Bare Acts Page 117

Immoral Traffic Prevention Act

November 30, 2014

Chapter I: PRELIMINARY

Section 1. Short title, extent and commencement.

(1) This Act may be called The Immoral Traffic (Prevention) Act, 1956.

(2) It extends to the whole of India.

(3) This section shall come into force at once; and the remaining provisions of this come into force on such date as the Central Government may, by notification in the official Gazette appoint.

Section 2. Definitions.

In this Act, unless the context otherwise requires-

(a) “Brother” includes any house, room, conveyance or place, or any portion of any house, room, conveyance or place, which is used for purposes of sexual exploitation or abuse for the gain of another person or for the mutual gain of two or more prostitutes;

(aa) “Child’ means a person who has not completed the age of sixteen years;

(b) “Corrective institution” means an institution, by whatever name called (being an institution established or licenced as such under Section 21), in which persons, who are in need of correction, may be detained under this Act, and includes a shelter where under trials may be kept in pursuance of this Act;

(c) “Magistrate” means a Magistrate specified in the second column of the Schedule as being competent to exercise the powers conferred by the section in which the expression occurs and which is specified in the first column of the Schedule;

(ca) “Major” means a person who has completed the age of eighteen years;

(cb) “Minor” means a person who has completed the age of sixteen years but has not completed the age of eighteen years;

(d) “Prescribed’ means prescribed by rules made under this Act;

(e) ¹[* * * * * *].

(f) “Prostitution” means the sexual exploitation or abuse of persons for commercial purposes, and the expression “prostitute” shall be construed accordingly;

(g) “Protective home” means an institution, by whatever name called (being an institution established or licenced as such under Section 21), in which persons who are in need of care and protection, may be kept under this Act and where appropriate technically qualified persons, equipments and other facilities have been provided but does not include, -

(i) A shelter where undertrials may be kept in pursuance of this Act, or

(ii) A corrective institution;

(h) “Public place” means any place intended for use by, or accessible to, the public and includes any public conveyance;

(i) “Special police officer” means a police officer appointed by or on behalf of the State Government to be in charge of police duties within a specified area for the purpose of this Act;

(j) “Trafficking police officer” means a police officer appointed by the Central Government under sub-section (4) of Section 13.

1. Sub-section (e) emitted by Act No 46 of 1978.

Section 2-A. Rule of construction regarding enactments not extending to Jammu and Kashmir.

Any reference in this Act to a law which is not in force in the State of Jammu and Kashmir shall in relation to that State, be construed as a reference to the corresponding law, if any, in force in that State.

Section 3. Punishment for keeping a brothel or allowing premises to be used as a brothel.

(1) Any person who keeps or manages, or acts or assists in the keeping or management of, a brothel, shall be punishable on first conviction with rigorous imprisonment for a term of not less than one year and not more than three years and also with fine which may extend to two thousand rupees and in the event of a second or subsequent to conviction with rigorous imprisonment for a term of not less than two years and not more than five years and also with fine which may extend to two thousand rupees.

(2) A any person who, -

(a) Being the tenant, lessee, occupier or person in charge of any premises, uses, or knowingly allows any other person to use, such premises or any part thereof as a brothel, or

(b) Being the owner, lessor or landlord of any premises or the agent of such owner, lessor or landlord, lets the same or any part thereof with the knowledge that the same or any part thereof is intended to be used as a brothel, or is wilfully a party to the use of such premises or any part thereof as a brothel, shall be punishable on first conviction with imprisonment for a term which may extend to two years and with fine which fine which may extend to two thousand rupees and in the event of a second or subsequent conviction, with rigorous imprisonment for a term which may extend to five years and also with fine.

(2-A) For the purposes of sub-section (2), it shall be presumed, until the contrary is proved, that any person referred to in clause (a) or clause (b) of that subsection, is knowingly allowing the premises or any part thereof to be used as a brothel or, as the case may be, has knowledge that the premises or any part thereof are being used as a brothel, if, -

(a) A report is published in a newspaper having circulation in the area in which such person resides to the effect that the premises or any part thereof have been found to be used for prostitution as a result of a search made under this Act; or

(b) A copy of the list of all things found during the search referred to in clause (a) is given to such person.

(3) Notwithstanding any thing contained in any other law for the time being in force, on conviction of any person referred to in clause (a) or clause (d) of sub-section (2) of any offence under that sub-section in respect of any premises or any part thereof, any lease or agreement under which such premises have been leased out or held or occupied at the time of the commission of the offence, shall become void and inoperative with effect from the date of the said conviction.

Section 4. Punishment for living on the earnings of prostitution.

(1) Any person over the age of eighteen years who knowingly lives, wholly or in part, on the earnings of the prostitution of any other person shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to one thousand rupees, or with both, and where such earnings relate to the prostitution of a child or a minor, shall be punishable with imprisonment for a term of not less than seven years and not more than ten years.

(2) Where any person over the age of eighteen years is proved, -

(a) To be living with, or to be habitually in the company of, a prostitute; or

(b) To have exercised control, direction or influence over the movements of a prostitute in such a manner as to show that such person is aiding abetting or compelling her prostitution; or

(c) To be acting as a tout or pimp on behalf of a prostitute, it shall be presumed, until the contrary is proved, that such person is knowingly living on the earnings of prostitution of another person within the meaning of sub-section (1).

Section 5. Procuring, inducing or taking person for the sake of prostitution.

(1) Any person who-

(a) Procures or attempts to procure a person whether with or without his/her consent, for the purpose of prostitution; or

(b) Induces a person to go from any place, with the intent that he/she may for the purpose of prostitution become the inmate of, or frequent, a brothel; or

(c) Takes or attempts to take a person or causes a person to be taken, from one place to another with a view to his/her carrying on, or being brought up to carry on prostitution; or

(d) Causes or induces a person to carry on prostitution; shall be punishable on conviction with rigorous imprisonment for a term of not less than three years and not more than seven years and also with fine which may extend to two thousand rupees, and if any offence under this sub-section is committed against the will of any person, the punishment of imprisonment for a term of seven years shall extend to imprisonment for a term of fourteen years:

Provided that if the person in respect of whom an offence committed under this sub-section, -

(i) Is a child, the punishment provided under this sub-section shall extend to rigorous imprisonment for a term of not less than seven years but may extend to life; and

(ii) Is a minor; the punishment provided under this sub-section shall extend to rigorous imprisonment for a term of not less than seven years and not more than fourteen years.

¹(2) [* * * * * *]

(3) An offence under, this section shall he triable, -

(a) In the place from which a person is procured, induced to go, taken or caused to be taken or from which an attempt to procure or taken such persons made; or

(b) In the place to which she may have gone as a result of the inducement or to which he/she is taken or caused to be taken or an attempt to take him/her is made.

