THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 
_________ 
ARRANGEMENT OF SECTIONS 
__________ 

CHAPTER I 

PRELIMINARY 

SECTIONS 

1. Short title, extent and commencement. 

2. Declaration as to expediency of control by the Union. 

3. Definitions. 

4. [Omitted.]. 

CHAPTER II 

THE CENTRAL ADVISORY COUNCILAND DEVELOPMENT COUNCILS 

5. Establishment and constitution of Central Advisory Council and its functions. 

6. Establishment and constitution of Development Councils and their functions. 

7. Reports and accounts of Development Councils. 

8. Dissolution of Development Councils. 

9. Imposition of cess on scheduled industries in certain cases. 

CHAPTER III 

REGULATION OF SCHEDULED INDUSTRIES 

10. Registration of existing industrial undertakings. 

10A. Revocation of registration in certain cases. 

11. Licensing of new industrial undertakings. 

11A. Licence for producing or manufacturing new articles. 

11B.  Power  of  Central  Government  to  specify  the  requirements  which  shall  be  complied  with  by 

small scale industrial undertakings. 

12. Revocation and amendment of licences in certain cases. 

13. Further provision for licensing of industrial undertakings in special cases. 

14. Procedure for the grant of licence or permission. 

15. Power to cause investigation to be made into scheduled industries or industrial undertakings. 

15A. Power to investigate into the affairs of a company in liquidation. 

16. Powers of Central Government on completion of investigation under section 15. 

17. [Omitted.]. 

18.  Power  of  person  or  body  of  persons  appointed  under  section  15  to  call  for  assistance  in  any 

investigation. 

CHAPTER IIIA 

DIRECT MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS BY CENTRAL GOVERNMENT IN 
CERTAIN CASES 

18A. Power of Central Government to assume management or control of an industrial undertaking in 

certain cases. 

18AA. Power to take over industrial undertakings without investigation under certain circumstances. 

18B. Effect of notified order under section 18A. 

1 

SECTIONS 

18C. Contracts in bad faith, etc., may be cancelled or varied. 

18D. No right to compensation for termination of office or contract. 

18E. Application of Act 7 of 1913. 

18F. Power of Central Government to cancel notified order under section 18A. 

CHAPTER IIIAA 

MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS OWNED BY COMPANIES IN LIQUIDATION 

18FA. Power of Central Government to authorise, with the permission of the High Court, persons to 

take over management or control of industrial undertakings. 

POWER TO PROVIDE RELIEF TO CERTAIN INDUSTRIAL UNDERTAKINGS 

CHAPTER IIIAB 

18FB.  Power  of  Central  Government  to  make  certain  declarations  in  relation  to  industrial 
undertakings,  the  management  or  control  of  which  has  been  taken  over  under  section  18A, 
section 18AA or section 18FA. 

CHAPTER IIIAC 

LIQUIDATION OR RECONSTRUCTION OF COMPANIES 

18FC.  Power  of  Central  Government  to  call  for  report  on  the  affairs  and  working  of  managed 

company. 

18FD. Decision of Central Government in relation to managed Company. 

18FE. Provisions where Government decides to follow the course of action specified in section 18FD 

(1). 

18FF. Provisions where Government decides to follow the course of action specified in section 18FD 

(2). 

18FG. Preparation of inventory of assets and liabilities and list of members and creditors of managed 

company. 

18FH. Stay of suits and other proceedings. 

CHAPTER IIIB 

CONTROL OF SUPPLY, DISTRIBUTION, PRICE, ETC., OF CERTAIN ARTICLES 

18G. Power to control supply, distribution, price, etc., of certain articles. 

CHAPTER IV 

MISCELLANEOUS 

19. Powers of inspection. 

20. General prohibition of taking over management or control of industrial undertakings. 

21. Certain administrative expenses of Development Councils to be paid from moneys provided by 

Parliament. 

22. Power of the Central Government to issue directions to Development Council. 

23. Decision of Central Government final respecting certain matters. 

24. Penalties. 

24A. Penalty for false statements. 

25. Delegation of powers. 

2 

 
SECTIONS 

26. Power to issue directions. 

27. Cognizance of offences. 

28. Burden of proof in certain cases. 

29. Jurisdiction of courts. 

29A. Special provision regarding fines. 

29B. Power to exempt in special cases. 

29C. Protection of action taken under the Act. 

29D. Debts incurred by the authorised person to have priority. 

29E. Validation. 

30. Power to make rules. 

31. Application of other laws not barred. 

32. [Repealed.]. 

THE FIRST SCHEDULE. 

THE SECOND SCHEDULE. 

THE THIRD SCHEDULE. 

3 

THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 
ACT NO. 65 OF 1951  

[31st October, 1951.] 

 An Act to provide for the development and regulation of certain industries. 

BE it enacted by Parliament as follows:— 

CHAPTER I 
PRELIMINARY 

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

and Regulation) Act, 1951. 

(2) It extends to the whole of India 1*** 
(3)  It  shall  come  into  force  on  such  date2  as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint. 

2. Declaration as to expediency of control by the Union.—It is hereby declared that it is expedient 
in  the  public  interest  that  the  Union  should  take  under  its  control the industries  specified  in  the  First 
Schedule. 

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

(a) “Advisory Council” means the Central Advisory Council established under section 5; 
3[(aa)  “ancillary  industrial  undertaking” means  an  industrial  undertaking  which, in  accordance 

with  the  proviso  to  sub-section  (1)  of  section 11B and  the requirements  specified  under  that            
sub-section,  is  entitled  to  be  regarded  as an  ancillary  industrial  undertaking  for  the  purposes  of  this 
Act;] 

4[ 5[(ab)] “current  assets” means  bank  balances  and  cash  and  includes  such  other  assets  or 
reserves as are expected to be realised in cash or sold or consumed within a period of not more than 
twelve months in the ordinary course of business, such as, stock-in-trade, amounts due from sundry 
debtorsfor  sale  of  goods and for  services  rendered,  advance  tax  payments  and bills receivable, 
butdoes not include sums credited to a provident fund, a pension fund, a gratuity fund or any other 
fund for the welfare of the employees, maintained by a company owning an industrial undertaking; 

5[(ac)]“current liabilities” means liabilities which must be met on demand or within a period of 
twelve months from the date they are incurred; and includes any current liability which is suspended 
under section 18FB;] 

(b) “Development Council” means a Development Council established under section 6; 
6[(bb) “existing industrial undertaking” means— 

(a) in the case of an industrial undertaking pertaining to any of the industries specified in the 
First  Schedule  as  originally  enacted,  an  industrial  undertaking  which  was  in  existence  on  the 
commencement  of this Act  or  for the establishment  of  which  effective  steps  had  been  taken 
before such commencement, and 

(b)  in  the  case  of  an  industrial  undertaking  pertaining  to  any  of  the  industries  added  to 
the First Schedule by an amendment thereof, an industrial undertaking which is in existence on 

1. The words “except the State of Jammu and Kashmir” omitted by Act 51 of 1961, s. 2 (w.e.f. 11-12-1961). 
2. 8th May, 1952, vide notification No. S.R.O. 811 (E), dated 8th May, 1952,  see Gazette of India, Extraordinary, Part II, 

sec. 3(i). 

15th February, 1962, vide notification No. S.R.O. 458/IDRA/1/1/62 (E), in respect of the State of Jammu and Kashmir, 
dated 7th  February,  1962,  see  Gazette  of  India,  Extraordinary, Part  II,  sec.  3(ii)  and  this  Act  has  been  extended  in  its 
application to the Union territory Goa, Daman and Diu by the Act 11 of 1963, s. 3 and the Schedule (w.e.f 1-2-1963). 

3. Ins. by Act 4 of 1984, s. 2 (w.e.f. 12-1-1984).  
4. Ins. by Act 72 of 1971, s. 2 (w.e.f. 1-11-1971). 
5. Clauses (aa) and (ab) re-lettered as clause (ab) and (ac) thereof by Act 4 of 1984, s. 2 (w.e.f. 12-1-1984). 
6. Ins. by Act 26 of 1953, s. 2 (w.e.f. 1-10-1953). 

4 

                                                           
the coming into force of such amendment or for the establishment of which effective steps had 
been taken before the coming into force of such amendment;] 

(c)  “factory” means  any  premises,  including  the  precincts  thereof,  in  any  part  of  which  a 

manufacturing process is being carried on or is ordinarily so carried on— 

(i) with the aid of power, provided that fifty or more workers are working or were working 

thereon on any day of the preceding twelve months; or 

(ii) without  the aid of  power,  provided  that  one  hundred  or  more  workers  are  working or 
were working thereon on any day of the preceding twelve months and provided further that in no 
part of such premises any manufacturing process is being carried on with the aid of power; 

1[(cc) “High Court” means the High Court having jurisdiction in relation to the place at which the 

registered office of a company is situate;] 

(d) “industrial undertaking” means  any  undertaking  pertaining  to  a  scheduled  industry  carried 

on in one or more factories by any person or authority including Government; 

2[(dd) “new article”, in relation to an industrial undertaking which is registered or in respect of 

which a licence or permission has been issued under this Act, means— 

(a) any article which falls under an item in the First Schedule other than the item under which 
articles  ordinarily  manufactured  or  produced  in  the industrial  undertaking  at  the  date  of 
registration or issue of the licence or permission, as the case may be, fall; 

(b) any  article  which  bears  a  mark  as  defined  in  the  Trade  Marks  Act, 1940 (5 of 1940),  or 
which is the subject of a patent, if at the date of registration or issue of the licence or permission, as the 
case may be, the industrial undertaking was not manufacturing or producing such article bearing 
that mark or which is the subject of that patent;] 

(e) “notified order” means an order notified in the Official Gazette; 

(f) “owner”  in  relation  to  an  industrial  undertaking means  the  person  who,  or  the  authority 
which, has the ultimate  control over the affairs of the undertaking, and,  where the said affairs are 
entrusted  to  a  manager,  managing director  or  managing  agent,  such  manager,  managing  director  or 
managing agent shall be deemed to be the owner of the undertaking; 

(g) “prescribed” means prescribed by rules made under this Act; 

(h) “Schedule” means a Schedule to this Act; 

(i) “scheduled industry” means any of the industries specified in the First Schedule; 

3[(j) “small  scale  industrial  undertaking”  means  an  industrial  undertaking  which,  in  accordance 
with the requirements specified under sub-section (1) of section 11B, is entitled to be regarded as a 
small scale industrial undertaking for the purposes of this Act;] 

1[4[(k)] words  and  expressions  used  herein  but  not  defined  in  this  Act  and  defined in  the 

Companies Act, 1956 (1 of 1956), have the meanings respectively assigned to them in that Act.] 

4. [Saving.]—Omitted by the Industries (Development and Regulation) Amendment Act, 1953 (26 of 

1953), s. 3 (w.e.f. 1-10-1953). 

THE CENTRAL ADVISORY COUNCILAND DEVELOPMENT COUNCILS 

CHAPTER II 

5.  Establishment  and  constitution  of  Central  Advisory  Council  and  its  functions.—(1)  For  the 
purpose of advising it on matters concerning the development and regulation of scheduled industries, the 

1. Ins. by Act 72 of 1971, s. 2 (w.e.f. 1-11-1971).  
2. Ins. by Act 26 of 1953, s. 2 (w.e.f. 1-10-1953).  
3. Ins. by Act 4 of 1984, s. 2 (w.e.f. 1-11-1971).   
4. Clause (j) re-lettered as clause (k) thereof by s. 2, ibid. (w.e.f. 12-1-1984). 

5 

                                                           
Central  Government  may,  by  notified  order,  establish  a  Council  to  be  called  the  Central  Advisory 
Council. 

(2) The Advisory Council shall consist of a Chairman and such other members, not exceeding thirty 
in number, all of whom shall be appointed by the Central Government from among persons who are in its 
opinion capable of representing the interests of— 

(a) owners of industrial undertakings in scheduled industries; 

(b) persons employed in industrial undertakings in scheduled industries; 

(c) consumers of goods manufactured or produced by scheduled industries; 

(d)  such  other  class  of  persons  including  primary  producers,  as  in  the  opinion  of  the  Central 

Government, ought to be represented on the Advisory Council. 

(3) The term of office of, the procedure to be followed in the discharge of their functions by, and the 
manner  of  filling  casual  vacancies  among,  members  of  the  Advisory  Council,  shall  be  such  as  may  be 
prescribed. 

(4) The Central Government shall consult the Advisory Council in regard to— 

(a) the making of any rules, other than the first rules to be made under sub-section (3); 

1* 

* 

* 

* 

* 

and may consult the Advisory Council in regard to any other matter connected with the administration of 
this Act in respect of which the Central Government may consider it necessary to obtain the advice of the 
Advisory Council. 

6.  Establishment  and  constitution  of  Development  Councils  and  their  functions.—(1)  The 
Central  Government  may,  by  notified order  establish for any  scheduled  industry  or  group  of  scheduled 
industries, a body of persons to be called a Development Council which shall consist of members who in 
the opinion of the Central Government are— 

(a)  persons  capable  of  representing  the  interests  of  owners  of  industrial  undertakings  in  the 

scheduled industry or group of scheduled industries; 

(b) persons having special knowledge of matters relating to the technical or other aspects of the 

scheduled industry or group of scheduled industries; 

(c) persons capable of representing the interests of persons employed in industrial undertakings in 

the scheduled industry or group of scheduled industries; 

(d) persons not belonging to any of the aforesaid categories, who are capable of representing the 
interests  of  consumers  of  goods  manufactured  or  produced  by  the  scheduled  industry  or  group  of 
scheduled industries. 

