DISCLAIMER: This document is being furnished to you for your information by PRS Legislative Research (PRS). The contents of this document have been obtained from sources PRS believes to be reliable. These contents have not been independently verified, and PRS makes no representation or warranty as to the accuracy, completeness or correctness. In some cases the Principal Act and/or Amendment Act may not be available. Principal Acts may or may not include subsequent amendments. For authoritative text, please contact the relevant state department concerned or refer to the latest government publication or the gazette notification. Any person using this material should take their own professional and legal advice before acting on any information contained in this document. PRS or any persons connected with it do not accept any liability arising from the use of this document. PRS or any persons connected with it shall not be in any way responsible for any loss, damage, or distress to any person on account of any action taken or not taken on the basis of this document. The Punjab State Aid to Industries Act, 1935 Act 5 of 1935 Keyword(s): Borrower, Cottage Industry, Village Industry T I E PUNJAR STfiI'E AlD TO 1NI)USTHF-S hC'I'. 1935 Punjab Act V of 1935 Preamble TABLE OF CONYE-WS c m 1 Preliminary Seclions
1. - Sbon rille, exlent and commencement.
2. Defiii lions.
3 .
4.
5.
6 .
7 .
8.
9.
10. t i .
12.
13.
14.
15. ' 16.
CHAPTER T I Esmbllshdlcni of Board 01 Indusaies. Procedure In default of elcction of members. Vice-Chairman. Elecuon and appointmenu to be nodfied in Official Gazette. Tcm~ of ofr~cc. K c m v a l of memkrs. Casual vacancies. Allowances and fees. President a[ meerings. In~ercsted members nok lo vole. Power af 13oard ro make icgualtibns. Supersession of Duard. Duty or Board. Documents and rcpurls ro be lmlisbed to Ute Smtc Oovcmment U I W R 111 General Yrouisiont; Regarding the Giving of State Aid Forrns of State Aid. lndustnes to wlrich scverd fam~s of S ~ l e Aid may be given. Applicauulls for Slalr: hid. PUNJAH STATE ND TO INDUSTRIES ACT, 1935 PUNJAB ACT V OF 1935 /Received the assetlr of His Excellency the Governor on the 71h December; 1935, and that of His Excellency the Wceroy and the Governor-General on the 19th January, 1936, and was first published in the Punjub Gazette, Extraordinmy, of the 2 5th Junuary, 1 936. ] L. For Stalemcnl of Objects and Reasons, scc Putljab GazcUe, 1938, Part I, page 1120, and Tor Proceedings in Assembly, scc Punjab Legislalivc Assembly Deba~cs. Votumc W, page 139.
2. For Slakmcn of Objccls and Reasons, scc Punjab Gazettc, 1939, Exuaordimy, page 502, and for Proceedings in Assembly, scc Punjab Legislativc Asscmbly Debatcs, Volurnc X, pages 230-237 and Volume XI, pagcs 237 md 485-5 13 arid volumc XI-A, pages 88-99. ,
3. For Sla~ernent of Objccts and Reasons. see Punjab govern men^ Gazc~ie (Extraordinay). datcd 2nd November, 1953.
4. For Slate of Objects and Reasons, sec Punjab Govcrnrncnt Gazette (Exuaordinary), dated 241h Jdy, 1957.
5. For Statement of Objccls and Heasons are Punjab Government Gazclte (Extraordinary), 1935, pagcs 66-67. fo; rcporl of Select Cornmitree, see h e Punjab Gucttc, 1935. Part V, Pages 3 1 -33; and lor proceedings in Council, see Punjah Legislalive Council Dcbates, Volume XXVII, pagcs 42-59, 922-939, 971-1003, 1233-1238. I Year 1935 2 No. V 3 Shor~ title The Punjab SUE Aid to Lndusuies Acr, 1935 4 Wbcrhcr rcpcalcd or otherwise dfcctcd by legislation Amended by Government o l India (Adaptation of Indian Laws) Order{ 1337 Amcnded by Punjab Act VI of 1938> Amcndcd by Punjab Act LlI of 1940 Amended by thc Indian Independence (Adaptauon of Bengal and Punjab Acts) Order of 1948. (G.G.O. 40) Amcndcd by h e Adaptation of Laws Order, 1950 Amended by b e AdaptaLion of Laws [l'hird Amendmcnl) Ordcr of 195 1 Amendcd by Punjab Act No. 39 of 1953~ Extended Lo the rerritorics which immcdialely before Lhe 1st November, 1956, were comprised in me State of htiala and East +jab SLalcs Unioa by Punjab ACL 23 of 1957 254 S T ~ AID m INDIISTRIFS [I935 : Pb. Act V An Act to encourage the development or Endustries in 6 [Hary~a] by the grant of State aid. Preamble WIIEREAS it is expedient further to improve and regulate the giving of Stare aid for induslrial purposcs ; 1 And whereas the previous sanction of the Governor-General required under sub-sec tion (3) of section 80-A of the Ciovernmenl of India Act and thc previous sanction of Ihc Governor required under section 80-C of thc said Act have bccn obtained ; 3 2 Ti is hereby enactcd as follows :- 4 hmended by Punjab Acr 12 of 1359' hmended by Haryana Adapladon or Laws Order, 1968 hmend5d by Haryana ACL 46 of 1973 Amcnd* by Haryana ACI 26 or 1975 ~mend:d by Haryana ACL 15 of 1978
CHAPTER I Preliminary Short title, 1. ( 1 ) This Act may be called the Punjah Stale Aid to Industries :xtenr and Act, 1935. mrnmmcment
1. For Stalement of Objecls and Reasons, see Pluijah Government Gazetre, IExwdnrdinary), darcd 20h April, 1959.
2. Sw IIryana Government Gazetre (Extraordinary), daled fie 291h Octobcr,
1968.
