Employees State Insurance Act

November 30, 2014

Section 1. Short title, extent, commencement and application.

(1) This act may be called the Employees’ State Insurance Act, 1948.

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

(3) It shall come into force on such date or dates as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and ²for different States or for different parts thereof.

(4) It shall apply, in the first instance, to all factories (including factories belonging to the Government other than seasonal factories :

³Provided that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

(5) The appropriate Government may, in consultation with the Corporation and ⁴where the appropriate Government is a State Government, with the approval of the Central Government, after giving six months’ notice of its intention of so doing by notification in the Official Gazette, extend the provision of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agriculture or otherwise :

⁵Provided that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State.

⁶ (6) A factory or an establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under this Act or the manufacturing process therein ceases to be carried on with the aid of power.

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1. The words “except the State of Jammu and Kashmir” which were subs. for “except Part B States” by Act 53 of 1951, sec. 2, have been omitted by Act 51 of 1970, sec. 2 and Sch. (w.e.f. 1-9-1971).

2. Subs. by Act 53 of 1951, sec. 2, for “for different States” (w.e.f. 6-10-1951).

3. Ins. by Act 29 of 1989, sec. 2(i) (w.e.f. 20-10-1989).

4. Subs. by Act 53 of 1951, sec. 2, for “with the approval of the Central Government” (w.e.f. 6-10-1951).

5. Ins. by Act 29 of 1989, sec. 2(ii) (w.e.f. 16-5-1990).

6. Ins. by Act 29 of 1989, sec. 2(iii) (w.e.f. 20-10-1989).

Section 2. Definitions.

In this Act, unless there is anything repugnant in the subject or context, – (1) “appropriate Government” means, in respect of establishment under the control of the Central Government or ¹a railway administration or a major port or a mine oilfield, the Central Government, and in all other cases, the State Government;

²[***]

(3) “confinement” means labour resulting in the issue of a living child, or labour after twenty six weeks of pregnancy resulting in the issue of a child whether alive or dead;

(4) “contribution” means the sum of money payable to the Corporation by the principal employer in respect of an employee and includes any amount payable by or on behalf of the employee in accordance with the provisions of this Act;

³[***]

⁴(6) “Corporation” means the Employees State Insurance Corporation set up under this Act;

(6A) “dependant” means any of the following relatives of a deceased insured person, namely :- (i) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted ⁵daughter;

⁶(ia) a widowed mother;

(ii) if wholly dependent on the earnings of the insured person at the time of his death, a legitimate or adopted son or daughter who has attained the age of eighteen years and is infirm;

(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death, –

(a) a parent other than a widowed mother,

(b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or illegitimate if married and a minor or if widowed and a minor,

(c) a minor brother or an unmarried sister or a widowed sister if a minor,

(d) a widowed daughter-in-law,

(e) a minor child of a pre-deceased son,

(f) a minor child of a pre-deceased daughter where no parent of the child is alive, or

(g) a paternal grand-parent if no parent of the insured person is alive;

(7) “duly appointed” means appointed in accordance with the provisions of this Act or with the rules or regulations made thereunder;

⁷(8) “employment injury” means a personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his employment, being an insurable employment, whether the accident occurs or the occupational disease is contracted within or outside the territorial limits of India;

(9) “employee” means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and –

(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or

(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or

(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; ⁸and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment ⁹or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), or under the standing orders of the establishment; but does not include –

(a) any member of ¹⁰the Indian naval, military or air forces; or

¹¹(b) any person so employed whose wages (excluding remuneration for overtime work) exceed ¹²such wages as may be prescribed by the Central Government :

Provided that an employee whose wages (excluding) remuneration for overtime work) exceed ¹²such wages as may be prescribed by the Central Government at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period;

(10) “exempted employee” means an employee who is not liable under this Act to pay the employees’ contribution.

¹³(11) “family” means all or any of the following relatives of an insured person, namely :- (i) a spouse;

(ii) a minor legitimate or adopted child dependent upon the insured person;

(iii) a child who is wholly dependent on the earnings of the insured person and who is (a) receiving education, till he or she attains the age of twenty-one years, (b) an unmarried daughter;

(iv) a child who is infirm by reason of any physical or mental abnormality or injury and is wholly dependent on the earnings of the insured person, so long as the infirmity continues;

(v) dependent parents;

(12) “factory” means any premises including the precincts thereof – (a) whereon ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or

(b) whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed;

(13) “immediate employer” in relation to employees employed by or through him, means a person who has undertaken the execution, on the premises of factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory or establishment, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or let on hire to the principal employer ¹⁴and includes a contractor;

¹⁵(13A) “insurable employment” means an employment in a factory or establishment to which this Act applies;

(14) “insured person” means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act;

¹⁵(14A) “managing agent” means any person appointed or acting as the representative of another person for the purpose of carrying on such other person’s trade or business, but does not include an individual manager subordinate to an employer;

¹⁶(14AA) “manufacturing process” shall have the meaning assigned to it in the Factories Act, 1948 (63 of 1948);

(14B) “mis-carriage” means expulsion of the contents of a pregnant uterus at any period prior to or during the twenty-sixth week of pregnancy but does not include any mis-carriage, the causing of which is punishable under the Indian Penal Code (45 of 1860);

(15) “occupier” of the factory shall have the meaning assigned to it in the Factories Act, ¹⁷1948 (63 of 1948);

¹⁵(15A) “permanent partial disablement” means such disablement of a permanent nature, as reduces the earning capacity of an employee in every employment which he was capable of undertaking at the time of the accident resulting in the disablement : Provided that every injury specified in Part II of the Second Schedule shall be deemed to result in permanent partial disablement.

(15B) “permanent total disablement” means such disablement of a permanent nature as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement :

Provided that permanent total disablement shall be deemed to result from every injury specified in Part I of the Second Schedule or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent or more.

¹⁸(15C) “power” shall have the meaning assigned to it in the Factories Act, 1948 (63 of 1948);

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

(17) “principal employer” means – (i) in a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as the manager of the factory under ¹⁹[the Factories Act, 1948 (63 of 1948)], the person so named;

(ii) in any establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf or where no authority is so appointed, the head of the department;

(iii) in any other establishment, any person responsible for the supervision and control of the establishment;

(18) “regulation” means a regulation made by the Corporation;

(19) “Schedule” means a Schedule to this Act;

²⁰(19A) “seasonal factory” means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortications of ground-nuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and includes a factory which is engaged for a period not exceeding seven months in a year –

(a) in any process of blending, packing or repacking of tea or coffee; or

(b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify;

(20) “sickness” means a condition which requires medical treatment and attendance and necessitates abstention from work on medical grounds;

(21) “temporary disablement” means a condition resulting from an employment injury which requires medical treatment and renders an employee, as a result of such injury, temporarily incapable of ²¹[doing the work which he was doing prior to or at the time of the injury];

(22) “wages” means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes ²²[any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or lay-off and] other additional remunera­tion, if any, 23[paid at intervals not exceeding two months], but does not include—

(b) any travelling allowance or the value of any traveling concession;

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

(d) any gratuity payable on discharge.

²⁴(23) “wage period” in relation to an employee means the period in respect of which wages are ordinarily payable to him whether in terms of the contract of employment, express or implied or otherwise;

²⁵(24) all other words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act.

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1. Subs. by the A.O. 1950, for “a federal railway”.

2. Clause (2) omitted by Act 29 of 1989, sec. 3(i) (w.e.f. 1-2-1991).

3. Clause (5) omitted by Act 29 of 1989, sec. 3(ii) (w.e.f. 1-2-1991).

4. Ins. by Act 44 of 1966, sec. 2 (w.e.f. 28-1-1968).

5. Subs. by Act 29 of 1989, sec. 3(iii), for “daughter or a widowed mother, and” (w.e.f. 20-10-1989).

6. Ins. by Act 29 of 1989, sec. 3(iii) (w.e.f. 20-10-1989).

7. Subs. by Act 44 of 1966, sec. 2, for the original clause (w.e.f. 28-1-1968).

8. Subs. by Act 44 of 1966, sec. 2, for “but does not include” (w.e.f. 28-1-1968).

9. Subs. by Act 29 of 1989, sec. 3(iv), for “but does not include” (w.e.f. 20-10-1989).

10. Subs. by the A.O. 1950, for “His Majesty’s”.

11. Subs. by Act 44 of 1966, sec. 2, for the original sub-clause (w.e.f. 28-1-1968).

12. Subs. by Act 29 of 1989, sec. 3(iv), for “one thousand and six hundred rupees a month” (w.e.f. 12-1991).

13. Subs. by Act 29 of 1989, sec. 3(v), for clauses (11) and (12) (w.e.f. 20-10-1989).

14. Added by Act 29 of 1989 sec. 3(vi) (w.e.f. 20-10-1989).

15. Ins. by Act 44 of 1966, sec. 2 (w.e.f. 28-1-1968).

16. Ins. by Act 29 of 1989, sec. 3(vii) (w.e.f. 20-10-1989).

17. Subs. by Act 53 of 1951, sec. 3, for “1934” (w.e.f. 6-10-1951).

18. Ins. by Act 29 of 1989, sec. 3(ix) (w.e.f. 20-10-1989).

19. Subs. by Act 53 of 1951, sec. 3, for “clause (e) of sub-section (1) of section 9 of the Factories Act, 1934” (w.e.f. 6-10-1951).

20. Ins. by Act 29 of 1989, sec. 3(ix) (w.e.f. 20-10-1989).

21. Subs. by Act 44 of 1966, sec. 2, for “work” (w.e.f. 28-1-1968).

22. Ins. by Act 44 of 1966, sec. 2 (w.e.f. 28-1-1968).

23. Subs. by Act 53 of 1951, sec. 3, for “paid at regular intervals after the last day of the wage period” (w.e.f. 6-10-1951).

24. Subs. by Act 45 of 1984, sec. 2, for clause (23) (w.e.f. 27-1-1985).

25. Subs. by Act 44 of 1966, sec. 2, for the original clause (w.e.f. 28-1-1968).

Section 2A. Registration of factories and establishments.

¹REGISTRATION OF FACTORIES AND ESTABLISHMENTS. Every factory or establishment to which this Act applies shall be registered within such time and in such manner as may be specified in the regulations made in this behalf.

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1. Ins. by Act 44 of 1966, sec. 3 (w.e.f. 28-1-1968).

Section 3. Establishment of employees’ state insurance corporation.

(1) With effect from such date^* as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established for the administration of the scheme of Employees’ State Insurance in accordance with the provisions of this Act a Corporation to be known as the Employees’ State Insurance Corporation.

(2) The Corporation shall be a body corporate by the name of Employees’ State Insurance Corporation having perpetual succession and a common seal and shall by the said name sue and be sued.

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*  1st October, 1948, vide Gazette of India, 1948, Extra., p. 1441.

Section 4. Constitution of corporation.

The Corporation shall consist of the following members, namely :

¹(a) a Chairman to be ²appointed by the Central Government;

(b) a Vice-Chairman to be appointed by the Central Government;

(c) not more than five persons to be appointed by the Central Government.³[***]

(d) one person each representing each of the ⁴States in which this Act is in force to be appointed by the State Government concerned;

(e) one person to be ²appointed by the Central Government to represent the ⁵Union territories;

(f)⁶ persons representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government;

(g)⁶ ten persons representing employees to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government;

(h) two persons representing the medical profession to be ²appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central ⁷Government;

⁸(i) three members of Parliament of whom two shall be members of the House of the People (Lok Sabha) and one shall be a member of the Council of States (Rajya Sabha) elected respectively by the members of the House of the people and the members of the Council of States; and

(j) the Director General of the Corporation, ex officio.

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1. Subs. by Act 44 of 1966, sec. 4, for the original clauses (a) and (b) (w.e.f. 17-6-1967).

2. Subs. by Act 29 of 1989, sec. 4, for “nominated” and “nomina­tion” (w.e.f. 20-10-1989).

3. The words “of whom at least three shall be officials of the Central Government” omitted by Act 44 of 1966, sec. 4 (w.e.f. 17-6-1967).

4. Subs. by A.O. (No. 3) 1956, for “Part A States and B States”.

5. Subs. by the A.O. (No. 3) 1956, for “Part C States”.

6. Subs. by Act 29 of 1989, sec. 4, for “five” (w.e.f. 20-10-1989).

7. The word “and” omitted by Act 44 of 1966, sec. 4 (w.e.f. 17-6-1967).

8. Subs. by Act 44 of 1966, sec. 4, for clause (i) (w.e.f. 17-6-1967).

Section 5. Term of office of members of the corporation.

(1) Save as otherwise expressly provided in this Act, the term of office of members of the Corporation, other than ¹the members referred to in clauses (a), (b), (c), (d) and (e) of section 4 and the ex officio member, shall be four years commencing from the date on which their ²appointment or election is notified :

Provided that a member of the corporation shall, notwithstanding the expiry of the said period of four years, continue to hold office until the ²appointment or election of his successor is notified.

(2) The members of the Corporation referred to in clauses ³(a), (b), (c), (d) and (e) of section 4 shall hold office during the pleasure of the Government ³appointing them.

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1. Subs. by Act 44 of 1966, sec. 5, for certain words (w.e.f. 17-6-1967).

2. Subs. by Act 29 of 1989, sec. 4, for “nominating”, “re-nomination” and “nominated” (w.e.f. 20-10-1989).

3. Subs. by Act 44 of 1966, sec. 5, for “(c), (d) and (e)” (w.e.f. 17-6-1967).

Section 6. Eligibility for re-nomination or re-election.

An outgoing member of the Corporation, the Standing Committee, or the Medical Benefit Council shall be eligible for ¹reappointment or re-election as the cases may be.

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1. Subs. by Act 29 of 1989, sec. 4, for “nominating”, “re-nomination” and “nominated” (w.e.f. 20-10-1989).

Section 7. Authentication of orders, decisions, etc.

All orders and decisions of the Corporation shall be authenticated by the signature of the Director General of the Corporation and all other instruments issued by the Corporation shall be authenticated by the signature of the Director General or such other officer of the Corporation as may be authorised by him.

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1. Subs. by Act 44 of 1966, sec. 6, for section 7 (w.e.f. 17-6-1967).

Section 8. Constitution of standing committee.

A Standing Committee of the Corporation shall be constituted from among its members, consisting of –

(a) a Chairman, ¹[appointed] by the Central Government;

(b) three members of the Corporation, ¹[appointed] by the Central Government];

²[(bb) three members of the Corporation representing such three State Governments thereon as the Central Government may, by notification in the Official Gazette, specify from time to time;]

(c) ³[eight] members elected by the Corporation as follows:—

⁴[***]

(ii) ⁵[three] members from among the members of the corporation representing employers;

(iii) ⁵[three] members from among the members of the Corporation representing employees;

(iv) one member from among the members of the Corporation repre­senting the medical profession; and

(v) one member from among the members of the Corporation elected by ⁶[Parliament];

⁷[(d) the Director General of the Corporation, ex officio].

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1. Subs. by Act 29 of 1989, sec. 4, for “nominating”, “re-nomination” and “nominated” (w.e.f. 20-10-1989).

2. Ins. by Act 53 of 1951, sec. 5 (w.e.f. 6-10-1951).

3. Subs. by Act 44 of 1966, sec. 7, for “six” (w.e.f. 17-6-1967).

4. Sub-clause (i) omitted by Act 53 of 1951, sec. 5 (w.e.f. 6-10-1951).

5. Subs. by Act 44 of 1966, sec. 7, for “two” (w.e.f. 17-6-1967).

6. Subs. by the A.O. 1950, for “the Central Legislature”.

7. Ins. by Act 44 of 1966, sec. 7 (w.e.f. 17-6-1967).

Section 9. Term of office of members of standing committee.

(1) Save as otherwise expressly provided in this Act, the term of office of a member of the Standing Committee, other than a member referred to in clause (a) or ¹Clause (b) or clause (bb) of section 8, shall be two years from the date on which his election is notified :

Provided that a member of the Standing Committee, shall, notwithstanding the expiry of the said period of two years, continue to hold office until the election of his successor is notified :

Provided further that a member of the Standing Committee shall cease to hold office when he ceases to be a member of the Corporation.

(2) A member of the Standing Committee referred to in clause (a) or clause (b) or clause (bb) of section 8 shall hold office during the pleasure of the Central Government.

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1. Subs. by Act 53 of 1951, sec. 6, for “clause (b)” (w.e.f. 6-10-1951).

Section 10. Medical benefit council.

(1) The Central Government shall constitute a Medical Benefit Council consisting of – (a) the Director General, Health Services, ex officio, as Chairman;

(b) a Deputy Director-General, Health Services, to be appointed by the Central Government;

(c) the Medical Commissioner of the Corporation, ex officio;

(d)  one member each representing each of the ²[³[States (other than Union territories)] in which this Act is in force] to be ¹[appointed] by the State Government concerned;

(e) three members representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government;

(f) three members representing employees to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government; and

(g) three members, of whom not less than one shall be a woman, representing the medical profession, to be appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central Government.

(2) Save as otherwise expressly provided in this Act, the term of office of a member of the Medical Benefit Council, other than a member referred to in any of the clause (a) to (d) of sub-section (1), shall be four years from the date on which his appointment is notified :

⁵[Provided that a member of the Medical Benefit Council, shall, notwithstanding the expiry of the said period of four years continue to hold office until the ⁴[appointment] of his successor is notified].

(3) A member of the Medical Benefit Council referred to in clauses (b) and (d) of sub-section (1) shall hold office during the pleasure of the Government appointing him.

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1. Subs. by Act 29 of 1989, sec. 4 for “nominated”, “nominations” and “nominating” (w.e.f. 20-10-1989).

2. Subs. by Act 53 of 1951, sec. 7, for “Part A States” (w.e.f. 6-10-1951).

3. Subs. by the A.O. (No. 3) 1956, for “Part A States or Part B States”.

4. Subs. by Act 29 of 1989, sec. 4, for “nominated”, “nomination” and “nominating” (w.e.f. 20-10-1989).

5. Added by Act 44 of 1966, sec. 8 (w.e.f. 17-6-1967).

Section 11. Resignation of membership.

A member of the Corporation, the Standing Committee or the Medical Benefit Council may resign his office by notice in writing to the Central Government and his seat shall fall vacant on the acceptance of the resignation by that Government.

Section 12. Cessation of membership.

¹(1) A member of the Corporation, the Standing Committee or the Medical Benefit Council shall cease to be a member of that body if he fails to attend three consecutive meetings thereof :

Provided that the Corporation, the Standing Committee or the Medical Benefit Council, as the case may be, may, subject to rules made by the Central Government in this behalf, restore him to membership.

²(2) Where in the opinion of the Central Government any person ³appointed or elected to represent employers, employees or the medical profession on the Corporation, the Standing Committee or the Medical Benefit Council, as the case may be, has ceased to represent such employers, employees or the medical profession, the Central Government may, by notification in the Official Gazette, declare that with effect from such date as may be specified therein such person shall cease to be a member of the Corporation, the Standing Committee or the Medical Benefit Council, as the case may be.

⁴(3) A person referred to in clause (i) of section 4 shall cease to be a member of the Corporation, when he ceases to be a member of Parliament.

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1. Section 12 re-numbered as sub-section (1) thereof by Act 53 of 1951, sec. 8 (w.e.f. 6-10-1951).

2. Ins. by Act 53 of 1951, sec. 8 (w.e.f. 6-10-1951).

3. Subs. by Act 29 of 1989, sec. 4, for “nominated”, “nomination” and “nominating” (w.e.f. 20-10-1989).

4. Ins. by Act 44 of 1966, sec. 9 (w.e.f. 17-6-1967).

Section 13. Disqualification.

A person shall be disqualified for being chosen as or for being a member of the Corporation, the Standing Committee or the Medical Benefit Council –

(a) if he is declared to be of unsound mind by a competent Court; or

(b) if he is an undercharged insolvent; or

(c) if he has directly or indirectly by himself or by his partner any interest in a subsisting contract with, or any work being done for, the Corporation except as a medical practitioner or as a shareholder (not being a Director) of a company; or

(d) if before or after the commencement of this Act, he has been convicted of an offence involving moral turpitude.

Section 14. Filling of vacancies.

(1) Vacancies in the office of ¹appointed or elected members of the Corporation, the Standing Committee and the Medical Benefit Council shall be filled by appointment or election, as the case may be.

(2) A member of the Corporation, the Standing Committee or the Medical Benefit Council appointed or elected to fill a casual vacancy shall hold office only so long as the member in whose place he is ²appointed or elected would have been entitled to hold office if the vacancy had not occurred.

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1. Subs. by Act 29 of 1989, sec. 4, for “nominated”, “nomination” and “nominating” (w.e.f. 20-10-1989).

2. Subs. by Act 29 of 1989, sec. 4, for “nominated” and “nomina­tion” (w.e.f. 20-10-1989).

Section 15. Fees and allowances.

Members of the Corporation, the Standing Committee and the Medical Benefit Council shall receive such fees and allowances as may from time to time be prescribed by the Central Government.

Section 16. Principal officers.

(1) The Central Government may, in consultation with the Corporation, appoint a Director General and a Financial Commissioner.

(2) The Director General shall be the Chief Executive Officer of the Corporation.

(3)² The Director General and the Financial Commissioner shall be whole time officers of the Corporation and shall not undertake any work unconnected with their office without the sanction of the Central Government ³and of the Corporation.

(4) ²The Director General or the Financial Commissioner shall hold office for such period, not exceeding five years, as may be specified in the order appointing him. An outgoing Director General or the Financial Commissioner shall be eligible for reappointment if he is otherwise qualified.

(5) ²The Director General or the Financial Commissioner shall receive such salary and allowances as may be prescribed by the Central Government.

(6) A person shall be disqualified from being appointed as or for being the Director General or the Financial Commissioner if he is subject to any of the disqualification specified in section 13.

(7) The Central Government may at any time remove the ⁴Director General or the Financial Commissioner from office and shall do so if such removal is recommended by a resolution of the Corporation passed at a special meeting called for the purpose and supported by the votes of not less than two-thirds of the total strength of the Corporation.

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1. Subs. by Act 29 of 1989, sec. 6, for sub-section (1) (w.e.f. 20-10-1989).

2. Subs. by Act 29 of 1989, sec. 6, for “The Principal Officers” (w.e.f. 20-10-1989).

3. Ins. by Act 44 of 1966, sec. 10 (w.e.f. 17-6-1967).

4. Subs. by Act 29 of 1989, sec. 6, for “A Principal Officer” (w.e.f. 20-10-1989).

Section 17. Staff.

(1) The Corporation may employ such other staff of offi­cers and servants as may be necessary for the efficient transac­tion of its business provided that the sanction of the Central Government shall be obtained for the creation of any post ¹[the maximum monthly salary of which ²[exceeds such salary as may be prescribed by the Central Government].

³[(2) (a) The method of recruitment, salary and allowances, discipline and other conditions of service of the members of the staff of the Corporation shall be such as may be specified in the regulations made by the Corporation in accordance with the rules and orders applicable to the officers and employees of the Central Government drawing corresponding scales of pay:

Provided that where the Corporation is of the opinion that it is necessary to make a departure from the said rules or orders in respect of any of the matters aforesaid, it shall obtain the prior approval of the Central Government.

(b) In determining the corresponding scales of pay of the members of the staff under clause (a), the Corporation shall have regard to the educational qualifications, method of recruitment, duties and responsibilities of such officers and employees under the Central Government and in case of any doubt, the Corporation shall refer the matter to the Central Government whose decision thereon shall be final.]

(3) Every appointment to ⁴[posts ⁵[(other than medical posts)] corresponding to ⁶[Group A and Group B] posts under the Central Government], shall be made in consultation with the ⁷[Union] Public Service Commission:

Provided that this sub-section shall not apply to an officiating or temporary appointment for ⁸[a period] not exceeding one year:

⁹[Provided further that any such officiating or temporary ap­pointment shall not confer any claim for regular appointment and the services rendered in that capacity shall not count towards seniority or minimum qualifying service specified in the regula­tions for promotion to next higher grade.]

⁹([4) If any question arises whether a post corresponds to a ⁶[Group A and Group B] post under the Central Government, the question shall be referred to that Government whose decision thereon shall be final.]

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1. Subs. by Act 38 of 1975, sec. 3, for certain words (w.e.f. 1-9-1975).

2. Subs by Act 29 of 1989, sec. 7, for “exceeds two thousand and two hundred fifty rupees” (w.e.f. 1-2-1991).

3. Subs. by Act 29 of 1989, sec. 7, for sub-section (2) (w.e.f. 8-11-1989).

4. Subs. by Act 44 of 1966, sec. 11, for “post carrying a maximum monthly pay to five hundred rupees and above” (w.e.f. 17-6-1967).

5. Ins. by Act 29 of 1989, sec. 7(iii)(a) (w.e.f. 16-5-1990).

6. Subs. by Act 45 of 1984, sec. 3, for “Class I or Class II” (w.e.f. 27-1-1985).

7. Subs. by the A.O. 1950, for “Federal”.

8. Subs. by Act 29 of 1989, sec. 7(iii), for “an aggregate period” (w.e.f. 20-10-1989).

9. Ins. by Act 29 of 1989, sec. 7(iii) (w.e.f. 20-10-1989).

Section 18. Powers of the standing committee.

(1) Subject to the general superintendence and control of the Corporation, the Standing Committee shall administer the affairs of the Corporation and may exercise any of the powers and perform any of the functions of the Corporation.

(2) The Standing Committee shall submit for the consideration and decision of the Corporation all such cases and matters as may be specified in the regulations made in this behalf.

(3) The Standing Committee may, in its discretion, submit any other case or matter for the decision of the Corporation.

Section 19. Corporation’s power to promote measures for health, etc., of insured persons.

The Corporation may, in addition to the scheme of benefits specified in this Act, promote measures for the improvement of the health and welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled or injured and may incur in respect of such measures expenditure from the funds of the Corporation within such limits as may be prescribed by the Central Government.

Section 20. Meetings of corporation, standing committee and medical benefit council.

Subject to any rules made under this Act, the Corporation, the Standing Committee and the Medical Benefit Council shall meet at such times and places and shall observe such rules or procedure in regard to transaction of business at their meetings as may be specified in the regulations made in this behalf.

Section 21. Super session of the corporation and standing committee.

(1) If in the opinion of the Central Government, the Corporation or the Standing Committee persistently makes default in performing the duties imposed on it by or under this Act or abuses its powers, that Government may, by notification in the Official Gazette, supersede the Corporation, or in the case of the Standing Committee, supersede, in consultation with the Corporation, the Standing Committee :

Provided that before issuing a notification under this sub-section the Central Government shall give a reasonable opportunity to the Corporation or the Standing Committee, as the case may be, to show cause why it should not be superseded and shall consider the explanations and objections, if any, of the Corporation or the Standing Committee, as the case may be.

(2) Upon the publication of a notification under sub-section (1) superseding the Corporation or the Standing Committee, all the members of the Corporation or the Standing Committee, as the case may be, shall, as from the date of such publication, be deemed to have vacated their offices.

(3) When the Standing Committee has been superseded, a new Standing Committee shall be immediately constituted in accordance with section 8.

(4) When the Corporation has been superseded, the Central Government may – (a) immediately appoint or cause to be ¹appointed or elected new members to the Corporation in accordance with section 4 and may constitute a new Standing Committee under section 8;

(b) in its discretion, appoint such agency, for such period as it may think fit, to exercise the powers and perform the functions of the corporation and such agency shall be competent to exercise all the powers and perform all the functions of the Corporation.

(5) The Central Government shall cause a full report of any action taken under this section and the circumstances leading to such action to be laid before ²Parliament at the earliest opportunity and in any case not later than three months from the date of the notification superseding the Corporation or the Standing Committee, as the case may be.

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1. Subs. by Act 29 of 1989, sec. 4, for “nominate” and “nominated” (w.e.f. 20-10-1989).

2. Subs. by A.O. 1950, for “the Central Legislature”.

Section 22. Duties of medical benefits council.

The Medical Benefit Council shall –

(a) advise ¹the Corporation and the Standing Committee on matters relating to the administration of medical benefit, the certification for purposes of the grant of benefits and other connected matters;

(b) have such powers and duties of investigation as may be prescribed in relation to complaints against medical practitioners in connection with medical treatment and attendance; and

(c) perform such other duties in connection with medical treatment and attendance as may be specified in the regulations.

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1.  Subs. by Act 53 of 1951, sec. 9, for “the Corporation, the Standing Committee and the Medical Commissioner” (w.e.f. 6-10-1951).

Section 23. Duties of director general and the financial commissioner.

The Director General and the Financial Commissioner shall exercise such powers and discharge such duties as may be prescribed.

They shall also perform such other functions as may be specified in the regulations.

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1.  Subs. by Act 29 of 1989, sec. 8, for “Principal Officers”  (w.e.f. 20-10-1989).

Section 24. Acts of corporation, etc., not invalid by reason of defect in constitution, etc.

No act of the Corporation, the Standing Committee or the Medical Benefit Council shall be deemed to be invalid by reason of any defect in the constitution of the Corporation, the Standing Committee or the Medical Benefit Council, or on the ground that any member thereof was not entitled to hold or continue in office by reason of any disqualification or of any irregularity in his ¹appointment or election, or by reason of such act having been done during the period of any vacancy in the office of any member of the Corporation, the Standing Committee or the Medical Benefit Council.

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1.  Subs. by Act 29 of 1989, sec. 4, for “nomination”  (w.e.f. 20-10-1989).

Section 25. Regional boards, local committees, regional and local medical benefit councils.

The Corporation may appoint Regional Boards, Local Committees and Regional and Local Medical Benefit, Councils in such areas and in such manner, and delegate to them such powers and functions, as may be provided by the regulations.

Section 26. Employees’ state insurance fund.

(1) All contributions paid under this act and all other moneys received on behalf of the Corporation shall be paid into a fund called the Employees’ State Insurance Fund which shall be held and administered by the Corporation for the purposes of this Act.

