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INDUSTRIES (DEVELOPMENT AND REGULATION) ACT

Ministry of Law and Justice

Act nº 65 of 1951


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IIIA
  • Chapter IIIAA. Management of Control of Industrial Undertakings Owned by Companies in Liquidation
  • Chapter IIIAB
  • Chapter IIIAC
  • Chapter IIIB
  • Chapter IV
  • Schedules
  • Act nº 65 of 1951

Preamble

THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951

[Act, No. 65 of 1951 ]1

[ 31 st October, 1951 ]

PREAMBLE

An Act to provide for the development and regulation of certain industries .

B e it enacted by Parliament as follows:.-

1. For Statement of Objectives and Reasons, see Gazette of India, 1949, Pt. V, P. 156, and for Report of Select Committee, see Gazette of India, 1950, Pt. V. pp. 103 to 112, Gazette of India, 1951, Pt II, sec. 2, pp. 709 to 713.

Extended with modifications to Goa, Daman and Diu by Reg. 12 of 1962, section 3 and Schedule; to Pondicherry by Reg. 7 of 1963; Section 3 and Schedule I; to Dadra and Nagar Haveli by Reg. 6 of 1963, section 2 and Schedule I; and to Sikkim by S.O. 163 (E), Dated 2nd March, 1983.


Chapter I

Section 1. Short title, extent and commencement

( 1 ) This Act may be called the In­ dustries (Development and Regulation) Act, 1951 .

( 2 ) It extends to the whole of India1[ *** ]

( 3 ) It shall come into force on such date2as the Central Government may, by notification in the Official Gazette, appoint.

1. The words "except the State of Jammu and Kashmir" omitted by Act 51 of 1961, section 2 (w.e.f. 15th February, 1962).

2. Enforced w.e.f. 8th May, 1952, vide Notification No. S.R.O. 811, dated the 8th May, 1952; see Gazette of India, Extraordinary, pt. II Sec. 3, p. 539.

Enforced in the State of Jammu and Kashmir, w.e.f. 15th February, 1962; vide Notification No. S.O. 458/IDRA/1/1/62, dated 7th February, 1962, see Gazette of India, Extraordinary, Pt. II Sec. 3 (ii), p. 385.


Section 2. Declaration as to expediency of control by the Union

It is hereby declared that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule.

Section 3. Definitions

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

(a) "Advisory Council" means the Central Advisory Council established under section 5;

1 [(aa) "ancillary industrial undertaking" means an industrial undertaking which, in accordance with the proviso to sub-section (1) of section 11B and the requirements specified under that sub-section, is entitled to be regarded as an ancillary industrial undertaking for the purposes of this Act:]

2 [3 (ab) "current assets" means bank balances and cash and includes such other assets or reserves as are expected to be realised in cash or sold or consumed within a period of not more than twelve months in the ordinary course of business, such as stock-in-trade, amounts due from sundry debtors for sale of goods and for services rendered, advance tax payments and bills receivable, but docs not include sums credited to a provident fund, a pension fund, a gratuity fund or any other fund for the welfare of the employees, maintained by a company owning an industrial undertaking;]

4 [(ac) "current liabilities" means liabilities which must be met on demand or within a period of twelve months from the date they are incurred: and includes any current liability which is suspended under section 18FB:]

(b) "Development Council" means a Development Council established under section 6;

5 [(bb) "existing industrial undertaking" means--

(a) in the case of an industrial undertaking pertaining to any of the industries specified in the First Schedule as originally enacted, an industrial under­taking which was in existence on the commencement of this Act or for the establishment of which effective steps had been taken before such commencement, and

(b) in the case of an industrial undertaking pertaining to any of the industries added to the First Schedule by an amendment thereof, an industrial undertaking which is in existence on the coming into force of such amendment or for the establishment of which effective steps had been taken before the coming into force of such amendment:]

(c) "factory" means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on--

(i) with the aid of power, provided that fifty or more workers arc working or were working thereon on any day of the preceding twelve months, or

(ii) without the aid of power, provided that one hundred or more workers are working or were working thereon any day of the preceding twelve months and provided further that in no part of such premises any manufacturing process is being carried on with the aid of power:

6 [(cc) "High Court" means the High Court having jurisdiction in relation to the place at which the registered office of a company is situate;]

(d) "industrial undertaking" means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government:

5 [(dd) "new article", in relation to an industrial undertaking which is registered or in respect of which -a licence or permission has been issued under this Act means -

(a) any article which falls under an item in the First Schedule other that the item under which articles ordinarily manufactured or produced in the industrial undertaking at the date of registration or issue of the licence or permission, as the case may be, fall;

(b) any article which bears a mark as defined in the Trade Marks Act, 1940 (5 of 1940)7, or which is the subject of a patent, if at the dale of registration or issue of the licence or permission, as the case may be the industrial undertaking was not manufacturing or producing such article bearing that mark or which is the subject of that patent;]

(e) "notified order" means an order notified in the Official Gazette;

(f) "owner", in relation to an industrial undertaking, means the person who. or the authority which, has the ultimate control over the affairs of the un­dertaking, and, where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent shall be deemed to be the owner of the undertaking:

(g) "prescribed' means prescribed by rules made under this Act:

(h) "schedule'' means a Schedule to this Act:

(i) "schedule industry" means any of the industries specified in the First Schedule;

8 [(j) "small scale industrial undertaking" means an industrial undertaking which, in accordance with the requirements specified under sub-section (1) of section 11B, is entitled to be regarded as a small scale industrial undertaking for the purposes of this Act;]

9 [10 (k)] words and expressions used herein but not defined in this Act and defined in the Companies Act, 1956 (1 of 1956), have the meanings respectively assigned to them in that Act.]

