmetic in a manner likely to deceive or bears upon it or upon its conspicuously marked so as to reveal its true character and its lack of identity with such other cosmetic ; or

(c) If the label or container bears the name of an individual or a company purporting to be the manufacturer of the cosmetic which individual or company is fictitious or does not exist ; or

(d) If it purports to be the product of a manufacturer of whom it is not truly a product.

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1. Ins. by Act 68 of 1982, sec. 13 (w.e.f. 1-2-1983).

The Drugs and Cosmetics Act, 1940

Section 18 A. Disclosure of the name of the manufacturer, etc.

¹[18A. Disclosure of the name of the manufacturer, etc. Every person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof, shall, if so required, disclose to the Inspector the name, address and other particulars of the person from whom he acquired the drug or cosmetic.

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1. Ins. by Act 13 of 1964, sec. 14 (w.e.f. 15-9-1964).

Section 18 B. Maintenance of records and furnishing of information.

¹18B. Maintenance of records and furnishing of information. Every person holding a licence under clause (c) of section 18 shall keep and maintain such records, registers and other documents as may be prescribed and shall furnish to any officer or authority exercising any power or discharging any function under this Act such information as is required by such officer or authority for carrying out the purposes of this Act.

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1. Ins. by Act 68 of 1982, sec. 15 (w.e.f 1-2-1983).

Section 19. Pleas.

(1) Save as hereinafter provided in this section, it shall be no defence in a prosecution under this Chapter to prove merely that the accused was ignorant of the nature, substance or quality of the drug ¹[or cosmetic] in respect of which the offence has been committed or of the circumstances of its manufacture or import, or that a purchaser, having bought only for the purpose of test or analysis, has not been prejudiced by the sale.

(2) ²[For the purposes of section 18 a drug shall not be deemed to be misbranded or ³[adulterated or spurious] or to be below standard quality nor shall a cosmetic be deemed to be misbranded or to be below standard quality] only by reason of the fact that—

(a) there has been added thereto some innocuous substance or ingredient because the same is required for the manufacture or preparation of the drug ⁴[or cosmetic] as an article of commerce in a state fit for carriage or consumption, and not to increase the bulk, weight or measure of the drug ⁴[or cosmetic] or to conceal its inferior quality or other defects; or

⁵[***]

(b) in the process of manufacture, preparation or conveyance some extraneous substance has unavoidably become intermixed with it: provided that this clause shall not apply in relation to any sale or distribution of the drug ⁴[or cosmetic] occurring after the vendor or distributor became aware of such intermixture.

⁶[(3) A person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof, shall not be liable for a contravention of section 18 if he proves—

(a) that he acquired the drug or cosmetic from a duly licensed manufacturer, distributor or dealer thereof;

(b) that he did not know and could not, with reasonable diligence, have ascertained that the drug or cosmetic in any way contravened the provisions of that section; and

(c) that the drug or cosmetic, while in his possession was properly stored and remained in the same state as when he acquired it.]

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1. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

2. Subs. by Act 13 of 1964, sec. 15, for certain words (w.e.f. 15-9-1964).

3. Subs. by Act 68 of 1982, sec. 16, for “adulterated” (w.e.f. 1-2-1983).

4. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

5. Clause (aa) ins. by Act 11 of 1955, sec. 10 (w.e.f. 15-4-1955) and omitted by Act 13 of 1964, sec. 15 (w.e.f. 15-9-1964).

6. Subs. by Act 13 of 1964, sec. 15, for sub-section (3) (w.e.f. 15-9-1964).

Section 20. Government Analysts.

¹[20. Government Analysts.—(1) The State Government may, by notification in the Official Gazette, appoint such persons as it thinks fit, having the prescribed qualifications, to be Government Analysts for such areas in the State and in respect of such drugs or ²[classes of drugs or such cosmetics or classes of cosmetics] as may be specified in the notifications.

(2) The Central Government may also, by notification in the Official Gazette, appoint such persons as it thinks fit, having the prescribed qualifications, to be Government Analysts in respect of such drugs or ²[classes of drugs or such cosmetics or classes of cosmetics] as may be specified in the notification.

(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), neither the Central Government nor a State Government shall appoint as a Government Analyst any official not serving under it without the previous consent of the Government under which he is serving.]

³[(4) No person who has any financial interest in the import, manufacture or sale of drugs or cosmetics shall be appointed to be a Government Analyst under sub-section (1) or sub-section (2) of this section.]

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1. Subs. by Act 35 of 1960, sec. 4, for section 20 (w.e.f. 16-3-1961).

2. Subs. by Act 21 of 1962, sec. 16, for “class of drugs” (w.e.f. 27-7-1964).

3. Ins. by Act 68 of 1982, sec. 17 (w.e.f. 1-2-1983).

Section 21. Inspectors.

¹[21. Inspectors.—(1) The Central Government or a State Government may by notification in the Official Gazette, appoint such persons as it thinks fit, having the prescribed qualifications, to be Inspectors for such areas as may be assigned to them by the Central Government or the State Government, as the case may be.

(2) The powers which may be exercised by an Inspector and the duties which may be performed by him, the drugs or ²[classes of drugs or cosmetics or classes of cosmetics] in relation to which and the conditions, limitations or restrictions subject to which, such powers and duties may be exercised or performed shall be such as may be prescribed.

(3) No person who has any financial interest ³[in the import, manufacture or sale of drugs or cosmetics] shall be appointed to be an Inspector under this section.

(4) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (45 of 1860), and shall be officially subordinate to such authority ⁴[, having the prescribed qualifications,] as the Government appointing him may specify in this behalf.]

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1. Subs. by Act 35 of 1960, sec. 4, for section 21 (w.e.f. 16-3-1961).

2. Subs. by Act 21 of 1962, sec. 17 for “class of drugs” (w.e.f. 27-7-1964).

3. Subs. by Act 21 of 1962, sec. 17, for “in the manufacture, import or sale of drugs” (w.e.f. 27-7-1964).

4. Ins. by Act 68 of 1982, sec. 18 (w.e.f. 1-2-1983).

Section 22. Powers of Inspectors.

¹[22. Powers of Inspectors.—(1) Subject to the provisions of section 23 and of any rules made by the Central Government in this behalf, an Inspector may, within the local limits of the area for which he is appointed,—

²[(a) inspect,—

(i) any premises wherein any drug or cosmetic is being manufactured and the means employed for standardising and testing the drug or cosmetic;

(ii) any premises wherein any drug or cosmetic is being sold, or stocked or exhibited or offered for sale, or distributed;

(b) take samples of any drug or cosmetic,—

(i) which is being manufactured or being sold or is stocked or exhibited or offered for sale, or is being distributed;

(ii) from any person who is in the course of conveying, delivering or preparing to deliver such drug or cosmetic to a purchaser or a consignee;

(i) search any person, who, he has reason to believe, has secreted about his person, any drug or cosmetic in respect of which an offence under this Chapter has been, or is being, committed; or

(ii) enter and search any place in which he has reason to believe that an offence under this Chapter has been, or is being, committed; or

(iii) stop and search any vehicle, vessel or other conveyance which, he has reason to believe, is being used for carrying any drug or cosmetic in respect of which an offence under this Chapter has been, or is being, committed,

and order in writing the person in possession of the drug or cosmetic in respect of which the offence has been, or is being, committed, not to dispose of any stock of such drug or cosmetic for a specified period not exceeding twenty days, or, unless the alleged offence is such that the defect may be removed by the possessor of the drug or cosmetic, seize the stock of such drug or cosmetic and any substance or article by means of which the offence has been, or is being, committed or which may be employed for the commission of such offence;]

³[(cc) examine any record, register, document or any other material object found ⁴[with any person, or in any place, vehicle, vessel or other conveyance referred to in clause (c)], and seize the same if he has reason to believe that it may furnish evidence of the commission of an offence punishable under this Act or the Rules made thereunder;]

⁵[(cca) require any person to produce any record, register, or other document relating to the manufacture for sale or for distribution, stocking, exhibition for sale, offer for sale or distribution of any drug or cosmetic in respect of which he has reason to believe that an offence under this Chapter has been, or is being, committed;]

(d) exercise such other powers as may be necessary for carrying out the purposes of this Chapter or any rules made thereunder.

(2) The provisions of ⁶[the Code of Criminal Procedure, 1973 (2 of 1974)] shall, so far as may be, apply to any search or seizure under this Chapter as they apply to any search or seizure made under the authority of a warrant issued under ⁷[section 94] of the said Code.

⁸[(2A) Every record, register or other document seized under clause (cc) or produced under clause (cca) shall be returned to the person, from whom they were seized or who produce the same, within a period of twenty days of the date of such seizure or production, as the case may be, after copies thereof or extracts therefrom certified by that person, in such manner as may be prescribed, have been taken.]

(3) If any person wilfully obstructs an Inspector in the exercise of the powers conferred upon him by or under this Chapter ⁸[or refuses to produce any record, register or other document when so required under clause (cca) of sub-section (1),] he shall be punishable with imprisonment which may extend to three years, or with fine, or with both.]

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1. Subs. by Act 11 of 1955, sec. 11, for section 22 (w.e.f. 15-4-1955).

2. Subs. by Act 68 of 1982, sec. 19, for clauses (a), (b) and (c) (w.e.f. 1-2-1983).

3. Ins. by Act 35 of 1960, sec. 5 (w.e.f. 16-3-1961).

4. Subs. by Act 68 of 1982, sec. 19, for “in any place mentioned in clause (c)” (w.e.f. 1-2-1983).

5. Ins. by Act 68 of 1982, sec. 19 (w.e.f. 1-2-1983).

6. Subs. by Act 68 of 1982, sec. 19, for “the Code of Criminal Procedure, 1898 (5 of 1898)” (w.e.f. 1-2-1983).

7. Subs. by Act 68 of 1982, sec. 19, for “section 98” (w.e.f. 1-2-1983).

8. Ins. by Act 68 of 1982, sec. 19 (w.e.f. 1-2-1983).

Section 23. Procedure of Inspectors.

(1) Where an Inspector takes any sample of a drug ¹[or cosmetic] under this Chapter, he shall tender the fair price thereof and may require a written acknowledgement therefor.

(2) Where the price tendered under sub-section (1) is refused or where the Inspector seizes the stock of any drug ¹[or cosmetic] under clause (c) of section 22, he shall tender a receipt therefor in the prescribed form.

(3) Where an Inspector takes a sample of a drug ¹[or cosmetic] for the purpose of test or analysis, he shall intimate such purpose in writing in the prescribed form to the person from whom he takes it and, in the presence of such person unless he wilfully absents himself, shall divide the sample into four portions and effectively seal and suitably mark the same and permit such person to add his own seal and mark to all or any of the portions so sealed and marked:

Provided that where the sample is taken from premises whereon the drug ¹[or cosmetic] is being manufactured, it shall be necessary to divide the sample into three portions only:

Provided further that where the drug ¹[or cosmetic] is made up in containers of small volume, instead of dividing a sample as aforesaid, the Inspector may, and if the drug ¹[or cosmetic] be such that it is likely to deteriorate or be otherwise damaged by exposure shall, take three or four, as the case may be, of the said containers after suitably marking the same and, where necessary, sealing them.

(4) The Inspector shall restore one portion of a sample so divided or one container, as the case may be, to the person from whom he takes it, and shall retain the remainder and dispose of the same as follows:—

(i) one portion or container he shall forthwith send to the Government Analyst for test or analysis;

(ii) the second he shall produce to the Court before which proceedings, if any, are instituted in respect of the drug ¹[or cosmetic]; and

²[(iii) the third, where taken, he shall send to the person, if any, whose name, address and other particulars have been disclosed under section 18A.]

(5) Where an Inspector takes any action under clause (c) of section 22,—

(a) he shall use all despatch in ascertaining whether or not the drug 1[or cosmetic] contravenes any of the provisions of section 18 and, if it is ascertained that the drug ¹[or cosmetic] does not so contravene forthwith revoke the order passed under the said clause or, as the case may be, take such action as may be necessary for the return of the stock seized;

(b) if he seizes the stock of the drug ¹[or cosmetic], he shall as soon as may be, inform ³[a Judicial Magistrate] and take his orders as to the custody thereof;

(c) without prejudice to the institution of any prosecution, if the alleged contravention be such that the defect may be remedied by the possessor of the drug ¹[or cosmetic], he shall, on being satisfied that the defect has been so remedied, forthwith revoke his order under the said clause.

⁴[(6) Where an Inspector seizes any record, register, document or any other material object under clause (cc) of sub-section (1) of section 22, he shall, as soon as may be, inform ³[a Judicial Magistrate] and take his orders as to the custody thereof.]

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1. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

2. Subs. by Act 13 of 1964, sec. 16, for clause (iii) (w.e.f. 15-9-1964).

3. Subs. by Act 68 of 1982, sec. 20, for “a Magistrate” (w.e.f. 1-2-1983).

4. Ins. by Act 35 of 1960, sec. 6 (w.e.f. 16-3-1961).

Section 24. Persons bound to disclose place where drugs or cosmetics are manufactured or kept.

Every person for the time being in charge of any premises whereon any drug ¹[or cosmetic] is being manufactured or is kept for sale or distribution shall, on being required by any Inspector so to do, be legally bound to disclose to the Inspector the place where the drug 1[or cosmetic] is being manufactured or is kept, as the case may be.

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1. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

Section 25. Reports of Government Analysts.

(1) The Government Analyst to whom a sample of any drug ¹[or cosmetic] has been submitted for test or analysis under sub-section (4) of section 23, shall deliver to the Inspector submitting it a signed report in triplicate in the prescribed form.

(2) The Inspector on receipt thereof shall deliver one copy of the report to the person from whom the sample was taken ²[and another copy to the person, if any, whose name, address and other particulars have been disclosed under section 18A], and shall retain the third copy for use in any prosecution in respect of the sample.

(3) Any document purporting to be a report signed by a Government Analyst under this Chapter shall be evidence of the facts stated therein, and such evidence shall be conclusive unless the person from whom the sample was taken ³[or the person whose name, address and other particulars have been disclosed under section 18A] has, within twenty-eight days of the receipt of a copy of the report, notified in writing the Inspector or the Court before which any proceedings in respect of the sample are pending that he intends to adduce evidence in controversion of the report.

(4) Unless the sample has already been tested or analysed in the Central Drugs Laboratory, where a person has under sub-section (3) notified his intention of adducing evidence in controversion of a Government Analyst’s report, the Court may, of its own motion or in its discretion at the request either of the complainant or the accused: cause the sample of the drug¹[or cosmetic] produced before the Magistrate under sub-section (4) of section 23 to be sent for test or analysis to the said Laboratory, which shall make the test or analysis and report in writing signed by or under the authority of, the Director of the Central Drugs Laboratory the result thereof, and such report shall be conclusive evidence of the facts stated therein.

(5) The cost of a test or analysis made by the Central Drugs Laboratory under sub-section (4) shall be paid by the complainant or accused as the Court shall direct.

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1. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

2. Subs. by Act 13 of 1964, sec. 17, for certain words (w.e.f. 15-9-1964).

3. Subs. by Act 13 of 1964, sec. 17, for “or the said warrantor” (w.e.f. 15-9-1964).

Section 26. Purchaser of drug or cosmetic enabled to obtain test or analysis.

Any person ¹[or any recognised consumer association, whether such person is a member of that association or not] shall, on application in the prescribed manner and on payment of the prescribed fee, be entitled to submit for test or analysis to a Government Analyst any drug ²[or cosmetic] ³[purchased by him or it] and to receive a report of such test or analysis signed by the Government Analyst.

⁴[Explanation.—For the purposes of this section and section 32, “recognised consumer association” means a voluntary consumer association registered under the Companies Act, 1956 or any other law for the time being in force.]

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1. Ins. by Act 71 of 1986, sec. 2 (w.e.f. 15-9-1987).

2. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

3. Subs. by Act 71 of 1986, sec. 2, for “purchased by him” (w.e.f. 15-9-1987).

4. Added by Act 71 of 1986, sec. 2 (w.e.f. 15-9-1987).

Section 26 A. Powers of Central Government to prohibit manufacture, etc., of drug and cosmetic in public interest.

¹[26A. Powers of Central Government to prohibit manufacture, etc., of drug and cosmetic in public interest.—Without prejudice to any other provision contained in this Chapter, if the Central Government is satisfied, that the use of any drug or cosmetic is likely to involve any risk to human beings or animals or that any drug does not have the therapeutic value claimed or purported to be claimed for it or contains ingredients and in such quantity for which there is no therapeutic justification and that in the public interest it is necessary or expedient so to do, then, that Government may, by notification in the Official Gazette, prohibit the manufacture, sale or distribution of such drug or cosmetic.]

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1. Ins. by Act 68 of 1982, sec. 21 (w.e.f. 1-2-1983).

Section 27. Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter.

Whoever, himself or by any other person on his behalf, manufacturers for sale or for distribution, or sells, or stocks or exhibits or offers for sale or distributes,-

(a) any drug deemed to be adulterated under section 17A or spurious under section 17B or which when used by any person for or in the diagnosis, treatment, mitigation, or prevention of any disease or disorder is likely to cause his death or is likely to cause such harm on his body as would amount to grievous hurt within the meaning of section 320 of the Indian Penal Code solely on account of such drug being adulterated or spurious or not of standard quality, as the case may be, shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to a term of life and with fine which shall not be less than ten thousand rupees ;

(b) any drug —

(i) deemed to be adulterated under section 17A, but not being a drug referred to in clause (a), or

(ii) without a valid licence as required under clause © of section 18, shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than five thousand rupees :

Provided that the Court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a term of less than one year and of fine of less than five thousand rupees :

(c) any drug deemed to be spurious under section 17B, but not being a drug referred to in clause (a) shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to five years and with fine which shall not be less than five thousand rupees :

Provided that the Court may, for any adequate and special reasons, to be recorded in the judgement, impose a sentence of imprisonment for a term of less than three years but not less than one year,

(d) any drug, other than a drug referred to in clause (a) or clause (b) or clause (c), in contravention of any other provision of this Chapter or any rule made there under, shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to two years and with fine :

Provided that the Court may for any adequate and special reasons to be recorded in the judgement impose a sentence of imprisonment for a term of less than one year.

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1. Section 27 subs. by Act 13 of 1964, sec. 18 (w.e.f. 15-9-1964) and again subs. by Act 68 of 1982, sec. 22 (w.e.f. 1-2-1983).

Section 27 A. Penalty for manufacture, sale, etc., of cosmetics in contravention of this Chapter.

Whoever himself or by any other person on his behalf manufacturers for sale or for distribution, or sells, or stocks or exhibits or offers for sale –

(i) Any cosmetic deemed to be spurious under section 17C shall be punishable with imprisonment for a term, which may extend to three years and with fine ;

(ii) Any cosmetic other than a cosmetic referred to in clause (I) above in contravention of any provisions of this Chapter or any rule made there under shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to one thousand rupees or with both.

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1. Section 27A ins. by Act 21 of 1962, sec. 19 (w.e.f. 27-7-1964) and subs. by Act 68 of 1982, sec. 22 (w.e.f. 1-2-1983).

Section 28. Penalty for non-disclosure of the name of the manufacturer, etc.

¹[28. Penalty for non-disclosure of the name of the manufacturer, etc.—Whoever contravenes the provisions of section 18A ²[or section 24] shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to ³[one thousand rupees], or with both.]

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1. Subs. by Act 13 of 1964, sec. 19, for section 28 (w.e.f. 15-9-1964).

2. Ins. by Act 68 of 1982, sec. 23 (w.e.f. 1-2-1983).

3. Subs. by Act 68 of 1982, sec. 23, for “five hundred rupees” (w.e.f. 1-2-1983).

Section 28 A – Penalty for not keeping documents, etc., and for non-disclosure of information.

¹[28A. Penalty for not keeping documents, etc., and for non-disclosure of information.—Whoever without reasonable cause or excuse, contravenes the provisions of section 18B shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to one thousand rupees or with both.]

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1. Ins. by Act 68 of 1982, sec. 24 (w.e.f. 1-2-1983).

Section 28 B. Penalty for manufacture, etc., of drugs or cosmetics in contravention of section 26A.

¹[28B. Penalty for manufacture, etc., of drugs or cosmetics in contravention of section 26A. Whoever himself or by any other person on his behalf manufacturers or sells or distributes any drug or cosmetic in contravention of the provisions of any notification issued under section 26A, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine which may extend to five thousand rupees.

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1. Ins. by Act 68 of 1982, sec. 24 (w.e.f. 1-2-1983).

Section 29. Penalty for use of Government Analyst’s report for advertising.

Whoever uses any report of a test or analysis made by the Central Drugs Laboratory or by a Government Analyst, or any extract from such report, for the purpose of advertising any drug ¹ shall be punishable with fine which may extend to five hundred rupees.

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1. Ins. by Act 21 of 1962, sec. 15 (w.e.f. 27-7-1964).

Section 30. Penalty for subsequent offences. – [(1) (Note: Subs. by Act 68 of 1982, sec.25, for sub-section (1) (w.e.f. 1-2-1983)) Whoever having been convicted of an offence,

¹[30. Penalty for subsequent offences.—²[(1) Whoever having been convicted of an offence,—

(a) under clause (b) of section 27 is again convicted of an offence under that clause, shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to six years and with fine which shall not be less than ten thousand rupees:

Provided that the Court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than two years and of fine of less than ten thousand rupees;

(b) under clause (c) of section 27, is again convicted of an offence under that clause shall be punishable with imprisonment for a term which shall not be less than six years but which may extend to ten years and with fine which shall not be less than ten thousand rupees;

(c) under clause (d) of section 27, is again convicted of an offence under that clause shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to four years or with fine which shall not be less than five thousand rupees, or with both.]

³[(1A) Whoever, having been convicted of an offence under section 27A is again convicted under that section, shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to ⁴[two thousand rupees], or with both.]

(2) Whoever, having been convicted of an offence under ⁵[***] section 29 is again convicted of an offence under the same section, shall be punishable with imprisonment which may extend to 6[ten years], or with fine, or with both.]

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1. Subs. by Act 11 of 1955, sec. 14, for section 30 (w.e.f. 15-4-1955).

2. Subs. by Act 68 of 1982, sec. 25, for sub-section (1) (w.e.f. 1-2-1983).

3. Ins. by Act 21 of 1962, sec. 20 (w.e.f. 27-7-1964).

4. Subs. by Act 68 of 1982, sec. 25, for “one thousand rupees” (w.e.f. 1-2-1983).

5. The words “section 28 or” omitted by Act 13 of 1964, sec. 20 (w.e.f. 15-9-1964).

6. Subs. by Act 13 of 1964, sec. 20, for “two years” (w.e.f. 15-9-1964).

Section 31. Confiscation.

¹[(1)] Where any person has been convicted under this Chapter for contravening any such provision of this Chapter or any rule made thereunder as may be specified by rule made in this behalf, the stock of the drug ²[or cosmetic] in respect of which the contravention has been made shall be liable to confiscation ³[and if such contravention is in respect of—

⁴[(i) manufacture of any drug deemed to be misbranded under section 17, adulterated under section 17A or spurious under section 17B; or]

(ii) ⁵[manufacture for sale, or for distribution, sale, or stocking or exhibiting or offering for sale,] or distribution of any drug without a valid licence as required under clause (c) of section 18, any implements or machinery used in such manufacture, sale or distribution and any receptacles, packages or coverings in which such drug is contained and the animals, vehicles, vessels or other conveyances used in carrying such drug shall also be liable to confiscation].