3. For Stalcment of Objects and ltedsons, sce Haryana Government Gazcitc (Extraordinary) dared the 6- 11-19731 page 2032. . ,
4. For S~atemcnk o l ~ h j e c l s - an4 ,lteasons, see Haryana Governnienr Gweue (~xuaordinar~) dated b e 21-7- 1975, page 858.
5. For Slarement of Objccu nnd Reasons, scc I laryana Govemmcnt Gaic~te (Extraordinary) dated Ihc 3-3- 1978, pagc 3 18.
6. Subniruted. for.he words "Wljab" by h e Adaphuon of Laws Order, i968. . . . 1935 : Pb. Act V ] STATE All) TD INDlfS'IRlES
(3) It shaU come in to iorce '[in the principal territories] on such date3 as the '[Stale] Gove~mnenl rnay,hy notification, appcint in this behalf ' [and in the transferred territories on the 24th July, 1957.1
2. In this Acr, unless there is anything rcpugnanl in the Definirims. subject or contexi- ( I ) "Board" means thc Board of Industries constirutcd under section 3 of this Act;
(2) "Borrower" means a n individual, company or associa tion or body of individuals, whethcr incorporaled or not, Lo whom or to which State aid has been granled under Lhis Act; VII of (3) "Company" means a company as defmed in the Indian
1913. Companies ACL, 1923;j
(4) 'Director" meam the Director of Induslries, '[Hary anal 6[and includes any officer aulhorized hy the State Government to perform all or any of the functions of the Director under his Act;] 5 "industry" rncans any industrial busincss or cnlerprise conducted w underlaken either by an individual or by a company, association or body of individuals, whether incorporated or not; . '1161 "cotlage Industry" means any iridustry carried on by a worker in his -home and includes dairy farming, bee-keeping, lac-making and kccping a poultry farm;
1. Subslituled for rhe words "Punjab" by rhc Adaplalion of Laws Order, 1968.
2. Inserled by the Haryana Adaptation of Laws Order, 1968.
3. The Act camc inlo force on 7th March, 1936,-vide Punjab Governrncnt NoLificalion No. 1021 -1 & L m , dated 6th March, 1936. , , 7815
4. Substiiu tcd for Ihe word "kovincial" by Ihc Adaplation of Laws. Order, 1950 -
5. See now Companies Act, 1956.
6. Insened by Punjpb.Acr 12 of 1959. ,
7. Inserted by Punjab Act I11 of 1940, seclion 2 (i). ' - STA'IX d~ m INDIISTRIES [I935 : Pb. Act Y
(7) "Village Industry" means any indusuy which forms rhe nomal occupation, whether whole-time or pal-time, of any class of lhc rural popula~ion of [he '[S tatell; 2[(8) LLMa~hinery'' includes plant, apparatus, tools and orher appliances required for the purpose of' carrying on any industrial operation or process; ' (9) "Prescribed" means prescribed by rules made under rhis Act.
CHAPTER I1 stablishmcnl ,3. (1) For carrying out the purposes or this Act, the '[State] Government shall, as soon as possible, after the commencement ;f this ~dusmes. Act, establish a Board to be called the "Board of Industries" consisting of the fullbwing members, namely :-
(a) Minister-in-Chargc 01 Induslries, 3[HaryanaJ;
(b) the Director of Industries, 3[Haryana];
(c) '[three]rnembersto beappointedbythei[State]Government one of whom shall be a banking ex per^ ; [ ( d 6[lhreej members l o be elected by the 3 [ H ~ a n a ] Legislative Assembly from among their members, election being in accordance with lhe principle of proportional rcprcsentatioi~ by means of the single transferable vole.] ( , )7* * * * * * * Cf) one member to be elected by the 31jHaryana] Chamber of Commerce; and
(g) one member lo be elected' by the Indian Chamber of Commerce :
1. Substituted for Ibe word "R-ovincc" by Uic Adaplation of Laws Order, 1950. 2: Exisring c l a w s (6) and (7) rcnum bered, rcspcctivel y as (8) and (9) by Punjab Act LII of 1940, section 2(2).
3. Subs tiluted for the word "Fun jab" by the Haryana Adaptahon of Laws order,
1968.
4. Substi tuled for Ihe word "four" by the lndian Independence (Adapmlion of ~cngal and Punjab ACE) Order of 1948. (G.G.O. 4Oj.
5 . Substiwted for h e old clausc (d) by Governmen1 of India (Adaplation of lndian I,aws) Order, 1937. - .
6. Substituted for the word "five" by Lhe Indian Indepcndcnu: (A,daplauon of Bengal and Punjab Acts) Order of 1948. (G.G.O. 40).
7. Omitted by b e Indian Tndepe!~dcnce (Adaplation of Bengal and Punjab Acts) Order of 1948. (G.ti.O.40). , 1935 : Pb. Act V ] .STATE AID m INDUSTRIB 257
Provided that the Board shall have power ro invite [or consultation on any particular question before it, no1 more than ihrcc persons spccidy qual ificd to advisc on the martcr in question or having special knowtcdge of local conditions iri the area where the indusuy in question is situate. And provided f u ~ e r that at any mwung of the Board the Minisler shall have power to invite any person for consultation on any parricular question. Any person so invited whethcr by the Board or by the Miniskr shaIl not have the right to vote.
