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INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT

Ministry of Law and Justice

Act nº 62 of 1984


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Chapter VIII
  • Chapter IX
  • Schedules
  • Act nº 62 of 1984

Preamble

THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT, 1984

[Act, No. 62 of 1984]

[11th September, 1984]

PREAMBLE

An Act to provide for the establishment of the Industrial Reconstruction Bank of India, and for the transfer to, and vesting in, the said Reconstruction Bank, of the undertaking of the Corporation known as the Industrial Reconstruction Corporation of India Limited, with a view to enabling the said Reconstruction Bank to function as the principal credit and reconstruction agency for Industrial revival and to co-ordinate similar work of the other institution engaged therein and to assist and promote industrial development, and to rehabilitate industrial concerns, and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Thirty-fifth Year of the Republic of India as follows:--

Chapter I

Section 1. Short title and commencement

Section 1 - Short title and commencement(1) This Act may be called The Industrial Reconstruction Bank of India Act, 1984.

(2) It shall come into force on such date1as the, Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.

1. Act came into force on 20-3-1985


Section 2. Definitions

In this Act, unless the context otherwise requires,--

(a) "appointed day", in relation to any provision of this Act, means the date on which such provision comes into force and any reference to the appointed day in any provision of this Act shall be construed as a reference to the commencement of that provision;

(b) "assistance" means any direct or indirect financial, managerial or technical assistance granted by the Reconstruction Bank in pursuance of any business referred to in section 18;

(c) "assisted industrial concern" means any industrial concern to which any assistance has been given by the Reconstruction Bank;

(d) "Board" means the Board of directors of the Reconstruction Bank;

(e) "charge" includes a charge referred to in section 37;

(f) "Corporation" means the Industrial Reconstruction Corporation of India Limited, a company formed and registered under the Companies Act, 1956, and having its registered office in the State of West Bengal;

(g) "Development Bank" means the Industrial Development Bank of India, established under section 3 of the Industrial Development Bank of India Act, 1964;

(h) "dues" means any dues payable by any person to the Reconstruction Bank in relation to any assistance given by, or any bond or debenture issued to the Reconstruction Bank, and includes interest, rent, costs, charges and commission payable in relation thereto;

(i) "industrial concern"--

(1) means any concern engaged, or to be engaged, in--

(i) the manufacture, preservation or processing of goods;

(ii) shipping;

(iii) mining;

(iv) the hotel industry;

(v) the transport of passengers or goods by road or by water or by air or by ropeway or by lift;

(vi) the generation or distribution of electricity or any other form of power;

(vii) the maintenance, repair, testing or servicing of machinery of any description or vehicles or vessels or motor boats or trailers or tractors;

(viii) assembling, repairing or packing any article with the aid of machinery or power;

(ix) the development of any contiguous area of land as an industrial estate;

(x) fishing or providing shore facilities for fishing or maintenance thereof;

(xi) providing special or technical knowledge or other services for the promotion of industrial growth; or

(xii) the research and development of any process or product in relation to any of the matters aforesaid,

(2) and includes--

(i) an undertaking owned, controlled or managed by a company, firm or other body corporate, which is, or is to be, so engaged.

(ii) such other concern as the Central Government may, by notification in the Official Gazette, specify in this behalf.

Explanation.-- The expression "processing of goods" includes any art or process for producing, preparing or making an article by subjecting any material to manual, mechanical, chemical, electrical or any other like operation;

(j) "nationalised bank" means a corresponding new bank as defined in section 2 of the--

(i) Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970;

(ii) Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; (k) "prescribed" means prescribed by rules made under this Act;

(l) "public financial institution" means a public financial institution specified in, or under, section 4A of the Companies Act, 1956;

(m) "Reconstruction Bank" means the Industrial Reconstruction Bank of India, established under section 3;

(n) "regulation" means a regulation made under this Act;

(o) "Reserve Bank" means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934;

(p) "share" means a share in the capital of the Corporation;

(q) "shareholder" means a person registered by the Corporation as the holder of a share;

(r) "scheduled bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934;

(s) "State Bank" means the State Bank of India constituted under section 3 of the State Bank of India Act, 1955;

(t) "State co-operative bank" means the principal co-operative society in a State, the primary object of which is the financing of other co-operative societies in the State;

(u) "State Financial Corporation" means a financial corporation established under section 3 or section 3A or an institution notified under section 46, of the State Financial Corporations Act, 1951;

(v) "State level agency" means such institution or agency, operating in any State or Union Territory, as may be specified as its agency by the Reconstruction Bank.

