THE COMPENSATORY AFFORESTATION FUND ACT, 2016 

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ARRANGEMENT OF SECTIONS 

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CHAPTER I 

PRELIMINARY 

SECTIONS 

1. Short title, extent and commencement.  

2. Definitions. 

CHAPTER II 

ESTABLISHMENT, MANAGEMENT AND UTILISATION OF NATIONAL COMPENSATORY AFFORESTATION 
FUND AND STATE COMPENSATORY AFFORESTATION FUNDS 

3. Establishment of National Fund.  

4. Establishment of State Fund.  

5. Disbursement and utilisation of National Fund. 

6. Disbursement and utilisation of State Fund. 

7. Accounting procedure. 

CONSTITUTION OF NATIONAL AUTHORITY AND STATE AUTHORITIES 

CHAPTER III 

8. Constitution of National Authority. 

 9. Executive committee and monitoring group of National Authority.  

10. Constitution of State Authority. 

11. Steering committee and executive committee of State Authority. 

12. Term of office and conditions of service of members. 

13. Disqualifications.  

CHAPTER IV 

POWERS AND FUNCTIONS OF NATIONAL AUTHORITY AND STATE AUTHORITIES 

14. Powers and functions of National Authority. 

15. Powers and functions of executive committee of National Authority.  

16. Functions of monitoring group. 

17. Powers and functions of State Authority. 

 18. Powers and functions of steering committee of State Authority.  

19. Functions and powers of executive committee of State Authority. 

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CHAPTER V 

FINANCE, ACCOUNTS, AUDIT AND ANNUAL REPORT 

20. Budget of National Authority. 

21. Investment of funds by National Authority.  

22. Accounts and audit of National Authority. 

23. Annual report of National Authority. 

24. Annual report and audit report of National Authority to be laid before Parliament.  

25. Budget of State Authority. 

26.  Investment of funds by State Authority. 

27. Accounts and audit of State Authority.  

28. Annual report of State Authority.  

29. Annual report and audit report of State Authority to be laid before State Legislature. 

CHAPTER VI 

MISCELLANEOUS 

30. Power to make rules. 

31. Transfer of assets, liabilities, etc. 

32. Validation.  

33. Power of Central Government to issue directions.  

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THE COMPENSATORY AFFORESTATION FUND ACT, 2016 

ACT NO. 38 OF 2016 

[3rd August, 2016.] 

An  Act  to  provide  for  the  establishment  of  funds  under  the  public  accounts  of  India  and  the 
public  accounts  of  each  State  and  crediting  thereto  the  monies  received  from  the  user 
agencies  towards  compensatory  afforestation,  additional  compensatory  afforestation,  penal 
compensatory  afforestation,  net  present  value  and  all  other  amounts  recovered  from  such 
agencies under the Forest (Conservation) Act, 1980; constitution of an authority  at national 
level  and  at  each  of  the  State  and  Union  territory  Administration  for  administration  of  the 
funds  and  to  utilise  the  monies  so  collected  for  undertaking  artificial  regeneration 
(plantations), assisted natural regeneration, protection of forests, forest related infrastructure 
development, Green India Programme, wildlife protection and other related activities and for 
matters connected therewith or incidental thereto. 

WHEREAS the Supreme Court in its order in T.N. Godavarman Thirumulpad vs. Union of India and 
Others  [Writ  Petition  (Civil)  No.  202  of  1995],  dated  the  30th  October,  2002,  observed  that  a 
Compensatory  Afforestation  Fund  be  created  in  which  all  the  monies  received  from  the  user  agencies 
towards  compensatory  afforestation,  additional  compensatory  afforestation,  penal  compensatory 
afforestation,  net  present  value  of  the  diverted  forest  land  or  catchment  area  treatment  plan  shall  be 
deposited; 

AND  WHEREAS  it  had  also  been  observed  that  the  money  received  from  the  user  agencies  in  cases 
where  forest  land  diverted  falls  within  protected  areas,  that  is,  the  areas  notified  under  the  Wild  Life 
(Protection)  Act,  1972  (35  of  1972)  for  undertaking  activities  related  to  protection  of  biodiversity  or 
wildlife shall also be deposited in the Fund; 

AND WHEREAS the Supreme Court has directed that, besides artificial regeneration (Plantations), the 
Fund  shall  also  be  utilised  for  undertaking  assisted  natural  regeneration,  protection  of  forests, 
infrastructure development, wildlife protection and other related activities and an independent system of 
concurrent  monitoring  and  evaluation  should  be  evolved  and  implemented  through  the  Compensatory 
Afforestation Fund to ensure effective and proper utilisation of funds; 

AND  WHEREAS  the  Supreme  Court  in  its  judgment  dated  26th  September,  2005  in  the  said  Writ 
Petition observed that the Fund generated for protecting ecology and providing regeneration should not be 
treated as a Fund under article 266 and article 283 of the Constitution; 

AND WHEREAS in its direction dated the 5th May, 2006, the Supreme Court had directed that since the 
Government has not constituted a Compensatory Afforestation Fund Management and Planning Authority 
(hereinafter  referred  to  as  Authority),  an  ad  hoc  Authority  should  be  constituted  till  the  Compensatory 
Afforestation  Fund  Management  and  Planning  Authority  becomes  operational  and  directed  to  centrally 
pool the money recovered on behalf of the said Authority lying in the States and Union territories into the 
ad hoc Compensatory Afforestation Fund Management and Planning Authority; 

AND WHEREAS Central Government formulated guidelines dated the 2nd July, 2009 on the subject of 

State Authority for utilisation of funds lying with the ad hoc Authority; 

AND  WHEREAS  in  its  direction  dated  the  10th  July,  2009,  the  Supreme  Court  had  directed  that  the 
guidelines and structure of the State Authority prepared by the Central Government may be notified and 
implemented; 

AND WHEREAS in its directions dated the 10th July, 2009, the Supreme Court further directed that till 
an  alternative  system  is  put  in  place,  after  obtaining  permission  from  the  Supreme  Court,  the  money 
towards  compensatory  afforestation,  net  present  value  and  protected  areas  (national  parks,  wildlife 
sanctuaries) shall continue to be deposited in the ad hoc Authority; 

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AND WHEREAS in compliance of the directions of the Supreme Court including its order dated the 5th 
May,  2006,  over  rupees  thirty  eight  thousand  crores  as  collected  by  the  State  Governments  and  Union 
territory Administrations have been placed under the ad hoc Authority, and deposited in the nationalised 
banks; 

AND WHEREAS absence of permanent institutional mechanism for utilisation of funds collected by the 
State  Governments  and  Union  territory  Administrations  is  the  main  reason  for  accumulation  of  huge 
unspent funds in the ad hoc Authority; 

NOW,  THEREFORE, based on the above orders, directions and observations of the Supreme Court to 
ensure safety, security and expeditious utilisation in a transparent manner of funds accumulated with the 
ad  hoc  Authority  and  the  funds  to  be  collected  by  the  State  Governments  and  Union  territory 
Administrations,  it  is  proposed  to  create  a  National  Compensatory  Afforestation  Fund  and  a  National 
Compensatory Afforestation Fund Management and Planning Authority at the national level, and a State 
Compensatory  Afforestation  Fund  and  a  State  Compensatory  Afforestation  Fund  Management  and 
Planning Authority in each State and Union territory, by an Act of Parliament. 

BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows: — 

CHAPTER I 

PRELIMINARY 

1.  Short  title,  extent  and  commencement.—  (1)  This  Act  may  be  called  the  Compensatory 

Afforestation Fund Act, 2016. 

(2) It extends to the whole of India except the State of Jammu and Kashmir*. 

(3)  Save  as  otherwise  provided  in  this  Act,  it  shall  come  into  force  on  such  date1 as  the  Central 

Government may, by notification in the Official Gazette, appoint. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a)  “ad  hoc  Authority”  means  the  ad  hoc  Compensatory  Afforestation  Fund  Management  and 
Planning Authority constituted under the order dated the 5th May, 2006 of the Supreme Court in T.N. 
Godavarman Thirumulpad vs. Union of India and Others, [Writ Petition (Civil) No. 202 of 1995]; 

(b)  “Chairperson,  National  Authority”  means  the  Chairperson  of  the  governing  body  of  the 

National Authority; 

(c)  “Chairperson,  State  Authority”  means  the  Chairperson  of  the  governing  body  of  the  State 

Authority; 

(d) “compensatory afforestation” means afforestation done in lieu of the diversion of forest land 

for non-forestry use under the Forest (Conservation) Act, 1980 (69 of 1980); 

(e) “environmental services” includes— 

(i)  provision  of  goods  such  as  wood,  non-timber  forest  products,  fuel,  fodder,  water  and 

provision of services such as grazing, tourism, wildlife protection and life support; 

(ii) regulating services such as flood moderation, carbon sequestration and health of soil, air 

and water regimes; 

(iii)  supporting  such  other  services  necessary  for  the  production  of  ecosystem  services, 

biodiversity, nutrient cycling and primary production including pollination and seed dispersal; 

1. 30th September, 2018, vide notification NO. S.O. 3967(E), dated 13th August, 2018, see Gazette of India, Extraordinary,              

Part II, sec. 3(ii). 

*. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammu and 

Kashmir and the Union territory of Ladakh. 

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(f)  “Head  of  the  regional  office”  means  the  senior-most  officer  appointed  by  the  Central 
Government  at  regional  office  to  deal  with  the  forest  conservation  matters  under  the  Forest 
(Conservation) Act, 1980 (69 of 1980); 

(g)  “monitoring  group”  means  a  group  of  experts  to  monitor  the  activities  undertaken  from 
amounts released from the National Fund and State Fund constituted under sub-section (3) of section 
9; 

(h)  “National  Authority”  means  National  Compensatory  Afforestation  Fund  Management  and 

Planning Authority constituted under section 8; 

(i) “National Fund” means the National Compensatory Afforestation Fund established under sub-

section (1) of section 3; 

(j)  “net  present  value”  means  the  quantification  of  the  environmental  services  provided  for  the 
forest area diverted for non-forestry uses, as may be determined by an expert committee appointed by 
the Central Government from time to time in this regard; 

(k) “penal compensatory afforestation” means afforestation work to be undertaken over and above 
the compensatory afforestation specified in the guidelines issued under the Forest (Conservation) Act, 
1980,  in  lieu  of  the  extent  of  area  over  which  non-forestry  activities  have  been  carried  out  without 
obtaining prior approval of the competent authority under the Forest (Conservation) Act, 1980 (69 of 
1980); 

(l) “prescribed” means prescribed by rules made by the Central Government in consultation with 

the State Governments under this Act; 

(m)  “State  Authority”  means  the  State  Compensatory  Afforestation  Fund  Management  and 

Planning Authority constituted under section 10; 

(n)  “State  Fund”  means  the  State  Compensatory  Afforestation  Fund  established  by  each  State 

under sub-section (1) of section 4; 

(o) “State Government” includes Union territory Administration; 

(p)  “user  agency”  means  any  person,  organisation  or  company  or  department  of  the  Central 
Government or State Government making a request for diversion or de-notification of forest land for 
non-forest  purpose  or  using  forest  land  for  non-forest  purpose  in  accordance  with  the  provisions 
contained  in  the  Forest  (Conservation)  Act,  1980  (69  of  1980)  and  the  rules  made  and  guidelines 
issued, thereunder. 

CHAPTER II 

ESTABLISHMENT, MANAGEMENT AND UTILISATION OF NATIONAL COMPENSATORY AFFORESTATION 
FUND AND STATE COMPENSATORY AFFORESTATION FUNDS 

3.  Establishment  of  National  Fund.— (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 special Fund to be called the “National Compensatory Afforestation Fund” under 
the public account of India. 

(2)  The  National  Fund  shall  be  under  the  control  of  the  Central  Government  and  managed  by  the 

National Authority in such manner as may be prescribed. 

(3) On the date of establishment of the National Fund, all monies collected by the State Governments 
and Union territory Administrations which has been placed under the ad hoc Authority and deposited in 
the nationalised banks shall be transferred to the National Fund. 

(4) There shall also be credited into the National Fund, by each State on yearly basis, ten per cent. of 
the funds realised from the user agencies in respect of the forest land diverted in their favour, which have 
been credited directly into the State Fund. 

(5) There shall also be credited to the National Fund— 

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(a) grants-in-aid received, if any, by the National Authority; 

(b) any loan taken or any borrowings made by the National Authority; 

(c) any other sums received by the National Authority by way of benefaction, gift or donations. 

(6) The monies received in the National Fund shall be an interest bearing fund under public accounts 

of India. 

(7) The balance in the National Fund shall be non-lapsable and get interest as per the rate declared by 

the Central Government on year to year basis. 

4. Establishment of State Fund.—(1) With effect from such date as each State Government may, by 
notification in the Official Gazette, appoint in this behalf, there shall be established for the purposes of 
this Act, a special Fund to be called the “State Compensatory Afforestation                Fund-......... (name 
of State)” under public accounts of such State: 

Provided that in case of Union territory having no legislature, such fund shall be established under the 
public account of Union of India with effect from such date as the Union territory Administration may, by 
notification in the Official Gazette, appoint in this behalf. 