(2) Thc Miniskr-in-charge of Industries shall be ex-ofJscio Chairman and the Direclor shall be ex-oficio Smrcmy of thc Board.
(3) '[Four] member of the Board shall form a quorum.
4. If by such date as may be fixed by Lhe 2[State] Government, any of [he bodies referred to in cIauses (d), ( e ) , (f) and {g) of sub-section ( I ) of section 3 does not elect a mcmber to be elected by i t under the provisions of that section, the 2[State] Government shall appoint a suilable person from among lhosc bodies lo be such member, and any person so appointed shall be deemed to be a mcmber, as if he had been duly electcd by the body faiiing to elect a member under the said provisions.
5. The Hoard may from time lo time elect, for such period as i t Lhinks fit, one of its members to be Vice-Chairman.
6. The names of the Vice-Chairman and of the appointed and clecled membcrs of lhe Board shall be published by the 2[State] Governmen[ in he 3[0fficial Gar.xtte].
7. ( I ) Thc Vice-Chairman or any other appointed or clected member may resign his officc by giving notice in writing to the Chairinan.
(2) (a) Subject lo the provisions of this Act an appointed member shalI hold office for '[five] ycars or unless the 2[State] Government otherwise directs; and an elected member shall hold office for 4[five] years or until such time as he ccses lo be a member of the body electing hini; whichevcr is shorter. to be a member of Ihe body electing him, whichever is shomr. I . Substituted for lhe word "five" by tbe Indian hdependencc (Adaplalion of Ben~al and Punjab Acts) Order or 1948, (G.G.O. 40).
2. Subsiitutcd for rhe word "Prorincial" by rhc Adaptation oTLaws Order. 1950. Rocedurc in defaull of eleclion of mcrnbcrs. Electivns a11d appoinlmcnls to be nolified in OfficiaI Gazette. 'l'errns of officc.
3. Substituted for h e words "Punjab Gmelte" by thc Governmen1 of India (Arlaphrion OK Indian Laws) Order, 1937.
4. Subslituled Tor the words "three" by Punjab Act V I of 1938, secliot~ 2. 258 STAI'E AID TD INDUSTRIFS 11935 : Pb. Act V [Provided thai in the case of mem bcrs elected under the provisions of scction 3- by bodics other than the =[Haryana) Legislative Assembly, the [em of membership shall, in any case terminate automatically on the dissolulion of the '[Haryana] Legislative Assembly.]
(b) An outgoing member may, if orherwise qualified, he reelected or re-appoinled.
(3) Notwithstanding thc expiration of the term mentioned in sub-section (21, an appointed or clecled member shall continue to hold offlce untiI the vacancy caused by the expiration of the said term has been Wed, provided that no vacancy shall be allowcd LO remain unfillcd for more than six months. Rcmoval of 8. (1) The 3[State] (iovernment may, by notification, removc the members. Vice-Chainnan or any member of a Board if he-
(a) refuses lo act or becomes incapable of acring as a mcmbcr of the Board ;
(6) is declared insolvent ;
(c) is convicted of any such offence or is subjected by a criminal courl LO any such order as in the opinion of the 3[Srare] Government implies a defecr of characler which unii ls him to conlinue to he a Vice-Chairman or member of the Board ; provided that beforc Iha 3[StatejGovemment notifies the removal of a member under this sub-scction, the reason for his proposed removal shall bc communicated LO the member concerned and he shall be given an opportunily of kndering an explanation in writing ; I. Added by Punjab ACL V I of 1938, section 2.
2. Substituted for the word "Punjab" by the Haryana Adaptation of Laws Ordcr, 1968.
3. Subslituted for b e word "Provincial" by thc Adaptauon of Laws Order.
1950. ( [ I ) without excuse, sufficienl i n the opinion of Lhe '[State] Government is absent, wirhout the conscnt of the Board from morc lhan four consecutive meetings of the Board.
(2) The '[State] Government may fix a period during which any person so rcmvved under clause (b) or (c) of sub-sec tion (1) of this section shall nor be eligible for re-appointmcn~ or re-elec tion.
9. When the place of any appointed or elected member of a Board Casual becomes vacant by his removal, rcsignation or dealh, a new member vacancies. shall be appointed or elected in thc manner provided in section 3 :
Provided that if the placc of any member elected by thc '1 Haryana] Legislative ZIAssembIy J becomes vacant, the 4[State] Governmen1 may nominate another '[* * * * * * *] member of thc [Haryanaj Legislaiivc 2[Asscm bly] , in his placc :
Provided further that any person so appointed, eleclcd or nominated under this section shall be subjecl to retirement at the same time as if he had becomc a member of Lhe Board on the day on which the member of the Board in whose placc he is appointed, elected or nominated was last appointed, elected or nominated a member of the Board :
Provided further that no act of the Board or of its officers shall he deemed lo be invalid by reason only that the number of members of the Board at the time of the performance of such act was less than the numbcr provided by section 3.
10. The members of the Board and the mernbcrs of Committees, Attowances which may be appointed by the Board, when necessary, shall be paid and fees. travelling aIIowances of the prescribed amount and on rhc prescribed conditions for attending meclings of the Board, or for performing any duty assigned to them by the Board for thc purposes of this Act. I 1. ( I ) The Chairman or in his absence the Vice-Chairman shall Preside111 at prcsidc at every meeting of the Board, and shall have a second or casling meetings. vote in all cases of equalily of votes.