Chapter II

Section 3. Establishment of the Reconstruction Bank

(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be established, for the purposes of this Act, a corporation, to be known as the Industrial Reconstruction Bank of India.

(2) The Reconstruction Bank shall be a body corporate with the name aforesaid, having perpetual succession and a common seal with power, subject to the provisions of this Act to acquire, hold and dispose of property, and to contract, and may, by that name, sue and be sued.

(3) The head office of the Reconstruction Bank shall be at Calcutta, and the Reconstruction Bank may establish offices, branches or agencies at any other place, whether in, or outside, India.

Section 4. Authorised capital

(1) The authorised capital of the Reconstruction Bank shall be rupees two hundred crores.

(2) The initial paid-up capital of the Reconstruction Bank shall be rupees fifty crores which shall be obtained,--

(a) by the appropriation, out of the assets of the Corporation which stand transferred to the Reconstruction Bank by virtue of the provisions of section 5, of a sum of rupees twenty crores, being an amount equal to the amount paid-up on the shares of the Corporation;

(b) by the conversion, to the extent of rupees twenty crores, of the loans granted by the Central Government to the Corporation, into the capital of the Reconstruction Bank; and

(c) by the subscription, by the Central Government, to the paid up capital of the Reconstruction Bank, of a sum of rupees ten crores.

(3) The Reconstruction Bank may increase its paid-up capital by making further issue of shares of such amount as it may think expedient, but in doing so, the Reconstruction Bank shall ensure that its total capital does not, in any case, exceed its authorised capital.

(4) The entire paid-up capital of the Reconstruction Bank shall be wholly subscribed by, and allotted to, the Central Government.

Section 4A. Transitional Provisions regarding adjustment of capital of the Reconstruction Bank

Section 4A - Transitional Provisions regarding adjustment of capital of the Reconstruction Bank1[4A. Transitional Provisions regarding adjustment of capital of the Reconstruction Bank

(1) The Central Government may reduce share capital of the Reconstruction Bank by,--

(a) extinguishing or reducing the liability of any of its equity shares;

(b) either with or without extinguishing or reducing liability on any of its equity shares, cancelling any paid up share capital which is lost, or is unrepresented by available assets; or

(c) either with or without extinguishing or reducing liability on any of its equity shares, paying of any paid up share capital which is in excess of the wants of the Reconstruction Bank.

(2) The Central Government may at any time, by notification in the Official Gazette, convert such number of equity shares held by it, as it may decide into redeemable preference shares.

(3) The redeemable preference shares referred to in sub-section (2) shall carry such fixed rates of dividend as the Central Government may specify at the time of such conversion.]

1. Inserted by The Industrial Reconstruction Bank (Transfer of Undertakings and Repeal) Act, 1997 w.e.f. 24.01.1997.


Chapter III

Section 5. Undertaking of the Corporation to be transferred to the Reconstruction Bank

(1) On such date as the Central Government may, by notification in the Official Gazette, appoint, the undertaking of the Corporation shall stand transferred to, and shall vest in, the Reconstruction Bank.

(2) For the transfer to, and vesting in, the Reconstruction Bank of the undertaking of the Corporation, the Corporation shall be given, in cash, by the Central Government an amount equal to the amount of the total paid-up capital of the Corporation.

(3) The undertaking of the Corporation shall be deemed to include all assets, business, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments, book debts and all other rights and interests in, or arising out of, such property as were, immediately before the appointed day, in the ownership, possession, power or control of the Corporation whether within or outside India, and all books of account, registers, records, and all other documents of whatever nature relating thereto, and shall also be deemed to include all borrrowings, liabilities and obligations of whatever kind then subsisting of the Corporation in relation to its undertaking.