(2) The number and the term of office of, and the procedure to be followed in the discharge of their 
functions by, and the manner of filling casual vacancies among members of a Development Council shall 
be such as may be prescribed. 

(3) Every Development Council shall be, by virtue of this Act, a body corporate by such name as may 
be specified in the notified order establishing it and may hold and transfer property and shall by the said 
name sue and be sued. 

(4) A Development Council shall perform such functions of a kind specified in the Second Schedule 
as may be assigned to it by the Central Government and for whose exercise by the Development Council 
it  appears  to  the  Central  Government  expedient  to  provide  in  order  to  increase  the  efficiency  or 
productivity  in  the  scheduled  industry  or  group  of  scheduled  industries  for  which  the  Development 
Council is established, to improve or develop the service that such industry or group of industries renders 

1. Omitted by Act 26 of 1953, s. 4 (w.e.f. 1-10-1953).  

6 

                                                           
or could render to the community, or to enable such industry or group of industries to render such service 
more economically.  

(5) A Development Council shall also perform such other functions as it may be required to perform 

by or under any other provision of this Act. 

7. Reports and accounts of Development Councils.—(1) A Development Council shall prepare and 
transmit  to  the  Central  Government  and  the  Advisory  Council,  annually,  a  report  setting  out  what  has 
been done in the discharge of its functions during the financial year last completed. 

(2) The report shall include a statement of the accounts of the Development Council for that year, and 
shall be transmitted as soon as accounts therefor have been audited, together with a copy of any report 
made by the auditors on the accounts. 

(3) The statement of account shall be in such form as may be prescribed, being a form which shall 
conform  to  the  best  commercial  standards,  and  the  statement  shall  show  the  total  of  remuneration  and 
allowances paid during the year to members and officers of the Council. 

(4) A copy of each such report of a Development Council, or made by the auditors on its accounts, 

shall be laid before Parliament by the Central Government. 

8. Dissolution of Development Councils.—(1) The Central Government may, if it is satisfied that a 
Development  Council  should  cease  to  continue  in  being,  by  notified  order,  dissolve  that  Development 
Council. 

(2) On the dissolution of a Development Council under sub-section (1), the assets of the Development 
Council,  after  its  liabilities,  if  any,  are  met  therefrom,  shall  vest  in  the  Central  Government  for  the 
purposes of this Act. 

9.  Imposition  of  cess  on  scheduled  industries  in  certain  cases.—(1)  There  may  be  levied  and 
collected  as  a  cess  for  the  purposes  of  this  Act  on  all  goods  manufactured  or  produced  in  any  such 
scheduled industry as may be specified in this behalf by the Central Government by notified order a duty 
of excise at such rate as may be specified in the notified order, and different rates may be specified for 
different goods or different classes of goods: 

Provided that no such rate shall in any case exceed two annas per cent. of the value of the goods. 

Explanation.—In this sub-section, the expression “value” in relation to any goods shall be deemed to 
be the wholesale cash price for which such goods of the like kind and quality are sold or are capable of 
being sold for delivery at the place of manufacture and at the time of their removal therefrom, without any 
abatement or deduction whatever except trade discount and the amount of duty then payable. 

(2)  The  cess  shall  be  payable  at  such  intervals,  within  such  time  and  in  such  manner  as  may  be 
prescribed, and any rules made in this behalf may provide for the grant of a rebate for prompt payment of 
the cess. 

(3) The said cess may be recovered in the same manner as an arrear of land revenue. 

(4) The Central Government may hand over the proceeds of the cess collected under this section in 
respect  of  the  goods  manufactured  or  produced  by  any  scheduled  industry  or  group  of  scheduled 
industries  to  the  Development  Council established for that industry  or  group  of industries, and  where  it 
does so, the Development Council shall utilise the said proceeds— 

(a) to promote scientific and industrial research with reference to the scheduled industry or group 

of scheduled industries in respect of which the Development Council is established; 

(b) to promote improvements in design and quality with reference to the products of such industry 

or group of industries; 

(c) to provide for the training of technicians and labour in such industry or group of industries; 

7 

(d) to meet such expenses in the exercise of its functions and its administrative expenses as may 

be prescribed. 

CHAPTER III 

REGULATION OF SCHEDULED INDUSTRIES 

10. Registration of existing industrial undertakings.—1[(1) The owner of every existing industrial 
undertaking, not being the Central Government, shall, within such period as the Central Government may, 
by notification in the Official Gazette, fix in this behalf with respect to industrial undertakings generally 
or with respect to any class of them, register the undertaking in the prescribed manner.] 

(2)  The  Central  Government  shall  also  cause  to  be  registered  in  the  same  manner  every  existing 

industrial undertaking of which it is the owner. 

2[(3)  Where  an  industrial  undertaking  is  registered  under  this  section,  there  shall  be  issued  to  the 
owner  of  the  undertaking  or  the  Central  Government,  as  the  case  may  be,  a  certificate  of  registration 
3[containing  the  productive  capacity  of  the  industrial  undertaking  and  such  other  particulars  as  may  be 
prescribed].] 

4[4) The owner of every industrial undertaking to whom a certificate of registration has been issued 
under this section before the commencement of the Industries (Development and Regulation) Amendment 
Act,  1973  (67  of  1973),  shall,  if  the  undertaking  falls  within  such  class  of  undertakings  as  the  Central 
Government  may,  by  notification  in  the  Official  Gazette,  specify  in  this  behalf,  produce,  within  such 
period  as  may  be  specified  in  such  notification,  the  certificate  of  registration  for  entering  therein  the 
productive capacity of the industrial undertaking and other prescribed particulars. 

(5) In specifying the productive capacity in any certificate of registration issued under sub-section (3), 
the Central Government shall take into consideration the productive or installed capacity of the industrial 
undertaking  as  specified  in  the  application  for  registration  made  under  sub-section  (1),  the  level  of 
production  immediately  before  the  date  on  which  the  application  for  registration  was  made  under  sub-
section (1), the level of the highest annual production during the three years immediately preceding the 
introduction  in  Parliament  of  the  Industries  (Development  and  Regulation)  Amendment  Bill,  1973,  the 
extent  to  which  production  during  the  said  period  was  utilised  for  export  and  such  other  factors  as  the 
Central  Government  may  consider  relevant including  the extent of  under-utilisation  of capacity,  if any, 
during the relevant period due to any cause.] 

5[10A. Revocation of registration in certain cases.—If the Central Government is satisfied that the 
registration of any industrial undertaking has been obtained by misrepresentation as to an essential fact or 
that  any  industrial  undertaking  has  ceased  to  be  registrable  under  this  Act  by  reason  of  any  exemption 
granted  under  this  Act  becoming  applicable  thereto  or  that  for  any  other  reason  the  registration  has 
become  useless  or  ineffective  and  therefore  requires  to  be  revoked,  the  Central  Government  may  after 
giving an opportunity to the owner of the undertaking to be heard revoke the registration.] 

11. Licensing of new industrial undertakings.—(1) No person or authority other than the Central 
Government, shall, after the commencement of this Act, establish any new industrial undertaking, except 
under and in accordance with a licence issued in that behalf by the Central Government: 

Provided that a Government other than the Central Government may, with the previous permission of 

the Central Government, establish a new industrial undertaking. 

(2)  A  licence  or  permission  under  sub-section  (1)  may  contain  such  conditions  including,  in 
particular, conditions as to the location of the undertaking and the minimum standards in respect of size to 

1. Subs. by Act 26 of 1953, s. 5, for sub-section (1) (w.e.f. 1-10-1953).  
2. Ins. by s. 5, ibid. (w.e.f. 1-10-1953). 
3. Subs. by Act 67 of 1973, s. 2, for “containing such particulars as may be prescribed” (w.e.f. 7-2-1974). 
4. Ins. by s. 2, ibid. (w.e.f. 7-2-1974).  
5. Ins. by Act 26 of 1953, s. 6 (w.e.f. 1-10-1953).  

8 

                                                           
be provided therein as the Central Government may deem fit to impose in accordance with the rules, if 
any, made under section 30. 

1[11A.  Licence  for  producing  or  manufacturing  new  articles.—The  owner  of  an  industrial 
undertaking not being the Central Government which is registered under section 10 or in respect of which 
a licence or permission has been issued under section 11 shall not produce or manufacture any new article 
unless— 

(a) in the case of an industrial undertaking registered under section 10, he has obtained a licence 

for producing or manufacturing such new article; and 

(b) in the case of an industrial undertaking in respect of which a licence or permission has been 
issued  under  section  11,  he  has  had  the  existing  licence  or  permission  amended  in  the  prescribed 
manner.] 
2[11B.Power of Central Government to specify the requirements which shall be complied with 
by small scale industrial undertakings.—(1) The Central Government may, with a view to ascertaining 
which  ancillary  and  small  scale  industrial  undertakings  need  supportive  measures,  exemptions  or  other 
favourable treatment under this Act to enable them to maintain their viability and strength and so as to be 
effective in— 

(a)  promoting  in  a  harmonious  manner  the  industrial  economy  of  the  country  and  easing  the 

problem of unemployment, and 

(b)  securing  that  the  ownership  and  control  of  the  material  resources  of  the  community  are  so 

distributed as best to subserve the common good, 

specify,  having  regard  to  the  factors  mentioned  in  sub-section  (2),  by  notified  order,  the  requirements 
which shall be complied with by an industrial undertaking to enable it to be regarded, for the purposes of 
this  Act,  as  an  ancillary,  or  a  small  scale,  industrial  undertaking  and  different  requirements  may  be  so 
specified for different purposes or with respect to industrial undertakings engaged in the manufacture or 
production of different articles: 

Provided that no industrial undertaking shall be regarded as an ancillary industrial undertaking unless 

it is, or is proposed to be, engaged in— 

(i) the manufacture of parts, components, sub-assemblies, toolings or intermediates; or 

(ii) rendering of services, or supplying or rendering, not more than fifty per cent. of its production 

or its total services, as the case may be, to other units for production of other articles. 

(2) The factors referred to in sub-section (1) are the following, namely:— 

(a) the investment by the industrial undertaking in— 

(i) plant and machinery, or 

(ii) land, buildings, plant and machinery; 

(b) the nature of ownership of the industrial undertakings; 

(c) the smallness of the number of the workers employed in the industrial undertaking; 

(d) the nature, cost and quality of the product of the industrial undertaking; 

(e) foreign exchange, if any, required for the import of any plant or machinery by the industrial 

undertaking; and 

(f) such other relevant factors as may be prescribed. 

(3) A copy of every notified order proposed to be made under sub-section (1) shall be laid in draft 
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 
disapproving the issue of the proposed notified order or both Houses agree in making any modification in 

1. Ins. by Act 26 of 1953, s. 7 (w.e.f. 1-10-1953). 
2. Ins. by Act 4 of 1984, s. 3 (w.e.f. 12-1-1984). 

9 

                                                           
the proposed notified order, the notified order shall not be made, or, as the case may be, shall be made 
only in such modified form as may be agreed upon by both the Houses. 

(4) Notwithstanding anything contained in sub-section (1), an industrial undertaking which, according 
to  the  law  for  the  time  being  in  force,  fell,  immediately  before  the  commencement  of  the  Industries 
(Development and Regulation) Amendment Act, 1984 (4 of 1984), under the definition of an ancillary, or 
small  scale,  industrial  undertaking,  shall,  after  such  commencement,  continue  to  be  regarded  as  an 
ancillary, or small scale, industrial undertaking for the purposes of this Act until the definition aforesaid is 
altered or superseded by any notified order made under sub-section (1).] 

12.  Revocation  and  amendment  of  licences  in  certain  cases.—(1)  If  the  Central  Government  is 
satisfied,  either  on  a  reference  made  to  it  in  this  behalf  or  otherwise,  that  any  person  or  authority,  to 
whom or to which, a licence has been issued under  section 11, has, without reasonable cause, failed to 
establish  or  to  take  effective  steps  to  establish  the  new  industrial  undertaking  in  respect  of  which  the 
licence  has  been  issued  within  the  time  specified  therefor  or  within  such  extended  time  as  the  Central 
Government may think fit to grant in any case, it may revoke the licence. 

(2) Subject to any rules that may be made in this behalf, the Central Government may also vary or 

amend any licence issued under section 11: 

Provided that no such power shall be exercised after effective steps have been taken to establish the 

new industrial undertaking in accordance with the licence issued in this behalf. 

1[(3) The provisions  of this  section  shall  apply  in  relation  to a  licence issued under  section  11A  or 
where a licence has been amended under that section, to the amendment thereof, as they apply in relation 
to a licence issued under section 11.] 

2[13. Further provision for licensing of industrial undertakings in special cases.—(1) No owner 

of an industrial undertaking, other than the Central Government, shall— 

(a) in the case of an industrial undertaking required to be registered under section 10, but which 
has not been registered within the time fixed for the purpose under that section, carry on the business 
of that undertaking after the expiry of such period, or 

(b) in the case of an industrial undertaking the registration in respect of which has been revoked 

under section 10A 3***, carry on the business of the undertaking after the revocation, or 

(c) in the case of an industrial undertaking to which the provisions of this Act did not originally 
apply  but  became  applicable  after  the  commencement  of  this  Act  for  any  reason,  carry  on  the 
business of the undertaking after the expiry of three months from the date on which the provisions of 
this Act became so applicable, or 

(d) effect any substantial expansion of an industrial undertaking which has been registered4[or in 

respect of which a licence or permission has been issued], or 

(e)  change  the  location  of  the  whole  or  any  part  of  an  industrial  undertaking  which  has  been 

registered, 

except under, and in accordance with, a licence issued in that behalf by the Central Government, and, in 
the  case  of  a  State  Government,  except  under  and  in  accordance  with  the  previous  permission  of  the 
Central Government. 