1. Subslirulcd For ae word "Provincial" by me Adaplalion of Laws Order, 1950.
2. Subsb tutcd f ~ r ihe word "Council" by Ihe Govcmmen~ of India Order, 1950.
3. Subslituted Tor h e word "Punjab by the Adaplauon of Laws Order, 1968.
4. Substituted for the word " Provincial" by the Ahplalion of Laws (Adapta~ion or Indian Laws) Order 1937.
5. The word "Non-Official" was omitted by Lhc Governmcnl of Tndia (Adapmdon of Indian Laws) Order, 1937. 260 STATE AID IU INDUSTRIB [I935 : Pb. Acf V interesred members not to vae. Powcr of 13oard to make regulations. Supersession or Board.
(2) in thc abscnce of borh chc Chairman and thc Vicc-Chairman ihe members prcsenl at any meeung may elect one of lheir member to preside. who shall have a second or casting vote in all cases of cquality of votes.
12. No member of the Board shall vote on any question coming before h e Board for consideration in which (olhenvjsc than in its general application to all persons and properties within the '[Stare]) he has a pecuniary interest.
Explanation. - In case of any question arising whether a member has or has not a pecuniary interest, the decision of the Chairman shall be Iinal.
13. . ( I ) The Board may make regulalions consislcn t with this Act and ~e rulcs thcreundcr for the carrying of all or any of its purposes. 2 In particular and without prejudice to the gentrdty of the foregoing power, the Board may make regulations regulating or determining all or any of the following matters, narncly :-
(i) the time and placc of its meeting ;
(ii) hemanner in which noticc of mcctirtg shdf be given ; ( i i i ) the conduct of proceedings at meetings ;
(iv) the division of duties among the members of the Board; and
(v) theappoinlment,dutiesmdprocedurt:ofspecialCommittecs consisting wholly of members of the Roard or partly of such members and partly of olher persons.
14. ( I ) If at any time it appears to the 2[Starc] Government lhal the Board is not properly performing Lhe duties imposed upon it by or under this Act, the 2[State] Governmen1 may, after considering any explanahon offered by the Board, by an order in wriung specifying the reasons for so doing, dissolve the Board and direcl that the vacancies shall thereupon be filled by election in respect of elecred mcmbers and by appoinunent in respecr of appointed mcmbers in the rnanncr indicated I above.
1. substiruled for h e word "Province" by me Ahptatiuu o i Laws Order, 1950.
2. Subsliluted for Ihe word "Provincial" by the AdaptaCion of Laws Order, 1950. 1935 : Pb. Act V 1 .WAIF AID TI INDUSIUIL$ 26 1 (2 ) From the date of an order undcr sub-section (1) until the vacancies arc filled, all powers and duiies of the Board shall be exercised and performed by such person in such manner as the '[State] Government may direct.
15. 11 shall be the duty of thc Board-
(u) to reporc to the '[State] Government aftcr such enquiry, if any, as it deems necessary or as may bc required by this Act, on applications for State %d tha h a y be ieferred to it for advice by the ' [State] Gov~rnment;'~[or any officer authorized in this behall by it];
(b) La advise the ![State] ~obernmenl on any matiers Ulat may , - be referred to it : 6[Providcd that the State Government shall not sanction State Aid wilhout reference to the Board except in the case of a loan :-
(a) sanctiuncd for the payment of Central Sales Tax; or ( b ) the amount of which does no1 exceed ten thousand rupees.) , -
16. If the '[state] ~6 ie rnmen t so directs; the Secrbtary shall lorward to the [S htd Government any document and prepare and submit any report relaring to the work of the Board.
CHAPTER- IU , ' : :GENERAL PROV[SIONS REGARDING . , GGLV~NG OF STATE AID , ,
47. The forms of the stau: aid which , . . may be givcn may include, h e following, namely,:.-- , * .. . , . . - ' I
(11) the grant oP a loan ; , , (b ) , the grant sale or lease o l land, raw matend, firc-wdod, wekr or any olher property 2[vestcd] in 3[~ovcmrnentl'for the purpdses'ol the "[State] ; , ,
1. Subslituted lor ~e word "Provincial" by h c Adaptation ol Laws Ordcr, 1950.
2. Substitu~cd fora& words;:'of thc Local Government" by lhe Governrnen~ of India (Adapration or Indian taws) Order, 1937.
3 . Substiruled for thc words "13s Majesty" by. rhe Adaplation of Laws Ordcr, - 1950.