1. Inserted by Act 4 of 1984, section 2 (w.e.f. 12-1-1984).

2. Inserted by Act 72 of 1971, Section 2 (w.e.f. 12-1-1971 ).

3. Relettered by Act 4 of 1984, Section 2 (w.e.f. 1-11-1984).

4. Relettered as Cls. (ab) and (ac) by Act 4 of 1984, Section 2 (12-1-1984).

5. Inserted by Act 26 of 1953, Section 2 (1-10-1953).

6. Inserted by Act 72 of 1971, Section 2 (1-11-1971).

7. See now the Trade and Merchandise Marks Act, 1958 (43 of 1958).

8. Inserted by Act 4 of 1984, Section 2 (w.e.f. 12-1-1984).

9. Inserted by Act 72 of 1971, Section 2 (w.e.f. 1-11-1971).

10. Relettered as Cl. (k) by Act 4 of 1984, Section 2 (w.e.f. 12-1-1984).


Section 4. Saving [Repealed]

Rep. by the Industries (Development and Regulation) Amendment Act, 1953 (26 of 1953), Section 3 (w.e.f. 1st October, 1953).

Chapter II

Section 5. Establishment and constitution of Central Advisory Council and its functions

(1) For the purpose of advising it on matters concerning the development and regulation of scheduled industries, the Central Government may, by notified order, establish a Council to be called the Central Advisory Council.

(2) The Advisory Council shall consist of a Chairman and such other members, not exceeding thirty in number, all of whom shall be appointed by the Central Government from among persons who are in its opinion capable of representing the interests of:

(a) owners of industrial undertakings in scheduled industries ;

(b) persons employed in industrial undertakings in scheduled industries ;

(c) consumers of goods manufactured or produced by scheduled industries;

(d) such other class of persons including primary producers, as in the opinion of the Central Government, ought to be represented on the Advisory Council.

(3) The term of office of, the procedure to be followed in the discharge of their functions by, and the manner of filling casual vacancies among, members of the Advisory Council, shall be such as may be prescribed.

(4) The Central Government shall consult the Advisory Council in regard to--

(a) the making of any rules, other than the first rules to be made under sub-section (3) ;

1[***]

and may consult the Advisory Council in regard to any other matter connected with the administration of this Act in respect of which the Central Government may consider it necessary to obtain the advice of the Advisory Council.

1. Clause (b) omitted by Act 26 of 1953, Section 4 (w.e.f. 1st October, 1953).


Section 6. Establishment and constitution of Development Councils and their functions

(1) The Central Government may, by notified order, establish for any scheduled industry or group of scheduled industries, a body of persons to be called a Development Council which shall consist of members who in the opinion of the Central Government are--

(a) persons capable of representing the interests of owners of industrial undertakings in the scheduled industry or group of scheduled industries;

(b) persons having special knowledge of matters relating to the technical or other aspects of the scheduled industry or group of scheduled industries ;

(c) persons capable of representing the interests of persons employed in industrial undertakings in the scheduled industry or group of scheduled industries;

(d) persons not belonging to any of the aforesaid categories, who are capable of representing the interests of consumers of goods manufactured or produced by the scheduled industry or group of scheduled industries.

(2) The number and the term of office of, and the procedure to be followed in the discharge of their functions by, and the manner of filling casual vacancies among members of a Development Council shall be such as may be prescribed.

(3) Every Development Council shall be, by virtue of this Act, a body corporate by such name as may be specified in the notified order establishing it and may hold and transfer property and shall by the said name sue and be sued.

(4) A Development Council shall perform such functions of a kind specified in the Second Schedule as may be assigned to it by the Central Government and for whose exercise by the Development Council it appears to the Central Government expedient to provide in order to increase the efficiency or productivity in the scheduled industry or group of scheduled industries for which the Development. Council is established, to improve or develop the service that such industry or group of industries renders or could render to the community, or to enable such industry or group of industries to render such service more economically.

(5) A Development Council shall also perform such other functions as it may be required to perform by or under any other provision of this Act.

Section 7. Reports and accounts of Development Councils

(1) A Development Council shall prepare and transmit to the Central Government and the Advisory Council, annually, a report setting out what has been done in the discharge of its functions during the financial year last completed.

