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THE INDUSTRIAL DEVELOPMENT BANK OF INDIA ACT, 1964

Title : THE INDUSTRIAL DEVELOPMENT BANK OF INDIA ACT, 1964

Year : 1964



1*[(1) The general superintendence, direction and management of the affairs and business of the Development Bank shall vest in a Board of Directors which may exercise all powers and do all such acts and things, as may be exercised or done by the Development Bank and are not by this Act expressly directed or required to be done by the Development Bank in general meeting.

(2) The Board may direct that any power exercisable by it under this Act shall also be exercisable in such cases and subject to such conditions, if any, as may be specified by it, by the chairman, managing director or the whole-time director]

(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.

2 [***]

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1. Substituted by Act 5 of 1995, sec. 6, for sub-sections (1) and (2) (w.r.e.f. 12-10-1994). Earlier sub-section (2) was Substituted by Act 52 of 1975, sec. 6.

2. Sub-section (4) Inserted by Act 52 of 1975, sec. 6 and omitted by Act 5 of 1995, sec. 6 (w.r.e.f. 12-10-1994).

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2*[(1) The Board shall consist of the following, namely:-

(a) A chairman and a managing director appointed by the Central Government:

Provided that the same person may be appointed to function both as chairman and as managing director;

(b) One whole-time director appointed by the Central Government on the recommendation of the Board;

(c) Two directors who shall be officials of the Central Government nominated by the Central Government;

(d) Three directors from amongst persons having special knowledge of, and professional experience in science, technology, economics, industry, banking, industrial cooperatives, law, industrial finance, investment, accountancy, marketing or any other matter, the special knowledge of, and professional experience in, which would, in the opinion of the Central Government, be useful to the Development Bank, nominated by the Central Government; and

(e) Such number of directors elected, in the prescribed manner, by shareholders other than the Central Government, whose names are entered on the register of shareholders of the Development Bank ninety days before the date of the meeting in which such election takes place on the following basis, namely:-

(i) Where the total amount of equity share capital issued to such shareholders is ten per cent or less of the total issued equity capital, two directors;

(ii) Where the total amount of equity share capital issued to such shareholders is more than ten per cent but less than twenty-five per cent of the total issued equity capital, three directors; and

(iii) Where the total equity share capital issued to such shareholders is twenty-five per cent or more of the total issued equity capital, four directors:

Provided that until the assumption of charge by the elected directors under this clause, the Central Government may at any time nominate such number of directors, not exceeding four, from amongst persons having special knowledge of, and professional experience in science, technology, economics, industry, banking, industrial co-operatives, law, industrial finance, investment accountancy, marketing or any other matter, the special knowledge of, and professional experience in, which would, in the opinion of the Central Government, be useful to the Development Bank for carrying out its functions.]

(2) 3*[The chairman, the managing director and the whole-time director] shall hold office for such term not exceeding five years as the Central Government may specify in this behalf and any person so appointed shall be eligible for re-appointment.

3*[(2A) Notwithstanding anything contained in sub-section (1), the Central Government shall have the right to terminate the term of office of 4*[the chairman, managing director or the whole-time director], as the case may be, at any time before the expiry of the term specified under sub-section (2) by giving him notice of not less than three months in writing or three months' salary and allowances in lieu of such notice; and 4*[the chairman, managing director or the whole-time director] as the case may be, shall also have the right to relinquish his office at any time before the expiry of the term specified under sub-section (2) by giving to the Central Government notice of not less than three months in writing.]

(3) 5*[The chairman, managing director and the whole-time director] shall receive such salary and allowances as may be determine by the Central Government.

3*[(3A) The Central Government may, at any time, remove 4 [the chairman, managing director or the whole time director], as the case may be, from office:

Provided that no person shall be removed from his office, under this sub-section, unless the has been given an opportunity of showing cause against his removal. ]

(4) A nominated director shall hold office during the pleasure of the authority nominating him.

6*[(4A) Subject to the provisions of sub-section (4)-

(a) Every director nominated under clause (d) section-section (1) shall hold office for such term not exceeding three years as the Central Government may specify in this behalf and thereafter until his successor assumes office, and shall be eligible for re-nomination:

Provided
that no such director shall hold office continuously for a period exceeding six years; and

(b) Every director elected under clause (e) of sub-section (1) shall hold office for three years and thereafter until his successor assumes office, and shall be eligible for re-election:
Provided that no such director shall hold office continuously for a period exceeding six years.]

7*[(4B) The shareholders, other than the Central Government, may, after giving to the director a reasonable opportunity of being heard in the manner as may be prescribed, by resolution passed by majority of the votes of such shareholders holding in the aggregate not less than one-half of the share capital held by such shareholders, remove any director elected under clause (e) of sub-section(1) and elect another director in his place to fill the vacancy so caused. ]

8*[(5)(i) A meeting of the Board shall be held at least once every three months and at least four meetings shall be held every year and the meetings may be held at such places as may be prescribed.