4. Subsriluled Tor b e word "Provi?ce" by Ihe Adaplalion bf l a w s Ordcr, 1950.
5. hscned by Punjab &L 12'0~ 1959. ' .: I
6. Snbsrituled by I-Iaryana Act I5 of 1978. 8 . Duly of Board. Documcnls and rep or^ 10 be Furnishcd LO h e S~atc Governmcnr. F O ~ S or S ~ R aid. ,262 AID TO INDUSTRIES [I935 : Pb. Act V '[(c) the paymenr of a subsidy, in the cast of a cottage industry or village industry for any purpose ; and in thc casc of any o&er industry for the conduct of research or thc purchase af machinery] ;
(d ) the suppIy of machinery on the hire-purchase system; , ' (e) thc guarantee of a rninhurn return on the whole or part of thc capital of a joint slock - , company , invested in an industry. hdusrries lo 18. State ai-d rnay be givcn towliicb several forms of (a) a new or nasccn~ indusuy; Slate aid may (b) an indusuy to be newly e-stablishcd in an area where such bc given. , industries are undeveloped; , . . . , (c ) a cottage industry '[or village industry]; or
(d) an industry w,hich needs revival, or development'by modem methods. Application 19. Applications for State aid shall be made to the Dircctor in stare aid- . slich form, and shall contain such information as may be prescribed. . CHAPTER IV , ,. PROVISIONS REGULATING THE GIVING 01: S p a AD ' - . , , OlHERWISE THAN BY THE SUPPLY OF MACHINERY ON THE HIRE-PURCHASE SYSIEM Power to grant 20. Loansgran~dunderthischaptershdlbesubjectto thesanction Ibans. of the >[State] Government given after consultation with the Finance r)cparhneht, providcd that h regard to loans not exceeding a: prescribed amount, the 3[State] Government may make rules delegating their powers to such authority or officer as hey deem fit. . . . . Securiry for 21. 'I(!) (a) On h e accep~ancc or an application' for a loan, the repaymen[- applican~ shall execute a deed in the prmcribed form,,'bndcrtaking to apply the loan to the purpose for which, and to fulfil the conditions on which, Ihe loan is granled, rendeag himself &d such propeay as may have been specified in the deed as security,, including machinery ,... . - , .
1. Subsumled for the old clause, by Punjab ACI III or 1940, secbon 3. .
2. Inserted by Punjab Acr I11 of 1940, section 3-A. -
3. Substitulcd for Lhc word "Rovincial" by the ~ d a & & m of 1,aws Order, i950. ' , '
4. Substituted for clausc ( I ) by h e Yunjab ACL 39 of 1953. , , .. .. . 1935 : Pb. Act V ] . ST.4TE AID TO INDUSTRIES 263 purchased or any building constructed with the aid of rhe loan. and in the cvcnt of such propefiy being found insulficient, rendering thc whole of his property liable for the repayment of the loan wilh intercsl and costs, if any, incurred by rhe State Government in making or rccovcring the loan.
(b) No transfer, assignment, or charge made or created after the cxccution of the deed, in relation to the property specified herein or machinery purchased or building constructed with the aid of the loan, shall be valid against, the State Government unless it has been made or creakd wilh the previous consent in writing of he authority sanctioning thc loan.]
(2) When the application has been made by a fm or,campany the deed shall be executed by a duly authorized representative thereof ,-dnd the deed shall thereupon be deemed binding on the said firm or company . . , and the property of the said firm or company shall bc liablc for Lhc rcpaymcn t 01 thc loan in h e same manner as if thc loan had bcen granted . . lo an individual. , ..
22. The loan, togelher with aU interest due thereon, if my; shall Loan how bc repayable either in a lump sum or by instalmenb as may be provided repayab1e. for in'the deed executed by the borrower under section 21.
23. (l]Whenanyl~anorinslalmentor interesCthekonfallsdue Noiiceiopay. and is not paid on or before Ihe due date or when a loan has been'declarkd immediately repayable under section 27, the officer empowered by the I [State] Gdvement in this behalf may causc ro bc scrvcd on the borrower a noLicc in Ihe..prescribed manner ,calling upon him to pay the sums-due . wilhin such lime as may be fixed therein.
(2) Such notice shall contain an intimalion that in case of deraull the said officer will issue a declaration in the prescribed form showing the ainount of the debt due and the. property mentioned in the deed as liable to satisfy the same. . .
24. (1) If within b c lime so fixed, the sums due are not paid. the ~m~~~ of officer empowered under section 23 may issue the declaration as dcclaralion. described in sub-section (2) or the s a n k 'section. and such declaration shall be published in the 2[0fficial Gazette].
1. Substituted for h e word "Provincial" by the Adaptadon of Laws Orclcr, 1950.
2. Substirulcd for me word "C;.xzette" by lhc Government of 111dia (Adaptation of Indian Laws) Order, 1937: . 264 STATE AID TO INDUSTRIES [I935 : Pb. Act V
(2) Such declaration shall be conclusive evidcncc of i!s contenrs, and shall not be called into question in any court by Ihc borrower, his heirs, IegaI representatives or assigns, '[or by any member of his family if he belongs to a Joint Hindu family] 2[nor shall any right, principle or rule arising from or under the personal or customary law applicable to ihc said persons or any or them, nor anything contained in the =Punjab Alienafion of Land Act;1900, affccr the validity or effectiveness of a mortgage cxecuted or 01 a declaration published under this Act, or the procedure therein provided for enforcement thereof.]
(3) Such declaration may be produced by t h e said'omcer, or by such othcr person as he may either generally or specially appoinl in that behalf before the principal civil court of original jurisdiction, within thc local limits of whose jurisdiction any of the property liable for Ihe deb! due is situate in the same manner as a decree of which exccuuon is sought. %ecution of 25. When declaration has been recdvcd by a civil court under icclarauon. section 24, the court shall immediately at tach the propeny menlioned in the declaration and shaIl pass an order directing that; unless the amount mentioned in the declaration is paid within such time, not exceeding f two months, as the court may consider reasonable; it may be recovered .by saie of the properly mentioned in the declaration as if it weTe a decrcc for thc payment of moncy passed by the said court in, the exercise of its ordinary civil jutisdiction. . . nspeclion and 26. Znanycase~inwhichanapplica~ionforaloanbasbccnmade etums. under h i s Chapter the applicant, and at any rime during-thecurrency of: . . a loan that has bccn granted the borrower, shall he bound-.