(2) The report shall include a statement of the accounts of the Development Council for that year, and shall be transmitted as soon as accounts therefor have been audited, together with a copy of any report made by the auditors on the accounts.

(3) The statement of account shall be in such form as may be prescribed, being a form which shall conform to the best commercial standards, and the statement shall show the total of remuneration and allowances paid during the year to members and officers of the Council.

(4) A copy of each such report of a Development Council, or made by the auditors on its accounts, shall be laid before Parliament by the Central Government.

Section 8. Dissolution of Development Councils

(1) The Central Government may, if it is satisfied that a Development Council should cease to continue in being, by notified order, dissolve that Development Council.

(2) On the dissolution of a Development Council under sub-section (1), the assets of the Development Council, after its liabilities, if any, are met therefrom, shall vest in the Central Government for the purposes of this Act.

Section 9. Imposition of cess on scheduled industries in certain cases

(1) There may be levied and collected as a cess for the purposes of this Act on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by the Central Government by notified order a duly of excise at such rate as may be specified in the notified order, and different rates may be specified for different goods or different classes of goods:

Provided that no such rate shall in any case exceed two annas per cent of the value of the goods.

Explanation.In this sub-section the expression "value" in relation to any goods shall be deemed to be the wholesale cash price for which such goods of the like kind and quality arc sold or arc capable of being sold for delivery at the place of manufacture and at the time of their removal therefrom, without any abatement or deduction whatever except trade discount and the amount of duty then payable.

(2) The cess shall be payable at such intervals, within such time and in such manner as may be prescribed, and any rules made in this behalf may provide for the grant of a rebate for prompt payment of the cess.

(3) The said cess may be recovered in the same manner as an arrear of land revenue.

(4) The Central Government may hand over the proceeds of the cess collected under this section in respect of the goods manufactured or produced by any scheduled industry or group of scheduled industries to the Development Council established for that industry or group of industries, and where it does so, the Development Council shall utilise the said proceeds--

(a) to promote scientific and industrial research with reference to the scheduled industry or group of scheduled industries in respect of which the Development Council is established;

(b) to promote improvements in design and quality with reference to the products of such industry or group of industries;

(c) to provide for the training of technicians and labour in such industry or group of industries;

(d) to meet such expenses in the exercise of its functions and its administrative expenses as may be prescribed.

Chapter III

Section 10. Registration of existing industrial undertakings

1[(1) The owner of every existing industrial undertaking, not being the Central Government, shall, within such period as the Central Government may, by notification in the Official Gazette, fix in this behalf with respect to industrial undertakings generally or with respect to any class of them, register the undertaking in the prescribed manner.]

(2) The Central Government shall also cause to be registered in the same manner every existing industrial undertaking of which it is the owner.

2[(3) Where an industrial undertaking is registered under this section, there shall be issued to the owner of the undertaking or the Central Government, as the case may be, a certificate of registration3[containing the productive capacity of the industrial undertaking and such other particulars as may be prescribed].]

4[4) The owner of every industrial undertaking to whom a certificate of registration has been issued under this section before the commencement of the Industries (Development and Regulation) Amendment Act, 1973 (67 of 1973), shall, if the undertaking falls within such class of undertakings as the Central Government may, by notification in the Official Gazette, specify in this behalf, produce, within such period as may be specified in such notification, the certificate of registration for entering therein the productive capacity of the industrial undertaking and other prescribed particulars.

(5) In specifying the productive capacity in any certificate of registration issued under sub-section (3), the Central Government shall take into consideration the productive or installed capacity of the industrial undertaking as specified in the application for registration made under sub-section (1), the level of production immeditatey before the date on which the application for registration was made under sub-section (1), the level of the highest annual production during the three years immediately preceding the introduction in Parliament of the Industries (Development and Regulation) Amendment Bill, 1973, the extent to which production during the said period was utilised for export and such other factors as the Central Government may consider relevant including the extent of under-utilisation of capacity, if any, during the relevant period due to any cause.]

1. Substituted by Act 26 of 1953, Section 5, for the original sub-section (1) (w.e.f. 1st October, 1953).

2. Inserted by Act 26 of 1953, Section 5, for the original sub-section (1), (w.e.f. 1st October, 1953).

3. Substituted by Act 67 of 1973, Section 2, for certain words (w.e.f. 7th February, 1974).

4. Inserted by Section 2, Act 67 of 1973, Section 2, for certain words, (w.e.f. 7th February, 1974).


Section 10A. Revocation of registration in certain cases

1[10A. Revocation of registration in certain cases

If the Central Government is satisfied that the registration of any industrial undertaking has been obtained by misrepresentation as to an essential fact or that any industrial undertaking has ceased to be registrable under this Act by reason of any exemption granted under this Act becoming applicable thereto or that for any other reason the registration has become useless or ineffective and therefore requires to be revoked the Central Government may after giving an opportunity to the owner of the undertaking to be heard revoke the registration.]

1. Inserted by Act 26 of 1953, Section 6 (w.e.f. 1st October, 1953).