Indian Bare Acts

Search Alphabatically :

THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974

Title : THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974

Year : 1974



(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established for the purposes of this Act a Board to be called the Oil Industry Development Board.

(2) The Board shall be a body corporate by the name aforesaid having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall by the said name sue and be sued.

(3) The Board shall consist of the following members, namely:-

(a) Not more than three members to be appointed by the
Central Government to represent the Ministry or Ministries of the Central Government dealing with petroleum and chemicals;

(b) Two members to be appointed by the Central Government to represent the Ministry of the Central Government dealing with finance;

(c) Not more than five members to be appointed by the Central Government to represent the Corporations, being Corporations owned or controlled by the Central Government, engaged in activities referred to in clause (k) of section 2;

(d) Two members of whom one shall be appointed by the
Central Government from amongst persons who, in the opinion of that Government, have special knowledge or experience of oil industry and the other shall be appointed by that Government to represent labour employed in the oil industry;

(e) The Secretary to the Board, ex officio.

(4) The Central Government shall appoint the Chairman of the
Board.

(5) The term of office of the members of the Board (other than the members appointed by virtue of office) and the manner of filling vacancies among, and the procedure to be followed in the discharge of their functions by, the members shall be such as may be prescribed.

(6) Subject to such conditions and restrictions as may be prescribed, the Board may constitute Standing Committees or Committees for exercising any power or discharging any duty of the Board or for inquiring into, reporting and advising on, any matter which the Board may refer to them:

Provided that a Standing Committee shall consist exclusively of members of the Board.

(7) No act or proceeding of the Board or of any Committee constituted under sub-section (6) shall be invalidated merely by reason of-

(a) Any vacancy in, or any defect in the constitution of, the Board or such Committee; or

(b) Any defect in the appointment of a person acting as a member of the Board or such Committee; or

(c) Any irregularity in the procedure of the Board or such Committee not affecting the merits of the case.



Every person appointed as a whole-time member of the Board shall be entitled to such salary and allowances and such conditions of service in respect of leave, pension, provident fund and other matters as may, from time to time, be fixed by the Central Government and the other members of the Board and such of the members of any Committee constituted under sub-section (6) of section 3 as are not members of the Board shall be entitled to such allowances, if any, and such other conditions of service, as may be prescribed.



(1) The Central Government shall appoint a Secretary to the Board.

(2) Subject to rules made in this behalf, the Secretary shall exercise such powers and perform such duties as may be prescribed or as may be delegated to him by the Board.

(3) The Secretary shall be entitled to such salary and allowances and such conditions of service in respect of leave, pension, provident fund and other matters as may, from time to time, be fixed by the Central Government.

(4) Subject to such conditions and restrictions as may be prescribed, the Board may appoint such consultants as may be necessary for the performance of its functions on such terms and conditions as it may determine from time to time.

(5) Subject to such conditions and restrictions as may be prescribed, the Board may appoint such other officers and employees as may be necessary for the performance of its functions and pay them such salaries and allowances as it may determine from time to time.



(1) Subject to the provisions of this Act and the rules made there under, the Board shall render, in such manner, to such extent and on such terms and conditions as it may deem fit, financial and other assistance for the promotion of all such measures as are, in its opinion, conducive to the development of oil industry.

(2) Without prejudice to the generality of the provisions of sub- section (1), the Board may render assistance under that sub-
section by-

(a) Making grants or advancing loans to any oil industrial concern or other person who is engaged or is to engage in any activity referred to in clause (k) of section 2;

(b) Guaranteeing on such terms and conditions as may be agreed upon loans raised by any oil industrial concern or other person which are repayable within a period not exceeding twenty-five years and are floated in the market or loans raised by an oil industrial concern or other person from any bank which is a scheduled bank, or a State co-operative bank, as defined in the Reserve
Bank of India Act, 1934 (2 of 1934)

(c) Guaranteeing on such terms and conditions as may be agreed upon deferred payments due from any oil industrial concern or other person in connection with import of capital goods from outside India or in connection with purchase of capital goods within India by such concern or other person;

(d) Guaranteeing on such terms and conditions as may be agreed upon loans raised from, or credit arrangements made with, any bank or financial institution in any country outside India by any oil industrial concern or other person in foreign currency:

Provided that no such guarantee shall be given without the prior approval of the Central Government;