(2) The State Fund in each State shall be under the control of the State Government of such State and 

managed by the State Authority of such State, in such manner as may be prescribed. 

(3) There shall be credited into the State Fund of a State— 

(i) the unspent balance of all monies which has been transferred by ad hoc Authority to the State 
Compensatory Afforestation Compensatory Afforestation Funds Management and Planning Authority 
constituted in such State in compliance of guidelines dated the 2nd July, 2009; 

(ii) all monies transferable from the National Fund under clause (a) of section 5; 

(iii)  all  monies  realised  from  user  agencies  by  such  State  towards  compensatory  afforestation, 
additional compensatory afforestation, penal compensatory afforestation, net present value, catchment 
area treatment plan or any money for compliance of conditions stipulated by the Central Government 
while according approval under the provisions of the Forest (Conservation) Act, 1980 (69 of 1980); 
and 

(iv) the funds recoverable from user agencies by such State in cases where forest land diverted 
falls within the protected areas, that is, areas notified under sections 18, 26A or 35 of the         Wild 
Life  (Protection)  Act,  1972  (53  of  1972)  for  undertaking  activities  relating  to  the  protection  of 
biodiversity and wildlife. 

(4) A State Government may also credit to the State Fund constituted by it— 

(i) grants-in-aid received, if any, by the State Authority; 

(ii) any loan taken or any borrowings made by the State Authority; 

(iii) any other sums received by the State Authority by way of benefaction, gift or donations. 

(5) The monies received in the State Fund shall be an interest bearing fund under public accounts. 

(6) The balance in each State Fund shall be non-lapsable and get interest as per the rate declared by 

the Central Government on year to year basis. 

5.  Disbursement  and  utilisation  of  National  Fund.—Save  as  otherwise  provided  in  this  Act,  the 
monies available in the National Fund shall be disbursed and utilised in the following manner, namely:— 

(a) ninety per cent. of the all monies collected by a State, which has been placed under the    ad 
hoc Authority and the interest accrued thereon, shall be transferred to the State Fund established in 
such state under sub-section (1) of section 4; 

(b)  the  balance  ten  per  cent.  of  all  monies  collected  by  the  States  and  Union  territory 
Administrations, which has been placed under the ad hoc Authority and the interest accrued thereon, 

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and all fresh accrual to the National Fund, as provided in sub-section (4) of section 3, and the interest 
accrued thereon, shall be utilised for meeting— 

(i) the non-recurring and recurring expenditure for the management of the National Authority 

including the salary and allowances payable to its officers and other employees; 

(ii) the expenditure incurred on monitoring and evaluation of works executed by the National 

Authority and each State Authority; 

(iii)  the  expenditure  incurred  on  specific  schemes  approved  by  governing  body  of  the 

National Authority. 

Explanation.—For  the  purposes  of  this  section,  “scheme”  includes  any  institute,  society,  centre  of 
excellence in the field of forest and wildlife, pilot schemes, standardisation of codes and guidelines and 
such other related activities for the forestry and wildlife sector. 

6. Disbursement and utilisation of State Fund.—Save as otherwise provided in this Act, the monies 

available in a State Fund shall be disbursed and utilised in the following manner, namely:— 

(a)  the  money  received  for  compensatory  afforestation,  additional  compensatory  afforestation, 
penal  compensatory  afforestation,  catchment  area  treatment  plan  and  for  any  other  site  specific 
scheme  may  be  used  as  per  site-specific  schemes  submitted  by  the  State  along  with  the  approved 
proposals for diversion of forest land under the Forest (Conservation) Act, 1980 (69 of 1980); 

(b) the monies received towards net present value and penal net present value shall be used for 
artificial regeneration (plantation), assisted natural regeneration, forest management, forest protection, 
forest and wildlife related infrastructure development, wildlife protection and management, supply of 
wood  and  other  forest  produce  saving  devices  and  other  allied  activities  in  the  manner  as  may  be 
prescribed; 

(c) the interest accrued on funds available in a State Fund and the interest accrued on all monies 
collected by the State Governments, which has been placed under the ad hoc Authority and deposited 
in the nationalised banks, in compliance of the directions of the Supreme Court dated the 5th May, 
2006, shall be used for conservation and development of forest and wildlife in the manner as may be 
prescribed; 

(d)  all  monies  realised  from  the  user  agencies  in  accordance  with  the  decision  taken  by  the 
Standing  Committee  of  the  National  Board  for  Wild  Life  constituted  under section  5A of  the  Wild 
Life  (Protection)  Act,  1972  (35  of  1972)   or  the  orders  of  the  Supreme  Court  involving  cases  of 
diversion  of forest  land in protected areas shall  form  the corpus and the  income  therefrom  shall  be 
used exclusively for undertaking protection and conservation activities in protected areas of the State 
including facilitating voluntary relocation from such protected areas and in exceptional circumstance, 
a part of the corpus may also be used subject to prior approval of the National Authority; 

(e) ten per cent. of amount realised from the user agencies, which has been credited directly into 
the State Fund in a year shall be transferred to the National Fund to meet expenditure as provided in 
clause (b) of section 5; 

(f) the non-recurring and recurring expenditure for the management of a State Authority including 
the salary and allowances payable to its officers and other employees may be met from a part of the 
interest accrued on the amounts available in the State Fund, in the manner as may be prescribed; 

(g) in case of trans-boundary forestry or environmental implication of diversion of forest land for 
non-forest purposes in a particular State, if found expedient and necessary by the National Authority, 
it may, in consultation with the concerned Sate Authorities order that such sum as may be justified for 
reparation of the trans-boundary effects, be transferred to State Fund of such State or States; 

(h) State Authority shall release monies to agencies identified for execution of activities in pre-
determined  instalments as per the  annual  plan  of  operation finalised  by  steering  committee  of  such 
State Authority and executive committee of the National Authority. 

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7.  Accounting  procedure.—  The  accounting  procedure  to  regulate  the  manner  of  crediting  the 

monies to the National Fund and State Fund in a year shall be in such manner as may be prescribed. 

CONSTITUTION OF NATIONAL AUTHORITY AND STATE AUTHORITIES 

CHAPTER III 

8. Constitution of National Authority.— (1) With effect from such date as the Central Government 
may, by notification in the Official Gazette, appoint in this behalf, there shall be constituted a National 
Authority  to  be  called  the  “National  Compensatory  Afforestation  Fund  Management  and  Planning 
Authority”. 

(2) The National Authority shall manage and utilise the National Fund for the purposes of this Act. 

(3) The  National  Authority  shall  consist of a  governing  body  and  shall  be  assisted by  an  executive 

committee, monitoring group and administrative support mechanism. 