(a) to comply with any general or special order of the 1)irector relaling to the inspection of: the premises, buildings. machinery 'And stcjck-in -hand of thc indusky ;' . , ,
(b) LO permit the inspeclion of all accounts relative to the industry ; ' I '
(c) to furnish full returns of all prod~ctsman~iactured or sold; both as regards description and quantity ; . . - .
1. lnscrred by Punjab AcL ,111 of 1940, section 4(a).
2. Inserted by Punjab Acl HI of 1940. section 4@). : ,
3. Repealed by Adaptahon of Laws ~ r n e n d m e n ~ Ordcr or 1951. 1935 : Yb. Acl V 1 STNE AID m INDUSTRIES 265 ( d l to maintain such special accounts and to furnish such statements as Ihe Direcror may from lime to time require; and
(e) 10 submil the account5 of Ihc industry to such audit as thc Ilirector may prescribe.
27. I t Ihe Director, afkr any inspection provided for in section 26, js not satisfied that the money lent is being applied to lhc purpose or purposes for which the loan was granted or that the conditions on which [he loan was- granted are being duly fulfilled, he may declare. notwithstanding anything contained in the deed executed under section 21 that the loan is immediately repayable and shall give notice of such declaration to the borrower.
28. If at any time during Ihe currency of the Ioan, ~e value of the security falls below the outstanding balance of the loan, the Dircctor may eilher proceed to recoverin the manner laid down in sections 23,24 and 25 so much of such -balance as i s not adequaiely covered by the lhcn cxisting value of the security or accept such additional or collateral s~curily as he may deem suIficicnl.
29.. If the borrower fails to comply with-any order under clause
(a) of section- 26 or does not permit or; obstructs the inspection of the accounls rclative ro the industry or makes default in respect of any or the particulars sepcified in clauses (c), (d) and (e) of the said section, or if the borrower disposes of any profirs in contravention of the provisions of section 33, the Director may, after considering any representation the borrower may make withiri such time as the '[State] CiovcmmenL may allow in this behalf, proceed. 10 recovcr the loan in thc manner laid down in seclions 23.24 and 25.
30. Within fif'lcen days of the reccipt of a notice under sectioas
27.28 or-29, h e borrower may appeal against such ardcr to the '[State] Government and the decision of thc '[State] Governmen1 thereon shall be final.
31. The conditions of a grlarantee by the '[S tak] Government of a minimum return on the whole or of the capital of a joint stock company shall bca } tha~ Lhe industry shall be subject to the conditions of seclion 26 in respect of inspection, returns and accounts ; PenaIrv for dcfaulr in applying dle loan. Powcr LO adjusL securiry during currency of loan. Powcr lo recover loans. Govcnunen~ guarantee of a minimum return.
1. Substiluted Tor Lhe word "Provincial" by the Adaptation of Laws Order, 1950. Subsidies.
(b) thal a minimum portion of the authorized capilal or rhc industry Lo be fixed according to the circumstances of each case has been subscribed and paid in cash;
(c) that no such guarantee shall in any case cxtend beyond a period of 5 years ; (dl that during the period Lo which the. guqantcc exlends . ihc '[Slate] Ciovernrncnl may impose on such persons as ir considers to be dircclly concerned in the promolion of ihe company, a condilion that if they transfer any of thcir shares without the consent of the ' [State] Govcrnment, they shall be liable joinrly and severally to rerund to lhe ' [State] Government any sums paid lo lhe company in fulPhent of thc guarantee ;
(e) that the '[State] Government silaH be enritIed to recover the wholc or vy part of the sum paid by the '[State] Govcrnmcnt on account 01 such guarantee with interest at che rate in force on the date of the agrmment far loans granted under Lhe Land Improvement Loans Acr, 1883, at any rime after such period as may have been laid down in the agreement. 1 provided that the '[State] Government is satisfied that the company is paying or is able to pay intcrcst or a dividend upon the capiral shown as-paid up in exccss of such rate as may be fixed in the agreement and such recovcry shall be made in the manner Iaid down in Scctions 23:24 and 25- : , , provided that the ~bm'recoverable by Lhe '[Sfate] Govcrnment in any one year shall not exceed a sum cqual to half the net - . . profits made by the company in the preceding year in excess of the sum required for the payment of intcrcst or dividend a1 the rate fixed in h c agreement.
32. 2[A subsidy to a cottage industry or a village industry for any purpose and a subsidy to any other i n d u s u for the conduct or research or for purchase of machinery may be granted by thc '[State] ~ o ~ e m m e n t on such conditions as may bc prescribed in that behalf.] I . Subslimled for Ihc word "Provincial" by the Adaplalion of Laws Ordcr, 1950.
2. Subsululed for the old s d o n by hnjab kc1 III 01 1940, secuon 5 . 1935 : Pb. Act V ] STATE AID rn INDUSTRIES 267
33. N o borrower shall pay any dividend or dislribute or takc any Uisposal of profits in excess of such percentage ratc upon the arnoun t of the capital pro f i ls conditions on of the industry as ihe '[State] Govcmmenr may from me to timc fix, whjchSlaE aid u n ti1 Ulc conditions on which h e Slate aid has bcen granted are fulfilled, is given fulfilled
34. Norwi thsianding anything contained elsewhere in rhis Chapter, G o v ~ ~ - I - I ~ ~ L Ihe '[Sraa] Government may, by the appointment 01 ils own directors or CO"UO' Of aided otherwise exercise such control over die conduct of the h~ldustry to which the Stale aid has been given as shdl suffice in ils opinion to safeguard its interests, provided lhat such right has been expressly rcserved by igrcemenl at Lhe time the aid was granted. , 235. Notwithstanding anything contained in seclions 23, 24 and Mebod of 25, any amounl payable to Lhc State Government under this Act or by r e c O v e ~ Of virt-ue of a contract entercd into under this Act including interest and money due. -costs, j f any, 3[shall] be recoverable as arrcars of land revenue.].