⁶[(2) Without prejudice to the provisions contained in sub-section (1) where the Court is satisfied, on the application of an Inspector or otherwise and after such inquiry as may be necessary that the drug or cosmetic is not of standard quality ⁷[or is a 8[misbranded, adulterated or spurious drug or misbranded or spurious cosmetic,]] such drug or, as the case may be, such cosmetic shall be liable to confiscation.]

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1. Section 31 re-numbered as sub-section (1) of that section by Act 35 of 1960, sec. 9 (w.e.f. 16-3-1961).

2. Ins. by Act 21 of 1962, sec. 21 (w.e.f. 27-7-1964).

3. Added by Act 13 of 1964, sec. 21 (w.e.f. 15-9-1964).

4. Subs. by Act 68 of 1982, sec. 26, for clause (i) (w.e.f. 1-2-1983).

5. Subs. by Act 68 of 1982, sec. 26, for certain words (w.e.f. 1-2-1983).

6. Sub-section (2) ins. by Act 35 of 1960, sec. 9 (w.e.f. 16-3-1961) and subs. by Act 21 of 1962, sec. 21 (w.e.f. 27-7-1964).

7. Subs. by Act 13 of 1964, sec. 21, for “or is a misbranded drug” (w.e.f. 15-9-1964).

8. Subs. by Act 68 of 1982, sec. 26, for “misbranded or adulterated drug, or misbranded cosmetic” (w.e.f. 1-2-1983).

Section 31 A. Application of provisions to Government departments.

¹[31A. Application of provisions to Government departments

The provisions of this Chapter except those contained in section 31 shall apply in relation to the manufacture, sale or distribution of drugs by any department of Government as they apply in relation to the manufacture, sale or distribution of drugs by any other person.

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1. Ins. by Act 13 of 1964, sec. 22 (w.e.f. 15-9-1964).

Section 32. Cognizance of offences.

(1) No prosecution under this Chapter shall be instituted except by an Inspector ¹or by the person aggrieved or by a recognised consumer association whether such person is a member of that association or not.]

(2) No court inferior to that of ² a Metropolitan Magistrate or of a Judicial Magistrate of the first class] shall try an offence punishable under this Chapter.

(3) Nothing contained in this Chapter shall be deemed to prevent any person from being prosecuted under any other law for any act or omission, which constitutes an offence against this Chapter.

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1. Ins. by Act 71 of 1986, sec. 3 (w.e.f. 15-9-1987).

2. Subs. by Act 68 of 1982, sec. 27, for “a Presidency Magistrate or of a Magistrate of the first class” (w.e.f. 1-2-1983).

Section 32 A. Power of Court to implead the manufacturer, etc.

¹[32A. Power of Court to implead the manufacturer, etc.—Where, at any time during the trial of any offence under this Chapter alleged to have been committed by any person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof the Court is satisfied, on the evidence adduced before it, that such manufacturer or agent is also concerned in that offence, then, the Court may, notwithstanding anything contained ²[in sub-sections (1), (2) and (3) of section 319 of the Code of Criminal Procedure, 1973 (2 of 1974)], proceed against him as though a prosecution had been instituted against him under section 32.

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1. Ins. by Act 13 of 1964, sec. 23 (w.e.f. 15-9-1964).

2. Subs. by Act 68 of 1982, sec. 28, for “in sub-section (1) of section 351 of the Code of Criminal Procedure, 1898 (5 of 1898)” (w.e.f. 1-2-1983).

Section 33. Power of Central Government to make rules.

¹[(1) The Central Government may ²[after consultation with, or on the recommendation of, the Board] and after previous publication by notification in the Official Gazette, make rules for the purposes of giving effect to the provisions of this Chapter:

Provided that consultation with the Board may be dispensed with if the Central Government is of opinion that circumstances have arisen which render it necessary to make rules without such consultation, but in such a case the Board shall be consulted within six months of the making of the rules and the Central Government shall take into consideration any suggestions which the Board may make in relation to the amendment of the said rules.]

(2) Without prejudice to the generality of the foregoing power, such rules may—

(a) provide for the establishment of laboratories for testing and analysing drugs ³[or cosmetics];

(b) prescribe the qualifications and duties of Government Analysts and the qualifications of Inspectors;

(c) prescribe the methods of test or analysis to be employed in determining whether a drug ³[or cosmetic] is of standard quality;

(d) prescribe, in respect of biological and organometallic compounds, the units or methods of standardisation;

⁴[(dd) prescribe under clause (d) of ⁵[section 17A] the colour or colours which a drug may bear or contain for purposes of colouring;]

(e) prescribe the forms of licences 6[for the manufacture for sale or for distribution], for the sale and for the distribution of drugs or any specified drug or class of drugs ⁷[or of cosmetics or any specified cosmetic or class of cosmetics], the form of application for such licences, the conditions subject to which such licences may be issued, the authority empowered to issue the same ⁸[the qualifications of such authority] and the fees payable therefor; ⁸[and provide for the cancellation or suspension of such licences in any case where any provision of this Chapter or the rules made thereunder is contravened or any of the conditions subject to which they are issued is not complied with];

⁸[(ee) prescribe the records, registers or other documents to be kept and maintained under section 18B;

(eea) prescribe the fees for the inspection (for the purposes of grant or renewal of licences) of premises, wherein any drug or cosmetic is being or is proposed to be manufactured;

(eeb) prescribe the manner in which copies are to be certified under sub-section (2A) of section 22;]

(f) specify the diseases or ailments which a drug may not purport or claim ⁹[to prevent, cure or mitigate] and such other effects which a drug may not purport or claim to have;

(g) prescribe the conditions subject to which small quantities of drugs may be manufactured for the purpose of examination, test or analysis;

(h) require the date of manufacture and the date of expiry of potency to be clearly and truly stated on the label or container of any specified drug or class of drugs, and prohibit the sale, stocking or exhibition for sale, or distribution of the said drug or class of drugs after the expiry of a specified period from the date of manufacture or after the expiry of the date of potency;

(i) prescribe the conditions to be observed in the packing in bottles, packages, and other containers of drugs ¹⁰[or cosmetics], ¹¹[including the use of packing material which comes into direct contact with the drugs] and prohibit the sale, stocking or exhibition for sale, or distribution of drugs ¹⁰[or cosmetics] packed in contravention of such conditions;

(j) regulate the mode of labelling packed drugs ¹⁰[or cosmetics], and prescribe the matters which shall or shall not be included in such labels;

(k) prescribe the maximum proportion of any poisonous substance which may be added to or contained in any drug, prohibit the manufacture, sale or stocking or exhibition for sale, or distribution of any drug in which that proportion is exceeded, and specify substances which shall be deemed to be poisonous for the purposes of this Chapter and the rules made thereunder;

(l) require that the accepted scientific name of any specified drug shall be displayed in the prescribed manner on the label or wrapper of any patent or proprietary medicine containing such drug;

¹²[***]

¹³[(n) prescribe the powers and duties of Inspectors ¹⁴[and the qualifications of the authority to which such Inspectors shall be subordinate] and ¹⁵[specify the drugs or classes of drugs or cosmetics or classes of cosmetics] in relation to which and the conditions, limitations or restrictions subject to which, such powers and duties may be exercised or performed;]

(o) prescribe the forms of report to be given by Government Analysts, and the manner of application for test or analysis under section 26 and the fees payable therefor;

¹⁶[(p) specify the offences against this Chapter or any rule made thereunder in relation to which an order of confiscation may be made under section 31; and]

(q) provide for the exemption, conditionally or otherwise, from all or any of the provisions of this Chapter or the rules made thereunder, of any specified drug or class of drugs ¹⁷[or cosmetic or class of cosmetics].

¹⁸[***]

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1. Subs. by Act 11 of 1955, sec. 15, for sub-section (1) (w.e.f. 15-4-1955).

2. Subs. by Act 68 of 1982, sec. 29, for “after consultation with the Board” (w.e.f. 1-2-1983).

3. Ins. by Act 21 of 1962, sec. 22 (w.e.f. 27-7-1964).

4. Ins. by Act 13 of 1964, sec. 24 (w.e.f. 15-9-1964).

5. Subs. by Act 68 of 1982, sec. 29, for “section 17B” (w.e.f. 1-2-1983).

6. Subs. by Act 68 of 1982, sec. 29, for “for the manufacture for sale” (w.e.f. 1-2-1983).

7. Ins. by Act 21 of 1962, sec. 22 (w.e.f. 27-7-1964).

8. Ins. by Act 68 of 1982, sec. 29 (w.e.f. 1-2-1983).

9. Subs. by Act 11 of 1955, sec. 15, for “to cure or mitigate” (w.e.f. 15-4-1955).

10. Ins. by Act 21 of 1962, sec. 22 (w.e.f. 27-7-1964).

11. Ins. by Act 68 of 1982, sec. 29 (w.e.f. 1-2-1983).

12. Clause (m) omitted by Act 13 of 1964, sec. 24 (w.e.f. 15-9-1964).

13. Subs. by Act 35 of 1960, sec. 10, for clause (n) (w.e.f. 16-3-1961).

14. Ins. by Act 68 of 1982, sec. 29 (w.e.f. 1-2-1983).

15. Subs. by Act 21 of 1962, sec. 22, for “the drugs or class of drugs” (w.e.f. 27-7-1964).

16. Subs. by Act 13 of 1964, sec. 24, for clause (p) (w.e.f. 15-9-1964).

17. Ins. by Act 21 of 1962, sec. 22 (w.e.f. 27-7-1964).

18. Sub-section (3) ins. by Act 35 of 1960, sec. 10 (w.e.f. 16-3-1961) and omitted by Act 13 of 1964, sec. 24 (w.e.f. 15-9-1964).

Section 33 A. Chapter not to apply to [Ayurvedic, Siddha or Unani] drugs.

¹33A. Chapter not to apply to [Ayurvedic, Siddha or Unani] drugs. –Save as otherwise provided in this Act, nothing contained in this Chapter shall apply to ²[Ayurvedic, Siddha or Unani drugs.]

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1. Ins. by Act 13 of 1964, sec. 25 (w.e.f. 1-2-1969).

2. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

Section 33 B. Application of Chapter IVA.

This Chapter shall apply only to ¹Ayurvedic, Siddha and Unani] drugs.

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1. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha)and Unani” (w.e.f. 1-2-1983).

Section 33 C. Ayurvedic and Unani Drugs Technical Advisory Board.

(1) The Central Government shall, by notification in the Official Gazette and with effect from such date as may be specified therein, constitute a Board (to be called the ¹Ayurvedic, Siddha and Unani Drugs Technical Advisory Board] to advise the Central Government and the State Governments on technical matters arising out of this Chapter and to carry out the other functions assigned to it by this Chapter.

(2) The Board shall consist of the following members, namely, –

(i) The Director General of Health Services, ex officio ;

(ii) The Drugs Controller, India, ex officio,

²(iii) The principal officer dealing with Indian systems of medicine in the Ministry of Health, ex-officio;]

(iv) The Director of the Central Drugs Laboratory, Calcutta, ex-officio ;

(v) One person holding the appointment of Government Analyst under section 33F, to be nominated by the Central Government ;

(vi) One Pharmacognocist to be nominated by the Central Government ;

(vii) One Photo-chemist to be nominated by the Central Government ;

³(VIII)Four persons to be nominated by the Central Government, two from amongst the members of the Ayurvedic Pharmacopoeia Committee, one from amongst the members of Unani Pharmacopoeia Committee and one from amongst the members of the Siddha Pharmacopoeia Committee ;]

(ix) One teacher in Darvyaguna, and Bhaishajya Kalpana, to be nominated by the Central Government ;

⁴(x) One teacher in ILM-UL-ADVIA and TAKLIS-WA-DAWASAZI, to be nominated by the Central Government ;

[(xi) (Note: Subs. by Act 68 of 1982, sec.30, for clauses (xi) and (xii) (w.e.f. 1-2-1983)) One teacher in Gunapadam to be nominated by the Central Government ;

(xii) Three persons, one each to represent the Ayurvedic, Siddha and Unani drug industry, to be nominated by the Central Government ;

(xiii) Three persons, one each from amongst the practitioners of Ayurvedic, Siddha and Unani Tibb systems of medicine to be nominated by the Central Government.]

(3) The Central Government shall appoint a member of the Board as its Chairman.

(4) The nominated members of the Board shall hold office for three years

but shall be eligible for recombination.

(5) The Board may, subject to the previous approval of the Central Government, make bye-laws fixing quorum and regulating its own procedure and conduct of all business to be transacted by it.

(6) The functions of the Board may be exercised notwithstanding any vacancy therein.

(7) The Central Government shall appoint a person to be Secretary of the Board and shall provide the Board with such clerical and other staff as the Central Government considers necessary.

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1. Subs. by Act 68 of 1982, sec. 30, for “Ayurvedic and Unani Drugs Technical Adviory Board” (w.e.f. 1-2-1983).

2. Subs. by Act 68 of 1982, sec. 30, for clause (iii) (w.e.f. 1-2-1983).

3. Subs. by Act 68 of 1982, sec. 30, for clause (viii) (w.e.f. 1-2-1983).

4. Subs. by Act 68 of 1982, sec. 30, for clauses (xi) and (xii) (w.e.f. 1-2-1983).

Section 33 D. The Ayurvedic, Siddha and Unani Drugs Consultative Committee.

¹33D. The Ayurvedic, Siddha and Unani Drugs Consultative Committee. (1) The Central Government may constitute an Advisory Committee to be called the Ayurvedic, Siddha and Unani Drugs Consultative Committee to advise the Central Government, the State Governments and the Ayurvedic, Siddha and Unani Drugs Technical Advisory Board on any matter for the purpose of securing uniformity throughout India in the administration of this Act in so far as it relates to Ayurvedic, Siddha or Unani drugs.

(2) The Ayurvedic, Siddha and Unani Drugs Consultative Committee shall consist of two persons to be nominated by the Central Government as representatives of that Government and not more than one representative of each State to be nominated by the State Government concerned.

(3) The Ayurvedic, Siddha and Unani Drugs Consultative Committee shall meet when required to do so by the Central Government and shall regulate its own procedure.

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f. 1-2-1983).

Section 33 E. Misbranded drugs.

For the purposes of this Chapter, an Ayurvedic, Siddha or Unani drug shall be deemed to be misbranded –

(a) If it is so coloured, coated, powdered or polished that damage is concealed or if it is made to appear of better or greater therapeutic value than it really is ; or

(b) If it is not labeled in the prescribed manner ; or

(c) If its label or container or anything accompanying the drug bears any statement, design or device which makes any false claim for the drug or which is false or misleading in any particular.

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f. 1-2-1983).

Section 33 EE. Adulterated drugs.

For the purposes of this Chapter, an Ayurvedic, Siddha or Unani drug shall be deemed to be adulterated, –

(a) If it consists, in whole or in part, of any filthy, putrid or decomposed substance ; or

(b) It has been prepared, packed or stored under in sanitary conditions whereby it may have been contaminated with filth or whereby it may have been rendered injurious to health ; or

(c) If its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health ; or

(d) If it bears or contains, for purposes of colouring only, a colour other than one which is prescribed ; or

(e) If it contains any harmful or toxic substance which may render it injurious to health ; or

(f) If any substance has been mixed therewith so as to reduce its quality or strength.

Explanation. – For the purpose of clause (a), a drug shall not be deemed to consist, in whole or in part, of any decomposed substance only by reason of the fact that such decomposed substance is the result of any natural decomposition of the drug :

Provided that such decomposition is not due to any negligence on the part of the manufacturer of the drug or the dealer thereof and that it does not render the drug injurious to health.

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f.1-2-1983).

Section 33 EEA. Spurious drugs.

For the purposes of this Chapter, an Ayurvedic, Siddha or Unani drug shall be deemed to be spurious –

(a) If it is sold, or offered or exhibited for sale, under a name which belongs to another drug ; or

(b) If it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive, or bears upon it or upon its label or container the name of another drug, unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug ; or

(c) If the label or container bears the name of an individual or company purporting to be the manufacturer of the drug, which individual or company is fictitious or does not exist ; or

(d) If it has been substituted wholly or in part by any other drug or substance ; or

(e) If it purports to be the product of a manufacturer of whom it is not truly a product.

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f. 1-2-1983).

Section 33 EEB. Regulation of manufacturer for sale of Ayurvedic, Siddha and Unani drugs.

¹33EEB. Regulation of manufacturer for sale of Ayurvedic, Siddha and Unani drugs.– No person shall manufacture for sale or for distribution any Ayurvedic, Siddha or Unani drug except in accordance with such standards, if any, as may be prescribed in relation to that drug.

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f. 1-2-1983).

Section 33 EEC. Prohibition of manufacture and sale of certain Ahyurvedic, Siddha and Unani drugs.

¹ Prohibition of manufacture and sale of certain Ahyurvedic, Siddha and Unani drugs. –From such date as the State Government may, by notification in the Official Gazette, specify in this behalf, no person, either by himself or by any other person on his behalf, shall –

(a) Manufacture for sale or for distribution –

(i) Any misbranded, adulterated or Ayurvedic, siddha or Unani drug ;

(ii) Any patent or proprietary medicine, unless there is displayed in the prescribed manner on the label or container thereof the true list of all the ingredients contained in it ; and

(iii) Any Ayurvedic, Siddha or Unani drug in contravention of any of the provisions of this Chapter or any rule made thereunder ;

(b) Sell, stock or exhibit or offer for sale or offer for sale or distribute any Ayurvedic, Siddha or Unani drug which has been manufactured in contravention of any of the provisions of this Act, or any rule made thereunder :

(c) Manufacture for sale or for distribution, any Ahyurvedic, Siddha or Unani drug, except under, and in accordance with the conditions of, a licence issued for such purpose under this Chapter by the prescribed authority.

Provided that nothing in this section shall apply to Vaidyas and Hakims who manufacture Ayurvedic, Siddha or Unani drug for the use of their own patients :

Provided further that nothing in this section shall apply to the manufacture, subject to the prescribed conditions, of small quantities of any Ayurvedic, Siddha or Unani drug for the purpose of examination, test or analysis.

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f. 1-2-1983).

Section 33 EED. Power of Central Government to prohibit manufacture, etc., of Ayurvedic, Siddha or Unani drugs in public interest.

¹[33EED. Power of Central Government to prohibit manufacture, etc., of Ayurvedic, Siddha or Unani drugs in public interest.—Without prejudice to any other provision contained in this Chapter, if the Central Government is satisfied on the basis of any evidence or other material available before it that the use of any Ahyurvedic, Siddha or Unani drug is likely to involve any risk to human beings or animals or that any such drug does not have the therapeutic value claimed or purported to be claimed for it and that in the public interest it is necessary or expedient so to do then, that Government may, by notification in the Official Gazette, prohibit the manufacture, sale or distribution of such drug.]

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1. Subs. by Act 68 of 1982, sec. 31, for sections 33D and 33E (w.e.f. 1-2-1983).

Section 33 F. Government Analysts.

(1) The Central Government or a State Government may, by notification in the Official Gazette, appoint such persons as it thinks fit, having the prescribed qualifications to be Government Analysts for such areas as may be assigned to them by the Central Government or the State Government, as the case may be.

(2) Notwithstanding anything contained in sub-section (1), neither the Central Government nor a State Government shall appoint as a Government Analyst any official not serving under it without the previous consent of the Government under which he is serving.

¹(3) No person who has any financial interest in the manufacture or sale of any drug shall be appointed to be a Government Analyst under this section.]

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1. Ins. by Act 68 of 1982, sec. 32 (w.e.f. 1-2-1983).

Section 33 G. Inspectors.

(1) The Central Government or a State Government may, by notification in the Official Gazette, appoint such persons as it thinks fit, having the prescribed qualifications, to be Inspectors for such areas as may be assigned to them by the Central Government or the State Government as the case may be.

(2) The powers which may be exercised by an Inspector and the duties which may be performed by him and the conditions, limitations or restrictions subject to which such powers and duties may be exercised or performed shall be such as may be prescribed.

(3) No person who has any financial interest in the manufacture or sale of any drug shall be appointed to be an Inspector under this section.

(4) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code and shall be officially sub-ordinate to such authority as the Central Government appointing him may specify in this behalf.

Section 33 H. Application of provisions of sections 22, 23, 24 and 25.

The provisions of sections 22, 23, 24 and 25 and the rules, if any, made there under shall, so far as may be, apply in relation to an Inspector and a Government Analyst appointed under this Chapter as they apply in relation to an Inspector and a Government Analyst appointed under Chapter IV, subject to the modification that the references to “drug” in the said sections, shall be construed as references to ¹Ayurvedic, Siddha or Unani] drug.

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1. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

Section 33-I. Penalty for manufacture, sale, etc., of Ayurvedic, Siddha or Unani drug in contravention of this Chapter.

¹[33-I. Penalty for manufacture, sale, etc., of Ayurvedic, Siddha or Unani drug in contravention of this Chapter.—Whoever himself or by any other person on his behalf—

(1) Manufactures for sale or for distribution –

(a) Any Ayurvedic, Siddha or Unani drug –

(i) Deemed to be adulterated under section 33EE, or

(ii) Without a valid licence as required under clause ( c) of section 33EEC,

shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than two thousand rupees ;

(b) Any Ayurvedic, Siddha or Unani drug deemed to be spurious under section 33EEA, shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than five thousand rupees :

Provided that the Court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than one year and of fine of less than five thousand rupees ; or

(2) Contravenes any other provisions of this Chapter or of section 24 as applied by section 33H or any rule made under this Chapter, shall be punishable with imprisonment for a term which may extend to three months and with fine which shall not be less than five hundred rupees.

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1. Subs. by Act 68 of 1982, sec. 33, for sections 33-I (w.e.f. 1-2-1983).

Section 33 J. Penalty for subsequent offences.

¹ 33J. Penalty for subsequent offences. -Whoever having been convicted of an offences, –

(a) Under clause (a) of sub-section (1) of section 33I is again convicted of an offence under that clause, shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than two thousand rupees ;

(b) Under clause (b) of sub-section (1) of section 33I is again convicted of an offence under that clause, shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to six years and with fine which shall not be less than five thousand rupees :

(c) Under sub-section (2) of section 33I is again convicted of an offence under that sub-section, shall be punishable with imprisonment for a term which may extend to six months and with fine which shall not be less than one thousand rupees.

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1. Subs. by Act 68 of 1982, sec. 33, for sections 3J (w.e.f. 1-2-1983).

Section 33 K. Confiscation.

Where any person has been convicted under this Chapter, the stock of the ¹[Ayurvedic, Siddha or Unani] drug, in respect of which the contravention has been made, shall be liable to confiscation.

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1. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

Section 33 L. Application of provisions to Government departments.

The provisions of this Chapter except those contained in section 33K shall apply in relation to the manufacture for sale, sale or distribution of any ¹drug by any department of Government as they apply in relation to the manufacture for sale, sale or distribution of such drug by any other person.

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1. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

Section 33 M. Cognizance of offences.

(1) No prosecution under this Chapter shall be instituted except by an Inspector ¹with the previous sanction of the authority specified under sub-section (4) of section 33G].

(2) No Court inferior to that² of a Metropolitan Magistrate or of a Judicial Magistrate of the first class] shall try an offence punishable under this Chapter.

——————————-

1. Ins. by Act 68 of 1982, sec. 34 (w.e.f. 1-2-1983).

2. Subs. by Act 68 of 1982, sec. 34, for “of a Presidency Magistrate or of a Magistrate of the first class” (w.e.f. 1-2-1983).