(4) The governing body of the National Authority shall consist of the following, namely:— 

(i) Minister for Environment, Forest and Climate Change, Government of                      India—

Chairperson, ex officio; 

(ii)  Secretaries  of  Ministries  dealing  with  Environment,  Forest,  Climate  Change,  Finance 
(Expenditure),  Rural  Development,  Land  Resources,  Agriculture,  Panchayati  Raj,  Tribal 
Development, Science, Technology, Space and Earth Sciences and Chief Executive Officer, National 
Institution for Transforming India Ayog, Government of India—Members, ex officio; 

(iii)  Director  General  of  Forests  and  Special  Secretary,  Ministry  of  Environment,  Forest  and 

Climate Change, Government of India—Member, ex officio; 

(iv)  Additional  Director  General  of  Forests  (Forest  Conservation),  Ministry  of  Environment, 

Forest and Climate Change, Government of India—Member, ex officio; 

(v)  Additional  Director  General  of  Forests  (Wildlife),  Ministry  of  Environment,  Forest  and 

Climate Change, Government of India—Member, ex officio; 

(vi) Mission Director, National Mission for a Green India, Ministry of Environment, Forest and 

Climate Change, Government of India—Member, ex officio; 

(vii)  Financial  Adviser,  Ministry  of  Environment,  Forest  and  Climate  Change,  Government  of 

India—Member, ex officio; 

(viii) five Principal Chief Conservator of Forests, not more than one from each of the ten regions, 
to be nominated by the Ministry of Environment, Forest and Climate Change, Government of India 
on rotation basis for a period of two years, at a time—Members, ex officio; 

(ix)  Inspector  General  of  Forests  (Forest  Conservation),  Ministry  of  Environment,  Forest  and 

Climate Change, Government of India—Member, ex officio; 

(x)  five  experts,  one  each  from  environmentalists,  conservationists,  scientists,  economists,  and 
social scientists appointed by the Central Government for a period of two years subject to not more 
than two consecutive terms—Members. 

(5) The Central Government may appoint an officer of the rank of an Additional Director General of 
Forests as the Chief Executive Officer of the National Authority who shall be the                 Member—
Secretary of the governing body and the executive committee of the National Authority. 

9. Executive committee and monitoring group of National Authority.— (1) The governing body 
of the National Authority shall, in performance of its functions and powers under the Act, be assisted by 
the executive committee and the monitoring group. 

(2) The executive committee of the National Authority shall consist of the following, namely:— 

(i)  Director  General  of  Forests  and  Special  Secretary,  Ministry  of  Environment,  Forest  and 

Climate Change, Government of India—Chairperson, ex officio; 

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(ii)  Additional  Director  General  of  Forests  (Forest  Conservation),  Ministry  of  Environment, 

Forest and Climate Change, Government of India—Member, ex officio; 

(iii)  Additional  Director  General  of  Forests  (Wildlife),  Ministry  of  Environment,  Forest  and 

Climate Change, Government of India—Member, ex officio; 

(iv) Mission Director, National Mission for a Green India, Ministry of Environment, Forest and 

Climate Change, Government of India—Member, ex officio; 

(v)  Financial  Adviser,  Ministry  of  Environment,  Forest  and  Climate  Change,  Government  of 

India—Member, ex officio; 

(vi)  Head  of  all  regional  offices  of  the  Ministry  of  Environment,  Forest  and  Climate  Change, 

Government of India—Members, ex officio; 

(vii)  Inspector  General  of  Forests  (Forest  Conservation),  Ministry  of  Environment,  Forest  and 

Climate Change, Government of India—Member, ex officio; 

(viii)  a  professional  ecologist,  not  being  from  the  Central  Government,  to  be  appointed  by  the 

Central Government— Member; 

(ix)  three  experts,  one  each  in  the  fields  of  forestry,  tribal  development,  forest  economy 
development, not being from the Central Government, to be appointed by the Central Government— 
Members; 

(x) Chief Executive Officer of the National Authority—Member-Secretary. 

(3) The monitoring group shall consist of six experts in the field of environment, economics, wildlife, 
forest, remote sensing and geographical information system and social sector and the Director General, 
Forest Survey of India, Ministry of Environment, Forest and Climate Change, Government of India. 

(4) The  following  officers shall  be  appointed  by  the National  Authority  for  a  period  not exceeding 
five years, to assist the executive committee in performance of its functions and powers under the Act, 
namely:— 

(i) Joint Chief Executive Officer of the rank of Inspector General of Forests; 

(ii) Financial Advisor and Chief Accounts Officer of the rank of Director in the Government of 

India; and 

(iii) Deputy Chief Executive Officers of the rank  of Deputy Inspector General of Forests. 

(5)  The  governing  body  of  the  National  Authority  may  with  the  prior  concurrence  of  the  Central 
Government create posts in the National Authority at the level of Assistant Inspector General of Forests 
and other officials to assist the executive committee and monitoring group in performance of its functions 
under the Act. 

10.  Constitution  of  State  Authority.— (1) With effect from such date as the Central Government 
may,  by  notification  in  the  Official  Gazette,  appoint  in  this  behalf,  there  shall  be  constituted  a  State 
Authority to be called the “State Compensatory Afforestation Fund Management and Planning Authority” 
in each State. 

(2)  The  Central  Government  may,  if  so  desires,  appoint  different  dates  for  constitution  of  State 

Authority in each of the States. 

(3) The  State  Authority  constituted in  a  State shall  be  responsible  for the  management  of the  State 

Fund of such State and its utilisation for the purposes of the Act. 

(4)  The  State  Authority  shall  consist  of  a  governing  body  and  shall  be  assisted  by  a  steering 

committee and an executive committee. 

(5) The governing body of a State Authority shall consist of the following, namely:— 

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(i)  Chief  Minister  of  the  State  and  in  case  of  a  Union  territory  having  no  legislature,  the 

Lieutenant Governor or the Administrator, as the case may be—Chairperson, ex officio; 

(ii) Minister of Forests—Member, ex officio; 

(iii) Chief Secretary—Member, ex officio; 

(iv) Principal Secretaries of the Departments dealing with Environment, Finance, Planning, Rural 
Development,  Revenue,  Agriculture,  Tribal  Development,  Panchayati  Raj,  Science  and 
Technology—Members, ex officio; 

(v) Principal Chief Conservator of Forests (Head of Forest Force)-Member, ex officio; 

(vi) Chief Wildlife Warden—Member, ex officio; 

(6) Principal Secretary in-charge of the Forest Department in a State shall be Member Secretary of the 

State Authority in such State. 