(2) The Corporation may accept grants, donations and gifts from the Central or any State Government,¹ local authority, or any individual or body whether incorporated or not, for all or any of the purposes of this Act.

²(3) Subject to the other provisions contained in this Act and to any rules or regulations made in this behalf, all moneys accruing or payable to the said Fund shall be paid into the Reserve Bank of India or such other bank as may be approved by the Central Government to the credit of an account styled the Account of the Employees’ State Insurance Fund.

(4) Such account shall be operated on by such officer as may be authorised by the Standing Committee with the approval of the Corporation.

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1. The words “Part B State,” omitted by Act 53 of 1951, sec. 10 (w.e.f. 6-10-1951).

2. Subs. by Act 53 of 1951, sec. 10, for sub-section (3) (w.e.f. 6-10-1951).

Section 27. Grant by the central government.

[Rep. by the Employees’ State Insurance (Amendment) Act</em>,<em> 1966 (44 of 1966), sec. 12 (w.e.f. 17-6-1967).

Section 8. Purposes for which the fund may be expended.

Subject to the provisions of this Act and of any rules made by the Central Government in that behalf, the Employees’ State Insurance Fund shall be expended only for the following purposes, namely :

(i) payment of benefits and provision of medical treatment and attendance to insured persons and, where the medical benefit is extended to their families, the provision of such medical benefit to their families, in accordance with the provisions of this Act and defraying the charges and costs in connection therewith;

(ii) payment of fees and allowances to members of the Corporation, the Standing Committee and the Medical Benefit Council, the Regional Boards, Local Committees and Regional and Local Medical Benefit Councils;

(iii) payment of salaries, leave and joining time allowances, traveling and compensatory allowances, gratuities and compassionate allowances, pensions, contributions to provident or other benefit fund of officers and servants of the Corporation and meeting the expenditure in respect of offices and other services set up for the purpose of giving effect to the provisions of this Act;

(iv) establishment and maintenance of hospitals, dispensaries and other institutions and the provisions of medical and other ancillary services for the benefit of insured persons and where the medical benefit is extended to their families, their families;

(v) payment of contributions to any State Government, ¹[***] local authority or any private body or individual, towards the cost of medical treatment and attendance provided to insured persons and, where the medical benefit is extended to their families, their families, including the cost of any building and equipment, in accordance with any agreement entered into by the Corporation;

(vi) defraying the cost (including all expenses of auditing the accounts of the Corporation and of the valuation of its assets and liabilities;

(vii) defraying the cost (including all expenses) of the Employees’ Insurance Courts set up under this Act;

(viii) payment of any sums under any contract entered into for the purposes of this Act by the Corporation or the Standing Committee or by any officer duly authorised by the Corporation or the Standing Committee in that behalf;

(ix) payment of sums under any decree, order or award of any Court or Tribunal against the Corporation or any of its officers or servants for any act done in the execution of his duty or under a compromise or settlement of any suit or other legal proceeding or claim instituted or made against the Corporation;

(x) defraying the cost and other charges of instituting or defending any civil or criminal proceedings arising out of any action taken Under this Act;

(xi) defraying expenditure, within the limits prescribed, on measures for the improvement of the health and welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled or injured; and

(xii) such other purposes as may be authorised by the Corporation with the previous approval of the Central Government.

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1. The words “Part B State”, omitted by Act 53 of 1951, sec. 11 (w.e.f. 6-10-1951).

Section 28A. Administrative expenses.

The types of expenses which may be termed as administrative expenses and the percentage of the income of the Corporation which may be spent for such expenses shall be such as may be prescribed by the Central Government and the Corporation shall keep its administrative expenses within the limit so prescribed by the Central Government.

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1.  Ins. by Act 29 of 1989, sec. 9 (w.e.f. 1-5-1997).

Section 29. Holding of property, etc.

(1) The Corporation may, subject to such conditions as may be prescribed by the Central Government, acquire and hold property both movable and immovable, sell or otherwise transfer any movable or immovable property which may have become vested in or have been acquired by it and do all things necessary for the purposes for which the Corporation is established.

(2) Subject to such conditions as may be prescribed by the Central Government, the Corporation may from time to time, invest any moneys which are not immediately required for expenses properly defrayable under this Act and may, subject as aforesaid, from time to time re-invest or realise such investments.

(3) The Corporation may, with the previous sanction of the Central Government and on such terms as may be prescribed by it, raise loans and take measures for discharging such loans.

(4) The Corporation may constitute for the benefit of its staff or any class of them, such provident or other benefit fund as it may think fit.

Section 30. Vesting of the property in the corporation.

All property acquired before the establishment of the Corporation shall vest in the Corporation and all income derived and expenditure incurred in this behalf shall be brought into the books of the Corporation.

Section 31. Expenditure by central government to be treated as a loan.

[Rep. by the Employees’ State Insurance (Amendment) Act, 1966 (44 of 1966), sec. 12 (w.e.f. 17-6-1967)].

Section 32. Budget estimates.

The Corporation shall in each year frame a budget showing the probable receipts and the expenditure which it proposes to incur during the following year and shall submit a copy of the budget for the approval of the Central Government before such date as may be fixed by it in that behalf.

The budget shall contain provisions adequate in the opinion of the Central Government for the discharge of the liabilities incurred by the Corporation and for the maintenance of a working balance.

Section 33. Accounts.

The Corporation shall maintain correct accounts of its income and expenditure in such form and in such manner as may be prescribed by the Central Government.

Section 34. AUDIT.

(1) The accounts of the Corporation shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Corporation to the Comptroller and Auditor-General of India.

(2) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the Corporation shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has, in connection with the audit of Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Corporation.

(3) The accounts of the Corporation as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded to the Corporation which shall forward the same to the Central Government along with its s on the report of the Comptroller and Auditor-General.

1.  Subs. by Act 29 of 1989, sec. 10, for section 34 (w.e.f. 20-10-1989).

Section 35. Annual report.

The Corporation shall submit to the Central Government an annual report of its work and activities.

Section 36. Budget, audited accounts and the annual report to be placed before parliament.

The annual report, the audited accounts of the Corporation, ¹[together with ²[the report of the Comptroller and Auditor-General of India thereon and the s of the Corporation on such report under section 34, and the budget as finally adopted by the Corporation shall be placed before ³[Parliament] ⁴[***]..

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1. Ins. by Act 44 of 1986, sec. 13 (w.e.f. 17-6-1967).

2. Subs. by Act 29 of 1989, sec. 11, for “auditor’s report thereon” (w.e.f. 20-10-1989).

3. Subs. by the A.O. 1950, for “the Central Legislature”.

4. The words “and published in the Gazette of India” omitted by Act 29 of 1989, sec. 11 (w.e.f. 20-10-1989).

Section 37. Valuation of assets and liabilities.

The Corporation shall, at intervals of five years, have a valuation of its assets and liabilities made by a valuer appointed with the approval of the Central Government :

Provided that it shall be open to the Central Government to direct a valuation to be made at such other times as it may consider necessary.

Section 38. All employees to be insured.

Subject to the provisions of the Act, all employees in factories, or establishments to which this Act applies shall be insured in the manner provided by this Act.

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The Employees’ State Insurance Act is aimed at conferring benefits on employees in case of sickness, maternity and employment injury. Section 38 of the Act mandates that all the employees in the factories or establishments shall be insured. The initial and vital endeavour should be to identify the beneficiaries or the employees for insurance; Transport Corporation of India v. Employees’ State Insurance Corporation, AIR 2000 SC 238.

Section 39. Contributions.

(1) The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer’s contribution) and contribution payable by the employee (hereinafter referred to as the employee’s contribution) and shall be paid to the Corporation.

¹(2) The contributions shall be paid at such rates as may be prescribed by the Central Government

Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of the Employees’ State Insurance (Amendment) Act, 1989.

²[(3) The wage period in relation to an employee shall be the unit in respect of which all contributions shall be payable under this Act.]

(4) The contributions payable in respect of each ³[wage period] shall ordinarily fall due on the last day of the ³[wage period], and where an employee is employed for part of the ³[wage period], or is employed under two or more employers during the same ³[wage period], the contributions shall fall due on such days as may be specified in the regulations.

⁴(5) (a) If any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the regulations till the date of its actual payment :

Provided that higher interest specified in the regulations shall not exceed the lending rate of interest charged by any scheduled bank.

(b) Any interest recoverable under clause (a) may be recovered as an arrear of land revenue or under section 45C to section 45-I.

Explanation : In this sub-section, “scheduled bank” means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).

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(i) No contribution need to be made on the incentive offered to the employees for a limited period and was paid at staggered intervals; Employees State Insurance Corpn., Hyderabad v. A.P. Electrical Equipment Corporation a Unit of ECE Industries Ltd., Visakhapattnam, 2005 LLR 466.

(ii) Payment of statutory interest on delayed deposit of E.S.I. contribution cannot be waived even when the E.I. Court has granted payment by instalments; Employee State Insurance Corpn. v. Bagsvig, 2005 LLR 983.

(iii) The liability to pay the entire contribution under section 39 is of the employer; Regional Director, Employees’ State Insurance Corporation v. Fashion Fab­rics, (1990) 2 CLR 844 (Ker).

(iv) Contribution is payable by the employer even in respect of casual labourers under section 39(3) and (4); Employees’ State Insurance Corporation v. Jaipur Enterprises, (1988) 56 FLR 207 (Raj).

(v) The employer is statutorily bound to contribute, whether he has sufficient resources or not; South India Viscose Co-op. Stores Ltd. v. Regional Director, Employees’ State Insurance Corporation, (1986) 68 FLR 329 (Mad).

(vi) Contribution for the past period is recoverable even if the employees had not availed the benefit of insurance; Employees’ State Insurance Corporation v. Hotel Kalpaka International, 1993 LLR 177 (SC).

(vii) Contributions are to be paid only on the wages payable to the eligible employees; Employees’ State Insurance Corporation v. Vijayamohini Mills, (1990) 76 FJR 246 (Ker).

(viii) Only wages paid to the employees can be reckoned for calculation of contributions; Employees’ State Insurance Corporation v. Ram Lal Textiles, (1990) 61 FLR 298.

(ix) The E.S.I.C. must hear an employer before determining the contribution to be payable by him if there is any dispute regard­ing such liability; Rameshwar Jute Mills Ltd. v. Employees’ State Insurance Corporation, AIR 1986 Pat 228.

(x) The employer can claim refund of ESI contributions which have been deposited by mistake; Anil Textile Industry v. Employees’ State Insurance Corporation, (1992) 64 FLR 856 (Raj).

(xi) Section 39(5)(a) applies where the employer fails to make contributions. If such failure is on account of circumstances beyond his control or if the circumstances make it impossible for the employer to make contributions even if he wanted to do so, unless he risks being hauled up for contempt of court, such failure on the part of the employer in making payments in time cannot be called a failure within the meaning of clause (a) of sub-section (5) so as to call for levying of interest; H.M.T. Ltd. v. Employees’ State Insurance Corporation, (1998) 92 FJR 454 (Kar).

(xii) The applicability of the clause (a) of sub-section (5) of section 39 of the Act is where the employer fails to make contributions. If such failure is on account of circumstances beyond his control or if the circumstances make it impossible for the employer to make contributions even if he wanted to do so unless the risks being hauled up for contempt of Court, such failure on the part of the employer in making payment in time cannot be called a failure within the meaning of this provision; Fenner (India) Ltd. v. Joint Regional Director, Employees’ State Insurance Corporation, (2003) 2 LLJ 447 (Mad).

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1. Subs. by Act 29 of 1989, sec. 12, for sub-section (2) (w.e.f. 1-2-1991).

2. Subs. by Act 45 of 1984, sec. 4, for sub-section (3) (w.e.f. 27-1-1985).

3. Subs. by Act 45 of 1984, sec. 4, for “week” (w.e.f. 27-1-1985).

4. Ins. by Act 29 of 1989, sec. 12(ii) (w.e.f. 20-10-1989).

Section 40. Principal employer to pay contributions in the first instance.

(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer’s contribution and the employee’s contribution.

(2) Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made there under, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee’s contribution by deduction from his wages and not otherwise :

Provided that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee’s contributing for the period.

(3) Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer’s contribution from any wages payable to an employee or otherwise to recover it from him.

(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.

(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation.

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(i) Principal employer is liable to pay contributions; Vemly Hotels v. Kuldeep Singh, (1987) 55 FLR 183 (Bom).

(ii) The employer’s liability to contribute continues till the closure of factory or establishment; Employees’ State Insurance Corporation v. Hotel Kalpaka International, 1993 LLR 117 (SC).

Section 41. Recovery of contributions from immediate employer.

(1) A principal employer, who has paid contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid (that is to say the employer’s contribution as well as the employee’s contribution, if any) from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer.

¹(1A) The immediate employer shall maintain a register of employees employed by or through him as provided in the regulations and submit the same to the principal employer before the settlement of any amount payable under sub-section (1).

(2) In the case referred to in sub-section (1), the immediate employer shall be entitled to recover the employee’s contribution from the employee employed by or through him by deduction from wages and not otherwise, subject to the conditions specified in the proviso to sub-section (2) of section 40.

²[***]

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1. Ins. by Act 29 of 1989, sec. 13 (w.e.f. 1-2-1991).

2. Explanation omitted by Act 44 of 1966, sec. 14 (w.e.f. 28-1-1968).

Section 42. General provisions as to payment of contributions.

(1) No employee’s contribution shall be payable by or on behalf of an employee whose average daily wages are below ¹during a wage period are below ²Such wages as may be prescribed by the Central Government.

Explanation.—The average daily wages of an employee shall be calculated ³[in such manner as may be prescribed by the Central Government].

(2) Contribution (both the employer’s contribution and the em­ployee’s contribution) shall be payable by the principal employer for each ⁴[wage period], ⁵[in respect of the whole or part of which wages are payable to the employee and not otherwise].

⁶[***]

⁷[***]

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1. Subs. by Act 45 of 1984, sec. 5, for “are below one rupee and fifty paise” (w.e.f. 27-1-1985).

2. Subs. by Act 29 of 1989, sec. 14, for “six rupees” (w.e.f. 1-2-1991).

3. Subs. by Act 29 of 1989, sec. 14, for “in such manner specified in the First Schedule”(w.e.f. 1-2-1991).

4. Subs. by Act 45 of 1984, sec. 5, for “week” (w.e.f. 27-1-1985).

5. Subs. by Act 44 of 1966, sec. 15, for “during the whole or part of which an employee is employed” (w.e.f. 28-1-1968).

6. Sub-section (3) omitted by Act 45 of 1984, sec. 5 (w.e.f. 27-1-1985).

7. Sub-sections (4) and (5) omitted by Act 44 of 1966, sec. 15 (w.e.f. 28-1-1968).

Section 43. Method of payment of contribution.

Subject to the provisions of this Act, the Corporation may make regulations for any matter relating or incidental to the payment and collection of contributions payable under this Act and without prejudice to the generality of the foregoing power such regulations may provide for –

(a) the manner and time of payment of contributions;

(b) the payment of contributions by means of adhesive or other stamps affixed to or impressed upon books, cards or otherwise and regulating the manner, times and conditions in, at and under which, such stamps are to be affixed or impressed;

(bb) the date by which evidence of contributions having been paid is to be received by the Corporation;

(c) the entry in or upon books or cards of particulars of contributions paid and benefits distributed in the case of the insured persons to whom such books or cards relate; and

(d) the issue, sale, custody, production, inspection and delivery of books or cards and the replacement of books or cards which have been lost, destroyed or defaced.

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1. Ins. by Act 44 of 1966, sec. 16 (w.e.f. 28-1-1968).

Section 44. Employers to furnish returns and maintain registers in certain cases.

¹EMPLOYERS TO FURNISH RETURNS AND MAINTAIN REGISTERS IN CERTAIN CASES. (1) Every principal and immediate employer shall submit to the Corporation or to such officer of the Corporation as it may direct such returns in such form and containing such particulars relating to persons employed by him or to any factory or establishment in respect of which he is the principal or immediate employer as may be specified in regulations made in this behalf.

(2) Where in respect of any factory or establishment the Corporation has reason to believe that a return should have been submitted under sub-section (1) but has not been so submitted, the Corporation may require any person in charge of the factory or establishment to furnish such particulars as it may consider necessary for the purpose of enabling the Corporation to decide whether the factory or establishment is a factory or establishment to which this Act applies.

(3) Every principal and immediate employer shall maintain such registers or records in respect of his factory or establishment as may be required by regulations made in this behalf.

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It is mandatory on the part of the establishment to maintain the records and to produce the same whenever demanded by the authorities. If there is contravention, the punishment as stipulated by section 85(g) of the Act will be imposed; State through the Manager, State Insurance Corporation, Gulbarga v. Kranthi Kumar, 2005 LLR 376.

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1. Subs. by Act 53 of 1951, sec. 12, for section 44 (w.e.f. 6-10-1951).

Section 45. Inspectors, their functions and duties.

(1) The Corporation may appoint such persons as Inspectors, as it thinks fit, for the purposes of this Act, within such local limits as it may assign to them.

(2) Any Inspector appointed by the Corporation under sub-section (1) (hereinafter referred to as Inspector), or other official of the Corporation authorised in this behalf by it may, for the purposes of enquiring into the correctness of any of the particulars stated in any return referred to in section 44 or for the purpose of ascertaining whether any of the provisions of this Act has been complied with –

(a) require any principal or immediate employer to furnish to him such information as he may consider necessary for the purposes of this Act; or

(b) at any reasonable time enter any office, establishment, factory or other premises occupied by such principal or immediate employer and require any person found in charge thereof to produce to such Inspector or other official and allow him to examine such accounts, books and other documents relating to the employment of persons and payment of wages or to furnish to him such information as he may consider necessary; or

(c) examine, with respect to any matter relevant to the purposes aforesaid, the principal or immediate employer, his agent or servant, or any person found in such factory, establishment, office or other premises, or any person whom the said Inspector or other official has reasonable cause to believe to be or to have been an employee;

¹(d) make copies of, or take extracts from, any register, account book or other document maintained in such factory, establishment, office or, other premises;

(e) exercise such other powers as may be prescribed.

(3) An Inspector shall exercise such functions and perform such duties as may be authorised by the Corporation or as may be specified in the regulations.

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1.  Ins. by Act 53 of 1951, sec. 13 (w.e.f. 6-10-1951).

Section 45A. Determination of contributions in certain cases.

¹45A. DETERMINATION OF CONTRIBUTIONS IN CERTAIN CASES. -(1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any Inspector or other official of the Corporation referred to in sub-section (2) of section 45 is ²prevented in any manner by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment :

³Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of the factory or establishment has been given a reasonable opportunity of being heard;

(2) An order made by the Corporation under sub-section (1) shall be sufficient proof of the claim of the Corporation under section 75 or for recovery of the amount determined by such order as an arrears of land revenue under section 45B ⁴or the recovery under section 45C to section 45-I.

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(i) The plea of the employer that he was not allowed to produce all documents and the registers to attract the applicability of the E.S.I. Act will not be tenable when these have been found to be bogus; Srinidhi Bars and Restaurant, Bangalore v. Regional Director, E.S.I. Corporation, Bangalore, 2006 LLR 41.

(ii) Assessment is ad hoc with record; R.S. Ganesh Das Dhomi Mal v. Employees’ State Insurance Corporation, (1988) 56 FLR 111 (Del).

(iii) The Limitation Act will have no scope for operation in respect of any claims arising under section 45A of the Act; Employees’ State Insurance Corporation v. Ramadas Reddiar, (1980) 56 FJR 490 (Mad).

(iv) Amount determined under section 45A can be recovered from the employer as arrears of land revenue; Modi Steels v. Employees’ State Insurance Corporation, (1989) 59 FLR 176 (All).

(v) Regional Director and not the ESI Inspector is empowered to determine the contributions by giving opportunity to the employer; Employees’ State Insurance Corporation, Jaipur v. Bharat Motors, Sri Ganganagar, 2001 LLR 49 (Raj HC).

(vi) In the absence of an order determining the amount payable under section 45A of the Employees’ State Insurance Act, 1948, recovery proceedings under section 45B of the Act could not be initiated; Employees’ State Insurance Corporation v. Depot Manager, M.P.S.R.T.C., (2003) 2 LLJ 351 (MP).

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1. Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

2. Subs. by Act 29 of 1989, sec. 15, for “obstructed” (w.e.f. 20-10-1989).

3. Ins. by Act 29 of 1989, sec. 15 (w.e.f. 20-10-1989).

4. Added by Act 29 of 1989, sec. 15 (w.e.f. 20-10-1989).

Section 45B. Recovery of contributions.

¹[45B. Recovery of contributions.—Any contribution payable under this Act may be recovered as an arrears of land revenue.

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1. Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

Section 45C. Issue of certificate to the recovery officer.

¹[45C. Issue of certificate to the Recovery Officer.(1) Where any amount is in arrear under this Act, the authorised officer may issue, to the Recovery Officer, a certificate under his signature specifying the amount of arrears and the Recovery Officer, on receipt of such certificate, shall proceed to recover the amount specified therein from the factory or establishment or, as the case may be, the principal or immediate employer by one or more of the modes mentioned below :

(a) attachment and sale of the movable or immovable property of the factory or establishment or, as the case may be, the principal or immediate employer;

(b) arrest of the employer and his detention in prison;

(c) appointing a receiver for the management of the movable or immovable properties of the factory or establishment or, as the case may be, the employer :

Provided that the attachment and sale of any property under this sections shall first be effected against the properties of the factory or establishment and where such attachment and sale is insufficient for recovering the whole of the amount of arrears specified in the certificate, the Recovery Officer may take such proceedings against the property of the employer for recovery of the whole or any part of such arrears.

(2) The authorised officer may issue a certificate under sub-section (1)

notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.

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Attachment of Bank account of the defaulter can be undertaken for recovery of dues, notwithstanding issuance of certificate under section 45C;Ranchi Refractories v. Regional Director, Employee State Insurance Corporation, Patna, 2005 LLR 620.

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1. Ins. by Act 29 of 1989, sec. 16 (w.e.f. 1-9-1991).

Section 45D. Recovery officer to whom certificate is to be forwarded.

¹[45D. Recovery Officer to whom certificate is to be forwarded.— (1) The authorised officer may forward the certificate referred to in section 45C to the Recovery Officer within whose jurisdiction the employer –

(a) carries on his business or profession or within whose jurisdiction the principal place of his factory or establishment is situate; or

(b) resides or any movable or immovable property of the factory or establishment or the principal or immediate employer is situate.

(2) Where a factory or an establishment or the principal or immediate employer has property within the jurisdiction of more than one Recovery Officer and the Recovery Officer to whom a certificate is sent by the authorised officer –

(a) is not able to recover the entire amount by the sale of the property, movable or immovable, within his jurisdiction; or

(b) is of the opinion that, for the purpose of expediting or securing the recovery of the whole or any part of the amount, it is necessary so to do, he may send the certificate or, where only a part of the amount is to be recovered, a copy of the certificate certified in the manner prescribed by the Central Government and specifying the amount to be recovered to the Recovery Officer within whose jurisdiction the factory or establishment or the principal or immediate employer has property or the employer resides, and thereupon that Recovery Officer shall also proceed to recover the amount due under this section as if the certificate or the copy thereof had been the certificate sent to him by the authorised officer.

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1.  Ins. by Act 44 of 1966, sec. 17 (w.e.f.17-6-1967).

Section 45E. Validity of certificate and amendment thereof.

¹[45E. Validity of certificate and amendment thereof.—(1) When the authorised officer issues a certificate to a Recovery Officer under section 45C, it shall not be open to the factory or establishment or the principal or immediate employer to dispute before the Recovery Officer the correctness of the amount, and no objection to the certificate on any other ground shall also be entertained by the Recovery Officer.

(2) Notwithstanding the issue of a certificate to a Recovery Officer, the authorised officer shall have power to withdraw the certificate or correct any clerical or arithmetical mistake in the certificate by sending an intimation to the Recovery Officer.

(3) The authorised officer shall intimate to the Recovery Officer any orders withdrawing or canceling a certificate or any correction made by him under sub-section (2) or any amendment made under sub-section (4) of section 45F.

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1. Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

Section 45F. Stay of proceedings under certificate and amendment or withdrawal thereof.

¹[45F. Stay of proceedings under certificate and amendment or withdrawal thereof.—(1) Notwithstanding that a certificate has been issued to the Recovery Officer for the Recovery of any amount, the authorised officer may grant time for the payment of the amount, and thereupon the Recovery Officer shall stay the proceedings until the expiry of the time so granted.

(2) Where a certificate for the recovery of amount has been issued, the authorised officer shall keep the Recovery Officer informed of any amount paid or time granted for payment, subsequent to the issue of such certificate.

(3) Where the order giving rise to a demand of amount for which a certificate for recovery has been issued has been modified in appeal or other proceedings under this Act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of a further proceeding under this Act, the authorised officer shall stay the recovery of such part of the amount of the certificate as pertains to the said reduction for the period for which the appeals or other proceeding remains pending.

(4) Where a certificate for the recovery of amount has been issued and subsequently the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act, the authorised officer shall, when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate or withdraw it, as the case may be.

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1.  Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

Section 45G. Other modes of recovery.

¹[45G. Other modes of recovery.—(1) Notwithstanding the issue of a certificate to the Recovery Officer under section 45C, the Director General or any other officer authorised by the Corporation may recover the amount by any one or more of the modes provided in this section.

(2) If any amount is due from any person to any factory or establishment or, as the case may be, the principal or immediate employer who is in arrears, the Director General or any other officer authorised by the Corporation in this behalf may require such person to deduct from the said amount the arrears due from such factory or establishment or, as the case may be, the principal or immediate employer under this Act and such person shall comply with any such requisition and shall pay the sum so deducted to the credit of the Corporation :

Provided that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908).

(3) (i) The Director General or any other officer authorised by the Corporation in this behalf may, at any time or from time to time, by notice in writing, require any person from whom money is due or may become due to the factory or establishment or, as the case may be, the principal or immediate employer or any person who holds or may subsequently hold money for or on account of the factory or establishment or, as the case may be, the principal or immediate employer, to pay to the Director General either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as if sufficient to pay the amount due from the factory or establishment or, as the case may be, the principal or immediate employer in respect of arrears or the whole of the money when it is equal to or less than that amount.

(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the principal or immediate employer jointly with any other person and for the purposes of this sub-section, the shares of the joint-holders in such account shall be presumed, until the contrary is proved, to be equal.

(iii) A copy of the notice shall be forwarded to the principal or immediate employer at his last address known to the Director General or, as the case may be, the officer so authorised and in the case of a joint account to all the joint-holders at their last addresses known to the Director General or the officer so authorised.

(iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, bank or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made notwithstanding any rule, practice or requirement to the contrary.

(v) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.

(vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the principal or immediate employer or that he does not hold any money for or on account of the principal or immediate employer, then, nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Director General or the Officer so authorised to the extent of his own liability to the principal or immediate employer on the date of the notice, or to the extent of the principal or immediate employer’s liability for any sum due under this Act, whichever is less.

(vii) The Director General or the officer so authorised may, at any time or from time to time, amend or revoke any notice issued under this sub-section or extend the time for making any payment in pursuance of such notice.

(viii) The Director General or the officer so authorised shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section and the person so paying shall be fully discharged from his liability to the principal or immediate employer to the extent of the amount so paid.

(ix) any person discharging any liability to the principal or immediate employer after the receipt of a notice under this sub-section shall be personally liable to the Director General or the officer so authorised to the extent of his own liability to the principal or immediate employer so discharge or to the extent of the principal or immediate employer’s liability for any sum due under this Act, whichever is less.

(x) If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Director General or the officer so authorised, he shall be deemed to be a principal or immediate employer in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realization of the amount as if it were an arrear due from him, in the manner provided in sections 45C to 45F and the notice shall have the same effect as an attachment of a debt by the Recovery Officer in exercise of his powers under section 45C.

(4) The Director General or the officer authorised by the Corporation in this behalf may apply to the court in whose custody there is money belonging to the principal or immediate employer for payment to him of the entire amount of such money, or if it is more than the amount due, an

amount sufficient to discharge the amount due.

(5) The Director General or any officer of the Corporation may, if so authorised by the Central Government by general or special order, recover any arrears of amount due from a factory or an establishment or, as the case may be, from the principal or immediate employer by distrait and sale of its or his movable property in the manner laid down in the Third Schedule to the Income-tax Act, 1961 (43 of 1961).

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1.  Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

Section 45H. Application of certain provisions of the income-tax act.

¹[45H. Application of certain provisions of the Income-tax Act.

The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time, shall apply with necessary modifications as if the said provisions and the rules referred to the arrears of the amount of contributions, interests or damages under this Act instead of to the income-tax :

Provided that any reference in the said provisions and the rules to the “assessee” shall be construed as a reference to a factory or an establishment or the principal or immediate employer under this Act.

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1.  Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

Section 45-I. Definitions.

¹ DEFINITIONS. For the purposes of sections 45C to 45H, –

(a) “authorised officer” means the Director General, Insurance Commissioner, Joint Insurance Commissioner, Regional Director or such other officer as may be authorised by the Central Government, by notification in the Official Gazette;

(b) “Recovery Officer” means any officer of the Central Government, State Government or the Corporation, who may be authorised by the Central Government, by notification in the Official Gazette, to exercise the powers of a Recovery Officer under this Act.

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1.  Ins. by Act 44 of 1966, sec. 17 (w.e.f. 17-6-1967).

Section 46. Benefits.