Section 33 N. Power of Central Government to make rules.

(1) The Central Government may, ¹[after consultation with, or on the recommendation of, the Board] and after previous publication by notification in the Official Gazette, make rules for the purpose of giving effect to the provisions of this Chapter:

Provided that consultation with the Board may be dispensed with if the Central Government is of opinion that circumstances have arisen which render it necessary to make rules without such consultation, but in such a case, the Board shall be consulted within six months of the making of the rules and the Central Government shall take into consideration any suggestions which the Board may make in relation to the amendment of the said rules.

(2) Without prejudice to the generality of the foregoing power, such rules may—

(a) provide for the establishment of laboratories for testing and analysing ²[Ayurvedic, Siddha or Unani] drugs;

(b) prescribe the qualifications and duties of Government Analysts and the qualifications of Inspectors;

(c) prescribe the methods of test or analysis to be employed in determining whether any ²[Ayurvedic, Siddha or Unani] drug is labelled with the true list of the ingredients which it is purported to contain;

(d) specify any substance as a poisonous substance;

(e) prescribe the forms of licences for the manufacture for sale of ²[Ayurvedic, Siddha or Unani] drugs, ³[and for sale of processed Ayurvedic, Siddha or Unani drugs,] the form of application for such licences, the conditions subject to which such licences may be issued, the authority empowered to issue the same and the fees payable therefor; ³[and provide for the cancellation or suspension of such licences in any case where any provision of this Chapter or rules made thereunder is contravened or any of the conditions subject to which they are issued is not complied with];

⁴[(f) prescribe the conditions to be observed in the packing of Ayurvedic, Siddha and Unani drugs including the use of packing material which comes into direct contact with the drugs, regulate the mode of labelling packed drugs and prescribe the matters which shall or shall not be included in such labels;]

(g) prescribe the conditions subject to which small quantities of ⁵[Ayurvedic, Siddha or Unani] drugs may be manufactured for the purpose of examination, test or analysis; and

⁶[(gg) prescribe under clause (d) of section 33EE the colour or colours which an Ayurvedic, Siddha or Unani drug may bear or contain for purposes of colouring;

(gga) prescribe the standards for Ayurvedic, Siddha or Unani drugs under section 33EEB;]

(h) any other matter which is to be or may be prescribed under this Chapter.

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1. Subs. by Act 68 of 1982, sec. 35, for “after consultation with the Board” (w.e.f. 1-2-1983).

2. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

3. Ins. by Act 68 of 1982, sec. 35 (w.e.f. 1-2-1983).

4. Subs. by Act 68 of 1982, sec. 35, for “clause (f)” (w.e.f. 1-2-1983).

5. Subs. by Act 68 of 1982, sec. 2, for “Ayurvedic (including Siddha) or Unani” (w.e.f. 1-2-1983).

6. Ins. by Act 68 of 1982, sec. 35 (w.e.f. 1-2-1983).

Section 33-O. Power to amend First Schedule.

The Central Government, after consultation with the Board and after giving, by notification in the Official Gazette, not less than three months’ notice of its intention so to do, may, by a like notification, add to or otherwise amend the First Schedule for the purposes of this Chapter and thereupon the said Schedule shall be deemed to be amended accordingly.

Section 33 P. Power to give directions.

¹[²[33P.] Power to give directions.—The Central Government may give such directions to any State Government as may appear to the Central Government to be necessary for carrying into execution in the State any of the provisions of this Act or of any rule or order made there under

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1. Ins. by Act 35 of 1960, sec. 11 (w.e.f. 16-3-1961).

2. Section 33A re-numbered as section 33P by Act 13 of 1964, sec. 27 (w.e.f. 15-9-1964).

Section 34. Offences by companies.

(1) Where an offence under this Act has been committed 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 as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation. – For the purposes of this section –

(a) “company” means a body corporate, and includes a firm or other association of individuals ; and

(b) “director” in relation to a firm means a partner in the firm.

Section 34 A. Offences by Government Departments.

Where an offence under Chapter IV or Chapter IVA has been committed by any department of Government, such authority as is specified by the Central Government to be in charge of manufacture, sale or distribution of drugs or where no authority is specified, the head of the department, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :

Provided that nothing contained in this section shall render any such authority or person liable to any punishment provided in Chapter IV or Chapter IVA, as the case may be, if such authority or person proves that the offence was committed without its or his knowledge or that such authority or person exercised all due diligence to prevent the commission of such offence.

————————

1. Ins. by Act 13 of 1964, sec. 28 (w.e.f. 15-9-1964).

Section 34 AA. Penalty for vexatious search or seizure.

Any Inspector exercising powers under this Act or the rules made there under, who,-

(a) Without reasonable ground of suspicion searches any place, vehicle, vessel or other conveyance ; or

(b) Vexatiously and unnecessarily searches any person ; or

(c) Vexatiously and unnecessarily seizes any drug or cosmetic, or any substance or article, or any record, register, document or other material object ; or

(d) Commits, as such Inspector, any other act, to the injury of any person without having reason to believe that such act is required for the execution of his duty shall be punishable with fine which may extend to one thousand rupees.

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1. Ins. by Act 68 of 1982, sec. 36 (w.e.f. 1-2-1983).

Section 35. Publication of sentences passed under this Act.

(1) If any person is convicted of an offence under this Act, ¹[the Court before which the conviction takes place shall, on application made to it by the Inspector, cause] the offender’s name, place of residence, the offence of which he has been convicted and the penalty which has been inflicted upon him, to be published at the expense of such person in such newspapers or in such other manner as the Court may direct.

(2) The expenses of such publication shall be deemed to form part of the costs relating to the conviction and shall be recoverable in the same manner as those costs are recoverable.

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1. Subs. by Act 68 of 1982, sec. 37, for certain words (w.e.f. 1-2-1983).

Section 36. Magistrate’s power to impose enhanced penalties.

Notwithstanding anything contained in ¹[***] ²[the Code of Criminal Procedure, 1973 (2 of 1974)], it shall be lawful for ³[any Metropolitan Magistrate or any Judicial Magistrate of the first class] to pass any sentence authorized by this Act in excess of his powers under ¹[***] the said Code.

——————————

1. The words “section 32 of” omitted by Act 13 of 1964, sec. 29 (w.e.f. 15-9-1964).

2. Subs. by Act 68 of 1982, sec. 38, for “the Code of Criminal Procedure,1898 (5 of 1898)” (w.e.f. 1-2-1983).

3. Subs. by Act 68 of 1982, sec. 38, for “any Presidency Magistrate or any Magistrate of the first class” (w.e.f. 1-2-1983).

36A. Certain offences to be tried summarily. –

¹[36A. Certain offences to be tried summarily.—Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act, punishable with imprisonment for a term not exceeding three years, other than an offence under clause (b) of sub-section (1) of section 33-I, shall be tried in a summary way by a Judicial Magistrate of the first class specially empowered in this behalf by the State Government or by a Metropolitan Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trial:

Provided that, in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year:

Provided further that when at the commencement of, or in the course of, a summary trial under this section it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall, after hearing the parties, record an order to that effect and thereafter recall any witness who has been examined and proceed to hear or rehear the case in the manner provided by the said Code.]

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1. Ins. by Act 68 of 1982, sec. 39 (w.e.f. 1-2-1983).

Section 37. Protection of action taken in good faith.

No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act.

Section 38. Rules to be laid before Parliament.

Every rule made this Act shall be laid as soon as may be after it is made before each House of Parliament 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,²[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 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 rule.

——————–

1. Ins. by Act 13 of 1964, sec. 30 (w.e.f. 15-9-1964).

2. Subs. by Act 68 of 1982, sec. 40, for certain words (w.e.f. 1-2-1983).

THE FIRST SCHEDULE

[See section 3(a)]

[A.—AYURVEDIC AND SIDDHA SYSTEMS] Ayurveda

Serial No.	Name of book
AYURVEDA
1.	Arogya Kalpadruma
2.	Arka Prakasha
3.	Arya Bhishak
4.	Ashtanga Hridaya
5.	Ashtanga Samgraha
6.	Ayurveda Kalpadruma
7.	Ayurveda Prakasha
8.	Ayurveda Samgraha
9.	Bhaishajya Ratnavali
10.	Bharat Bhaishajya Ratnakara
11.	Bhava Prakasha
12.	Brihat Nighantu Ratnakara
13.	Charaka Samhita
14.	Chakra Datta
15.	Gada Nigraha
16.	Kupi Pakva Rasayana
17.	Nighantu Ratnakara
18.	Rasa Chandanshu
19.	Rasa Raja Sundara
20.	Rasaratna Samuchaya
21.	Rasatantra Sara Siddha Prayoga Samgraha
22.	Rasa Tarangini
23.	Rasa Yoga Sagra
24.	Rasa Yoga Ratnakara
25.	Rasa Yoga Samgraha
26.	Rasendra Sara Samgraha
27.	Rasa Pradipika
28.	Sahasrayoga
29.	Sarvaroga Chikitsa Ratnam
30.	Sarvayoga Chikitsa Ratnam
31.	Siddha Bhaishajya Manimala
32.	Sharangadhara Samhita
33.	Siddha Yoga Samgraha
34.	Sushruta Samhita
35.	Vaidya Chintamani
36.	Vaidyaka Shabda Sindu
37.	Vaidyaka Chikitsa Sara
38.	Vaidya Jiwan
39.	Basava Rajeeyam
40.	Yoga Ratnakara
41.	Yoga Tarangini
42.	Yoga Chintamani
43.	Kashyapasamhita
44.	Bhelasamhita
45.	Vishwanathachikitsa
46.	Vrindachikitsa
47.	Ayurvedachintamani
48.	Abhinavachintamani
49.	Ayurveda-ratnakar
50.	Yogaratnasangraha
51.	Rasamrita
52.	Dravyagunanighantu
53.	Rasamanjari
54.	Bangasena
54-A.	Aurvedic Formulary of India (Part-I)
54-B.	Aurveda Sara Sangraha.]
SIDDHA
55.	Siddha Vaidya Thirattu
56.	Therayar Maha Karisal
57.	Brahma Muni Karukkadi (300)
58.	Hogar (700)
59.	Pulippani (500)
60.	Agasthiya Paripuranam (400)
61.	Therayar Yamagam
62.	Agasthiya Chenduram (300)
63.	Agasthiyar (1500)
64.	Athmarakshamrutham
65.	Agasthiyar Pin (80)
66.	Agasthiyar Rathna Churukkam
67.	Therayar Karisal (300)
68.	Veeramamuni Nasa Kandam
69.	Agasthiyar (600)
70.	Agasthiyar Kanma Soothiram
71.	18 Siddhar’s Chillarai Kovai
72.	Yogi Vatha Kaviyam
73.	Therayar Tharu
74.	Agasthiyar Vaidya Kaviyam (1500)
75.	Bala Vagadam
76.	Chimittu Rathna (Rathna) Churukkam
77.	Nagamuni (200)
78.	Agasthiyar Chillarai Kovai
79.	Chiktsa Rathna Deepam
80.	Agasthiyar Nayana Vidhi
81.	Yugi Karisal (151)
82.	Therayar Thaila Varkam
83.	Agasthiya Vallathi (600)
¹84.	Siddha Formulary of Unani Medicine (Part-I)
²[B. – UNANI TIBB SYSTEM]
1.	Karabadin Qadri
2.	Karabadin Kabir
3.	Karabadin Azam
4.	Iiaj-ul-amraz
5.	Al Karabadin
6.	Biaz Kabir Vol.II
7.	Karabadin Jadid
8.	Kitab-ul-Taklis
9.	Sanat-ul-Taklis
10.	Mifta-ul-Khazain
11.	Madan-ul-Aksir
12.	Makhzan-ul-Murabhat
³13.	National Formulary of Unani Medicine ⁴[***]]
⁵14.	Makhzan-ul-Murabhat

1. Added by G.S.R. 735 (E), dated 28th August, 1987.

2. Subs. by Act 68 of 1982, sec. 41, for the heading “B.—UNANI (TIBB) SYSTEM” (w.e.f. 1-2-1983).

3. Added by G.S.R. 735 (E), dated 28th August, 1987.

4. The brackets, word and figure “(Part I)” omitted by G.S.R. 780 (E), dated 25th November, 2004.

5. Ins. by G.S.R. 780 (E), dated 25th November, 2004

THE SECOND SCHEDULE

(See sections 8 and 16)

STANDARDS TO BE COMPLIED WITH BY IMPORTED DRUGS AND BY DRUGS MANUFACTURED FOR SALE, SOLD, STOCKED OR EXHIBITED FOR SALE FOR DISTRIBUTED

Serial No.	Class of drug	Standard to be complied with
1.	Patent or proprietary medicines [(Note: Ins. by Notification No. S.O. 887, dated 19th March, 1966, Gazette of India, Pt. II, Sec.3(ii), p.819) other than Homoeopathic medicines].	The formula or list of ingredients displayed in the prescribed manner on the label or container and such other standards as may be prescribed.
²2.	Substances commonly known as vaccines, sera, toxine, toxoids, antitoxins, and antigens and biological products of such nature.	The standards maintained at the International Laboratory for Biological Standards, Stantans Seruminstitut, Copenhagen, and such further standards of strength, quality and purity as may be prescribed.
3.	Vitamins, hormones and analogous products.	The standards maintained at the International Laboratory for Biological Standards, National Institute for Medical Research, London, and such further standards of strength, quality and purity as may be prescribed.
4.	Substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals.	Such standards as may be prescribed.
⁴4-A.	Homoeopathic Medicines:
	(a) Drugs included in the Homoeopathic Pharmacopoeia of India.	Standards of identity, purity and strength specified in the edition of the Homoeopathic Pharmacopoeia of India for the time being and such other standards as may be prescribed.
	(b) Drugs not included in the Homoeopathic Pharmacopoeia of India but which are included in the Homoeopathic Pharmacopoeia of United States of America or the United Kingdom or the German Homoeopathic Pharmacopoeia.	Standards of identity, purity and strength prescribed for the drugs in the edition of such Pharmacopoeia for the time being in which they are given and such other standards as may be prescribed.
	(c) Drugs not included in the Homoeopathic Pharmacopoeia of India or the United States of America, or the United Kingdom or the German Homoeopathic Pharmacopoeia.	The formula or list of ingredients displayed in the prescribed manner on the lable of the container and such other standards as may be prescribed by the Central Government].
⁵ 5.	Other drugs:
	(a) Drugs included in the Indian Pharmacopoeia.

Standards of identity, purity and strength specified in the edition of the Indian Pharmacopoeia for the time being and such other standards as may be prescribed.In case the standards of identity, purity and strength for drugs are not specified in the edition of the Indian Pharmacopoeia for the time being in force but are specified in the edition of the Indian Pharmacopoeia immediately preceding, the standards of identity, purity and strength shall be those occurring in such immediately preceding edition of the Indian Pharmacopoeia and such other standards as may be prescribed.(b) Drugs not included in the Indian Pharmacopoeia but which are included in the official Pharmacopoeia of any other country.

Standards of identity, purity and strength specified for drugs in the edition of such official Pharmacopoeia of any other country for the time being in force and such other standards as may be prescribed.In case the standards of identity, purity and strength for drugs are not specified in the edition of such official Pharmacopoeia for the time being in force but are specified in the edition immediately strength shall be those occurring in such immediately preceding edition of such official Pharmacopoeia and such other standards as may be prescribed.]

1. Ins. by S.O. 887, dated 19th March, 1966.

2. Subs. by G.S.R. 299 (E), dated 23rd April, 1984.

3. Omitted by G.S.R. 299 (E), dated 23rd April, 1984.

4. Subs. by G.S.R. 820, dated 6th June, 1978.

5. Subs. by G.S.R. 883, dated 18th August, 1973.

Forest Conservation Act

November 30, 2014

Section 1. SHORT TITLE, EXTENT AND COMMENCEMENT.

ACT NO. 69 OF 1980 [27th December, 1980.]

An Act to provide for the conservation of forests and for matters connected therewith or ancillary or incidental thereto. Be it enacted by Parliament in the Thirty-first Year of the Republic of India as follows:- 1. Short title, extent and commencement.(1) This Act may be called the Forest (Conservation) Act, 1980. (2) It extends to the whole of India except the State of Jammu and Kashmir. (3) It shall be deemed to have come into force on the 25th day of October, 1980.

(1) This Act may be called the Forest (Conservation) Act, 1980.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall be deemed to have come into force on the 25th day of October, 1980.

Section 2. RESTRICTION ON THE PRESERVATION OF FORESTS OR USE OF FOREST LAND FOR NON-FOREST PURPOSE.

Notwithstanding anything contained in any other law for the time being in force in a State, no State Government or other authority shall make, except with the prior approval of the Central Government, any order directing –

(i) That any reserved forest (within the meaning of the expression “reserved forest” in any law for the time being in force in that State) or any portion thereof, shall cease to be reserved.

(ii) That any forest land or any portion thereof may be used for any non-forest purpose.

(iii) That any forest land or any portion thereof may be assigned by way of lease or otherwise to any private person or to any authority, corporation, agency or any other organisation not owned, managed or controlled by Government;

(iv) That any forest land or any portion thereof may be cleared of trees

which have grown naturally in that land or portion, for the purpose of using it for reforestation.

Explanation : For the purpose of this section “non-forest purpose” means the breaking up or clearing of any forest land or portion thereof for –

(a) The cultivation of tea, coffee, spices, rubber, palms, oil-bearing plants, horticultural crops or medicinal plants;

(b) Any purpose other than reforestation, but does not include any work relating or ancillary to conservation, development and management of forests and wild life, namely, the establishment of check-posts, fire lines, wireless communications and construction of fencing, bridges and culverts, dams, waterholes, trench marks, boundary marks, pipelines or other like purposes.

Section 3. CONSTITUTION OF ADVISORY COMMITTEE.

The Central Government may constitute a Committee consisting of such number of persons as it may deem fit to advise that Government with regard to –

(i) The grant of approval under Section 2; and

(ii) Any other matter connected with the conservation of forest which may be referred to it by the Central Government.

Section 3-A. PENALTY FOR CONTRAVENTION OF THE PROVISIONS OF THE ACT.

Whoever contravenes or abets the contravention of any of the provisions of Section 2, shall be punishable with simple imprisonment for a period which may extend to fifteen days.

Section 3-B. OFFENCES BY AUTHORITIES AND GOVERNMENT DEPARTMENTS.

(1) Where any offence under this Act has been committed –

(a) by any department of Government, the head of the department; or

(b) by any authority, every person, who, at the time the offence was committed, was directly in charge, of, and was responsible to, the authority for the conduct of the business of the authority as well as the authority, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render the head of the department or any person referred to in clause (b), liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence punishable under the Act has been committed by a department of Government or any authority referred to in clause (b) of sub-section (1) and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any officer, other than the head of the department, or in the case of any authority, any person other than the persons referred to in clause (b) of sub-section (1), such officer or persons shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Section 4. POWER TO MAKE RULES.

(1) The Central Government may, be notification in the Official Gazette, make rules for carrying out the provisions of this Act.

(2) Every rule made under this Act shall be laid, as soon as may be, after it is made, before each House of Parliament, 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 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 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 rule.

Section 5. REPEAL AND SAVING.

(1) The Forest (Conservation) Ordinance, 1980 is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the provisions of the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.

Trade Marks Act

November 30, 2014

Chapter 1 Preliminary

Section 1. Short title, extent and commencement.

(Act No. 47 of 1999)

An Act to amend and consolidate the law relating to trade marks, to provide for registration and better protection of trade marks for goods and services and for the prevention of the use of fraudulent marks.

Be it enacted by Parliament in the Fiftieth Year of the Republic of India as follows:-

(1) This Act may be called the Trade Marks Act, 1999.

(2) It extend to the whole of India.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Act, and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Section 2. Definitions and interpretation.

(1) In this Act , unless the context otherwise requires, –

(a) “Appellate Board” means the Appellate Board established under section 83:

(b) “assignment” means an assignment in writing by act of te parties concerned;

(c) “associated trade Marks” means trade marks deemed to be, or required to be, registered as associated trade marks under this Act;

(d) “Bench ” means a Bench of the Appellate Board;

(e) “certification trade mark” means a mark capable of distinguishing the goods or service in connection with which it is used in the course of trade which are certified by the proprietor of the mark in respect of origin, material, mode of manufacture of goods or performance of service not so certified and registrable as such under Chapter IX in respect of those goods or service in the name, as proprietor of the certification trade mark , of that person;

(f) “Chairman” means the Chairman of the Appellate Board.

(g) “collective mark” means a trade mark distinguishing the goods or services of members of an association of persons (not being a partnership within the meaning of the Indian Partnership Act, 1932 (9 of 1932) which is the proprietor of the mark from those of others.

(h) “deceptively similar”, – A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion.

(i) “false trade description” means-

(I) a trade description which is untrue or misleading in a material respect as regards the goods or services to which it is applied or

(II) any alteration of a trade description as regards the goods or services to which it is applied, whether by way of addition, effacement or otherwise, where that alteration makes the description untrue or misleading in a material respect, or

(III) any trade description which denotes or implies that there are contained, as regards the goods to which it is applied, more yards or meters than there are contained therein standard yards or standard meters, or

(IV) any marks or arrangement or combination thereof when applied-

(a) to goods in such a manner as to be likely to lead persons to believe that the goods are the manufacture or merchandise of some person other than the person whose merchandise or manufacture they really are.

(b) in relation to services in such a manner as to be likely to lead persons to believe that the services are provided or rendered by some persons other than the person whose services they really are, or

(V) any false name or initials of a person applied to goods or service in such manner as if such name or initials were a trade description in any case where the name or initials-

(a) is or are not a trade mark or part of a trade mark, and

(b) is or are identical with or deceptively similar to the name or initials of a person carrying on business in connection with goods or services of the same description or both and who has not authorized the use of such name or initials, and

(c) is or are either the name or initials of a fictions person or some person not bona fide carrying on business in connection with such goods or services.

And the fact that a trade description is a trade mark or part of a trade mark shall not prevent such trade description being a false trade description within the meaning of this Act.

(j) “goods” means anything which is the subject of trade or manufacture.

(k) “Judicial Member” means a Member of the Appellate Board appointed as such under this Act, and includes the Chairman and the Vice-Chairman.

(l) “limitations” (with its grammatical variations) means any limitation of the exclusive right to the use of a trade mark given by the registration of a person as proprietor thereof, including limitations of that right a to mode or area of use within India or outside India.

(m) “mark” includes a device, brand, heading, lable, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof.

(n) “Member” means a Judicial Member or a Technical Member of the Appellate Board and includes the Chairman and the Vice-Chairman.

(o) “name” includes and abbreviation of a name.

(p) “notify” means to notify in the Trade Mark Journal published by the Registrar.

(q) “package” includes any case, box, container, covering, folder, recetacle, vessel, casket, bottle, wrapper, labler, band, ticket, reel, frame, capsule, cap, lid, stopper and cork.

(r) “permitted use: in relation to a registered trade mark, means the use of trade mark-

(i) by a registered user of the trade mark in relation to goods or service-

(a) with which he is connected in the course of trade, and

(b) in respect of which the trade mark remains registered for the time being, and

(d) which complies with any conditions or limitations to which the registration of registered user is subject, or

(ii) by a person other than the registerd proprietor and registered user in relation to goods or services-

(a) with which he is connected in the course of trade, and

(b) in respect of which the trade mark remains registered for the time being, and

(c ) by consent of such registered proprietor in a written agreement, and

(d) which complies with any conditions or limitations to which such user is subject and to which the registration of the trade mark is subject.