(7)  The  State  Government  shall  appoint  an  officer  of  the  rank  not  below  the  rank  of  a  Chief 
Conservator of Forests as the Chief Executive Officer of the State Authority who shall be the Member-
Secretary of the steering committee and the executive committee of the State Authority. 

11. Steering committee and executive committee of State Authority.—(1) The governing body of 
the  State  Authority  shall,  in  performance  of its functions  and  powers  under  the Act,  be  assisted  by  the 
steering committee and the executive committee. 

(2) The steering committee of a State Authority shall consist of the following, namely:— 

(i) Chief Secretary—Chairperson, ex officio; 

(ii)  Principal  Secretaries  of  the  Departments  dealing  with  Forests,  Environment,  Finance, 
Planning,  Rural  Development,  Revenue,  Agriculture,  Tribal  Development,  Panchayati  Raj,  Science 
and Technology—Members, ex officio; 

(iii) Principal Chief Conservator of Forests (Head of Forest Force)—Member, ex officio; 

(iv) Chief Wildlife Warden—Member, ex officio; 

(v) Nodal Officer, the Forest (Conservation) Act, 1980 (69 of 1980) Member, ex officio; 

(vi)  Head  of the  concerned  regional  office  of  the Ministry  of  Environment,  Forest  and  Climate 

Change—Member, ex officio; 

(vii) Nodal Officer, State Forest Development Agency—Member, ex officio; 

(viii) an expert on tribal matters or a representative of tribal communities to be appointed by the 

State Government—Member; 

(ix) Chief Executive Officer, State Authority—Member-Secretary. 

(3) The executive committee of a State Authority shall consist of the following, namely:— 

(i) Principal Chief Conservator of Forests (Head of Forest Force) —Chairperson, ex officio; 

(ii) Chief Wildlife Warden—Member, ex officio; 

(iii)  an  officer  not  below  the  rank  of  a  Chief  Conservator  of  Forests  dealing  with  forest  and 

wildlife related schemes—Member, ex officio; 

(iv)  an  officer  not  below  the  rank  of  a  Chief  Conservator  of  Forests  dealing  with  forestry 

research—Member, ex officio; 

(v) Nodal Officer, State Forest Development Agency—Member, ex officio; 
(vi) a representative each of the Departments dealing with Environment, Finance, Planning, Rural 
Development,  Revenue,  Agriculture,  Tribal  Development,  Panchayati  Raj,  Science  and 
Technology—Members, ex officio; 

10 

 
(vii)  Financial  Controller  or  Financial  Adviser, 

to  be  nominated  by 

the  Finance                  

Department—Member, ex officio; 

(viii) two eminent non-government organisations to be appointed by the State        Government—

Members; 

(ix) two representatives of district level Panchayati Raj Institutions to be appointed by the State 

Government—Members; 

(x) an expert on tribal matters or a representative of tribal community to be appointed by the State 

Government—Member; 

(xi) Chief Executive Officer, State Authority—Member-Secretary. 

(4) The State Authority may appoint the following officers for a period not exceeding five years, to 
assist  the  steering  committee  and  executive  committee  in  performance  of  its  functions  under  the  Act, 
namely:— 

(i) Joint Chief Executive Officer of the rank not below the rank of a Conservator of Forests; 
(ii)  Financial  Advisor  and  Chief  Accounts  Officer  of  the  rank  not  below  the  rank  of  a  Deputy 

Secretary in the State Government; 

(iii) Deputy Chief Executive Officer of the rank not below the rank of a Deputy Conservator of 

Forests. 
(5)  The  governing  body  of  the  State  Authority  may  with  the  prior  concurrence  of  the  State 
Government create posts in the State Authority at the level of Assistant Conservator of Forests and other 
officials to assist the steering committee and executive committee in performance of its functions under 
the Act. 

12. Term of office and conditions of service of members.— Save as otherwise provided in this Act, 
the  terms  of  office  and  other  conditions  of  the  service  of  the  members  of  the  National  Authority, 
executive committee, monitoring group, Chief Executive Officer and officials appointed by the National 
Authority,  members  of  State  Authority,  steering  committee  and  executive  committee  of  each  State 
Authority shall be such as may be prescribed. 

13.  Disqualifications.—  A  person  shall  be  disqualified  for  being  appointed  as  a  member  of  the 
National Authority, executive committee of the National Authority, a State Authority, steering committee 
and executive committee of a State Authority, monitoring group, if he— 

(i) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the 

Central Government, involves moral turpitude; or 

(ii) is an undischarged insolvent; or 
(iii) is of unsound mind and stands so declared by the competent court; or 
(iv)  has  been  removed  or  dismissed  from  the  service  of  the  Government  or  organisation  or 

undertaking owned by the Government; or 

(v) has, in the opinion of the Central Government, such financial or other interest in the National 
Authority or the concerned State Authority as is likely to affect the duties discharged by him of his 
function as a member. 

CHAPTER IV 

POWERS AND FUNCTIONS OF NATIONAL AUTHORITY AND STATE AUTHORITIES 

14.  Powers  and  functions  of  National  Authority.—(1)  The  governing  body  of  the  National 

Authority shall— 

(i)  formulate  broad  policy  framework  for  functioning  of  the  National  Authority  and  State 

Authorities as may be notified by the Central Government; 

(ii) approve the annual report and audited accounts of the National Authority; 

(iii)  review  reports  on  decision  taken  by  executive  committee  and  monitoring  group  of  the 

National Authority including investment decisions; 

11 

 
(iv) approve the proposal for the schemes specified in sub-clause (iii) of clause (b) of    section 5; 

(v)  approve  the  proposals  for  creation  of  posts  in  the  National  Authority,  subject  to  prior 

permission of the Central Government; 

(vi)  provide  a  mechanism  to  State  Authorities  to  resolve  issues  of  inter-State  or  Centre-State 

character; 

(vii)  formulate  such  procedures  for  delegation  of  financial  and  administrative  powers  to  the 

National Authority and State Authorities as may be notified by the Central Government. 

(2) The governing body of the National Authority shall meet at least once in six months. 

(3) The governing body and executive committee of the National Authority and the monitoring group 
of the National Authority shall meet at such places and shall observe such rules and procedures in regard 
to transaction of business at its meeting, including the quorum thereat, as may be prescribed. 