(ii) Notice of every meeting of the Board shall be given in writing to every director for the time being in India, and at his usual address in India to every other director.

(5A) Subject to the provisions contained in this Chapter, the Board may meet at such times and places and shall observe such rules of procedure in regard to transaction of its business including the manner of adoption of resolutions as may be prescribed.]

(6) The chairman, or, if for any reason he is unable to attend a meeting of the Board, the managing director or, in the event of both the chairman and the managing director being unable to attend a meeting, any other director nominated by the chairman in this behalf and in the absence of such nomination any director elected by the directors from among themselves, shall preside at the meeting.

(7) All questions which come up before any meeting of the Board shall be decided by a majority of votes of the directors present and voting, and in the event of an equality of votes, the chairman, or in his absence, the managing director, or in the absence of both the chairman and the managing director, the person presiding, shall have a second or casting vote.

(8) Save as provided in sub-section (7), every director of the Board shall have one vote.]

 6A - Omitted

9***

6B - 10*Disqualification of directors

(1) A person shall not be eligible for being elected as a director under clause (e)of sub-section (1) of section 6, if he-

(a) Has been found to be of unsound mind by a court of competent jurisdiction and the finding is in force;

(b) Is an undischarged insolvent;

(c) Has applied to be adjudicated as an insolvent and his application is pending;

(d) Has been convicted by a court of any offence involving moral turpitude and sentenced in respect there of to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence; or

(e) Has not paid any call in respect of shares of the Development Bank held by him, whether along or jointly with others, and six months have elapsed from the last day fixed for the payment of the call.

6C -10* Vacation of office by director

(1) The office of a director shall become vacant if he-

(a) Becomes subject to any of the disqualifications mentioned in section 6B; or

(b) Resigns his office by giving notice in writing under his hand and the resignation is accepted; or

(c) Absents himself from three consecutive meetings of the Board without obtaining leave of absence from the Board;

(2) Notwithstanding anything in clause (a) of sob-section (1), the disqualifications referred to in that clause shall not take effect-

(a) For thirty days from the date of the adjudication, sentence or order;

(b) Where any appeal or petition is preferred within thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or

(c) Where within the seven days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentence, conviction or order and the appeal or petition, if allowed, would result in the removal of the disqualification, until such further appeal or petition is disposed of.

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1. Substituted by Act 52 of 1995, sec. 7, for section 6.

2. Substituted by Act 5 of 1995, sec. 7, for sub-section(1) (w.r.e.f. 12-10-1994).

3. Inserted by Act 73 of 1976, sec. 5.

4. Substituted by Act 5 of 1995, sec. 7, for "the chairman or the managing director"(w.r.e.f. 12-10-1994).

5. Substituted by Act 5 of 1995, sec. 7 for "The chairman and the managing director"(w.r.e.f 12-10-1994).

6. Sub-section (4A) Inserted by Act 35 of 1986, sec. 5, Substituted by Act 66 of 1988, sec. 27 and again Substituted by Act 5 of 1995, sec. 7(w.r.e.f. 12-10-1994).

7. Inserted by Act 5 of 1995, sec. 7(w.r.e.f. 12-10-1994).

8. Substituted by Act 5 of 1995, sec. 7, for sub-section(5) (w.r.e.f. 12-10-1994).

9. Section 6A Inserted by Act 52 of 1975, sec. 8 and omitted by Act 5 of 1995, sec. 8 (w.r.e.f. 12-10-1994).

10.Sections 6B and 6C inserted by Act 5 of 1995, section 9 (w.r.e.f. 12-10-1994).

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1*[(1) The Board shall constitute an Executive Committee consisting of the chairman, the managing director, the whole-time director and such other directors as it may deem fit.]

(2) The Executive Committee shall discharge such functions as may be prescribed or as may be delegated to it by the Board.

(3) The Board may constitute such other committee whether consisting wholly of directors or wholly of other persons or partly of directors and partly of other persons for such purpose or purposes as it may think fit.

(4) The Executive Committee or any other committee constituted under this section shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed.

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1.Sub-section (1) substituted by Act 52 of 1975, section 9 and again substituted by Act 5 of 1995, section 10 (w.r.e.f. 12-10-1994).

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The directors and the members of a committee shall be paid such fees and allowances as may be prescribed for attending the meetings of the Board or of any committee constituted in pursuance of this Act and for attending to any other work of the Development Bank:

Provided that no fees shall be payable to the chairman, if he is appointed whole-time, or to the managing director or to the whole time director or to any other director who is an official of the Government.

Last updated on July, 2016

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