(1) Subject to the provisions of this Act, the insured persons, ¹[their dependants or the persons hereinafter mentioned, as the case may be,] shall be entitled to the follow­ing benefits, namely:

(a) periodical payments to any insured person in case of his sickness certified by a duly appointed medical practitioner ²[or by any other person possessing such qualifications and experience as the Corporation may, by regulations, specify in this behalf] (hereinafter referred to as sickness benefit);

³[(b) periodical payments to an insured woman in case of confine­ment or mis-carriage or sickness arising out of pregnancy, con­finement, premature birth of child or miscarriage, such woman being certified to be eligible for such payments by an authority specified in this behalf by the regulations (hereinafter referred to as maternity benefit);]

(c) periodical payments to an insured person suffering from disa­blement as a result of an employment injury sustained as an employee under this Act and certified to be eligible for such payments by an authority specified in this behalf by the regula­tions (hereinafter referred to as disablement benefit);

(d) periodical payments to such dependants of an insured person who dies as a result of an employment injury sustained as an employee under this Act, as are entitled to compensation under this Act (hereinafter referred to as dependants’ benefit); ⁴[***]

(e) medical treatment for and attendance on insured persons (hereinafter referred to as medical benefit); ²[and]

²[(f) payment to the eldest surviving member of the family of an insured person who has died, towards the expenditure on the funeral of the deceased insured person, or, where the insured person did not have a family or was not living with his family at the time of his death, to the person who actually incurs the expenditure on the funeral of the deceased insured person (to be known as ⁵[funeral expenses]):

Provided that the amount of such payment shall not exceed ⁶[such amount as may be prescribed by the Central Government] and the claim for such payment shall be made within three months of the death of the insured person or within such extended period as the Corporation or any officer or authority authorised by it in this behalf may allow.]

(2) The Corporation may, at the request of the appropriate Gov­ernment, and subject to such conditions as may be laid down in the regulations, extend the medical benefits to the family of an insured person.

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1. Subs. by Act 44 of 1966, sec. 18, for “or, as the case may be, their dependants” (w.e.f. 28-1-1968).

2. Ins. by Act 44 of 1966, sec. 18 (w.e.f. 28-1-1968).

3. Subs. by Act 44 of 1966, sec. 18, for original clause (b) (w.e.f. 28-1-1968).

4. The word “and” omitted by Act 44 of 1966, sec. 18 (w.e.f. 28-1-1968).

5. Subs. by Act 29 of 1989, sec. 17, for “funeral benefit” (w.e.f. 20-10-1989).

6. Subs. by Act 29 of 1989, sec. 17, for “one hundred rupees” (w.e.f. 1-2-1991).

Section 47. When person eligible for sickness benefit.

[Rep. by the Employee’s State Insurance [Amendment] Act, 1989 (29 of 1989), sec. 18 (1-2-1991)].

Section 48. When person deemed available for employment.

[Rep. by the Employees’ State Insurance (Amendment) Act, 1966 (44 of 1966), sec. 20 (28-1-1968).]

Section 49. Sickness benefit.

¹[49. Sickness benefit.—The qualification of a person to claim sickness benefit, the conditions subject to which such benefit may be given, the rates and period thereof shall be such as may be prescribed by the Central Government.

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1.  Subs. by Act 29 of 1989, sec. 19, for section 49 (w.e.f. 1-2-1991).

Section 50. Maternity benefit.

¹[50. Maternity benefit.—The qualification of an insured woman to claim maternity benefit, the conditions subject to which such benefit may be given, the rates and period thereof shall be such as may be prescribed by the Central Government.

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1.  Subs. by Act 29 of 1989, sec. 19, for section 50 (w.e.f. 1-2-1991).

Section 51. Disablement benefit.

¹[51. Disablement benefit.—Subject to the provisions of this Act ²[***],—

(a) a person who sustains temporary disablement for not less than three days (excluding the day of accident) shall be entitled to periodical payment ³[at such rates and for such periods and subject to such conditions as may be prescribed by the Central Government];

(b) a person who sustains permanent disablement, whether total or partial, shall be entitled to periodical payment 3[at such rates and for such periods and subject to such conditions as may be prescribed by the Central Government]:

⁴[***]]

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1. Subs. by Act 44 of 1966, sec. 23, for the original section 51 (w.e.f. 28-1-1968).

2. The words “and the regulations, if any” omitted by Act 29 of 1989, sec. 20 (w.e.f. 1-2-1991).

3. Subs. by Act 29 of 1989, sec. 20, for “for the period of such disablement in accordance with the provisions of the First Schedule” (w.e.f. -2-1991).

4. Proviso omitted by Act 29 of 1991, sec. 20 (w.e.f. 1-2-1991).

Section 51A. Presumption as to accident arising in course of employment.

¹[51A. Presumption as to accident arising in course of employment.—For the purposes of this Act, an accident arising in the course of an insured person’s employment shall be presumed, in the absence of evidence to the contrary, also to have arisen out of that employment.

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Accident arisen out of employment is to be presumed and no other evidence is required; Harjinder Kaur v. Employees’ State Insurance Corporation, (1987) 55 FLR 772 (P&H).

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1. Subs. by Act 44 of 1966, sec. 23, for the original section 51 (w.e.f. 28-1-1968).

Section 51B. Accidents happening while acting in breach of regulations, etc.

¹[51B. Accidents happening while acting in breach of regulations, etc.An accident shall be deemed to arise out of and in the course of an insured person’s employment notwithstanding that he is at the time of the accident acting in contravention of the provisions of any law applicable to him, or of any orders given by or on behalf of his employer or that he is acting without instructions from his employer, if –

(a) the accident would have been deemed so to have arisen had the act not been done in contravention as aforesaid or on without instructions from his employer, as the case may be; and

(b) the act is done for the purpose of and in connection with the employer’s trade or business.

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1.  Subs. by Act 44 of 1966, sec. 23, for the original section 51 (w.e.f. 28-1-1968).

Section 51C. Accidents happening while traveling in employer’s transport.

¹[51C. Accidents happening while travelling in employer’s trans­port.—(1) An accident happening while an insured person is, with the express or implied permission of his employer, traveling as a passenger by any vehicle to or from his place of work shall, notwithstanding that he is under no obligation to his employer to travel by that vehicle, be deemed to arise out of and in the course of his employment, if –

(a) the accident would have been deemed so to have arisen had he been under such obligation; and

(b) at the time of the accident, the vehicle –

(i) is being operated by or on behalf of his employer or some other person by whom it is provided in pursuance of arrangements made with his employer, and

(ii) is not being operated in the ordinary course of public transport service.

(2) In this section “vehicle” includes a vessel and an aircraft.

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1.  Subs. by Act 44 of 1966, sec. 23, for the original section 51 (w.e.f. 28-1-1968).

Section 51D. Accidents happening while meeting emergency.

¹[51D. Accidents happening while meeting emergency.—An accident happening to an insured person in or about any premises at which he is for the time being employed for the purpose of his employer’s trade or business shall be deemed to arise out of and in the course of his employment, if it happens while he is taking steps, on an actual or supposed emergency at those premises, to rescue, succor or protect persons who are, or are thought to be or possibly to be, injured or imperiled, or to avert or minimize serious damage to property.

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1.  Subs. by Act 44 of 1966, sec. 23, for the original section 51 (w.e.f. 28-1-1968).

Section 52. Dependant’s benefits.

¹[52. Dependant’s benefit.—(1) If an insured person dies as a result of an employment injury sustained as an employee under this Act (whether or not he was in receipt of any periodical payment for temporary disablement in respect of the injury) dependant’s benefit shall be payable ²[at such rates and for such period and subject to such conditions as may be prescribed by the Central Government] to his dependants specified in ³[sub-clause (i), sub-clause (ia) and] sub-clause (ii) of clause (6A) of sec­tion 2.

(2) In case the insured person dies without leaving behind him the dependants as aforesaid, the dependants’ benefit shall be paid to the other dependants of the deceased at such rates and for such period and subject to such conditions as may be prescribed by the Central Government.

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1.  Subs. by Act 44 of 1966, sec. 24, for the original section 52 (w.e.f. 28-1-1968).

2.  Subs. by Act 29 of 1989, sec. 21, for “in accordance with the provisions of the First Schedule” (w.e.f. 1-2-1991).

3.  Subs. by Act 29 of 1989, sec. 21, for “sub-clause (i) and” (w.e.f. 1-2-1991).

Section 52A. Occupational disease.

¹[52A. Occupational disease.—(1) If an employee employed in any employment specified in Part A of the Third Schedule contracts any disease specified therein as an occupational disease peculiar to that employment, or if an employee employed in the employment specified in Part B of that Schedule for a continuous period of not less than six months contracts any disease specified therein as an occupational disease peculiar to that employment or if an employee employed in any employment specified in Part C of that Schedule for such continuous period as the Corporation may specify in respect of each such employment, contracts any disease specified therein as an occupational disease peculiar to that employment, the contracting of the disease shall, unless the contrary is proved, be deemed to be an “employment injury” arising out of and in the course of employment.

(2) (i) Where the Central Government or a State Government, as the case may be, adds any description of employment to the employments specified in Schedule III to the Workmen’s Compensation Act, 1923 (8 of 1923), by virtue of the powers vested in it under sub-section (3) of section 3 of the said Act, the said description of employment and the occupational diseases specified under that sub-section as peculiar to that description of employment shall be deemed to form part of the Third Schedule.

(ii) Without prejudice to the provisions of clause (i), the Corporation 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 any description of employment to the employments specified in the Third Schedule and shall specify in the case of employments so added the diseases which shall be deemed for the purposes of this section to be occupational diseases peculiar to those employments respectively and thereupon the provisions of this Act shall apply, as if such diseases had been declared by this Act to be occupational diseases peculiar to those employments.

(3) Save as provided by sub-sections (1) and (2), no benefit shall be payable to an employee in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of and in the course of his employment.

(4) The provisions of section 51A shall not apply to the cases to which this section applies.

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1.  Subs. by Act 44 of 1966, sec. 24, for the original section 52 (w.e.f. 28-1-1968).

Section 53. Bar against receiving or recovery of compensation or damages under any other law.

¹[53. Bar against receiving or recovery of compensation or damag­es under any other law.An insured person or his dependants shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen’s Compensation Act, 1923 (8 of 1923), or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act.

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1. Subs. by Act 44 of 1966, sec. 25, for the original section 53 (w.e.f. 28-1-1968).

Section 54. Determination of question of disablement.

¹DETERMINATION OF QUESTION OF DISABLEMENT. Any question – (a) whether the relevant accident has resulted in permanent disablement; or

(b) whether the extent of loss of earning capacity can be assessed provisionally or finally; or

(c) whether the assessment of the proportion of the loss of earning capacity is provisional or final; or

(d) in the case of provisional assessment, as to the period for which such

assessment shall hold good, shall be determined by a medical board constituted in accordance with the provisions of the regulations and any such question shall hereafter be referred to as the “disablement question”

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1. Subs. by Act 44 of 1966, sec. 26, for the original section 54 (w.e.f. 28-1-1968).

Section 54A. References to medical boards and appeals to medical appeal tribunals and employees’ insurance courts.

¹[54A. References to medical boards and appeals to medical appeal tribunals and Employees’ Insurance Courts.

(1) The case of any insured person for permanent disablement benefit shall be referred by the corporation to a medical board for determination of the disablement question and if, on that or any subsequent reference, the extent of loss of earning capacity of the insured person is provisionally assessed, it shall again be so referred to the medical board not later than the end of the period taken into account by the provisional assessment.

(2) If the insured person or the Corporation is not satisfied with the decision of the medical board, the insured person or the Corporation may appeal in the prescribed manner and within the prescribed time to – (i) the medical appeal tribunal constituted in accordance with the provisions of the regulations with a further right of appeal in the prescribed manner and within the prescribed time to the Employees’ Insurance Court, or

(ii) the Employees’ Insurance Court directly :

²Provided that no appeal by an insured person shall lie under this sub-section if such person has applied for commutation of disablement benefit on the basis of the decision of the medical board and received the commuted value of such benefit :

Provided further that no appeal by the Corporation shall lie under this sub-section if the Corporation paid the commuted value of the disablement benefit on the basis of the decision of the medical board.

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1. Subs. by Act 44 of 1966, sec. 26, for the original section 54 (w.e.f. 28-1-1968).

2.  Ins. by Act 29 of 1989, sec. 22 (w.e.f. 20-10-1989).

Section 55. Review of decisions by medical board or medical appeal tribunal.

¹[55. Review of decisions by medical board or medical appeal tribunal.—(1) Any decision under this Act of a medical board or a medical appeal tribunal may be reviewed at any time by the medical board or the medical appeal tribunal, as the case may be, if it is satisfied by fresh evidence that the decision was given in consequence of the non-disclosure or misrepresentation by the employee or any other person of a material fact (whether the non-disclosure or misrepresentation was or was not fraudulent).

(2) Any assessment of the extent of the disablement resulting from the relevant employment injury may also be reviewed by a medical board, if it is satisfied that since the making of the assessment there has been a sub-spatial and unforeseen aggravation of the results of the relevant injury :

Provided that an assessment shall not be reviewed under this sub-section unless the medical board is of opinion that having regard to the period taken into account by the assessment and the probable duration of the aggravation aforesaid, substantial injustice will be done by not reviewing it.

(3) Except with the leave of a medical appeal tribunal, an assessment shall not be reviewed under sub-section (2) on any application made less than five years, or in the case of a provisional assessment, six months, from the date thereof and on such a review the period to be taken into account by any revised assessment shall not include any period before the date of the application.

(4) Subject to the foregoing provisions of this section, a medical board may deal with a case of review in any manner in which it could deal with it on an original reference to it, and in particular may make a provisional assessment notwithstanding that the assessment under review was final; and the provisions of section 54A shall apply to an application for review under this section and to a decision of a medical board in connection with such application as they apply to a case for disablement benefit under that section and to a decision of the medical board in connection with such case.

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1.  Subs. by Act 44 of 1966, sec. 27, for the original section 55 (w.e.f. 28-1-1968).

Section 55A. Review of dependants’ benefit.

¹[55A. Review of dependants’ benefit.—(1) Any decision awarding dependants’ benefit under this Act may be reviewed at any time by the Corporation if it is satisfied by fresh evidence that the decision was given in consequence of non-disclosure or misrepresentation by the claimant or any other person of a material fact (whether the non-disclosure, or misrepresentation was or was not fraudulent) or that the decision is no longer in accordance with this Act due to any birth or death or due to the marriage, re-marriage or cesser of infirmity of, or attainment of the age of eighteen years by, a claimant.

(2) Subject to the provisions of this Act, the Corporation may, on such review as aforesaid, direct that the dependent’s benefit be continued, increased, reduced or discontinued.

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1.  Subs. by Act 44 of 1966, sec. 27, for the original section 55 (w.e.f. 28-1-1968).

Section 56. Medical benefit.

(1) An insured person or (where such medical benefit is extended to his family) a member of his family whose condition requires medical treatment and attendance shall be entitled to receive medical benefit.

(2) Such medical benefit may be given either in the form of out patient treatment and attendance in a hospital or dispensary, clinic or other institution or by visits to the home of the insured person or treatment as inpatient in a hospital or other institution.

(3) A person shall be entitled to medical benefit during any ¹[period] for which contributions are payable in respect of him or in which he is qualified to claim sickness benefit or maternity benefit ²[or is in receipt of such disablement benefit as does not disentitle him to medical benefit under the regulations]:

Provided that a person in respect of whom contribution ceases to be payable under this Act may be allowed medical benefit for such period and of such nature as may be provided under the regulations :

³Provided further that an insured person who ceases to be in insurable employment on account of permanent disablement shall continue, subject to payment of contribution and such other conditions as may be prescribed by the Central Government, to receive medical benefit till the date on which he would have vacated the employment on attaining the age of superannuating had he not sustained such permanent disablement :

Provided also that an insured person, who has attained the age of super-annotation, and his spouse shall be eligible to receive medical benefit subject to payment of contribution and such other conditions as may be prescribed by the Central Government.

Explanation : In this section, “superannuating”, in relation to an insured person, means the attainment by that person of such age as is fixed in the contract or conditions of service as the age on the attainment of which he shall vacate the insurable employment or the age of sixty years where no such age is fixed and the person is no more in the insurable employment.

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1. Subs. by Act 45 of 1984, sec. 8, for “week” (w.e.f. 27-1-1985).

2. Subs. by Act 53 of 1951, sec. 17, for “or, as provided under the regulations, is in receipt of disablement benefit” (w.e.f. 6-10-1951).

3. Ins. by Act 29 of 1989, sec. 23 (w.e.f. 1-2-1991).

Section 57. Scale of medical benefit.

(1) An insured person and (where such medical benefit is extended to his family) his family shall be entitled to receive medical benefit only of such kind and on such scale as may be provided by the State Government or by the Corporation, and an insured person or, where such medical benefit is extended to his family, his family shall not have a right to claim any medical treatment except such as is provided by the dispensary, hospital, clinic or other institution to which he or his family is allotted, or as may be provided by the regulations.

(2) Nothing in this Act shall entitle an insured person and (where such medical benefit is extended to his family) his family to claim reimbursement from the Corporation of any expenses incurred in respect of any medical treatment, except as may be provided by the regulations.

Section 58. Provision of medical treatment by state government.

(1) The State Government shall provide for insured persons and (where such benefit is extended to their families) their families in the State reasonable medical, surgical and obstetric treatment :

Provided that the State Government may, with the approval of the Corporation, arrange for medical treatment at clinics of medical practitioners on such scale and subject to such terms and conditions as may be agreed upon.

(2) Where the incidence of sickness benefit payment to insured persons in any State is found to exceed the all-India average, the amount of such excess shall be shared between the Corporation and the (Substituted for “Provincial” and “Province” by the A. O. 1950) State Government in such proportion as may be fixed by agreement between them :

Provided that the Corporation may in any case waive the recovery of the whole or any part of the share which is to be borne by the State Government.

(3) The corporation may enter into an agreement with a State Government in regard to the nature and scale of the medical treatment that should be

provided to insured persons and (where such medical benefit is extended to the families) their families (including provision of buildings, equipment, medicines, and staff) and for the sharing of the cost thereof and of any excess in the incidence of sickness benefit to insured persons between the Corporation and the State Government.

(4) In default of agreement between the Corporation and any State Government as aforesaid the nature and extent of the medical treatment to be provided by the State Government and the proportion in which the cost thereof and of the excess in the incidence of sickness benefit shall be shared between the Corporation and that Government, shall be determined by an arbitrator (who shall be or shall have been a Judge of the High Court of a State appointed by the Chief Justice of India (and the award of the arbitrator) shall be binding on the Corporation and the State Government.

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1.  Subs. by the A.O. 1950, for “High Court of a Province”.

2.  Subs. by Act 53 of 1951, sec. 18, for “for a Part A State” (w.e.f. 6-10-1951).

Section 59. Establishment and maintenance of hospitals, etc., by corporation.

(1) The Corporation may, with the approval of the State Government establish and maintain in a State such hospitals, dispensaries and other medical and surgical services as it may think fit for the benefit of insured persons and (where such medical benefit is extended to their families) their families.

(2) The Corporation may enter into agreement with any1[***] local authority, private body or individual in regard to the provision of medical treatment and attendance for insured persons and (where such medical benefit is extended to their families) their families, in any area and sharing the cost thereof.

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1.  The words “Part B State”, omitted by the A.O. (No. 4) 1957 (w.e.f. 1-11-1956).

Section 59A. Provision of medical benefit by the corporation in lieu of state government.

¹[59A. Provision of medical benefit by the Corporation in lieu of State Government.—(1) Notwithstanding anything contained in any other provisions of this Act, the Corporation may, in consultation with the State Government, undertake the responsibility for providing medical benefit to insured persons and where such medical benefit is extended to their families, to the families of such insured persons in the State subject to the condition that the State Government shall share the cost of such medical benefit in such proportion as may be agreed upon between the State Government and the Corporation.

(2) In the event of the Corporation exercising its power under sub-section (1), the provisions relating to medical benefit under this Act shall apply, so far as may be, as if a reference therein to the State Government were a reference to the Corporation.

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1.  Ins. by Act 44 of 1966, sec. 28 (w.e.f. 17-6-1967).

Section 60. Benefit not assignable or attachable.

(1) The right to receive any payment of any benefit under this Act shall not be transferable or assignable.

(2) No cash benefit payable under this Act shall be liable to attachment or sale in execution of any decree or order of any Court.

Section 61. Bar of benefits under other enactments.

When a person is entitled to any of the benefits provided by this Act, he shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment

Section 62. Persons not to commute cash benefits.

Save as may be provided in the regulations no person shall be entitled to commute for a lump sum any ¹[disablement benefit] admissible under this Act.

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1. Subs. by Act 29 of 1989, sec. 24, for “periodical payment” (w.e.f. 20-10-1989).

Section 63. Persons not entitled to receive benefit in certain cases.

Save as may be provided in the regulations, no person shall be entitled to sickness benefit or disablement benefit for temporary disablement on any day on which he works or remains on leave or on a holiday in respect of which he receives wages or on any day on which he remains on strike.

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1.  Subs. by Act 29 of 1989, sec. 25, for section 63 (w.e.f. 20-10-1989).

Section 64. Recipients of sickness or disablement benefit to observe conditions.

A person who is in receipt of sickness benefit or disablement benefit (other than benefit granted on permanent disablement) –

(a) shall remain under medical treatment at a dispensary, hospital, clinic or other institution provided under this act and shall carry out the instructions given by the medical officer or medical attendant in charge thereof;

(b) shall not while under treatment do anything which might retard or prejudice his chances of recovery.

(c) shall not leave the area in which medical treatment provided by this Act is being given, without the permission of the medical officer, medical attendant or such other authority as may be specified in this behalf by the regulations; and

(d) shall allow himself to be examined by any duly appointed medical officer ¹[***] or other person authorised by the Corpora­tion in this behalf.

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1. The words “or sick visitor” omitted by Act 29 of 1989, sec. 26 (w.e.f. 20-10-1989).

Section 65. Benefits not to be combined.

(1) An insured person shall not be entitled to receive for the same period –

(a) both sickness benefit and maternity benefit; or

(b) both sickness benefit and disablement benefit for temporary disablement; or

(c) both maternity benefit and disablement benefit for temporary disablement.

(2) Where a person is entitled to more than one of the benefits mentioned in sub-section (1), he shall be entitled to choose which benefit he shall receive.

Section 66. Corporation’s right to recover damages from employer in certain cases.

Rep. by the Employees’ State Insurance (Amendment) Act, 1966 (44 of 1966), sec. 29 (w.e.f. 17-6-1967)

Section 67. Corporations right to be indemnified in certain cases.

Rep. by the Employees’ State Insurance (Amendment) Act, 1966 (44 of 1966), sec. 29 (w.e.f. 17-6-1967).]

Section 68. Corporation’s rights where a principal employer fails or neglects to pay any contribution.

(1) If any principal employer fails or neglects to pay any contribution which under this Act he is liable to pay in respect of any employee and by reason thereof such person becomes disentitle to any benefit or entitled to a benefit on a lower scale, the Corporation may, on being satisfied that the contribution should have been paid by the principal employer, pay to the person the benefit at the rate to which he would have been entitled if the failure or neglect had not occurred and the Corporation shall be entitled to recover from the principal employer either –

¹(i) the difference between the amount of benefit which is paid by the Corporation to the said person and the amount of the benefit which would have been payable on the basis of the contributions were in fact paid by the employer; or

(ii) twice the amount of the contribution which the employer failed or neglected to pay, whichever is greater.

(2) The amount recoverable under this section may be recovered as if it were an arrear of land-revenue ²[or under section 45C to section 45-I].

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Default is sufficient for the levy and recovery of damages; Employees’ State Insurance Corporation v.Jaipur Spinning and Weaving Mills Ltd., (1988) 56 FLR 431 (Raj).

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1.  Subs. by Act 53 of 1951, sec. 19, for clause (i) (w.e.f. 6-10-1951).

2.  Added by Act 29 of 1989, sec. 27 (w.e.f. 20-10-1989).

Section 69. Liability of owner or occupier of factories, etc., for excessive sickness benefit.

1) Where the Corporation considers that the incidence of sickness among insured persons is excessive by reason of –

(i) unsanitary working conditions in a factory or establishment or the neglect of the owner or occupier of the factory or establishment to observe any health regulations enjoined on him by or under any enactment, or

(ii) unsanitary conditions of any tenements or lodgings occupied by insured persons and such unsanitary conditions are attributable to the neglect of the owner of the tenements or lodgings to observe any health regulations enjoined on him by or under any enactment, the Corporation may send to the owner or occupier of the factory or establishment or to the owner of the tenements or lodgings, as the case may be, a claim for the payment of the amount of the extra expenditure incurred by the Corporation as sickness benefit; and if the claim is not settled by agreement, the Corporation may refer the matter, with a statement in support of its claim, to the appropriate Government.

(2) If the appropriate Government is of opinion that a prima facie case for inquiry is disclosed, it may appoint a competent person or persons to hold an inquiry into the matter.

(3) If upon such inquiry it is proved to the satisfaction of the person or persons holding the inquiry that the excess in incidence of sickness among the insured persons is due to the default or neglect of the owner or occupier of the factory or establishment or the owner of the tenements or lodgings, as the case may be, the said person or persons shall determine the amount of the extra expenditure incurred as sickness benefit, and the person or persons by whom the whole or any part of such amount shall be paid to the Corporation.

(4) A determination under sub-section (3) may be enforced as if it were a decree for payment of money passed in a suit by a Civil Court.

(5) For the purposes of this section “owner” of tenements or lodgings shall include any agent of the owner and any person who is entitled to collect the rent of the tenements or lodgings as a lessee of the owner.

Section 70. Repayment of benefit improperly received.

(1) Where any person has received any benefit or payment under this Act when he is not lawfully entitled thereto, he shall be liable to repay to the Corporation the value of the benefit or the amount of such payment, or in the case of his death his representative shall be liable to repay the same from the assets of the deceased, if any, in his hands.

(2) The value of any benefits received other than cash payments shall be determined by such authority as may be specified in the regulations made in this behalf and the decision of such authority shall be final.

(3) The amount recoverable under this section may be recovered as if it were an arrear of land-revenue ¹or under section 45-C to section 45-I.

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1. Added by Act 29 of 1989, sec. 27 (w.e.f. 20-10-1989).

Section 71. Benefit payable up to and including day of death.

¹ If a person during any period for which he is entitled to a cash benefit under this Act, the amount of such benefit up to and including the day of his death shall be paid to any person nominated by the deceased person in writing in such form as may be specified in the regulations or, if there is no such nomination, to the heir or legal representative of the deceased person.

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1. Subs. by Act 29 of 1989, sec. 28, for “Except as provided in the provision to sub-section (2) of section 50, if a person dies” (w.e.f. 1-2-1991).

Section 72. Employer not to reduce wages, etc.

No employer by reason only of his liability for any contributions payable under this act shall, directly or indirectly, reduce the wages of any employee, or except as provided by the regulations, discontinue or reduce benefits payable to him under the conditions of his service which are similar to the benefits conferred by this Act.

Section 73. Employer not to dismiss or punish employee during period of sickness, etc.

(1) No employer shall dismiss, discharge, or reduce or otherwise punish an employee during the period the employee is in receipt of sickness benefit or maternity benefit, nor shall he, except as provided under the regulations, dismiss, discharge or reduce or otherwise punish an employee during the period he is in receipt of disablement benefit for temporary disablement or is under medical treatment for sickness or is absent from work as a result of illness duly certified in accordance with the regulations to arise out of the pregnancy or confinement rendering the employee unfit for work.

(2) No notice of dismissal or discharge or reduction given to an employee during the period specified in sub-section (1) shall be valid or operative.

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(i) Section 73 is not applicable to a case where termination of services follows automatically; Moti Singh v. Factory Manager, Cimmco Ltd., (1989) 58 FLR 900 (Raj).

(ii) The employer cannot dismiss, discharge or reduce or otherwise punish the employee during the period an employee is in receipt of sickness benefits or maternity benefits; Management of Guest Keen Williams Ltd. v. Presiding Officers, 2nd Addl. Labour Court, (1992) 1 CLR 433 (Karn).

Section 74. Constitution of employees’ insurance court.

(1) The State Government shall, by notification in the Official Gazette, constitute an Employees’ Insurance Court for such local area as may be specified in the notification.

(2) The Court shall consist of such number of Judges as the State Government may think fit.

(3) Any person who is or has been a judicial officer or is a legal practitioner of five years standing shall be qualified to be a Judge of the Employees’ Insurance Court.

(4) The State Government may appoint the same Court for two or more local areas or two or more Courts for the same local area.

(5) Where more than one Court has been appointed for the same local area, the State Government may by general or special order, regulate the distribution of business between them.

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An employee insured under this Act cannot claim ‘compensation’ under the Workmen’s Compensation Act; Abad Fisheries v. Commis­sioner for Workmen’s Compensation, (1985) 50 FLR 512.

Section 75. Matters to be decided by employees’ insurance court.

(1) If any question or dispute arises as to – (a) whether any person is an employee within the meaning of this Act or whether he is liable to pay the employee’s contribution, or

(b) the rate of wages or average daily wages of an employee for the purposes of this Act, or

(c) the rate of contribution payable by a principal employer in respect of any employee, or

(d) the person who is or was the principal employer in respect of any employee, or

(e) the right of any person to any benefit and as to the amount and duration thereof, or

¹[(ee) any direction issued by the Corporation under section 55A on a review of any payment of dependants’ benefit, or]

²[***]

(g) any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, ³[or any other matter required to be or which may be decided by the Employees’ Insurance Court under this Act],

such question or dispute ⁴[subject to the provisions of sub-section (2A)] shall be decided by the Employees’ Insurance Court in accordance with the provisions of this Act.

(2) ⁴[Subject to the provisions of sub-section (2A), the follow­ing claims] shall be decided by the Employees’ Insurance Court, namely:—

(a) claim for the recovery of contributions from the principal employer;

(b) claim by a principal employer to recover contributions from any immediate employer;

⁵[***]

(d) claim against a principal employer under section 68;

(e) claim under section 70 for the recovery of the value or amount of the benefits received by a person when he is not law­fully entitled thereto; and

(f) any claim for the recovery of any benefit admissible under this Act.