1. Sub-sec. (2) emitted by Act No. 44 of 1986.

Section 6. Detaining a person in premises where prostitution is carried on.

(1) Any person who detains any other person, whether with or without his consent,-

(a) In any brothel, or

(b) In or upon any premises with intent that such person may have sexual intercourse with a person, who is not the spouse of such person, shall he punishable on conviction, with imprisonment of either description for a term which shall not be less than seven years but which may be for life or for a term which may extend to ten years and shall also be liable to fine:

Provided that the court may for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term, which may be less than seven years.

(2) Where any person is found with a child in a brothel, it shall be presumed, unless the contrary is proved, that he has committed an offence under sub-section (1).

(2-A) Where a child or minor found in a brothel, is, on medical examination, detected to have been sexually abused, it shall be presumed unless the contrary is proved, that the child or minor has been detained for purposes of prostitution or, as the case may be, has been sexually exploited for commercial purposes.

(3) A person shall be presumed to detail a person in a brothel or in upon any premises for the purpose of sexual intercourse with a man other than her lawful husband, if such person, with intent to compel or induce her to remain there,

(a) Withholds from her any jewellery, wearing apparel, money or other property belonging to her, or

(b) Threatens her with legal proceedings if she takes away with her any jewellery, wearing apparel, money or other property lent or supplied to her by or by the direction of such person.

(4) Notwithstanding any law to the contrary, no suit, prosecution or other legal proceeding shall lie against such woman or girl at the instance of the person by whom she has been detained, for the recovery of any jewellery, wearing apparel or other property alleged to have been lent or supplied to or for such woman or girl or to have been pledged by such woman or girl or for the recovery of any money alleged to be payable by such woman or girl.

Section 7. Prostitution in or in the vicinity of public place.

(1) Any person who carries on prostitution and the person with whom such prostitution is carried on, in any premises:

(a) Which are within the area or areas, notified under subjection (3), or

(b) Which are within a distance of two hundred meters of any place of public religious worship, educational institution, hotel, hospital, nursing home or such other public place of any kind as may be notified in this behalf by the Commissioner of Police or Magistrate in the manner prescribed, shall be punishable with imprisonment for a term which may extend to three months.

(I-A) Where an offence committed under sub-section (1) is in respect of a child or minor, the person committing the offence shall be punishable with imprisonment of either description for a term which not be less than seven years but which may be for life or for a term which may extend to ten years and shall also be liable to fine:

Provided that the Court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than seven years.

(2) Any person who:

(a) Being the keeper of any public place knowingly permits prostitutes for purposes of their trade to resort to or remain in such place; or

(b) Being the tenant, lessee, occupier or person in charge of any premises referred to in sub-section (1) knowingly permits the same or any part thereof to be used for prostitution; or

(c) Being the owner, lessor or landlord of any premises referred to in sub-section (1), or the agent of such owner, lessor or landlord, lets the same or any part thereof with the knowledge that the same or any part thereof may be used for prostitution, or is wilfully a party to such use. Shall be punishable on first conviction with imprisonment for a, term which may extend to three months, or with fine which may extend to two hundred rupees, or with both, and in the event of a second or subsequent conviction with imprisonment for a term which may extend to six months and also with fine, which may extend to two hundred rupees, and if the public place or premises happen to be a hotel, the licence for carrying on the business of such hotel under any law for the time being in force shall also be liable to be suspended for a period of not less than three months but which may extend to one year:

Provided that if an offence committed under this sub-section is in respect of a child or minor in a hotel, such licence shall also be liable to be cancelled.

Explanation. -For the purposes of this subjection, “hotel” shall have the meaning as in clause (6) of Section 2 of the Hotel-Receipts Tax Act, 1980 (54 of 1980).

(3) The State Government may, having regard to the kinds of persons frequenting any area or areas in the State, the nature and the density of population therein and other relevant considerations, by notification in the official Gazette, direct that the prostitution shall not be carried on in such area or areas as may be specified in the notification.

(4) Where the notification is issued under Sub-section (3) in respect of any area or areas, the State Government shall define the limits of such area or areas in the notification with reasonable certainty.

(5) No such notification shall be issued so as to have effect from a date earlier than the expiry of a period of ninety days after the date on which it is issued.6. Detaining a person in premises where prostitution is carried on.

(1) Any person who detains any other person, whether with or without his consent,-

(a) In any brothel, or

Provided that the court may for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term, which may be less than seven years.

(2) Where any person is found with a child in a brothel, it shall be presumed, unless the contrary is proved, that he has committed an offence under sub-section (1).

(a) Withholds from her any jewellery, wearing apparel, money or other property belonging to her, or

(b) Threatens her with legal proceedings if she takes away with her any jewellery, wearing apparel, money or other property lent or supplied to her by or by the direction of such person.

Section 8. Seducing or soliciting for purpose of prostitution.

Whoever, in any public place or within sight of, and in such manner as to be seen or heard from, any public place, whether from within any building or house or not:

(a) By words, gestures, willful exposure of her person (whether by sitting by a window or on the balcony of a building or house or in any other way), or otherwise tempts or endeavour to tempt, or attracts or endeavour to attract the attention of, any person for the purpose of prostitution; or

(b) Solicits or molests any person, or loiters, or acts in such manner as to cause obstruction or annoyance to persons residing nearby or passing by such public place or to offend against public decency, for the purpose of prostitution,

Shall be punishable on first conviction with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both, and in the event of a second or subsequent conviction, with imprisonment for a term which may extend to one year, and also with fine which may extend to five hundred rupees:

Provided that where an offence under this Section is committed by a man he shall be punishable with imprisonment for a period of not less than seven days but which may extend to three months.

Section 9. Seduction of a person in custody.

Any person who having the custody, charge or care of or in a position of authority over any person causes or aids or abets the seduction for prostitution of that shall be punishable on conviction with imprisonment of either description for a term which shall not be less than seven years but which may be for life or for a term which may extend to ten years and shall also be liable to fine:

Provided that the court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than seven years.

¹[(2) * * * * * * *]

1. Sub-section (2) emitted by Act No. 44 of 1986.

Section 10. Omitted.

¹[10. * * * * * * *]

1. Sec. 10 omitted by Act No. 44 of 1986.

Section 11. Notification of address of previously convicted offenders.