15.  Powers  and  functions  of  executive  committee  of  National  Authority.—(1)  The  executive 

committee of the National Authority shall— 

(i)  approve  within  three  months  from  the  date  of  receipt,  annual  plan  of  operations  of  State 

Authorities, with such amendments as it deems fit and proper; 

(ii) formulate proposals for schemes specified in sub-clause (iii) of clause (b) of section 5; 

(iii) execute schemes specified in sub-clause (iii) of clause (b) of section 5; 

(iv) deploy staff on contract or on deputation basis to the posts in the National Authority; 

(v)  formulate  proposals  for  creation  of  posts  in  the  National  Authority  at  the  level  of  Assistant 

Inspector General of Forests and other officers; 

(vi) invest surplus amounts available in the National Fund; 

(vii) execute other day-to-day work in respect of receipt of amounts in the National Fund; 

(viii) maintain books of account and such other records; 

(ix)  facilitate  scientific,  technological  and  other  assistance  that  may  be  required  by  State 

Authorities; 

(x) present its decisions to the governing body of the National Authority for information; 

(xi) maintain and update a public information system on the National Authority and present all 

information on its transaction in the public domain; 

(xii)  undertake  any  other  work  as  may  be  assigned  by  the  governing  body  of  the  National 

Authority or the Central Government, from time to time. 

(2) The executive committee of the National Authority shall meet at least once in every three months. 

16. Functions of monitoring group.— (1) The monitoring group shall— 

(i)  evolve  independent  system  for  concurrent  monitoring  and  evaluation  of  the  works 
implemented  in  the  States  and  Union  territories  utilising  the  funds  released  by  the  National 
Authority  and  State  Authorities  to  ensure  effective  and  proper  utilisation  of  funds  by  utilising  the 
services of the regional offices, of the Central Government in the Ministry of Environment, Forest 
and Climate Change: 

Provided that the Central Government may also undertake third party monitoring and evaluation 
of  the  works  implemented  in  the  States  and  Union  territories  utilising  the  funds  released  by  the 
National  Authority  and  State  Authorities  through  individual  and  institutional  experts  including 
remote sensing agencies; 

(ii) inspect and undertake financial audit of works executed by utilising the funds released by the 

National Authority and State Authorities in the State and Union territories; 

12 

 
(iii) devise measures for transparency and accountability. 

(2) The monitoring group shall meet at least once in three months. 

17. Powers and functions of State Authority.—(1) The governing body of a State Authority shall— 

(i) lay down the broad policy framework for the functioning of such State Authority within the 
overall  framework  notified  by  the  Central  Government  on  the  recommendations  of  the  National 
Authority; 

(ii) review the working of the State Authority from time to time. 

(2) The governing body of a State Authority shall meet at least once in six months. 

(3) The governing body, steering committee and executive committee of a State Authority shall meet 
at  such  places  and  shall  observe  such  rules  and  procedures  in  regards  to  transaction  of  business  at  its 
meeting, including the quorum thereat, as may be prescribed. 

18. Powers and functions of steering committee of State Authority.—(1) The steering committee 

of a State Authority shall— 

(i) scrutinise and approve with such amendments as it may deems fit and proper the annual plan 
of operations prepared by the executive committee of such State Authority and send the same to the 
executive committee of the National Authority for final approval; 

(ii) monitor the progress of the utilisation of funds released from the State Fund; 

(iii) review reports on decision taken by executive committee including investment decisions; 

(iv) approve, subject to prior concurrence of the State Government, proposals formulated by the 

executive committee for creation of posts in the State Authority; 

(v) approve annual report of the State Authority and send the same to the State Government to lay 

it, each year, in each House of the State Legislature; 

(vi) ensure inter-departmental coordination. 

(2) The steering committee of a State Authority shall meet at least once in every three months. 

19.  Functions  and  powers  of  executive  committee  of  State  Authority.—(1)  The  executive 

committee of a State Authority shall— 

(i)  formulate  and  submit  annual  plan  of  operations  to  the  steering  committee  of  the  State 

Authority for its concurrence; 

(ii)  undertake  qualitative  and  quantitative  supervision,  monitoring  and  evaluation  of  the  works 

being implemented from amounts available in the State Fund; 

(iii) invest surplus amounts available in the State Fund of such State; 

(iv) maintain books of account and other records; 

(v) submit reports to the steering committee of the State Authority; 

(vi) prepare annual report of the State Authority; 

(vii) deploy staff on contractual basis or on deputation to the posts in the State Authority; 

(viii) formulate proposals for creation of posts in the State Authority; 

(ix) be responsible for delegation of financial or administrative powers; 

(x) be responsible for other day-to-day working in respect of the State Authority; 

(xi)  maintain  and  update  public  information  system  on  the  State  Authority  and  present  all 

information on its transaction in the public domain; 

(xii) undertake any other work as may be assigned by the governing body or steering committee 

of the State Authority or the State Government, from time to time. 

(2) The executive committee of a State Authority shall meet at least once in every three months. 

13 

 
CHAPTER V 

FINANCE, ACCOUNTS, AUDIT AND ANNUAL REPORT 

20. Budget of National Authority.— (1) The National Authority shall prepare its budget for the next 
financial year, showing the estimated receipts and expenditure of the National Authority and forward the 
same  to  the  Central  Government,  in  such  form  and  at  such  time  in  each  financial  year  as  may  be 
prescribed. 

(2)  The  National  Authority,  shall  adopt  financial  regulation  and  procedures,  in  particular  the 

procedure for drawing up and implementing the budget of the National Authority as may be prescribed. 

21.  Investment  of  funds  by  National  Authority.—  The  National  Authority  may  invest  its  funds, 
including any reserve fund, in the securities of the Central Government and in scheduled banks in such 
manner as may be prescribed: 

Provided  that  the  grants  received  from  the  Central  Government  shall  not  be  invested  and  shall  be 

utilised for the purposes and in the manner attached to it. 

22. Accounts and audit of National Authority.—(1) The National Authority shall maintain proper 
accounts and other relevant records and prepare an annual statement of accounts in such form as may be 
prescribed in consultation with the Comptroller and Auditor-General of India. 

(2) The accounts of the National Authority shall be audited by the Comptroller and Auditor-General 
of  India  at such intervals  as  may  be  specified by  him  and  any  expenditure  incurred in  connection  with 
such audit shall be payable by the National Authority to the Comptroller and Auditor-General. 

(3) The Comptroller and Auditor-General and any other person appointed by him in connection with 
the audit of the accounts of the National Authority shall have the same right and privileges and authority 
in connection with such audit as the Comptroller and Auditor-General generally has in connection with 
the audit of the Government accounts and, in particular, shall have the right to demand the production of 
books,  accounts,  connected  vouchers  and  other  documents  and  papers  and  to  inspect  the  office  of  the 
National Authority. 

(4)  The  accounts  of  the  National  Authority  as  certified  by  the  Comptroller  and  Auditor-General  or 
any other person appointed by him in this behalf together with the audit report thereon, shall be forwarded 
annually to the Central Government by the National Authority. 