(4) Unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature subsisting or having effect immediately before the appointed day and to which to Corporation is a party or which are in favour of the Corporation, shall be of as full force and effect against or in favour of the Reconstruction Bank, and may be enforced or acted upon as fully and effectually as if, in the place of the Corporation, the Reconstruction Bank had been a party thereto or as if they had been issued in favour of the Reconstruction Bank.

(5) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to the business of the undertaking which has been transferred under this section, is pending by, or against, the Corporation, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertaking of the Corporation or of anything contained in this Act, and the suit, appeal or other proceeding may be continued, prosecuted and enforced by, or against, the Reconstruction Bank.

Section 6. Power of Central Government to authorise a person to take over the management of the Corporation

(1) The Central Government may appoint, on or after the appointed day, a suitable person to take over the management of the Corporation for the purpose of winding up of the Corporation, and, where any person is so appointed, it shall be the duty of such person to bring the operations of the Corporation to a close, realise the amounts payable to the Corporation under sub-section (2) of section 5, and distribute the said amount to the shareholders in accordance with their rights and interests, and after such realisation and distribution, to obtain the order of the Central Government for the dissolution of the Corporation.

(2) For the purposes of sub-section f 1), the person appointed under that sub-section shall have such powers and duties of the Official Liquidator under the Companies Act, 1956, as are necessary to give effect to the provisions of sub-section (1) as if the Corporation were being wound up by the Court, and, for this purpose the provisions of the Companies Act, 1956 shall apply, subject to the modification that for the word "Court", wherever it occurs, the words "Central Government" shall be substituted.

(3) When any person is appointed by the Central Government under sub-section (1), to take over the management of the Corporation,--

(a) the provisions of the Companies Act, 1956, or of any other law for the time being in force, or any instrument having effect by virtue of any Act, or other law, shall, in so far as they are inconsistent with the provisions of this Act, cease to apply to, or in relation to, the Corporation;

(b) all persons holding office as Chairman and Managing Director and other Directors, of the Corporation, immediately before the appointment of the person under sub-section (1), snail be deemed to have vacated their offices as such.

(4) Notwithstanding anything contained in this Act or in any other law for the time being in force or in any agreement or contract, any person holding, immediately before the appointed day, office as the Chairman or director of the Corporation, who vacates his office as such on the appointed day by reason of the provisions of sub-section (3), shall not be entitled to any compensation from the Reconstruction Bank for the loss of office or for the premature termination of any agreement or contract relating to his employment, except such compensation or other benefit which the Reconstruction Bank may grant to him, having regard to what that person would have received as an officer of the Corporation if this Act had not been passed and if he had retired from his employment in the ordinary course.

Section 7. Transfer of the services of the officers and other employees of the Corporation to the Reconstruction Bank

(1) Save as otherwise provided in sub-section (3) of section 6, every officer or other employee of the Corporation shall become, on and from the appointed day, an officer or other employee, as the case may be, of the Reconstruction Bank and shall hold his office or service in that bank on the same terms and conditions and with the same rights to gratuity and other matters as would have been admissible to him, if the undertaking of the Corporation had not been transferred to, and vested in, the Reconstruction Bank, and continue to do so unless and until his employment in the Reconstruction Bank is duly terminated or until his remuneration, terms and conditions are duly altered by the Reconstruction Bank :

Provided that an officer or other employee who does not intend to continue as an employee of the Reconstruction Bank may, within ninety days from the appointed day, serve a notice of his intention to the Reconstruction Bank, and, on the expiry of the period of thirty days from the date of service of the notice, he shall cease to be an employee of the Reconstruction Bank and, on such cesser, superannuation and other benefits due to him under the terms of his employment shall be paid to him forthwith by the Reconstruction Bank as if he had retired from service.

(2) Any person who, on the appointed day, is entitled to, or is in receipt of, any superannuation or compassionate allowance or benefit from the Corporation or any provident or other fund or any authority administering such fund shall be entitled to be paid by, and to receive from, the Reconstruction Bank or any provident or other fund or any authority administering such fund, the same allowance or benefit so long as he observes the conditions on which the allowance or benefit was granted, and, if any question arises whether he has so observed such conditions, the question shall be determined by the Central Government and the decision of the Central Government thereon shall be final.

