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THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT, 1984

Title : THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT, 1984

Year : 1984



The provisions of this Act and of any rule or scheme made there under shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the memorandum or articles of association of an industrial concern or in any other instrument having effect by virtue of any law other than this Act.



Notwithstanding anything contained in the Income-tax Act, 1961, or the Companies (Profits) Surtax Act, 1964 or the Interest-tax Act, 1974, or any other enactment for the time being in force relating to tax on income, profits or gains, the Reconstruction Bank shall not be liable to pay income-tax, surtax, interest-tax, or any other tax in respect of-

(a) Any income, profits or gains accruing to the Reconstruction Assistance Fund or any amount received to the credit of that Fund;

(b) Any income, profits or gains derived, or any amount received, by the Reconstruction Bank; and

(c) Any interest collected by, or payable to, the Reconstruction Bank in accordance with the provisions of the Interest-tax Act, 1974.




No provision of law relating to winding up of corporations shall apply to the Reconstruction Bank and the Reconstruction Bank shall not be placed in liquidation, save by order of the Central Government and in such manner as it may direct.




The Reconstruction Bank shall be deemed to be a bank for the purposes of the Bankers Books Evidence Act, 1891.56.Certain provisions of Act 10 of 1949 not to apply to Reconstruction Bank.




Nothing contained in the Banking Regulation Act,1949, except the provisions of section 34A and section 36AD, shall apply to the Reconstruction Bank.




No provision of the Monopolies and Restrictive Trade Practices Act, 1969, in relation to the amalgamation, merger, modernization or expansion of any undertaking to which Part III of that Act applies, shall apply when such amalgamation, merger, modernization or expansion of such undertaking, takes place as a result of any sale, lease, purchase, amalgamation or merger in accordance with the provisions of this Act.



The Reconstruction Bank shall furnish, from time to time, to the Central Government and the Reserve Bank such returns as the Central Government, or, as the case may be, Reserve Bank, may require.



The Board may, by general or special order, delegate, subject to such conditions and limitations, if any, as may be specified in the said order, to the Executive Committee or any other committee constituted under this Act or to any director, officer or other employee of the Reconstruction Bank or to the directors, administrators, officers, or other persons authorized by the Reconstruction Bank to manage any assisted industrial concern or any undertaking owned by such assisted industrial concern, such of its powers and duties under this Act as it may deem necessary.




(1) Without prejudice to the provisions of section 7, the Reconstruction Bank may appoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine their terms and conditions of appointment and service.

(2) The Reconstruction Bank may, notwithstanding anything contained in any other law for the time being in force or in any contract, depute any of its officers or other members of its staff to, or receive on deputation from, prescribed institutions on such terms and conditions as may be prescribed, and may also depute any of its officers or other members of its staff to any assisted industrial concern:

Provided that nothing contained in this section shall be construed as empowering the Reconstruction Bank to depute to any prescribed institution or assisted industrial concern any officer or other member of its staff on any salary, emoluments or other terms and conditions of service which are less favour able to him than those to which he was entitled immediately before such deputation.



(1) The Reconstruction Bank shall observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, it shall not, except as otherwise provided in sub-section (3), divulge any information relating to, or to the affairs of, the assisted industrial concern, except in circumstances in which it is, in accordance with law or practices and usages, customary among bankers, necessary or appropriate for the Reconstruction Bank to divulge such information.

(2) Every director, auditor, adviser, officer or any other employee of the Reconstruction Bank shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the Second Schedule.

(3) The Reconstruction Bank may, for the purpose of efficient discharge of its functions under this Act, collect from, or furnish to,--

(a) The Central Government,

(b) The Reserve Bank,

(c) The State Bank, or any subsidiary bank within the meaning of the State Bank of India (Subsidiary Banks) Act, 1959.(38 of 1959), or any nationalized bank, or any other scheduled bank, or any State co-operative bank or the Development Bank or other public financial institutions, or State level agencies or prescribed institutions or State Financial Corporations, such credit information or other information as it may consider useful for the purpose, in such manner and at such times, as it may think fit.

Explanation.-For the purposes of this sub-section, the expression "credit information" shall have the same meaning as in clause (c) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934), subject to the modification that the banking company referred to therein shall mean an assisted industrial concern.




(1) The Reconstruction Bank shall constitute, for the benefit of the officers and other employees appointed under section 60 (as also for the officers and other employees whose services have been transferred to it under section 7) in such manner and subject to such conditions as may be prescribed, such insurance and provident fund as it may deem fit.

(2) Where any such insurance or provident fund has been so constituted, the Central Government may declare that the provisions of the Provident Funds Act, 1925 (19 of 1925), shall apply to such fund as if it were a Government Provident Fund.




(1) Every director shall be indemnified by the Reconstruction Bank against all losses and expenses incurred by him in or in relation to the discharge of his duties, except such as are caused by his own willful act or default.