(s) “prescribed” means prescribed by rules made under this Act.

(t) “register” means the Register of Trade Mark referred to in sub-section (1) of section 6.

(u) “registered” (with its grammatical variations) means registered under this Act.

(v) “registered proprietor” in relation to a trade mark, means the person for the time being entered in the register as proprietor of the trade mark.

(w) “registered trade mark” means a trade mark which is actually on the register and remaining in force.

(x) “registered user” means a person who is for the time being registered as such under section 49.

(y) “Registrar” means the Registrar of Trade Mark referred to in section 3.

(z) “service” means service of any description which is made available to potential users and includes the provisions of services in connection with business of any industrial or commercial matters such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising.

(za) “trade description” means any description, statement or other indication, direct or indirect,-

(i) as to the number, quantity, measure, gauge or weight of any goods, or

(ii) as to the standard of quality of any goods or services according to a classification commonly used or recognized in the trade, or

(iii) as t fitness fr the purpose, strength, performance or behaviour of any goods, being “drug” as defined in the Drugs and Cosmetics Act, 1940 (23 of 194)) or “food” as defined in the Prevention of Food Adulteration Act, 1954 (37 of 1954), or

(iv) as to the place or country in which or the time at which any goods or services were made, produced or provided, as the case may be, or

(v) as to the name and address or other indication of the identity of the manufacturer or of the person providing the services of the person for whom the goods are manufactured or services are provided, or

(vi) as to the mode of manufacture or producing any goods or providing services, or

(vii) as to the material of which any goods are composed, or

(viii) as to any goods being the subject of an existing patent, privilege or copyright, and includes-

(a) any description as to the use of any mark which according to the custom of the trade is commonly taken to be an indication of any of the above matters.

(b) the description as to any imported goods contained in any bill of entry or shipping bill.

(zb) “trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from choose of others and may include shape of goods, their packaging and combination of colours , and

in relation to Chapter XII (other than section 107), a registered trade mark or mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark, and

in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate to a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark.

(zc) “transmission” means transmission by operation of law, devolution on the personal representative of a deceased person and any other mode of transfer, not being assignment.

(zd) “Technical Member” means a Member who is not a Judicial Member.

(Ze) “tribunal” means the Registrar or, as the case may be, the Appellate Board, before which the proceeding concerned is pending.

(zf) “Vice-Chairman” means a Vice-Chairman of the Appellate Board.

(zg) “well-known trade mark” in relation to any goods or service, means a mark which has becomes so to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first mentioned goods or services.

In this Act, unless the context otherwise requires, any reference – to “trade-mark” shall include reference to “collective mark” or “certification trade mark”.

To the use of a mark shall be construed as a reference to the use of printed or other visual representation of the mark.

To the use of a mark.- in relation to goods, shall be construed as a reference to the use of the mark upon, or n any physical or in any other relation whatsoever, to such goods.

In relation to goods, shall be construed as a reference to the use of the mark as or as part of any statement about the availability, provision or performance of such services.

To the Registrar shall be construed as including a reference to any officer when discharging the functions of the Registrar in pursuance of sub-section (2) of section 3.

To the Trade Marks Registry shall be construed as including a reference to any office of the Trade Marks Registry.

For the purposes of this Act, goods and services are associated with each other if it is likely that those goods might be sold or otherwise traded in and those services might be provided by the same business and so with description of goods and descriptions of services.

For the purposes of this Act, “existing registered trade mark” means a trade mark registered under the Trade and Merchandise Marks Act, 1958 (43 of 1958) immediately before the commencement of this Act.

Chapter 2 The Register and Conditions for Registration

Section 3. Appointment of Registrar and other officers.

(1) The Central Government may, by notification in the Official Gazette, appoint a person to be known as the Controller-General of Patents, Designs and Trade Marks, who shall be the Registrar of Trade Mark for the purposes of this Act.

The Central Government may appoint such other officers with such designations as it thinks fit for the purpose of discharging, under the superintendence and direction of the Registrar, such functions of the Registrar under this Act as he may from time to time authorise them to discharge.

Section 4. Power of Registrar to withdraw or transfer cases, etc.

Without prejudice to the generality of the provisions of such-section (2) of section 3, the Registrar may, by order in writing and for reasons to be recorded therein, withdraw any matter pending before an officer appointed under the said sub-section (2) and deal with such matter himself either de novo or from the stage it was so withdrawn or transfer the same to another officer so appointed who may, subject to special directions in the order of transfer, proceed with the matter either de novo or from the stage it was so transferred.

Section 5. Trade Marks Registry and offices thereof.

(1) For the purposes of this Act, there shall be a trade marks registry and the Trade Marks Registry established under the Trade and Merchandise Marks Act, 1958 (43 of 1958) shall be the Trade Marks Registry under this Act.

(2) The head office of the Trade Marks Registry shall be at such place as the Central Government may specify, and for the purpose of facilitating the registration of trade marks, there may be established at such places as the Central Government may think fit branch offices of the Trade Marks Registry.

(3) The Central Government may, by notification in the Official Gazette, define the territorial limits within which an office of the Trade Marks Registry may exercise its functions.

(4) There shall be a seal of the Trade Marks Registry.

Section 6. The Register of Trade Marks.

(1) For the purposes of this Act, a record called the Register of Trade Marks shall be kept at the head office of the Trade Marks Registry, wherein shall be entered all registered trade marks with the names, addresses and description of the proprietors, notifications of assignment and transmissions, the names, addresses and descriptions of registered users, conditions, limitations and such other matter relating to registered trade marks as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), it shall be lawful for the Registrar to keep the records wholly or partly in computer floppies, diskettes or in any other electronic form subject to such safeguards as may be prescribed.

(3) Where such register is maintained wholly or partly on computer under sub-section (2) any reference in this Act to entry in the register shall be construed as the reference to any entry as maintained on computer or in any other electronic form.

(4) No notice of any trust, express or implied or constructive, shall be entered in the register and no such notice shall be receivable by the Registrar.

(5) The register shall be kept under the control and management of the Registrar.

(6) There shall be kept at each branch office of the Trade Marks Registry a copy of the register and such of the other documents mentioned in section 148 as the Central Government may, by notification in the Official Gazette, direct.

(7) The Register of Trade Marks, both Part A and Part B, existing at the commencement of this Act, shall be incorporated in and form part of the register under this Act.

Section 7. Classification of goods and services.

(1) The Registrar shall classify goods and services, as far as may be, in accordance with the International classification of goods and services for the purposes of registration of trade marks.

(2) Any question arising as to the class within which any goods or services falls shall be determined by the Registrar whose decision shall be final.

Section 8. Publication of alphabetical index.

(1) The Registrar may publish in the prescribed manner an alphabetical index of classification of goods and services referred to in section 7.

(2) Where any goods or services are not specified in the alphabetical index of goods and services published under sub-section (1), the classification of goods or services shall be determined by the Registrar in accordance with sub-section (2) of section 7.

Section 9. Absolute grounds for refusal of registration.

(1) The trade marks—

(a) which are devoid of any distinctive character, that is to say, not capable of distinguishing the goods or services of one person from those of another person;

(b) which consist exclusively of marks or indications which may serve in trade to designate the kind, quality, quantity, intended purpose, values, geographical origin or the time of production of the goods or rendering of the service or other characteristics of the goods or service;

(c) which consist exclusively of marks or indications which have become customary in the current language or in the bona fide and established practices of the trade,

shall not be registered :

Provided that a trade mark shall not be refused registration if before the date of application for registration it has acquired a distinctive character as a result of the use made of it or is a well-known trade mark.

(2) A mark shall not be registered as a trade mark if—

(a) it is of such nature as to deceive the public or cause confusion;

(b) it contains or comprises of any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India;

(d) its use is prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950 (12 of 1950).

(3) A mark shall not be registered as a trade mark if it consists exclusively of—

(a) the shape of goods which results from the nature of the goods themselves; or

(b) the shape of goods which is necessary to obtain a technical result; or

Explanation.—

For the purposes of this section, the nature of goods or services in relation to which the trade mark is used or proposed to be used shall not be a ground for refusal of registration.

Section 10. Limitation as to colour.

(1) A trade mark may be limited wholly or in part to any combination of colours and any such limitation shall be taken into consideration by the tribunal having to decide on the distinctive character of the trade mark.

(2) So far as a trade mark is registered without limitation of colour, it shall be deemed to be registered for all colours.

Section 11. Relative grounds for refusal of registration.

(1) Save as provided in section 12, a trade mark shall not be registered if, because of—

(a) its identity with an earlier trade mark and similarity of goods or services covered by the trade mark; or

(b) its similarity to an earlier trade mark and the identity or similarity of the goods or services covered by the trade mark,

there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.

(2) A trade mark which—

(a) is identical with or similar to an earlier trade mark; and

(b) is to be registered for goods or services which are not similar to those for which the earlier trade mark is registered in the name of a different proprietor,

shall not be registered, if or to the extent, the earlier trade mark is a well-known trade mark in India and the use of the later mark without due cause would take unfair advantage of or be detrimental to the distinctive character or repute of the earlier trade mark.

(3) A trade mark shall not be registered if, or to the extent that, its use in India is liable to be prevented—

(a) by virtue of any law in particular the law of passing off protecting an unregistered trade mark used in the course of trade; or

(b) by virtue of law of copyright.

(4) Nothing in this section shall prevent the registration of a trade mark where the proprietor of the earlier trade mark or other earlier right consents to the registration, and in such case the Registrar may register the mark under special circumstances under section 12.

Explanation.—For the purposes of this section, earlier trade mark means—

(a) a registered trade mark or convention application referred to in section 154 which has a date of application earlier than that of the trade mark in question, taking account, where appropriate, of the priorities claimed in respect of the trade marks;

(b) a trade mark which, on the date of the application for registration of the trade mark in question, or where appropriate, of the priority claimed in respect of the application, was entitled to protection as a well-known trade mark.

(5) A trade mark shall not be refused registration on the grounds specified in sub-sections (2) and (3), unless objection on any one or more of those grounds is raised in opposition proceedings by the proprietor of the earlier trade mark.

(6) The Registrar shall, while determining whether a trade mark is a well-known trade mark, take into account any fact which he considers relevant for determining a trade mark as a well-known trade mark including—

(i) the knowledge or recognition of that trade mark in the relevant section of the public including knowledge in India obtained as a result of promotion of the trade mark;

(ii) the duration, extent and geographical area of any use of that trade mark;

(iii) the duration, extent and geographical area of any promotion of the trade mark, including advertising or publicity and presentation, at fairs or exhibition of the goods or services to which the trade mark applies;

(iv) the duration and geographical area of any registration of or any application for registration of that trade mark under this Act to the extent they reflect the use or recognition of the trade mark;

(v) the record of successful enforcement of the rights in that trade mark; in particular, the extent to which the trade mark has been recognised as a well-known trade mark by any court or Registrar under that record.

(7) The Registrar shall, while determining as to whether a trade mark is known or recognised in a relevant section of the public for the purposes of sub-section (6), take into account—

(i) the number of actual or potential consumers of the goods or services;

(ii) the number of persons involved in the channels of distribution of the goods or services;

(iii) the business circles dealing with the goods or services,

to which that trade mark applies.

(8) Where a trade mark has been determined to be well-known in at least one relevant section of the public in India by any court or Registrar, the Registrar shall consider that trade mark as a well-known trade mark for registration under this Act.

(9) The Registrar shall not require as a condition, for determining whether a trade mark is a well-known trade mark, any of the following, namely:—

(i) that the trade mark has been used in India;

(ii) that the trade mark has been registered;

(iii) that the application for registration of the trade mark has been filed in India;

(iv) that the trade mark—

(a) is well known in; or

(b) has been registered in; or

(v) that the trade mark is well-known to the public at large in India.

(10) While considering an application for registration of a trade mark and opposition filed in respect thereof, the Registrar shall—

(i) protect a well-known trade mark against the identical or similar trade marks;

(ii) take into consideration the bad faith involved either of the applicant or the opponent affecting the right relating to the trade mark.

(11) Where a trade mark has been registered in good faith disclosing the material informations to the Registrar or where right to a trade mark has been acquired through use in good faith before the commencement of this Act, then, nothing in this Act shall prejudice the validity of the registration of that trade mark or right to use that trade mark on the ground that such trade mark is identical with or similar to a well-known trade mark.

Section 12. Registration in the case of honest concurrent use, etc.

In the case of honest concurrent use or of other special circumstances which in the opinion of the Registrar, make it proper so to do, he may permit the registration by more than one proprietor of the trade marks which are identical or similar (whether any such trade mark is already registered or not) in respect of the same or similar goods or services, subject to such conditions and limitations, if any, as the Registrar may think fit to impose.

Section 13. Prohibition of registration of names of chemical elements or international non-proprietary names

No word—

(a) which is the commonly used and accepted name of any single chemical element or any single chemical compound (as distinguished from a mixture) in respect of a chemical substance or preparation, or

(b) which is declared by the World Health Organisation and notified in the prescribed manner by the Registrar from time to time, as an international non-proprietary name or which is deceptively similar to such name,

shall be registered as a trade mark and any such registration shall be deemed for the purpose of section 57 to be an entry made in the register without sufficient cause or an entry wrongly remaining on the register, as the circumstances may require.

Section 14. Use of names and representations of living persons or persons recently dead.

Where an application is made for the registration of a trade mark which falsely suggests a connection with any living person, or a person whose death took place within twenty years prior to the date of application for registration of the trade mark, the Registrar may, before he proceeds with the application, require the applicant to furnish him with the consent in writing of such living person or, as the case may be, of the legal representative of the deceased person to the connection appearing on the trade mark, and may refuse to proceed with the application unless the applicant furnishes the registrar with such consent.

Section 15. Registration of parts of trade marks and of trade marks as a series.

(1) Where the proprietor of a trade mark claims to be entitled to the exclusive use of any part thereof separately, he may apply to register the whole and the part as separate trade marks.

(2) Each such separate trade mark shall satisfy all the conditions applying to and have all the incidents of, an independent trade mark.

(3) Where a person claiming to be the proprietor of several trade marks in respect of the same or similar goods or services or description of goods or description of services, which, while resembling each other in the material particulars thereof, yet differ in respect of—

(a) statement of the goods or services in relation to which they are respectively used or proposed to be used; or

(b) statement of number, price, quality or names of places; or

(d) colour,

seeks to register those trade marks, they may be registered as a series in one registration.

Section 16. Registration of trade marks as associated trade marks.

(1) Where a trade mark which is registered, or is the subject of an application for registration, in respect of any goods or services is identical with another trade mark which is registered, or is the subject of an application for registration, in the name of the same proprietor in respect of the same goods or description of goods or same services or description of services or so nearly resembles it as to be likely to deceive or cause confusion if used by a person other than the proprietor, the Registrar may, at any time, require that the trade marks shall be entered on the register as associated trade marks.

(2) Where there is an identity or near resemblance of marks that are registered, or are the subject of applications for registration in the name of the same proprietor, in respect of goods and in respect of services which are associated with those goods or goods of that description and with those services or services of that description, sub-section (1) shall apply as it applies as where there is an identity or near resemblance of marks that are registered, or are the subject of applications for registration, in the name of the same proprietor in respect of the same goods or description of goods or same services or description of services.

(3) Where a trade mark and any part thereof are, in accordance with the provisions of sub-section (1) of section 15, registered as separate trade marks in the name of the same proprietor, they shall be deemed to be, and shall be registered as, associated trade marks.

(4) All trade marks registered in accordance with the provisions of sub-section (3) of section 15 as a series in one registration shall be deemed to be, and shall be registered as, associated trade marks.

(5) On application made in the prescribed manner by the registered proprietor of two or more trade marks registered as associated trade marks, the Registrar may dissolve the association as respects any of them if he is satisfied that there would be no likelihood of deception or confusion being caused if that trade mark were used by any other person in relation to any of the goods or services or both in respect of which it is registered, and may amend the register accordingly.

Section 17. Effect of registration of parts of a mark.

(1) When a trade mark consists of several matters, its registration shall confer on the proprietor exclusive right to the use of the trade mark taken as a whole.

(2) Notwithstanding anything contained in sub-section (1), when a trade mark—

(a) contains any part—

(i) which is not the subject of a separate application by the proprietor for registration as a trade mark; or

(ii) which is not separately registered by the proprietor as a trade mark; or

(b) contains any matter which is common to the trade or is otherwise of a non-distinctive character,

the registration thereof shall not confer any exclusive right in the matter forming only a part of the whole of the trade mark so registered.

Chapter 3 Procedure for and Duration of Registration

Section 18. Application for registration.

(1) Any person claiming to be the proprietor of a trade mark used or proposed to be used by him, who is desirous of registering it, shall apply in writing to the Registrar in the prescribed manner for the registration of his trade mark.

(2) A single application may be made for registration of a trade mark for different classes of goods and services and fee payable therefor shall be in respect of each such class of goods or services.

(3) Every application under sub-section (1) shall be filed in the office of the Trade Marks Registry within whose territorial limits the principal place of business in India of the applicant or in the case of joint applicants the principal place of business in India of the applicant whose name is first mentioned in the application as having a place of business in India, is situate:

Provided that where the applicant or any of the joint applicants does not carry on business in India, the application shall be filed in the office of the Trade Marks Registry within whose territorial limits the place mentioned in the address for service in India as disclosed in the application, is situate.

(4) Subject to the provisions of this Act, the Registrar may refuse the application or may accept it absolutely or subject to such amendments, modifications, conditions or limitations, if any, as he may think fit.

(5) In the case of a refusal or conditional acceptance of an application, the Registrar shall record in writing the grounds for such refusal or conditional acceptance and the materials used by him in arriving at his decision.

Section 19. Withdrawal of acceptance.

Where, after the acceptance of an application for registration of a trade mark but before its registration, the Registrar is satisfied—

(a) that the application has been accepted in error; or

(b) that in the circumstances of the case the trade mark should not be registered or should be registered subject to conditions or limitations or to conditions additional to or different from the conditions or limitations subject to which the application has been accepted,

the Registrar may, after hearing the applicant if he so desires, withdraw the acceptance and proceed as if the application had not been accepted.

Section 20. Advertisement of application.

(1) When an application for registration of a trade mark has been accepted whether absolutely or subject to conditions or limitations, the Registrar shall, as soon as may be after acceptance, cause the application as accepted together with the conditions or limitations, if any, subject to which it has been accepted, to be advertised in the prescribed manner:

Provided that the Registrar may cause the application to be advertised before acceptance if it relates to a trade mark to which sub-section (1) of section 9 and sub-sections (1) and (2) of section 11 apply, or in any other case where it appears to him that it is expedient by reason of any exceptional circumstances so to do.

(2) Where—

(a) an application has been advertised before acceptance under sub-section (1); or

(b) after advertisement of an application,—

(i) an error in the application has been corrected; or

(ii) the application has been permitted to be amended under

section 22,

the Registrar may in his discretion cause the application to be advertised again or in any case falling under clause (b) may, instead of causing the application to be advertised again, notify in the prescribed manner the correction or amendment made in the application.

Section 21. Opposition to registration.

(1) Any person may, within three months from the date of the advertisement or re-advertisement of an application for registration or within such further period, not exceeding one month in the aggregate, as the Registrar, on application made to him in the prescribed manner and on payment of the prescribed fee, allows, give notice in writing in the prescribed manner to the Registrar, of opposition to the registration.

(2) The Registrar shall serve a copy of the notice on the applicant for registration and, within two months from the receipt by the applicant of such copy of the notice of opposition, the applicant shall send to the Registrar in the prescribed manner a counter-statement of the grounds on which he relies for his application, and if he does not do so he shall be deemed to have abandoned his application.

(3) If the applicant sends such counter-statement, the Registrar shall serve a copy thereof on the person giving notice of opposition.

(4) Any evidence upon which the opponent and the applicant may rely shall be submitted in the prescribed manner and within the prescribed time to the Registrar, and the Registrar shall give an opportunity to them to be heard, if they so desire.

(5) The Registrar shall, after hearing the parties, if so required, and considering the evidence, decide whether and subject to what conditions or limitations, if any, the registration is to be permitted, and may take into account a ground of objection whether relied upon by the opponent or not.

(6) Where a person giving notice of opposition or an applicant sending a counter-statement after receipt of a copy of such notice neither resides nor carries on business in India, the Registrar may require him to give security for the costs of proceedings before him, and in default of such security being duly given, may treat the opposition or application, as the case may be, as abandoned.

(7) The Registrar may, on request, permit correction of any error in, or any amendment of, a notice of opposition or a counter-statement on such terms as he thinks just.

Section 22. Correction and amendment.

The Registrar may, on such terms as he thinks just, at any time, whether before or after acceptance of an application for registration under section 18, permit the correction of any error in or in connection with the application or permit an amendment of the application:

Provided that if an amendment is made to a single application referred to in sub-section (2) of section 18 involving division of such application into two or more applications, the date of making of the initial application shall be deemed to be the date of making of the divided applications so divided.

Section 23. Registration.

(1) Subject to the provisions of section 19, when an application for registration of a trade mark has been accepted and either—

(a) the application has not been opposed and the time for notice of opposition has expired; or

(b) the application has been opposed and the opposition has been decided in favour of the applicant,

the Registrar shall, unless the Central Government otherwise directs, register the said trade mark and the trade mark when registered shall be registered as of the date of the making of the said application and that date shall, subject to the provisions of section 154, be deemed to be the date of registration.

(2) On the registration of a trade mark, the Registrar shall issue to the applicant a certificate in the prescribed form of the registration thereof, sealed with the seal of the Trade Marks Registry.

(3) Where registration of a trade mark is not completed within twelve months from the date of the application by reason of default on the part of the applicant, the Registrar may, after giving notice to the applicant in the prescribed manner, treat the application as abandoned unless it is completed within the time specified in that behalf in the notice.

(4) The Registrar may amend the register or a certificate of registration for the purpose of correcting a clerical error or an obvious mistake.

Section 24. Jointly owned trade marks.

(1) Save as provided in sub-section (2), nothing in this Act shall authorise the registration of two or more persons who use a trade mark independently, or propose so to use it, as joint proprietors thereof.

(2) Where the relations between two or more persons interested in a trade mark are such that no one of them is entitled as between himself and the other or others of them to use it except—

(a) on behalf of both or all of them; or

(b) in relation to an article or service with which both or all of them are connected in the course of trade,

those persons may be registered as joint proprietors of the trade mark, and this Act shall have effect in relation to any rights to the use of the trade mark vested in those persons as if those rights had been vested in a single person.

Section 25. Duration, renewal, removal and restoration of registration.

(1) The registration of a trade mark, after the commencement of this Act, shall be for a period of ten years, but may be renewed from time to time in accordance with the provisions of this section.

(2) The Registrar shall, on application made by the registered proprietor of a trade mark in the prescribed manner and within the prescribed period and subject to payment of the prescribed fee, renew the registration of the trade mark for a period of ten years from the date of expiration of the original registration or of the last renewal of registration, as the case may be (which date is in this section referred to as the expiration of the last registration).

(3) At the prescribed time before the expiration of the last registration of a trade mark the Registrar shall send notice in the prescribed manner to the registered proprietor of the date of expiration and the conditions as to payment of fees and otherwise upon which a renewal of registration may be obtained, and, if at the expiration of the time prescribed in that behalf those conditions have not been duly complied with the Registrar may remove the trade mark from the register:

Provided that the Registrar shall not remove the trade mark from the register if an application is made in the prescribed form and the prescribed fee and surcharge is paid within six months from the expiration of the last registration of the trade mark and shall renew the registration of the trade mark for a period of ten years under sub-section (2).