(1) When any person having been convicted-

(a) By a court in India of an offence punishable under this Act or punishable under Section 363, Section 365, Section 366, Section 366-A, Section 366-B, Section 367, Section 368, Section 370, Section 371, Section 372 or Section 373 of the Indian Penal Code (45 of 1860), with imprisonment for a term of two years or up wards; or

(b) By a court or tribunal in any other country of an offence which would, if committed in India, have been punishable under this Act, or under any of the aforesaid sections with imprisonment for a like term, is within a period of five years after release from prison, again convicted of any offence Punishable under this Act or under of those section with, imprisonment for a term of two years or upwards by a court, such court may, if it thinks fit, at the time of passing the sentence of imprisonment on such person, also order that his residence, and any change of, or absence from, such residence, after release, be notified according to rules made under Section 23 for a period not exceeding five years from the date of expiration of that sentence.

(2) If such conviction is set-aside on appeal or otherwise, such order shall become void.

(3) All order under this section may also be made by an Appellate Court or by the High Court when exercising its powers of revision.

(4) Any person charged with a breach of any rule referred to in sub-section

(1) may be tried by a Magistrate of competent jurisdiction in the District in which the place last notified as his residence is situated.

Section 12. Omitted

¹[12. * * * * * * ]

1. Section 12 omitted by Act No. 44 of 1986.

Section 13. Special police officer and advisory body.

(1) There shall be for each area to be specified by the State Government in this behalf a special police officer appointed by or on behalf of that government for dealing with offences under this Act in that area.

(2) The special police officer shall not he below the rank of an inspector of Police.

(2-A) The District Magistrate may, if he considers it necessary or expedient so to do, confer upon any retired police or military officer all or any of the powers conferred by or under this Act on a special police officer, with respect to particular cases or classes of cases or to cases generally:

Provided that no such power shall be conferred on, -

(a) A retired police officer unless such officer, at the time of his, retirement, was holding a post not below the rank of an inspector;

(b) A retired military officer unless such officer, at the time of his retirement, was holding a post not below the rank of a commissioned officer.

(3) For the efficient discharge of his functions in relation to offences under this Act, -

(a) The special police officer of an area shall be assisted by such number of subordinate police officers (including women police officers wherever practicable) as the State Government may think fit; and

(b) The State Government may associate with the special police officer a nonofficial advisory body consisting of not more than five leading social welfare workers of that area (including women social welfare workers wherever practicable) to advise him on questions of general importance regarding the working of this Act.

(4) The Central Government may, for the purpose of investigating any offence under this Act or under any other law for the time being in force dealing with sexual exploitation of persons and committed in more than one State appoint such number of police officers as trafficking police officers and they shall exercise all the powers and discharge all the functions as are exercisable by special police officers under this Act with the modification that they shall exercise such powers and discharge such functions in relation to the whole of India.

Section 14. Offences to be cognizable.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence punishable under this Act shall be deemed to be a cognizable offence within the meaning of that Code:

Provided that, notwithstanding anything contained in that Code, -

(i) Arrest without warrant may be made only by the special police officer or under his direction or guidance, or subject to his prior approval;

(ii) When the special police officer requires any officer subordinate to him to arrest without warrant otherwise than in his presence any person for an offence under this Act, he shall give that subordinate officer an order in writing, specifying the person to be arrested and the offence for which the arrest is being made; and the latter officer before arresting the person shall inform him of the substance of the, order and, on being required by such person, show him the order;

(iii) Any police officer not below the rank of sub-inspector specially authorised by the special police officer may, if he has reason to believe that on account of delay involved in obtaining the order of the special police officer, any valuable evidence relating to any offence under this Act is likely to be destroyed or concealed, or the person who has committed or is suspected to have committed the offence is likely to escape, or if the name and address of such a person is unknown or there is reason to suspect that a false name or address has been given, arrest the person concerned without such order, but in such a case he shall report, as soon as may be, to the special police officer the arrest and the circumstances in which the arrest was made.

Section 15. Search without warrant.

(1) Notwithstanding anything contained in any other law for the time being in force, whenever the special police officer or the trafficking police officer as the case may be, has reasonable grounds for believing that an offence punishable under this Act has been or is being committed in respect of a person living in any premises, and that search of the premises with warrant cannot be made without undue delay, such officer may, after recording the grounds of his belief, enter and search such premises without a warrant.

(2) Before making a search under subsection (1), the special police officer or the trafficking police officer, as the case may be shall call upon two or more respectable inhabitants (at least one of whom shall be a woman) of the locality in which the place to be searched is situate, to attend and witness the search and may issue an order in writing to them or any of them so to do:

Provided that the requirement as to the respectable inhabitants being from the locality in which the place to be searched is situate shall not apply to a woman required to attend and witness the search.

(3) Any person who, without reasonable cause, refuses or neglects, to attend and witness a search under this section, when called upon to do so by an order in writing delivered or, tendered to him, shall be deemed to have committed an offence under Section 187 of the Indian Penal Code (45 of 1860).

(4) The special police officer or the trafficking police officer, as the case may be, entering any premises under sub-section (1) shall be entitled to remove therefrom all the persons found therein.

(5) The special police officer or the trafficking police officer, as the case may be, after removing person under subsection (4) shall forthwith produce her before the appropriate Magistrate.

(5-A) Any person who is produced before a Magistrate under sub-section (5), shall be examined by a registered medical practitioner for the purposes of determination of the age of such person, or for the detection of any injuries as a result of sexual abuse or for the presence of any sexually transmitted diseases.

Explanation. -In this sub-section, “registered medical practitioner” has the same meaning as in the Indian Medical Council Act, 1956 (102 of 1956).

(6) The special police officer or the trafficking police officer, as the case may be, and other persons taking part in, or attending, and witnessing a search shall not be liable to any civil or criminal proceeding against them in respect of anything lawfully done in connection with, or for the purpose of, the search.

(6-A) The special police officer or the trafficking police officer, as the case may be, making a search under this section shall be accompanied by at least two women police officers, and where any woman or girl removed under sub-section (4) is required to be interrogated it shall be done by woman police officer and if no woman police officer is available, the interrogation shall be done only in the presence of a lady member of a recognized welfare institution or organization.

Explanation. -For the purposes of this sub-section and Section 17-A, “recognised welfare institution or Organisation” means such institution or Organisation, as may be recognized in this behalf by the State Government.

(7) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall, so far as may be, apply to any search under this section as they apply to any search made under the authority of a warrant issued under 94 of the said Code.

Section 16. Rescue of person.

(1) Where a Magistrate has reason to believe from information received from the police or from any other person authorised by State Government in this behalf or otherwise, that any person is living, or is carrying, or is being made to carry on, prostitution in a brothel, he may direct a police officer not below the rank of a sub-inspector to enter such brothel, and to remove therefrom such person and produce her before him.

(2) The police officer, after removing the person shall forthwith produce her before the Magistrate issuing the order.