⁶[(2A) If in any proceedings before the Employees’ Insurance Court a disablement question arises and the decision of a medical board or a medical appeal tribunal has not been obtained on the same and the decision of such question is necessary for the determination of the claim or question before the Employees’ Insurance Court, that Court shall direct the Corporation to have the question decided by this Act and shall thereafter proceed with the determination of the claim or question before it in accordance with the decision of the medical board or the medical appeal tribunal, as the case may be, except where an appeal has been filed before the Employees’ Insurance Court under sub-section (2) of section 54A in which case the Employees’ Insurance Court may itself determine all the issues arising before it.]

⁷[(2B)No matter which is in dispute between a principal employer and the Corporation in respect of any contribution or any other dues shall be raised by the principal employer in the Employees’ Insurance Court unless he has deposited with the Court fifty per cent of the amount due from him as claimed by the Corporation :

Provided that the Court may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this sub-section.

(3) No Civil Court shall have jurisdiction to decide or deal with any question or dispute as aforesaid or to adjudicate on any liability which by or under this Act is to be decided by a medical board, or by a medical appeal tribunal or by the Employees’ Insurance Court.

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(i) When an appropriate remedy is available for appeal under section 75 of the E.S.I. Act, the employer cannot file a writ petition; Tuticorin Thermal Power Station Industrial Cooperative Society Ltd. v. Deputy Regional Director, E.S.I. Corpn., Madurai, 2005 LLR 963.

(ii) Section 75(2A) is applicable in cases of unscheduled inju­ries; Employees’ State Insurance Corporation v. Hari Hazra, (1989) 58 FLR 762 (Cal).

(iii) Insurance Court is a court for all practical purposes; J.C. Patel Kamalaben v. Employees’ State Insurance Corporation, (1987) 55 FLR 337 (Bom).

(iv) Jurisdiction of civil court on a dispute as to whether this Act is applicable to a factory or not has been excluded under section 75(3); Employees’ State Insurance Corporation v. Nirmala Chemical Industries, (1994) 1 ALT 4 (DN) AP.

(v) Applying the theory of notional extension, the E.S.I.C. will be liable to pay compensation to the employee’s dependants, who died on his way to the factory; Sheela v. Employees’ State Insurance Corporation, (1990) 77 FJR 119 (P&H).

(vi) The ESI Court has power to grant an injunction or interim stay; Aggarwal Hardware Industries v. Employees’ State Insurance Corporation, 1976 Lab IC 1354.

(vii) A Civil Court cannot determine whether this Act is applica­ble to an establishment or not; Employees’ State Insurance Corporation v. Jalandhar Gymkhana Club, 1992 LLR 733 (P&H).

(viii) Jurisdiction of a civil court is barred/ousted; Employees’ State Insurance Corporation v. Jalandhar Gymkhana Club, 1992 LLR 733 (P&H).

(ix) The cause of action for contribution would arise only after the decision of the Insurance Court in the proceedings laid under section 75 of the Act. Therefore, in all matters arising for consideration of the Court under section 75 which relate back to the period anterior to October 20, 1989, from when on the amended Act came into force, the bar of limitation would not operate; Deputy Director, Employees’ State Insurance Corporation v. Bhuwalka Steel Industries Ltd., (2003) 2 LLJ 348 (Kar).

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1. Subs. by Act 44 of 1966, sec. 32, for clause (ee) (w.e.f. 28-1-1968).

2. Clause (f) omitted by Act 44 of 1966, sec. 32 (w.e.f. 28-1-1968).

3. Ins. by Act 44 of 1966, sec. 32 (w.e.f. 28-1-1968).

4. Subs. by Act 44 of 1966, sec. 32, for “The following claims” (w.e.f. 28-1-1968).

5. Clause (c) omitted by Act 44 of 1966, sec. 32 (w.e.f. 28-1-1968).

6. Ins. by Act 44 of 1966, sec. 32 (w.e.f. 28-1-1968).

7. Ins. by Act 29 of 1989, sec. 29 (w.e.f. 20-10-1989).

8. Subs. by Act 44 of 1966, sec. 32, for “the Employees’ Insurance Court” (w.e.f. 28-1-1968).

Section 76. Institution of proceedings, etc.

(1) Subject to the provisions of this Act and any rules made by the State Government, all proceedings before the Employees’ Insurance Court shall be instituted in the Court appointed for the local area in which the insured person was working at the time the question or dispute arose.

(2) If the Court is satisfied that any matter arising out of any proceeding pending before it can be more conveniently dealt with by any other Employees’ Insurance Court in the same State, it may, subject to any rules made by the State Government in this behalf, order such matter to be transferred to such other Court for disposal and shall forthwith transmit to such other Court the records connected with that matter.

(3) The State Government may transfer any matter pending before any Employees’ Insurance Court in the State to any such Court in another State with the consent of the State Government of that State.

(4) The Court to which any matter is transferred under sub-section (2) or sub-section (3) shall continue the proceedings as if they had been originally instituted in it.

Section 77. Commencement of proceedings.

(1) The proceedings before an Employees’ Insurance Court shall be commenced by application.

¹ (1A) Every such application shall be made within a period of three years from the date on which the cause of action arose.

Explanation : For the purpose of this sub-section, –

(a) the cause of action in respect of a claim for benefit shall not be deemed to arise unless the insured person or in the case of dependants’ benefit, the dependants of the insured person claims or claim that benefit in accordance with the regulations made in that behalf within a period of twelve months after the claim became due or within such further period as the Employees’ Insurance Court may allow on grounds which appear to it to be reasonable;

²(b) the cause of action in respect of a claim by the Corporation for recovering contributions (including interest and damages) from the principal employer shall be deemed to have arisen on the date on which such claim is made by the Corporation for the first time : Provided that no claim shall be made by the Corporation after five years of the period to which the claim relates;

(c) the cause of action in respect of a claim by the principal employer for recovering contributions from an immediate employer shall not be deemed to arise till the date by which the evidence of contributions having been paid s due to be received by the Corporation under the regulation.

(2) Every such application shall be in such form and shall contain such particulars and shall be accompanied by such fee, if any, as may be prescribed by rules made by the State Government in consultation with the Corporation.

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(i) For disablement benefit, ESIC should be approached first; Radhey Shyam v. Employees’ State Insurance Corporation, (1989) 58 FLR 133 (MP).

(ii) An insured employee cannot claim “disablement benefit” from the Employees’ Insurance Court without first approaching the E.S.I.C.; Radhey Shyam v. Employees’ State Insurance Corporation, (1989) 58 FLR 133 (MP).

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1. Ins. by Act 44 of 1966, sec. 33 (w.e.f. 28-1-1968).

2. Subs. by Act 29 of 1989, sec. 30, for clause (b) (w.e.f. 20-10-1989).

Section 78. Powers of employees’ insurance court.

(1) The Employees’ Insurance Court shall have all the powers of a Civil Court for the purposes of summoning and enforcing the attendance of witnesses, compelling the discovery and production of documents and material objects, administering oath and recording evidence and such Court shall be deemed to be a Civil Court within the meaning of ¹1[section 195 and Chapter XXVI of the Code of Criminal Proce­dure, 1973 (2 of 1974)].

(2) The Employees’ Insurance Court shall follow such procedure as may be prescribed by rules made by the State Government.

(3) All costs incidental to any proceeding before an Employees’ Insurance Court shall, subject to such rules as may be made in this behalf by the (Substituted for “Provincial” by the A. O. 1950) [State] Government, be in the discretion of the Court.

(4) An order of the Employees’ Insurance Court shall be enforceable as if it were a decree passed in a suit by a Civil Court.

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Only some of the powers of the Civil Court have been conferred on the ESI Court;Arul Theatre v. Regional Director, Employees’ State Insurance Corporation (1987) 55 FLR 3 (Bom).

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1. Subs. by Act 45 of 1984, sec. 9, for “section 195 Chapter XXXV of the Code of Criminal Procedure, 1898” (w.e.f.27-1-1985).

Section 79. Appearance by legal practitioners, etc.

Any application, appearance or act required to be made or done by any person to or before an Employees’ Insurance Court (other than appearance of a person required for the purpose of his examination as a witness) may be made or done by a legal practitioner or by an officer of a registered trade union authorised in writing by such person or with the permission of the Court, by any other person so authorised.

Section 80. Benefit not admissible unless claimed in time.

[Rep. by the Employees’ State Insurance (Amendment) Act, 1966 (44 of 1966), sec. 34 (w.e.f. 28-1-1968).]

Section 81. Reference to high court.

An Employees’ Insurance Court may submit any question of law for the decision of the High Court arid if it does so, shall decide the question pending before it in accordance with such decision.

Section 82. Appeal.

(1) Save as expressly provided in this section, no appeal shall lie from an order of an Employees’ Insurance Court.

(2) An appeal shall lie to the High Court from an order of an Employees’ Insurance Court if it involves a substantial question of law.

(3) The period of limitation for an appeal under this section shall be sixty days.

(4) The provisions of sections 5 and 12 of the ¹limitation Act, 1963 (36 of 1963) shall apply to appeals under this section.

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(i) Different units of appellant constitute single unit for the purpose of application of the Act; Srinidhi Silks and Textiles, Shimoga v. Regional Director, E.S.I. Corporation, Bangalore, 2006 LLR 76.

(ii) Recommendations of Medical Board are not binding on the E.S.I. Court; Chhotelal v. Regional Director of Employees’ State Insurance Corporation, (1989) 58 FLR 158 (MP).

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1. Subs. by Act 29 of 1989, sec. 31, for “Indian Limitation Act, 1908 (9 of 1908) (w.e.f. 20-10-1989).

Section 83. Stay of payment pending appeal.

Where the Corporation has presented an appeal against an order of the Employees’ Court, that Court may, and if so directed by the High Court, shall, pending the decision on the appeal, withhold the payment of any sum directed to be paid by the order appealed against.

Section 84. Punishment for false statement.

Whoever, for the purpose of causing any increase in payment or benefit under this Act, or for the purpose of causing any payment or benefit to be made where no payment or benefit is authorised by or under this Act, or for the purpose of avoiding any payment to be made by himself under this Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representation, shall be punishable with imprisonment for a term which may extend to ¹six months or with fine not exceeding ²two thousand rupees or with both :

³Provided that where an insured person is convicted under this section, he shall not be entitled for any cash benefit under this Act for such period as may be prescribed by the Central Government.

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1. Subs. by Act 29 of 1989, sec. 32(i), for “three months” (w.e.f. 20-10-1989).

2. Subs. by Act 29 of 1989, sec. 32, for “five hundred” (w.e.f. 20-10-1989).

3. Ins. by Act 29 of 1989, sec. 32(iii) (w.e.f. 1-2-1991).

Section 85. Punishment for failure to pay contributions, etc.

If any person – (a) fails to pay any contribution which under this Act he is liable to pay, or

(b) deducts or attempts to deduct from the wages of an employee the whole or any part of the employer’s contribution, or

(c) in contravention of section 72 reduces the wages or any privileges or benefits admissible to an employee, or

(d) in contravention of section 73 or any regulation dismisses, discharges, reduces or otherwise punishes an employee, or

(e) fails or refuses to submit any return required by the regulations or makes a false return, or

(f) obstructs any Inspector or other official of the Corporation in the discharge of his duties, or

(g) is guilty of any contravention of or non-compliance with any of the requirements of this Act or the rules or the regulations in respect of which no special penalty is provided,

¹[he shall be punishable—

²[(i) where he commits an offence under clause (a), with impris­onment for a term which may extend to three years but—

(a) which shall not be less than one year, in case of failure to pay the employee’s contribution which has been deducted by him from the employee’s wages and shall also be liable to fine of ten thousand rupees;

(b) which shall not be less than six months, in any other case and shall also be liable to fine of five thousand rupees :

Provided that the Court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence or imprisonment for a lesser term; (ii) where he commits an offence under any of the clauses (b) to (g) (both inclusive), with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both.

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(i) Offences on the part of the employer for non-compliance of the provisions of the Act does not get wiped off with the belated payment; Sub-Regional Office, E.S.I. Corporation v. Krishchand Shetty, 2005 LLR 853.

(ii) As a partner of the firm owning the factory, he is liable to be prosecuted for non-distribution of the identity/contribution cards; Shankar Bhattacharjee v. Bholanath Ghosh, (1987) 1 CLR 413 (Cal).

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1. Subs. by Act 38 of 1975, sec. 4, for certain words (w.e.f. 1-9-1975).

2. Subs. by Act 29 of 1989, sec. 33, for clauses (i) and (ii) (w.e.f. 20-10-1989).

Section 85A. Enhanced punishment in certain cases after previous conviction.

¹ ENHANCED PUNISHMENT IN CERTAIN CASES AFTER PREVIOUS CONVICTION. –

Whoever, having been convicted by a court of an offence punishable under this Act, commits the same offence shall, for every such subsequent offence, be punishable with imprisonment for a term which may extend to ²two years and with fine of five thousand rupees :

Provided that where such subsequent offence is for failure by the employer to pay any contribution which under this Act he is liable to pay, he shall, for every such subsequent offence, be punishable with imprisonment for a term which may extend to ³five years but which shall not be less than two years and shall also be liable to fine of twenty-five thousand rupees.

—————

1. Ins. by Act 38 of 1975, sec. 5 (w.e.f. 1-9-1975).

2. Subs. by Act 29 of 1989, sec. 34, for “one year or with fine which may extend to two thousand rupees, or both” (w.e.f. 20-10-1989).

3. Subs. by Act 29 of 1989, sec. 34, for certain words (w.e.f. 20-10-1989).

Section 85B. Power to recover damages.

¹[85B. Power to recover damages.—(1) Where an employer fails to pay the amount due in respect of any contribution or any other amount payable under this Act, the Corporation may recover ²[from the employer by way of penalty such damages not exceeding the amount of arrears as may be specified in the regulations]:

Provided that before recovering such damages, the employer shall be given a reasonable opportunity of being heard:

³[Provided further that the Corporation may reduce or waive the damages recoverable under this section in relation to an estab­lishment which is a sick industrial company in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), subject to such terms and conditions as may be specified in regulations.]

(2) Any damages recoverable under sub-section (1) may be recov­ered as an arrear of land revenue ⁴[or under section 45C to section 45-I].]

S

(i) Damages may be levied for delay in payment of contributions; Employees’ State Insurance Corporation v. Indoflex Pvt. Ltd., (1988) 56 FLR 109 (Raj).

(ii) Section 68 has no bearing on section 85B; Hind Art Press v. Employees’ State Insurance Corporation, (1989) 59 FLR 778 (Karn).

(iii) Levy of damages is penal in nature. Damages cannot, there­fore, be levied in a cursory manner; Beama Mfg. (P.A.) Ltd. v. Regional Director, Employees’ State Insurance Corporation, (1990) 2 LLN 24 (Mad).

(iv) In recovering the damages as envisaged in section 85B, if at a given point of time it is found that the extent of damages claimed would exceed the ceiling of 100 per cent, such damages would get frozen and can not be recovered to the extent to which the ceiling prescribed by section 85B got exceeded; Employees’ State Insurance Corporation v. Nasniat Pharmaceuticals Chemicals Pvt. Ltd., (1998) 1 SCC 185.

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1. Ins. by Act 38 of 1975, sec. 5 (w.e.f. 1-9-1975).

2. Subs. by Act 29 of 1989, sec. 35, for certain words (w.e.f. 1-1-1992)

.3. Ins. by Act 29 of 1989, sec. 35 (w.e.f. 1-1-1992).

4. Added by Act 29 of 1989, sec. 35 (w.e.f. 1-1-1992).

Section 85C. Power of court to make orders.

¹[85C. Power of Court to make orders.—(1) Where an employer is convicted of an offence for failure to pay any contribution payable under this Act, the court may, in addition to awarding any punishment, by order, in writing, require him within a period specified in the order (which the court may if it thinks fit and on application in that behalf, from time to time, extend), to pay the amount of contribution in respect of which the offence was committed ²and to furnish the return relating to such contributions.

(2) Where an order is made under sub-section (1), the employer shall not be liable under this Act in respect of the continuation of the offence during the period or extended period, if any, allowed by the court, but if, on the expiry of such period or extended period, as the case may be, the order of the court has not been fully complied with, the employer shall be deemed to have committed a further offence and shall be punishable with imprisonment in respect thereof under section 85 and shall also be liable to pay fine which may extend to ³one thousand rupees for every day after such expiry on which the order has not been complied with.

—————

1. Ins. by Act 38 of 1975, sec. 5 (w.e.f. 1-9-1975).

2. Added by Act 29 of 1989, sec. 36 (w.e.f. 20-10-1989)

3.  Subs. by Act 29 of 1989, sec. 36, for “one hundred” (w.e.f. 20-10-1989).

Section 86. Prosecutions.

(1) No prosecution under this Act shall be instituted except by or with the previous sanction of the Insurance Commissioner ¹or of such other officer of the corporation as may be authorised in this behalf by the ²Director General of the Corporation.

³(2) No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the First Class shall try any offence under this Act.

(3) No Court shall take cognizance of any offence under this Act except on a complaint made in writing in respect thereof ⁴[***]

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1. Added by Act 53 of 1951, sec. 22 (w.e.f. 6-10-1951).

2. Subs. by Act 44 of 1966, sec. 35, for “Central Government” (w.e.f. 17-6-1967).

3. Subs. by Act 29 of 1989, sec. 37, for sub-section (2) (w.e.f. 20-10-1989).

4. Certain words omitted by Act 29 of 1989, sec. 37 (w.e.f. 20-10-1989).

Section 86A. Offences by companies.

¹ (1) If the person committing an offence under this Act is 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 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 with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall 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, – (i) “company” means any body corporate and includes a firm and other associations of individuals; and (ii) “director” in relation to –

(a) a company, other than a firm, means the managing director or a whole-time director;

(b) a firm means a partner in the firm.

S

When an offence has been committed by a company and to make a director liable, the averments in the complaint or the documents produced along with the complaint must prima facie indicate that such director was in charge of and responsible for the conduct of the business of the company; Siddharth Kejriwal v. Employees’ State Insurance Corporation, (1998) 92 FJR 89 (Karn).

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1. Ins. by Act 29 of 1989, sec. 38 (w.e.f. 20-10-1989).

Section 87. Exemption of a factory or establishment or class of factories, or establishments.

The appropriate Government, may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time.

Section 88. Exemption of persons or class of persons.

The appropriate Government may, by notification in the Official Gazette and subject to such conditions as it may deem fit to impose, exempt any persons or class of persons employed in any factory or establishment or class of factories or establishments to which this Act applies from the operation of the Act.

S

Exempting persons or class of persons from coverage under ESI Act should not be in a mechanical manner hence an employer, seeking exemption under ESI Act, has to prove that medical facilities and other benefits as extended to employees are better than those under the ESI Act; Lark Laboratories (India) Ltd. v. Government of NCT of Delhi, 2006 LLR 1093: 2007 (1) LLJ 72 (Del HC).

Section 89. Corporation to make representation.

No exemption shall be granted or renewed under section 87 or section 88, unless a reasonable opportunity has been given to the Corporation to make any representation it may wish to make in regard to the proposal and such representation has been considered by the appropriate Government.

Section 90. Exemption of factories or establishments belonging to government or any local authority.

The appropriate Government may, ¹after consultation with the Corporation, by notification in the Official Gazette and subject to such conditions as may be specified in the notifications, exempt any factory or establishment belonging to ²[***] any local authority from the operation of this Act, if the employees in any such factory or establishment are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

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1. Ins. by Act 44 of 1966, sec. 36 (w.e.f. 17-6-1967).

2. The words “The Government or” omitted by Act 29 of 1989, sec. 39 (w.e.f. 20-10-1989).

Section 91. Exemption from one or more provisions of the act.

The appropriate Government may, with the consent of the Corporation, by notification in the Official Gazette, exempt any employees or class of employees in any factory or establishment or class of factories or establishments from one or more of the provisions relating to the benefits provided under this Act.

Section 91A. Exemptions to be either prospective or retrospective.

¹[91A. Exemptions to be either prospective or retrospective.

Any notification granting exemption under section 87, section 88, section 90 or section 91 may be issued so as to take effect either prospectively or retrospectively on such date as may be specified therein.

—————

1. Ins. by Act 44 of 1966, sec. 37 (w.e.f. 17-6-1967).

Section 91B. Misuse of benefits.

¹[91B. Misuse of benefits.—If the Central Government is satisfied that the benefits under this Act are being misused by insured persons in a factory or establishment, that Government may, by order, published in the Official Gazette, disentitle such persons from such of the benefits as it thinks fit :

Provided that no such order shall be passed unless a reasonable opportunity of being heard is given to the concerned factory or establishment, insured persons and the trade unions registered under the Trade Unions Act, 1926 (16 of 1926), having members in the factory or establishment.

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1. Ins. by Act 29 of 1989, sec. 40 (w.e.f. 20-10-1989).

Section 91C. Writing off of losses.

¹ WRITING OFF OF LOSSES. -Subject to the conditions as may be prescribed by the Central Government, where the Corporation is of opinion that the amount of contribution, interest and damages due to the Corporation is irrecoverable, the Corporation may sanction the writing off finally of the said amount.

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1. Ins. by Act 29 of 1989, sec. 40 (w.e.f. 20-10-1989).

Section 92. Power of central government to give directions.

¹(1) The Central Government may give directions to a State Government as to the carrying into execution of this Act in the State.

²(2) The Central Government may, from time to time, give such directions to the Corporation as it may think fit for the efficient administration of the Act, and if any such direction is given, the Corporation shall comply with such direction.

————

1. Section 92 renumbered as sub-section (1) thereof by Act 29 of 1989, sec. 41 (w.e.f. 20-10-1989).

2. Ins. by Act 29 of 1989, sec. 41 (w.e.f. 20-10-1989).93. CORPORATION OFFICERS AND SERVANTS TO BE PUBLIC SERVANTS. –

All officers and servants of the Corporation shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

Section 93A. Liability in case of transfer of establishment.

¹[93A. Liability in case of transfer of establishment.—Where an employer, in relation to a factory or establishment, transfers that factory or establishment in whole or in part, by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the factory or establishment is so transferred shall jointly and severally be liable to pay the amount due in respect of any contribution or any other amount payable under this Act in respect of the periods up to the date of such transfer :

Provided that the liability of the transferee shall be limited to the value of the assets obtained by him by such transfer.

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A plain reading of section 93A of the ESI Act, makes it clear that the word ‘transfer’ in section 93A has a different connection than ‘transfer’ under the Transfer of Property Act, hence the purchaser of property cannot be held liable to pay ESI contributions of an establishment; ANK Seals, Nagpur v. Employees’ State Insurance Corporation, Nagpur, 2006 LLR (SN) 1277: 2007 (1) LLJ 310 (Bom HC).

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1. Ins. by Act 38 of 1975, sec. 6 (w.e.f. 1-9-1975).

Section 94. Contributions, etc., due to corporation to have priority over other debts.

There shall be deemed to be included among the debts which, under section 49 of the Presidency-towns Insolvency Act, 1909 (3 of 1909),or under section 61 of the Provincial Insolvency Act, 1920 (5 of 1920), ¹or under any law relating to insolvency in force ²in the territories which, immediately before the 1st November, 1956, were comprised in a Part B State, ³or under section 530 of the Companies Act, 1956 (1 of 1956), are in the distribution of the property of the insolvent or in the distribution of the assets of a company being wound up, to be paid in priority to all other debts, the amount due in respect of any contribution or any other amount payable under this Act the liability wherefore accrued before the date of the order of adjudication of the insolvent or the date of the winding up, as the case may be.

—————

1. Ins. by Act 53 of 1951, sec. 23 (w.e.f. 6-10-1951).

2. Subs. by A.O. (No. 3) 1956, for “in a Part B State”.

3. Subs. by Act 29 of 1989, sec. 42, for “or under section 230 of the Indian Companies Act, 1913 (7 of 1913)” (w.e.f. 20-10-1989).

Section 94A. Delegation of powers.

¹[94A. Delegation of powers.—The Corporation, and, subject to any regulations made by the Corporation in this behalf, the Standing Committee may direct that all or any of the powers and functions which may be exercised or performed by the Corporation or the Standing Committee, as the case may be, may, in relation to such matters and subject to such conditions, if any, as may be specified, be also exercisable by any officer or authority subordinate to the Corporation.

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Delegation of power in matter of levy may be made in favour of all officers; Regional Director, Employees’ State Insurance Corporation v. P.B. Bhaskaran, (1988) 56 FLR 9 (Summary) Ker.

—————

1. Ins. by Act 53 of 1951, sec. 24 (w.e.f. 6-10-1951).

Section 95. Power of central government to make rules.

(1) The Central Government may, ¹after consultation with the Corporation and subject to the condition of previous publication, make rules not inconsistent with this Act for the purpose of giving effect to the provisions thereof.

(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:

²(a) the limit of wages beyond which a person shall not be deemed to be an employee;

(ab) the limit of maximum monthly salary for the purpose of sub-section (1) of section 17;

³(ac) the manner in which ⁴appointments and elections of members of the Corporation, the Standing Committee and the Medical Benefit Council shall be made;

(b) the quorum at meetings of the Corporation, the Standing Committee and the Medical Benefit Council and the minimum number of meetings of those bodies to be held in a year;

(c) the records to be kept of the transaction of business by the Corporation, the Standing Committee and the Medical Benefit Council;

(d) the powers and duties of the ⁵Director General and the Financial Commissioner and the conditions of their service;

(e) the powers and duties of the Medical Benefit Council;

⁶(ea) the types of expenses which may be termed as administrative expenses, the percentage of income of the corporation which may be spent for such expenses;

(eb) the rates of contributions and limits of wages below which employees are not liable to pay contribution;

(ec) the manner of calculation of the average daily wage;

(ed) the manner of certifying the certificate to recover amount by the Recovery Officer;

(ee) the amount of funeral expenses;

(ef) the qualifications, conditions, rates and period of sickness benefit, maternity benefit, disablement benefit and dependents benefit;

(eg) the conditions for grant of medical benefits for insured persons who cease to be in insurable employment on account of permanent disablement;

(eh) the conditions for grant of medical benefits for persons who have attained the age of superannuation;

⁰⁷(ei) the manner in which and the time within which appeals may be filed to medical appeal tribunals or Employees’ Insurance Courts;

(f) the procedure to be adopted in the execution of contracts;

(g) the acquisition, holding and disposal of property by the Corporation;

(h) the raising and repayment of loans;

(i) the investment of the funds of the Corporation and of any provident or other benefit fund and their transfer or realisation;

(j) the basis on which the periodical valuation of the assets and liabilities of the Corporation shall be made;

(k) the bank or banks in which the funds of the Corporation may be deposited, the procedure to be followed in regard to the crediting of money accruing or payable to the Corporation and the manner in which any sums may be paid out of the Corporation funds and the officers by whom such payment may be authorised;

(l) the accounts to be maintained by the Corporation and the forms in which such accounts shall be kept and the times at which such accounts shall be audited;

(m) the publication of the accounts of the Corporation and the report of auditors, the action to be taken on the audit report, the powers of auditors to disallow and surcharge items of expenditure and the recovery of sums so disallowed or surcharged;

(n) the preparation of budget estimates and of supplementary estimates and the manner in which such estimates shall be sanctioned and published;

(o) the establishment and maintenance of provident or other benefit fund for officers and servants of the Corporation; ⁸

⁹(oa) the period of non-entitlement for cash benefit in case of conviction of an insured person;

(p) any matter which is required or allowed by this Act to be prescribed by the Central Government.

¹⁰(2A) The power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them but no retrospective effect shall be given to any rule so as to prejudicially affect the interest of any person other than the Corporation to whom such rule may be applicable.

(3) Rules made under this sections shall be published in the Official Gazette and thereupon shall have effect as if enacted in this Act.

¹¹(4) 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 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 has 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 44 of 1966, sec. 38 (w.e.f. 28-1-1968).

2. Ins. by Act 29 of 1989, sec. 43 (w.e.f. 20-10-1989).

3. Clause (a) re-lettered as clause (ac) by Act 29 of 1989, sec. 43 (w.e.f. 20-10-1989).

4. Subs. by Act 29 of 1989, sec. 43, for “nominations” (w.e.f. 20-10-1989).

5. Subs. by Act 29 of 1989, sec. 43, for “Principal Officers” (w.e.f. 20-10-1989).

6. Ins. by Act 29 of 1989, sec. 43 (w.e.f. 20-10-1989).

7. Clause (ee) re-lettered as clause (ei) by Act 29 of 1989, sec. 43 (w.e.f. 20-10-1989).

8. The word “and” omitted by Act 29 of 1989, sec. 43(v) (w.e.f. 20-10-1989).

9. Ins. by Act 29 of 1989, sec. 43 (w.e.f. 20-10-1989).

10. Ins. by Act 45 of 1984, sec. 10 (w.e.f. 27-1-1985).

11. Ins. by Act 44 of 1966, sec. 38 (w.e.f. 28-1-1968).

12. Subs. by Act 38 of 1975, sec. 7, for certain words (w.e.f. 1-9-1975).

Section 96. Power of state governments to make rules.

(1) The State Government may, ¹after consultation with the Corporation and, subject to the condition of previous publication, make rules not inconsistent with this Act in regard to all or any of the following matters, namely :

(a) the constitution of Employees’ Insurance Courts, the qualifications of persons who may be appointed Judges thereof, and the conditions of service of such Judges;

(b) the procedure to be followed in proceedings before such Courts and the execution of orders made by such Courts;

(c) the fee payable in respect of applications made to the Employees’ Insurance Court, the costs incidental to the proceedings in such court, the form in which applications should be made to it and the particulars to be specified in such applications;

(d) the establishment of hospitals, dispensaries and other institutions, the allotment of insured persons or their families to any such hospital, dispensary or other institution;

(e) the scale of medical benefit which shall be provided at any hospital, clinic, dispensary or institution, the keeping of medical records and the furnishing of statistical returns;

(f) the nature and extent of the staff, equipment and medicines that shall be provided at such hospitals, dispensaries and institutions;

(g) the conditions of service of the staff employed at such hospitals, dispensaries and institutions; and

(h) any other matter which is required or allowed by this Act to be prescribed by the State Government.