(4) Where a trade mark has been removed from the register for non-payment of the prescribed fee, the Registrar shall, after six months and within one year from the expiration of the last registration of the trade mark, on receipt of an application in the prescribed form and on payment of the prescribed fee, if satisfied that it is just so to do, restore the trade mark to the register and renew the registration of the trade mark either generally or subject to such conditions or limitations as he thinks fit to impose, for a period of ten years from the expiration of the last registration.

Section 26. Effect of removal from register for failure to pay fee for renewal.

Where a trade mark has been removed from the register for failure to pay the fee for renewal, it shall nevertheless, for the purpose of any application for the registration of another trade mark during one year, next after the date of the removal, be deemed to be a trade mark already on the register, unless the tribunal is satisfied either—

(a) that there has been no bona fide trade use of the trade mark which

has been removed during the two years immediately preceding its removal; or

(b) that no deception or confusion would be likely to arise from the use of the trade mark which is the subject of the application for registration by reason of any previous use of the trade mark which has been removed.

Chapter 4 Effect of Registration

Section 27. No action for infringement of unregistered trade mark.

(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark.

(2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof.

Section 28. Rights conferred by registration.

(1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act.

(2) The exclusive right to the use of a trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.

(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.

Section 29. Infringement of registered trade marks.

(1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.

(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of—

(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or

(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or

(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark,

is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.

(3) In any case falling under clause (c) of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public.

(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which—

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

(5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.

(6) For the purposes of this section, a person uses a registered mark, if, in particular, he—

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;

(d) uses the registered trade mark on business papers or in advertising.

(7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.

(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising—

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or

(b) is detrimental to its distinctive character; or

(9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly.

Section 30. Limits on effect of registered trade mark.

(1) Nothing in section 29 shall be construed as preventing the use of a registered trade mark by any person for the purposes of identifying goods or services as those of the proprietor provided the use—

(a) is in accordance with honest practices in industrial or commercial matters, and

(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark.

(2) A registered trade mark is not infringed where—

(a) the use in relation to goods or services indicates the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services;

(b) a trade mark is registered subject to any conditions or limitations, the use of the trade mark in any manner in relation to goods to be sold or otherwise traded in, in any place, or in relation to goods to be exported to any market or in relation to services for use or available or acceptance in any place or country outside India or in any other circumstances, to which, having regard to those conditions or limitations, the registration does not extend;

(i) in relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if, as to those goods or a bulk or which they form part, the registered proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark; or

(ii) in relation to services to which the proprietor of such mark or of a registered user conforming to the permitted use has applied the mark, where the purpose and effect of the use of the mark is to indicate, in accordance with the fact, that those services have been performed by the proprietor or a registered user of the mark;

(d) the use of a trade mark by a person in relation to goods adapted to form part of, or to be accessory to, other goods or services in relation to which the trade mark has been used without infringement of the right given by registration under this Act or might for the time being be so used, if the use of the trade mark is reasonably necessary in order to indicate that the goods or services are so adapted, and neither the purpose nor the effect of the use of the trade mark is to indicate, otherwise than in accordance with the fact, a connection in the course of trade between any person and the goods or services, as the case may be;

(e) the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.

(3) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or through him is not infringement of a trade by reason only of—

(a) the registered trade mark having been assigned by the registered proprietor to some other person, after the acquisition of those goods; or

(b) the goods having been put on the market under the registered trade mark by the proprietor or with his consent.

(4) Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor to oppose further dealings in the goods in particular, where the condition of the goods, has been changed or impaired after they have been put on the market.

Section 31. Registration to be prima facie evidence of validity.

(1) In all legal proceedings relating to a trade mark registered under this Act (including applications under section 57), the original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be prima facie evidence of the validity thereof.

(2) In all legal proceedings as aforesaid a registered trade mark shall not be held to be invalid on the ground that it was not a registrable trade mark under section 9 except upon evidence of distinctiveness and that such evidence was not submitted to the Registrar before registration, if it is proved that the trade mark had been so used by the registered proprietor or his predecessor in title as to have become distinctive at the date of registration.

Section 32. Protection of registration on ground of distinctiveness in certain cases.

Where a trade mark is registered in breach of sub-section (1) of section 9, it shall not be declared invalid if, in consequence of the use which has been made of it, it has after registration and before commencement of any legal proceedings challenging the validity of such registration, acquired a distinctive character in relation to the goods or services for which it is registered.

Section 33. Effect of acquiescence.

(1) Where the proprietor of an earlier trade mark has acquiesced for a continuous period of five years in the use of a registered trade mark, being aware of that use, he shall no longer be entitled on the basis of that earlier trade mark—

(a) to apply for a declaration that the registration of the later trade mark is invalid, or

(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used,unless the registration of the later trade mark was not applied in good faith.

(2) Where sub-section (1) applies, the proprietor of the later trade mark is not entitled to oppose the use of the earlier trade mark, or as the case may be, the exploitation of the earlier right, notwithstanding that the earlier trade mark may no longer be invoked against his later trade mark.

Section 34. Saving for vested rights.

Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior—

(a) to the use of the first-mentioned trade mark in relation to those goods or services be the proprietor or a predecessor in title of his; or

(b) to the date of registration of the first-mentioned trade mark in respect of those goods or services in the name of the proprietor of a predecessor in title of his;

whichever is the earlier, and the Registrar shall not refuse (on such use being proved), to register the second mentioned trade mark by reason only of the registration of the first mentioned trade mark.

Section 35. Saving for use of name, address or description of goods or services.

Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with any bona fide use by a person of his own name or that of his place of business, or of the name, or of the name of the place of business, of any of his predecessors in business, or the use by any person of any bona fide description of the character or quality of his goods or services.

Section 36. Saving for words used as name or description of an article or substance or service.

(1) The registration of a trade mark shall not be deemed to have become invalid by reason only of any use after the date of the registration of any word or words which the trade mark contains or of which it consists as the name or description of an article or substance or service:

Provided that, if it is proved either—

(a) that there is a well known and established use of the said word as the name or description of the article or substance or service by a person or persons carrying on trade therein, not being used in relation to goods or services connected in the course of trade with the proprietor or a registered user of the trade mark or (in the case of a certification trade mark) in relation to goods or services certified by the proprietor; or

(b) that the article or substance was formerly manufactured under a patent that a period of two years or more after the cesser of the patent has elapsed and that the said word is the only practicable name or description of the article or substance,

the provisions of sub-section (2) shall apply.

(2) Where the facts mentioned in clause (a) or clause (b) of the proviso to sub-section (1) are proved with respect to any words, then,—

(a) for the purpose of any proceedings under section 57 if the trade mark consists solely of such words, the registration of the trade mark, so far as regards registration in respect of the article or substance in question or of any goods of the same description, or of the services or of any services of the same description, as the case requires, shall be deemed to be an entry wrongly remaining on the register;

(b) for the purposes of any other legal proceedings relating to the trade mark,—

(i) if the trade mark consists solely of such words, all rights of the proprietor under this Act or any other law to the use of the trade mark; or

(ii) if the trade mark contains such words and other matter, all such right of the proprietor to the use of such words,

in relation to the article or substance or to any goods of the same description, or to the service or to any services of the same description, as the case requires, shall be deemed to have ceased on the date on which the use mentioned in clause (a) of the proviso to sub-section (1) first became well known and established or at the expiration of the period of two years mentioned in clause (b) of the said proviso.

Chapter 5 Assignment and Transmission

Section 37. Power of registered proprietor to assign and give receipts.

The person for the time being entered in the register as proprietor of a trade mark shall, subject to the provisions of this Act and to any rights appearing from the register to be vested in any other person, have power to assign the trade mark, and to give effectual receipts for any consideration for such assignment.

Section 38. Assignability and transmissibility of registered trade marks.

Notwithstanding anything in any other law to the contrary, a registered trade mark shall, subject to the provisions of this Chapter, be assignable and transmissible, whether with or without the goodwill of the business concerned and in respect either of all the goods or services in respect of which the trade mark is registered or of some only of those goods or services.

Section 39. Assignability and transmissibility of unregistered trade marks.

An unregistered trade mark may be assigned or transmitted with or without the goodwill of the business concerned.

Section 40. Restriction on assignment or transmission where multiple exclusive rights would be created.

(1) Notwithstanding anything in sections 38 and 39, a trade mark shall not be assignable or transmissible in a case in which as a result of the assignment or transmission there would in the circumstances subsist, whether under this Act or any other law, exclusive rights in more than one of the persons concerned to the use, in relation to—

(a) same goods or services;

(b) same description of goods or services;

of trade marks nearly resembling each other or of identical trade mark, if having regard to the similarity of the goods and services and to the similarity of the trade marks, the use of the trade marks in exercise of those rights would be likely to deceive or cause confusion:

Provided that an assignment or transmission shall not be deemed to be invalid under this sub-section if the exclusive rights subsisting as a result thereof in the persons concerned respectively are, having regard to limitations imposed thereon, such as not to be exercisable by two or more of those persons in relation to goods to be sold, or otherwise traded in, within India otherwise than for export therefrom, or in relation to goods to be exported to the same market outside India or in relation to services for use at any place in India or any place outside India in relation to services available for acceptance in India.

(2) The proprietor of a registered trade mark who proposes to assign it may submit to the Registrar in the prescribed manner a statement of case setting out the circumstances and the Registrar may issue to him a certificate stating whether, having regard to the similarity of the goods or services and of the trade marks referred to in the case, the proposed assignment would or would not be invalid under sub-section (1), and a certificate so issued shall, subject to appeal and unless it is shown that the certificate was obtained by fraud or misrepresentation, be conclusive as to the validity or invalidity under sub-section (1) of the assignment insofar as such validity or invalidity depends upon the facts set out in the case, but, as regards a certificate in favour of validity, only if application for the registration under section 45 of the title of the person becoming entitled is made within six months from the date on which the certificate is issued.

Section 42. Assignability and transmissibility of certification trade marks.

A certification trade mark shall not be assignable or transmissible otherwise than with the consent of the Registrar, for which application shall be made in writing in the prescribed manner.

Section 43. Assignability and transmissibility of certification trade marks.

A certification trade mark shall not be assignable or transmissible otherwise than with the consent of the Registrar, for which application shall be made in writing in the prescribed manner.

Section 44. Assignability and transmissibility of associated trade marks.

Associated trade marks shall be assignable and transmissible only as a whole and not separately, but, subject to the provisions of this Act, they shall, for all other purposes, be deemed to have been registered as separate trade marks.

Section 45. Registration of assignments and transmissions.

(1) Where a person becomes entitled by assignment or transmission to a registered trade mark, he shall apply in the prescribed manner to the Registrar to register his title, and the Registrar shall, on receipt of the application and on proof of title to his satisfaction, register him as the proprietor of the trade mark in respect of the goods or services in respect of which the assignment or transmission has effect, and shall cause particulars of the assignment or transmission to be entered on the register:

Provided that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register the assignment or transmission until the rights of the parties have been determined by a competent court.

(2) Except for the purpose of an application before the Registrar under sub-section (1) or an appeal from an order thereon, or an application under section 57 or an appeal from an order thereon, a document or instrument in respect of which no entry has been made in the register in accordance with sub-section (1), shall not be admitted in evidence by the Registrar or the Appellate Board or any court in proof of title to the trade mark by assignment or transmission unless the Registrar or the Appellate Board or the court, as the case may be, otherwise directs.

Chapter 6 Use of Trade Marks and Registered Users

Section 46. Proposed use of trade mark by company to be formed, etc.

(1) No application for the registration of a trade mark in respect of any goods or services shall be refused nor shall permission for such registration be withheld, on the ground only that it appears that the applicant does not use or propose to use the trade mark if the Registrar is satisfied that—

(a) a company is about to be formed and registered under the Companies Act, 1956 (1 of 1956) and that the applicant intends to assign the trade mark to that company with a view to the use thereof in relation to those goods or services by the company, or

(b) the proprietor intends it to be used by a person, as a registered user after the registration of the trade mark.

(2) The provisions of section 47 shall have effect, in relation to a trade mark registered under the powers conferred by this sub-section, as if for the reference, in clause (a) of sub-section (1) of that section, to the intention on the part of an applicant for registration that a trade mark should be used by him there were substituted a reference to the intention on his part that it should be used by the company or registered user concerned.

(3) The tribunal may, in a case to which sub-section (1) applies, require the applicant to give security for the costs of any proceedings relating to any opposition or appeal, and in default of such security being duly given, may treat the application as abandoned.

(4) Where in a case to which sub-section (1) applies, a trade mark in respect of any goods or services is registered in the name of an applicant who, relies on intention to assign the trade mark to a company, then, unless within such period as may be prescribed or within such further period not exceeding six months as the Registrar may, on application being made to him in the prescribed manner, allow, the company has been registered as the proprietor of the trade mark in respect of those goods or services, the registration shall cease to have effect in respect thereof at the expiration of that period and the Registrar shall amend the register accordingly.

Section 47. Removal from register and imposition of limitations on ground of non-use.

(1) A registered trade mark may be taken off the register in respect of the goods or services in respect of which it is registered on application made in the prescribed manner to the Registrar or the Appellate Board by any person aggrieved on the ground either—

(a) that the trade mark was registered without any bona fide intention on

the part of the applicant for registration that it should be used in relation to those goods or services by him or, in a case to which the provisions of section 46 apply, by the company concerned or the registered user, as the case may be, and that there has, in fact, been no bona fide use of the trade mark in relation to those goods or services by any proprietor thereof for the time being up to a date three months before the date of the application; or

(b) that up to a date three months before the date of the application, a continuous period of five years from the date on which the trade mark is actually entered in the register or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods or services by any proprietor thereof for the time being:

Provided that except where the applicant has been permitted under section 12 to register an identical or nearly resembling trade mark in respect of the goods or services in question, or where the tribunal is of opinion that he might properly be permitted so to register such a trade mark, the tribunal may refuse an application under clause (a) or clause (b) in relation to any goods or services, if it is shown that there has been, before the relevant date or during the relevant period, as the case may be, bona fide use of the trade mark by any proprietor thereof for the time being in relation to—

(i) goods or services of the same description; or

(ii) goods or services associated with those goods or services of that description being goods or services, as the case may be, in respect of which the trade mark is registered.

(2) Where in relation to any goods or services in respect of which a trade mark is registered—

(a) the circumstances referred to in clause (b) of sub-section (1) are shown to exist so far as regards non-use of the trade mark in relation to goods to be sold, or otherwise traded in a particular place in India (otherwise than for export from India), or in relation to goods to be exported to a particular market outside India; or in relation to services for use or available for acceptance in a particular place in India or for use in a particular market outside India; and

(b) a person has been permitted under section 12 to register an identical or nearly resembling trade mark in respect of those goods, under a registration extending to use in relation to goods to be so sold, or otherwise traded in, or in relation to goods to be so exported, or in relation to services for use or available for acceptance in that place or for use in that country, or the tribunal is of opinion that he might properly be permitted so to register such a trade mark,

on application by that person in the prescribed manner to the Appellate Board or to the Registrar, the tribunal may impose on the registration of the first-mentioned trade mark such limitations as it thinks proper for securing that registration shall cease to extend to such use.

(3) An applicant shall not be entitled to rely for the purpose of clause (b) of sub-section (1) or for the purposes of sub-section (2) on any non-use of a trade mark which is shown to have been due to special circumstances in the trade, which includes restrictions on the use of the trade mark in India imposed by any law or regulation and not to any intention to abandon or not to use the trade mark in relation to the goods or services to which the application relates.

Section 48. Registered users.

(1) Subject to the provisions of section 49, a person other than the registered proprietor of a trade mark may be registered as a registered user thereof in respect of any or all of the goods or services in respect of which the trade mark is registered.

(2) The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor, for the purposes of section 47 or for any other purpose for which such use is material under this Act or any other law.

Section 49. Registration as registered user.

(1) Where it is proposed that a person should be registered as a registered user of a trade mark, the registered proprietor and the proposed registered user shall jointly apply in writing to the Registrar in the prescribed manner, and every such application shall be accompanied by—

(a) the agreement in writing or a duly authenticated copy thereof, entered into between the registered proprietor and the proposed registered user with respect to the permitted use of the trade mark; and

(b) an affidavit made by the registered proprietor or by some person authorised to the satisfaction of the Registrar to act on his behalf,—

(i) giving particulars of the relationship, existing or proposed, between the registered proprietor and the proposed registered user, including particulars showing the degree of control by the proprietor over the permitted use which their relationship will confer and whether it is a term of their relationship that the proposed registered user shall be the sole registered user or that there shall be any other restriction as to persons for whose registration as registered users application may be made;

(ii) stating the goods or services in respect of which registration is

proposed;

(iii) stating the conditions or restrictions, if any, proposed with respect to the characteristics of the goods or services, to the mode or place of permitted use, or to any other matter;

(iv) stating whether the permitted use is to be for a period or without limit of period, and, if for a period, the duration thereof; and

(2) When the requirements of sub-section (1) have been complied with, the Registrar shall register the proposed registered user in respect of the goods or services as to which he is so satisfied.

(3) The Registrar shall issue notice in the prescribed manner of the registration of a person as a registered user, to other registered users of the trade mark, if any.

(4) The Registrar shall, if so requested by the applicant, take steps for securing that information given for the purposes of an application under this section (other than matters entered in the register) is not disclosed to rivals in trade.

Section 50. Power of Registrar for variation or cancellation of registration as registered user.

(1) Without prejudice to the provisions of section 57, the registration of a person as registered user—

(a) may be varied by the Registrar as regards the goods or services in respect of which it has effect on the application in writing in the prescribed manner of the registered proprietor of the trade mark;

(b) may be cancelled by the Registrar on the application in writing in the prescribed manner of the registered proprietor or of the registered user or of any other registered user of the trade mark;

(c) may be cancelled by the Registrar on the application in writing in the prescribed manner of any person on any of the following grounds,

namely:—

(i) that the registered user has used the trade mark otherwise than in accordance with the agreement under clause (a) of sub-section (1) of section 49 or in such way as to cause or to be likely to cause, deception or confusion;

(ii) that the proprietor or the registered user misrepresented, or failed to disclose, some fact material to the application for registration which if accurately represented or disclosed would not have justified the registration of the registered user;

(iii) that the circumstances have changed since the date of registration in such a way that at the date of such application for cancellation they would not have justified registration of the registered user;

(iv) that the registration ought not to have been effected having regard to rights vested in the applicant by virtue of a contract in the performance of which he is interested;

(d) may be cancelled by the Registrar on his own motion or on the application in writing in the prescribed manner by any person, on the ground that any stipulation in the agreement between the registered proprietor and the registered user regarding the quality of the goods or services in relation to which the trade mark is to be used is either not being enforced or is not being complied with;

(e) may be cancelled by the Registrar in respect of any goods or services in relation to which the trade mark is no longer registered.

(2) The Registrar shall issue notice in the prescribed manner in respect of every application under this section to the registered proprietor and each registered user (not being the applicant) of the trade mark.

(3) The procedure for cancelling a registration shall be such as may be prescribed:

Provided that before cancelling of registration, the registered proprietor shall be given a reasonable opportunity of being heard.

Section 51. Power of Registrar to call for information relating to agreement in respect of registered users.

(1) The Registrar may, at any time during the continuance of the registration of the registered user, by notice in writing, require the registered proprietor to confirm to him within one month that the agreement filed under clause (a) of sub-section (1) of section 49 continues to be in force.

(2) If the registered proprietor fails to furnish the confirmation within one month as required under sub-section (1), the registered user shall cease to be the registered user on the day immediately after the expiry of the said period and the Registrar shall notify the same.

Section 52. Right of registered user to take proceedings against infringement.

(1) Subject to any agreement subsisting between the parties, a registered user may institute proceedings for infringement in his own name as if he were the registered proprietor, making the registered proprietor a defendant and the rights and obligations of such registered user in such case being concurrent with those of the registered proprietor.

(2) Notwithstanding anything contained in any other law, a registered proprietor so added as defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings.

Section 53. No right of permitted user to take proceeding against infringement.

A person referred to in sub-clause (ii) of clause (r) of sub-section (1) of section 2 shall have no right to institute any proceeding for any infringement.

Section 54. Registered user not to have right of assignment or transmission.

Nothing in this Act shall confer on a registered user of a trade mark any assignable or transmissible right to the use thereof.

Explanation I.—The right of a registered user of a trade mark shall not be deemed to have been assigned or transmitted within the meaning of this section in the following cases, namely:—

(a) where the registered user being an individual enters into a partnership with any other person for carrying on the business concerned; but in any such case the firm may use the trade mark, if otherwise in force, only for so long as the registered user is a member of the firm;

(b) where the registered user being a firm subsequently undergoes a change in its constitution; but in any such case the reconstituted firm may use the trade mark, if otherwise in force, only for so long as any partner of the original firm at the time of its registration as registered user, continues to be a partner of the reconstituted firm.

Explanation II.—For the purposes of Explanation 1, “firm” has the same meaning as in the Indian Partnership Act, 1932 (9 of 1932).

Section 55. Use of one of associated or substantially identical trade marks equivalent to use of another.

(1) Where under the provisions of this Act, use of a registered trade mark is required to be proved for any purpose, the tribunal may, if and, so far as it shall think right, accept use of a registered associated trade mark, or of the trade mark with additions or alterations not substantially affecting its identity, as an equivalent for the use required to be proved.

(2) The use of the whole of a registered trade mark shall, for the purpose of this Act, be deemed to be also use of any trade mark being a part thereof and registered in accordance with sub-section (1) of section 15 in the name of the same proprietor.

(3) Notwithstanding anything in section 32, the use of part of the registered trade mark in sub-section (2) shall not be conclusive as to its evidence of distinctiveness for any purpose under this Act.

Section 56. Use of trade mark for export trade and use when form of trade connection changes.

(1) The application in India of trade mark to goods to be exported from India or in relation to services for use outside India and any other act done in India in relation to goods to be so exported or services so rendered outside India which, if done in relation to goods to be sold or services provided or otherwise traded in within India would constitute use of a trade mark therein, shall be deemed to constitute use of the trade mark in relation to those goods or services for any purpose for which such use is material under this Act or any other law.

(2) The use of a registered trade mark in relation to goods or services between which and the person using the mark any form of connection in the course of trade subsists shall not be deemed to be likely to cause deception or confusion on the ground only that the mark has been or is used in relation to goods or services between which and the said person or a predecessor in title of that person a different form of connection in the course of trade subsisted or subsists.

Chapter 7 Rectification and Correction of the Register

Section 57. Power to cancel or vary registration and to rectify the register.

(1) On application made in the prescribed manner to the Appellate Board or to the Registrar by any person aggrieved, the tribunal may make such order as it may think fit for cancelling or varying the registration of a trade mark on the ground of any contravention, or failure to observe a condition entered on the register in relation thereto.

(2) Any person aggrieved by the absence or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to the Appellate Board or to the Registrar, and the tribunal may make such order for making, expunging or varying the entry as it may think fit.

(3) The tribunal may in any proceeding under this section decide any question that may be necessary or expedient to decide in connection with the rectification of the register.

(4) The tribunal, of its own motion, may, after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard, make any order referred to in sub-section (1) or sub-section (2).

(5) Any order of the Appellate Board rectifying the register shall direct that notice of the rectification shall be served upon the Registrar in the prescribed manner who shall upon receipt of such notice rectify the register accordingly.