Section 17. Intermediate custody, of persons removed under Section 15 or rescued under Section 16.

(1) When the special police officer removing a person under subsection (4) of Section 15 or a police officer rescuing a person under sub-section (1) of Section 16, is for any reason unable to produce her before the appropriate Magistrate as required by sub-section (5) of Section 15, or before the Magistrate issuing the order under sub-section (2) of Section 16, he shall forthwith produce her before the nearest Magistrate of any class, who shall pass such orders as he deems proper for her safe custody until she is produced before the appropriate Magistrate, or, as the case may be, the Magistrate issuing the order:

Provided that no person shall be,

(i) Detained in custody under this sub-section for a period exceeding tell days from the date of the order under this sub-section; or

(ii) Restored to or placed in the custody of a person who may exercise a harmful influence over her.

(2) When the person is produced before the appropriate Magistrate under subsection (5) of Section 15 or the Magistrate under sub-section (2) of Section 16, he shall, after giving her an opportunity of being heard, cause an inquiry to be made as to the correctness of the information received under subsection (1) of Section 16, the age, character and antecedents of the person and the suitability of her parents, guardian or husband for taking charge of her and the nature of the influence which the conditions in her home are likely to have on her if she is sent home, and, for this purpose, he may direct a Probation officer appointed under the Probation of Offenders Act, 1958, to inquire into the above circumstances and into the personality of the person and the prospects of her rehabilitation.

(3) The Magistrate may, while an inquiry is made into a case under sub-section (2), pass such orders, as he deems proper for the safe custody of the person:

Provided that where a person rescued under Section 16 is a child or minor, it shall be open to the magistrate to place such child or minor in any institution established or recognised under any Children Act for the time being in force in any State for the safe custody of children:

Provided further that no person shall be kept in custody for this purpose for a period exceeding three weeks from the date of such an order, and no person shall be kept ill the custody of a person likely to have a harmful influence over her.

(4) Where the Magistrate is satisfied, after making an inquiry as required under sub-section (2), -

(a) That the information received is correct; and

(b) That she is in need of care and protection,

He may, subject to the provisions of subsection (5), make an order that such person be detained for such period, being not less than one year and not more than three, as may be specified in the order, in a protective home, or in such other custody, as he shall, for reasons to be recorded in writing, consider suitable:

Provided that such custody shall not be that of a person or body of persons of a religious persuasion different from that of the person, and that those entrusted with the custody of the person, including the persons in charge of a protective home; may be required to enter into a bond which may, where necessary and feasible contained undertaking based on directions relating to the proper care, guardianship, education, training and medical and psychiatric treatment of the person as well as supervision by a person appointed by the Court, which will be in force for a period not exceeding three years.

(5) In discharging his functions under sub-section (2), a Magistrate may summon a panel of five respectable persons, three of whom shall, wherever practicable, be women, to assist him; and may, for this purpose, keep a list of experienced social welfare workers, particularly women social welfare workers, in the field of suppression of immoral traffic in persons.

(6) An appeal against an order made under sub-section (4) shall lie to the Court of Session whose decision on such appeal shall be final.

Section 17-A. Conditions to Be Observed Before Placing Persons Rescued Under Section 16 To Parents Or Guardians.

Notwithstanding anything contained in sub-section (2) of Section 17, the magistrate making an inquiry under Section 17, may, before passing all order for handing over any person rescued under Section 16 to the parents, guardian or husband, satisfy himself about the capacity or genuineness of the parents, guardian or husband to keep such person by causing an investigation to be made by a recognized welfare institution or Organisation.

Section 18. Closure of brothel and eviction of offenders from the premises.

(1) A Magistrate may, on receipt of information from the police or otherwise, that any house, room, place or any portion thereof within a distance of two hundred meters of any public place referred to in sub-section (1) of Section 7 is being run or used as a brothel by any person, or is being used by prostitutes for carrying on their trade, issue notice on the owner, lessor or landlord or such house, room, place or portion or the agent of the owner, lessor or landlord or on the tenant, lessee, occupier of, or any other person in charge of such house, room, place, or portion, to show cause within seven days of the receipt of the notice why the same should not he attached for improper use thereof, and if, after hearing the person concerned, the Magistrate is satisfied that the house, room, place or portion is being used as a brothel or for carrying on prostitution, then the Magistrate may pass orders,-

(a) Directing eviction of the occupier within seven days of the passing of the order from the house, room, place, or portion;

(b) Directing that before letting it out during the period of one year or in a case where a child or minor has been found in such house, room, place or portion during a search under Section 15, during the period of three years, immediately after the passing of the order, the owner, lessor or landlord or the agent of the owner, lessor or landlord shall obtain the previous approval of the Magistrate;

Provided that, if the Magistrate finds that the owner, lessor or landlord as well as the agent of the owner, lessor or landlord, was innocent of the improper user of the house, room, place, or portion, he may cause the same to be restored to the owner, lessor or landlord or the agent of the owner, lessor landlord, with a direction that the house, room, place or portion shall not be leased out, or otherwise given possession of, to or for the benefit of the person who was allowing the improper use therein.

(2) A court convicting a person of any offence under Section 3 or Section 7 may pass orders under sub-section (1), without further notice to such person to show cause as required in that sub-section.

(3) Orders passed by the Magistrate or court under sub-section (1) or sub-section (2), shall not be subject to appeal and shall not be stayed or set aside by the order of any court, civil or criminal, and the said orders shall cease to have validity after the expiry of one year or three years, as the case may be:

Provided that where a conviction under Section 3 or Section 7 is set aside on an appeal on the ground that such house, room, place, or any portion thereof is not being run or uses as a brothel or is not being used by prostitutes for carrying on their trade, any order passed by the trial court under sub-section (1) shall also be set aside. (4) Notwithstanding anything contained in any other law for the time being in force, when a Magistrate passes an order under subsection (1), or a Court passes all order under sub-section (2), any lease or a agreement under which the house, room, place or portion is occupied at the time shall become void and inoperative.

(5) When an owner, lessor or landlord, or the agent of such owner, lessor or landlord fails to comply with a direction given under clause (b) of sub-section (1) he shall be punishable with fine which may extend to five hundred rupees or when he fails to comply with a direction under the proviso to that subsection, he shall be deemed to have committed an offence under clause (b) of sub-section (2), of Section 3 or clause (c) of sub-section (2) of Section 7, as the case may be, and punished accordingly.

Section 19. Application for being kept in a protective home or provided care and protection by court,

(1) A person who is carrying oil, or is being made to carry oil prostitution, may make all applications, to the Magistrate within the local limits of whose jurisdiction she is carrying on, or is being made to carry on prostitution, for an order that she may be-

(a) Kept in a protective home, or

(b) Provided care and protection by the court in the manner specified in subsection (3).