(2) Rules made under this section shall be published in the Official Gazette and thereupon shall have effect as if enacted in this Act.

(3) 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 where it consists of two Houses, or, where such Legislature consists of one House, before that House.

²[(3) 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 where it consists of two Houses, or, where such Legislature consists of one House, before that House.]

—————

1. Ins. by Act 44 of 1966, sec. 39 (w.e.f. 28-1-1968).

2. Ins. by Act 45 of 1984, sec. 11 (w.e.f. 27-1-1985).

Section 97. Power of corporation to make regulations.

(1) The Corpora­tion may, ¹[***] subject to the condition of previous publica­tion, make regulations, not inconsistent with this Act and the rules made thereunder, for the administration of the affairs of the Corporation and for carrying into effect 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:—

(i) the time and place of meetings of the Corporation, the Stand­ing Committee and the Medical Benefit Council and the procedure to be followed at such meetings;

²[(ia) the time within which and the manner in which a factory or establishment shall be registered;]

(ii) the matters which shall be referred by the Standing Commit­tee to the Corporation for decision;

(iii) the manner in which any contribution payable under this Act shall be assessed and collected;

³[(iiia) the rate of interest higher than twelve per cent. on delayed payment of contributions;]

(iv) reckoning of wages for the purpose of fixing the contribu­tion payable under this Act;

⁴[(iva) the register of employees to be maintained by the imme­diate employer;

(ivb) the entitlement of sickness benefit or disablement benefit for temporary disablement on any day on which person works or remains on leave or on holiday and in respect of which he re­ceives wages or for any day on which he remains on strike;]

(v) the certification of sickness and eligibility for any cash benefit;

⁵[(vi) the method of determining whether an insured person is suffering from one or more of the diseases specified in the Third Schedule;]

(vii) the assessing of the money value of any benefit which is not a cash benefit;

(viii) the time within which 6[and the form and manner in which] any claim for a benefit may be made and the particulars to be specified in such claim;

(ix) the circumstances in which an employee in receipt of disa­blement benefit may be dismissed, discharged, reduced or other­wise punished;

(x) the manner in which and the place and time at which any benefit shall be paid;

(xi) the method of calculating the amount of cash benefit payable and the circumstances in which and the extent to which commuta­tion of disablement and dependant’s benefits, may be allowed and the method of calculating the commutation value;

(xii) the notice of pregnancy or of confinement and notice and proof of sickness;

⁷[(xiia) specifying the authority competent to give certificate of eligibility for maternity benefit;

(xiib) the manner of nomination by an insured woman for payment of maternity benefit in case of her or her child’s death;

(xiic) the production of proof in support of claim for maternity benefit or additional maternity benefit;]

(xiii) the conditions under which any benefit may be suspended;

(xiv) the conditions to be observed by a person when in receipt of any benefit and the periodical medical examination of such persons;

⁸[***]

(xvi) the appointment of medical practitioners for the purposes of this Act, the duties of such practitioners and the form of medical certificates;

⁷[(xvia) the qualifications and experience which a person should possess for giving certificate of sickness;

(xvib) the constitution of medical boards and medical appeal tribunals;]

(xvii) the penalties for breach of regulations by fine (not exceeding two days’ wages for a first breach and not exceeding three days’ wages for any subsequent breach) which may be imposed on employees;

⁹[(xviia) the amount of damages to be recovered as penalty;

(xviib) the terms and conditions for reduction or waiver of damages in relation to a sick industrial company;]

(xviii) the circumstances in which and the conditions subject to which any regulation may be relaxed, the extent of such relaxa­tion, and the authority by whom such relaxation may be granted;

¹⁰[(xix) the returns to be submitted and the registers or records to be maintained by the principal and immediate employers, the forms of such returns, registers or records, and the times at which such returns should be submitted and the particulars which such returns, registers and records should contain;]

(xx) the duties and powers of Inspectors and other officers and servants of the Corporation;

¹¹[(xxi) the method of recruitment, pay and allowances, disci­pline, superannuation benefits and other conditions of service of the officers and servants of the Corporation other than the ¹²[Director General and Financial Commissioner];]

(xxii) the procedure to be followed in remitting contributions to the Corporation; and

(xxiii) any matter in respect of which regulations are required or permitted to be made by this Act.

¹³[(2A) The condition of previous publication shall not apply to any regulations of the nature specified in clause (xxi) of sub-section (2).]

(3) Regulations made by the Corporation shall be published in the Gazette of India and thereupon shall have effect as if enacted in this Act.

¹⁴[(4) Every regulation shall, as soon as may be, after it is made by the Corporation, 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.]

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1. The words “with the prior approval of the Central Government” omitted by Act 29 of 1989, sec. 44 (w.e.f. 20-10-1989).

2. Ins. by Act 44 of 1966, sec. 40 (w.e.f. 28-1-1968).

3. Subs. by Act 29 of 1989, sec. 44, for clause (iiia) (w.e.f. 20-10-1989).

4. Ins. by Act 29 of 1989, sec. 44 (w.e.f. 20-10-1989).

5. Subs. by Act 44 of 1966, sec. 40, for clause (vi) (w.e.f. 28-1-1968).

6. Subs. by Act 44 of 1966, sec. 40, for “and the form in which” (w.e.f. 28-1-1968).

7. Ins. by Act 44 of 1966, sec. 40 (w.e.f. 28-1-1968).

8. Clause (xv) omitted by Act 29 of 1989, sec. 44 (w.e.f. 20-10-1989).

9. Ins. by Act 29 of 1989, sec. 44 (w.e.f. 20-10-1989).

10. Subs. by Act 53 of 1951, sec. 25, for clause (xix) (w.e.f. 6-10-1951).

11. Subs. by Act 53 of 1951, sec. 25, for clause (xxi) (w.e.f. 6-10-1951).

12. Subs. by Act 29 of 1989, sec. 44, for “Principal Officers” (w.e.f. 20-10-1989).

13. Ins. by Act 53 of 1951, sec. 25 (w.e.f. 6-10-1951).

14. Ins. by Act 45 of 1984, sec. 12 (w.e.f. 27-1-1985).

Section 98. Corporation may undertake duties in the indian states.

[Rep. by the Employees’ State Insurance (Amendment) Act, 1951 (53 of 1951), sec. 26.]

Section 99. Medical care for the families of insured persons.

¹[99. Medical care for the families of insured persons.—At any time when its funds so permit, the Corporation may provide or contribute towards the cost of medical care for the families of insured persons.

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1. Subs. by Act 29 of 1989, sec. 45, for section 99 (w.e.f. 20-10-1989).

Section 99A. Power to remove difficulties.

¹[99A. Power 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 or give such directions, not inconsistent with the provisions of this Act, as appears to it to be necessary or expedient for removing the difficulty.

(2) Any order made under this section shall have effect notwithstanding anything inconsistent therewith in any rules or regulations made under this Act.

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1. Ins. by Act 44 of 1966, sec. 41 (w.e.f. 17-6-1967).

Section 100. Repeals and savings.

¹[100. Repeals and savings.—If, immediately before the day on which this Act comes into force ²[in any part of the territories which, immediately before the 1st November, 1956, were comprised in a Part B State], there is in force in ³[that part] any law corresponding to this Act, that law shall, on such day, stand repealed:

Provided that the repeal shall not affect – (a) the previous operations of any such law; or

(b) any penalty, forfeiture or punishment incurred in respect of any offence committed against any such law, or

(c) any investigation or remedy in respect of any such penalty, forfeiture or punishment; and any such investigation, legal proceeding or remedy, may be instituted continued or enforced and any such penalty, forfeiture or punishment may be imposed, as if this Act had not been passed :

Provided further that subject to the preceding proviso anything done or any action taken under any such law shall be deemed to have been done or taken under the corresponding provision of this Act and shall continue in force accordingly unless and until superseded by anything done or any action taken under this Act

—————

1. Ins. by Act 53 of 1951, sec. 27 (w.e.f. 6-10-1951).

2. Subs. by the A.O. (No. 3) 1956, for “in a Part B State”.

3. Subs. by the A.O. (No. 3) 1956, for “that State”.

The first schedule.

OMITTED BY THE EMPLOYEES’ STATE INSURANCE (AMENDMENT) ACT, 1989, W.E.F. 1-2-1991.

The Second Schedule.

NOTE. – Complete and permanent loss of the use of any limb or member referred to in this Schedule shall be deemed to be the equivalent of the loss of that limb or member.

The Third Schedule.

1[THE THIRD SCHEDULE

(See section 52A)

LIST OF OCCUPATIONAL DISEASES

PART B

PART C

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;

(c) inland vessel mechanically propelled;

(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;

(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);

(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

(c) the failure of the employed person to apply for or accept payment.

(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

(c) by any person directed to pay a penalty under sub-section (4) of section 15.

(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

(c) willfully furnishes or causes to be furnished any information or return which he knows to be false; 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

(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

(c) the failure of the employed person to apply for or accept payment.

(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

(c) has been adjudged in any proceeding under section 15 not to be owned to 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);

(c) ‘Board” means a Board of Conciliation constituted under this Act;

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]

(c) Termination of the service of a workman on the ground of continued ill-health;]

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;

(c) Any gratuity payable on the termination of his service;];

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:

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

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

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),-

(c) for clause (j) the following clause shall be substituted, namely : -

(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;

(c) Issuing commissions for the examination of witnesses;

(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.”]

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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.]

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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.]

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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.

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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.

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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.]

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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.

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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.]

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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].

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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).

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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

(c) Before the expiry of the date of strike specified in any such notice as aforesaid; 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

(c) Before the expiry of the date of lock-out specified in any such notice as aforesaid ; 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.

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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.

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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

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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.

(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.

——————–

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);

(c) Changing seniority rating of workmen because of trade union activities;

(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;

(c) By falsely implicating a workman in a criminal case on false evidence or on concocted evidence;

(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.

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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

(c) [ Note: Omitted by Act 42 of 1988, s. 5 (w.e.f. 27-5-1988) ]

(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;

(c) the Leader of the Opposition in the House of the People —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.”;

(c) after section 6, the following section shall be inserted, namely:—

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

(c) engages during his term of office in any paid employment outside the duties of his office; 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

(c) any irregularity in the procedure of the Commission not affecting the merits of the case.

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;

(c) receiving evidence on affidavits;

(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

(c) any other matter which is required to be, or may be, prescribed.

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;

(c) Ten Directors to be nominated by the Central Government; and

(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

(c) Is found lunatic or becomes of unsound mind; 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

(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;

(4K) The making to the Reconstruction 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

(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;

(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,

(c) price of foreign securities,

(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;

(c) The collection of the proceeds, whether principal, interest or dividends, of any securities or shares;

(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

(c) Any other person,

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

(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 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;]

(c) “Liabilities” shall not include-

(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,

(c) The balance held by it at the Bank 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;

(c) Alter the description in that Schedule whenever any scheduled bank changes its name.

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.

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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.

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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.]

——————–

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;

(c) “Credit information” means any information relating to-

(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.

——————–

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,

(c) Earnest money, or

(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.]

——————–

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.]

——————–

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.

——————–

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.]

——————–

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.

——————–

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.

——————–

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.

——————–

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

——————–

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.]

——————–

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.]

——————–

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.]

——————–

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.]

——————–

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.]

——————–

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.

——————–

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.

——————–

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.

——————–

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.]

——————–

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.

——————–

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—

(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.”

Constitution of India

November 29, 2014

Section 1. Name and territory of the Union

(1) India, that is Bharat, shall be a Union of States.

¹[(2) The States and Territories thereof shall be a specified in the First Schedule.]

(3) The Territory of the India shall comprise-

(a) the Territories of the States;

²[(b) the Union Territories specified in the First Schedule; and

(c) such other Territories as may be acquired;

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, Sec. 2, for clause (2).

2. 1. Subs. by the Constitution (Seventh Amendment) Act, 1956, Sec. 2, for sub-clause (b).

Section 2. Admission or establishment of new States

Parliament may by law admit into the Union, or establish, new States on such terms and conditions as it thinks fit.

Section 2A. Sikkim to be associated with the Union

¹2A. [Sikkim to be associated with the Union.]

Rep. by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 5 (w.e.f. 26-4-1975).

1. Ins. by the Constitution (Thirty-fifth Amendment) Act, 1974, s.2 (w.e.f. 1-3 1975).

Section 3. Formation of new States and alteration of areas, boundaries or names of existing States

Parliament may by law-

(a) Form a new State by separation of territory from any State or by uniting two or more States or parts of States or by uniting any territory to a part of any State;

(b) Increase the area of any State;

(c) Diminish the area of any State;

(d) Alter the boundaries of any State;

(e) Alter the name of any State:

¹[Provided that no Bill for the purpose shall be introduced in either House of Parliament except on the recommendation of the President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States ²***, the Bill has been referred by the President to the Legislature of that State for expressing its views thereon within such period as may be specified in the reference or within such further period as the President may allow and the period so specified or allowed has expired.]

³[Explanation I.

In this article, in clauses (a) to (e), “State” includes a Union territory, but in the proviso, “State” does not include a Union territory.

Explanation II.

The power conferred on Parliament by clause (a) includes the power to form a new State or Union territory by uniting a part of any State or Union territory to any other State or Union territory.]

1. Subs. by the Constitution (Fifth Amendment) Act, 1955, s. 2, for the proviso

2. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

3. Ins. by the Constitution (Eighteenth Amendment) Act, 1966, s. 2.

Section 4. Laws made under articles 2 and 3 to provide for the amendment of the First and the Fourth Schedules and supplemental, incidental and consequential matters

(1) Any law referred to in article 2 or article 3 shall contain such provisions for the amendment of the First Schedule and the Fourth Schedule as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions (including provisions as to representation in Parliament and in the Legislature or Legislatures of the State or States affected by such law) as Parliament may deem necessary.

(2) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of article 368.

Section 5. Citizenship at the commencement of the Constitution

At the commencement of this Constitution, every person who has his domicile in the territory of India and-

(a) Who was born in the territory of India; or

(b) Either of whose parents was born in the territory of India; or

(c) Who has been ordinarily resident in the territory of India for not less than five years immediately preceding such commencement, Shall be a citizen of India.

Section 6. Rights of citizenship of certain persons who have migrated to India from Pakistan.

Notwithstanding anything in article 5, a person who has migrated to the territory of India from the territory now included in Pakistan shall be deemed to be a citizen of India at the commencement of this Constitution if-

(a) He or either of his parents or any of his grand-parents was born in India as defined in the Government of India Act, 1935 (as originally enacted); and

(b) (i) In the case where such person has so migrated before the nineteenth day of July, 1948, he has been ordinarily resident in the territory of India since the date of his migration, or

(ii) In the case where such person has so migrated on or after the nineteenth day of July, 1948, he has been registered as a citizen of India by an officer appointed in that behalf by the Government of the Dominion of India on an application made by him therefor to such officer before the commencement of this Constitution in the form and manner prescribed by that Government:

Provided that no person shall be so registered unless he has been resident in the territory of India for at least six months immediately preceding the date of his application.

(2) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes

Section 7. Rights of citizenship of certain migrants to Pakistan

Notwithstanding anything in articles 5 and 6, a person who has after the first day of March, 1947, migrated from the territory of India to the territory now included in Pakistan shall not be deemed to be a citizen of India:

Provided that nothing in this article shall apply to a person who, after having so migrated to the territory now included in Pakistan, has returned to the territory of India under a permit for resettlement or permanent return issued by or under the authority of any law and every such person shall for the purposes of clause (b) of article 6 be deemed to have migrated to the territory of India after the nineteenth day of July, 1948.

Section 8. Rights of citizenship of certain persons of Indian origin residing outside India

Notwithstanding anything in article 5, any person who or either of whose parents or any of whose grand-parents was born in India as defined in the Government of India Act, 1935 (as originally enacted), and who is ordinarily residing in any country outside India as so defined shall be deemed to be a citizen of India if he has been registered as a citizen of India by the diplomatic or consular representative of India in the country where he is for the time being residing on an application made by him therefor to such diplomatic or consular representative, whether before or after the commencement of this Constitution, in the form and manner prescribed by the Government of the Dominion of India or the Government of India.

Section 9. Persons voluntarily acquiring citizenship of a foreign State not to be citizens

No person shall be a citizen of India by virtue of article 5, or be deemed to be a citizen of India by virtue of article 6 or article 8, if he has voluntarily acquired the citizenship of any foreign State.

Section 10. Continuance of the rights of citizenship

Every person who is or is deemed to be a citizen of India under any of the foregoing provisions of this Part shall, subject to the provisions of any law that may be made by Parliament, continue to be such citizen.

Section 11. Parliament to regulate the right of citizenship by law

Nothing in the foregoing provisions of this Part shall derogate from the power of Parliament to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship

Section 12. Definition

In this Part, unless the context otherwise requires, “the State” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.

Section 13. Laws inconsistent with or in derogation of the fundamental rights

(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.

(2) The State shall not make any law, which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.

(3) In this article, unless the context otherwise requires, -

(a) “Law” includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law;

(b) “Laws in force” includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas.

¹[(4) Nothing in this article shall apply to any amendment of this Constitution made under article 368.]

1. Ins. by the Constitution (Twenty-fourth Amendment) Act, 1971, s.2.

Section 14. Equality before law

The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.

Section 15. Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth

(1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.

(2) No citizen shall, on grounds only of religion, race, caste, sex, place of birth or any of them, be subject to any disability, liability, restriction or condition with regard to-

(a) Access to shops, public restaurants, hotels and places of public entertainment; or

(b) The use of wells, tanks, bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or dedicated to the use of the general public.

(3) Nothing in this article shall prevent the State from making any special provision for women and children.

¹[(4) Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.]

1. Added by the Constitution (First Amendment) Act, 1951, s. 2.

Section 16. Equality of opportunity in matters of public employment

(1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.

(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.

(3) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office ¹[under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory] prior to such employment or appointment.

(4) Nothing in this article shall prevent the State from making any provision for the reservation of appointment or posts in favour of any backward class of citizen which, in the opinion of the State, is not adequately represented in the services under the State.

²[(4A) Nothing in this article shall prevent the State from making any provision for reservation ⁴[in matters of promotion to any class] or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State.]

³[(4B) Nothing in this article shall prevent the State from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent. reservation on total number of vacancies of that year.]

(5) Nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or any member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination.

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for “under any State specified in the First Schedule or any local or other authority within its territory, any requirement as to residence within that State”.

2. Ins. by the Constitution (Seventy-seventh Amendment) Act, 1995,s. 2. (w.e.f. 17-6-1995).

3. Ins. by the Constitution (Eighty-first Amendment) Act, 2000, s.2 (w.e.f. 09-06-2000)

4. Subs. by the Constitution (Eighty-fifth Amendment) Act, 2001, sec. 2 (w.r.e.f. 17-6-1995).

Section 17. Abolition of Untouchability

“Untouchability” is abolished and its practice in any form is forbidden. The enforcement of any disability rising out of “Untouchability” shall be an offence punishable in accordance with law.

Section 18. Abolition of titles

(1) No title, not being a military or academic distinction, shall be conferred by the State.

(2) No citizen of India shall accept any title from any foreign State.

(3) No person who is not a citizen of India shall, while he holds any office of profit or trust under the State, accept without the consent of the President any title from any foreign State.

(4) No person holding any office of profit or trust under the State shall, without the consent of the President, accept any present, emolument, or office of any kind from or under any foreign State.

Section 19. Protection of certain rights regarding freedom of speech, etc.

(1) All citizens shall have the right-

(a) To freedom of speech and expression;

(b) To assemble peaceably and without arms;

(c) To form associations or unions;

(d) To move freely throughout the territory of India;

(e) To reside and settle in any part of the territory of India; ¹[and]

(f) ²* * * * *

(g) To practise any profession, or to carry on any occupation, trade or business.

³[(2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of ⁴[the sovereignty and integrity of India,] the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.]

(3) Nothing in sub-clause (b) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of ⁴[the sovereignty and integrity of India or] public order, reasonable restrictions on the exercise of the right conferred by the said sub-clause.

(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of ⁴[the sovereignty and integrity of India or] public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause.

(5) Nothing in ⁵[sub-clauses (d) and (e)] of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe.

(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, ⁶[nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, -

(i) The professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or

(ii) The carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise].

1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 2 (w.e.f. 20-6-1979).

2. Sub-clause (f) omitted by s. 2, Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).

3. Subs. by the Constitution (First Amendment) Act, 1951, s. 3, for cl. (2) (with retrospective effect

4. Ins. by the Constitution (Sixteenth Amendment) Act, 1963, s. 2.

5. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 2, for “sub-clauses (d), (e) and (f)” (w.e.f. 20-6-1979)

6. Subs. by the Constitution (First Amendment) Act, 1951, s. 3, for certain words.

Section 20. Protection in respect of conviction for offences

(1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

(2) No person shall be prosecuted and punished for the same offence more than once.

(3) No person accused of any offence shall be compelled to be a witness against himself.

Section 21. Protection of life and personal liberty

No person shall be deprived of his life or personal liberty except according to procedure established by law.

Section 21A. Right to education

¹[21A. Right to education.

The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine.]

1. Ins. By the Constitution (Eighty-sixth Amendment) Act, 2002.

22. Protection against arrest and detention in certain cases

¹22. Protection against arrest and detention in certain cases.

(1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice.

(2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate.

(3) Nothing in clauses (1) and (2) shall apply-

(a) To any person who for the time being is an enemy alien; or

(b) To any person who is arrested or detained under any law providing for preventive detention.

(4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless-

(a) An Advisory Board consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court has reported before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention:

Provided that nothing in this sub-clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by Parliament under sub-clause (b) of clause (7); or

(b) Such person is detained in accordance with the provisions of any law made by Parliament under sub-clauses (a) and (b) of clause (7).

(5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.

(6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose.

(7) Parliament may by law prescribe-

(a) The circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an Advisory Board in accordance with the provisions of sub-clause (a) of clause (4);

(b) The maximum period for which any person may in any class or classes of cases be detained under any law providing for preventive detention; and

(c) The procedure to be followed by an Advisory Board in an inquiry under sub-clause (a) of clause (4).

1. On the enforcement of s. 3 of the Constitution (Forty-fourth Amendment) Act, 1978, art. 22 shall stand amended as directed in s. 3 of that Act. For the text of s. 3 of that Act, see Appendix III.

Section 23. Prohibition of traffic in human beings and forced labour

(1) Traffic in human beings and begar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law.

(2) Nothing in this article shall prevent the State from imposing compulsory service for public purposes, and in imposing such service the State shall not make any discrimination on grounds only of religion, race, caste or class or any of them.

Section 24. Prohibition of employment of children in factories, etc.

No child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment.

Section 25. Freedom of conscience and free profession, practice and propagation of religion.

(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion.

(2) Nothing in this article shall affect the operation of any existing law or prevent the State from making any law-

(a) Regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice;

(b) Providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.

Explanation I. The wearing and carrying of kirpans shall be deemed to be included in the profession of the Sikh religion.

Explanation II. In sub-clause (b) of clause (2), the reference to Hindus shall be construed as including a reference to persons professing the Sikh, Jaina or Buddhist religion, and the reference to Hindu religious institutions shall be construed accordingly.

Section 26. Freedom to manage religious affairs.

Subject to public order, morality and health, every religious denomination or any section thereof shall have the right-

(a) To establish and maintain institutions for religious and charitable purposes;

(b) To manage its own affairs in matters of religion;

(c) To own and acquire movable and immovable property; and

(d) To administer such property in accordance with law.

Section 27. Freedom as to payment of taxes for promotion of any particular religion

No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denomination.

Section 28. Freedom as to attendance at religious instruction or religious worship in certain educational institutions

(1) No religious instruction shall be provided in any educational institution wholly maintained out of State funds.

(2) Nothing in clause (1) shall apply to an educational institution, which is administered by the State but has been established under any endowment or trust which requires that religious instruction shall be imparted in such institution.

(3) No person attending any educational institution recognised by the State or receiving aid out of State funds shall be required to take part in any religious instruction that may be imparted in such institution or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto.

Section 29. Protection of interests of minorities

(1) Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same.

(2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.

Section 30. Right of minorities to establish and administer educational institutions

(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.

¹[(1A) In making any law providing for the compulsory acquisition of any property of any educational institution established and administered by a minority, referred to in clause (1), the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.]

(2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language ²[* * *]

1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 4 (w.e.f. 20-6-1979).

2. The sub-heading “Right to Property” omitted by s. 5, Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).

Section 31. Compulsory acquisition of property

Rep. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 6 (w.e.f. 20-6-1979).

Section 31A. Saving of laws providing for acquisition of estates, etc.

¹[Saving of Certain Laws]

²[31A. Saving of laws providing for acquisition of estates, etc.

³[(1) Notwithstanding anything contained in article 13, no law providing for-

(a) The acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or

(b) The taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property, or

(c) The amalgamation of two or more corporations either in the public interest or in order to secure the proper management of any of the corporations, or

(d) The extinguishment or modification of any rights of managing agents, secretaries and treasurers, managing directors, directors or managers of corporations, or of any voting rights of shareholders thereof, or

(e) The extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by ⁴[article 14 or article 19]:

Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent:]

⁵[Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.]

(2) In this article, -

⁶[(a) The expression “estate” shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include-

(i) Any jagir, inam or muafi or other similar grant and in the States of ⁷[Tamil Nadu] and Kerala, any janmam right;

(ii) Any land held under ryotwari settlement;

(iii) Any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;]

(b) The expression “rights”, in relation to an estate, shall include any rights vesting in a proprietor, sub-proprietor, under-proprietor, tenure-holder, ⁸[raiyat, under-raiyat] or other intermediary and any rights or privileges in respect of land revenue.]

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 3 (w.e.f. 3-1-1977).

2. Ins. by the Constitution (First Amendment) Act, 1951, s. 4 (with retrospective effect).

3. Subs. by the Constitution (Fourth Amendment) Act, 1955, s. 3, for cl. (1) (with retrospective effect).

4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 7, for “article 14, article 19 or article 31″ (w.e.f. 20-6-1979).

5. Ins. by the Constitution (Seventeenth Amendment) Act, 1964, s. 2.

6. Subs. by s. 2, the Constitution (Seventeenth Amendment) Act, 1964, for sub-clause (a) (with retrospective effect).

7. Subs. by the Madras State (Alteration of Name) Act, 1968 (53 of 1968), s. 4, for “Madras” (w.e.f. 14-1-1969).

8. Ins. by the Constitution (Fourth Amendment) Act, 1955, s. 3 (with retrospective effect).

Section 31B. Validation of certain Acts and Regulations

¹[31B. Validation of certain Acts and Regulations.

Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or Tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.]

1. Ins. by the Constitution (First Amendment) Act, 1951, s. 5. (w.e.f. 8-6-1951)

Section 31C. Saving of laws giving effect to certain directive principles

¹[31C. Saving of laws giving effect to certain directive principles.

Notwithstanding anything contained in article 13, no law giving effect to the policy of the State towards securing ²[all or any of the principles laid down in Part IV] shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by ³[article 14 or article 19]; ⁴[and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy:

Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.]

1. Ins. by the Constitution (Twenty-fifth Amendment) Act, 1971, s.3 (w.e.f. 20-4-1972).

2. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 4, for “the principles specified in clause (b) or clause (c) of article 39″ (w.e.f. 3-1-1977). Section 4 has been declared invalid by the Supreme Court in Minerva Mills Ltd. and Others Vs. Union of India and Others (1980) 2. S.C.C. 591.

3. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 8, for “article 14, article 19 or article 31″ (w.e.f. 20-6-1979).

4. In Kesavananda Bharati Vs. The State of Kerala, (1973) Supp. S.C.R.1, the Supreme Court held the provision in italics to be invalid.

Section 31D. Saving of laws in respect of anti-national activities

¹[31D. [Saving of laws in respect of anti-national activities.]

Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 2 (w.e.f. 13-4-1978).

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 5 (w.e.f. 3-1-1977).

Section 32. Remedies for enforcement of rights conferred by this Part

(1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.

(2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of any of

(3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2).

(4) The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitution.

Section 32A. Constitutional validity of State laws not to be considered in proceedings under article 32

¹[32A. [Constitutional validity of State laws not to be considered in proceedings under article 32.]

Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 3 (w.e.f. 13-4-1978).

1. Ins. by s. 6, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 1-2-1977).

Section 33. Power of Parliament to modify the rights conferred by this Part in their application to Forces, etc.

¹[33. Power of Parliament to modify the rights conferred by this Part in their application to Forces, etc.

Parliament may, by law, determine to what extent any of the rights conferred by this Part shall, in their application to, -

(a) The members of the Armed Forces; or

(b) The members of the Forces charged with the maintenance of public order; or

(c) Persons employed in any bureau or other organisation established by the State for purposes of intelligence or counter intelligence; or

(d) Persons employed in, or in connection with, the telecommunication systems set up for the purposes of any Force, bureau or organisation referred to in clauses (a) to (c),

be restricted or abrogated so as to ensure the proper discharge of their duties and the maintenance of discipline among them.]

1. Subs. by the Constitution (Fiftieth Amendment) Act, 1984, s. 2, for art. 33(w.e.f.11-9-1984).

Section 34. Restriction on rights conferred by this Part while martial law is in force in any area

Notwithstanding anything in the foregoing provisions of this Part, Parliament may by law indemnify any person in the service of the Union or of a State or any other person in respect of any act done by him in connection with the maintenance or restoration of order in any area within the territory of India where martial law was in force or validate any sentence passed, punishment inflicted, forfeiture ordered or other act done under martial law in such area.