(2) The provisions of sub-section (2) of section 11 and of section 12 shall apply, so far as may be, in 
relation to the issue of licences or permissions to any industrial undertaking referred to in this section as 
they apply in relation to the issue of licences or permissions to a new industrial undertaking. 

Explanation.—For  the  purposes  of  this  section,  “substantial  expansion”  means  the  expansion  of  an 
existing industrial undertaking which substantially increases the productive capacity of the undertaking, 
or which is of such a nature as to amount virtually to a new industrial undertaking, but does not include 

1. Ins. by Act 26 of 1953, s. 8 (w.e.f. 1-10-1953).  
2. Subs. by s. 9, ibid., for section 13 (w.e.f. 1-10-1953).  
3.  The  words  “on  the  ground  that  it  had  been  obtained  by  misrepresentation  as  to  an  essential  fact”  omitted  by                            

Act 71 of 1956, s. 2 (w.e.f. 1-3-1957).  

4. Ins. by s. 2, ibid. (w.e.f. 1-3-1957).  

10 

                                                           
any  such  expansion  as  is  normal  to  the  undertaking  having  regard  to  its  nature  and  the  circumstances 
relating to such expansion.] 

14. Procedure for the grant of licence or permission.—Before granting any licence or permission 
under 1[section 11, section 11A  2[section 13 or section 29B]], the Central Government may require such 
officer or authority as it may appoint for the purpose, to make a full and complete investigation in respect 
of applications received in this behalf and report to it the result of such investigation and in making any 
such investigation, the officer or authority shall follow such procedure as may be prescribed. 

 15.  Power  to  cause  investigation  to  be  made  into  scheduled  industries  or  industrial 

undertakings.—Where the Central Government is of the opinion that— 

(a) in respect of any scheduled industry or industrial undertaking or undertakings— 

(i) there has been, or is likely to be, a substantial fall in the volume of production in respect of 
any  article  or  class  of  articles  relatable  to  that  industry  or  manufactured  or  produced  in  the 
industrial  undertaking  or  undertakings,  as  the  case  may  be;  for  which,  having  regard  to  the 
economic conditions prevailing, there is no justification; or 

(ii) there has been, or is likely to be, a marked deterioration in  the quality of any article or 
class  of  articles  relatable  to  that  industry  or  manufactured  or  produced  in  the  industrial 
undertaking or undertakings, as the case may be, which could have been or can be avoided; or 

(iii)  there  has  been  or  is  likely  to  be  a  rise  in  the  price  of  any  article  or  class  of  articles 
relatable  to  that  industry  or  manufactured  or  produced  in  the  industrial  undertaking  or 
undertakings, as the case may be, for which there is no justification; or 

(iv) it is necessary to take any such action as is provided in this Chapter for the purpose of 
conserving  any  resources  of  national  importance  which  are  utilised  in  the  industry  or  the 
industrial undertaking or undertakings, as the case may be; or 
3[(b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled 

industry concerned or to public interest;] 

the  Central  Government  may  make  or  cause  to  be  made  a  full  and  complete  investigation  into  the 
circumstances of the case by such person or body of persons as it may appoint for the purpose. 

4[15A. Power to investigate into the affairs of a company in liquidation.—(1) Where a company, 
owning an industrial undertaking is being wound up by or under the supervision of the High Court, and 
the business of such company is not being continued, the Central Government may, if it is of opinion that 
it  is  necessary,  in  the  interests  of  the  general  public  and,  in  particular,  in  the  interests  of  production, 
supply  or  distribution  of  articles  or  class  of  articles  relatable  to  the  concerned  scheduled  industry,  to 
investigate into the possibility of running or re-starting the industrial undertaking, make an application to 
the High Court praying for permission to make, or cause to be made, an investigation into such possibility 
by such person or body of persons as that Government may appoint for the purpose. 

(2) Where an application is made by the Central Government under sub-section (1), the High Court 
shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or in any other law for 
the time being in force, grant the permission prayed for.] 

16. Powers of Central Government on completion of investigation under section 15.—(1) If after 
making  or  causing  to  be  made  any  such  investigation  as  is  referred  to  in  section  15  the  Central 
Government  is  satisfied  that  action  under  this  section  is  desirable,  it  may  issue  such  directions  to  the 
industrial  undertaking  or  undertakings  concerned  as  may  be  appropriate  in  the  circumstances  for  all  or 
any of the following purposes, namely:— 

(a)  regulating  the  production  of  any  article  or  class  of  articles  by  the  industrial  undertaking  or 

undertakings and fixing the standards of production; 

1. Subs. by Act 26 of 1953, s. 10, for “section 11 or section 13 (w.e.f. 1-10-1953).  
2. Subs. by Act 71 of 1956, s. 3, for “or section 13” (w.e.f. 1-3-1957).   
3. Subs. by Act 26 of 1953, s. 11, for clause (b) (w.e.f. 1-10-1953).  
4. Ins. by Act 72 of 1971, s. 3 (w.e.f. 1-11-1971). 

11 

                                                           
(b)  requiring  the  industrial  undertaking  or  undertakings  to  take  such  steps  as  the  Central 
Government  may  consider  necessary  to  stimulate  the  development  of  the  industry  to  which  the 
undertaking or undertakings relates or relate; 

(c)  prohibiting  the  industrial  undertaking  or  undertakings  from  resorting  to  any  act  or  practice 

which might reduce its or their production, capacity or economic value; 

(d) controlling the prices, or regulating the distribution, of any article or class of articles which 

have been the subject-matter of investigation. 
(2)  Where  a  case  relating  to  any  industry  or  industrial  undertaking  or  undertakings  is  under 
investigation, the Central Government may issue at any time any direction of the nature referred to in sub-
section  (1)  to  the  industrial  undertaking  or  undertakings  concerned  ,  and  any  such  direction  shall  have 
effect until it is varied or revoked by the Central Government. 

17. [Special provisions for direct control by Central Government in certain cases.]—Omitted by 
the Industries (Development and Regulation) Amendment Act, 1953 (26 of 1953), s. 12 (w.e.f. 1-10-1953). 
18. Power of person or body of persons appointed under section 15 to call for assistance in any 
investigation.—(1) The person or body of persons appointed to make any investigation under section 15 
1[or section 15A] may choose one or more persons possessing special knowledge of any matter relating to 
the investigation to assist him or it in holding the investigation. 

(2) The person or body of persons so appointed shall have all the powers of a  civil court under the 
Code of Civil Procedure, 1908 (5 of 1908), for the purpose of taking evidence on oath (which he or it is 
hereby  empowered  to  administer)  and  of  enforcing  the  attendance  of  witnesses  and  compelling  the 
production of documents and material objects, and the person or body of persons shall be deemed to be a 
civil  court  for  all  the  purposes  of  section  195  and  Chapter  XXXV  of  the  Code  of  Criminal  Procedure, 
1898 (5 of 1898). 

2[CHAPTER IIIA 
DIRECT MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS BY CENTRAL GOVERNMENT IN 
CERTAIN CASES 

18A.  Power  of  Central  Government  to  assume  management  or  control  of  an  industrial 

undertaking in certain cases.—(1) If the Central Government is of opinion that— 

(a) an industrial undertaking to which directions have been issued in pursuance of section 16 has 

failed to comply with such directions, or 

(b) an industrial undertaking in respect of which an investigation has been made under section 15 
(whether  or  not  any  directions  have  been  issued  to  the  undertaking  in  pursuance  of  section  16),  is 
being  managed  in  a  manner  highly  detrimental  to  the  scheduled  industry  concerned  or  to  public 
interest, 

the Central Government may, by notified order, authorise any person or body of persons to take over the 
management of the whole or any part of the undertaking or to exercise in respect of the whole or any part 
of the undertaking such functions of control as may be specified in the order. 

(2)  Any  notified  order  issued  under sub-section  (1) shall  have  effect  for  such  period  not  exceeding 

five years as may be specified in the order: 

3[Provided that if the Central Government is of opinion that it is expedient in the public interest that 
any  such  notified  order  should  continue  to  have  effect  after  the  expiry  of  the  period  of  five  years 
aforesaid, it may from time to time issue directions for such continuance for such period, not exceeding 
two  years  at  a  time,  as  may  be  specified  in  the  direction,  so  however  that  the  total  period  of  such 
continuance (after the expiry of the said period of five years) does not exceed4[twelve years]; and where 
any  such  direction  is  issued,  a  copy  thereof  shall  be  laid,  as  soon  as  may  be,  before  both  Houses  of 
Parliament.] 

1. Ins. by Act 72 of 1971, s. 4 (w.e.f. 1-11-1971).  
2. Ins. by Act 26 of 1953, s. 13 (w.e.f. 1-10-1953).  
3. Subs. by Act 6 of 1965, s. 2, for the proviso (w.e.f. 29-3-1965).  
4. Subs. by Act 32 of 1974, s. 2, for “ten years” (w.e.f. 29-6-1974). 

12 

                                                           
Explanation.—The  power  to  authorise  a  body  of  persons  under  this  section  to  take  over  the 
management  of  an  industrial  undertaking  which  is  a  company  includes  also  a  power  to  appoint  any 
individual,  firm  or  company  to  be  the  managing  agent  of  the  industrial  undertaking  on  such  terms  and 
conditions as the Central Government may think fit. 

1[18AA.  Power  to  take  over  industrial  undertakings  without  investigation  under  certain 
circumstances.—(1) Without prejudice  to  any  other provision  of this  Act,  if, from  the  documentary  or 
other  evidence  in  its  possession,  the  Central  Government  is  satisfied,  in  relation  to  an  industrial 
undertaking, that— 

(a) the persons in charge of such industrial undertaking have, by reckless investments or creation 
of incumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a 
situation which is likely to affect the production of articles manufactured or produced in the industrial 
undertaking, and that immediate action is necessary to prevent such a situation; or 

(b)  it  has  been  closed  for  a  period  of  not  less  than  three  months  (whether  by  reason  of  the 
voluntary winding up of the company owning the industrial undertaking or for any other reason) and 
such closure is prejudicial to the concerned scheduled industry and that the financial condition of the 
company  owning  the  industrial  undertaking  and  the  condition  of  the  plant  and  machinery  of  such 
undertaking are such that it is possible to re-start the undertaking and such re-starting is necessary in 
the interests of the general public, 

it  may,  by  a  notified  order,  authorise  any  person  or  body  of  persons  (hereafter  referred  to  as  the 
“authorised person”) to take over the management of the whole or any part of the industrial undertaking 
or to exercise in respect of the whole or any part of the undertaking such functions of control as may be 
specified in the order. 

(2) The provisions of sub-section (2) of section 18A shall, as far as may be, apply to a notified order 

made under sub-section (1) as they apply to a notified order made under sub-section (1) of section 18A. 

(3) Nothing contained in sub-section (1) and sub-section (2) shall apply to an industrial undertaking 

owned by a company which is being wound up by or under the supervision of the Court. 

(4)  Where  any  notified  order  has  been  made  under  sub-section  (1),  the  person  or  body  of  persons 
having for the time being, charge of the management or control of the industrial undertaking, whether by 
or under the orders of any court or any contract, instrument or otherwise, shall, notwithstanding anything 
contained  in  such  order,  contract,  instrument  or  other  arrangements  forthwith  make  over  the  charge  of 
management or control, as the case may be, of the industrial undertaking to the authorised person. 

(5)  The  provisions  of  sections  18B  to  18E  (both  inclusive)  shall,  as  far  as  may  be,  apply  to,  or  in 
relation  to,  the  industrial  undertaking,  in  respect  of  which  a  notified  order  has  been  made  under  sub-
section (1), as they apply to an industrial undertaking in relation to which a notified order has been issued 
under section 18A.] 

18B. Effect of notified order under section 18A.—(1) On the issue of a notified order under section 

18A authorising the taking over of the management of an industrial undertaking,— 

(a)  all  persons  in  charge  of  the  management,  including  persons  holding  office  as  managers  or 
directors  of  the  industrial  undertaking  immediately  before  the  issue  of  the  notified  order,  shall  be 
deemed to have vacated their offices as such; 

(b) any contract of management between the  industrial undertaking and any  managing agent or 
any director thereof holding office as such immediately before the issue of the notified order shall be 
deemed to have been terminated; 

1. Ins. by Act 72 of 1971, s. 5 (w.e.f. 1-11-1971).  

13 

                                                           
(c) the managing agent, if any, appointed under section 18A shall be deemed to have been duly 
appointed as the managing agent in pursuance of the Indian Companies Act, 1913 (7 of 1913), and 
the memorandum and articles of association of the industrial undertaking, and the provisions of the 
said Act and of the memorandum and articles shall, subject to the other provisions contained in this 
Act,  apply  accordingly,  but  no  such  managing  agent  shall  be  removed  from  office  except  with  the 
previous consent of the Central Government; 

(d) the person or body of persons authorised under section 18A to take over the management shall 
take all such steps as may  be necessary to take into his or their custody or control all the property, 
effects and actionable claims to which the industrial undertaking is or appears to be entitled, and all 
the  property  and  effects  of  the  industrial  undertaking  shall  be  deemed  to  be  in  the  custody  of  the 
person or, as the case may be, the body of persons as from the date of the notified order; and 

(e) the persons, if any, authorised under section 18A to take over the management of an industrial 
undertaking which is a company shall be for all purposes the directors of the industrial undertaking 
duly  constituted  under  the  Indian  Companies  Act,  1913  (7  of  1913),  and  shall  alone  be  entitled  to 
exercise all the powers of the directors of the industrial undertaking, whether such powers are derived 
from the said Act or from the memorandum or articles of association of the industrial undertaking or 
from any other source. 