(e) Underwriting the issue of stock, shares, bonds or debentures by any oil industrial concern and retaining as part of its assets any stock, shares, bonds or debentures which it may have to take up in fulfilment of its obligations thereto;

(f) Acting as agent for the Central Government or, with its approval, for any overseas financial organisation or credit agency in the transaction of any business with any oil industrial concern in respect of loans or advances granted, or debentures subscribed by the
Central Government or such organisation or agency;

(g) Subscribing to the stock or shares of any oil industrial concern;

(h) Subscribing to the debentures of any oil industrial concern repayable within a period not exceeding twenty-five years from the date on which they are subscribed to:

Provided that nothing contained in this clause shall be deemed to preclude the Board from subscribing to the debentures of any oil industrial concern, the amounts outstanding thereon may be convertible at the option of the Board into stock or shares of that concern within the period the debentures are repayable.

Explanation.-In this clause, the expression, "amounts outstanding thereon" used in relation to any loan or advance shall mean the principal, interest and other charges payable on such loan or advance as at the time when the amounts are sought to be converted into stock or shares.

(3) Without prejudice to the generality of the provisions of sub-section (1), the measures for the promotion of which the Board may render assistance under that sub-section may include measures for or by way of--

(a) Prospecting for and exploration of mineral oil within
India (including the continental shelf thereof) or outside India;

(b) The establishment of facilities for production, handling, storage and transport of crude oil;

(c) Refining and marketing of petroleum and petroleum products;

(d) The manufacture and marketing of petro-chemicals and fertilisers;

(e) Scientific, technological and economic research which could be, directly or indirectly, useful to oil industry;

(f) Experimental or pilot studies in any field of oil industry;

(g) Training of personnel, whether in India or outside, engaged or to be engaged in any field of oil industry, and such other measures as may be prescribed.

(4) The Board may charge such fees or receive such commission as it may deem appropriate for any services rendered by it in the exercise of its functions.

(5) The Board may transfer for consideration any instrument relating to loans or advances granted by it to any oil industrial concern or other person.

(6) The Board may do all such things as may be incidental to or consequential upon the discharge of its functions under this Act.



(1) Before rendering any assistance to any oil industrial concern or other person, the Board shall have regard to such directions as the Central Government may issue in this behalf and shall satisfy itself that-

(a) Such assistance is not contrary to such directions; and

(b) Such assistance is necessary as a matter of priority in the interests of the development of oil industry.

(2) In rendering any assistance to any oil industrial concern or other person, the Board shall impose such conditions as may be prescribed and may also impose such additional conditions as it may think necessary or expedient for protecting the interests of the Board and for securing that the assistance rendered by it is put to the best use by such concern or other person.



Notwithstanding anything in any agreement to the contrary, the Board may, by notice in writing, require any oil industrial concern or other person to which or to whom it has rendered any assistance to discharge forthwith in full its or his liabilities to the Board-

(a) If it appears to the Board that false or misleading information in any material particulars was given in the application for such assistance; or

(b) If the concern or other person has failed to comply with the terms of its or his contract with the Board in the matter of such assistance; or

(c) If there is a reasonable apprehension that the concern or other person is unable to pay its or his debts or that proceedings for liquidation or in insolvency may be commenced in respect of such concern or person; or

(d) If the property pledged, mortgaged, hypothecated or assigned to the Board as security is not insured and kept insured by the concern or other person to the satisfaction of the Board; or depreciates in value to such an extent that, in the opinion of the Board, further security to the satisfaction of the Board should be given and such security is not given; or

(e) If, without the permission of the Board, any machinery, plant or other equipment (whether or not forming part of the security), is removed from the premises of the concern or other person without being replaced; or

(f) If for any reason it is necessary to protect the interests of the Board.



(1) Where an oil industrial concern or other person, in breach of any agreement, makes any default in repayment of any loan or advance or any installment thereof or in meeting its or his obligations in relation to any other assistance rendered by the Board or otherwise fails to comply with the terms of the agreement with the Board or where the Board requires an oil industrial concern or other person to make immediate repayment of any loan or advance and the concern or other person fails to make such repayment, then, without prejudice to the provisions of section 69 of the Transfer of Property Act, 1882 (4.of 1882), any officer of the Board generally or specially authorised by the Board in this behalf may apply to the court for one or more of the following reliefs, namely:-

(a) For an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Board as security for the loan or advance; or

(b) For an ad interim injunction where there is apprehension of the machinery or the equipment being removed from the premises of the oil industrial concern or other person without the permission of the Board; or

(c) In the case of an oil industrial concern, for transferring the management of the concern to the Board.