Section 35. Legislation to give effect to the provisions of this Part

Notwithstanding anything in this Constitution, -

(a) Parliament shall have, and the Legislature of a State shall not have, power to make laws-

(i) With respect to any of the matters which under clause (3) of article 16, clause (3) of article 32, article 33 and article 34 may be provided for by law made by Parliament; and

(ii) For prescribing punishment for those acts which are declared to be offences under this Part;

and Parliament shall, as soon as may be after the commencement of this Constitution, make laws for prescribing punishment for the acts referred to in sub-clause (ii);

(b) any law in force immediately before the commencement of this Constitution in the territory of India with respect to any of the matters referred to in sub-clause (i) of clause (a) or providing for punishment for any act referred to in sub-clause (ii) of that clause shall, subject to the terms thereof and to any adaptations and modifications that may be made therein under article 372, continue in force until altered or repealed or amended by Parliament.

In this article, the expression “law in force” has the same meaning as in article 372.

Section 36. Definition

In this Part, unless the context otherwise requires, “the State” has the same meaning as in Part III.

Section 37. Application of the principles contained in this Part

The provisions contained in this Part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws.

Section 38. State to secure a social order for the promotion of welfare of the people

¹[(1)] The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.

²[(2) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.]

1. Art. 38 renumbered as cl. (1) thereof by the Constitution (Forty-fourth Amendment) Act, 1978, s. 9 (w.e.f. 20-6-1979).

2. Ins. by s. 9, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).

Section 39. Certain principles of policy to be followed by the State

The State shall, in particular, direct its policy towards securing-

(a) That the citizens, men and women equally, have the right to an adequate means of livelihood;

(b) That the ownership and control of the material resources of the community are so distributed as best to subserve the common good;

(c) That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;

(d) That there is equal pay for equal work for both men and women;

(e) That the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength

¹[(f) That children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.]

1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 7, for cl. (f) (w.e.f. 3-1-1977).

Section 39A. Equal justice and free legal aid

¹[39A. Equal justice and free legal aid.

The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.]

1. Ins. by s. 8, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 3-1-1977).

Section 40. Organisation of village panchayats

The State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.

Section 41. Right to work, to education and to public assistance in certain cases

The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.

Section 42. Provision for just and humane conditions of work and maternity relief

The State shall make provision for securing just and humane conditions of work and for maternity relief

Section 43. Living wage, etc., for workers

The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.

Section 43A. Participation of workers in management of industries

¹[Participation of workers in management of industries.

The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.]

1. Ins. by the Constitution (Forty-second Amendment) Act,1976, sec.9 (w.e.f.3-1-1977).

Section 44. Uniform civil code for the citizens

The State shall endeavour to secure for the citizens a uniform civil code throughout the territory of India.

Section 45. Provision for early childhood care and education to children below the age of six years

¹[45. Provision for early childhood care and education to children below the age of six years.

The State shall endeavours to provide early childhood care and education for all children until they complete the age of six years.]

1. Subs. by the Constitution (Eighty-sixth Amendment) Act, 2002 for “45. Provision for free and compulsory education for children.- The State shall endeavour to provide, within a period of ten years from the commencement of this Constitution, for free and compulsory education for all children until they complete the age of fourteen years.”

Section 46. Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections

The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation

Section 47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health

The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.

Section 48. Organisation of agriculture and animal husbandry

The State shall endeavour to organise agriculture and animal husbandry on modern and scientific lines and shall, in particular, take steps for preserving and improving the breeds, and prohibiting the slaughter, of cows and calves and other milch and draught cattle

Section 48A. Protection and improvement of environment and safeguarding of forests and wild life

1[Protection and improvement of environment and safeguarding of forests and wild life.

The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.]

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976,sec. 10 (w.e.f. 3-1-1977).

Section 49. Protection of monuments and places and objects of national importance

It shall be the obligation of the State to protect every monument or place or object of artistic or historic interest, ¹[declared by or under law made by Parliament] to be of national importance, from spoliation, disfigurement, destruction, removal, disposal or export, as the case may be.

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 27, for “declared by Parliament by law”.

Section 50. Separation of judiciary from executive

The State shall take steps to separate the judiciary from the executive in the public services of the State.

Section 51. Promotion of international peace and security

The State shall endeavour to- (a) promote international peace and security; (b) maintain just and honourable relations between nations; (c) foster respect for international law and treaty obligations in the dealings of organised peoples with one another; and (d) encourage settlement of international disputes by arbitration.

Section 51A. Fundamental Duties

¹[PART IV-A

FUNDAMENTAL DUTIES

It shall be the duty of every citizens of India-

(a) To abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem;

(b) To cherish and follow the noble ideals which inspired our national struggle for freedom;

(c) To uphold and protect the sovereignty, unity and integrity of India;

(d) To defend the country and render national service when called upon to do so;

(e) To promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious, linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of women;

(f) To value and preserve the rich heritage of our composite culture;

(g) To protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures;

(h) To develop the scientific temper, humanism and the spirit of inquiry and reform;

(i) To safeguard public property and to abjure violence;

(j) To strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement.]

²[(k) who is a parent or guardian to provide opportunities for education to his child or, as the case may be, ward between the age of six and fourteen years]

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 11 (w.e.f. 3-1-1977).

2. Ins. By the Constitution (Eighty-sixth Amendment) Act, 2002.

Section 52. The President of India

There shall be a President of India.

Section 53. Executive power of the Union

(1) The executive power of the Union shall be vested in the President and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution.

(2) Without prejudice to the generality of the foregoing provision, the supreme command of the Defence Forces of the Union shall be vested in the President and the exercise thereof shall be regulated by law.

(3) Nothing in this article shall-

(a) Be deemed to transfer to the President any functions conferred by any existing law on the Government of any State or other authority; or

(b) Prevent Parliament from conferring by law functions on authorities other than the President.

Section 54. Election of President

The President shall be elected by the members of an electoral college consisting of-

(a) The elected members of both Houses of Parliament; and

(b) The elected members of the Legislative Assemblies of the States.

¹[Explanation. In this article and in article 55, State includes the National Capital Territory of Delhi and the Union territory of Pondicherry.]

1. Ins. by the Constitution (Seventieth Amendment) Act, 1992, s. 2 (w.e.f. 1-6-1995).

Section 55. Manner of election of President

(1) As far as practicable, there shall be uniformity in the scale of representation of the different States at the election of the President.

(2) For the purpose of securing such uniformity among the States interest as well as parity between the States as a whole and the Union, the number of votes which each elected member of Parliament and of the Legislative Assembly of each State is entitled to cast at such election shall be determined in the following manner: -

(a) Every elected member of the Legislative Assembly of a State shall have as many votes as there are multiples of one thousand in the quotient obtained by dividing the population of the State by the total number of the elected members of the Assembly;

(b) If, after taking the said multiples of one thousand, the remainder is not less than five hundred, then the vote of each member referred to in sub-clause (a) shall be further increased by one;

(c) Each elected member of either House of Parliament shall have such number of votes as may be obtained by dividing the total number of votes assigned to the members of the Legislative Assemblies of the States under sub-clauses (a) and (b) by the total number of the elected members of both Houses of Parliament, fractions exceeding one-half being counted as one and other fractions being disregarded.

(3) The election of the President shall be held in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot.

¹[Explanation. In this article, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:

Provided that the reference in this Explanation to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year ²[2026] have been published, be construed as a reference to the 1971 census.]

1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 12, for the Explanation (w.e.f. 3-1-1977).

2. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 2, for “2000” (w.e.f. 21-2-2002).

Section 56. Term of office of President

(1) The President shall hold office for a term of five years from the date on which he enters upon his office:

Provided that-

(a) The President may, by writing under his hand addressed to the Vice-President, resign his office;

(b) The President may, for violation of the Constitution, be removed from office by impeachment in the manner provided in article 61;

(c) The President shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.

(2) Any resignation addressed to the Vice-President under clause (a) of the proviso to clause (1) shall forthwith be communicated by him to the Speaker of the House of the People.

Section 57. Eligibility for re-election

A person who holds, or who has held, office as President shall, subject to the other provisions of this Constitution, be eligible for re-election to that office.

Section 58. Qualifications for election as President

(1) No person shall be eligible for election as President unless he-

(a) Is a citizen of India?

(b) Has completed the age of thirty-five years, and

(c) Is qualified for election as a member of the House of the People.

(2) A person shall not be eligible for election as President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.

Explanation. For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor ¹[***] of any State or is a Minister either for the Union or for any State.

1. The words “or Rajpramukh or Uparajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

Section 59. Conditions of President’s office

(1) The President shall not be a member of either House of Parliament or of a House of the Legislature of any State, and if a member of either House of Parliament or of a House of the Legislature of any State be elected President, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as President.

(2) The President shall not hold any other office of profit.

(3) The President shall be entitled without payment of rent to the use of his official residences and shall be also entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.

(4) The emoluments and allowances of the President shall not be diminished during his term of office.

Section 60. Oath or affirmation by the President

Every President and every person acting as President or discharging the functions of the President shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of India or, in his absence, the senior-most Judge of the Supreme Court available, an oath or affirmation in the following form, that is to say-

“I, A.B., do (swear in the name of God/solemnly affirm) that I will faithfully execute the office of President (or discharge the functions of the President) of India and will to the best of my ability preserve, protect and defend the Constitution and the law and that I will devote myself to the service and well-being of the people of India.”.

Section 61. Procedure for impeachment of the President

(1) When a President is to be impeached for violation of the Constitution, the charge shall be preferred by either House of Parliament.

(2) No such charge shall be preferred unless-

(a) The proposal to prefer such charge is contained in a resolution which has been moved after at least fourteen days’ notice in writing signed by not less than one-fourth of the total number of members of the House has been given of their intention to move the resolution, and

(b) Such resolution has been passed by a majority of not less than two-thirds of the total membership of the House.

(3) When a charge has been so preferred by either House of Parliament, the other House shall investigate the charge or cause the charge to be investigated and the President shall have the right to appear and to be represented at such investigation.

(4) If as a result of the investigation a resolution is passed by a majority of not less than two-thirds of the total membership of the House by which the charge was investigated or caused to be investigated, declaring that the charge preferred against the President has been sustained, such resolution shall have the effect of removing the President from his office as from the date on which the resoultion is so passed.

Section 62. Time of holding election to fill vacancy in the office of President and the term of office of person elected to fill casual vacancy

(1) An election to fill a vacancy caused by the expiration of the term of office of President shall be completed before the expiration of the term.

(2) An election to fill a vacancy in the office of President occurring by reason of his death, resignation or removal, or otherwise shall be held as soon as possible after, and in no case later than six months from, the date of occurrence of the vacancy; and the person elected to fill the vacancy shall, subject to the provisions of article 56, be entitled to hold office for the full term of five years from the date on which he enters upon his office.

Section 63. The Vice-President of India

There shall be a Vice-President of India.

Section 64. The Vice-President to be ex officio Chairman of the Council of States

The Vice-President shall be ex officio Chairman of the Council of States and shall not hold any other office of profit:

Provided that during any period when the Vice-President acts as President or discharges the functions of the President under article 65, he shall not perform the duties of the office of Chairman of the Council of States and shall not be entitled to any salary or allowance payable to the Chairman of the Council of States under article 97.

Section 65. The Vice-President to act as President or to discharge his functions during casual vacancies in the office, or during the absence, of President

(1) In the event of the occurrence of any vacancy in the office of the President by reason of his death, resignation or removal, or otherwise, the Vice-President shall act as President until the date on which a new President elected in accordance with the provisions of this Chapter to fill such vacancy enters upon his office.

(2) When the President is unable to discharge his functions owing to absence, illness or any other cause, the Vice-President shall discharge his functions until the date on which the President resumes his duties.

(3) The Vice-President shall, during, and in respect of, the period while he is so acting as, or discharging the functions of, President, have all the powers and immunities of the President and be entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.

Section 66. Election of Vice-President

(1) The Vice-President shall be elected by the ¹[members of an electoral college consisting of the members of both Houses of Parliament] in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot.

(2) The Vice-President shall not be a member of either House of Parliament or of a House of the Legislature of any State, and if a member of either House of Parliament or of a House of the Legislature of any State be elected Vice-President, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Vice-President.

(3) No person shall be eligible for election as Vice-President unless he-

(a) Is a citizen of India?

(b) Has completed the age of thirty-five years; and

(c) Is qualified for election as a member of the Council of States.

(4) A person shall not be eligible for election as Vice-President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.

Explanation. For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor ²[***] of any State or is a Minister either for the Union or for any State.

1. Subs. by the Constitution (Eleventh Amendment) Act, 1961, s. 2, for “members of both Houses of Parliament assembled at a joint meeting”.

2. The words “or Rajpramukh or Uparajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

Section 67. Term of office of Vice-President

The Vice-President shall hold office for a term of five years from the date on which he enters upon his office:

Provided that-

(a) A Vice-President may, by writing under his hand addressed to the President, resign his office;

(b) A Vice-President may be removed from his office by a resolution of the Council of States passed by a majority of all the then members of the Council and agreed to by the House of the People; but no resolution for the purpose of this clause shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution;

(c) A Vice-President shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.

Section 68. Time of holding election to fill vacancy in the office of Vice-President and the term of office of person elected to fill casual vacancy

(1) An election to fill a vacancy caused by the expiration of the term of office of Vice-President shall be completed before the expiration of the term.

(2) An election to fill a vacancy in the office of Vice-President occurring by reason of his death, resignation or removal, or otherwise shall be held as soon as possible after the occurrence of the vacancy, and the person elected to fill the vacancy shall, subject to the provisions of article 67, be entitled to hold office for the full term of five years from the date on which he enters upon his office.

Section 69. Oath or affirmation by the Vice-President

Every Vice-President shall, before entering upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation in the following form, that is to say-

“I, A.B., do (swear in the name of God/solemnly affirm) that I will bear true faith and allegiance to the Constitution of India as by law established and that I will faithfully discharge the duty upon which I am about to enter.”.

Section 70. Discharge of President’s functions in other contingencies

Parliament may make such provision as it thinks fit for the discharge of the functions of the President in any contingency not provided for in this Chapter.

Section 71. Matters relating to, or connected with, the election of a President or Vice-President

¹[71. Matters relating to, or connected with, the election of a President or Vice-President.

(1) All doubts and disputes arising out of or in connection with the election of a President or Vice-President shall be inquired into and decided by the Supreme Court whose decision shall be final.

(2) If the election of a person as President or Vice-President is declared void by the Supreme Court, acts done by him in the exercise and performance of the powers and duties of the office of President or Vice-President, as the case may be, on or before the date of the decision of the Supreme Court shall not be invalidated by reason of that declaration.

(3) Subject to the provisions of this Constitution, Parliament may by law regulate any matter relating to or connected with the election of a President or Vice-President.

(4) The election of a person as President or Vice-President shall not be called in question on the ground of the existence of any vacancy for whatever reason among the members of the electoral college electing him.]

1. Art. 71 has been successively subs. by the Constitution (Thirty-ninth Amendment) Act, 1975, s. 2 (w.e.f. 10-8-1975) and the Constitution (Forty-fourth Amendment) Act, 1978, s.10, to read as above (w.e.f. 20-6-1979).

Section 72. Power of President to grant pardons, etc., and to suspend, remit or commute sentences in certain cases

(1) The President shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence-

(a) In all cases where the punishment or sentence is by a Court Martial;

(b) In all cases where the punishment or sentence is for an offence against any law relating to a matter to which the executive power of the Union extends;

(c) In all cases where the sentence is a sentence of death.

(2) Nothing in sub-clause (a) of clause (1) shall affect the power conferred by law on any officer of the Armed Forces of the Union to suspend, remit or commute a sentence passed by a Court Martial.

(3) Nothing in sub-clause (c) of clause (1) shall affect the power to suspend, remit or commute a sentence of death exercisable by the Governor ¹[***] of a State under any law for the time being in force.

1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

Section 73. Extent of executive power of the Union

(1) Subject to the provisions of this Constitution, the executive power of the Union shall extend-

(a) To the matters with respect to which Parliament has power to make laws; and

(b) To the exercise of such rights, authority and jurisdiction as are exercisable by the Government of India by virtue of any treaty or agreement: Provided that the executive power referred to in sub-clause (a) shall not, save as expressly provided in this Constitution or in any law made by Parliament, extend in any State ¹[***] to matters with respect to which the Legislature of the State has also power to make laws.

(2) Until otherwise provided by Parliament, a State and any officer or authority of a State may, notwithstanding anything in this article, continue to exercise in matters with respect to which Parliament has power to make laws for that State such executive power or functions as the State or officer or authority thereof could exercise immediately before the commencement of this Constitution.

1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitutuion (Forty-fourth Amendment) Act, 1978, s. 29 and Sch.

Section 74. Council of Ministers to aid and advise President

¹[(1) There shall be a Council of Ministers with the Prime Minister at the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such advice:]

²[Provided that the President may require the Council of Ministers to reconsider such advice, either generally or otherwise, and the President shall act in accordance with the advice tendered after such reconsideration.]

(2) The question whether any, and if so what, advice was tendered by Ministers to the President shall not be inquired into in any court.

1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 13, for cl.(1) (w.e.f. 3-1-1977).

2. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 11 (w.e.f. 20-6-1979).

Section 75. Other provisions as to Ministers

(1) The Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister.

(2) The Ministers shall hold office during the pleasure of the President.

(3) The Council of Ministers shall be collectively responsible to the House of the People.

(4) Before a Minister enters upon his office, the President shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule.

(5) A Minister who for any period of six consecutive months is not a member of either House of Parliament shall at the expiration of that period cease to be a Minister.

(6) The salaries and allowances of Ministers shall be such as Parliament may from time to time by law determine and, until Parliament so determines, shall be as specified in the Second Schedule.

Section 76. Attorney-General for India

(1) The President shall appoint a person who is qualified to be appointed a Judge of the Supreme Court to be Attorney-General for India.

(2) It shall be the duty of the Attorney-General to give advice to the Government of India upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the President, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force.

(3) In the performance of his duties the Attorney-General shall have right of audience in all courts in the territory of India.

(4) The Attorney-General shall hold office during the pleasure of the President, and shall receive such remuneration as the President may determine.

Section 77. Conduct of business of the Government of India

(1) All executive action of the Government of India shall be expressed to be taken in the name of the President.

(2) Orders and other instruments made and executed in the name of the President shall be authenticated in such manner as may be specified in rules ¹to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.

(3) The President shall make rules for the more convenient transaction of the business of the Government of India, and for the allocation among Ministers of the said business.

²[* * * ]

1. See Notifn. No. S.O. 2297, dated the 3rd November, 1958, Gazette of India, Extraordinary, 1958, Pt.II, s. 3 (ii), p.1315, as amended from time to time.

2. Cl.(4) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 14 (w.e.f. 3-1-1977) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 12 (w.e.f. 20-6-1979).

Section 78. Duties of Prime Minister as respects the furnishing of information to the President, etc.

It shall be the duty of the Prime Minister-

(a) To communicate to the President all decisions of the Council of Ministers relating to the administration of the affairs of the Union and proposals for legislation;

(b) To furnish such information relating to the administration of the affairs of the Union and proposals for legislation as the President may call for; and

(c) If the President so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council.

Section 79. Constitution of Parliament

There shall be a Parliament for the Union which shall consist of the President and two Houses to be known respectively as the Council of States and the House of the People.

Section 80. Composition of the Council of States

(1) ¹[²[***] The Council of States] shall consist of-

(a) Twelve members to be nominated by the President in accordance with the provisions of clause (3); and

(b) Not more than two hundred and thirty-eight representatives of the States 3[and of the Union territories].

(2) The allocation of seats in the Council of States to be filled by representatives of the States ³[and of the Union territories] shall be in accordance with the provisions in that behalf contained in the Fourth Schedule.

(3) The members to be nominated by the President under sub-clause (a) of clause (1) shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely: -

Literature, science, art and social service.

(4) The representatives of each State ⁴[***] in the Council of States shall be elected by the elected members of the Legislative Assembly of the State in accordance with the system of proportional representation by means of the single transferable vote.

(5) The representatives of the ⁵[Union territories] in the Council of States shall be chosen in such manner as Parliament may by law prescribe.

1. Subs. by the Constitution (Thirty-fifth Amendment) Act, 1974, s. 3, for “The Council of States” (w.e.f. 1-3-1975).

2. The words “Subject to the provisions of paragraph 4 of the Tenth Schedule,” omitted by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 5 (w.e.f. 26-4-1975).

3. Added by the Constitution (Seventh Amendment) Act, 1956, s. 3.

4. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 3.

5. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 3, for “States specified in Part C of the First Schedule”.

Section 81. Composition of the House of the People

¹[81. Composition of the House of the People.

(1) Subject to the provisions of article 331 ⁹[***],] the House of the People shall consist of-

(a) Not more than ²[five hundred and thirty members] chosen by direct election from territorial constituencies in the States, and

(b) Not more than ³[twenty members] to represent the Union territories, chosen in such manner as Parliament may by law provide.

(2) For the purposes of sub-clause (a) of clause (1), -

(a) There shall be allotted to each State a number of seats in the House of the People in such manner that the ratio between that number and the population of the State is, so far as practicable, the same for all States; and

(b) Each State shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it is, so far as practicable, the same throughout the State:

⁴[Provided that the provisions of sub-clause (a) of this clause shall not be applicable for the purpose of allotment of seats in the House of the People to any State so long as the population of that State does not exceed six millions.]

(3) In this article, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:

⁵[Provided that the reference in this clause to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year ⁶[2026] have been published, ⁷[be construed, (i) for the purposes of sub-clause (a) of clause (2) and the proviso to that clause, as a reference to the 1971 census; and

(ii) for the purpose of sub-clause (b) of clause (2) as a reference to the ⁸[2001] census]]

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 4, for arts. 81 and 82.

2. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, “five hundred and twenty-five members” (w.e.f. 30-5-1987).

3. Subs. by the Constitution (Thirty-first Amendment) Act, 1973, s. 2, for “twenty-five members”.

4. Ins. by s. 2, the Constitution (Thirty-first Amendment) Act, 1973

5. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 15 (w.e.f. 3-1-1977).

6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 3, for “2000” (w.e.f. 21-2-2002).

7. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 3, for “be construed as a reference to the 1971 census” (w.e.f. 21-2-2002).

8. Subs. by the Constitution (Eighty-Seventh Amendment) Act, 2003, for the words “1991”

9. The words and figure “and pargraph 4 of th Tenth Schedule” omitted by the Constitution (Thirty-sixth Amendment) Act, 1975, sec. 5 (w.e.f. 26-4-1975).

Section 82. Readjustment after each census

⁵[Readjustment after each census.

Upon the completion of each census, the allocation of seats in the House of the People to the States and the division of each State into territorial constituencies shall be readjusted by such authority and in such manner as Parliament may by law determine:

Provided that such readjustment shall not affect representation in the House of the People until the dissolution of the then existing House:]

¹[Provided further that such readjustment shall take effect from such date as the President may, by order, specify and until such readjustment takes effect, any election to the House may be held on the basis of the territorial constituencies existing before such readjustment:

Provided also that until the relevant figures for the first census taken after the year ²[2026] have been published, it shall not be necessary to ³[readjust -

(i) the allocation of seats in the House of the People to the States as readjusted on the basis of the 1971 census; and

(ii) the division of each State into territory constituencies as may be readjusted on the basis of the ⁴[2001] census,

under this article]]

1. Ins. by s. 16, the Constitution (Forty-second Amendment) Act, 1976.

2. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 4, for “2000” (w.e.f. 21-2-2002).

3. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 4, for certain words (w.e.f. 21-2-2002).

4. Subs. by the

Constitution (Eighty-Seventh Amendment) Act, 2003, for the words “1991”.

5. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 4, for article 82.

Section 83. Duration of Houses of Parliament

(1) The Council of States shall not be subject to dissolution, but as nearly as possible one-third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.

(2) The House of the People, unless sooner dissolved, shall continue for ¹[five years] from the date appointed for its first meeting and no longer and the expiration of the said period of ¹[five years] shall operate as a dissolution of the House:

Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the Proclamation has ceased to operate.

1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 13, for “six years” (w.e.f. 20-6-1979). The words “six years” were subs. for the original words “five years” by the Constitution (Forty-second Amendment) Act, 1976, s.17 (w.e.f. 3-1-1977).

Section 84. Qualification for membership of Parliament

A person shall not be qualified to be chosen to fill a seat in Parliament unless he-

¹[(a) Is a citizen of India, and makes and subscribes before some person authorized in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule;]

(b) Is, in the case of a seat in the Council of States, not less than thirty years of age and, in the case of a seat in the House of the People, not less than twenty-five years of age; and

(c) Possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.

1. Subs. by the Constitution (Sixteenth Amendment) Act, 1963, s. 3 for cl. (a).

Section 85. Sessions of Parliament, prorogation and dissolution

¹[85. Sessions of Parliament, prorogation and dissolution.

(1) The President shall from time to time summon each House of Parliament to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.

(2) The President may from time to time-

(a) Prorogue the House or either House;

(b) Dissolve the House of the People.]

1. Subs. by the Constitution (First Amendment) Act, 1951, s. 6, for art. 85. (w. e. f.18/6/1951)

Section 86. Right of President to address and send messages to Houses

(1) The President may address either House of Parliament or both Houses assembled together, and for that purpose require the attendance of members.

(2) The President may send messages to either House of Parliament, whether with respect to a Bill then pending in Parliament or otherwise, and a House to which any message is so sent shall with all convenient despatch consider any matter required by the message to be taken into consideration.

Section 87. Special address by the President

(1) At the commencement of ¹[the first session after each general election to the House of the People and at the commencement of the first session of each year] the President shall address both Houses of Parliament assembled together and inform Parliament of the causes of its summons.

(2) Provision shall be made by the rules regulating the procedure of either House for the allotment of time for discussion of the matters referred to in such address ²[***].

1. Subs. by s. 7, the Constitution (First Amendment) Act, 1951, for “every session”.

2. The words “and for the precedence of such discussion over other business of the House” omitted by the Constitution (First Amendment) Act, 1951, s. 7.

Section 88. Rights of Ministers and Attorney-General as respects Houses

Every Minister and the Attorney-General of India shall have the right to speak in, and otherwise to take part in the proceedings of, either House, any joint sitting of the Houses, and any committee of Parliament of which he may be named a member, but shall not by virtue of this article be entitled to vote.

Section 89. The Chairman and Deputy Chairman of the Council of States.

(1) The Vice-President of India shall be ex officio Chairman of the Council of States.

(2) The Council of States shall, as soon as may be, choose a member of the Council to be Deputy Chairman thereof and, so often as the office of Deputy Chairman becomes vacant, the Council shall choose another member to be Deputy Chairman thereof.

Section 90. Vacation and resignation of, and removal from, the office of Deputy Chairman.

A member holding office as Deputy Chairman of the Council of States-

(a) Shall vacate his office if he ceases to be a member of the Council;

(b) May at any time, by writing under his hand addressed to the Chairman, resign his office; and

(c) May be removed from his office by a resolution of the Council passed by a majority of all the then members of the Council:

Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution.

Section 91. Power of the Deputy Chairman or other person to perform the duties of the office of, or to act as, Chairman.

(1) While the office of Chairman is vacant, or during any period when the Vice-President is acting as, or discharging the functions of, President, the duties of the office shall be performed by the Deputy Chairman, or, if the office of Deputy Chairman is also vacant, by such member of the Council of States as the President may appoint for the purpose.

(2) During the absence of the Chairman from any sitting of the Council of States the Deputy Chairman, or, if he is also absent, such person as may be determined by the rules of procedure of the Council, or, if no such person is present, such other person as may be determined by the Council, shall act as Chairman.

Section 92. The Chairman or the Deputy Chairman not to preside while a resolution for his removal from office is under consideration.

(1) At any sitting of the Council of States, while any resolution for the removal of the Vice-President from his office is under consideration, the Chairman, or while any resolution for the removal of the Deputy Chairman from his office is under consideration, the Deputy Chairman, shall not, though he is present, preside, and the provisions of clause (2) of article 91 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Chairman, or, as the case may be, the Deputy Chairman, is absent.

(2) The Chairman shall have the right to speak in, and otherwise to take part in the proceedings of, the Council of States while any resolution for the removal of the Vice-President from his office is under consideration in the Council, but, notwithstanding anything in article 100, shall not be entitled to vote at all on such resolution or on any other matter during such proceedings.

Section 93. The Speaker and Deputy Speaker of the House of the People.

The House of the People shall, as soon as may be, choose two members of the House to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the House shall choose another member to be Speaker or Deputy Speaker, as the case may be.

Section 94. Vacation and resignation of, and removal from, the offices of Speaker and Deputy Speaker.

A member holding office as Speaker or Deputy Speaker of the House of the People-

(a) Shall vacate his office if he ceases to be a member of the House of the People;

(b) May at any time, by writing under his hand addressed, if such member is the Speaker, to the Deputy Speaker, and if such member is the Deputy Speaker, to the Speaker, resign his office; and

(c) May be removed from his office by a resolution of the House of the People passed by a majority of all the then members of the House:

Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution:

Provided further that, whenever the House of the People is dissolved, the Speaker shall not vacate his office until immediately before the first meeting of the House of the People after the dissolution.

Section 95. Power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker

(1) While the office of Speaker is vacant, the duties of the office shall be performed by the Deputy Speaker or, if the office of Deputy Speaker is also vacant, by such member of the House of the People as the President may appoint for the purpose.

(2) During the absence of the Speaker from any sitting of the House of the People the Deputy Speaker or, if he is also absent, such person as may be determined by the rules of procedure of the House, or, if no such person is present, such other person as may be determined by the House, shall act as Speaker.