(2) The Magistrate may pending inquiry under sub-section (3) direct that the person be kept in such custody, as he may consider proper, having regard to the circumstances of the case.

(3) If the Magistrate after hearing the applicant and making such inquiry as he may consider necessary, including an inquiry by a Probation Officer appointed under the Probation of Offender Act, 1958, (20 of 1958) into the personality, conditions of home and prospects of rehabilitation of the applicant, is satisfied that an order should be made under this section, he shall for reasons to be recorded, make an order that the applicant to be kept:

(i) In a protective home, or

(ii) In a corrective institution, or

(iii) Under the supervision of a person appointed by the Magistrate for such period as may be specified in the order.

Section 20. Removal of prostitute from any place.

(1) A Magistrate on receiving information that any person residing in or frequenting any place within the local limits of his jurisdiction is a prostitute, may record the substance of the information received and issue a notice to such person requiring her to appear before the Magistrate and show cause why she should not be required to remove herself from the place and be prohibited form reentering it.

(2) Every notice issued under subsection (1) shall be accompanied by a copy of the record aforesaid and the copy shall be served along with the notice on the person against whom the notice is issued.

(3) The Magistrate shall, after the service of the notice referred to in subsection (2), proceed to inquire into the truth of the information received, and after giving the person an opportunity of adducing evidence; take such further evidence as he thinks fit and if upon such inquiry it appears to him that such person is a prostitute and that it is necessary in the interest of the general public that such person should be required to remove herself therefrom and be prohibited from re-entering the same, the Magistrate shall, by order in writing communicate to the person in the manner specified therein, require her after a date (to be specified in the order) which shall not be less than seven days from the date of the order, to remove herself from the place to such place whether within or without the local limits of his jurisdiction, by such route or routes and within such time as may be specified in the order and also prohibit her from reentering the place without the permission in writing of the Magistrate having jurisdiction over such place.

(4) Whoever, -

(a) Fails to comply with an order issued under this section, within the period specified therein, or whilst an order prohibiting her from re-entering a place without permission is in force, re-enters the place without such permission, or

(b) Knowing that any person has, under this section, been required to remove herself from the place and has not obtained the requires site permission to re-enter it, harbours or conceals such person in the place, shall be punishable with fine which may extend to two hundred rupees and in the case of a continuing offence with an additional fine which may extend to twenty rupees for every day after the first during which she or he has persisted in the offence.

Section 21. Protective homes.

(1) The State Government may in its discretion establish as many protective homes and corrective institutions under this Act as it thinks fit and such homes and institutions when established shall be maintained in such manner as may be prescribed.

(2) No person or no authority other than the State government shall, after the commencement of this Act, establish or maintain any protective home or corrective institution except under and in accordance with the conditions of, a licence issued under this section by the State Government.

(3) The State Government may, on application made to it in this behalf by a person or authority, issue to such person or authority a licence in the prescribed form for establishing and maintaining or as the case may be, for maintaining a protective home or corrective institution and a licence so issued may contain such conditions as the State Government may think fit to impose in accordance with the rules made under this Act:

Provided that any such condition may require that the management of the protective home or corrective institution shall, wherever practicable, be entrusted to women:

Provided further that a person or authority maintaining any protective home at the commencement of this Act shall be allowed a period of six months from such commencement to make an application for such licence:

Provided also that a person or authority maintaining any corrective institution at the commencement of the Suppression of Immoral Traffic in Women and Girls (Amendment) Act, 1978, shall be allowed a period of six months from such commencement to make an application for such licence.

(4) Before issuing a licence, the State Government may require such officer or authority as it may appoint for this purpose, to make a full and complete investigation in respect of the application received in this behalf and report to it the result of such investigation and in making any such investigation the officer or authority shall allow such procedure as may be prescribed.

(5) A licence, unless sooner revoked, shall remain in force for such period as may be specified in the licence and may, on application made in this behalf at least thirty days before the date of its expiration, be renewed for a like period.

(6) No licence issued or renewed under this Act shall be transferable.

(7) Where any person or authority to whom a licence has been granted under this Act or any agent or servant of such person or authority commits a breach of any of the conditions thereof or any of the provisions of this Act or of any of the rules made under this Act, or where the State Government is not satisfied with the conditions, management or superintendence or any protective home or corrective institution the State Government may, without prejudice to any other penalty which may have been incurred under this Act, for reasons to be recorded, revoke the licence by order in writing:

Provided that no such order shall be made until an opportunity is given to the holder of the licence to show cause why the licence shall not be revoked

(8) Where a licence in respect of a protective home or corrective institution has been revoked under the foregoing subsection such protective home or corrective institution shall cease to function from the date of, such revocation.

(9) Subject to any rule that may be made in this behalf the State Government may also vary or amend any licence issued or renewed under this Act.

(9-A) The State Government or any authority authorised by it in this behalf may, subject to any rules that may be made in this behalf, transfer an inmate of a protective home to another protective home or to a corrective institution or an inmate of a corrective institution to another corrective institution or to a protective home, where such transfer is considered desirable having regard to the conduct of the person to be transferred, the kind of training to be imparted and other circumstances of the case:

Provided that, -

(i) No person who is transferred under this sub-section shall be required to stay in the home or institution to which she is transferred for a period longer than she was required to stay in the home or institution from which she was transferred;

(ii) Reasons shall be recorded for every order of transfer under this subsection (10) whoever establishes or maintains a protective home or corrective institution except in accordance with the provisions of this section, shall be punishable in the case of a first offence with fine which may extend to one thousand rupees and in the case of second or subsequent offence with imprisonment for a term which may extend to one year, or with fine which may extend to two thousand rupees, or with both.

Section 21-A. Production of records.

Every person or authority who is licensed- under subsection (3) of Section 21 to establish or maintain, or, as the case may be, for maintaining, a protective home or corrective institution

Section 22. Trials.

No Court, inferior to that of a Metropolitan Magistrate or a judicial magistrate of the first class, shall try any offence under Section 3, Section 4, Sectioii.5, Section 6, Section 7 or Section 8.

Section 22-A. Power to establish special Courts.

(1) If the State Government is satisfied that it is necessary for the purpose of providing for speedy trial of offences under this Act in any district or metropolitan area, it may, by notification in the official Gazette and after consultation with the High Court, establish one or more Courts of Judicial Magistrates of the first class, or, as the case may be, Metropolitan Magistrate, in such district or metropolitan area.

(2) Unless otherwise directed by the High Court, a court established under sub-section (1) shall exercise jurisdiction only in respect of cases under this Act.