(2) An application under sub-section (1) shall state the nature and extent of the liability of the oil industrial concern or other person to the Board, the ground on which it is made and such other particulars as may be prescribed.

(3) When the application is for the relief mentioned in clause
(a) or clause (b) of sub-section (1), the court shall pass an ad interim order attaching the property or so much of the property of the oil industrial concern or other person as would on being sold realise in the estimation of the court an amount equivalent in value to the outstanding liability of the concern or other person to the Board together with costs of the proceedings taken under this section with or without an ad interim injunction restraining the oil industrial concern or other person from transferring or removing any machinery or equipment.

(4) Where the application is for the relief mentioned in clause
(c) of sub-section (1), the court shall grant an ad interim injunction restraining the oil industrial concern from transferring or removing its machinery and equipment and issue a notice calling upon the concern to show cause on a date to be specified in the notice why the management of the concern should not be transferred to the Board.

(5) Before passing any order under sub-section (3) or sub-section
(4), the court may, if it thinks fit, examine the officer making the application.

(6) At the same time as it passed an order under sub-section (3), the court shall issue to the oil industrial concern or other person a notice accompanied by copies of the order, the application and the evidence, if any, recorded by it, calling upon the concern or other person to show cause on a date to be specified in the notice why the ad interim order of attachment should not be made absolute or the injunction confirmed.

(7) If no cause is shown before the date specified in the notice under sub-sections (4) and (6), the court shall forthwith make the ad interim order absolute and direct the sale of the attached property or transfer the management of the oil industrial concern to the Board or confirm the injunction.

(8) If cause is shown, the court shall proceed to investigate the claim of the Board and the provisions of the Code of Civil Procedure,1908 (5 of 1908) shall, so far as may be, apply to such proceedings.

(9) On an investigation made under sub-section (8), the court shall pass an order-

(a) Confirming the order of attachment and directing the sale of the attached property, or

(b) Varying the order of attachment so as to release a portion of the property from attachment and directing the sale of the remainder of the attached property, or

(c) Releasing the property from attachment, if it is satisfied that it is not necessary in the interests of the Board, or

(d) Confirming or dissolving the injunction, or

(e) Transferring the management of the oil industrial concern to the Board or rejecting the claim made in this behalf:

Provided that when making any order under clause (c), the court may make such other orders as it thinks necessary to protect the interests of the Board, and, may apportion the costs of the proceedings in such manner as it thinks fit:

Provided further
that unless the Board intimates the court that it will not appeal against any order releasing any property from attachment, such order shall not be given effect to until the expiry of the period fixed under sub-section (12) within which an appeal may be preferred, or if an appeal is preferred, unless the court empowered to hear appeals from the decisions of the said court otherwise directs, until the appeal is disposed of.

(10) An order of attachment or sale of property shall be carried into effect, as far as may be practicable, in the manner provided in the Code of Civil Procedure, 1908 (5 of 1908), for the attachment or sale of property in execution of a decree, as if the Board were the decree-holder.

(11) An order under this section transferring the management of an oil industrial concern to the Board shall be carried into effect, as far as may be practicable, in the manner provided in the Code of
Civil Procedure, 1908 (5 of 1908), for the possession of immovable property or the delivery of movable property in execution of a decree, as if the Board were the decree-holder.

(12) Any party aggrieved by an order under sub-section (7), or sub-section (9) may, within thirty days from the date of the order, appeal to the court empowered to hear appeals from the decisions
of the court which passed the order and the appellate court may after hearing the parties pass such orders as it thinks proper.

(13) Nothing in this section shall be construed, where proceedings for liquidation or in insolvency in respect of the oil industrial concern or other person have commenced before an application is made under sub-section (1) as giving to the Board any preference over the other creditors of the concern or other person not conferred on it by any other law.

(14) For the removal of doubts, it is hereby declared that any court competent to grant an ad interim injunction under this section shall also have the power to appoint a receiver and to exercise all other powers incidental thereto.