Section 58. Correction of register.

(1) The Registrar may, on application made in the prescribed manner by the registered proprietor,—

(a) correct any error in the name, address or description of the registered proprietor of a trade mark, or any other entry relating to the trade mark;

(b) enter any change in the name, address or description of the person who is registered as proprietor of a trade mark;

(d) strike out any goods or classes of goods or services from those in respect of which a trade mark is registered,

and may make any consequential amendment or alteration in the certificate of registration, and for that purpose, may require the certificate of registration to be produced to him.

(2) The Registrar may, on application made in the prescribed manner by a registered user of a trade mark, and after notice to the registered proprietor, correct any error, or enter any change, in the name, address or description of the registered user.

Section 59. Alteration of registered trade marks.

(1) The registered proprietor of a trade mark may apply in the prescribed manner to the Registrar for leave to add to or alter the trade mark in any manner not substantially affecting the identity thereof, and the Registrar may refuse leave or may grant it on such terms and subject to such limitations as he may think fit.

(2) The Registrar may cause an application under this section to be advertised in the prescribed manner in any case where it appears to him that it is expedient so to do, and where he does so, if within the prescribed time from the date of advertisement any person gives notice to the Registrar in the prescribed manner of opposition to the application, the Registrar shall, after hearing the parties if so required, decide the matter.

(3) Where leave is granted under this section, the trade mark as altered shall be advertised in the prescribed manner, unless the application has already been advertised under sub-section (2).

Section 60. Adaptation of entries in register to amended or substituted classification of goods or services.

(1) The Registrar shall not make any amendment of the register which would have the effect of adding any goods or classes of goods or services to those in respect of which a trade mark is registered (whether in one or more classes) immediately before the amendment is to be made or of antedating the registration of a trade mark in respect of any goods or services:

Provided that this sub-section, shall not apply when the Registrar is satisfied that compliance therewith would involve undue complexity and that the addition or antedating, as the case may be, would not affect any substantial quantity of goods or services and would not substantially prejudice the rights of any person.

(2) A proposal so to amend the register shall be brought to the notice of the registered proprietor of the trade mark affected and advertised in the prescribed manner, and may be opposed before the Registrar by any person aggrieved on the ground that the proposed amendment contravenes the provisions of sub-section (1).

Chapter 8 Collective Marks

Section 61. Special provisions for collective marks.

(1) The provisions of this Act shall apply to collective marks subject to the provisions contained in this Chapter.

(2) In relation to a collective mark the reference in clause (zb) of sub-section (1) of section 2 to distinguishing the goods or services of one person from those of others shall be construed as a reference to distinguishing the goods or services of members of an association of persons which is the proprietor of the mark from those of others.

Section 62. Collective mark not to be misleading as to character or significance.

A collective mark shall not be registered if it is likely to deceive or cause confusion on the part of public in particular if it is likely to be taken to be something other than a collective mark, and in such case the Registrar may require that a mark in respect of which application is made for registration comprises some indication that it is a collective mark.

Section 63. Application to be accompanied by regulations governing use of collective marks.

(1) An application for registration of a collective mark shall be accompanied by the regulations governing the use of such collective mark.

(2) The regulations referred to in sub-section (1) shall specify the persons authorised to use the mark, the conditions of membership of the association and, the conditions of use of the mark, including any sanctions against misuse and such other matters as may be prescribed.

Section 64. Acceptance of application and regulations by Registrar.

If it appears to the Registrar that the requirements for registration are satisfied, he shall accept the application together with the regulations, either unconditionally or subject to such conditions including amendments of the said regulations, if any, as he may deem fit or refuse to accept it and if accepted shall notify the regulations.

Section 65. Regulations to be open to inspection.

The regulations referred to in sub-section (1) of section 63 shall be open to public inspection in the same way as the register as provided in section 148.

Section 66. Amendment of regulations.

Any amendment of regulations referred to in sub-section (1) of section 63 shall not be effective unless the amended regulations are filed with the Registrar, and accepted and published by him in accordance with section 64.

Section 67. Infringement proceedings by registered proprietor of collective mark.

In a suit for infringement instituted by the registered proprietor of a collective mark as plaintiff the court shall take into account any loss suffered or likely to be suffered by authorised users and may give such directions as it thinks fit as to the extent to which the plaintiff shall hold the proceeds of any pecuniary remedy on behalf of such authorised users.

Section 68. Additional grounds for removal of registration of collective mark.

The registration of a collective mark may also be removed from the register on the ground—

(a) that the manner in which the collective mark has been used by the proprietor or authorised user has caused it to become liable to mislead the public as a collective mark; or

(b) that the proprietor has failed to observe, or to secure the observance of the regulations governing the use of the mark.

Explanation I.—For the purposes of this Chapter, unless the context otherwise requires, “authorised user” means a member of an association authorised to use the registered collective mark of the association.

Explanation II.—For the purposes of this Act, use of a collective mark by an authorised user referred to in Explanation I shall be deemed to be the use by the registered proprietor thereof.

Chapter 9 Certification Trade Marks

Section 69. Certain provisions of this Act not applicable to certification trade marks.

The following provisions of this Act shall not apply to certification trade marks, that is to say,—

(a) clauses (a) and (c) of sub-section (1) of section 9;

(b) sections 18, 20 and 21, except as expressly applied by this Chapter;

(d) Chapter XII, except section 107.

Section 70. Registration of certification trade marks.

A mark shall not be registrable as a certification trade mark in the name of a person who carries on a trade in goods of the kind certified or a trade of the provision of services of the kind certified.

Section 71. Applications for registration of certification trade marks.

(1) An application for the registration of a mark as a certification trade mark shall be made to the Registrar in the prescribed manner by the person proposed to be registered as the proprietor thereof, and accompanied by a draft of the regulations to be deposited under section 74.

(2) Subject to the provisions of section 70, the provisions of sections 18, 19 and 22 shall apply in relation to an application under this section as they apply in relation to an application under section 18, subject to the modification that references therein to acceptance of an application shall be construed as references to authorisation to proceed with an application.

(3) In dealing under the said provision with an application under this section, the tribunal shall have regard to the like considerations, so far as relevant, as if the application were application under section 18 and to any other considerations relevant to applications under this section, including the desirability of securing that a certification trade mark shall comprise some indication that it is a certification trade mark.

Section 72. Consideration of application for registration by the Registrar.

(1) The Registrar shall consider the application made under section 71 with regard to the following matters, namely:—

(a) whether the applicant is competent to certify the goods in respect of which the mark is to be registered;

(b) whether the draft of the regulations to be filed under section 74 is satisfactory;

and may either—

(i) refuse the application; or

(ii) accept the application and approve the said draft of the regulations either without modification and unconditionally or subject to any conditions or limitations, or to any amendments or modifications of the application or of the regulations, which he thinks requisite having regard to any of the said matters.

(2) Except in the case of acceptance and approval without modification and unconditionally, the Registrar shall not decide any matter under sub-section (1) without giving the applicant an opportunity of being heard

Section 73. Opposition to registration of certification trade marks.

When an application has been accepted, the Registrar shall, as soon as may be thereafter, cause the application as accepted to be advertised in the prescribed manner, and the provisions of section 21 shall apply in relation to the registration of the mark as they apply in relation to an application under section 18.

Section 74. Filing of regulations governing use of a certification trade mark.

(1) There shall be filed at the Trade Marks Registry in respect of every mark registered as a certification trade mark regulations for governing the use thereof, which shall include provisions as to the cases in which the proprietor is to certify goods or services and to authorise the use of the certification trade mark, and may contain any other provisions which the Registrar may by general or special order, require or permit to be inserted therein (including provisions conferring a right of appeal to the Registrar against any refusal of the proprietor to certify goods or to authorise the use of the certification trade mark in accordance with the regulations); and regulations so filed shall be open to inspection in like manner as the register as provided in section 148.

(2) The regulations so filed may, on the application of the registered proprietor, be altered by the Registrar.

(3) The Registrar may cause such application to be advertised in any case where it appears to him expedient so to do, and where he does so, if within the time specified in the advertisement any person gives notice of opposition to the application, the Registrar shall not decide the matter without giving the parties an opportunity of being heard.

Section 75. Infringement of certification trade marks.

The right conferred by section 78 is infringed by any person who, not being the registered proprietor of the certification trade mark or a person authorised by him in that behalf under the regulations filed under section 74, using it in accordance therewith, uses in the course of trade, a mark, which is identical with, or deceptively similar to the certification trade mark in relation to any goods or services in respect of which it is registered, and in such manner as to render the use of the mark likely to be taken as being a use as a trade mark.

Section 76. Acts not constituting infringement of certification trade marks.

(1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of the right to the use of a registered certification trade mark—

(a) where a certification trade mark is registered subject to any conditions or limitations entered on the register, the use of any such mark in any mode, in relation to goods to be sold or otherwise traded in any place, or in relation to goods to be exported to any market or in relation to services for use or available for acceptance in any place, country or territory or in any other circumstances, to which having regard to any such limitations, the registration does not extend;

(b) the use of a certification trade mark in relation to goods or services certified by the proprietor of the mark if, as to those goods or services or a bulk of which they form part, the proprietor or another in accordance with his authorisation under the relevant regulations has applied the mark and has not subsequently removed or obliterated it, or the proprietor has at any time expressly or impliedly consented to the use of the mark;

(c) the use of a certification trade mark in relation to goods or services adapted to form part of, or to be accessory to, other goods in relation to which the mark has been used without infringement of the right given as aforesaid or might for the time being be so used, if the use of the mark is reasonably necessary in order to indicate that the goods or services as so adapted and neither the purpose nor the effect of the use of the mark is to indicate otherwise than in accordance with the fact that the goods or services are certified by the proprietor.

(2) Clause (b) of sub-section (1) shall not apply to the case of use consisting of the application of a certification trade mark to goods or services, notwithstanding that they are such goods or services as are mentioned in that clause if such application is contrary to the regulations referred to in that clause.

(3) Where a certification trade mark is one of two or more trade marks registered under this Act, which are identical or nearly resemble each other, the use of any of those trade marks in exercise of the right to the use of that trade mark given by registration, shall not be deemed to be an infringement of the right so given to the use of any other of those trade marks.

Section 77. Cancellation or varying of registration of certification trade marks.

The Registrar may, on the application in the prescribed manner of any person aggrieved and after giving the proprietor an opportunity of opposing the application, make such order as he thinks fit for expunging or varying any entry in the register to a certification trade mark, or for varying the regulations, on any of the following grounds, namely:—

(a) that the proprietor is no longer competent, in the case of any of the goods or services in respect of which the mark is registered, to certify those goods or services;

(b) that the proprietor has failed to observe any provisions of the regulations to be observed on his part;

(d) that it is requisite for the public advantage that if the mark remains registered, the regulations should be varied.

Section 78. Rights conferred by registration of certification trade marks.

(1) Subject to the provisions of sections 34, 35 and 76, the registration of a person as a proprietor of certification trade mark in respect of any goods or services shall, if valid, give to that person the exclusive right to the use of the mark in relation to those goods or services.

(2) The exclusive right to the use of a certification trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.

Chapter 10 Special Provisions for Textile Goods

Section 79. Textile goods.

The Central Government may prescribe classes of goods (in this Chapter referred to as textile goods) to the trade marks used in relation to which the provisions of this Chapter shall apply; and subject to the said provisions, the other provisions of this Act shall apply to such trade marks as they apply to trade marks used in relation to other classes of goods.

80. Restriction on registration of textile goods.—

(1) In respect of textile goods being piece goods—

(a) no mark consisting of a line heading alone shall be registrable as a trade mark;

(b) a line heading shall not be deemed to be capable of distinguishing;

(2) In respect of any textile goods, the registration of letters or numerals, or any combination thereof, shall be subject to such conditions and restrictions as may be prescribed.

Section 81. Stamping of piece goods, cotton yarn and thread.

(1) Piece goods, such as are ordinarily sold by length or by the piece, which have been manufactured, bleached, dyed, printed or finished in premises which are a factory, as defined in the Factories Act, 1948 (63 of 1948), shall not be removed for sale from the last of such premises in which they underwent any of the said processes without having conspicuously stamped in international form of Indian numerals on each piece the length thereof in standard yards, or in standard yards and a fraction of such a yard, or in standard metres or in standard metres and a fraction of such a metre, according to the real length of the piece, and, except when the goods are sold from the factory for export from India, without being conspicuously marked on each piece with the name of the manufacturer or of the occupier of the premises in which the piece was finally processed or of the wholesale purchaser in India of the piece.

(2) Cotton yarn such as is ordinarily sold in bundles, and cotton thread, namely, sewing, darning, crochet or handicraft thread, which have been manufactured, bleached, dyed or finished in any premises not exempted by the rules made under section 82 shall not be removed for sale from those premises unless, in accordance with the said rules in the case of yarn—

(a) the bundles are conspicuously marked with an indication of the weight of yarn in English or the metric system in each bundles; and

(b) the count of the yarn contained in the bundles and in the case of thread each unit is conspicuously marked with the length or weight of thread in the unit and in such other manner as may be required by the said rules; and

(c) except where the goods are sold from the premises for export from India, unless each bundle or unit is conspicuously marked with the name of the manufacturer or of the wholesale purchaser in India of the goods:

Provided that the rules made under section 82 shall exempt all premises where the work is done by members of one family with or without the assistance of not more than ten other employees, and all premises controlled by a co-operative society where not more than twenty workers are employed in the premises.

Section 82. Determination of character of textile goods by sampling.

(1) For the purposes of this Act, the Central Government may make rules—

(a) to provide, with respect to any goods which purport or are alleged to be of uniform number, quantity, measure, gauge or weight, for the number of samples to be selected and tested and for the selection of the samples;

(b) to provide, for the manner in which for the purposes of section 81 cotton yarn and cotton thread shall be marked with the particulars required by that section, and for the exemption of certain premises used for the manufacture, bleaching, dying or finishing of cotton yarn or cotton thread from the provisions of that section; and

(c) declaring what classes of goods are included in the expression “piece goods such as are ordinarily sold by length or by the piece” for the purpose of section 81, of this Act or clause (n) of sub-section (2) of section 11 of the Customs Act, 1962 (52 of 1962).

(2) With respect to any goods for the selection and testing of samples of which provision is not made in any rules for the time being in force under sub-section (1), the court or officer of customs, as the case may be, having occasion to ascertain the number, quantity, measure, gauge or weight of the goods, shall by order in writing, determine the number of samples to be selected and tested and the manner in which the samples are to be selected.

(3) The average of the results of the testing in pursuance of rules under sub-

section (1) or of an order under sub-section (2) shall be prima facie evidence of the number, quantity, measure, gauge or weight, as the case may be, of the goods.

(4) If a person having any claim to, or in relation to, any goods of which samples have been selected and tested in pursuance of rules under sub-section (1), or of an order under sub-section (2), desires that any further samples of the goods be selected and tested, such further samples shall, on his written application and on the payment in advance by him to the court or officer of customs, as the case may be, of such sums for defraying the cost of the further selection and testing as the court or officer may from time to time require, be selected and tested to such extent as may be permitted by rules made by the Central Government in this behalf or as, in the case of goods with respect to which provision is not made in such rules, the court or officer of customs may determine in the circumstances to be reasonable, the samples being selected in the manner prescribed under sub-section (1), or in sub-section (2), as the case may be.

(5) The average of the results of the testing referred to in sub-section (3) and of the further testing under sub-section (4) shall be conclusive proof of the number, quantity, measure, gauge or weight, as the case may be, of the goods.

Section 83. Establishment of Appellate Board1.

The Central Government shall, by notification in the Official Gazette, establish an Appellate Board to be known as the Intellectual Property Appellate Board to exercise the jurisdiction, powers and authority conferred on it by or under this Act.

Chapter 11 Appellate Board

Section 84. Composition of Appellate Board.

(1) The Appellate Board shall consist of a Chairman, Vice-Chairman and such number of other Members, as the Central Government may, deem fit and, subject to the other provisions of this Act, the jurisdiction, powers and authority of the Appellate Board may be exercised by Benches thereof.

(2) Subject to the other provisions of this Act, a Bench shall consist of one Judicial Member and one Technical Member and shall sit at such place as the Central Government may, by notification2 in the Official Gazette, specify.

(3) Notwithstanding anything contained in sub-section (2), the Chairman—

(a) may, in addition to discharging the functions of the Judicial Member or Technical Member of the Bench to which he is appointed, discharge the functions of the Judicial Member or, as the case may be, the Technical Member, of any other Bench;

(b) may transfer a Member from one Bench to another Bench;

(c) may authorise the Vice-Chairman, the Judicial Member or the Technical Member appointed to one Bench to discharge also the functions of the Judicial Member or the Technical Member, as the case may be, of another Bench.

(4) Where any Benches are constituted, the Central Government may, from time to time, by notification, make provisions as to the distribution of the business of the Appellate Board amongst the Benches and specify the matters which may be dealt with by each Bench.

(5) If any question arises as to whether any matter falls within the purview of the business allocated to a Bench, the decision of the Chairman shall be final.

Explanation.—For the removal of doubts, it is hereby declared that the expression “matter” includes an appeal under section 91.

(6) If the Members of a Bench differ in opinion on any point, they shall state the point or points on which they differ, and make a reference to the Chairman who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members and such point or points shall be decided according to the opinion of the majority of the Members who have heard the case, including those who first heard it.

Section 85. Qualifications for appointment as Chairman, Vice-Chairman, or other Members.

(1) A person shall not be qualified for appointment as the Chairman unless he—

(a) is, or has been, a Judge of a High Court; or

(b) has, for at least two years, held the office of a Vice-Chairman.

(2) A person shall not be qualified for appointment as the Vice-Chairman, unless he—

(a) has, for at least two years, held the office of a Judicial Member or a Technical Member; or

(b) has been a member of the Indian Legal Service and has held a post in Grade I of that Service or any higher post for at least five years.

(3) A person shall not be qualified for appointment as a Judicial Member, unless he—

(a) has been a member of the Indian Legal Service and has held the post in Grade I of that Service for at least three years; or

(b) has, for at least ten years, held a civil judicial office.

(4) A person shall not be qualified for appointment as a Technical Member, unless he—

(a) has, for at least ten years, exercised functions of a tribunal under this Act or under the Trade and Merchandise Marks Act, 1958 (43 of 1958), or both, and has held a post not lower than the post of a Joint Registrar for at least five years; or

(b) has, for at least ten years, been an advocate of a proven specialised experience in trade mark law.

(5) Subject to the provisions of sub-section (6), the Chairman, Vice-Chairman and every other Member shall be appointed by the President of India.

(6) No appointment of a person as the Chairman shall be made except after consultation with the Chief Justice of India.

86. Term of office of Chairman, Vice-Chairman and other Members.—

The Chairman, Vice-Chairman or other Members shall hold office as such for a term of five years from the date on which he enters upon his office or until he attains,—

(a) in the case of Chairman and Vice-Chairman, the age of sixty-five years; and

(b) in the case of a Member, the age of sixty-two years,

whichever is earlier.

Section 87. Vice-Chairman or senior-most Member to act as Chairman or discharge his functions in certain circumstances.

(1) In the event of or any vacancy in the office of the Chairman by reasons of his death, resignation or otherwise, the Vice-Chairman and in his absence the senior-most Member shall act as Chairman until the date on which a new Chairman, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(2) When the Chairman is unable to discharge his functions owing to his absence, illness or any other cause, the Vice-Chairman and in his absence the senior-most Member shall discharge the functions of the Chairman until the date on which the Chairman resumes his duty.

Section 88. Salaries, allowances and other terms and conditions of service of Chairman, Vice-Chairman and other Members.

(1) The salaries and allowances payable to, and other terms and conditions of service (including pension, gratuity and other retirement benefits) of the Chairman, Vice-Chairman and other Members shall be such as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), a person who, immediately before the date of assuming office as the Chairman, Vice-Chairman or other Member was in service of Government, shall be deemed to have retired from service on the date on which he enters upon office as the Chairman, Vice-Chairman or other Member.

Section 89. Resignation and removal.

(1) The Chairman, Vice-Chairman or any other Member may, by notice in writing under his hand addressed to the President of India, resign his office:

Provided that the Chairman, Vice-Chairman or any other Member shall, unless he is permitted by the President of India to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is earlier.

(2) The Chairman, Vice-Chairman or any other Member shall not be removed from his office except by an order made by the President of India on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the Supreme Court in which the Chairman, Vice-Chairman or other Member had been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.

(3) The Central Government may, by rules, regulate the procedure for the investigation of misbehaviour or incapacity of the Chairman, Vice-Chairman or other Member referred to in sub-section (2).

Section 90. Staff of Appellate Board.

(1) The Central Government shall determine the nature and categories of the officers and other employees required to assist the Appellate Board in the discharge of its functions and provide the Appellate Board with such officers and other employees as it may think fit.

(2) The salaries and allowances and conditions of service of the officers and other employees of the Appellate Board shall be such as may be prescribed.

(3) The officers and other employees of the Appellate Board shall discharge their functions under the general superintendence of the Chairman in the manner as may be prescribed.

Section 91. Appeals to Appellate Board.

(1) Any person aggrieved by an order or decision of the Registrar under this Act, or the rules made thereunder may prefer an appeal to the Appellate Board within three months from the date on which the order or decision sought to be appealed against is communicated to such person preferring the appeal.

(2) No appeal shall be admitted if it is preferred after the expiry of the period specified under sub-section (1):

Provided that an appeal may be admitted after the expiry of the period specified therefor, if the appellant satisfies the Appellate Board that he had sufficient cause for not preferring the appeal within the specified period.

(3) An appeal to the Appellate Board shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by a copy of the order or decision appealed against and by such fees as may be prescribed.

Section 92. Procedure and powers of Appellate Board.

(1) The Appellate Board shall not be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by principles of natural justice and subject to the provisions of this Act and the rules made thereunder, the Appellate Board shall have powers to regulate its own procedure including the fixing of places and times of its hearing.

(2) The Appellate Board shall have, for the purpose of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:—

(a) receiving evidence;

(b) issuing commissions for examination of witnesses;

(d) any other matter which may be prescribed.

(3) Any proceeding before the Appellate Board shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860), and the Appellate Board shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

Section 93. Bar of jurisdiction of courts, etc.

No court or other authority shall have or, be entitled to, exercise any jurisdiction, powers or authority in relation to the matters referred to in sub-section (1) of section 91.

Section 94. Bar to appear before Appellate Board.

On ceasing to hold office, the Chairman, Vice-Chairman or other Members shall not appear before the Appellate Board or the Registrar.

Section 95. Conditions as to making of interim orders.

Notwithstanding anything contained in any other provisions of this Act or in any other law for the time being in force, no interim order (whether by way of injunction or stay or any other manner) shall be made on, or in any proceedings relating to, an appeal unless –

(a) copies of such appeal and of all documents in support of the plea for such interim order are furnished to the party against whom such appeal is made or proposed to be made, and

(b) opportunity is given to such party to be heard in the matter.

Section 96. Power of Chairman to transfer cases from one Bench to another.

On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairman may transfer any case pending before one Bench, for disposal, to any other Bench.

Section 97. Procedure for application for rectification, etc., before Appellate Board.

(1) An application for rectification of the register made to the Appellate Board under section 57 shall be in such form as may be prescribed.

(2) A certified copy of every order or judgment of the Appellate Board relating to a registered trade mark under this Act shall be communicated to the Registrar by the Board and the Registrar shall give effect to the order of the Board and shall, when so directed, amend the entries in, or rectify, the register in accordance with such order.