(3) Subject to the provisions of sub-section (2), the jurisdiction and powers of the presiding officer of a court established under sub-section (1) in any district or metropolitan area shall extend throughout the district or the metropolitan area, as the case may be.

(4) Subject to the foregoing provisions of this section, a Court established under sub-section (1) in any district or metropolitan area shall be deemed to be a court established under subsection (1) of Section 11, or, as the case may be, sub-section (1) of Section 16 of the Code of Criminal Procedure, 1973 (2 of 1974) and provisions of the Code shall apply accordingly in relation to such courts.

Explanation. -In this section, “High Court” has the same meaning as in clause (e) of Section 2 of the Code of Criminal Procedure, 1973.

Section 22-AA. Power of Central Government to establish special courts.

¹[22-AA. Power of Central Government to establish special courts. -

(1) If the Central Government is satisfied that it is necessary for the purpose of providing for speedy trial of offences under this Act and committed in more than one State, it may, by notification in the official Gazette and after consultation with the High Court concerned, establish one or more courts of Judicial Magistrates of the first class or Metropolitan Magistrates for the trial of such offences.

(2) The provisions of Section 22-A, shall, so far as may be, apply to the courts established under sub-section (1), as they apply to Courts established under that section.

1. Ins. by Act No. 44 of 1986 (w.e.f. 26-1-1987).

Section 22-B. Power of court to try cases summarily.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the State Government may, if it considers it necessary so to do, direct that offences under this Act shall be tried in a summary way by a Magistrate including the presiding officer of a court established under sub-section (1) of Section 22-A and the provisions of Section 262 to 265 (both inclusive) of the said Code, shall, as far as may be, apply to such trial:

Provided that in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year:

Provided further that when at the commencement of, or in the course of, a summary trial under this section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undersirable to try the case summarily, the Magistrate shall, after hearing the parties record an order to that effect and thereafter recall any witness, who may have been examined and proceed to hear or re-hear the case in the manner provided by the said Code]

Section 23. Power to make rules.

(1) The State Government may, by notification in the official Gazette, make rules for carrying on the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide for:

(a) The notification of any place as a public place;

(b) The placing in custody of persons for whose safe custody orders have been passed under subsection (1) of Section 17 and their maintenance;

(bb) The discharge of an offender under subsection (3) of Section 10-A from a corrective institution and the form of licence to be granted to such offender;

(c) The detention and keeping in protective homes or, as the case may be, in corrective institutions or person under this Act and their maintenance;

(d) The carrying out of the provisions of Section 11 regarding notification of residence or change of or absence from residence by released convicts;

(e) The delegation of authority to appoint the special police officer under subsection (1) of Section 13;

(f) The carrying into effect of the provisions of Section 18;

(g) (i) The establishment, maintenance, management and superintendence of protective homes and corrective institutions under Section 21 and the appointment, powers and duties of persons employed in such home or institution;

(ii) The form in which an application for a licence may be made and the particulars to be contained in such application;

(iii) The procedure for the issue or renewal of a licence, the time within which such licence shall be issued or renewed and the procedure to be followed in making a full and complete, investigation in respect of all application for licence;

(iv) The form of a licence and the condition to be specified therein;

(v) The manner in which the accounts of a protective home and a corrective institution shall be maintained and audited;

(vi) The maintenance of registers and statements by a licensee and the form of such registers and statements;

(vii) The care, treatments, maintenance, training, instruction, control and discipline of the inmates of protective home and corrective institutions;

(viii) The visits to and communications with inmates;

(ix) The temporary detention of persons sentenced to detention in protective homes or in corrective institution until arrangements are made for sending them to such homes or institutions;

(x) The transfer of all inmate from:

(a) Protective home to another, or to a corrective institution,

(b) One corrective institution to another, or to a protective home, under subsection (9-A) of Section 21;

(xi) The transfer in pursuance of an order of the Court from a protective home or a corrective institution to a prison of a person found to be incorrigible or exercising bad influence upon other inmates of the protective home or the corrective institution and the period of her detention in such prison;

(xii) The transfer to a protective home or corrective institution of persons sentenced under Section 7 or Section 8 and the period of their detention in such home or institution;

(xiii) The discharge of inmates front a protective home or corrective institution either absolutely or subject to conditions, and their arrest in the event of breach of such conditions;

(xiv) The grant of permission to inmates to absent themselves for short periods;

(xv) The inspection of protective homes and corrective institutions and other institutions in which a persons may be kept, detained and maintained;

(h) Any other matter which has to be, or may be prescribed.

(3) In making any rule under clause (d) or clause (g) or sub-section (2), the State Government may provide that a breach thereof be punishable with fine which may extend to two hundred and fifty rupees.

(4) All rules made under this Act shall, as soon as may be after they are made, be laid before the State Legislature.

Section 24. Act not to be in derogation of certain other Acts.

Nothing in this Act shall be construed to be in derogation of the provisions of the Reformatory Schools Act, 1897 or any State Act enacted in modification of the said Act or otherwise, relating to juvenile offenders.

Section 25. Repeal and savings.

(1) As from the date of the coming into force in ally State of the provisions other than Section I of this Act, all State Acts relating to suppression of immoral traffic in persons or to the prevention of prostitution, in force in that State immediately before such date shall stand repealed.

(2) Notwithstanding the repeal by this Act, of any State Act referred to in sub-section (1), anything done or any action taken including any direction given in any register, rule or order made, any restriction imposed under the provision of such State Act shall in so far as such thing or action is not inconsistent with the provisions of this Act be deemed to have been done or taken under the provisions of this Act as if the said provisions were in force when such thing was done or such action was taken and shall continue in force accordingly until superseded by anything done or any action taken under this Act.

Explanation. -In this section, the expression ‘State Act “includes” a Provincial Act’.

Section 26- THE SCHEDULE

[SEE SECTION 2(C)]

Section	Magistrate competent to exercise the powers
7(l)	District Magistrate.
11 (4)	Metropolitan Magistrate or Judicial Magistrate of the first class.
12 (4)	1[* * * * * * *]
15(5)	Metropolitan Magistrate, Judicial Magistrate of the first class, District Magistrate or Sub-divisional Magistrate.
16	Metropolitan Magistrate, Judicial Magistrate of the first class, District Magistrate or Sub-divisional Magistrate.
18	District Magistrate or Sub-divisional Magistrate.
19	Metropolitan Magistrate, Judicial Magistrate of the first class, District Magistrate or Sub-divisional Magistrate.
20	District Magistrate, Sub-divisional Magistrate or any Executive Magistrate specially empowered by the State Government.
22-B	Metropolitan Magistrate of Judicial Magistrate of the first class.