CHAPTER V
36. NO machinery shall be supplied by the '[Stare] Government Percenlage or on the hirc-purc hase system unless the applicant therefor deposits with lo bC: dejmsilcd by h e Direclot such percentage of the cost there01 as may be prescribed, binr and furnishes security Tor the unpaid portion of such cost in the same manner as for a loan granted under the provisions of Chapter IV. . 37. Whcn an application i s allowed. the ~irectof shdl, subject to pluuculns LO andinaccordancewithanyrulcsthatmay bemadeunderthisAct,make bcsPcifi*in an ,order specifying the following particul;irs, namely :- . order when appIication is
(a) k e amount of each instalmcnl of rcnl to b e paid for rhe hire allowed. of the machinery and the number of such instalrnents to be paid beForc ihe machincryshall become the p~opcrQ of the hirer; , . (b) the anlount of intcres~, if any, to be paid with each ins talmcnr of renl on the remaining unpaid instalrnents ; (cJ the dates on which and the manner in which thc aforesaid paymcnls shall bc made ; md , -
1. Subslitu~ed for b e word "Provincial" by the Adap~ation of Laws Ordcr, 1950.
2. Substiruled for section 35 by Punjab Acl39 of 1953.
3. Subs[imred hy Haryana Act 46 of 1973. 268 S'UIE AID 'IU I ~ U S I I U E S [I935 : Pb. Act V
(d) such olher particulars as may bc prescribed. - Condilions of 38. Until-lhc hiring is terminated in lhc manner hcrcinafter supply of provided, the following provisions shall apply, namely :- machinery on - birc purchase svs~ern .
(a) The hirer shall pay punctually and wirhout dcrnand Ihe instalmenis o l rent and amount of intresr specified in rhc -, ----- order referred to in secLion 37.
(b) The hirer shall retain the machinery in h~ own possession in good and serviceable order and condition and shall not, without the prcvious written consent of Ihe Dircctor, makc any addition thereto or alteralion thcrcin, nor removc [he machinery or any part thereof from [he premises specified in Ihe application for the supply thereof.
( c ) The machinery shall remain lhe sole and absolute of the 2[Govergmcnt]], and any transfer thcreof or rtssigmcnr of any right, tit@ or interest herein or the creation of any mortgage encumbrance or any oher charge thereon by [he hirer shall be void as against the 3[Stak] Government unlcss it has been made with the previous written consent of lhe Director. (dl The machinery shall not be lia5le to distraint, attachment or ' , saie by any process under any law for the time being in force, otherwise than under this Act.
(e) The machincry shall bear a metal plate in the prescribed form, and any who ~ i l l l ~ l l ~ rcrnoves or defaccs such piate shall be liable to a fine not exceeding five hundred rupees. It shall be presumed until the contrary is proved that mach_ineq bearing such metal plate is the [property of the 2[Government]] hired out under this Chapter. (D The hirer shall permil [he Director or any au thorixcd by the Director in this behalf to inspecl Ihe machinery a1 all - reasmable times, and the Director or such other person shall havc all such POWC~S of entry as may be necessary for the purpose of making an inspection.
1. Subs(ituted for thc words "properly of the Local Govemrnenr" by lllc Government of India (Adaptation of Indim Laws) Order, 1937. . ,
2. Subsumred for Ihe word "Crown" by the Adaptation of Laws Order, 1950.
3. Substituted for the word "Provincial" by the Adaprarion of Laws Order, 1950.
(8) In addition to thc Iorcgoing conditions thc hires shall bc bound by such olher conditions consistent therewith as may bc prescribed by rules made under this Act, or may be imposed by the Director in any parlicular case.
39. If the hirer makes default in paying Lhe rent of the machinery Consequences or any sum payable as interesl or any other charges due from him under of dehult by this C h a p ~ r or fails lo comply with any of thc conditions which are hirer. contained in, or may be imposed under section 38, Ihe Director may, after giving him 16 days' notice terminalc lhc hiring and he or any othcr officer authorized by him in this behalf may hereupon enter the premises in which rhe machinery is for the time being kept, whcther such premiscs belong lo the hirer or not and seize-and rake away the same.
40. (1 ) If thc machinery is seized and taken away under sccrion Oplion of 39 he hirer shall have the option to be exercised w i h h one month alter hirer to purc hasc such a seizure or such longer period as may be allowed by the Director machinery in this- bchall. of purchasing the same by payment to the Director of Ihc ,,i,,d for un-paid balance of the cost thcrccf, together with such other amounts as default. may be due, and the cost ol and expenscs incidental to such scizure and removal. I
(2) If within ~ h c period specified in sub-section (I) the hirer .does noicxcrcise rhe option of purchase, the Director shall proceed lo dispose of the machinery.