(2) Subject to the other provisions contained in this Act and to the control of the Central Government, 
the person or body of persons authorised to take over the management of an industrial undertaking, shall 
take such steps as may be necessary for the purpose of efficiently managing the business of the industrial 
undertaking and shall exercise such other powers and have such other duties as may be prescribed. 

(3) Where any person or body of persons has been authorised to exercise any functions of control in 
relation to an industrial undertaking, the undertaking shall be carried on pursuant to any directions given 
by the authorised person in accordance with the provisions of the notified order, and any person having 
any  functions  of  management  in  relation  to  the  undertaking  or  part  thereof  shall  comply  with  all  such 
directions. 

(4) The  person  or  body  of  persons  authorised  under  section  1[18A]  shall,  notwithstanding  anything 
contained in the memorandum or articles of association of the industrial undertaking, exercise his or their 
functions in accordance with such directions as may  be given by the Central Government so, however, 
that  he  or  they  shall  not  have  any  power  to  give  any  other  person  any  directions  under  this  section 
inconsistent  with  the  provisions  of  any  Act  or  instrument  determining  the  functions  of  the  authority 
carrying on the undertaking except in so far as may be specifically provided by the notified order. 

18C.  Contracts  in  bad  faith,  etc.,  may  be  cancelled  or  varied.—Without  prejudice  to  the 
provisions contained in section 18B, the person or body of persons authorised under section 18A to take 
over  the  management  of  an  industrial  undertaking  may,  with  the  previous  approval  of  the  Central 
Government,  make  an  application  to  any  court  having  jurisdiction  in  this  behalf  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 18A, between the industrial undertaking 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  industrial  undertaking,  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 have effect accordingly. 

18D. No right to compensation for termination of office or contract.—Notwithstanding anything 
contained in any law for the time being in force, no person who ceases to hold any office by reason of the 
provisions  contained  in  clause  (a)  of  section  18B,  or  whose  contract  of  management  is  terminated  by 
reason of the provisions contained in clause (b) of that section, shall be entitled to any compensation for 
the loss of office or for the premature termination of his contract of management: 

Provided  that  nothing  contained  in  this  section  shall  affect  the  right  of  any  such  person  to  recover 

from the industrial undertaking moneys recoverable otherwise than by way of such compensation. 

1. Subs. by Act 36 of 1957, s. 3 and the Second Schedule, for “18” (w.e.f. 17-9-1957). 

14 

                                                           
18E. Application of Act 7 of 1913.—(1) Where the management of an industrial undertaking, being 
a  company  as  defined  in  the  Indian  Companies  Act,  1913  (7  of  1913)  is  taken  over  by  the  Central 
Government, then, notwithstanding anything contained in the said Act or in the memorandum or articles 
of association of such undertaking,— 

(a) it shall not be lawful for the shareholders of such undertaking or any other person to nominate 

or appoint any person to be a director of the undertaking; 

(b)  no  resolution  passed  at  any  meeting  of  the  shareholders  of  such  undertaking  shall  be  given 

effect to unless approved by the Central Government; 

(c) no proceeding for the winding up of such undertaking or for the appointment of a receiver in 

respect thereof shall lie in any court except with the consent of the Central Government. 

(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 Indian Companies Act, 1913 (7 of 
1913),  shall  continue  to  apply  to  such  undertaking  in  the  same  manner  as  it  applied  thereto  before  the 
issue of the notified order under section 18A. 

 18F. Power of Central Government to cancel notified order under section 18A.—If at any time it 
appears  to  the  Central  Government  on  the  application  of  the  owner  of  the  industrial  undertaking  or 
otherwise that the purpose of the order made under  section 18A has been fulfilled or that for any other 
reason it is not necessary that the order should remain in force, the Central Government may, by notified 
order, cancel such order and on the cancellation of any such order the management or the control, as the 
case may be, of the industrial undertaking shall vest in the owner of the undertaking. 

1[CHAPTER IIIAA 

MANAGEMENT OR CONTROL OF INDUSTRIAL UNDERTAKINGS OWNED BY COMPANIES IN LIQUIDATION 

 18FA.  Power  of  Central  Government  to  authorise,  with  the  permission  of  the  High  Court, 
persons  to  take  over  management  or  control  of  industrial  undertakings.—(1)  If  the  Central 
Government is of opinion that there are possibilities of running or re-starting an industrial undertaking, in 
relation to which an investigation has been made under section 15A, and that such industrial undertaking 
should be run or re-started, as the case may be, for maintaining or increasing the production, supply or 
distribution  of  articles  or  class  of  articles  relatable  to  the  scheduled  industry,  needed  by  the  general 
public, that  Government  may  make  an  application to the  High  Court  praying  for  permission to appoint 
any person or body of persons to take over the management of the industrial undertaking or to exercise in 
respect  of  the  whole  or  any  part  of  the  industrial  undertaking  such  functions  of  control  as  may  be 
specified in the application. 

(2)  Where  an  application  is  made  under  sub-section  (1),  the  High  Court  shall  make  an  order 
empowering the Central Government to authorise any person or body of persons (hereinafter referred to 
as  the  “authorised  person”,)  to  take  over  the  management  of  the  industrial  undertaking  or  to  exercise 
functions of control in relation to the whole or any part of the industrial undertaking (hereinafter referred 
to as the “concerned part”) for a period not exceeding five years: 

Provided that if the Central Government is of opinion that it is expedient in the interests of the general 
public  that  the  authorised  person  should  continue  to  manage  the  industrial  undertaking,  or  continue  to 
exercise functions of control in relation to the concerned part, as the case may be, after the expiry of the 
period of five years aforesaid, it may make an application to the High Court for the continuance of such 
management  or  functions  of  control,  for  such  period,  not  exceeding  two  years  at  a  time,  as  may  be 
specified in the application and thereupon the High Court may make an order permitting the authorised 
person to continue to manage the industrial undertaking or to exercise functions of control in relation to 
the concerned part: 

Provided further that the total period of such continuance (after the expiry of the initial period of five 

years) shall not, in any case, be permitted to exceed 1[twelve years]. 

1. Ins. by Act 72 of 1971, s. 6 (w.e.f. 1-11-1971).  

15 

                                                           
(3)  Where  an  order  has  been  made  by  the  High  Court  under  sub-section  (2),  the  High  Court  shall 
direct the Official Liquidator or any other person having, for the time being, charge of the management or 
control  of  the  industrial  undertaking,  whether  by  or  under  the  orders  of  any  Court,  or  any  contract  or 
instrument or otherwise, to make over the management of such undertaking or the concerned part, as the 
case  may  be,  to  the  authorised  person  and  thereupon  the  authorised  person  shall  be  deemed  to  be  the 
Official Liquidator in respect of the industrial undertaking or the concerned part, as the case may be. 

(4)  Before  making  over  the  possession  of  the  industrial  undertaking  or  the  concerned  part  to  the 
authorised person, the Official Liquidator shall make a complete inventory of all the assets and liabilities 
of the industrial undertaking or the concerned part, as the case may be, in the manner specified in section 
18FG  and  deliver  a  copy  of  such  inventory  to  the  authorised  person,  who  shall,  after  verifying  the 
correctness thereof, sign on the duplicate copy thereof as evidence of the receipt of the inventory by him. 

(5)  On  taking  over  the  management  of  the  industrial  undertaking,  or  on  the  commencement  of  the 
exercise  of  functions  of  control  in  relation  to  the  concerned  part,  the  authorised  person  shall  take 
immediate steps to so run the industrial undertaking or the concerned part as to ensure the maintenance of 
production. 

(6)  The  authorised  person  may,  on  such  terms  and  conditions  and  subject  to  such  limitations  or 
restrictions as may be prescribed, raise any loan for the purpose of running the industrial undertaking or 
the  concerned  part,  and  may,  for  that  purpose,  create  a  floating  charge  on  the  current  assets  of  the 
industrial undertaking or the concerned part, as the case may be. 

(7) Where the authorised person is of opinion that the replacement or repair of any machinery of the 
industrial  undertaking  or  the  concerned  part  is  necessary  for  the  purpose  of  efficient  running  of  the 
industrial undertaking or such part, he shall, on such terms and conditions and subject to such limitations 
or restrictions as may be prescribed, make such replacement or repair, as the case may be. 

(8)  The  loan  obtained  by  the  authorised  person  shall  be  recovered  from  the  assets  of  the  industrial 

undertaking or the concerned part, in such manner and subject to such conditions as may be prescribed. 

(9) For the purpose of running the industrial undertaking, or exercising functions of control in relation 
to the concerned part, the authorised person may employ such of the former employees of the industrial 
undertaking whose services became discharged by reason of the windingup of the company owning such 
undertaking and every such person employed by the authorised person shall be deemed to have entered 
into a fresh contract of service with the company. 

(10) The proceedings in the winding up of the company in so far as they relate to— 

(a) the industrial undertaking, the management of which has been taken over by the authorised 

person under this section, or 

(b) the concerned part in relation to which any function of control is exercised by the authorised 

person under this section, 

shall, during the period of such management or control, remain stayed, and, in computing the period of 
limitation for the enforcement of any right, privilege, obligation or liability in relation to such undertaking 
or the concerned part, the period during which such proceedings remained stayed shall be excluded. 

CHAPTER IIIAB 

POWER TO PROVIDE RELIEF TO CERTAIN INDUSTRIAL UNDERTAKINGS 

18FB.  Power  of  Central  Government  to  make  certain  declarations  in  relation  to  industrial 
undertakings, the management or control of which has been taken over under section 18A, section 
18AA or section 18FA.—(1) The Central Government may, if it is satisfied, in relation to an industrial 
undertaking or any part thereof, the management or control of which has been taken over under  section 
18A,  whether  before  or  after  the  commencement  of  the  Industries  (Development  and  Regulation) 

1. Subs. by Act 32 of 1974, s. 2, for “ten years” (w.e.f. 29-6-1974). 

16 

                                                                                                                                                                      
Amendment Act, 1971 (72 of 1971), or under section 18AA or section 18FA, that it is necessary so to do 
in the interests of the general public with a view to preventing fall in the volume of production of any 
scheduled industry, it may, by notified order, declare that— 

(a) all or any of the enactments specified in the Third Schedule shall not apply or shall apply with 
such adaptations,  whether by  way  of  modification, addition  or  omission  (which  does  not,  however, 
affect the policy of the said enactments) to such industrial undertaking, as may be specified in such 
notified order, or 

(b) the operation of all or any of the contracts, assurances of property, agreements, settlements, 
awards,  standing  orders  or  other  instruments  in  force  (to  which  such  industrial  undertaking  or  the 
company  owning  such  undertaking  is  a  party  or  which  may  be  applicable  to  such  industrial 
undertaking  or  company)  immediately  before  the  date  of  issue  of  such  notified  order  shall  remain 
suspended  or  that  all  or  any  of  the  rights,  privileges,  obligations  and  liabilities  accruing  or  arising 
thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations 
and in such manner as may be specified in the notified order. 

(2)  The  notified  order  made  under  sub-section  (1)  shall  remain  in  force,  in  the  first  instance,  for  a 
period of one year, but the duration of such notified order may be extended from time to time by a further 
notified order by a period not exceeding one year at a time: 

Provided that no such notified order shall, in any case, remain in force— 

(a)  after  the  expiry  of  the  period  for  which  the  management  of  the  industrial  undertaking  was 

taken over under section 18A, section 18AA or section 18FA, or 

(b) for more than1[eight years] in the aggregate from the date of issue of the first notified order, 

whichever is earlier. 

(3) Any notified order made under sub-section (1) shall have effect notwithstanding anything to the 
contrary contained in any other law, agreement or instrument or any decree or order of a  court, tribunal, 
officer or other authority or of any submission, settlement or standing order. 

(4) Any remedy for the enforcement of any right, privilege, obligation or liability referred to in clause 
(b) of sub-section (1) and suspended or modified by a notified order made under that sub-section shall, in 
accordance  with  the  terms  of  the  notified  order,  remain  suspended  or  modified,  and  all  proceedings 
relating  thereto  pending  before  any  court,  tribunal,  officer  or  other  authority  shall  accordingly  remain 
stayed or be continued subject to such adaptations, so, however, that on the notified order ceasing to have 
effect— 

(a) any right, privilege, obligation or liability so remaining suspended or modified shall become 

revived and enforceable as if the notified order had never been made; 

(b) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any 
law  which  may  then  be  in  force,  from  the  stage  which  had  been  reached  when  the  proceedings 
became stayed. 

(5)  In  computing  the  period  of  limitation  for  the  enforcement  of  any  right,  privilege,  obligation  or 
liability  referred  to  in  clause  (b)  of  sub-section  (1),  the  period  during  which  it  or  the  remedy  for  the 
enforcement thereof remained suspended shall be excluded. 