Section 96. The Speaker or the Deputy Speaker not to preside while a resolution for his removal from office is under consideration

(1) At any sitting of the House of the People, while any resolution for the removal of the Speaker from his office is under consideration, the Speaker, or while any resolution for the removal of the Deputy Speaker from his office is under consideration, the Deputy Speaker, shall not, though he is present, preside, and the provisions of clause (2) of article 95 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Speaker, or, as the case may be, the Deputy Speaker, is absent.

(2) The Speaker shall have the right to speak in, and otherwise to take part in the proceedings of, the House of the People while any resolution for his removal from office is under consideration in the House and shall, notwithstanding anything in article 100, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.

Section 97. Salaries and allowances of the Chairman and Deputy Chairman and the Speaker and Deputy Speaker

There shall be paid to the Chairman and the Deputy Chairman of the Council of States, and to the Speaker and the Deputy Speaker of the House of the People, such salaries and allowances as may be respectively fixed by Parliament by law and, until provision in that behalf is so made, such salaries and allowances as are specified in the Second Schedule

Section 98. Secretariat of Parliament

(1) Each House of Parliament shall have a separate secretarial staff:

Provided that nothing in this clause shall be construed as preventing the creation of posts common to both Houses of Parliament.

(2) Parliament may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of either House of Parliament.

(3) Until provision is made by Parliament under clause (2), the President may, after consultation with the Speaker of the House of the People or the Chairman of the Council of States, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House of the People or the Council of States, and any rules so made shall have effect subject to the provisions of any law made under the said clause.

Section 99. Oath or affirmation by members

Every member of either House of Parliament shall, before taking his seat, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.

Section 100. Voting in Houses, power of Houses to act notwithstanding vacancies and quorum

(1) Save as otherwise provided in this Constitution, all questions at any sitting of either House or joint sitting of the Houses shall be determined by a majority of votes of the members present and voting, other than the Speaker or person acting as Chairman or Speaker. The Chairman or Speaker, or person acting as such, shall not vote in the first instance, but shall have and exercise a casting vote in the case of an equality of votes.

(2) Either House of Parliament shall have power to act notwithstanding any vacancy in the membership thereof, and any proceedings in Parliament shall be valid notwithstanding that it is discovered subsequently that some person who was not entitled so to do sat or voted or otherwise took part in the proceedings.

(3) Until Parliament by law otherwise provides, the quorum to constitute a meeting of either House of Parliament shall be one-tenth of the total number of members of the House.

(4) If at any time during a meeting of a House there is no quorum, it shall be the duty of the Chairman or Speaker, or person acting as such, either to adjourn the House or to suspend the meeting until there is a quorum.

Section 101. Vacation of seats

(1) No person shall be a member of both Houses of Parliament and provision shall be made by Parliament by law for the vacation by a person who is chosen a member of both Houses of his seat in one House or the other.

(2) No person shall be a member both of Parliament and of a House of the Legislature of a State ¹[***], and if a person is chosen a member both of Parliament and of a House of the Legislature of ²[a State], then, at the expiration of such period as may be specified in rules ³made by the President, that person’s seat in Parliament shall become vacant, unless he has previously resigned his seat in the Legislature of the State.

(3) If a member of either House of Parliament-

(a) Becomes subject to any of the disqualifications mentioned in ⁴[clause (1) or clause (2) of article 102], or

⁵[(b) Resigns his seat by writing under his hand addressed to the Chairman or the Speaker, as the case may be, and his resignation is accepted by the Chairman or the Speaker, as the case may be,] his seat shall thereupon become vacant:

⁶[Provided that in the case of any resignation referred to in sub-clause (b), if from information received or otherwise and after making such inquiry as he thinks fit, the Chairman or the Speaker, as the case may be, is satisfied that such resignation is not voluntary or genuine, he shall not accept such resignation.]

(4) If for a period of sixty days a member of either House of Parliament is without permission of the House absent from all meetings thereof, the House may declare his seat vacant: Provided that in computing the said period of sixty days no account shall be taken of any period during which the House is prorogued or is adjourned for more than four consecutive days.

1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “such a State”.

3. See the Prohibition of Simultaneous Membership Rules, 1950, published with the Ministry of Law Notification No. F.46/50-C, dated the 26th January, 1950, Gazette of India, Extraordinary, p.678

4. Subs. by the Constitution (Fifty-second Amendment) Act, 1985, s. 2, for “clause (1) of article 102″ (w.e.f. 1-3-1985).

5. Subs. by the Constitution (Thirty-third Amendment) Act, 1974, s. 2, for sub-clause (b).

6. Ins. by s. 2, the Constitution (Thirty-third Amendment) Act, 1974.

Section 102. Disqualifications for membership

(1) A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament-

(a) If he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder;

(b) If he is of unsound mind and stands so declared by a competent court;

(c) If he is an undischarged insolvent;

(d) If he is not a citizen of India or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State;

(e) If he is so disqualified by or under any law made by Parliament.

¹[Explanation. For the purposes of this clause] a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State by reason only that he is a Minister either for the Union or for such State.

²[(2) A person shall be disqualified for being a member of either House of Parliament if he is so disqualified under the Tenth Schedule.]

1. Subs. by the Constitution (Fifty-second Amendment) Act, 1985, s. 3 for “(2) For the purposes of this article” (w.e.f. 1-3-1985).

2. Ins. by s. 3, ibid. (w.e.f. 1-3-1985).

Section 103. Decision on questions as to disqualifications of members

¹[103. Decision on questions as to disqualifications of members.

(1) If any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in clause (1) of article 102, the question shall be referred for the decision of the President and his decision shall be final.

(2) Before giving any decision on any such question, the President shall obtain the opinion of the Election Commission and shall act according to such opinion.]

1. Art. 103 has been successively subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 20 (w.e.f. 3-1-1977) and the Constitution (Forty-fourth Amendment) Act, 1978, s. 14, to read as above (w.e.f. 20-6-1979).

Section 104. Penalty for sitting and voting before making oath or affirmation under article 99 or when not qualified or when disqualified

If a person sits or votes as a member of either House of Parliament before he has complied with the requirements of article 99, or when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the Union.

Section 105. Powers, privileges, etc., of the Houses of Parliament and of the members and committees thereof

(1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of Parliament, there shall be freedom of speech in Parliament.

(2) No member of Parliament shall be liable to any proceedings in any court in respect of anything said or any vote given by him in Parliament or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of either House of Parliament of any report, paper, votes or proceedings.

(3) In other respects, the powers, privileges and immunities of each House of Parliament, and of the members and the committees of each House, shall be such as may from time to time be defined by Parliament by law, and, until so defined, ¹[shall be those of that House and of its members and committees immediately before the coming into force of section 15 of the Constitution (Forty-fourth Amendment) Act, 1978].

(4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of Parliament or any committee thereof as they apply in relation to members of Parliament.

1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 15, for certain words (w.e.f. 20-6-1979).

Section 106. Salaries and allowances of members

Members of either House of Parliament shall be entitled to receive such salaries and allowances as may from time to time be determined by Parliament by law and, until provision in that respect is so made, allowances at such rates and upon such conditions as were immediately before the commencement of this Constitution applicable in the case of members of the Constituent Assembly of the Dominion of India

Section 107. Provisions as to introduction and passing of Bills

(1) Subject to the provisions of articles 109 and 117 with respect to Money Bills and other financial Bills, a Bill may originate in either House of Parliament.

(2) Subject to the provisions of articles 108 and 109, a Bill shall not be deemed to have been passed by the Houses of Parliament unless it has been agreed to by both Houses, either without amendment or with such amendments only as are agreed to by both Houses.

(3) A Bill pending in Parliament shall not lapse by reason of the prorogation of the Houses.

(4) A Bill pending in the Council of States which has not been passed by the House of the People shall not lapse on a dissolution of the House of the People.

(5) A Bill which is pending in the House of the People, or which having been passed by the House of the People is pending in the Council of States, shall, subject to the provisions of article 108, lapse on a dissolution of the House of the People.

Section 108. Joint sitting of both Houses in certain cases

(1) If after a Bill has been passed by one House and transmitted to the other House-

(a) The Bill is rejected by the other House; or

(b) The Houses have finally disagreed as to the amendments to be made in the Bill; or

(c) More than six months elapse from the date of the reception of the Bill by the other House without the Bill being passed by it, the President may, unless the Bill has elapsed by reason of a dissolution of the House of the People, notify to the Houses by message if they are sitting or by public notification if they are not sitting, his intention to summon them to meet in a joint sitting for the purpose of deliberating and voting on the Bill: Provided that nothing in this clause shall apply to a Money Bill.

(2) In reckoning any such period of six months as is referred to in clause (1), no account shall be taken of any period during which the House referred to in sub-clause (c) of that clause is prorogued or adjourned for more than four consecutive days.

(3) Where the President has under clause (1) notified his intention of summoning the Houses to meet in a joint sitting, neither House shall proceed further with the Bill, but the President may at any time after the date of his notification summon the Houses to meet in a joint sitting for the purpose specified in the notification and, if he does so, the Houses shall meet accordingly.

(4) If at the joint sitting of the two Houses the Bill, with such amendments, if any, as are agreed to in joint sitting, is passed by a majority of the total number of members of both Houses present and voting, it shall be deemed for the purposes of this Constitution to have been passed by both Houses:

Provided that at a joint sitting-

(a) If the Bill, having been passed by one House, has not been passed by the other House with amendments and returned to the House in which it originated, no amendment shall be proposed to the Bill other than such amendments (if any) as are made necessary by the delay in the passage of the Bill;

(b) If the Bill has been so passed and returned, only such amendments as aforesaid shall be proposed to the Bill and such other amendments as are relevant to the matters with respect to which the Houses have not agreed

and the decision of the person presiding as to the amendments which are admissible under this clause shall be final.

(5) A joint sitting may be held under this article and a Bill passed thereat, notwithstanding that a dissolution of the House of the People has intervened since the President notified his intention to summon the Houses to meet therein.

Section 109. Special procedure in respect of Money Bills

(1) A Money Bill shall not be introduced in the Council of States.

(2) After a Money Bill has been passed by the House of the People it shall be transmitted to the Council of States for its recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the House of the People with its recommendations and the House of the People may thereupon either accept or reject all or any of the recommendations of the Council of States.

(3) If the House of the People accepts any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the Council of States and accepted by the House of the People.

(4) If the House of the People does not accept any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the House of the People without any of the amendments recommended by the Council of States.

(5) If a Money Bill passed by the House of the People and transmitted to the Council of States for its recommendations is not returned to the House of the People within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the House of the People.

Section 110. Definition of “Money Bills”

(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely: -

(a) The imposition, abolition, remission, alteration or regulation of any tax;

(b) The regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;

(c) The custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;

(d) The appropriation of moneys out of the Consolidated Fund of India;

(e) The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;

(f) The receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or

(g) Any matter incidental to any of the matters specified in sub-clauses (a) to (f).

(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

(3) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final.

(4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.

Section 111. Assent to Bills

When a Bill has been passed by the Houses of Parliament, it shall be presented to the President, and the President shall declare either that he assents to the Bill, or that he withholds assent therefrom:

Provided that the President may, as soon as possible after the presentation to him of a Bill for assent, return the Bill if it is not a Money Bill to the Houses with a message requesting that they will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message, and when a Bill is so returned, the Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the Houses with or without amendment and presented to the President for assent, the President shall not withhold assent therefrom.

Section 112. Annual financial statement

(1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the “annual financial statement”.

(2) The estimates of expenditure embodied in the annual financial statement shall show separately-

(a) The sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and

(b) The sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure.

(3) The following expenditure shall be expenditure charged on the Consolidated Fund of India-

(a) The emoluments and allowances of the President and other expenditure relating to his office;

(b) The salaries and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People;

(c) Debt charges for which the Government of India is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;

(d) (i) The salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court;

(ii) The pensions payable to or in respect of Judges of the Federal Court;

(iii) The pensions payable to or in respect of Judges of any High Court which exercises jurisdiction in relation to any area included in the territory of India or which at any time before the commencement of this Constitution exercised jurisdiction in relation to any area included in ¹[a Governor’s Province of the Dominion of India];

(e) The salary, allowances and pension payable to or in respect of the Comptroller and Auditor-General of India;

(f) Any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;

(g) Any other expenditure declared by this Constitution or by Parliament by law to be so charged.

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for “a Province corresponding to a State specified in Part A of the First Schedule”(w. e. f. 19/10/1956).

Section 113. Procedure in Parliament with respect to estimates

(1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of India shall not be submitted to the vote of Parliament, but nothing in this clause shall be construed as preventing the discussion in either House of Parliament of any of those estimates.

(2) So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the House of the People, and the House of the People shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.

(3) No demand for a grant shall be made except on the recommendation of the President.

Section 114. Appropriation Bills

(1) As soon as may be after the grants under article 113 have been made by the House of the People, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet-

(a) The grants so made by the House of the People; and

(b) The expenditure charged on the Consolidated Fund of India but not exceeding in any case the amount shown in the statement previously laid before Parliament.

(2) No amendment shall be proposed to any such Bill in either House of Parliament which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.

(3) Subject to the provisions of articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article.

Section 115. Supplementary, additional or excess grants

(1) The President shall-

(a) If the amount authorised by any law made in accordance with the provisions of article 114 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or

(b) If any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, cause to be laid before both the Houses of Parliament another statement showing the estimated amount of that expenditure or cause to be presented to the House of the People a demand for such excess, as the case any be.

(2) The provisions of articles 112, 113 and 114 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or grant.

Section 116. Votes on account, votes of credit and exceptional grants

(1) Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power-

(a) To make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 113 for the voting of such grant and the passing of the law in accordance with the provisions of article 114 in relation to that expenditure;

(b) To make a grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;

(c) To make an exceptional grant which forms no part of the current service of any financial year; and Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which the said grants are made.

(2) The provisions of articles 113 and 114 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure.

Section 117. Specaal provisions as to financial Bills

(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States:

Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.

(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.

Section 118. Rules of procedure

(1) Each House of Parliament may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business.

(2) Until rules are made under clause (1), the rules of procedure and standing orders in force immediately before the commencement of this Constitution with respect to the Legislature of the Dominion of India shall have effect in relation to Parliament subject to such modifications and adaptations as may be made therein by the Chairman of the Council of States or the Speaker of the House of the People, as the case may be.

(3) The President, after consultation with the Chairman of the Council of States and the Speaker of the House of the People, may make rules as to the procedure with respect to joint sittings of, and communications between, the two Houses.

(4) At a joint sitting of the two Houses the Speaker of the House of the People, or in his absence such person as may be determined by rules of procedure made under clause (3), shall preside.

Section 119. Regulation by law of procedure in Parliament in relation to financial business

Parliament may, for the purpose of the timely completion of financial business, regulate by law the procedure of, and the conduct of business in, each House of Parliament in relation to any financial matter or to any Bill for the appropriation of moneys out of the Consolidated Fund of India, and, if and so far as any provision of any law so made is inconsistent with any rule made by a House of Parliament under clause (1) of article 118 or with any rule or standing order having effect in relation to Parliament under clause (2) of that article, such provision shall prevail.

Section 120. Language to be used in Parliament

(1) Notwithstanding anything in Part XVII, but subject to the provisions of article 348, business in Parliament shall be transacted in Hindi or in English:

Provided that the Chairman of the Council of States or Speaker of the House of the People, or person acting as such, as the case may be, may permit any member who cannot adequately express himself in Hindi or in English to address the House in his mother-tongue.

(2) Unless Parliament by law otherwise provides, this article shall, after the expiration of a period of fifteen years from the commencement of this Constitution, have effect as if the words “or in English” were omitted therefrom.

Section 121. Restriction on discussion in Parliament

No discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties except upon a motion for presenting an address to the President praying for the removal of the Judge as hereinafter provided.

Section 122. Courts not to inquire into proceedings of Parliament

(1) The validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure.

(2) No officer or member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.

Section 123. Power of President to promulgate Ordinances during recess of Parliament

(1) If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require.

(2) An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance-

(a) Shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and

(b) May be withdrawn at any time by the President. Explanation.

Where the Houses of Parliament are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause.

(3) If and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void.

1. Cl. (4) was ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 2 (retrospectively) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 16 (w.e.f. 20-6-1979).

Section 124. Establishment and constitution of Supreme Court

(1) There shall be a Supreme Court of India consisting of a Chief Justice of India and, until Parliament by law prescribes a larger number, of not more than seven¹ other Judges.

(2) Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal after consultation with such of the Judges of the Supreme Court and of the High Courts in the States as the President may deem necessary for the purpose and shall hold office until he attains the age of sixty-five years:

Provided that in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of India shall always be consulted:

Provided further that-

(a) A Judge may, by writing under his hand addressed to the President, resign his office;

(b) A Judge may be removed from his office in the manner provided in clause (4).

²[(2A) The age of a Judge of the Supreme Court shall be determined by such authority and in such manner as Parliament may by law provide.]

(3) A person shall not be qualified for appointment as a Judge of the Supreme Court unless he is a citizen of India and-

(a) Has been for at least five years a Judge of a High Court or of two or more such Courts in succession; or

(b) Has been for at least ten years an advocate of a High Court or of two or more such Courts in succession; or

(c) Is, in the opinion of the President, a distinguished jurist.

Explanation I. In this clause “High Court” means a High Court which exercises, or which at any time before the commencement of this Constitution exercised, jurisdiction in any part of the territory of India.

Explanation II. In computing for the purpose of this clause the period during which a person has been an advocate, any period during which a person has held judicial office not inferior to that of a district judge after he became an advocate shall be included.

(4) A Judge of the Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting has been presented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.

(5) Parliament may by law regulate the procedure for the presentation of an address and for the investigation and proof of the misbehaviour or incapacity of a Judge under clause (4).

(6) Every person appointed to be a Judge of the Supreme Court shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.

(7) No person who has held office as a Judge of the Supreme court shall plead or act in any court or before any authority within the territory of India.

1. Now “twenty-five”, vide the Supreme Court (number of Judges) Amendment Act, 1986 (Act 22 of 1986).

2. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 2.

Section 125. Salaries, etc., of Judges

¹[(1) There shall be paid to the Judges of the Supreme Court such salaries as may be determined by Parliament by law and, until provision in that behalf is so made, such salaries as are specified in the Second Schedule.]

(2) Every Judge shall be entitled to such privileges and allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such privileges, allowances and rights as are specified in the Second Schedule:

Provided that neither the privileges nor the allowances of a Judge nor his rights in respect of leave of absence or pension shall be varied to his disadvantage after his appointment.

1. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, s. 2, for cl. (1) (w.e.f. 1-4-1986).

Section 126. Appointment of acting Chief Justice

When the office of Chief Justice of India is vacant or when the Chief Justice is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such one of the other Judges of the Court as the President may appoint for the purpose.

Section 127. Appointment of ad hoc, Judges

(1) If at any time there should not be a quorum of the Judges of the Supreme Court available to hold or continue any session of the Court, the Chief Justice of India may, with the previous consent of the President and after consultation with the Chief Justice of the High Court concerned, request in writing the attendance at the sittings of the Court, as an ad hoc Judge, for such period as may be necessary, of a Judge of a High Court duly qualified for appointment as a Judge of the Supreme Court to be designated by the Chief Justice of India.

(2) It shall be the duty of the Judge who has been so designated, in priority to other duties of his office, to attend the sittings of the Supreme Court at the time and for the period for which his attendance is required, and while so attending he shall have all the jurisdiction, powers and privileges, and shall discharge the duties, of a Judge of the Supreme Court.

Section 128. Attendance of retired Judges at sittings of the Supreme Court

Notwithstanding anything in this Chapter, the Chief Justice of India may at any time, with the previous consent of the President, request any person who has held the office of a Judge of the Supreme Court or of the Federal Court ¹[or who has held the office of a Judge of a High Court and is duly qualified for appointment as a Judge of the Supreme Court] to sit and act as a Judge of the Supreme Court, and every such person so requested shall, while so sitting and acting, be entitled to such allowances as the President may by order determine and have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that Court:

Provided that nothing in this article shall be deemed to require any such person as aforesaid to sit and act as a Judge of that Court unless he consents so to do.

1. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 3.

Section 129. Supreme Court to be a court of record

The Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.

Section 130. Seat of Supreme Court

The Supreme Court shall sit in Delhi or in such other place or places, as the Chief Justice of India may, with the approval of the President, from time to time, appoint.

Section 131. Original jurisdiction of the Supreme Court

Subject to the provisions of this Constitution, the Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute-

(a) Between the Government of India and one or more States; or

(b) Between the Government of India and any State or States on one side and one or more other States on the other; or

(c) Between two or more States,

If and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends:

¹[Provided that the said jurisdiction shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, sanad or other similar instrument which, having been entered into or executed before the commencement of this Constitution, continues in operation after such commencement, or which provides that the said jurisdiction shall not extend to such a dispute.]

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 5, for the proviso.

Section 131A. Exclusive jurisdiction of the Supreme Court in regard to questions as to constitutional validity of Central laws

¹[131A. Exclusive jurisdiction of the Supreme Court in regard to questions as to constitutional validity of Central laws.

[Rep. by the Constitution (Forty-third Amendment) Act, 1977 sec. 4 (w.e.f. 13-4-1978).]]

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 23 (w.e.f. 1-2-1977).

Section 132. Appellate jurisdiction of Supreme Court in appeals from High Courts in certain cases

(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order of a High Court in the territory of India, whether in a civil, criminal or other proceeding, ¹[if the High Court certifies under article 134A] that the case involves a substantial question of law as to the interpretation of this Constitution.

²[* * *]

(3) Where such a certificate is given, ³[***] any party in the case may appeal to the Supreme Court on the ground that any such question as aforesaid has been wrongly decided 3[***].

Explanation. For the purposes of this article, the expression “final order” includes an order deciding an issue, which, if decided in favour of the appellant, would be sufficient for the final disposal of the case.

1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 17, for “if the High Court certifies” (w.e.f. 1-8-1979).

2. Cl. (2) omitted by s. 17, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 1-8-1979).

3. Certain words omitted by s. 17, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 1-8-1979).

Section 133. Appellate jurisdiction of Supreme Court in appeals from High Courts in regard to civil matters

¹[(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India ²[if the High Court certifies under article 134A-]

(a) That the case involves a substantial question of law of general importance; and

(b) That in the opinion of the High Court the said question needs to be decided by the Supreme Court.]

(2) Notwithstanding anything in article 132, any party appealing to the Supreme Court under clause (1) may urge as one of the grounds in such appeal that a substantial question of law as to the interpretation of this Constitution has been wrongly decided.

(3) Notwithstanding anything in this article, no appeal shall, unless Parliament by law otherwise provides, lie to the Supreme Court from the judgment, decree or final order of one Judge of a High Court.

1. Subs. by the Constitution (Thirtieth Amendment) Act, 1972, s. 2, for cl. (1) (w.e.f. 27-2-1973).

2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 18, for “if the High Court certifies-” (w.e.f. 1-8-1979).

Section 134. Appellate jurisdiction of Supreme Court in regard to criminal matters

(1) An appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India if the High Court-

(a) Has on appeal reversed an order of acquittal of an accused person and sentenced him to death; or

(b) Has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to death; or

(c) ¹[certifies under article 134A] that the case is a fit one for appeal to the Supreme Court:

Provided that an appeal under sub-clause (c) shall lie subject to such provisions as may be made in that behalf under clause (1) of article 145 and to such conditions as the High Court may establish or require.

(2) Parliament may by law confer on the Supreme Court any further powers to entertain and hear appeals from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India subject to such conditions and limitations as may be specified in such law.

1. Subs. by s. 19, the Constitution (Forty-fourth Amendment) Act, 1978, for “certifies” (w.e.f. 1-8-1979).

Section 134A. Certificate for appeal to the Supreme Court

¹[134A. Certificate for appeal to the Supreme Court .

Every High Court, passing or making a judgment, decree, final order, or sentence, referred to in clause (1) of article 132 or clause (1) of article 133, or clause (1) of article 134, -

(a) May, if it deems fit so to do, on its own motion; and

(b) Shall, if an oral application is made, by or on behalf of the party aggrieved, immediately after the passing or making of such judgment, decree, final order or sentence,

Determine, as soon as may be after such passing or making, the question whether a certificate of the nature referred to in clause (1) of article 132, or clause (1) of article 133 or, as the case may be, sub-clause (c) of clause (1) of article 134, may be given in respect of that case.]

1. Ins. by s. 20, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 1-8-1979).

Section 135. Jurisdiction and powers of the Federal Court under existing law to be exercisable by the Supreme Court

Until Parliament by law otherwise provides, the Supreme Court shall also have jurisdiction and powers with respect to any matter to which the provisions of article 133 or article 134 do not apply if jurisdiction and powers in relation to that matter were exercisable by the Federal Court immediately before the commencement of this Constitution under any existing law.

Section 136. Special leave to appeal by the Supreme Court

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.

(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces.

Section 137. Review of judgments or orders by the Supreme Court

Subject to the provisions of any law made by Parliament or any rules made under article 145, the Supreme Court shall have power to review any judgment pronounced or order made by it.

Section 138. Enlargement of the jurisdiction of the Supreme Court

(1) The Supreme Court shall have such further jurisdiction and powers with respect to any of the matters in the Union List as Parliament may by law confer.

(2) The Supreme Court shall have such further jurisdiction and powers with respect to any matter as the Government of India and the Government of any State may by special agreement confer, if Parliament by law provides for the exercise of such jurisdiction and powers by the Supreme Court.

Section 139. Conferment on the Supreme Court of powers to issue certain writs

Parliament may by law confer on the Supreme Court power to issue directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for any purposes other than those mentioned in clause (2) of article 32.

Section 139A. Transfer of certain cases

¹ [139A. Transfer of certain cases.

² [(1) Where cases involving the same or substantially the same questions of law are pending before the Supreme Court and one or more High Courts or before two or more High Courts and the Supreme Court is satisfied on its own motion or on an application made by the Attorney-General of India or by a party to any such case that such questions are substantial questions of general importance, the Supreme Court may withdraw the case or cases pending before the High Court or the High Courts and dispose of all the cases itself:

Provided that the Supreme Court may after determining the said questions of law return any case so withdrawn together with a copy of its judgment on such questions to the High Court from which the case has been withdrawn, and the High Court shall on receipt thereof, proceed to dispose of the case in conformity with such judgment.]

(2) The Supreme Court may, if it deems it expedient so to do for the ends of justice, transfer any case, appeal or other proceedings pending before any High Court to any other High Court.]

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 24 (w.e.f. 1-2-1977).

2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 21, for cl. (1) (w.e.f. 1-8-1979).

Section 140. Ancillary powers of Supreme Court

Parliament may by law make provision for conferring upon the Supreme Court such supplemental powers not inconsistent with any of the provisions of this Constitution as may appear to be necessary or desirable for the purpose of enabling the Court more effectively to exercise the jurisdiction conferred upon it by or under this Constitution.

Section 141. Law declared by Supreme Court to be binding on all courts

The law declared by the Supreme Court shall be binding on all courts within the territory of India.

Section 142. Enforcement of decrees and orders of Supreme Court and orders as to discovery, etc.

(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order ¹prescribe.

(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.

1. See the Supreme Court (Decrees and Orders) Enforcement Order, 1954 (C.O. 47).

Section 143. Power of President to consult Supreme Court.

(1) If at any time it appears to the President that a question of law or fact has arisen, or is likely to arise, which is of such a nature and of such public importance that it is expedient to obtain the opinion of the Supreme Court upon it, he may refer the question to that Court for consideration and the Court may, after such hearing as it thinks fit, report to the President its opinion thereon.

(2) The President may, notwithstanding anything in ¹[***] the proviso to article 131, refer a dispute of the kind mentioned in the 2[said proviso] to the Supreme Court for opinion and the Supreme Court shall, after such hearing as it thinks fit, report to the President its opinion thereon.

1. The words, brackets and figure “clause (i) of” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “said clause”.

Section 144. Civil and judicial authorities to act in aid of the Supreme Court

All authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court.

Section 144A. Special provisions as to disposal of questions relating to constitutional validity of laws

¹[144A. Special provisions as to disposal of questions relating to constitutional validity of laws.

[Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 5 (w.e.f. 13-4-1978).

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 25 (w.e.f. 1-2-1977).

Section 145. Rules of Court, etc.

(1) Subject to the provisions of any law made by Parliament, the Supreme Court may from time to time, with the approval of the President, make rules for regulating generally the practice and procedure of the Court including-

(a) Rules as to the persons practising before the Court;

(b) Rules as to the procedure for hearing appeals and other mattters pertaining to appeals including the time within which appeals to the Court are to be entered;

(c) Rules as to the proceedings in the Court for the enforcement of any of the rights conferred by Part III;

¹ [(cc) Rules as to the proceedings in the Court under 2[article 139A];]

(d) Rules as to the entertainment of appeals under sub-clause (c) of clause (1) of article 134;

(e) Rules as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review including the time within which applications to the Court for such review are to be entered;

(f) Rules as to the costs of and incidental to any proceedings in the Court and as to the fees to be charged in respect of proceedings therein;

(g) Rules as to the granting of bail;

(h) Rules as to stay of proceedings;

(i) Rules providing for the summary determination of any appeal which appears to the Court to be frivolous or vexatious or brought for the purpose of delay;

(j) Rules as to the procedure for inquiries referred to in clause (1) of article 317.

(2) Subject to the ³ [provisions of ⁴ [***] clause (3)], rules made under this article may fix the minimum number of Judges who are to sit for any purpose, and may provide for the powers of single Judges and Division Courts.

(3) ⁵ [⁴ [***] The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five:

Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion.

(4) No judgment shall be delivered by the Supreme Court save in open Court, and no report shall be made under article 143 save in accordance with an opinion also delivered in open Court.

(5) No judgment and no such opinion shall be delivered by the Supreme Court save with the concurrence of a majority of the Judges present at the hearing of the case, but nothing in this clause shall be deemed to prevent a Judge who does not concur from delivering a dissenting judgment or opinion.