When the management of an oil industrial concern is taken over by the Board, the Board may, by order notified in the Official
Gazette, appoint as many persons as it thinks fit to be the Directors of that concern and nothing in the Companies Act, 1956 (1 of 1956), or in any law or instrument relating to the concern, in so far as it makes, in relation to a Director, any provision for the holding of any share qualification, age limit, restrictions on the number of directorships, retirement by rotation or removal from office shall apply to any Director appointed by the Board under this section.



On the issue of a notified order under section 10-

(a) All persons holding office as Directors of the oil industrial concern or in charge of the management of such concern immediately before the issue of the notified order shall be deemed to have vacated their offices as such;

(b) The Directors appointed under section 10 shall take such steps as may be necessary to take into their custody or under their control the property, effects and actionable claims to which the oil industrial concern is, or appears to be, entitled and all the property and effects of the concern shall be deemed to be in the custody of the Directors as from the date of the notified order;

(c) The Directors appointed under section 10 shall for all purposes be the Directors of the oil industrial concern duly constituted under the Companies Act, 1956 (1 of 1956), and shall alone be entitled to exercise all the powers of the Directors of the concern, whether such powers are derived from the said Act or from the memorandum or articles of association of the concern or from any other source.



(1) Subject to the control of the Board, the Directors appointed under section 10 shall take such steps as may be necessary for the purpose of efficiently managing the business of the oil industrial concern and shall exercise such powers and perform such duties as may be prescribed.

(2) Without prejudice to the generality of the powers vested in them under sub-section (1), the Directors appointed under section 10.may, with the previous approval of the Board, make an application to a court for the purpose of cancelling or varying any contract or agreement entered into at any time before the issue of the notified order under section 10, between the oil industrial concern and any other person and the court may, if satisfied after due inquiry that such contract or agreement had been entered into in bad faith and is detrimental to the interests of the concern, make an order cancelling or varying (either unconditionally or subject to such conditions as it may think fit to impose) that contract or agreement and the contract or agreement shall accordingly stand cancelled or, as the case may be, have effect as so varied.




(1) Notwithstanding anything contained in any law for the time being in force, no Director or other person in charge of the management of an oil industrial concern immediately before the issue of a notified order under section 10 in respect of such concern shall be entitled to any compensation for the loss of office or for the premature termination under this Act of the contract entitling him to be in charge of such management.

(2) Nothing contained in sub-section (1) shall affect the right of any Director or other person referred to therein to recover from the oil industrial concern moneys recoverable otherwise than by way of such compensation.



(1) Where the management of an oil industrial concern, being a company as defined in the Companies Act, 1956, is taken over by the Board, then, notwithstanding anything contained in the said Act or in the memorandum or articles of association of such concern,-

(a) It shall not be lawful for the shareholders of such concern or any other person to nominate or appoint any person to be a Director of such concern;

(b) No resolution passed at any meeting of the shareholders of such concern shall be given effect to unless approved by the Board;

(c) No proceeding for the winding up of such concern or for the appointment of a receiver in respect thereof shall lie in any court, except with the consent of the Board.

(2) Subject to the provisions contained in sub-section (1) and to the other provisions contained in this Act and subject to such other exceptions, restrictions and limitations, if any, as the Central
Government may, by notification in the Official Gazette, specify in this behalf, the Companies Act, 1956 (1 of 1956), shall continue to apply to such concern in the same manner as it applied thereto before the issue of the notified order under section 10.

Last updated on June, 2016

Find a Lawyer

Legal Hall of Fame

The current Legal Luminaries of India, the credible names in the legal circle along with those who would be the leading stars of the next decade. These are some of the reliable names in field of law. Nominate the Legal Stars of tomorrow

More

Recent Judgment


Sudha Mishra vs. Surya Chandra Mishra( R.F.A 299 of 2014

The Hon'ble High Court of Delhi in Sudha Mishra vs. Surya Chandra Mishra (R.F.A 299 of 2014)has ruled that a woman has a right over the property of her husband but she cannot claim a right to live in the house of her parents-in-law

More

Bare Acts

Helpline Law provides a user friendly compendium of Indian Law & Bare Acts. Get a complete list & detail of Indian Bare Acts, with amendments and repeals. It comes with easy-to-use features like Search by bare acts & by year. You can even email the information to yourself!

More

Have a Legal Matter ?
Need a Lawyer?

Have a Legal Matter ?

Need a Lawyer?

Male
Female