1. Figures and words omitted by Act No. 44 of 1986 (w.e.f. 2-6-1987).

Prevention of Cruelty to Animals Act

November 30, 2014

Section 1. Short title, extent and commencement.

(1) This Act may be called the Prevention of Cruelty to Animals Act, 1960.

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

(3) It shall come into force on such date as the Central Government may, by notification in the official Gazette, appoint, and different dates may be appointed for different States and for the different provisions contained in this Act.¹

——————–

1. See Annexure for notifications under Section 1(3).

Section 2. Definitions.

In this Act, unless the context otherwise requires, -

(a) “Animal” means any living creature other than a human being;

¹[(b) “Board” means the Board established under Section 4, and as reconstituted form time to time under Section 5A.]

(c) “Captive animal” means any animal (not being a domestic animal) which is in captivity or confinement, where permanent or temporary, or which is subjected to any appliance or contrivance for the purposes of hindering or preventing its escape form captivity or confinement or which is pinioned or which is or appears to be maimed;

(d) “Domestic animal” means any animal which is tamed or which has been or is being sufficiently tamed to serve some purpose for the use of man or which, although it neither has been nor is intended to be so tamed, is or has become in fact wholly or partly tamed;

(e) “Local authority” means a municipal committee, district board or other authority for the time being invested by law with the control and administration of any matters within a specified local area;

(f) “Owner”, used with reference to an animal, includes not only the owner but also any other person for the time being in possession or custody of the animal, whether with or without the consent of the owner.

(g) “Phooka” or “doom dev” includes any process of introducing air or any substance into the female organ of a milch animal with the object of drawing off from the animal any secretion of milk;

(h) “Prescribed” means prescribed by Rules made under this Act;

(i) “Street” includes any way, road, lane, square, court, alley, passage or open space, whether a thorough fare or not to which the public have access.

——————–

1. Substituted by Act 26 of 1982 which came into force on 30th July 1982.

Section 3. Duties of persons having charge of animals.

It shall be the duty of every person having the care or charge of any animal to take all reasonable measures to ensure the well being of such animal and to prevent the infliction upon such animal of unnecessary pain or suffering.

Section 4. Establishment of Animal Welfare Board of India.

Chapter Ii ¹[Animal Welfare Board Of India]

——————–

1. Subs. by Act 26 of 1982; S. 3, for the words “Animal Welfare Board”.

4. Establishment of Animal Welfare Board of India-

(1) For the promotion of animal welfare generally and for the purpose of protecting animals from being subjected to unnecessary pain or suffering, in particular, there shall be established by the Central Government, as soon as may be after the commencement of this Act, a Board to be called the ¹[Animal Welfare Board of India.]

(2) The Board shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and may by its name sue and be sued.

——————–

1. Subs. by Act 26 of 1982; S. 4 for the words “Animal Welfare Board”.

Section 5. Constitution of the Board.

(1) The Board shall consist of the following persons, namely: -

(a) The Inspector-General of Forests, Government of India, ex-officio;

(b) The Animal Husbandry Commissioner to the Government of India, ex-officio;

¹(ba) Two persons to represent respectively the Ministries of the Central Government dealing with Home Affairs and Education, to be appointed by the Central Government;

(bb) One person to represent the Indian Board for Wild Life, to be appointed by the Central Government;

(bc) Three persons who, in the opinion of the Central Government, are or have been actively engaged in animal welfare work and are well-known humanitarians, to be nominated by the Central Government;]

(c) One person to represent such association of veterinary practitioners as in the opinion of the Central Government ought to be represented on the Board, to be elected by that association in the prescribed manner;

(d) Two persons to represent practitioners of modern and indigenous systems of medicine, to be nominated by the Central Government;

²[(e) One person to represent each of such two municipal corporations as in the opinion of the Central Government ought to be represented on the Board, to be elected by each of the said corporations in the prescribed manner;]

(f) One person to represent each of such three organisations actively interested in animal welfare as in the opinion of the Central Government ought to be represented on the Board, to be chosen by each of the said organisations in the prescribed manner;

(g) One person to represent each of such three societies dealing with prevention of cruelty to animals as in the opinion of the Central Government ought to be represented on the Board, to be chosen in the prescribed manner;

(h) Three persons to be nominated by the Central Government;

(i) Six Members of Parliament, four to be elected by the House of the People (Lok Sabha) and two by the Council of States (Rajya Sabha).

(2) Any of the persons referred to in clause (a) or ³ [clause (b) or clause (ba) or clause (bb)] of sub-section (1) may depute any other person to attend any of the meetings of the Board.

⁴[(3) The Central Government shall nominate one of the members of the Board to be its Chairman and another member of the Board to be its Vice-Chairman.]

——————–

1. Inserted by Act 26 of 1982; Section 5(a)(i).

2. Subs. by Act 26 of 1982; S.5 (a)(ii), for the original clause.

3. Subs. by Act 26 of 1982; S.5 (b), for the word, brackets and letter “clause (b)”.

4. Subs. by Act 26 of 1982; Section 5(c) for the original clause.

Section 5 A. Reconstitution of the Board.

¹[Reconstitution of the Board. (1) In order that the Chairman and other members of the Board hold office till the same date and that their terms of office come to an end on the same date, the Central Government may, by notification in the Official Gazette, reconstitute, as soon as may be after the Prevention of Cruelty to Animals (Amendment) Act, 1982 comes into force, the Board.

(2) The Board as reconstituted under sub-section (1) shall be reconstituted from time to time on the expiration of every third year from the date of its reconstitution under sub-section (1).

(3) There shall be included amongst the members of the Board reconstituted under sub-section (1), all persons who immediately before the date on which such reconstitution is to take effect, are Members of the Board but such persons shall hold office only for the unexpired portion of the term for which they would have held office if such reconstitution had not been made and the vacancies arising as a result of their ceasing to be Members of the Board shall be filled up as casual vacancies for the remaining period of the term of the Board as so reconstituted :

Provided that nothing in this sub-section shall apply in relation to any person who ceases to be a Member of the Board by virtue of the amendment made in sub-section (1) of section 5 by sub-clause (ii) of clause (a) of section 5 of the Prevention of Cruelty to Animals (Amendment) Act, 1982.]

——————–

1. Ins. by Act 26 of 1982; S. 6,

Section 6. Terms of office and conditions of service of Members of the Board.

¹[Terms of office and conditions of service of Members of the Board. (1) The term for which the Board may be reconstituted under section 5A shall be three years from the date of the reconstitution and the Chairman and other Members of the Board as so reconstituted shall hold office till the expiry of the term for which the Board has been so reconstituted.