(2) A director shall not be responsible for any other director or for any officer or other employee of the Reconstruction Bank or for any loss or expenses resulting to the Reconstruction Bank from the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the Reconstruction Bank or the insolvency or wrongful act of any debtor or any person under obligation to the Reconstruction Bank or any thing done in good faith in execution of the duties of his office or in relation thereto.




No suit or other legal proceeding shall lie against the Reconstruction Bank, or any director, or officer, or other employee of the Reconstruction Bank, or any other person authorized by the Reconstruction Bank to discharge any functions under this Act, for any loss or damage caused or is likely to be caused by anything which is in good faith done or intended to be done, in pursuance of this act or any other law or provision having the force of law.




Chairman, director, adviser and auditor and every other employee of the Reconstruction Bank shall be deemed to be public servants for the purposes of Chapter IX of the Indian Penal Code (45 of 1860).



If in any application, return or statement or other document made, submitted, furnished or produced for the purpose of obtaining any loan or advance or any other assistance from the Reconstruction Bank any person makes a statement-

(a) Which is false in any material particular, knowing it to be false; or

(b) Which omits to state any material fact, knowing it to be material; he shall be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine.




(1) Where any offence, punishable under section 66, has been committed by a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), when any offence punishable under section 66 has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.-For the purpose of this section,-

(a) "Company" means any body corporate and includes a firm or other association of individuals; and

(b) "Director", in relation to a firm, means a partner in the firm.




(1) The Central Government may, by notification in the Official Gazette, make rules to carry out the provisions of this Act.

(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-

(a) Institutions and agencies in, and outside, India, payment of whose loans may be guaranteed, counter-guaranteed or indemnified by the Reconstruction Bank, as may be specified under sub-section (1) of section 18;

(b) Institutions and agencies which may be provided with the line of credit by the Reconstruction Bank for grant of loans and advances by them to industrial concerns as may be specified under clause (d) of sub-section (1) of section 18;

(c) Persons who may be appointed to act as the agents of the
Reconstruction Bank as required by clause (q) of sub-section (1)
of section 18;

(d) Borrowing of foreign currency from any source, other than the source specified in sub-section (1) of section 23;

(e) The powers which may be exercised and duties which may be performed by any director or administrator appointed under sub-section (1) of section 44;

(f) The manner in which and the conditions subject to which an insurance or provident fund may be constituted by the
Reconstruction Bank as required by sub-section (1) of section 62;

(g) Any other matter which is required to be, or may be, prescribed.

(3) Every rule made under this Act shall be laid as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.




(1) The Board may, with the previous sanction of the Central Government, 1*[by notification in the Official Gazette.] make regulations, not inconsistent with the provisions of this Act and the rules made there under, to provide for all matters for which regulations are necessary or expedient for the purpose of giving effect to the provisions of this Act and of the rules made there under.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:-

(a) Restrictions relating to the powers which may be exercised by the Chairman, in pursuance of the provisions of sub- section (2) of section 9;

(b) The time and place at which the Board shall meet and the rules of procedure (including quorum) which shall be observed by the Board in regard to the transaction of business at its meetings, as required by sub-section (1) of section 14;

(c) (i) The constitution of the Executive Committee or other committees and the functions thereof;

(ii) The time and place at which such committees shall meet; and

(iii) The rules of procedure (including quorum) which shall be observed by each Committee in relation to the transaction of business at its meetings, as required by section 15;

(d) Fees and allowances which may be paid to the directors and members of the committee, as required by section 17;

(e) Conditions and limitations, subject to which an industrial concern may enter into any kind of business, as required by clause (i) of sub-section (2) of section 19;

(f) The form and manner in which the balance sheet and accounts of the Reconstruction Assistance Fund shall be prepared, as required by sub-section (1) of section 29;

(g) The form and the manner in which the balance sheet and accounts of the Reconstruction Bank shall be prepared, as required by sub-section (1) of section 32;

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1. Ins. by Act 66 of 1988, s. 50 (w.e.f. 30-12-1988).

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(h) The duties, conduct, salaries, allowances and conditions of service of officers and other employees (whether employed on regular basis or on contract) of the Reconstruction Bank and all those who are appointed for the management of any undertaking, the management of which has been taken over; and

(i) Any other matter which is required to be, or may be, provided for by regulations.

(3) The Central Government shall cause every regulation made under this Act to be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.




If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by notification in the Official Gazette, remove the difficulty:

Provided
that no such notification shall be made after the expiry of a period of two years from the appointed day.




The enactments specified in Parts I to III of the Third Schedule to this Act shall be amended in the manner directed in the first column thereof and such amendments shall take effect on the dates specified in the second column of that Schedule.




In every Act, rule or regulation in force on the appointed day, for the words "Industrial Reconstruction Corporation of India Limited", wherever they occur, the words "Industrial Reconstruction Bank of India" shall be substituted.



Last updated on March, 2016

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