CHAPTER IIIAC 

LIQUIDATION OR RECONSTRUCTION OF COMPANIES 

 18FC. Power of Central Government to call for report on the affairs and working of managed 
company.—Where  the  management  or  control  of  an  industrial  undertaking  has  been  taken  over  under 
section 18A, whether before or after the commencement of the Industries (Development and Regulation) 
Amendment  Act,  1971 (72  of  1971),  or  under  section  18AA  or  section  18FA,  the  Central  Government 
may,  at  any  time  during  the  continuance  of  such  management  or  control,  call  for  a  report  from  the 

1. Subs. by Act 17 of 1979, s. 2, for “five years” (w.e.f. 30-12-1978).  

17 

                                                           
authorised person on the affairs and working of the industrial undertaking and in submitting the report the 
authorised person shall take into account the inventory and the lists of members and creditors prepared 
under section 18FG. 

18FD. Decision of Central Government in relation to managed  Company.—(1) If, on receipt of 

the report submitted by the authorised person, the Central Government is satisfied,— 

(a) in relation to the company owning the industrial undertaking, which is not being wound up by 
the High Court, that the financial condition and other circumstances of the company are such that it is 
not  in  a  position  to  meet  its  current  liabilities  out  of  its  current  assets,  that  Government  may,  if  it 
considers necessary or expedient in the interests of the general public so to do, by order, decide that 
the  industrial  undertaking  should  be  sold  as  a  running  concern  as  provided  in  section  18FE  and 
proceedings should simultaneously be started for the winding up, by the High Court, of the company; 

(b) in relation to the company, owning the industrial undertaking, which is being wound up by the 
High Court, that its assets and liabilities are such that in the interests of its creditors and contributories 
the industrial undertaking should be sold as a running concern as provided in section 18FE, it may, by 
order, decide accordingly. 

(2)  Notwithstanding  anything  contained  in  sub-section  (1), if,  on  receipt  of the report  submitted  by 

the authorised person, the Central Government is satisfied that— 

(a) in the interests of the general public, or 

(b) in the interests of the shareholders, or 

(c) to secure the proper management of the company owning the industrial undertaking, 

it is necessary so to do, that Government may, by order, decide to prepare a scheme for the reconstruction 
of the company owning the industrial undertaking: 

Provided that no such scheme shall be prepared in relation to a company which is being wound up by 

or under the supervision of the High Court, except with the previous permission of that Court. 

(3)  The  powers  exercisable  by  the  Central  Government  under  section  18F,  in  relation  to  an 
undertaking taken over under  section 18A, shall also be exercisable in relation to an undertaking taken 
over under section 18AA or section 18FA, but such powers shall not be exercised after the making of an 
order under sub-section (1) or, as the case may be, under sub-section (2) of this section. 

18FE. Provisions where Government decides to follow the course of action specified in section 
18FD (1).—(1) The provisions hereinafter laid down shall apply where the Central Government decides 
that the course of action specified in sub-section (1) of section 18FD should be followed, namely:— 

(a)  the  decision  of  the  Central  Government  that  the  course  of  action  specified  in  clause  (a)  of  
sub-section  (1)  section  18FD  should  be  followed  in  relation  to  a  company  owning  an  industrial 
undertaking shall be deemed to be a ground specified in section 433 of the Companies Act, 1956 (1 of 
1956), on which the company may be wound up by the High Court; 

(b)  the  authorised  person  shall,  as  soon  as  may  be,  after  the  decision  specified  in  clause (a)  of 
sub-section (1) of section 18FD has been taken by the Central Government, present an application to 
the High Court for the winding up of the company owning the industrial undertaking; 

(c) when an application is made by the authorised person, under clause (b), for the winding up, by 
the  High  Court,  of  the  company  owning  the  industrial  undertaking,  the  High  Court  shall  order  the 
winding  up  of  the  company  and  shall,  notwithstanding  anything  contained  in  the  Companies  Act, 
1956  (1  of  1956),  appoint  the  authorised  person  as  the  Official  Liquidator  in  relation  to  such 
undertaking; 

(d)  whenever  the  Central  Government  decides  under  clause  (b)  of  sub-section  (1)  of                            

section 18FD that the industrial undertaking should be sold as a running concern, it shall cause a copy 
of its decision to be laid before the High Court; 

18 

(e)  until  the  industrial  undertaking  referred  to  in  clause  (a)  or  clause  (b)  of  sub-section  (1)  of 
section 18FD is sold or purchased in pursuance of this section, the authorised person shall continue to 
function as the Official Liquidator in relation to the said undertaking in the winding up proceedings of 
the  company,  and  thereafter  the  Official  Liquidator  appointed  by  the  Central  Government  under 
section  448  of  the  Companies  Act,  1956  (1  of  1956),  shall  take  over  and  function  as  the  Official 
Liquidator in the said proceedings. 

(2) The  authorised  person shall  make  a  report  to the Central  Government  as to what  should  be  the 

reserve price for the sale of the industrial undertaking as a running concern. 

(3) In making a report under sub-section (2), the authorised person shall have regard to— 

(a) the financial condition of the company owning the industrial undertaking on the date on which 

the order under section 18FD is made— 

(i) as disclosed in its books of account, 

(ii) as disclosed in its balance-sheet and profit and loss account during a period of five years 

immediately preceding the said date; 

(b) the condition and nature of the plant, machinery, instruments and other equipment from the 

point of view of their suitability for profitable use in the running of the industrial undertaking; 

(c) the total amount of liability on account of secured and unsecured debts including overdrafts, if 
any,  drawn  on  banks,  liabilities  on  account  of  terminal  benefits  to  the  employees  and  other 
borrowings and other liabilities of the company; and 

(d) other relevant factors including the factor that the industrial undertaking will be sold free from 

all incumbrances. 

(4) Notice of the reserve price determined by the authorised person shall be given in such manner as 
may be prescribed to the members and creditors of the company owning such industrial undertaking to 
make  representations  within  a  specified  time  to  the  Central  Government  through  the  authorised  person 
and  the  Central  Government  shall,  after  considering  the  representations  received  and  the  report  of  the 
authorised person, determine the reserve price. 

(5) The authorised person shall thereafter, with the permission of the High Court, invite tenders from 
the  public  in  such  manner  as  may  be  determined  by  the  High  Court  for  the  sale  of  the  industrial 
undertaking as a running concern subject to the condition that it will be sold to the person offering the 
highest price which shall not be less than the reserve price determined under sub-section (4): 

Provided  that  the  High  Court  shall  not  refuse  to  grant  such  permission  if  it  is  satisfied  that  the 

company is not in a position to meet its current liabilities out of its current assets. 

(6) The  industrial  undertaking  shall  be  sold  to  the  highest  bidder, as  a running concern,  only if  the 

price offered by him therefore is not less than the reserve price. 

(7) Where no offer of price is equal to, or more than, the reserve price, the industrial undertaking shall 

be purchased by the Central Government at the reserve price. 

(8) (a) The amount realised from the sale of the industrial undertaking as a running concern together 
with  any  other  sum  which  may  be  realised  from  any  contributory,  purchaser  or  any  other  person  from 
whom  any  money  is  due  to  the  company  shall  be  utilised  in  accordance  with  the  provisions  of  the 
Companies  Act,  1956  (1  to  1956),  in  discharging  the  liabilities  of  the  company  and  distributing  the 
balance, if any, amongst the members of the company. 

(b) In other respects, the provisions of the Companies Act, 1956 (1 of 1956), relating to the winding 

up of a company by the High Court shall, as far as may be, apply. 

(9) When an industrial undertaking is sold to any person under sub-section (6), or purchased by the 
Central Government under sub-section (7), there shall be transferred to and vested in the purchaser, free 

19 

from all incumbrances, all such assets relating to the industrial undertaking as are referred to in sub-clause 
(i) of clause (a) of section 18FG and existing at the time of the sale or purchase. 

18FF. Provisions where Government decides to follow the course of action specified in  section 
18FD (2).—(1) Where in any case the Central Government decides that the course of action specified in 
sub-section (2) of section 18FD should be followed, it shall, subject to the provisions of that sub-section, 
cause to be prepared, by the authorised person, a scheme for the reconstruction of the company, owning 
the  industrial  undertaking,  in  accordance  with  the  provisions  hereinafter  contained  and  the  authorised 
person shall submit the same for the approval of that Government. 

(2) The scheme for the reconstruction of the company owning the industrial undertaking may contain 

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

(a)  the  constitution,  name  and  registered  office,  the  capital,  assets,  powers,  rights,  interests, 

authorities and privileges, the liabilities, duties and obligations of the company on its reconstruction; 

(b) any change in the Board of directors, or the appointment of a new Board of directors of the 
company on its reconstruction and the authority by whom, the manner in which and the other terms 
and conditions on which, such change or appointment shall be made and in the case of appointment of 
a new Board of directors or of any director, the period for which such appointment shall be made; 

(c) the vesting of controlling interest, in the reconstructed company, in the Central Government 

either by the appointment of additional directors or by the allotment of additional shares; 

(d)  the  alteration  of  the  memorandum  and  articles  of  association  of  the  company,  on  its 

reconstruction, to give effect to such reconstruction; 

(e)  subject  to  the  provisions  of  the  scheme,  the  continuation  by  or  against  the  company,  on  its 
reconstruction,  of  any  action  or  proceedings  pending  against  the  company  immediately  before  the 
date of its reconstruction; 

(f) the reduction of the interest or rights which the members and creditors have in or against the 
company before its reconstruction to such extent as the Central Government may consider necessary 
in  the  interests  of  the  general  public  or  in  the  interests  of  the  members  and  creditors  or  for  the 
maintenance of the business of the company : 

Provided that nothing contained in this clause shall be deemed to authorise the reduction of the 
interest or rights of any creditor (including Government) in respect of any loan or advance made by 
that creditor to the company after the date on which the management of the industrial undertaking of 
the company has been taken over under section 18A, section 18AA, or section 18FA; 

(g) the payment in cash or otherwise to the creditors in full satisfaction of their claim— 

(i) in respect of their interest or rights in or against the company before its reconstruction; or 

(ii) where their interest or rights in or against the company has or have been reduced under 

clause (f), in respect of such interest, or rights as so reduced; 

(h)  the  allotment  to  the  members  of  the  company  for  shares  held  by  them  therein  before  its 
reconstruction  [whether  their  interest  in  such  shares  has  been  reduced  under  clause  (f)  or  not],  of 
shares  in  the  company  on  its  reconstruction  and  where  it  is  not  possible  to  allot  shares  to  any 
members, the payment in cash to those members in full satisfaction of their claim— 

(1) in respect of their interest in shares in the company before its reconstruction; or 

(2) where such interest has been reduced under clause (f), in respect of their interest in shares 

as so reduced; 

(i)  the  offer  by  the  Central  Government  to  acquire  by  negotiations  with  the  members  of  the 
company their respective shares on payment in cash to those members who may volunteer to sell their 
shares to the Central Government in full satisfaction of their claim— 

(1) in respect of their interest in shares in the company before its reconstruction; or 

20 

(2) where such interest has been reduced under clause (f), in respect of their interest in shares 

as so reduced; 

(j)  the  conversion  of  any  debentures  issued  by  the  company  after  the  taking  over  of  the 
management  of  the  company  under  section  18A  or  section  18AA  or  section  18FA  or  of  any  loans 
obtained by the company after that date or of any part of such debentures or loans, into shares in the 
company and the allotment of those shares to such debenture-holders or creditors, as the case may be; 

(k) the increase of the capital of the company by the issue of new shares and the allotment of such 

new shares to the Central Government; 

(l)  the  continuance  of  the  services  of  such  of  the  employees  of  the  company  as  the  Central 
Government  may  specify  in  the  scheme  in  the  company  itself,  on  its  reconstruction,  on  such  terms 
and conditions as the Central Government thinks fit; 

(m)  notwithstanding  anything  contained  in  clause  (l),  where  any  employees  of  the  company 
whose services have been continued under clause (l) have, by notice in writing given to the company 
at any time before the expiry of one month next following the date on which the scheme is sanctioned 
by  the  High  Court,  intimated  their  intention  of  not  becoming  employees  of  the  company,  on  its 
reconstruction, the payment to such employees and to other employees whose services have not been 
continued on the reconstruction of the company, of compensation, if any, to which they are entitled 
under the Industrial Disputes Act, 1947 (14 of 1947), and such pension, gratuity, provident fund and 
other  retirement  benefits  ordinarily  admissible  to  them  under  the  rules  or  authorisation  of  the 
company immediately before the date of its reconstruction; 

(n) any other terms and conditions for the reconstruction of the company; 

(o)  such  incidental,  consequential  and  supplemental  matters  as  are  necessary  to  secure  that  the 

reconstruction of the company shall be fully and effectively carried out. 

(3) (a) A copy of the scheme, as approved by the Central Government, shall be sent in draft to the 
company, to the registered trade unions, if any, of which the employees of the company are members and 
to  the  creditors  thereof  for  suggestions  and  objections,  if  any,  within  such  period  as  the  Central 
Government may specify for this purpose. 

(b)  The  Central  Government  may  make  such  modifications,  if  any,  in  the  draft  scheme  as  it  may 
consider  necessary  in  the  light  of  the  suggestions  and  objections  received  from  the  company,  from  the 
registered trade unions of which the employees of the company are members and from any members or 
creditors of the company. 