(5)  The  Comptroller  and  Auditor-General  shall,  within  a  period  of  six  months  from  the  date  of 
commencement of the Act, audit the accounts of the all monies collected by the State Governments and 
Union territory Administrations, which has been placed under the ad hoc Authority and deposited in the 
nationalised banks and submit the report to the Central Government under this section. 

(6) The Central Government shall have the power to conduct the special audit or performance audit of 

the National Fund and of the National Authority through the Comptroller and Auditor- General. 

23.  Annual  report  of  National  Authority.—  (1)  The  National  Authority  shall  prepare,  its  annual 
report, giving a full account of its activities during the previous financial year and forward a copy thereof 
to the Central Government, in such form and at such time, for each financial year, as may be prescribed. 

(2) The annual report shall, inter alia, provide for— 

(i)  the  summary  of  monitoring  and  evaluation  of  activities  undertaken  from  amounts  released 

from the National Fund and State Funds during the year; 

(ii)  the  summary  of  specific  schemes  specified  in  sub-clause  (iii)  of  clause  (b)  of  section  5 

executed during the year; 

(iii) the amount of money received and expended. 

24.  Annual  report  and  audit  report  of  National  Authority 

to  be 

laid  before               

Parliament.—The  Central  Government  shall  cause  the  annual  report  and  audit  report  together  with  a 
memorandum of action taken on the recommendations contained therein to be laid as soon as may be after 
the reports are received before each House of Parliament. 

14 

 
25.  Budget  of  State  Authority.—(1)  Each  State  Authority  shall  prepare  its  budget  for  the  next 
financial  year,  showing  the  estimated  receipts  and  expenditure  of  the  State  Authority  and  forward  the 
same  to  the  State  Government,  in  such  form  and  at  such  time,  in  each  financial  year,  as  may  be 
prescribed. 

(2) Each State Authority shall adopt financial regulation and procedures, in particular the procedure 

for drawing up and implementing the budget of the State Authority as may be prescribed. 

26.    Investment  of  funds  by  State  Authority.—State Authority may invest funds available in the 
State  Fund  of  such  State  in  the  securities  of  the  Central  Government  and  in  scheduled  banks  in  such 
manner as may be prescribed: 

Provided  that  the  grants  received  from  the  State  Government  shall  not  be  invested  and  shall  be 

utilised for the purpose and in the manner prescribed. 

27.  Accounts  and  audit  of  State  Authority.—(1)  Each  State  Authority  shall  maintain  proper 
accounts and other relevant records and prepare an annual statement of accounts in such form as may be 
prescribed in consultation with the Comptroller and Auditor-General of India. 

(2) The accounts of each State Authority shall be audited by the Comptroller and Auditor-General at 
such  intervals  as  may  be  specified  by  him  and  any  expenditure  incurred  in  connection  with  such  audit 
shall be payable by the State Authority to the Comptroller and Auditor-General. 

(3) The Comptroller and Auditor-General and any other person appointed by him in connection with 
the audit of the accounts of the State Authority shall have the same right and privileges and authority in 
connection with such audit as the Comptroller and Auditor-General generally has in connection with the 
audit  of  the  Government  accounts  and,  in  particular,  shall  have  the  right  to  demand  the  production  of 
books, accounts, connected vouchers, other documents and papers and to inspect the office of the State 
Authority. 

(4) The Accounts of the State Authority as certified by the Comptroller and Auditor-General or any 
other  person appointed  by  him  in  this  behalf together  with the audit report thereon,  shall  be forwarded 
annually to the State Government by the State Authority. 

(5)  The  Comptroller  and  Auditor-General  shall,  within  a  period  of  six  months  from  the  date  of 
commencement of the Act, audit the accounts of all the monies which have been transferred by the     ad 
hoc  Authority  to  the  State  Compensatory  Afforestation  Fund  Management  and  Planning  Authorities 
constituted in the States in compliance of guidelines dated the 2nd July, 2009 and submit the report to the 
State Government under this section. 

(6) The Central Government and the State Government concerned shall have the power to conduct the 
special audit or performance audit of the State Fund and of the State Authority through the Comptroller 
and Auditor-General. 

28.  Annual  report  of  State  Authority.—(1)  Each  State  Authority  shall  prepare  its  annual  report, 
giving a full account of its activities during the previous financial year and forward a copy thereof to the 
concerned  State  Government,  in  such  form  and  at  such  time,  for  each  financial  year,  as  may  be 
prescribed. 

(2) The annual report of a State Authority shall, inter alia, provide for—  

(i) the number and location of each reforestation, afforestation and conservation activity subject 

to the requirement of this section; 

(ii)  the  amount  and  location  of  lands  in  hectares,  cleared,  conserved  and  planted  in  connection 

with the activity; and 

(iii) the amount of afforestation money collected and expended. 

29. Annual report and audit report of State Authority to be laid before State      Legislature.—
The State Government shall cause the annual report and the audit report together with a memorandum of 
action taken on the recommendations contained therein to be laid as soon as may be after the reports are 
received before each House of the State Legislature: 

15 

 
Provided that in case of a Union territory having no legislature, the Central Government shall cause 
the  annual  report  and  the  audit  report  together  with  a  memorandum  of  action  taken  on  the 
recommendations contained therein to be laid as soon as may be after the reports are received before each 
House of the Parliament. 

CHAPTER VI 

MISCELLANEOUS 

30. Power to make rules.—(1) The Central Government in consultation with the State Governments 

may, after previous publication, make rules for carrying out the purposes of this Act. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a)  the  management  of  the  National  Fund  by  the  National  Authority  under  sub-section  (2)  of 

section 3; 

(b) the management of State Fund by the State Authorities under sub-section (2) of section 4; 

(c) the manner of using the money for purposes specified in clause (b) of section 6; 

(d) the manner of utilising the money for purposes specified in clause (c) of section 6; 

(e)  the  manner  of  payment  of  the  salary  and  allowances  payable  to  the  officers  and  other 

employees of the State Authority under clause (f) of section 6; 

(f) the accounting procedure regulating the manner of crediting the monies to the National Fund 

and State Funds under section 7; 

(g)  the  terms  of  office  and  other  conditions  of  the  service  of  the  members  of  the  National 
Authority,  executive  committee,  monitoring  group,  Chief  Executive  Officer  and  officials  appointed 
by the National Authority, members of State Authority, steering committee and executive committee 
of each State Authority under section 12; 

(h) the rules and procedures in respect of the transaction of business of the governing body and 
executive committee of the National Authority and monitoring group of the National Authority and 
the place of meeting, including the quorum under sub-section (3) of section 14; 

