(1) When a person alleged to be a neglected child is produced before a children's court, it shall examine the police officer or the authorised person who brought the child or made the report and record the substance of such examination and hold the inquiry in the prescribed manner and may make such orders in relation to the child as it may deem fit:
Provided that before holding such inquiry the children's courts shall direct the probation officer to furnish it with a report regarding the antecedents and family history of the child and other material circumstances likely to be of assistance to the court in holding the inquiry.
(2) Where a children's court is satisfied on inquiry that a child is a neglected child and that it is expedient so to deal with him, the children's court may make an order directing the child to be sent to a children's home for the period until he ceases to be a child:
Provided that the children's court may, for reasons to be recorded, extend the period of such stay, but in no case the period of stay shall extend beyond the time when the child attains the age of eighteen years in the case of a boy and twenty years in the case of a girl:
Provided further that the children's court may, if it is satisfied that having regard to the circumstances of the case it is expedient so to do, for reasons to be recorded, reduce the period of stay by such period not exceeding two years as it thinks fit.
(3) During the pendency of any inquiry regarding a child, the child shall, unless he is kept with his parent or guardian, be sent to an observation home for such period as may be specified in the order of the children's court:
Provided that no child shall be kept with his parent or guardian if, in the opinion of the children's court, such parent or guardian is unfit to exercise or does not exercise proper care and control over the child.