(4) The scheme shall thereafter be placed before the High Court for its sanction and the High Court, if 
satisfied that the scheme is in the interests of the general public or in the interests of the shareholders or 
for  securing  the  proper  management  of  the  company  and  that  the  scheme  is  designed  to  be  fair  and 
reasonable to the members and creditors of the company, may, after giving a reasonable opportunity to 
the  company  and  to  its  members  and  creditors  of  showing  cause,  sanction  the  scheme  without  any 
modification or with such modifications as it may consider necessary. 

(5) The scheme, as so sanctioned by the High Court, shall come into force on such date as that Court 

may specify in this behalf: 

Provided that different dates may be specified for different provisions of the scheme. 

(6) The sanction accorded by the High Court under sub-section (4) shall be conclusive evidence that 
all  the  requirements  of  this  section  relating  to  the  reconstruction  of  the  company  have  been  complied 
with, and a copy of the sanctioned scheme certified by the High Court to be a true copy thereof, shall, in 
all  legal  proceedings  (whether original  or  in  appeal  or  otherwise), be admitted  as  evidence to the  same 
extent as the original scheme. 

(7)  On and from  the  date of  the  coming  into  operation  of the  scheme  or  any  provision  thereof, the 
scheme  or  such  provision  shall  be  binding  on  the  company  and  also  on  all  the  members  and  other 
creditors and employees of the company and on any other person having any right or liability in relation 
to the company. 

21 

(8) On the coming into operation of the scheme or any provision thereof, the authorised person shall 
cease to function, and the management of the reconstructed company shall be assumed by the Board of 
directors as provided in the scheme. 

(9) Copies of the scheme shall be laid before each House of Parliament, as soon as may be, after the 

scheme has been sanctioned by the Court. 

(10)  The  provisions  of  this  section  and  of  any  scheme  made  thereunder  shall  have  effect 
notwithstanding anything contained in sections 391 to 394A (both inclusive) of the Companies Act, 1956 
(1 of 1956). 

18FG.  Preparation  of  inventory  of  assets  and  liabilities  and  list  of  members  and  creditors  of 
managed company.—For the purposes of this Act, the authorised person shall, as soon as may be, after 
taking  over  the  management  of  the  industrial  undertaking  of  a  company  under  section  18A  or  section 
18AA or section 18FA,— 

(a) prepare a complete inventory of— 

(i)  all  properties,  movable  and  immovable,  including  lands,  buildings,  works,  workshops, 
stores, instruments, plant, machinery, automobiles and other vehicles, stocks of materials in the 
course  of  production,  storage  or  transit,  raw  materials,  cash  balances,  cash  in  hand,  deposits  in 
bank or with any other person or body or on loan, reserve funds, investments and book debts and 
all other rights and interests arising out of such property as were immediately before the date of 
taking  over  of  the  industrial  undertaking  in  the  ownership,  possession,  power  or  control  of  the 
company,  whether  within  or  without  India;  and  all  books  of  account,  registers,  maps,  plans, 
sections, drawings, records, documents or titles of ownership of property, and all other documents 
of whatever nature relating thereto; and 

(ii)  all  borrowings,  liabilities  and  obligations  of  whatever  kind  of  the  company  including 
liability on account of terminal benefits to its employees subsisting immediately before the said 
date; 

(b) prepare separately a list of members, and a list of creditors, of such company as on the date of 
taking  over  of  the  management  of  the  industrial  undertaking  showing  separately  in  the  list  of 
creditors, the secured creditors and the unsecured creditors : 

Provided that where the management of the industrial undertaking of a company has been taken over 
under  the  said  section  18A  before  the  commencement  of  the  Industries  (Development  and  Regulation) 
Amendment Act, 1971 (72 of 1971), the aforesaid functions shall be performed by the authorised person 
within six months from such commencement. 

18FH. Stay of suits and other proceedings.—In the case of a company in respect of which an order 
under  section  18FD  has  been  made,  no  suit  or  other  legal  proceeding  shall  be  instituted  or  continued 
against  the  company  except  with  the  previous  permission  of  the  Central  Government  or  any  officer  or 
authority authorised by that Government in this behalf.] 

CHAPTER IIIB 

CONTROL OF SUPPLY, DISTRIBUTION, PRICE, ETC., OF CERTAIN ARTICLES 

18G.  Power  to  control  supply,  distribution,  price,  etc.,  of  certain  articles.—(1)  The  Central 
Government, so far as it appears to it to be necessary or expedient for securing the equitable distribution 
and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, 
notwithstanding  anything  contained  in  any  other  provision  of  this  Act,  by  notified  order,  provide  of 
regulating the supply and distribution thereof and trade and commerce therein. 

(2)  Without  prejudice  to the  generality  of  the  powers conferred  by  sub-section  (1),  a  notified  order 

made thereunder may provide— 

(a) for controlling the prices at which any such article or class thereof may be bought or sold; 

22 

(b)  for  regulating  by  licences,  permits  or  otherwise  the  distribution,  transport,  disposal, 

acquisition, possession, use or consumption of any such article or class thereof; 

(c) for prohibiting the withholding from sale of any  such article or class thereof ordinarily kept 

for sale; 

(d)  for  requiring  any  person  manufacturing,  producing  or  holding  in  stock  any  such  article  or 
class thereof to sell the whole or part of the articles so manufactured or produced during a specified 
period or to sell the whole or a part of the articles so held in stock to such person or class of persons 
and in such circumstances as may be specified in the order; 

(e) for regulating or prohibiting any class of commercial or financial transactions relating to such 
article or class thereof which in the opinion of the authority making the order are, or if unregulated 
are likely to be, detrimental to public interest; 

(f) for requiring persons engaged in the distribution and trade and commerce in any such article or 
class thereof to mark the articles exposed or intended for sale with the sale price or to exhibit at some 
easily  accessible  place  on  the  premises  the  price-lists  of  articles  held  for  sale  and  also  to  similarly 
exhibit on the first day of every month, or at such other time as may be prescribed, a statement of the 
total quantities of any such articles in stock; 

(g) for collecting any information or statistics with a view to regulating or prohibiting any of the 

aforesaid matters; and 

(h)  for  any  incidental  or  supplementary  matters,  including,  in  particular,  the  grant  or  issue  of 

licences, permits or other documents and the charging of fees therefor. 

(3) Where, in pursuance of any order made with reference to clause (d) of sub-section (2), any person 

sells any article, there shall be paid to him the price therefor— 

(a) where the price can consistently with the controlled price, if any, be fixed by agreement, the 

price so agreed upon; 

(b) where no such agreement can be reached, the price calculated with reference to the controlled 

price, if any, fixed under this section; 

(c)  where  neither  clause  (a)  nor  clause  (b)  applies,  the  price  calculated  at  the  market  rate 

prevailing in the locality at the date of sale. 

(4) No order made in exercise of any power conferred by this section shall be called in question in 

any court. 

(5) Where an order purports to have been made and signed by an authority in exercise of any power 
conferred by this section, a court shall, within the meaning of the Indian Evidence Act, 1872 (1 of 1872), 
presume that such order was so made by that authority. 

Explanation.—In this section, the expression “article or class of articles” relatable to any scheduled 
industry  includes  any  article  or  class  of  articles  imported  into  India  which  is  of  the  same  nature  or 
description as the article or class of articles manufactured or produced in the scheduled industry.] 

CHAPTER IV 

MISCELLANEOUS 

19.  Powers  of  inspection.—(1)  For  the  purpose  of  ascertaining  the  position  or  working  of  any 
industrial undertaking or for any other purpose mentioned in this Act or the rules made thereunder, any 
person authorised by the Central Government in this behalf shall have the right— 

(a) to enter and inspect any premises; 

(b) to order the production of any document, book, register or record in the possession or power 

of any person having the control of, or employed in connection with, any industrial undertaking; and 

(c) to examine any person having the control of, or employed in connection with, any industrial 

undertaking. 

23 

(2) Any person authorised by the Central Government under sub-section (1) shall be deemed to be a 

public servant within the meaning of section 21 of the Indian Penal Code (45 of 1860). 

 20.  General  prohibition  of  taking  over  management  or  control  of  industrial  undertakings.—
After  the  commencement  of  this  Act,  it  shall  not  be  competent  for  any  State  Government  or  a  local 
authority to take over the management or control of any industrial undertaking under any law for the time 
being in force which authorises any such Government or local authority so to do. 

21. Certain administrative expenses of Development Councils to be paid from moneys provided 
by Parliament.—Such administrative expenses as relate to the emoluments of officers of a Development 
Council who are appointed by or with the approval of the Central Government, shall be defrayed out of 
moneys provided by Parliament. 

22.  Power  of  the  Central  Government  to  issue  Directions  to  Development  Council.—In  the 
exercise of its functions under this Act, every Development Council shall be guided by such instructions 
as may be given to it by the Central Government and such instructions may include directions relating to 
the manner in which, and the purpose for which, any proceeds of the cess levied under section 9 which 
may have been handed over to it, shall be expanded. 

1[23.  Decision  of  Central  Government final  respecting  certain  matters.—If,  for  the  purposes  of 

this Act, any question arises as to whether— 

(a) there has been a substantial expansion of an industrial undertaking, or 

(b) an industrial undertaking is producing or manufacturing any new article, 

the decision of the Central Government thereon shall be final.] 

24. Penalties.—2[(1) If any person contravenes or attempts to contravene or abets the contravention 

of— 

(i)  the  provisions  of  sub-section  (1)3[or  sub-section  (4)]  of  section  10  or  of  sub-section  (1)  of 
section 11 or of section 11A or of sub-section (1) of section 134[or of5[sub-sections (2), (2A), (2D), 
(2F) and (2G) of section 29B]], or 

(ii) any direction issued under section 16 or sub-section (3) of section 18B, or 

(iii) any order made under section 18G, or 

(iv) any rule the contravention of which is made punishable under this section, 

he  shall  be  punishable  with  imprisonment  which  may  extend  to  six  months,  or  with  fine  which  may 
extend  to  five  thousand  rupees,  or  with  both,  and,  in  the  case  of  a  continuing  contravention,  with  an 
additional fine which may extend to five hundred rupees for every day during which such contravention 
continues after conviction for the first such contravention.] 

(2) If the person contravening any of the said provisions is a company, every person who at the time 
the offence was committed was in charge of, and was responsible to, the company for the conduct of the 
business of the company, as well as the company, shall be deemed to be guilty of the contravention and 
shall be liable to be proceeded against and punished accordingly: 

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

1. Subs. by Act 26 of 1953, s. 14, for section 23 (w.e.f. 1-10-1953).  
2. Subs. by s. 15, ibid., for sub-section (1) (w.e.f. 1-10-1953).  
3. Ins. by Act 67 of 1973, s. 3 (w.e.f. 7-2-1974).  
4. Ins. by Act 71 of 1956, s. 4 (w.e.f. 1-3-1957). 
5. Subs. by Act 4 of 1984, s. 4, for “sub-section (2) of section 29B” (w.e.f. 12-1-1984). 

24 

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

Explanation.—For the purposes of this section,— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

(b) “director” in relation to a firm means a partner in the firm. 

1[24A. Penalty for false statements.—If any person,— 

(a) when required by this Act or by any order under this Act to make any statement or furnish any 
information,  makes  any  statement  or  furnishes  any  information  which  is  false  in  any  material 
particular and which he knows or has reasonable cause to believe to be false or does not believe to be 
true; or 

(b)  makes  any  such  statement  as  aforesaid  in  any  book,  account,  record,  declaration,  return  or 

other document which he is required by any order made under this Act to maintain or furnish; 

he  shall  be  punishable  with  imprisonment  which  may  extend  to  three  months,  or  with  fine  which  may 
extend to two thousand rupees, or with both.] 

2[25.  Delegation  of  powers.—(1)  The  Central  Government  may,  by  notified  order,  direct  that  any 
power exercisable by it under this Act (other than the power given to it by  section 163[,18A, 18AA and 
18FA]) shall, in relation to such matters and subject to such conditions, if any, as may be specified in the 
direction,  be  exercisable  also  by  such  officer  or  authority  (including  in  the  said  expressions  any 
Development Council, State Government or officer or authority subordinate to the Central Government) 
as may be specified in the direction. 

(2) Any power exercisable by a State Government by virtue of a direction under sub-section (1) may, 
unless otherwise provided in such direction, be exercised also by such officer or authority subordinate to 
that State Government as it may, by notified order, specify in this behalf. 

 26.  Power  to  issue  directions.—The  Central  Government  may  give  directions  to  any  State 
Government as to the carrying into execution in the State of any of the provisions of this Act or of any 
order or direction made thereunder. 

27. Cognizance of offences.—No court shall take cognizance of any offence punishable under this 
Act except on a report in writing of the facts constituting such offence made by a person who is a public 
servant as defined in section 21 of the Indian Penal Code (45 of 1860). 

28. Burden of proof in certain cases.—Where any person is prosecuted for contravening any order 
made under section 18G which prohibits him from doing an act or being in possession of a thing without 
lawful authority or without a permit, licence or other document, the burden of proving that he has such 
authority, permit, licence or other document shall be on him. 

29. Jurisdiction of courts.—(1) Subject to the provisions of sub-section (2), no court inferior to that 
of  a  Presidency  magistrate  or  a  magistrate  of  the  first  class  shall  try  any  offence  punishable  under  this 
Act. 

