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THE KHADI AND VILLAGE INDUSTRIES COMMISSION ACT, 1956

Title : THE KHADI AND VILLAGE INDUSTRIES COMMISSION ACT, 1956

Year : 1956



(1) With effect from such date as the Central Government may, by notification in the Official Gazette, fix in this behalf, there shall be established a Commission to be called the Khadi and Village Industries Commission which shall be a body corporate having perpetual succession and a common seal, with power to acquire, hold and dispose of property and to contract, and may by the said name sue and be sued.

2*[(1A) Save as otherwise provided under this Act and the rules made there under, the exercise of all powers and discharge of all functions under this Act, including general superintendence, direction and management of day-to-day affairs of the Commission, shall vest in the Commission.]

1*[(2) The Commission shall consist of the following members appointed by the Central Government, namely:-

(a) Six non-official members 3*[having specialised knowledge and not less than ten years of experience of khadi or village industries] and representing such six geographical zones of the country, as may be prescribed;

4*[(b) Four non-official members of whom each member shall be from the following disciplines, namely:-

(i) One member having expert knowledge and experience in Science and Technology;

(ii) One member having expert knowledge and experience in Marketing;

(iii) One member having expert knowledge and experience in Rural Development; and

(iv) One member having expert knowledge and experience in Technical Education and Training]

2*[(ba) The Chairman of the State Bank of India constituted under sub-section (1) of section 3 of the State Bank of India Act, 1955(23 of 1955) or an officer not below the rank of the Deputy Managing Director as may be nominated by the Chairman of the State Bank of India-ex-officio;]

5*[(c) A Chief Executive Officer, ex-officio; and

(d) A Financial Adviser, who shall also be the Chief Accounts Officer of the Commission, ex-officio.]

6 [***]

(3) The Central Government may appoint one of the members appointed under clause (a) of sub-section (2) to be the chairman who shall be a full-time member.]

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1. Substituted by Khadi and Village Industries Commission (Amdt.) Act (12 of 1987), Section 4 (24-7-87).

2. Inserted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

3. Substituted for the words "having specialised knowledge and experience of khadi and village industries" by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

4. Clause (b) substituted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

5. Clause (c  & d) substituted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

6. Proviso omitted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

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2*[(1) Subject to the provisions contained in sub-section (1A) of section 4, the Chief Executive Officer, appointed under clause (c) of sub-section (2) of section 4, shall exercise such powers and discharge such functions in respect of general superintendence over the affairs of the Commission and its day-to-day management, as may be prescribed.

(1A) Without prejudice to the powers and functions referred to in subsection (1), the Chief Executive Officer shall exercise such powers and discharge such functions under the general superintendence, direction and management of the Commission.].

(2) The Chief Executive Officer 3*[shall, in addition to exercise of the powers and discharge of the functions referred to in sub-section (1), be responsible] for the furnishing of all returns, reports and statements required to be furnished to the Central Government under Section 24.

(3) It shall be the duty of the Chief Executive Officer to place before the Commission for its consideration and decision any matter of financial import if the Financial Adviser suggests to him in writing that such matter be placed before the Commission.

5A - Powers and functions of the Financial Adviser

The Financial Adviser 4*[appointed under clause (d) of sub-section (2) of section 4 shall be in charge of such financial matters of the Commission including its budget, accounts and audit, as may be prescribed] and it shall be the duty of the Financial Adviser to bring to the notice of the Commission through the Chief Executive Officer any matter of financial import, which, in his opinion, requires consideration and decision by the Commission.

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1. Substituted for Sections 5 and 6 by Khadi and Village Industries Commission (Amdt.) Act (12 of 1987), Section 5 (24-7-87).

2. Substituted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

3. Substituted for the words "shall be responsible" by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006)

4.Substituted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

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A person shall be disqualified for being appointed as, and for being, a member of the Commission-

(a) If he is, or is found to be a lunatic or a person of unsound mind; or

(b) If he has been adjudged insolvent; or

(c) If he has been convicted of an offence involving moral turpitude; or

(d) If he has any financial interest in any subsisting contract made with or in any work being done by the Commission, except as a shareholder (other than a Director), in a company as defined in section 3 of the Companies Act, 1956:

Provided
that where he is a shareholder, he shall disclose to the Central Government, the nature and extent of shares held by him in such a company; or

(e) If he has any financial interest in any business undertaking dealing with or any other village industry specified or deemed to be specified in the Schedule to the Act.

6A - Removal of Chairman, Member, etc., from the Commission

The Central Government may, by notification in the Official Gazette, remove from office any member of the Commission who-

(a) Is or becomes subject to any of the disqualifications mentioned in section 6; or

(b) In the opinion of the Central Government has failed or is unable to carry out his duties; or

(c) Absents himself from three consecutive meetings of the Commission without the leave of the Commission:

Provided
that before issuing any such notification, the Central Government shall give an opportunity to the member concerned to show cause against such removal.]



Any member may resign his office by giving notice in writing to the Central Government and, on such resignation being notified in the Official Gazette by that Government, shall be deemed to have vacated his office.



No act or proceeding of the Commission shall be invalid by reason only of the existence of any vacancy amongst its members or any defect in the constitution thereof.