(i)  the  rules  and  procedures  in  respect  of  the  transaction  of  business  of  the  governing  body, 
steering committee and executive committee of a State Authority and the place of meeting, including 
the quorum under sub-section (3) of section 17; 

(j) the preparation of the budget of the National Authority under sub-section (1) of section 20; 

(k)  the  financial  regulation  and  procedures,  in  particular  the  procedure  for  drawing  up  and 

implementing the budget of the National Authority under sub-section (2) of section 20; 

(l) the investment of the funds of the National Authority under section 21; 

(m)  the  maintenance  of  the  accounts  and  other  relevant  records  and  preparation  of  an  annual 

statement of accounts by the National Authority under sub-section (1) of section 22; 

(n)  the  preparation  of  the  annual  report  by  the  National  Authority  under  sub-section  (1)  of    

section 23; 

(o) the preparation of the budget of the State Authority under sub-section (1) of section 25; 

(p)  the  financial  regulation  and  procedures,  in  particular  the  procedure  for  drawing  up  and 

implementing the budget of the State Authorities under sub-section (2) of section 25; 

(q) the investment of funds by the State Authorities under section 26; 

(r)  the  maintenance  of  the  accounts  and  other  relevant  records  and  preparation  of  annual 

statement of accounts by each State Authority under sub-section (1) of section 27; 

16 

 
(s) the preparation of the annual report by the State Authorities under sub-section (1) of section 

28; and 

(t) 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. 

31.  Transfer  of  assets,  liabilities,  etc.—  (1)  On  and  from  the  date  of  constitution  of  the  National 

Authority— 

(i) all the assets and liabilities of the ad hoc Authority shall stand transferred to, and vested in, the 

National Authority; 

Explanation.—The  assets  of  the  ad  hoc  Authority  shall  be  deemed  to  include  all  rights  and 
powers,  all  properties,  whether  movable  or  immovable,  including  in  particular,  cash  balances, 
deposits, and all other interests and rights in, or arising of, such properties as may be in the possession 
of  the  ad  hoc  Authority  and  all  books  of  account  and  other  documents  relating  to  the  same,  and 
liabilities shall include all debts, liabilities and obligations of whatever kind; 

(ii) without prejudice to the provisions of clause (i), all debts, obligations and liabilities incurred, 
all contracts  entered  into and  all  matters  and  things  engaged  to  be  done by,  with  or  for the  ad hoc 
Authority  immediately  before  constitution  of  the  National  Authority,  for  or  in  connection  with  the 
purpose of the ad hoc Authority, shall be deemed to have been incurred, entered into or engaged to be 
done by, with or for, the National Authority; 

(iii)  all  sums  of  money  due  to  the  ad  hoc  Authority  immediately  before  constitution  of  the 

National Authority shall be due to the National Authority; 

(iv) all suits and legal proceedings instituted or which could have been instituted by or against the 
ad  hoc  Authority  may  be  continued  or  may  be  instituted  by  or  against  the  National  Compensatory 
Authority. 

(2) On and from the date of constitution of a State Authority— 

(i)  all the assets and liabilities  of  the  State  Compensatory  Afforestation  Fund Management  and 
Planning  Authority  constituted  in  such  State  in  compliance  of  guidelines  dated  the  2nd  July,  2009 
shall stand transferred to, and vested in, the State Authority. 

Explanation.—The  assets  of  the  State  Compensatory  Afforestation  Fund  Management  and 
Planning  Authority  constituted  in  such  State  in  compliance  of  guidelines  dated  the  2nd  July,  2009 
shall  be  deemed  to  include  all  rights  and  powers,  all  properties,  whether  movable  or  immovable, 
including in particular, cash balances, deposits, and all other interests and rights in, or arising of, such 
properties  as  may  be  in the  possession  of  the  State Compensatory  Afforestation  Fund Management 
and Planning Authority constituted in such State in compliance of guidelines dated the 2nd July, 2009 
and  all  books  of  account  and  other  documents  relating  to  the  same,  and  liabilities  shall  include  all 
debts, liabilities and obligations of whatever kind; 

(ii) without prejudice to the provisions of clause (i), all debts, obligations and liabilities incurred, 
all  contracts  entered  into  and  all  matters  and  things  engaged  to  be  done  by,  with  or  for  the  State 
Compensatory Afforestation Fund Management and Planning Authority constituted in such State in 
compliance  of  guidelines  dated  the  2nd  July,  2009  before  this  Act  came  into  force,  for  or  in 
connection  with  the  purpose  of  the  State  Compensatory  Afforestation  Fund  Management  and 
Planning Authority constituted in such State in compliance of guidelines dated the 2nd July, 2009, 
shall be deemed to have been incurred, entered into or engaged to be done by, with or for, the State 
Authority; 

17 

 
(iii)  all  sums  of  money  due  to  the  State  Compensatory  Afforestation  Fund  Management  and 
Planning  Authority  constituted  in  such  State  in  compliance  of  guidelines  dated  the  2nd  July,  2009 
before constitution of the State Authority shall be due to the State Authority; 

(iv) all suits and legal proceedings instituted or which could have been instituted by or against the 
State  Compensatory  Afforestation  Fund  Management  and  Planning  Authority  constituted  in  such 
State in compliance of guidelines dated the 2nd July, 2009 may be continued or may be instituted by 
or against the State Authority. 

32.  Validation.—(1)  Notwithstanding  anything  contained  in  any  judgment,  decree  or  order  of  any 
court,  the  amount  credited  to  the  National  Fund  shall  be  deemed  to  be  credited  and  shall  always  be 
deemed to have been credited to the public account of India within the meaning of articles 266 and 283 of 
the Constitution, and it shall be regulated by law made by Parliament in this behalf. 

(2)  Notwithstanding  anything  contained  in  any  judgment  or  order  of  any  court,  all  the  monies 
collected by the State Governments and the Union territory Administrations which has been placed under 
the ad hoc Authority and deposited in the nationalised banks and the interest accrued thereon shall stand 
transferred to the National Fund. 

(3)  Notwithstanding  anything  contained  in  any  judgment  or  any  order  of  any  court,  the  amount 
credited  to  the  State  Fund  shall  be  deemed  to  be  credited  and  shall  always  be  deemed  to  have  been 
credited to the public account of the State within the meaning of articles 266 and 283 of the Constitution, 
and it shall be regulated by law made by the State Legislature in this behalf. 

33.  Power  of  Central  Government  to  issue  directions.—(1)  The  Central  Government  may,  if  it 
finds necessary or expedient in the public interest, issue such policy directives to the National Authority 
or any State Authority, in writing and such policy directives shall be binding upon the National Authority 
or the State Authority, as the case may be. 

(2) The decision of the Central Government, whether a question is one of policy or not, shall be final. 

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