(2) Any magistrate or bench of magistrates empowered, for the time being, to try in a summary way 
the  offence  specified  in  sub-section  (1)  of  section  260  of  the  Code  of  Criminal  Procedure,  1898  (5  of 
1898),may,  on  application  in  this  behalf  being  made  by  the  prosecution,  try  in  accordance  with  the 

1. Ins. by Act 26 of 1953, s. 16 (w.e.f. 1-10-1953).  
2. Subs. by s. 17, ibid., for sections 25 to 29 (w.e.f. 1-10-1953).  
3. Subs. by Act 72 of 1971, s. 7, for “and 18A” (w.e.f. 1-11-1971).  

25 

                                                           
provisions  contained  in  sections  262  to  265  of  the  said  Code  any  offence  which  consists  of  a 
contravention of an order made under section 8G. 

29A. Special provision regarding fines.—Notwithstanding anything contained in  section 32 of the 
Code of Criminal Procedure, 1898 (5 of 1898), it shall be lawful for any magistrate of the first class and 
for  any  Presidency  magistrate  to  pass  a  sentence  of  fine  exceeding  one  thousand  rupees  on  any  person 
convicted of any offence under this Act. 

29B.  Power  to  exempt  in  special  cases.—1[(1)]  If  the  Central  Government  is  of  opinion,  having 
regard to the smallness of the number of workers employed or to the amount invested in any industrial 
undertaking  or  to  the  desirability  of  encouraging  small  undertakings  generally  or  to  the  stage  of 
development of any scheduled industry, that it would not be in public interest to apply all or any of the 
provisions  of  this  Act  thereto,  it  may,  by  notification  in  the  Official  Gazette,  exempt,  subject  to  such 
conditions as it may think fit to impose, any industrial undertaking or class of industrial undertakings or 
any  scheduled  industry  or  class  of  scheduled  industries  as  it  may  specify  in  the  notification  from  the 
operation of all or any of the provisions of this Act or of any rule or order made thereunder. 

2[(2) Where any notification under sub-section (1) granting any exemption is cancelled, no owner of 
any industrial undertaking to which the provisions of section 10, section 11, section 11A or clause (d) of 
sub-section (1) of section 13 would have applied, if the notification under sub-section (1) had not been 
issued, shall carry on the business of the undertaking after the expiry of such period as may be specified 
in the notification cancelling the exemption except under and in accordance with a licence issued in this 
behalf by the Central Government and, in the case of a State Government, except under and in accordance 
with the previous permission of the Central Government. 

3[2A)  In  particular,  and  without  prejudice  to the  generality  of  the  provisions  of sub-section (1), the 
Central  Government  may,  if  it  is  satisfied,  after  considering  the  recommendations  made  to  it  by  the 
Advisory Committee constituted under sub-section (2B), that it is necessary so to do for the development 
and expansion of ancillary, or small scale, industrial undertakings, by notified order, direct that any article 
or class of articles specified in the First Schedule shall, on and from such date as may be specified in the 
notified order (hereafter in this section referred to as the “date of reservation”), be reserved for exclusive 
production by the ancillary, or small scale, industrial undertakings (hereafter in this section referred to as 
“reserved article”). 

(2B) The Central Government shall, with a view to determining the nature of any article or class of 
articles  that  may  be  reserved  for  production  by  the  ancillary,  or  small  scale,  industrial  undertakings, 
constitute an Advisory Committee consisting of such persons as have, in the opinion of that Government, 
the necessary expertise to give advice on the matter. 

(2C)  The  Advisory  Committee  shall,  after  considering  the  following  matters,  communicate  its 

recommendations to the Central Government, namely:— 

(a)  the  nature  of  any  article  or  class  of  articles  which  may  be  produced  economically  by  the 

ancillary, or small scale, industrial undertakings; 

(b) the level of employment likely to be generated by the production of such article or class of 

articles by the ancillary, or small scale, industrial undertakings; 

(c) the possibility of encouraging and diffusing entrepreneurship in industry; 

(d) the prevention of concentration of economic power to the common detriment; and 

(e) such other matters as the Advisory Committee may think fit. 

(2D) The production of any reserved article or class of reserved articles by any industrial undertaking 
(not  being  an  ancillary,  or  small  scale,  industrial  undertaking)  which,  on  the  date  of  reservation,  is 
engaged  in,  or  has  taken  effective  steps  for,  the  production  of  any  reserved  article  or  class  of  reserved 

1. Section 29B re-numbered as sub-section (1) thereof by Act 71 of 1956, s. 5 (w.e.f. 1-3-1957). 
2. Ins. by Act 71 of 1956, s. 5 (w.e.f. 1-3-1957).  
3. Ins. by Act 4 of 1984, s. 5 (w.e.f. 12-1-1984). 

26 

                                                           
articles, shall, after the commencement of the Industries (Development and Regulation) Amendment Act, 
1984 (4 of 1984), or, as the case may be, the date of reservation, whichever is later, be subject to such 
conditions as the Central Government may, by notified order, specify. 

(2E) While specifying any condition under sub-section (2D), the Central Government may take into 
consideration  the  level  of  production  of  any  reserved  article  or  class  of  reserved  articles  achieved, 
immediately before the date of reservation, by the industrial undertaking referred to in sub-section (2D), 
and such other factors as may be relevant. 

(2F) Every person or authority, not being the Central Government, who, or which, is registered under 
section  10  or  to  whom,  or  to  which,  a  licence  has  been  issued  or  permission  has  been  granted  under 
section  11  for  the  production  of  any  article  or  class  of  articles  which  has,  or  have,  been  subsequently 
reserved  for  the  ancillary,  or  small  scale,  industrial  undertakings,  shall  produce,  such  registration 
certificate, licence or permission, as the case may be, within such period as the Central Government may, 
by notified order, specify in this behalf, and the Central Government may enter therein all or any of the 
conditions  specified  by  it  under  sub-section  (2D),  including  the  productive  capacity  of  the  industrial 
undertakings and other prescribed particulars. 

(2G)  The  owner  of  every  industrial  undertaking  (not  being  an  ancillary  or  small  scale,  industrial 
undertaking)  which,  immediately  before  the  commencement  of  the  Industries  (Development  and 
Regulation) Amendment Act, 1984 (4 of 1984), or the date of reservation, whichever is later,— 

(a)  was  engaged  in  the  production  of  any  article  or  class  of  articles,  which  has,  or  have,  been 

reserved for the ancillary, or small scale, industrial undertakings, or 

(b) had before such commencement or before the date of such reservation, as the case may be, 
taken  effective  steps  for  commencing  the  production  of  such  reserved  article  or  class  of  reserved 
articles, 

without  being  registered  under  section  10  or  in  respect  of  which  a  licence  or  permission  has  not  been 
issued  under  section  11,  shall  refrain  from  the  production  of  such  reserved  article  or  class  of  reserved 
articles, on and from the date of expiry of three months from such commencement or from the date of 
such reservation, whichever is later. 

(2H)  Every  notified  order  made  under  sub-section  (2A)  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  notified  order  or  both  Houses  agree  that  the  notified  order should  not be  made,  the 
notified order 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 notified order.] 

(3) The provisions of this Act shall apply, so far as may be, in relation to the issue of a licence or 
permission to any industrial undertaking referred to in sub-section (2) as they apply in relation to the issue 
of a licence or permission to a new industrial undertaking.] 

29C. Protection of action taken under the Act.—(1) No suit, prosecution or other legal proceeding 
shall lie against any person for anything which is in good faith done or intended to be done under this Act 
or any rule or order made thereunder. 

(2) No suit or other legal proceeding shall lie against the Government for any damage caused or likely 
to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or 
any rule or order made thereunder.] 

 1[29D. Debts incurred by the authorised person to have priority.—Every debt arising out of any 
loan  obtained  by  the  authorised  person  for  carrying  on  the  management  of,  or  exercising  function  of 
control in relation to, an industrial undertaking or part thereof, the management of which has been taken 
over under section 18A or section 18AA or section 18FA,— 

(a)  shall  have  priority  over  all  other  debts,  whether  secured  or  unsecured,  incurred  before  the 

management of such industrial undertaking was taken over; 

1. Ins. by Act 72 of 1971, s. 8 (w.e.f. 1-11-1971).  

27 

                                                           
(b) shall be a preferential debt within the meaning of section 530 of the Companies Act, 1956 (1 

of 1956), 

and such debts shall rank equally among themselves and be paid in full out of the assets of the industrial 
undertakings  unless  such  assets  are  insufficient  to  meet  them,  in  which  case  they  shall  abate  in  equal 
proportions.] 

1[29E.  Validation.—Notwithstanding  anything  contained  in  any  judgment,  decree  or  order  of  any 
court, tribunal or other authority, any power exercised, or action taken or done or purported to have been 
taken or done, by the Central Government or, as the case may be, the State Government, shall be deemed 
to be, and shall always deemed to have been, for all purposes, as validly taken or done or omitted to be 
done, as if the amendment  made to the First Schedule by the  Industries (Development and Regulation) 
Amendment Act, 2016 had been in force at all material times and no suit or claim or other proceedings 
shall be instituted, maintained or continued in any court, tribunal or other authority as such.] 

30. Power to make rules.—(1) The Central Government  may, subject to the condition of 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 constitution of the Advisory Council and Development Councils, the term of office and 
other  conditions  of  service  of,  the  procedure  to  be  followed  by,  and  the  manner  of  filling  casual 
vacancies among members of the Advisory Council or a Development Council; 

(b) the form of the statement of account to be furnished by a Development Council; 

(c) the intervals at which, the time within which, and the manner in which the cess leviable under 

section 9 shall be payable and the rebate for the prompt payment of such cess; 

(d) the expenses which a Development Council may  meet from the proceeds of the cess levied 

under section 9 which may have been handed over to it; 

(e)  the  appointment  by  or  with  the  approval  of  the  Central  Government  of  any  officers  of  a 

Development Council; 

(f) the facilities to be provided by any industrial undertaking for the training of technicians and 

labour; 

(g) the collection of any information or statistics in respect of any scheduled industry; 

(h) the manner in which industrial undertakings may be registered under section 10 and the levy 

of a fee therefor; 

(i)  the  procedure  for  the  grant  or  issue  of  licences  and  permissions  under2[section  11,                     

section 11A3[section 13 or section 29B]], the time within which such licences or permissions shall be 
granted or issued including, in particular, the publication of notices calling for applications and the 
holding of such public inquiry in relation thereto as may be necessary in the circumstances; 

(j) the fees to be levied in respect of licences and permissions issued under this Act; 

(k)  the  matters  which  may  be  taken  into  account  in  the  granting  or  issuing  of  licences  and 
permissions,  including  in  particular,  the  previous  consultation  by  the  Central  Government  with  the 
Advisory  Council  or  any  Development  Council  or  both  in  regard  to  the  grant  or  issue  of  any  such 
licences or permission; 

(l) the procedure to be followed in making any investigation under this Act; 

(m) the conditions which may be included in any licences and permissions; 

(n) the conditions on which licences and permissions may be varied or amended under section 12; 

(o) the maintenance of books, accounts and records relating to an industrial undertaking; 

1. Ins. by Act 27 of 2016, s. 2 (w.e.f. 14-5-2016).  
2. Subs. by Act 26 of 1953, s. 18, for “section 11 or section 13” (w.e.f. 1-10-1953).  
3. Subs. by Act 71 of 1956, s. 6, for “or section 13” (w.e.f. 1-3-1957).  

28 

                                                           
(p) the submission of special or periodical returns relating to an industrial undertaking by persons 
having the control of, or employed in connection with, such undertaking, and the forms in which, and 
the authorities to which, such returns and reports shall be submitted; 

1[(pp)  any  matter  which  is  to  be  or  may  be  prescribed  for  giving  effect  to  the  provisions  of   

Chapter IIIAA or Chapter IIIAC;] 

(q) any other matter which is to be or may be prescribed under this Act. 

(3)  Any  rule  made  under  this  section  may  provide  that  a  contravention  thereof  shall  be  punishable 

under section 24. 

2[(4) Every rule made under this section 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. Application of other laws not barred.—The provisions of this Act shall be in addition to and 
not, save as otherwise expressly provided in this Act, in derogation of any other Central Act for the time 
being in force, relating to any of the scheduled industries. 

32.[Amendment of section 2, Act 14 of 1947.]—Rep. by the Repealing and Amending Act 1957 (36 of 

1957), s. 2 and the First Schedule (w.e.f. 17-9-1957). 

1. Ins. by Act 72 of 1971, s. 9 (w.e.f. 1-11-1971).  
2. Subs. by Act 4 of 1986, s. 2 and the Schedule, for sub-section (4) (w.e.f. 15-5-1986). 

29 

                                                           
1[THE FIRST SCHEDULE 

[See sections 2 and 3(i)] 

Any industry engaged in the manufacture or production of any of the articles mentioned under each of 

the following headings or sub-headings, namely:— 

1. METALLURGICAL INDUSTRIES: 

A. Ferrous: 

(1) Iron and steel (Metal). 

(2) Ferro-alloys. 

(3) Iron and Steel castings and forgings. 

(4) Iron and Steel structurals. 

(5) Iron and Steel pipes. 

(6) Special steels 

(7) Other products of iron and steel. 

B. Non-ferrous: 

2[(1) Precious metals, including gold and silver, and their alloys; 

(1A) Other non-ferrous metals and their alloys.] 

(2) Semi-manufactures and manufactures. 

2. FUELS: 

(1) Coal, lignite, coke and their derivatives. 

(2) Mineral oil (crude oil), motor and aviation spirit, diesel oil, kerosene oil, fuel oil, diverse 

hydrocarbon oils and their blends including synthetic fuels, lubricating oils and the like. 