(1) The Commission may associate with itself in such manner and for such purposes as may be determined by regulations made under this Act any persons whose assistance or advice it may desire in complying with any of the provisions of this Act.

(2) A person associated with it by the Commission under sub-section (1) for any purpose shall have the right to take part in the discussions of the Commission relevant to that purpose, but shall not have the right to vote, and shall not be a member for any other purpose.

(3) The Central Government may, by notification in the Official Gazette, depute one or more officers of the Government to attend any meetings of the Commission and to take part in the discussions of the Commission, but such officer or officers shall not have the right to vote.



1*[(1) For the purpose of assisting the Commission in the discharge of its functions under this Act, the Central Government may, by notification in the Official Gazette, consisting of a chairman and such number of other members as the Central Government may think fit, chosen from among persons who, in the opinion of the Central Government, are qualified as having had experience, and shown capacity, in matters relating to the development of 2*[National Khadi and Village Industries Board].];

3*(2) The Board shall, subject to the provisions of sub-section (3), meet at such times and places and observe such rules of procedure in regard to the transaction of business at its meetings including the quorum at meetings as may be prescribed;

(3) The Board shall meet at least twice in a year.].

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1.Numbered as sub-section 1 by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

2.Substituted for the words " Khadi and Village Industries Board " by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

3.Inserted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).  

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The Commission shall ordinarily consult the Board with respect to the discharge of its functions under this Act.



(1) The Commission shall meet at such times and places and shall, subject to the provisions of sub-sections (2) and (3), observe such rules of procedure in regard to transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the Commission under this Act:

Provided that the Commission shall meet at least once in every month.

1*[(2) The chairman or, in his absence, any member (other than an ex-officio member) chosen by the members present from among themselves, shall preside at a meeting of the Commission.]

(3) All questions at a meeting of the Commission shall be decided by a majority of the 2[votes of the members (including ex-officio members) present] and voting and in the case of an equality of votes, the chairman or, in his absence the person presiding shall have a second or casting vote.

12A - 3*Zonal Committee

(1) The Commission shall constitute for each of the six geographical zones, referred to in clause (a) of sub-section (2) of section 4, a Zonal Committee, which shall consist of the following, namely:-

(a) The non-official member representing the zone, referred to in clause (a) of sub-section (2) of section 4, who shall be the Chairman of the Zonal Committee constituted for respective zones;

(b) One representative of each of the State Khadi and Village Industries Boards of the States or, as the case may be, the Government of each State in the zone, to be notified by the Central Government in consultation with the State Government concerned-member;

(c) The Zonal Deputy Chief Executive Officer of the Commission, who shall be the convener of the Zonal Committee-member;

(d) The State Directors in charge of the Commission's Directorates for the States in the zone-member;

(e) A Zonal or Regional manager of one of the lead banks operating in the zone-member; and

(f) One representative of an institution of repute, working for at least ten years in the khadi or village industries sector and having a good record of performance, from each State in the zone, to be notified by the Central Government-member.

(2) The Zonal Committee shall meet at such times and places and shall, subject to the provisions of sub-section (3), observe such rules of procedure in regard to the transaction of business at its meetings (including the quorum at the meetings) as may be provided by regulations made by the Commission under this Act:

Provided that the Committee shall meet at least once in every three months.

(3) The Chairman of the Zonal Committee or, in his absence, any member chosen by the members present from among themselves, shall preside at a meeting of the Committee.

(4) The Zonal Committee shall generally function as a forum for consultation and, accordingly, inter alia,-

(a) Act as a conduit for the dissemination of information relating to the programmes and schemes of the Commission for the development of khadi and village industries in the zone;

(b) Monitor, from time to time, the implementation of the programmes and schemes referred to in clause (a);

(c) Provide feedback to the Commission on the problems and difficulties envisaged and suggestions made by banks, voluntary agencies, artisans and others engaged in the operation of programmes and schemes referred to in clause (a).].

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1. Substituted by Khadi and Village Industries Commission (Amdt.) Act (12 of 1987), Section 6 (24-7-87).

2.Substituted for the words " votes of the members present " by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

3. Inserted by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

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(1) Every member of the Commission, other than an ex-officio member, shall hold office 2*[at the pleasure of the Central Government which shall not exceed continuous period of five years]:

Provided that the chairman shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.

(2) The terms and conditions of service of the chairman, Chief Executive Offficer, Financial Adviser and other members shall be such as may be prescribed.]

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1. Substituted by Khadi and Village Industries Commission (Amdt.) Act (12 of 1987), Section 7 (24-7-87).

2.Substituted for the words " for a term of five years " by the Khadi and Village Industries Commission (Amendment) Act, 2006 (10 of 2006).

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1[****].

2[**] Subject to such rules as may be made by the Central Government in this behalf, the Commission may appoint such other officers and servants as it considers necessary for the efficient performance of its functions:

2[****].

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1. Sub-section (1) omitted by Khadi and Village Industries Commission (Amdt.) Act (12 of 1987), Section 8 (24-7-87).

2. Brackets and figure "(2)" and proviso omitted, by Khadi and Village Industries Commission (Amdt.) Act (12 of 1987), Section 8 (24-7-87).

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Last updated on August, 2016

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