Section 98. Appearance of Registrar in legal proceedings.

(1) The Registrar shall have the right to appear and be heard—

(a) in any legal proceedings before the Appellate Board in which the relief sought includes alteration or rectification of the register or in which any question relating to the practice of the Trade Marks Registry is raised;

(b) in any appeal to the Board from an order of the Registrar on an application for registration of a trade mark—

(i) which is not opposed, and the application is either refused by the Registrar or is accepted by him subject to any amendments, modifications, conditions or limitations, or

(ii) which has been opposed and the Registrar considers that his appearance is necessary in the public interest,

and the Registrar shall appear in any case if so directed by the Board.

(2) Unless the Appellate Board otherwise directs, the Registrar may, in lieu of appearing, submit a statement in writing signed by him, giving such particulars as he thinks proper of the proceedings before him relating to the matter in issue or of the grounds of any decision given by him affecting it, or of the practice of the Trade Marks Registry in like cases, or of other matters relevant to the issues and within his knowledge as Registrar, and such statement shall be evidence in the proceeding.

Section 99. Costs of Registrar in proceedings before Appellate Board.

In all proceedings under this Act before the Appellate Board the costs of the Registrar shall be in the discretion of the Board, but the Registrar shall not be ordered to pay the costs of any of the parties.

Section 100. Transfer of pending proceedings to Appellate Board.

All cases of appeals against any order or decision of the Registrar and all cases pertaining to rectification of register, pending before any High Court, shall be transferred to the Appellate Board from the date as notified by the Central Government in the Official Gazette and the Appellate Board may proceed with the matter either de novo or from the stage it was so transferred.

Chapter 12 Offences, Penalties and Procedure

Section 101. Meaning of applying trade marks and trade descriptions.

(1) A person shall be deemed to apply a trade mark or mark or trade description to goods or services who—

(a) applies it to the goods themselves or uses it in relation to services; or

(b) applies it to any package in or with which the goods are sold, or exposed for sale, or had in possession for sale or for any purpose of trade or manufacture, or

(c) places, encloses or annexes any goods which are sold, or exposed for sale, or had in possession for sale or for any purpose of trade or manufacture, in or with any package or other thing to which a trade mark or mark or trade description has been applied; or

(d) uses a trade mark or mark or trade description in any manner reasonably likely to lead to the belief that the goods or services in connection with which it is used are designated or described by that trade mark or mark or trade description; or

(e) in relation to the goods or services uses a trade mark or trade description in any sign, advertisement, invoice, catalogue, business letter, business paper, price list or other commercial document and goods are delivered or services are rendered to a person in pursuance of a request or order made by reference to the trade mark or trade description as so used.

(2) A trade mark or mark or trade description shall be deemed to be applied to goods whether it is woven in, impressed on, or otherwise worked into, or annexed or affixed to, the goods or to any package or other thing.

Section 102. Falsifying and falsely applying trade marks.

(1) A person shall be deemed to falsify a trade mark who, either,—

(a) without the assent of the proprietor of the trade mark makes that trade mark or a deceptively similar mark; or

(b) falsifies any genuine trade mark, whether by alteration, addition, effacement or otherwise.

(2) A person shall be deemed to falsely apply to goods or services a trade mark who, without the assent of the proprietor of the trade mark,—

(a) applies such trade mark or a deceptively similar mark to goods or services or any package containing goods;

(b) uses any package bearing a mark which is identical with or deceptively similar to the trade mark of such proprietor, for the purpose of packing, filling or wrapping therein any goods other than the genuine goods of the proprietor of the trade mark.

(3) Any trade mark falsified as mentioned in sub-section (1) or falsely applied as mentioned in sub-section (2), is in this Act referred to as a false trade mark.

(4) In any prosecution for falsifying a trade mark or falsely applying a trade mark to goods or services, the burden of proving the assent of the proprietor shall lie on the accused.

Section 103. Penalty for applying false trade marks, trade descriptions, etc.

Any person who—

(a) falsifies any trade mark; or

(b) falsely applies to goods or services any trade mark; or

(c) makes, disposes of, or has in his possession, any die, block, machine, plate or other instrument for the purpose of falsifying or of being used for falsifying, a trade mark; or

(d) applies any false trade description to goods or services; or

(e) applies to any goods to which an indication of the country or place in which they were made or produced or the name and address of the manufacturer or person for whom the goods are manufactured is required to be applied under section 139, a false indication of such country, place, name or address; or

(f) tampers with, alters or effaces an indication of origin which has been applied to any goods to which it is required to be applied under section 139; or

(g) causes any of the things above-mentioned in this section to be done,

shall, unless he proves that he acted, without intent to defraud, be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees:

Provided that the court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than six months or a fine of less than fifty thousand rupees.

Section 104. Penalty for selling goods or providing services to which false trade mark or false trade description is applied.

Any person who sells, lets for hire or exposes for sale, or hires or has in his possession for sale, goods or things, or provides or hires services, to which any false trade mark or false trade description is applied or which, being required under section 139 to have applied to them an indication of the country or place in which they were made or produced or the name and address of the manufacturer, or person for whom the goods are manufactured or services provided, as the case may be, are without the indications so required, shall, unless he proves,—

(a) that, having taken all reasonable precautions against committing an offence against this section, he had at the time of commission of the alleged offence no reason to suspect the genuineness of the trade mark or trade description or that any offence had been committed in respect of the goods or services; or

(b) that, on demand by or on behalf of the prosecutor, he gave all the information in his power with respect to the person from whom he obtained such goods or things or services; or

be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees:

Section 105. Enhanced penalty on second or subsequent conviction.

Whoever having already been convicted of an offence under section 103 or section 104 is again convicted of any such offence shall be punishable for the second and for every subsequent offence, with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to two lakh rupees:

Provided that the court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than one year or a fine of less than one lakh rupees:

Provided further that for the purposes of this section, no cognizance shall be taken of any conviction made before the commencement of this Act.

Section 106. Penalty for removing piece goods, etc., contrary to section 81.

If any person removes or attempts to remove or causes or attempts to cause to be removed for sale from any premises referred to in section 81 or sells or exposes for sale or has in his possession for sale or for any purpose of trade or manufacture piece goods or cotton yarn or cotton thread which is not marked as required by that section, every such piece and every such bundle of yarn and all such thread and everything used for the packing thereof shall be forfeited to Government and such person shall be punishable with fine which may extend to one thousand rupees.

Section 107. Penalty for falsely representing a trade mark as registered.

(1) No person shall make any representation—

(a) with respect to a mark, not being a registered trade mark, to the effect that it is a registered trade mark; or

(b) with respect to a part of a registered trade mark, not being a part separately registered as a trade mark, to the effect that it is separately registered as a trade mark; or

(c) to the effect that a registered trade mark is registered in respect of any goods or services in respect of which it is not in fact registered; or

(d) to the effect that registration of a trade mark gives an exclusive right to the use thereof in any circumstances in which, having regard to limitation entered on the register, the registration does not in fact give that right.

(2) If any person contravenes any of the provisions of sub-section (1), he shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both.

(3) For the purposes of this section, the use in India in relation to a trade mark of the word “registered”, or of any other expression, symbol or sign referring whether expressly or impliedly to registration, shall be deemed to import a reference to registration in the register, except—

(a) where that word or other expression, symbol or sign is used in direct association with other words delineated in characters at least as large as those in which that word or other expression, symbol or sign is delineated and indicating that the reference is to registration as a trade mark under the law of a country outside India being a country under the law of which the registration referred to is in fact in force; or

(b) where that other expression, symbol or sign is of itself such as to indicate that the reference is to such registration as is mentioned in clause (a); or

(c) where that word is used in relation to a mark registered as a trade mark under the law of a country outside India and in relation solely to goods to be exported to that country or in relation to services for use in that country.

Section 108. Penalty for improperly describing a place of business as connected with the Trade Marks Office.

If any person uses on his place of business, or on any document issued by him, or otherwise, words which would reasonably lead to the belief that his place of business is, or is officially connected with, the Trade Marks Office, he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.

Section 109. Penalty for falsification of entries in the register.

If any person makes, or causes to be made, a false entry in the register, or a writing falsely purporting to be a copy of an entry in the register, or produces or tenders or causes to be produced or tendered, in evidence any such writing, knowing the entry or writing to be false, he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.

Section 110. No offence in certain cases.

The provisions of sections 102, 103, 104 and 105 shall, in relation to a registered trade mark or proprietor of such mark, be subject to the rights created or recognised by this Act and no act or omission shall be deemed to be an offence under the aforesaid sections if,—

(a) the alleged offence relates to a registered trade mark and the act or omission is permitted under this Act; and

(b) the alleged offence relates to a registered or an unregistered trade mark and the act or omission is permitted under any other law for the time being in force.

Section 111. Forfeiture of goods.

(1) Where a person is convicted of an offence under section 103 or section 104 or section 105 or is acquitted of an offence under section 103 or section 104 on proof that he acted without intent to defraud, or under section 104 on proof of the matters specified in clause (a), clause (b) or clause (c) of that section, the court convicting or acquitting him may direct the forfeiture to Government of all goods and things by means of, or in relation to, which the offence has been committed, or but for such proof as aforesaid would have been committed.

(2) When a forfeiture is directed on a conviction and an appeal lies against the conviction, an appeal shall lie against the forfeiture also.

(3) When a forfeiture is directed on acquittal and the goods or things to which the direction relates are of value exceeding fifty rupees, an appeal against the forfeiture may be preferred, within thirty days from the date of the direction, to the court to which in appealable cases appeals lie from sentences of the court which directed the forfeiture.

(4) When a forfeiture is directed on a conviction, the court, before whom the person is convicted, may order any forfeited articles to be destroyed or otherwise disposed of as the court thinks fit.

Section 112. Exemption of certain persons employed in ordinary course of business.

Where a person accused of an offence under section 103 proves—

(a) that in the ordinary course of his business he is employed on behalf of other persons to apply trade marks or trade descriptions, or as the case may be, to make dies, blocks, machines, plates, or other instruments for making, or being used in making, trade marks; and

(b) that in the case which is the subject of the charge he was so employed, and was not interested in the goods or other thing by way of profit or commission dependent on the sale of such goods or providing of services, as the case may be; and

(c) that, having taken all reasonable precautions against committing the offence charged, he had, at the time of the commission of the alleged offence, no reason to suspect the genuineness of the trade mark or trade description; and

(d) that, on demand made by or on behalf of the prosecutor, he gave all the information in his power with respect to the persons on whose behalf the trade mark or trade description was applied, he shall be acquitted.

Section 113. Procedure where invalidity of registration is pleaded by the accused.

(1) Where the offence charged under section 103 or section 104 or section 105 is in relation to a registered trade mark and the accused pleads that the registration of the trade mark is invalid, the following procedure shall be followed:—

(a) If the court is satisfied that such defence is prima facie tenable, it shall not proceed with the charge but shall adjourn the proceeding for three months from the date on which the plea of the accused is recorded to enable the accused to file an application before the Appellate Board under this Act, for the rectification of the register on the ground that the registration is invalid.

(b) If the accused proves to the court that he has made such application within the time so limited or within such further time as the court may for sufficient cause allow, the further proceedings in the prosecution shall stand stayed till the disposal of such application for rectification.

(c) If within a period of three months or within such extended time as may be allowed by the court the accused fails to apply to the Appellate Board for rectification of the register, the court shall proceed with the case as if the registration were valid.

(2) Where before the institution of a complaint of an offence referred to in sub-section (1), any application for the rectification of the register concerning the trade mark in question on the ground of invalidity of the registration thereof has already been properly made to and is pending before the tribunal, the court shall stay the further proceedings in the prosecution pending the disposal of the application aforesaid and shall determine the charge against the accused in conformity with the result of the application for rectification in so far as the complainant relies upon the registration of his mark.

Section 114. Offences by companies.

(1) If the person committing an offence under this Act is a company, the company as well as every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or that the commission of the offence is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section—

(a) “company” means any body corporate and includes a firm or other association of individuals; and

(b) “director”, in relation to a firm, means a partner in the firm.

Section 115. Cognizance of certain offences and the powers of police officer for search and seizure.

(1) No court shall take cognizance of an offence under section 107 or section 108 or section 109 except on complaint in writing made by the Registrar or any officer authorised by him in writing:

Provided that in relation to clause (c) of sub-section (1) of section 107, a court shall take cognizance of an offence on the basis of a certificate issued by the Registrar to the effect that a registered trade mark has been represented as registered in respect of any goods or services in respect of which it is not in fact registered.

(2) No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class shall try an offence under this Act.

(3) The offences under section 103 or section 104 or section 105 shall be cognizable.

(4) Any police officer not below the rank of deputy superintendent of police or equivalent, may, if he is satisfied that any of the offences referred to in sub-section (3) has been, is being, or is likely to be, committed, search and seize without warrant the goods, die, block, machine, plate, other instruments or things involved in committing the offence, wherever found, and all the articles so seized shall, as soon as practicable, be produced before a Judicial Magistrate of the first class or Metropolitan Magistrate, as the case may be:

Provided that the police officer, before making any search and seizure, shall obtain the opinion of the Registrar on facts involved in the offence relating to trade mark and shall abide by the opinion so obtained.

(5) Any person having an interest in any article seized under sub-section (4), may, within fifteen days of such seizure, make an application to the Judicial Magistrate of the first class or Metropolitan Magistrate, as the case may be, for such article being restored to him and the Magistrate, after hearing the applicant and the prosecution, shall make such order on the application as he may deem fit.

Section 116. Evidence of origin of goods imported by sea.

In the case of goods brought into India by sea, evidence of the port of shipment shall, in a prosecution for an offence under this Act or under clause (b) of section 112 of the Customs Act, 1962 (52 of 1962), relating to confiscation of goods under clause (d) of section 111 and notified by the Central Government under clause (n) of sub-section (2) of section 11 of the said Act for the protection of trade marks relating to import of goods, be prima facie evidence of the place or country in which the goods are made or produced.

Section 117. Costs of defence or prosecution.

In any prosecution under this Act, the court may order such costs to be paid by the accused to the complainant, or by the complainant to the accused, as the court deems reasonable having regard to all the circumstances of the case and the conduct of the parties and the costs so awarded shall be recoverable as if they were a fine.

Section 118. Limitation of prosecution.

No prosecution for an offence under this Act or under clause (b) of section 112 of the Customs Act, 1962 (52 of 1962), relating to confiscation of goods under clause (d) of section 111 and notified by the Central Government under clause (n) of sub-section (2) of section 11 of the said Act for the protection of trade marks, relating to import of goods shall be commenced after expiration of three years next after the commission of the offence charged, or two years after the discovery thereof by the prosecutor, whichever expiration first happens

Section 119. Information as to commission of offence.

An officer of the Government whose duty it is to take part in the enforcement of the provisions of this Chapter shall not be compelled in any court to say whence he got any information as to the commission of any offence against this Act.

Section 120. Punishment of abetment in India of acts done out of India.

If any person, being within India, abets the commission, without India, of any act which, if committed in India, would, under this Act, be an offence, he may be tried for such abetment in any place in India in which he may be found, and be punished therefor with the punishment to which he would be liable if he had himself committed in that place the act which he abetted.

Section 121. Instructions of Central Government as to permissible variation to be observed by criminal courts.

The Central Government may, by notification in the Official Gazette, issue instructions for the limits of variation, as regards number, quantity, measure, gauge or weight which are to be recognized by criminal courts as permissible in the case of any goods.

Chapter 13 Miscellaneous

Section 122. Protection of action taken in good faith.

No suit or other legal proceedings shall lie against any person in respect of anything which is in good faith done or intended to be done in pursuance of this Act.

Section 123. Certain persons to be public servants.

Every person appointed under this Act and every Member of the Appellate Board shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (45 of 1860).

Section 124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.

(1) Where in any suit for infringement of a trade mark—

(a) the defendant pleads that registration of the plaintiff’s trade mark is invalid; or

(b) the defendant raises a defence under clause (e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registration of the defendant’s trade mark, the court trying the suit (hereinafter referred to as the court), shall,—

(i) if any proceedings for rectification of the register in relation to the plaintiff’s or defendant’s trade mark are pending before the Registrar or the Appellate Board, stay the suit pending the final disposal of such proceedings;

(ii) if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff’s or defendant’s trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the Appellate Board for rectification of the register.

(2) If the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.

(3) If no such application as aforesaid has been made within the time so specified or within such extended time as the court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the court shall proceed with the suit in regard to the other issues in the case.

(4) The final order made in any rectification proceedings referred to in sub-section (1) or sub-section (2) shall be binding upon the parties and the court shall dispose of the suit conformably to such order in so far as it relates to the issue as to the validity of the registration of the trade mark.

(5) The stay of a suit for the infringement of a trade mark under this section shall not preclude the court from making any interlocutory order (including any order granting an injunction directing account to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit

Section 125. Application for rectification of register to be made to Appellate Board in certain cases.

(1) Where in a suit for infringement of a registered trade mark the validity of the registration of the plaintiff’s trade mark is questioned by the defendant or where in any such suit the defendant raises a defence under clause (e) of sub-section (2) of section 30 and the plaintiff questions the validity of the registration of the defendant’s trade mark, the issue as to the validity of the registration of the trade mark concerned shall be determined only on an application for the rectification of the register and, notwithstanding anything contained in section 47 or section 57, such application shall be made to the Appellate Board and not to the Registrar.

(2) Subject to the provisions of sub-section (1), where an application for rectification of the register is made to the Registrar under section 47 or section 57, the Registrar may, if he thinks fit, refer the application at any stage of the proceedings to the Appellate Board.

Section 126. Implied warranty on sale of marked goods.

Where a mark or a trade mark or trade description has been applied to the goods on sale or in the contract for sale of any goods or in relation to any service, the seller shall be deemed to warrant that the mark is a genuine mark and not falsely applied, or that the trade description is not a false trade description within the meaning of this Act unless the contrary is expressed in writing signed by or on behalf of the seller and delivered at the time of the sale of goods or providing of services on contract to and accepted by the buyer.

Section 127. Powers of Registrar.

In all proceedings under this Act before the Registrar,—

(a) the Registrar shall have all the powers of a civil court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses, compelling the discovery and production of documents and issuing commissions for the examination of witnesses;

(b) the Registrar may, subject to any rules made in this behalf under section 157, make such orders as to costs as he considers reasonable, and any such order shall be executable as a decree of a civil court:

Provided that the Registrar shall have no power to award costs to or against any party on an appeal to him against a refusal of the proprietor of a certification trade mark to certify goods or provision of services or to authorise the use of the mark;

Section 128. Exercise of discretionary power by Registrar.

Subject to the provisions of section 131, the Registrar shall not exercise any discretionary or other power vested in him by this Act or the rules made thereunder adversely to a person applying for the exercise of that power without (if so required by that person within the prescribed time) giving to the person an opportunity of being heard.

Section 129. Evidence before Registrar.

In any proceeding under this Act before the Registrar, evidence shall be given by affidavit.

Provided that the Registrar may, if he thinks fit, take oral evidence in lieu of, or in addition to, such evidence by affidavit.

Section 130. Death of party to a proceeding.

If a person who is a party to a proceeding under this Act (not being a proceeding before the Appellate Board or a court) dies pending the proceeding, the Registrar may, on request, and on proof to his satisfaction of the transmission of the interest of the deceased person, substitute in the proceeding his successor in interest in his place, or, if the Registrar is of opinion that the interest of the deceased person is sufficiently represented by the surviving parties, permit the proceeding to continue without the substitution of his successor in interest.

Section 131. Extension of time.

(1) If the Registrar is satisfied, on application made to him in the prescribed manner and accompanied by the prescribed fee, that there is sufficient cause for extending the time for doing any act (not being a time expressly provided in this Act), whether the time so specified has expired or not, he may, subject to such conditions as he may think fit to impose, extend the time and inform the parties accordingly.

(2) Nothing in sub-section (1) shall be deemed to require the Registrar to hear the parties before disposing of an application for extension of time, and no appeal shall lie from any order of the Registrar under this section.

Section 132. Abandonment.

Where, in the opinion of the Registrar, an applicant is in default in the prosecution of an application filed under this Act or any Act relating to trade marks in force prior to the commencement of this Act, the Registrar may, by notice require the applicant to remedy the default within a time specified and after giving him, if so, desired, an opportunity of being heard, treat the application as abandoned, unless the default is remedied within the time specified in the notice.

Section 133. Preliminary advice by the Registrar as to distinctiveness.

(1) The Registrar may, on application made to him in the prescribed manner by any person who proposes to apply for the registration of a trade mark, give advice as to whether the trade mark appears to him prima facie to be distinctive.

(2) If, on an application for the registration of a trade mark as to which the Registrar has given advice as aforesaid in the affirmative made within three months after the advice was given, the Registrar, after further investigation or consideration, gives notice to the applicant of objection on the ground that the trade mark is not distinctive, the applicant shall be entitled, on giving notice of withdrawal of the application within the prescribed period, to have repaid to him any fee paid on the filing of the application.

Section 134. Suit for infringement, etc., to be instituted before District Court.

(1) No suit—

(a) for the infringement of a registered trade mark; or

(b) relating to any right in a registered trade mark; or

(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of clauses (a) and (b) of sub-section (1), a “District Court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain.

Explanation.—For the purposes of sub-section (2), “person” includes the registered proprietor and the registered user.

Section 135. Relief in suits for infringement or for passing off.

(1) The relief which a court may grant in any suit for infringement or for passing off referred to in section 134 includes injunction (subject to such terms, if any, as the court thinks fit) and at the option of the plaintiff, either damages or an account of profits, together with or without any order for the delivery-up of the infringing labels and marks for destruction or erasure.

(2) The order of injunction under sub-section (1) may include an ex parte injunction or any interlocutory order for any of the following matters, namely:—

(a) for discovery of documents;

(b) preserving of infringing goods, documents or other evidence which are related to the subject-matter of the suit;

(c) restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect plaintiff’s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

(3) Notwithstanding anything contained in sub-section (1), the court shall not grant relief by way of damages (other than nominal damages) or on account of profits in any case—

(a) where in a suit for infringement of a trade mark, the infringement complained of is in relation to a certification trade mark or collective mark; or

(b) where in a suit for infringement the defendant satisfies the court—

(i) that at the time he commenced to use the trade mark complained of in the suit, he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was on the register or that the plaintiff was a registered user using by way of permitted use; and

(ii) that when he became aware of the existence and nature of the plaintiff’s right in the trade mark, he forthwith ceased to use the trade mark in relation to goods or services in respect of which it was registered; or

(i) that at the time he commenced to use the trade mark complained of in the suit he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was in use; and

(ii) that when he became aware of the existence and nature of the plaintiff’s trade mark he forthwith ceased to use the trade mark complained of.

Section 136. Registered user to be impleaded in certain proceedings.

(1) In every proceeding under Chapter VII or under section 91, every registered user of a trade mark using by way of permitted use, who is not himself an applicant in respect of any proceeding under that Chapter or section, shall be made a party to the proceeding.

(2) Notwithstanding anything contained in any other law, a registered user so made a party to the proceeding shall not be liable for any costs unless he enters an appearance and takes part in the proceeding.

Section 137. Evidence of entries in register, etc., and things done by the Registrar.

(1) A copy of any entry in the register or of any document referred to in sub-section (1) of section 148 purporting to be certified by the Registrar and sealed with the seal of the Trade Marks Registry shall be admitted in evidence in all courts and in all proceedings without further proof or production of the original.