(3) Where, under the terms of any contract of service or otherwise, any person whose service becomes transferred to the Reconstruction Bank by reason of the provisions of this Act is entitled to any payment by way of gratuity or retirement benefit or compensation for any leave not availed of, or any other benefits, such person may enforce his claim against the Reconstruction Bank.

(4) Notwithstanding anything contained in sub-section (1) or sub-section (2), no application made or promotion, increment in salary, allowance or any other benefit granted to any person, before the appointed day, which would not ordinarily have been made or granted or which would not ordinarily have been admissible under the rules or authorisation of the Corporation, or of any provident or other fund in force prior to the appointed day, shall have effect or be payable or claimable from the Reconstruction Bank or from any provident or other fund or from an authority administering such fund, unless the Central Government has, by general or special order, confirmed the appointment, promotion or increment or has directed the continued grant of such allowance or other benefit, as the case may be.

(5) Notwithstanding anything contained in the Industrial Disputes Act, 1947, or in any other law for the time being in force, the transfer of the services of any officer or other employee of the Corporation to the Reconstruction Bank shall not entitle such officer or other employee to any compensation under that Act or other law, and no such claim shall be entertained by any Court, tribunal or other authority.

(6) Where any person, Chairman, or other director, by whatever name called, or other employee of the Corporation has, before the appointed day, been paid a sum by way of compensation or gratuity, the Reconstruction Bank shall be entitled to claim refund of any sum so paid, if the payment is not confirmed by the Central Government by general or special order.

(7) Where one or more provident funds have been established, or maintained, by the Corporation or any other authority, for the benefit of its officers and other employees, the money debitable to the officers and other employees whose services have become transferred, by or under this Act to the Reconstruction Bank, shall, out of the monies standing on the appointed day to the credit of such provident fund, stand transferred to, and vested in, the provident fund established by the Reconstruction Bank under section 62.

(8) Where superannuation, welfare and other funds have been established by the Corporation for the benefit of his officers or other employees whose services stand transferred to the Reconstruction Bank, the amount standing to the credit of such fund shall stand transferred, on the appointed day, to the Reconstruction Bank for distribution to the concerned officers or other employees in accordance with their rights and obligations.

Section 8. Dissolution of the Corporation

(1) As soon as realisation and distribution of the amount have been made under section 6, the person appointed under sub-section (1) of that section shall submit his duly audited accounts to the Central Government and shall apply to the Government for orders as to the dissolution of the Corporation.

(2) The Central Government shall, after hearing such person as it may think fit, and upon perusing the accounts so audited, if satisfied that the amount has been realised and distributed in accordance with the provisions of this Act, make an order that the Corporation is dissolved from the date of the order and the Corporation shall stand dissolved accordingly.

(3) A copy of the order made by the Central Government for the dissolution of the Corporation shall be filed by the Reconstruction Bank with the Registrar of Companies within thirty days from the date of such order, and the Registrar of Companies shall give effect to the said order as if it were an order made by the Court for the dissolution of the Corporation.

(4) The provisions of this section shall have effect, notwithstanding anything to the contrary contained in the Companies Act, 1956, or in any other law for the time being in force.

Chapter IV

Section 9. Management

(1) The general superintendence, direction and management of the affairs and business of the Reconstruction Bank shall vest in a Board of directors which may exercise all powers and do all acts and things which may be exercised or done by the Reconstruction Bank.

(2) Save as otherwise provided in the regulations made under this Act, the Chairman shall also have powers of general superintendence, direction and management of the affairs and business of the Reconstruction Bank and may also exercise all powers and do all acts and things which may be exercised or done by the Reconstruction Bank.

(3) Subject to the provisions of this Act, the Board, in discharging its functions, shall act on business principles with due regard to public interest.

(4) In the discharge of its functions under this Act, the Reconstruction Bank shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing, and if any dispute arises as to whether a question is or is not a question of such policy, the dispute shall be decided by the Central Government whose decision thereon shall be final.