(3) Fuel gases—(coal gas, natural gas and the like). 

3. BOILERS AND STEAM GENERATING PLANTS: 

Boilers and steam generating plants. 

4. PRIME MOVERS (OTHER THAN ELECTRICAL GENERATORS): 

(1) Steam engines and turbines. 

(2) Internal combustion engines. 

5. ELECTRICAL EQUIPMENT: 

(1)  Equipment  for  generation,  transmission  and  distribution  of  electricity  including 

transformers. 

(2) Electrical motors. 

(3) Electrical fans. 

(4) Electrical lamps. 

(5) Electrical furnaces. 

(6) Electrical cables and wires. 

(7) X-ray equipment. 

1. Subs. by Act 71 of 1956, s. 7, for the First Schedule (w.e.f. 1-3-1957).  
2. Subs. by Act 37 of 1962, s. 2, for item (1) (w.e.f. 16-9-1962). 

30 

                                                           
(8) Electronic equipment. 

(9) Household appliances such as electric irons, heaters and the like. 

(10) Storage batteries. 

(11) Dry cells. 

6. TELECOMMUNICATIONS: 

(1) Telephones. 

(2) Telegraph equipment. 

(3) Wireless communication apparatus. 

(4) Radio receivers, including amplifying and public address equipment. 

(5) Television sets. 

(6) Teleprinters. 

7. TRANSPORTATION: 

(1) Aircraft. 

(2) Ships and other vessels drawn by power. 

(3) Railway locomotives. 

(4) Railway rolling stock. 

(5) Automobiles (motor cars, buses, trucks, motor cycles, scooters and the like). 

(6) Bicycles. 

(7) Others, such as fork lift trucks and the like. 

8. INDUSTRIAL MACHINERY: 

A. Major items of specialised equipment used in specific industries:— 

(1) Textile machinery (such as spinning frames, carding machines, power looms and the 

like) including textile accessories. 

(2) Jute machinery. 

(3) Rayon machinery. 

(4) Sugar machinery. 

(5) Tea machinery. 

(6) Mining machinery. 

(7) Metallurgical machinery. 

(8) Cement machinery. 

(9) Chemical machinery. 

(10) Pharmaceuticals machinery. 

(11) Paper machinery. 

B. General items of machinery used in several industries, such as the equipment required for 

various ‘unit processes’: 

(1) Size reduction equipment—crushers, ball mills and the like. 

(2) Conveying equipment—bucket elevators, skip hoist, cranes, derricks and the like. 

(3) Size separation units—screens, classifiers and the like. 

31 

(4) Mixers and reactors—kneading mills, turbo mixers and the like. 

(5) Filtration equipment—filter presses, rotary filters and the like. 

(6) Centrifugal machines. 

(7) Evaporators. 

(8) Distillation equipment. 

(9) Crystallisers. 

(10) Driers. 

(11) Power driven pumps—reciprocating, centrifugal and the like. 

(12) Air and gas compressors and vacuum pipes (excluding electrical furnaces). 

(13) Refrigeration plants for industrial use. 

(14) Fire-fighting equipment and appliances including fire engines. 

C. Other items of Industrial Machinery: 

(1) Ball, roller and tapered bearings. 

(2) Speed reduction units. 

(3) Grinding wheels and abrasives. 

9. MACHINE TOOLS: 

Machine Tools. 

10. AGRICULTURAL MACHINERY: 

(1) Tractors, harvesters and the like. 

(2) Agricultural implements. 

11. EARTH-MOVING MACHINERY: 

Bulldozers,  dumpers,  scrapers,  loaders,  shovels,  drag  lines,  bucket  wheel  excavators,  road 

rollers and the like. 

12. MISCELLANEOUS MECHANICAL AND ENGINEERING INDUSTRIES: 

(1) Plastic moulded goods. 

(2) Hand tools, small tools and the like. 

(3) Razor blades. 

1[(4) Pressure Cookers. 

(5) Cutlery. 

(6) Steel furniture.] 

13. COMMERCIAL, OFFICE AND HOUSEHOLD EQUIPMENT: 

(1) Typewriters. 

(2) Calculating machines. 

(3) Air conditioners and refrigerators. 

(4) Vacuum cleaners. 

(5) Sewing and knitting machines. 

(6) Hurricane lanterns. 

1. Ins. by Act 17 of 1979, s. 3 (w.e.f. 30-12-1978).  

32 

                                                           
14. MEDICAL AND SURGICAL APPLIANCES: 

Surgical instruments—sterilisers, incubators and the like. 

15. INDUSTRIAL INSTRUMENTS: 

(1) Water meters, steam meters, electricity meters and the like. 

(2)  Indicating,  recording  and  regulating  devices  for  pressure,  temperature,  rate  of  flow, 

weights, levels and the like. 

(3) Weighing machines. 

16. SCIENTIFIC INSTRUMENTS: 

Scientific instruments. 

17. MATHEMATICAL, SURVEYING AND DRAWING INSTRUMENTS: 

Mathematical, surveying and drawing instruments. 

18. FERTILISERS: 

(1) Inorganic fertilisers. 

(2) Organic fertilisers. 

(3) Mixed fertilisers. 

19. CHEMICALS (OTHER THAN FERTILISERS): 

(1) Inorganic heavy chemicals. 

(2) Organic heavy chemicals. 

(3) Fine chemicals including photographic chemicals. 

(4) Synthetic resins and plastics. 

(5) Paints, varnishes and enamels. 

(6) Synthetic rubbers. 

(7) Man-made fibers including regenerated cellulose-rayon, nylon and the like. 

(8) Coke oven by-products. 

(9) Coal tar distillation products like naphthalene, anthracene and the like. 

(10) Explosives including gunpowder and safety fuses. 

(11) Insecticides, fungicides, weedicides and the like. 

(12) Textile auxiliaries. 

(13) Sizing materials including starch. 

(14) Miscellaneous chemicals. 

20. PHOTOGRAPHIC RAW FILM AND PAPER: 

(1) Cinema film. 

(2) Photographic amateur film. 

(3) Photographic printing paper. 

21. DYE-STUFFS: 

Dye-stuffs. 

22. DRUGS AND PHARMACEUTICALS: 

Drugs and Pharmaceuticals. 

33 

23. TEXTILES (INCLUDING THOSE DYED, PRINTED OR OTHERWISE PROCESSED): 

(1) Made wholly or in part of cotton, including cotton yarn, hosiery and rope, 

(2) Made wholly or in part of jute, including jute twine and rope. 

(3) Made wholly or in part of wool, including wool tops, woollen yarn, hosiery, carpets and 

druggets; 

(4) Made wholly or in part of silk, including silk yarn and hosiery; 

(5)  Made  wholly  or  in  part  of  synthetic,  artificial  (man-made)  fibers,  including  yarn  and 

hosiery of such fibers. 

24. PAPER AND PULP INCLUDING PAPER PRODUCTS: 

(1) Paper—writing, printing and wrapping. 

(2) Newsprint. 

(3) Paper board and straw board. 

(4) Paper for packaging (corrugated paper, Kraft paper), bags, paper containers and the like. 

(5) Pulp—wood pulp, mechanical, chemical, including dissolving pulp. 

25. SUGAR: 

Sugar. 

1[26. FERMENTATION INDUSTRIES (OTHER THAN POTABLE ALCOHOL):] 

(1) Alcohol. 

(2) Other products of fermentation industries 

27. FOOD PROCESSING INDUSTRIES: 

(1) Canned fruits and fruit products. 

(2) Milk foods. 

(3) Malted foods. 

(4) Flour. 

(5) Other processed foods. 

28. VEGETABLE OILS AND VANASPATI: 

(1) Vegetable oils, including solvent extracted oils. 

(2) Vanaspati. 

29. SOAPS, COSMETICS AND TOILET PREPARATIONS: 

(1) Soaps. 

(2) Glycerine. 

(3) Cosmetics. 

(4) Perfumery 

(5) Toilet preparations. 

30. RUBBER GOODS: 

(1) Tyres and tubes. 

(2) Surgical and medicinal products including prophylactics. 

(3) Footwear. 

(4) Other rubber goods. 

1. Subs. by Act 27 of 2016, s. 3, for “26. FERMENTATION INDUSTRIES:” (w.e.f. 14-5-2016). 

34 

                                                           
31. LEATHER, LEATHER GOODS AND PICKERS: 

Leather, leather goods and pickers. 

32. GLUE AND GELATIN: 

Glue and gelatin. 

33. GLASS: 

(1) Hollow ware. 

(2) Sheet and plate glass. 

(3) Optical glass. 

(4) Glass wool. 

(5) Laboratory ware. 

(6) Miscellaneous ware. 

34. CERAMICS: 

(1) Fire bricks. 

(2) Refractories. 

(3) Furnace lining bricks—acidic, basic and neutral. 

(4) Chinaware and pottery. 

(5) Sanitary ware. 

(6) Insulators. 

(7) Tiles. 

1[8) Graphite Crucibles.] 

35. CEMENT AND GYPSUM PRODUCTS: 

(1) Portland cement. 

(2) Asbestos cement. 

(3) Insulating boards. 

(4) Gypsum boards, wall boards and the like. 

36. TIMBER PRODUCTS: 

(1) Plywood. 

(2) Hardboard, including fiber-board, chip-board and the like. 

(3) Matches. 

(4) Miscellaneous (furniture components, bobbins, shutters and the like). 

37. DEFENCE INDUSTRIES: 

Arms and ammunition. 

38. MISCELLANEOUS INDUSTRIES: 

2[(1)] Cigarettes. 

3[(2) Linoleum, whether felt based or jute based.] 

1. Ins. by Act 17 of 1979, s. 3 (w.e.f. 30-12-1978).  
2. Item “Cigarettes” re-numbered as item (1) thereof by Act 67 of 1973, s. 4 (w.e.f. 7-2-1974).  
3. Ins. by s. 4, ibid. (w.e.f. 7-2-1974). 

35 

                                                           
1[(3) Zip fasteners (metallic and non-metallic). 

(4) Oil Stoves. 

(5) Printing, including litho printing industry.] 

Explanation 1.—The articles specified under each of the headings Nos. 3, 4, 5, 6, 7, 8, 10, 11 and 

13 shall include their component parts and accessories. 

Explanation 2.—The articles specified under each of the headings Nos. 18, 19, 21, and 22 shall 

include the intermediates required for their manufacture.] 

1. Ins. by Act 17 of 1979, s. 3 (w.e.f. 30-12-1978).  

36 

                                                           
THE SECOND SCHEDULE 

[See section 6(4)] 

Functions which may be assigned to Development Councils:— 

(1)  Recommending  targets  for  production,  co-ordinating  production  programmes  and  reviewing 

progress from time to time. 

(2)  Suggesting  norms  of  efficiency  with  a  view  to  eliminating  waste,  obtaining  maximum 

production, improving quality and reducing costs. 

(3)  Recommending  measures  for  securing  the fuller  utilisation  of the  installed  capacity  and  for 

improving the working of the industry, particularly of the less efficient units. 

(4)  Promoting  arrangements  for  better  marketing  and  helping  in  the  devising  of  a  system  of 

distribution and sale of the produce of the industry which would be satisfactory to the consumer. 

(5) Promoting standardisation of products. 

(6) Assisting in the distribution of controlled materials and promoting arrangements for obtaining 

materials for the industry. 

(7)  Promoting  or  undertaking  inquiry  as  to  materials  and  equipment  and  as  to  methods  of 
production,  management  and  labour  utilisation,  including  the  discovery  and  development  of  new 
materials, equipment and methods and of improvements in those already in use, the assessment of the 
advantages of different alternatives and the conduct of experimental establishments and of tests on a 
commercial scale. 

(8) Promoting the training of persons engaged or proposing engagement in the industry and their 

education in technical or artistic subjects relevant thereto. 

(9) Promoting the retaining in alternative occupations of personnel engaged in or retrenched from 

the industry. 

(10)  Promoting  or  undertaking  scientific  and  industrial research, research into matters  affecting 
industrial psychology and research into matters relating to production and to the consumption or use 
of goods and services supplied by the industry. 

(11)  Promoting,  improvements  and  standardisation  of  accounting  and  costing  methods  and 

practice. 

(12) Promoting or undertaking the collection and formation of statistics. 

(13) Investigating possibilities of decentralising stages and processes of production with a view to 

encouraging the growth of allied small scale and cottage industries. 

(14)  Promoting  the  adoption  of  measures  for  increasing  the  productivity  of  labour,  including 
measures  for  securing  safer  and  better  working  conditions  and  the  provision  and  improvement  of 
amenities and incentives for workers. 

(15) Advising on any matters relating to the industry (other than remuneration and conditions of 
employment)  as to  which  the  Central  Government  may  request the  Development  Council to  advise 
and undertaking inquiries for the purpose of enabling the Development Council so to advise, and 

(16) Undertaking arrangements for making available to the industry information obtained and for 
advising  on  matters  with  which  the  Development  Councils  are  concerned  in  the  exercise  of  any  of 
their functions. 

37 

1[THE THIRD SCHEDULE 

(See section 18-FB) 

1. The Industrial Employment (Standing Orders) Act, 1946 (20 of 1946). 

2. The Industrial Disputes Act, 1947 (14 of 1947). 

3. The Minimum Wages Act, 1948 (11 of 1948).] 

1. Ins. by Act 72 of 1971, s. 10 (w.e.f. 1-11-1971).  

38 

                                                           