41. If the Dkc tor terminates Ihi: hiring under secrion 39 and Ihe LiabiliLy of hirer does not ~urchase the machinery under sc'don 40, the hirer shall hirer on not be entilled lo the refund-of the-sum deposited by him under section "rminauon of hiring under 36 or lo the refund or remission or any payment made by or due from 24 him during the hiring, and shall be liable to pay such amount, if any, as , and 25. the UirecLor may determine in respect of any loss caused by the disposal of the machinery under sub-section (2) of section 40.
42. When, after credil has been given for the amount deposired of hiring on under section 36, the hirer has paid in full all h e instalmenls ol rent paymenL mentioned in' clause (a) of section 37 and ihe amount of interest, costs ,,,, ,f and other chargw payaMc by him under his Chapter he shall become machinery. rhe owner of the machinery and shall thereupon remove from thc samc STAE AID m ~ N ~ U S T R I F S 11935 : Pb. Act V the metal plate mentioned in clause (el of section 38 :
Provided that if at any time during the hiring the hirer pays in advance the remaining instalmerits 01 renl Lhe interest pay able in respect thereof shall be remittcd. 'a~aIty for i
43. If the hirer wilfully omits, after receiving due notice, to remove lo ,rcmovaI or Ihe metal plate from any machinery which has become his propcny under 7 pP'"t" scction 42, he shaIl be liable to a fine not exceeding j'lfty rupecs. m ;urns due 44. All sums payable under this chapter shall be recoverable i n nder bis the same way as loans under Chaplcr IV. :covcmblc as 3ans under Ibaprcr TV. ., , CHAPTER VI a m SUPPIL~K :indiLy of 3[45. (1) The decision of the State Government, or the decision of lccisions of the Uirector against which an appeal lies to the State Governmen1 but is ;talc not filed within the specified period, as to whether the conditions laid hvernmen t md bar of down in or under any of the provisions of this Act have been satisfied, uils and shall be final, and no civil court shall have the jurisdiction to entertain 1 lroceedings in any suit or proceedings in respect thereof.] 3vi l and . :riminal (2) No prosecution, suit or other proceeding shall Lie against any :OUIIS. Government offcer or other authority veslcd with powers undci this Act for anything in good faith done or inlendcd lo be done thercundc; .oms undcr 2[4S-A. All loans granted under the Patiala and East Punjab States 'ePsu Act U Union S talc Aid to Industries AcL, 2007 (Act No. 1 of 2007 Bk.) shall be f2007 lo be deemed to be granted under and in accbrdance with the provisions of ccmed Lo be ranled undcr this Act and shall be recoverable in the same manner in which loans 6 s Act. granted under this Act are recoverable.]. ?ewer to 46. (1 ) The '[State] Government may, after prcvious publication, "c rules- make rules consistent with this Act for -the carrying out of all or any of . , irs purposes.
(2) In particular &d without prejudice to the generality of Ihc foregoing power, the l [ S tatel Government may make rules regulating or determining all or any. of the following matters, namely :-
1. Subslituted for the word "Provincial" by Ihc Adaplalion of Laws Ordcr, 1950.
2. lnserted by Dunjab Acl23 of 1957.
3. Subsbtu~ed by Ilaryana Act 26 of 1975. 1935 : Pb. Act V ] STA'I'E AID M INDUSIWES 27 1
(a) electior! of members of the Hoard under cIauscs (e), (f) and
(g) of sub-section (1 ) of section 3 ;
(b) regulating the havelling allowance under section 10 ;
(c) lhe manner of making application for Stale aid under section 19 ;
(d) the delegalion of power to give loans under section 20 ;
( e ) the lorn of decd to be executed undcr seclion 2 1 ; (fl the naturc and amounr of the security to be taken under sections 21 and 36 for the duc application and repayment of the Slate aid or renb together wilh all iriterest due thcreon, iT any, and the rate of interest a1 which and the conditions under which S~ale aid may be granted :
Provided that where the security consists wholly or in part of the premises, machinery, stock, stores or other property, present or future, movable or immovable of [he industry concerned, then the whole of such properly present and future, movable and immovabIe, may be made liable for the recovery of the loan and all interest due thereon. if any ;
(g) the inspcclion under section 26 of the premises, buildings, machinery and stock-in-hand and the mode of kceping and auditing the account and of furnishing returns of any jnduslty in respect of which Slate aid has been given ;
(h) themanner inand the placeat whichnolicesororder~smay be served on any borrower; (il the form of the declaralion LO bc used under seclion 24;
( j ) the fixing of the period for the repayrncnt of loans; (kJ Ihc application under section 33 of profits in the case in which the conditions on which State aid ha$ been given, have not been fulfilled ; ( I ) the appointment and functions of directors appointed by the l [State] Governrncnt undcr section 34 and the prescrj bing of other methods of control of industries to which Stare aid has been given ; I. Subsriturerl for be word "Provincial" by Ihc Adaplalion of Laws Order, 1950. 272 S'rATE AID TU INDUSIRIFS [I935 : Pb. Act V
(m) the percentage of the cosl of machinery lo be dcposiled under section 36 ; (nJ the addirionaI particulars to be specified in the grder referred lo in section 37 and the condilions on which machinery may be supplied on the hire-purchasc syskrn ; 0 the fornl of the metal plate referred ro in clause (el of scction 38; (p] the form of notice undcr scction 39 ; {g] the rccovery of any sums payable under this Act; and
(r) all other matters'oertaining to the .working of this Act.
47. The Punjab IndusLrial Loans Act, 1923, i s hereby repealed. 1935HR5FirstPage.doc 1935HR5.pdf