(2) A certificate purporting to be under the hand of the Registrar as to any entry, matter or thing that he is authorised by this Act or the rules to make or do shall be prima facie evidence of the entry having been made, and of the contents thereof, or of the matter or things having been done or not done.

Section 138. Registrar and other officers not compellable to produce register, etc.

The Registrar or any officer of the Trade Marks Registry shall not, in any legal proceedings to which he is not a party, be compellable to produce the register or any other document in his custody, the contents of which can be proved by the production of a certified copy issued under this Act or to appear as a witness to prove the matters therein recorded unless by order of the court made for special cause.

Section 139. Power to require goods to show indication of origin.

(1) The Central Government may, by notification in the Official Gazette. require that goods of any class specified in the notification which are made or produced beyond the limits of India and imported into India, or, which are made or produced within the limits of India, shall, from such date as may be appointed by the notification not being less than three months from its issue, have applied to them an indication of the country or place in which they were made or produced, or of the name and address of the manufacturer or the person for whom the goods were manufactured.

(2) The notification may specify the manner in which such indication shall be applied that is to say, whether to goods themselves or in any other manner, and the times or occasions on which the presence of the indication shall be necessary, that is to say, whether on importation only, or also at the time of sale, whether by wholesale or retail or both.

(3) No notification under this section shall be issued, unless application is made for its issue by persons or associations substantially representing the interests of dealers in, or manufacturers, producers, or users of, the goods concerned, or unless the Central Government is otherwise convinced that it is necessary in the public interest to issue the notification, with or without such inquiry, as the Central Government may consider necessary.

(4) The provisions of section 23 of the General Clauses Act, 1897 (10 of 1897) shall apply to the issue of a notification under this section as they apply to the making of a rule or bye-law the making of which is subject to the condition of previous publication.

(5) A notification under this section shall not apply to goods made or produced beyond the limits of India and imported into India, if in respect of those goods, the Commissioner of Customs is satisfied at the time of importation that they are intended for exportation whether after transhipment in or transit through India or otherwise.

Section 140. Power to require information of imported goods bearing false trade marks.

(1) The proprietor or a licensee of a registered trade mark may give notice in writing to the Collector of Customs to prohibit the importation of any goods if the import of the said goods constitute infringement under clause (c) of sub-section (6) of section 29.

(2) Where goods, which are prohibited to be imported into India by notification of the Central Government under clause (n) of sub-section (2) of section 11 of the Customs Act, 1962 (52 of 1962), for the protection of trade marks, and are liable to confiscation on importation under that Act, are imported into India, the Commissioner of Customs if, upon representation made to him, he has reason to believe that the trade mark complained of is used as a false trade mark, may require the importer of the goods, or his agent, to produce any documents in his possession relating to the goods and to furnish information as to the name and address of the person by whom the goods were consigned to India and the name and address of the person to whom the goods were sent in India.

(3) The importer or his agent shall, within fourteen days, comply with the requirement as aforesaid, and if he fails to do so, he shall be punishable with fine which may extend to five hundred rupees.

(4) Any information obtained from the importer of the goods or his agent under this section may be communicated by the Commissioner of Customs to the registered proprietor or registered user of the trade mark which is alleged to have been used as a false trade mark.

Section 141. Certificate of validity.

If in any legal proceeding for rectification of the register before the Appellate Board a decision is on contest given in favour of the registered proprietor of the trade mark on the issue as to the validity of the registration of the trade mark, the Appellate Board may grant a certificate to that effect, and if such a certificate is granted, then, in any subsequent legal proceeding in which the said validity comes into question the said proprietor on obtaining a final order or judgment in his favour affirming validity of the registration of the trade mark shall, unless the said final order or judgment for sufficient reason directs otherwise, be entitled to his full cost charges and expenses as between legal practitioner and client.

Section 142. Groundless threats of legal proceedings.

(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trade mark which is registered, or alleged by the first-mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the court that the trade mark is registered and that the acts in respect of which the proceedings were threatened, constitute, or, if done, would constitute, an infringement of the trade mark.

(2) The last preceding sub-section does not apply if the registered proprietor of the trade mark, or a registered user acting in pursuance of sub-section (1) of section 52 with due diligence commences and prosecutes an action against the person threatened for infringement of the trade mark.

(3) Nothing in this section shall render a legal practitioner or a registered trade marks agent liable to an action under this section in respect of an act done by him in his professional capacity on behalf of a client.

(4) A suit under sub-section (1) shall not be instituted in any court inferior to a District Court.

Section 143. Address for service.

An address for service stated in an application or notice of opposition shall for the purposes of the application or notice of opposition be deemed to be the address of the applicant or opponent, as the case may be, and all documents in relation to the application or notice of opposition may be served by leaving them at or sending them by post to the address for service of the applicant or opponent, as the case may be.

Section 144. Trade usages, etc., to be taken into consideration.

In any proceeding relating to a trade mark, the tribunal shall admit evidence of the usages of the trade concerned and of any relevant trade mark or trade name or get up legitimately used by other persons.

Section 145. Agents.

Where, by or under this Act, any act, other than the making of an affidavit, is required to be done before the Registrar by any person, the act may, subject to the rules made in this behalf, be done instead of by that person himself, by a person duly authorised in the prescribed manner, who is—

(a) a legal practitioner, or

(b) a person registered in the prescribed manner as a trade marks agent, or

Section 146. Marks registered by an agent or representative without authority.

If an agent or a representative of the proprietor of a registered trade mark, without authority uses or attempts to register or registers the mark in his own name, the proprietor shall be entitled to oppose the registration applied for or secure its cancellation or rectification of the register so as to bring him as the registered proprietor of the said mark by assignment in his favour:

Provided that such action shall be taken within three years of the registered proprietor of the trade mark becoming aware of the conduct of the agent or representative.

Section 147. Indexes.

There shall be kept under the direction and supervision of the Registrar—

(a) an index of registered trade marks,

(b) an index of trade marks in respect of which applications for registration are pending,

(d) an index of the names of registered users.

Section 148. Documents open to public inspection.

(1) Save as otherwise provided in sub-section (4) of section 49,—

(a) the register and any document upon which any entry in the register is based;

(b) every notice of opposition to the registration of a trade mark application for rectification before the Registrar, counter-statement thereto, and any affidavit or document filed by the parties in any proceedings before the Registrar;

(c) all regulations deposited under section 63 or section 74, and all applications under section 66 or section 77 for varying such regulations;

(d) the indexes mentioned in section 147; and

(e) such other documents as the Central Government may, by notification in the Official Gazette, specify, shall, subject to such conditions as may be prescribed, be open to public inspection at the Trade Marks Registry:

Provided that when such register is maintained wholly or partly on computer, the inspection of such register under this section shall be made by inspecting the computer print-out of the relevant entry in the register so maintained on computer.

(2) Any person may, on an application to the Registrar and on payment of such fees as may be prescribed, obtain a certified copy of any entry in the register or any document referred to in sub-section (1).

Section 149. Reports of Registrar to be placed before Parliament.

The Central Government shall cause to be placed before both Houses of Parliament once a year a report respecting the execution by or under the Registrar of this Act.

Section 150. Fees and surcharge.

(1) There shall be paid in respect of applications and registration and other matters under this Act such fees and surcharge as may be prescribed by the Central Government.

(2) Where a fee is payable in respect of the doing of an act by the Registrar, the Registrar shall not do that act until the fee has been paid.

(3) Where a fee is payable in respect of the filing of a document at the Trade Marks Registry, the document shall be deemed not to have been filed at the registry until the fee has been paid.

Section 151. Savings in respect of certain matters in Chapter XII.

Nothing in Chapter XII shall—

(a) exempt any person from any suit or other proceeding which might, but for anything in that Chapter, be brought against him; or

(b) entitle any person to refuse to make a complete discovery, or to answer any question or interrogatory in any suit or other proceeding, but such discovery or answer shall not be admissible in evidence against such person in any such prosecution for an offence under that Chapter or against clause (h) of section 112 of the Customs Act, 1962 (52 of 1962), relating to confiscation of goods under clause (d) of section 111 of that Act and notified by the Central Government under clause (n) of sub-section (2) of section 11 thereof for the protection of trade marks relating to import of goods; or

(c) be construed so as to render liable to any prosecution or punishment any servant of a master resident in India who in good faith acts in obedience to the instructions of such master, and, on demand made by or on behalf of the prosecutor, has given full information as to his master and as to the instructions which he has received from his master.

Section 152. Declaration as to ownership of trade mark not registrable under the Registration Act, 1908.

Notwithstanding anything contained in the Registration Act, 1908 (16 of 1908), no document declaring or purporting to declare the ownership or title of a person to a trade mark other than a registered trade mark shall be registered under that Act.

Section 153. Government to be bound.

The provisions of this Act shall be binding on the Government.

Section 154. Special provisions relating to applications for registration from citizens of convention countries.

(1) With a view to the fulfilment of a treaty, convention or arrangement with any country or country which is a member of a group of countries or union of countries or Inter-Governmental Organisation outside India which affords to citizens of India similar privileges as granted to its own citizens, the Central Government may, by notification in the Official Gazette, declare such country or group of countries or union of countries or Inter-Governmental Organisation to be a convention country or group of countries or union of countries, or Inter-Governmental Organisations as the case may be, for the purposes of this Act.

(2) Where a person has made an application for the registration of a trade mark in a convention country or country which is a member of a group of countries or union of countries or Inter-Governmental Organisation and that person, or his legal representative or assignee, makes an application for the registration of the trade mark in India within six months after the date on which the application was made in the convention country or country which is a member of a group of countries or union of countries or Inter-Governmental Organisations the trade mark shall, if registered under this Act, be registered as of the date on which the application was made in the convention country or country which is a member of a group of countries or union of countries or Inter-Governmental organisations and that date shall be deemed for the purposes of this Act to be the date of registration.

(3) Where applications have been made for the registration of a trade mark in two or more convention countries or country which are members of group of countries or union of countries or Inter-Governmental Organisation the period of six months referred to in the last preceding sub-section shall be reckoned from the date on which the earlier or earliest of those applications was made.

(4) Nothing in this Act shall entitle the proprietor of a trade mark to recover damages for infringement which took place prior to the date of application for registration under this Act.

Section 155. Provision as to reciprocity.

Where any country or country which is a member of a group of countries or union of countries or Inter-Governmental Organisation specified by the Central Government in this behalf by notification in the Official Gazette does not accord to citizens of India the same rights in respect of the registration and protection of trade marks as it accords to its own nationals, no national of such country or country which is a member of a group of countries or union of countries or Inter-Governmental Organisation, as the case may be, shall be entitled, either solely or jointly with any other person,—

(a) to apply for the registration of, or be registered as the proprietor of, a trade mark;

(b) to be registered as the assignee of the proprietor of a registered trade mark; or

Section 156. Power of Central Government to remove difficulties.

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:

Provided that no order shall be made under this section after the expiry of five years from the commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 157. Power to make rules.

(1) The Central Government may, by notification in the Official Gazette and subject to the conditions of previous publication, make rules to carry out the provisions of this Act.

(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:—

(i) the matters to be included in the Register of Trade Marks under sub-section (1) of section 6, and the safeguards to be observed in the maintenance of records on computer floppies or diskettes or in any other electronic form under sub-section (2) of that section;

(ii) the manner of publication of alphabetical index of classification of goods and services under sub-section (1) of section 8;

(iii) the manner in which the Registrar may notify a word as an international non-proprietary name under section 13:

(iv) the manner of making an application for dissolution of an association under sub-section (5) of section 16;

(v) the manner of making an application for registration of a trade mark under sub-section (1) of section 18;

(vi) the manner of advertising of an application for registration under sub-section (1), and the manner of notifying corrections or amendments under sub-section (2), of section 20;

(vii) the manner of making an application and the fee payable for such application giving notice under sub-section (1) and sending counter-statements under sub-section (2) and submission of evidence and the time therefor under sub-section (4) of section 21;

(viii) the form of certificate of registration under sub-section (2), and the manner of giving notice to the applicant under sub-section (3) of section 23;

(ix) the forms of application for renewal and restoration the time within which such application is to be made and fee and surcharge if any payable with each application, under section 25 and the time within which the Registrar shall send a notice and the manner of such notice under sub-section (3) of that section;

(x) the manner of submitting statement of cases under sub-section (2) of section 40;

(xi) the manner of making an application by the proprietor of a trade mark under section 4l;

(xii) the manner of making an application for assignment or transmission of a certification trade mark under section 43;

(xiii) the manner of making an application to the Registrar to register title under sub-section (1) of section 45;

(xiv) the manner in which and the period within which an application is to be made under sub-section (4) of section 46;

(xv) the manner of marking an application under sub-section (2) of section 47;

(xvi) the manner of making an application, documents and other evidence to accompany such application under sub-section (1) and the manner in which notice is to be issued under sub-section (3) of section 49;

(xvii) the manner of making an application under sub-section (1), the manner of issuing a notice under sub-section (2) and the procedure for cancelling a registration under sub-section (3) of section 50;

(xviii) the manner of making applications under sub-sections (1) and (2), the manner of giving notice under sub-section (4) and the manner of service of notice of rectification under sub-section (5) of section 57;

(xix) the manner of making an application under section 58;

(xx) the manner of making an application under sub-section (1), the manner of advertising an application, time and manner of notice by which application may be opposed under sub-sections (2) and (3) of section 59;

(xxi) the manner of advertisement under sub-section (2) of section 60;

(xxii) the other matters to be specified in the regulations under sub-section (2) of section 63;

(xxiii) the manner of making an application under sub-section (1) of section 71;

(xxiv) the manner of advertising an application under section 73;

(xxv) the manner of making an application under section 77;

(xxvi) the classes of goods under section 79;

(xxvii) the conditions and restrictions under sub-section (2) of section 80;

(xxviii) determination of character of textile goods by sampling under section 82;

(xxix) the salaries and allowances payable to and the other terms and conditions of service of the Chairman, Vice-Chairman and other Members under sub-section (1) of section 88;

(xxx) the procedure for investigation of misbehaviour or incapacity of the Chairman, Vice-Chairman and other members under sub-section (3) of section 89;

(xxxi) the salaries and allowances and other conditions of service of the officers and other employees of the Appellate Board under sub-section (2) and the manner in which the officers and other employees of the Appellate Board shall discharge their functions under sub-section (3) of section 90;

(xxxii) the form of making an appeal, the manner of verification and the fee payable under sub-section (3) of section 91;

(xxxiii) the form in which and the particulars to be included in the application to the Appellate Board under sub-section (1) of section 97;

(xxxiv) the manner of making an application for review under clause (c) of section 127;

(xxxv) the time within which an application is to be made to the Registrar for exercising his discretionary power under section 128;

(xxxvi) the manner of making an application and the fee payable therefor under sub-section (1) of section 131;

(xxxvii) the manner of making an application under sub-section (1) and the period for withdrawal of such application under sub-section (2) of section 133;

(xxxviii) the manner of authorising any person to act and the manner of registration as a trade mark agent under section 145;

(xxxix) the conditions for inspection of documents under sub-section (1) and the fee payable for obtaining a certified copy of any entry in the register under sub-section (2) of section 148;

(xl) the fees and surcharge payable for making applications and registration and other matters under section 150;

(xli) any other matter which is required to be or may be prescribed.

(3) The power to make rules conferred by this section shall include the power to give retrospective effect in respect of the matters referred to in clauses (xxix) and (xxxi) of sub-section (2) from a date not earlier than the date of commencement of this Act, but no retrospective effect shall be given to any such rule so as to prejudicially affect the interests of any person to whom sub-rule may be applicable.

(4) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, 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 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 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 rule.

Section 158. Amendments.

The enactment specified in the Schedule shall be amended in the manner specified therein.

Section 159. Repeal and savings.

(1) The Trade and Merchandise Marks Act, 1958 (43 of 1958) is hereby repealed.

(2) Without prejudice to the provisions contained in the General Clauses Act, 1897 (10 of 1897), with respect to repeals, any notification, rule, order, requirement, registration, certificate, notice, decision, determination, direction, approval, authorisation, consent, application, request or thing made, issued, given or done under the Trade and Merchandise Marks Act, 1958 (43 of 1958) shall, if in force at the commencement of this Act, continue to be in force and have effect as if made, issued, given or done under the corresponding provisions of this Act.

(3) The provisions of this Act shall apply to any application for registration of a trade mark pending at the commencement of this Act and to any proceedings consequent thereon and to any registration granted in pursuance thereof.

(4) Subject to the provisions of section 100 and notwithstanding anything contained in any other provision of this Act, any legal proceeding pending in any court at the commencement of this Act may be continued in that court as if this Act had not been passed.

(5) Notwithstanding anything contained in this Act, where a particular use of a registered trade mark is not an infringement of a trade mark registered before the commencement of this Act, then, the continued use of that mark shall not be an infringement under this Act.

(6) Notwithstanding anything contained in sub-section (2), the date of expiration of registration of a trade mark registered before the commencement of this Act shall be the date immediately after the period of seven years for which it was registered or renewed:

Provided that the registration of a defensive trade mark referred to in section 47 of the Trade and Merchandise Marks Act, 1958 (43 of 1958), shall cease to have effect on the date immediately after the expiry of five years of such commencement or after the expiry of the period for which it was registered or renewed, whichever is earlier.

THE SCHEDULE

(See section 158) Amendments

Year	Act No.	Short title	Amendment
1	2	3	4
1956	1	The CompaniesAct, 1956	(1) In section 20, for sub-section (2), the following sub sections shall Act, 1956 be substituted, namely:-
			(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles,-
			(i) the name by which a company in existence has been previously registered, or
			(ii) a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999.
			May be deemed to be undesirable by the Central Government within the meaningof sub-section (1).
			(3) The Central Government may, before deeming a name as undesirable under clause (ii) of sub section (2), consult and Registrar of Trade Marks.
			(II) In section 22, in sub-section (1),
			(i) for the portion beginning with “if, through” and ending with “the fist’ mentioned company” the following shall be substituted, namely:-
			“If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,-
			(i) in the opinion of the Central Government, is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, whether under this Act or any previous companies law, the first mentioned company, or
			(ii) on an application by a registered proprietor of a trade mark, is in the opinion of the Central Government identical with, or too nearly resembles, a registered trade mark of such proprietor under the Trade Marks Act, 1999 such company-
			(ii) the following proviso shall be added, namely :-
			“Provided that no application under clause (ii) made by a registered proprietor of a trade mark after five years of coming to notice of registration of the company shall be considered by the Central Government”.

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Child Marriage Restraint Act

November 30, 2014

Section 1. Short titled, extent and commencement.

(1) This Act may be called the Child Marriage Restraint Act (1929).

(2) It extends to the whole of Pakistan and applies to all citizens of Pakistan wherever they may be.

(3) It shall come into force on the 1st day of April, 1939.

Section 2. Definitions.

In this Act, unless there is anything repugnant in the subject or context,

(a) “child” means a person who, if a male, is under eighteen years of age, and if a female, is under sixteen years of age;

(b) “child marriage” means a marriage to which either of the contracting parties is a child;

(c) “contracting party” to a marriage means either of the parties whose marriage is or is about to be thereby solemnized;

(d) “minor” means person of either sex who is under eighteen years of age,

(e) “Union Council” means the Union Council or the Town Committee constituted under the Law relating to Local Government for the time being in force.

PUNJAB AMENDMENT IN SECTION 2:

(ii) the comma appearing at the end of clause (d) shall be replaced by a full stop; and

(iii) clause e shall be omitted.

Punjab Ordinance, 23 of 1971.

Section 3. Omitted by Muslim Family Laws Ordinance, 1961 (VIII of 1961 S. 12 (w.e.f. 15.07.1961).

Section 4. Punishment for male adult above eighteen years of age marrying a child.

Whoever, being a male above eighteen years of age, contracts child marriage shall be punishable with simple imprisonment which may extend to one month, or with fine which may extend to one thousand rupees, or with both.

Section 5. Punishment for solemnizing a child marriage.

Whoever performs, conducts or directs any child marriage shall be punishable with simple imprisonment which may extend to one month, or with fine which may extend to one thousand rupees, or with both, unless he proves that he had reason to believe that the marriage was not a child marriage.

Section 6. Punishment for parent or guardian concerned in a child marriage.

(1) Where a minor contracts a child marriage any person having charge of the minor, whether as parent or guardian or in any other capacity, lawful or unlawful, who does any act to promote the marriage or permits it to be solemnized, or negligently fails to prevent it from being solemnized, shall be punishable with simple imprisonment which may extend to one month, or with fine which may extend to one thousand rupees, or with both:

Provided that no woman shall be punishable with imprisonment.

(2) For the purpose of this section, it shall be presumed, unless and until the contrary is proved, that where a minor has contracted a child marriage, the person having charge of such minor has negligently failed to prevent the marriage from being solemnized.

Section 7. Imprisonment not to be awarded for offence under section 3.

Notwithstanding anything contained in section 25 of the General Clauses At, 1897, or section 64 of the Pakistan Penal Code, Court sentencing an offender under section 3 shall not be competent to direct that, in default of payment of the fine imposed, he shall undergo only term of imprisonment.

Section 8. Jurisdiction under this Act.

Notwithstanding anything contained in section 90 of the Code of Criminal Procedure, 1898, no Court other than that of a Magistrate of the First Class shall take cognizance of or try any offence under this Act.

Section 9. Mode of taking cognizance of offence.

No Court shall take cognizance of any offence under this Act except on a complaint made by the Union Council, or if there is no Union Council in the area, by such authority as the Provincial Government may in this behalf prescribe, and such cognizance shall in no case be taken after the expiry of one year from the date on which the offence is alleged to have been committed.

Punjab Amendment

In section 9:

The words and commas “except on a complaint made by the Union Council, or if there is no Union Council in the area, by such authority as the Provincial Government may in this behalf prescribe, and such cognizance shall in no case be taken” occurring after the words “under this Act” and before the words “after the expiry” shall be omitted.

Punjab Ordinance, 23 of 1971, S. 3.

Section 10. Preliminary inquiries into offences under this Act.

The Court taking cognizance of an offence under this Act shall, unless it dismisses the complaint under section 203 of the Code of Criminal Procedure, 1898, either itself make an inquiry under section 202 of that Code or direct a Magistrate of the First Class subordinate to it to make such inquiry.

Section 11. Omitted by Muslim Family Laws Ordinance, 1961.

Section 12. Power to issue injunction prohibiting marriage in contravention of this Act.

(1) Notwithstanding anything to the contrary contained in this Act, the Court may, if satisfied from information laid before it through a complaint or otherwise that a child marriage in contravention of this Act has been arranged or is about to be solemnized, issue an injunction against any of the persons mentioned in sections 3, 4, 5 and 9 of this Act prohibiting such marriage.

(2) No injunction under sub-section (1) shall be issued against any person unless the Court has previously given notice to such person, and has afforded him an opportunity to show-cause against the issue of the injunction.

(3) The Court may either on its own motion or on the application of any person aggrieved, rescind or alter any order made under sub-section (1).

(4) Where such an application is received, the Court shall afford the applicant an early opportunity of appearing before it either in person or by pleader, and if the Court rejects the application wholly or in part, it shall record in writing its reasons for so doing.

(5) Whoever, knowing that an injunction has been issued against him under sub-section (1) of this section disobeys such injunction shall be punished with imprisonment of either description for a term which may extend to three months, or with fine which may extend to one thousand rupees, or with both:

Provided that no woman shall be punishable with imprisonment.

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