1. Ins. by s. 26, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 1-2-1977).

2. Subs. by the Constitution (Forty-third Amendment) Act, 1977, s. 6, for “articles 131A and 139A” (w.e.f. 13-4-1978).

3. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 26, for “provisions of clause (3)” (w.e.f. 1-2-1977).

4. Certain words omitted by the Constitution (Forty-third Amendment) Act, 1977, s. 6 (w.e.f. 13-4-1978).

5. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 26, for “The minimum number” (w.e.f. 1-2-1977).

Section 146. Officers and servants and the expenses of the Supreme Court

(1) Appointments of officers and servants of the Supreme Court shall be made by the Chief Justice of India or such other Judge or officer of the Court as he may direct:

Provided that the President may by rule require that in such cases as may be specified in the rule, no person not already attached to the Court shall be appointed to any office connected with the Court, save after consultation with the Union Public Service Commission.

(2) Subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court shall be such as may be prescribed by rules made by the Chief Justice of India or by some other Judge or officer of the Court authorised by the Chief Justice of India to make rules for the purpose:

Provided that the rules made under this clause shall, so far as they relate to salaries, allowances, leave or pensions, require the approval of the President.

(3) The administrative expenses of the Supreme Court, including all salaries, allowances and pensions payable to or in respect of the officers and servants of the Court, shall be charged upon the Consolidated Fund of India, and any fees or other moneys taken by the Court shall form part of that Fund.

Section 147. Interpretation

In this Chapter and in Chapter V of Part VI, references to any substantial question of law as to the interpretation of this Constitution shall be construed as including references to any substantial question of law as to the interpretation of the Government of India Act, 1935 (including any enactment amending or supplementing that Act), or of any Order in Council or order made thereunder, or of the Indian Independence Act, 1947, or of any order made thereunder.

Section 148. Comptroller and Auditor-General of India

(1) There shall be a Comptroller and Auditor-General of India who shall be appointed by the President by warrant under his hand and seal and shall only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court.

(2) Every person appointed to be the Comptroller and Auditor-General of India shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.

(3) The salary and other conditions of service of the Comptroller and Auditor-General shall be such as may be determined by Parliament by law and, until they are so determined, shall be as specified in the Second Schedule:

Provided that neither the salary of a Comptroller and Auditor-General nor his rights in respect of leave of absence, pension or age of retirement shall be varied to his disadvantage after his appointment.

(4) The Comptroller and Auditor-General shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office.

(5) Subject to the provisions of this Constitution and of any law made by Parliament, the conditions of service of persons serving in the Indian Audit and Accounts Department and the administrative powers of the Comptroller and Auditor-General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor-General.

(6) The administrative expenses of the office of the Comptroller and Auditor-General, including all salaries, allowances and pensions payable to or in respect of persons serving in that office, shall be charged upon the Consolidated Fund of India.

Section 149. Duties and powers of the Comptroller and Auditor-General

The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively.

Section 150. Form of accounts of the Union and of the States

¹[150. Form of accounts of the Union and of the States.

The accounts of the Union and of the States shall be kept in such form as the President may, ²[on the advice of] the Comptroller and Auditor-General of India, prescribe.]

1. Subs. by s. 27, the Constitution (Forty-second Amendment) Act, 1976, for art. 150 (w.e.f. 1-4-1977).

2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 22, for “after consultation with” (w.e.f. 20-6-1979).

Section 151. Audit reports

(1) The reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the President, who shall cause them to be laid before each House of Parliament.

(2) The reports of the Comptroller and Auditor-General of India relating to the accounts of a State shall be submitted to the Governor ¹[***] of the State, who shall cause them to be laid before the Legislature of the State.

1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.

Section 152. Definition

Part VI The State ¹[***] Chapter I General

In this Part, unless the context otherwise requires, the expression “State” does not include the State of Jammu and Kashmir.

Section 153. Governors of States

There shall be a Governor for each State:

¹[Provided that nothing in this article shall prevent the appointment of the same person as Governor for two or more States.]

1. Added by s. 6, the Constitution (Seventh Amendment) Act, 1956

Section 154. Executive power of State

(1) The executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution.

(2) Nothing in this article shall-

(a) Be deemed to transfer to the Governor any functions conferred by any existing law on any other authority; or

(b) Prevent Parliament or the Legislature of the State from conferring by law functions on any authority subordinate to the Governor.

Section 155. Appointment of Governor

The Governor of a State shall be appointed by the President by warrant under his hand and seal.

Section 156. Term of office of Governor

(1) The Governor shall hold office during the pleasure of the President.

(2) The Governor may, by writing under his hand addressed to the President, resign his office.

(3) Subject to the foregoing provisions of this article, a Governor shall hold office for a term of five years from the date on which he enters upon his office:

Provided that a Governor shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.

Section 157. Qualifications for appointment as Governor

No person shall be eligible for appointment as Governor unless he is a citizen of India and has completed the age of thirty-five years.

Section 158. Conditions of Governor’s office

(1) The Governor shall not be a member of either House of Parliament or of a House of the Legislature of any State specified in the First Schedule, and if a member of either House of Parliament or of a House of the Legislature of any such State be appointed Governor, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Governor.

(2) The Governor shall not hold any other office of profit.

(3) The Governor shall be entitled without payment of rent to the use of his official residences and shall be also entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.

¹[(3A) Where the same person is appointed as Governor of two or more States, the emoluments and allowances payable to the Governor shall be allocated among the States in such proportion as the President may by order determine.]

(4) The emoluments and allowances of the Governor shall not be diminished during his term of office.

1. Ins. by s. 7, the Constitution (Seventh Amendment) Act, 1956.

Section 159. Oath or affirmation by the Governor

Every Governor and every person discharging the functions of the Governor shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of the High Court exercising jurisdiction in relation to the State, or, in his absence, the senior most Judge of that Court available, an oath or affirmation in the following form, that is to say-

“I, A. B., do (swear in the name of God/solemnly affirm) that I will faithfully execute the office of Governor (or discharge the functions of the Governor) of ………….(name of the State) and will to the best of my ability preserve, protect and defend the Constitution and the law and that I will devote myself to the service and well-being of the people of …..(name of the State).”

Section 160. Discharge of the functions of the Governor in certain contingencies

The President may make such provision as he thinks fit for the discharge of the functions of the Governor of a State in any contingency not provided for in this Chapter

Section 161. Power of Governor to grant pardons, etc., and to suspend, remit or commute sentences in certain cases

The Governor of a State shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence against any law relating to a matter to which the executive power of the State extends.

Section 162. Extent of executive power of State

Subject to the provisions of this Constitution, the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws:

Provided that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by this Constitution or by any law made by Parliament upon the Union or authorities thereof.

Section 163. Council of Ministers to aid and advise Governor

(1) There shall be a Council of Ministers with the Chief Minister at the head to aid and advise the Governor in the exercise of his functions, except in so far as he is by or under this Constitution required to exercise his functions or any of them in his discretion.

(2) If any question arises whether any matter is or is not a matter as respects which the Governor is by or under this Constitution required to act in his discretion, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in his discretion.

(3) The question whether any, and if so what, advice was tendered by Ministers to the Governor shall not be inquired into in any court.

Section 164. Other provisions as to Ministers

(1) The Chief Minister shall be appointed by the Governor and the other Ministers shall be appointed by the Governor on the advice of the Chief Minster, and the Ministers shall hold office during the pleasure of the Governor:

Provided that in the States of Bihar, Madhya Pradesh and Orissa, there shall be a Minister in charge of tribal welfare who may in addition be in charge of the welfare of the Scheduled Castes and backward classes or any other work.

1(1A) The total number of Ministers, including the Chief Minister, in the Council of Ministers in a State shall not exceed fifteen per cent of the total number of members of the Legislative Assembly of the State.

Provided that the number of Ministers, including the Chief Minister in a State shall not be less than twelve:

Provided further that where the total number of Ministers Including the Chief MInister in the Council of Ministers in any State at the commencement of the Constitution (Ninety-first Amendment) Act, 2003 exceeds the said fifteen per cent or the number specified in the first proviso, as the case may be, then the total number of Ministers in that State shall be brought in conformity with the provisions of this clause within six months from such date as the President may by public notification appoint.

(1B) A member of the Legislative Assembly of a State or either House of the Legislature of a State having Legislative Council belonging to any political party who is disqualified for being a member of that house under paragraph 2 of the Tenth Schedule shall also be disqualified to be appointed as a Minister under clause (1) for duration of the period commencing from the date of his disqualification till the date on which the term of his office as such member would expire or where he contests any election to the Legislative Assembly of a State or either House of the Legislature of a State having Legislative Council, as the case may be, before the expiry of such period, till the date on which he is declared elected, whichever is earlier.]

(2) The Council of Ministers shall be collectively responsible to the Legislative Assembly of the State.

(3) Before a Minister enters upon his office, the Governor shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule.

(4) A Minister who for any period of six consecutive months is not a member of the Legislature of the State shall at the expiration of that period cease to be a Minister.

(5) The salaries and allowances of Ministers shall be such as the Legislature of the State may from time to time by law determine and, until the Legislature of the State so determines, shall be as specified in the Second Schedule.

1. Ins. by the Constitution (Ninety-first Amendmen) Act, 2003, sec.3 (w.e.f.1/1/2004).

Section 165. Advocate-General for the State

(1) The Governor of each State shall appoint a person who is qualified to be appointed a Judge of a High Court to be Advocate-General for the State.

(2) It shall be the duty of the Advocate-General to give advice to the Government of the State upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the Governor, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force.

(3) The Advocate-General shall hold office during the pleasure of the Governor, and shall receive such remuneration as the Governor may determine.

Section 166. Conduct of business of the Government of a State.

(1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor.

(2) Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor.

(3) The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion.

¹[* * *]

1. Cl. (4) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 28 (w.e.f. 3-1-1977) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 23 (w.e.f. 20-6-1979).

Section 167. Duties of Chief Minister as respects the furnishing of information to Governor, etc.

It shall be the duty of the Chief Minister of each State-

(a) To communicate to the Governor of the State all decisions of the Council of Ministers relating to the administration of the affairs of the State and proposals for legislation;

(b) To furnish such information relating to the administration of the affairs of the State and proposals for legislation as the Governor may call for; and

(c) If the Governor so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council.

Section 168. Constitution of Legislatures in States.

(1) For every State there shall be a Legislature which shall consist of the Governor, and-

(a) In the States of ¹[***] Bihar, ²[***] ³[⁴[***] ⁵[Maharashtra], ⁶[Karnataka] and ⁷[***] 8[and Uttar Pradesh, two Houses;

(b) In other States, one House.

(2) Where there are two Houses of the Legislature of a State, one shall be known as the Legislative Council and the other as the Legislative

Assembly, and where there is only one House, it shall be known as the Legislative Assembly.

1. The words “Andhra Pradesh,” omitted by the Andhra Pradesh Legislatve Council Abolition) Act, 1985 (34 of 1985), s. 4 (w.e.f. 1-6-1985).

2. The word “Bombay” omitted by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 20 (w.e.f. 1-5-1960).

3. No date has been appointed under s.8(2) of the Constitution (Seventh Amendment) Act, 1956, for the insertion of the words “Madhaya Pradesh” in this sub-clause.

4. The words “Tamil Nadu,” omitted by the Tamil Nadu Legislative Council (Abolition) Act, 1986 (40 of 1986), s. 4 (w.e.f. 1-11-1986).

5. Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 20 (w.e.f. 1-5-1960).

6. Subs. by the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), s. 4, for “Mysore” (w.e.f. 1-11-1973), which was inserted by the Constitution (Seventh Amendment) Act, 1956, s. 8 (1).

7. The word “Punjab”, omitted by the Punjab Legislative Council (Abolition) Act 1969 (46 of 1969), sec.4 (w.e.f.7/1/1970).

8. Subs. by the West Bengal Legislative Council (Abolition) Act, 1969 (20 of 1969), sec.4, for “Uttar Pradesh and West Bengal” (w.e.f. 1/8/1969).

Section 169. Abolition or creation of Legislative Councils in States

(1) Notwithstanding anything in article 168, Parliament may by law provide for the abolition of the Legislative Council of a State having such a Council or for the creation of such a Council in a State having no such Council, if the Legislative Assembly of the State passes a resolution to that effect by a majority of the total membership of the Assembly and by a majority of not less than two-thirds of the members of the Assembly present and voting.

(2) Any law referred to in clause (1) shall contain such provisions for the amendment of this Constitution as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions as Parliament may deem necessary.

(3) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of article 368.

Section 170. Composition of the Legislative Assemblies

¹[170. Composition of the Legislative Assemblies.

(1) Subject to the provisions of article 333, the Legislative Assembly of each State shall consist of not more than five hundred, and not less than sixty, members chosen by direct election from territorial constituencies in the State.

(2) For the purposes of clause (1), each State shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the State.

²[Explanation. In this clause, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:

Provided that the reference in this Explanation to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year ³[2026] have been published, be construed as a reference to the ⁴[2001] census.]

(3) Upon the completion of each census, the total number of seats in the Legislative Assembly of each State and the division of each State into territorial constituencies shall be readjusted by such authority and in such manner as Parliament may by law determine:

Provided that such readjustment shall not affect representation in the Legislative Assembly until the dissolution of the then existing Assembly:]

⁵[Provided further that such readjustment shall take effect from such date as the President may, by order, specify and until such readjustment takes effect, any election to the Legislative Assembly may be held on the basis of the territorial constituencies existing before such readjustment:

Provided also that until the relevant figures for the first census taken after the year ³[2026] have been published, it shall not be necessary to ⁶[readjust-

(i) the total number of seats in the Legislative Assembly of each State as readkisted pm the basis of the 1971 census; and

(ii) the division of such State into territorial constituencies as may be readjusted ion the basis of the ⁷[2001] census,

under this clause.]]

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 9, for art. 170.

2. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 29, for the Explanation (w.e.f. 3-1-1977).

3. Subs. by the Constitution (Eighty-fourth Amendment) act, 2001, sec.5, for “2000” (w.e.f. 21/2/2002).

4. Subs. by the Constitution (Eighty-fourth Amendment) act, 2001, sec.5, for “1971” (w.e.f. 21/2/2002) and again subs. by the Constitution (Eighty- seventh Amendment) Act, 2003,for ‘1991’ (w.e.f. 22/6/2003).

5. Ins. by s. 29, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 3-1-1977).

6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 5, for “2000” (w.e.f. 21-2-2002).

7. Subs. by the Constitution (Eighty-Seventh Amendment) Act, 2003, for ‘1991’ (w.e.f. 22/6/2003).

Section 171. Composition of the Legislative Councils

(1) The total number of members in the Legislative Council of a State having such a Council shall not exceed ¹[one third] of the total number of members in the Legislative Assembly of that State:

Provided that the total number of members in the Legislative Council of a State shall in no case be less than forty.

(2) Until Parliament by law otherwise provides, the composition of the Legislative Council of a State shall be as provided in clause (3).

(3) Of the total number of members of the Legislative Council of a State-

(a) As nearly as may be, one-third shall be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State as Parliament may by law specify;

(b) As nearly as may be, one-twelfth shall be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in the territory of India or have been for at least three years in possession of qualifications prescribed by or under any law made by Parliament as equivalent to that of a graduate of any such university;

(c) As nearly as may be, one-twelfth shall be elected by electorates consisting of persons who have been for at least three years engaged in teaching in such educational institutions within the State, not lower in standard than that of a secondary school, as may be prescribed by or under any law made by Parliament;

(d) As nearly as may be, one-third shall be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly;

(e) The remainder shall be nominated by the Governor in accordance with the provisions of clause (5).

(4) The members to be elected under sub-clauses (a), (b) and (c) of clause (3) shall be chosen in such territorial constituencies as may be prescribed by or under any law made by Parliament, and the elections under the said sub-clauses and under sub-clause (d) of the said clause shall be held in accordance with the system of proportional representation by means of the single transferable vote.

(5) The members to be nominated by the Governor under sub-clause (e) of clause (3) shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely: -

Literature, science, art, co-operative movement and social service.

1. Subs. by the Constitution (Seventh Amendment) Act,1956, sec.10, for “one-fourth”.

Section 172. Duration of State Legislatures

(1) Every Legislative Assembly of every State, unless sooner dissolved, shall continue for ¹[five years] from the date appointed for its first meeting and no longer and the expiration of the said period of ¹[five years] shall operate as a dissolution of the Assembly:

Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the Proclamation has ceased to operate.

(2) he Legislative Council of a State shall not be subject to dissolution, but as nearly as possible one-third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.

1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 24, for “six years” (w.e.f. 6-9-1979). The words “six years” were subs. for the original words “five years” by the Constitution (Forty-second Amendment) Act, 1976, s. 30 (w.e.f. 3-1-1977).

Section 173. Qualification for membership of the State Legislature

A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he-

¹[(a) Is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule;]

(b) Is, in the case of a seat in the Legislative Assembly, not less than twenty-five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and

(c) Possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.

1. Subs. by the Constitution (Sixteenth Amendment) Act, 1963, s. 4, for cl.(a).

Section 174. Sessions of the State Legislature, prorogation and dissolution

¹[174. Sessions of the State Legislature, prorogation and dissolution.

(1) The Governor shall from time to time summon the House or each House of the Legislature of the State to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.

(2) The Governor may from time to time-

(a) Prorogue the House or either House;

(b) Dissolve the Legislative Assembly.]

1. Subs. by the Constitution (First Amendment) Act, 1951, s. 8, for art. 174.

Section 175. Right of Governor to address and send messages to the House or Houses

(1) The Governor may address the Legislative Assembly or, in the case of a State having a Legislative Council, either House of the Legislature of the State, or both Houses assembled together, and may for that purpose require the attendance of members.

(2) The Governor may send messages to the House or Houses of the Legislature of the State, whether with respect to a Bill then pending in the Legislature or otherwise, and a House to which any message is so sent shall with all convenient despatch consider any matter required by the message to be taken into consideration.

Section 176. Special address by the Governor

(1) At the commencement of ¹[the first session after each general election to the Legislative Assembly and at the commencement of the first session of each year], the Governor shall address the Legislative Assembly or, in the case of a State having a Legislative Council, both Houses assembled together and inform the Legislature of the causes of its summons.

(2) Provision shall be made by the rules regulating the procedure of the House or either House for the allotment of time for discussion of the matters referred to in such address ²[***].

1. Subs. by s. 9, the Constitution (First Amendment) Act, 1951, for “every session”.

2. The words “and for the precedence of such discussion over other business of the House” omitted by s. 9, the Constitution (First Amendment) Act, 1951.

Section 177. Rights of Ministers and Advocate-General as respects the Houses

Every Minister and the Advocate-General for a State shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Assembly of the State or, in the case of a State having a Legislative Council, both Houses, and to speak in, and otherwise to take part in the proceedings of, any committee of the Legislature of which he may be named a member, but shall not, by virtue of this article, be entitled to vote.

Section 178. The Speaker and Deputy Speaker of the Legislative Assembly

Every Legislative Assembly of a State shall, as soon as may be, choose two members of the Assembly to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the Assembly shall choose another member to be Speaker or Deputy Speaker, as the case may be.

Section 179. Vacation and resignation of, and removal from, the offices of Speaker and Deputy Speaker

A member holding office as Speaker or Deputy Speaker of an Assembly-

(a) Shall vacate his office if he ceases to be a member of the Assembly;

(b) May at any time by writing under his hand addressed, if such member is the Speaker, to the Deputy Speaker, and if such member is the Deputy Speaker, to the Speaker, resign his office; and

(c) May be removed from his office by a resolution of the Assembly passed by a majority of all the then members of the Assembly:

Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution:

Provided further that, whenever the Assembly is dissolved, the Speaker shall not vacate his office until immediately before the first meeting of the Assembly after the dissolution.

Section 180. Power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker

(1) While the office of Speaker is vacant, the duties of the office shall be performed by the Deputy Speaker or, if the office of Deputy Speaker is also vacant, by such member of the Assembly as the Governor may appoint for the purpose.

(2) During the absence of the Speaker from any sitting of the Assembly the Deputy Speaker or, if he is also absent, such person as may be determined by the rules of procedure of the Assembly, or, if no such person is present, such other person as may be determined by the Assembly, shall act as Speaker

Section 181. The Speaker or the Deputy Speaker not to preside while a resolution for his removal from office is under consideration

(1) At any sitting of the Legislative Assembly, while any resolution for the removal of the Speaker from his office is under consideration, the Speaker, or while any resolution for the removal of the Deputy Speaker from his office is under consideration, the Deputy Speaker, shall not, though he is present, preside, and the provisions of clause (2) of article 180 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Speaker or, as the case may be, the Deputy Speaker, is absent.

(2) The Speaker shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Assembly while any resolution for his removal from office is under consideration in the Assembly and shall, notwithstanding anything in article 189, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.

Section 182. The Chairman and Deputy Chairman of the Legislative Council

The Legislative Council of every State having such Council shall, as soon as may be, choose two members of the Council to be respectively Chairman and Deputy Chairman thereof and, so often as the office of Chairman or Deputy Chairman becomes vacant, the Council shall choose another member to be Chairman or Deputy Chairman, as the case may be.

Section 183. Vacation and resignation of, and removal from, the offices of Chairman and Deputy Chairman

A member holding office as Chairman or Deputy Chairman of a Legislative Council-

(a) Shall vacate his office if he ceases to be a member of the Council;

(b) May at any time by writing under his hand addressed, if such member is the Chairman, to the Deputy Chairman, and if such member is the Deputy Chairman, to the Chairman, resign his office; and

(c) May be removed from his office by a resolution of the Council passed by a majority of all the then members of the Council:

Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution.

Section 184. Power of the Deputy Chairman or other person to perform the duties of the office of, or to act as, Chairman

(1) While the office of Chairman is vacant, the duties of the office shall be performed by the Deputy Chairman or, if the office of Deputy Chairman is also vacant, by such member of the Council as the Governor may appoint for the purpose.

(2) During the absence of the Chairman from any sitting of the Council the Deputy Chairman or, if he is also absent, such person as may be determined by the rules of procedure of the Council, or, if no such person is present, such other person as may be determined by the Council, shall act as Chairman.

Section 185. The Chairman or the Deputy Chairman not to preside while a resolution for his removal from office is under consideration

(1) At any sitting of the Legislative Council, while any resolution for the removal of the Chairman from his office is under consideration, the Chairman, or while any resolution for the removal of the Deputy Chairman from his office is under consideration, the Deputy Chairman, shall not, though he is present, preside, and the provisions of clause (2) of article 184 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Chairman or, as the case may be, the Deputy Chairman is absent.

(2) The Chairman shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Council while any resolution for his removal from office is under consideration in the Council and shall, notwithstanding anything in article 189, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.

Section 186. Salaries and allowances of the Speaker and Deputy Speaker and the Chairman and Deputy Chairman

There shall be paid to the Speaker and the Deputy Speaker of the Legislative Assembly, and to the Chairman and the Deputy Chairman of the Legislative Council, such salaries and allowances as may be respectively fixed by the Legislature of the State by law and, until provision in that behalf is so made, such salaries and allowances as are specified in the Second Schedule

Section 187. Secretariat of State Legislature

(1) The House or each House of the Legislature of a State shall have a separate secretarial staff:

Provided that nothing in this clause shall, in the case of the Legislature of a State having a Legislative Council, be construed as preventing the creation of posts common to both Houses of such Legislature.

(2) The Legislature of a State may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House or Houses of the Legislature of the State.

(3) Until provision is made by the Legislature of the State under clause (2), the Governor may, after consultation with the Speaker of the Legislative Assembly or the Chairman of the Legislative Council, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the Assembly or the Council, and any rules so made shall have effect subject to the provisions of any law made under the said clause.

Section 188. Oath or affirmation by members

Every member of the Legislative Assembly or the Legislative Council of a State shall, before taking his seat, make and subscribe before the Governor, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.

Section 189. Voting in Houses, power of Houses to act notwithstanding vacancies and quorum

(1) Save as otherwise provided in this Constitution, all questions at any sitting of a House of the Legislature of a State shall be determined by a majority of votes of the members present and voting, other than the Speaker or Chairman, or person acting as such.

The Speaker or Chairman, or person acting as such, shall not vote in the first instance, but shall have and exercise a casting vote in the case of an equality of votes.

(2) A House of the Legislature of a State shall have power to act notwithstanding any vacancy in the membership thereof, and any proceedings in the Legislature of a State shall be valid notwithstanding that it is discovered subsequently that some person who was not entitled so to do sat or voted or otherwise took part in the proceedings.

(3) Until the Legislature of the State by law otherwise provides, the quorum to constitute a meeting of a House of the Legislature of a State shall be ten members or one-tenth of the total number of members of the House, whichever is greater.

(4) If at any time during a meeting of the Legislative Assembly or the Legislative Council of a State there is no quorum, it shall be the duty of the Speaker or Chairman, or person acting as such, either to adjourn the House or to suspend the meeting until there is a quorum.

Section 190. Vacation of seats

(1) No person shall be a member of both Houses of the Legislature of a State and provision shall be made by the Legislature of the State by law for the vacation by a person who is chosen a member of both Houses of his seat in one house or the other.

(2) No person shall be a member of the Legislatures of two or more States specified in the First Schedule and if a person is chosen a member of the Legislatures of two or more such States, then, at the expiration of such period as may be specified in rules ¹made by the President, that person’s seat in the Legislatures of all such States shall become vacant, unless he has previously resigned his seat in the Legislatures of all but one of the States.

(3) If a member of a House of the Legislature of a State.

(a) Becomes a subject to any of the disqualifications mentioned in ²[clause (1) or clause (2) of article 191]; or

³[(b) Resigns his seat by writing under his hand addressed to the speaker or the Chairman, as the case may be, and his resignation is accepted by the Speaker or the Chairman, as the case may be,]

His seat shall thereupon become vacant:

⁴[Provided that in the case of any resignation referred to in sub-clause (b), if from information received or otherwise and after making such inquiry as he thinks fit, the Speaker or the Chairman, as the case may be, is satisfied that such resignation is not voluntary or genuine, he shall not accept such resignation.]

(4) If for a period of sixty days a member of a House of the Legislature of a State is without permission of the House absent from all meetings thereof, the House may declare his seat vacant:

Provided that in computing the said period of sixty days no account shall be taken of any period during which the House is prorogued or is adjourned for more than four consecutive days.

1. See the Prohibition of Simultaneous Membership Rules, 1950, published with the Ministry of Law Notification No. F.46/50-C, dated the 26th January, 1950, Gazette of India, Extraordinary, p.678

Section 191. Disqualifications for membership.

(1) A person shall be disqualifed for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State-

(a) If he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder;

(b) If he is of unsound mind and stands so declared by a competent court;

(c) If he is an undischarged insolvent;

(d) If he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State;

(e) If he is so disqualified by or under any law made by Parliament.

¹[Explanation.- For the purposes of this clause], a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State specified in the First Schedule by reason only that he is a Minister either for the Union or for such State.

²[(2) A person shall be disqualified for being a member of the Legislative Assembly or Legislative Council of a State if he is so disqualified under the Tenth Schedule.]

1. Subs. by the Constitution (Fifty-second Amendment) Act, 1985, s. 5, for “(2) For the purposes of this article” (w.e.f. 1-3-1985).

2. Ins. by s. 5, the Constitution (Fifty-second Amendment) Act, 1985 (w.e.f. 1-3-1985).

Section 192. Decision on questions as to disqualifications of members.

¹[192. Decision on questions as to disqualifications of members.

(1) If any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of article 191, the question shall be referred for the decision of the Governor and his decision shall be final.

(2) Before giving any decision on any such question, the Governor shall obtain the opinion of the Election Commission and shall act according to such opinion.]

1. Art. 192 has been successively subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 33 (w.e.f. 3-1-1977) and the Constitution (Forty-fourth Amendment) Act, 1978, s. 25 to read as above (w.e.f. 20-6-1979).

Section 193. Penalty for sitting and voting before making oath or affirmation under article 188 or when not qualified or when disqualified.

If a person sits or votes as a member of the Legislative Assembly or the Legislative Council of a State before he has complied with the requirements of article 188, or when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament or the Legislature of the State, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the State.

Section 194. Powers, privileges, etc., of the Houses of Legislatures and of the members and committees thereof.

(1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of the Legislature, there shall be freedom of speech in the Legislature of every State.

(2) No member of the Legislature of a State shall be liable to any proceedings in any court in respect of anything said or any vote given by him in the Legislature or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of a House of such a Legislature of any report, paper, votes or proceedings.

(3) In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be such as may from time to time be defined by the Legislature by law, and, until so defined,¹[shall be those of that House and of its members and committees immediately before the coming into force of section 26 of the Constitution (Forty-fourth Amendment) Act, 1978].

(4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of the Legislature of a State or any committee thereof as they apply in relation to members of that Legislature.

1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 26, for certain words (w.e.f. 20-6-1979).

Section 195. Salaries and allowances of members.

Members of the Legislative Assembly and the Legislative Council of a State shall be entitled to receive such salaries and allowances as may from time to time be determined, by the Legislature of the State by law and, until provision in that respect is so made, salaries and allowances at such rates and upon such conditions as were immediately before the commencement of this Constitution applicable in the case of members of the Legislative Assembly of the corresponding Province.

Section 196. Provisions as to introduction and passing of Bills.

(1) Subject to the provisions of articles 198 and 207 with respect to Money Bills and other financial Bills, a Bill may originate in either House of the Legislature of a State which has a Legislative Council.

(2) Subject to the provisions of articles 197 and articles 198 , a Bill shall not be deemed to have been passed by the Houses of the Legislature of a State having a Legislative Council unless it has been agreed to by both Houses, either without amemdment or with such amendments only as are agreed to by both Houses.

(3) A Bill pending in the Legislature of a State shall not lapse by reason of the prorogation of the House or Houses thereof.

(4) A Bill pending in the Legislative Council of a State which has not been passed by the Legislative Assembly shall not lapse on a dissolution of the Assembly.