(2) Notwithstanding anything contained in sub-section (1)-

(a) The term of office of an ex-officio Member shall continue so long as he holds the office by virtue of which he is such a Member;

(b) The term of office of a Member elected or chosen under clause (c), clause (e), clause (f), clause (g), clause (h) or clause (i) of section 5 to represent any body of persons shall come to an end as soon as he ceases to be a Member of the body which elected him or in respect of which he was chosen;

(c) The term of office of a Member appointed, nominated, elected or chosen to fill a casual vacancy shall continue for the remainder of the term of office of the Member in whose place he is appointed, nominated, elected or chosen;

(d) The Central Government may, at any time, remove for reasons to be recorded in writing a Member from office after giving him a reasonable opportunity of showing cause against the proposed removal and any vacancy caused by such removal shall be treated as casual vacancy for the purpose of clause (c).

(3) The Members of the Board shall receive such allowances, if any, as the Board may, subject to the previous approval of the Central Government, provide by regulations made in this behalf.

(4) No act done or proceeding taken by the Board shall be questioned on the ground merely of the existence of any vacancy in, or defect in the constitution of the Board and in particular, and without prejudice to the generality of the foregoing, during the period intervening between the expiry of the term for which the Board has been reconstituted under section 5A and its further reconstitution under that section, the ex-officio members of the Board shall discharge all the powers and functions of the Board.]

——————–

1. Subs. by Act 26 of 1982, S. i, for the original Section.

Section 7. Secretary and other employees of the Board.

(1) The Central Government shall appoint ¹[x x x] the Secetary of the Board.

(2) Subject to such rules as may be made by the Central Government in this behalf, the Board may appoint such member of other officers and employees as may be necessary for the exercise of its powers and the discharge of its functions and may determine the terms and conditions of service of such officers and other employees by regulations made by it with the previous approval of the Central Government.

——————–

1. The words “one of its officers to be” omitted by Act, 26 of 1982.

Section 8. Funds of the Board.

The funds of the Board shall consist of grants made to it from time to time by the Government and of contributions, donations, subscriptions, bequests, gifts and the like made to it by any local authority or by any other person.

Section 9. Functions of the Board.

The functions of the Board shall be-

(a) To keep the law in force in India for the prevention of cruelty to animals under constant study and advise the Government on the amendments to be undertaken in any such law from time to time;

(b) To advise the Central Government on the making of rules under this Act with a view to preventing unnecessary pain or suffering to animals generally, and more particularly when they are being transported from one place to another or when they are used as performing animals or when they are kept in captivity or confinement;

(c) To advise the Government or any local authority or other person on improvements in the design of vehicles so as to lessen the burden on draught animals;

(d) To take all such steps as the Board may think fit for ¹[amelioration of animals] by encouraging, or providing for, the construction of sheds, water-troughs and the like and by providing for veterinary assistance to animals;

(e) To advise the Government or any local authority or other person in the design of slaughter-houses or the maintenance of slaughter houses or in connection with slaughter of animals so that unnecessary pain or suffering, whether physical or mental, is eliminated in the pre-slaughter stages as far as possible, and animals are killed, wherever necessary, in as humane a manner as possible;

(f) To take all such steps as the Board may think fit to ensure that unwanted animals are destroyed by local authorities, whenever it is necessary to do so, either instantaneously or after being rendered insensible to pain or suffering;

(g) To encourage, by the grant of financial assistance or otherwise, ²[the formation or establishment of pinjrapoles, rescue homes animal shelters, sanctuaries and the like] where animals and birds may find a shelter when they have become old and useless or when they need protection;

(h) To co-operate with, and co-ordinate the work of, associations or bodies established for the purpose of preventing unnecessary pain or suffering to animals or for the protection of animals and birds;

(i) To give financial and other assistance to animal welfare organisations functioning in any local area or to encourage the formation of animal welfare organisations in any local area which shall work under the general supervision and guidance of the Board;

(j) To advise the Government on matters relating to the medical care and attention which may be provided in animal hospitals and to give financial and other assistance to animal hospitals whenever the Board thinks it necessary to do so;

(k) To impart education in relation to the humane treatment of animals and to encourage the formation of public opinion against the infliction of unnecessary pain or suffering to animals and for the promotion of animal welfare by means of lectures, books, posters, cinematographic exhibitions and the like;

(l) To advise the Government on any matter connected with animal welfare or the prevention of infliction of unnecessary pain or suffering on animals.

——————–

1. Subs. by Act 26 of 1982, S. 9(a) for the word “ameliorating the condition of beats of burden”.

2. Subs. by Act 26 of 1982; S. 9(b) for the words “the formation of pinjrapoles, sanctuaries and the like”.

Section 10. Power of Board to make regulations.

The Board may, subject to the previous approval of the Central Government, make such regulations as it may think fit for the administration of its affairs and for carrying out its functions.

Section 11. Section.

(1) If any person-

(a) Beats, kicks, over-rides, over-drives, over-loads, tortures or otherwise treats any animal so as to subject it to unnecessary pain or suffering or cause, or, being the owner permits, any animal to be so treated’, or

(b) ¹[Employs in any work or labour or for any purpose any animal which, by reason of its age or any disease] infirmity, wound, sore or other cause, is unfit to be so employed or, being the owner, permits any such unfit animal to be so employed; or

(c) Wilfully and unreasonably administers any injurious drug or injurious substance to ²[any animal] or wilfully and unreasonably causes or attempts to cause any such drug or substance to be taken by ²[any animal;] or

(d) Conveys or carries, whether in or upon any vehicle or not, any animal in such a manner or position as to subject it to unnecessary pain or suffering; or (e) keeps or confines any animal in any cage or other receptacle which does not measure sufficiently in height, length and breadth to permit the animal a reasonable opportunity for movement; or

(f) Keeps for an unreasonable time any animal chained or tethered upon an unreasonably short or unreasonably heavy chain or cord; or

(g) Being the owner, neglects to exercise or cause to be exercised reasonably and dog habitually chained up or kept in close confinement; or

(h) Being the owner of ³[any animal] fails to provide such animal with sufficient food, drink or shelter; or

(i) Without reasonable cause, abandons any animal in circumstances which render it likely that it will suffer pain by reason of starvation or thirst; or

(j) Wilfully permits any animal, of which he is the owner, to go at large in any street while the animal is affected with contagious or infectious disease or, without reasonable excuse permits any diseased or disabled animal, of which he is the owner, to die in any street; or

(k) Offers for sale or, without reasonable cause, has in his possession any animal which is suffering pain by reason of mutilation, starvation, thirst, overcrowding or other illtreatment; or

⁴[(l) Mutilates any animal or kills any animal (including straydogs) by using the method of strychnine injections in the heart or in any other unnecessarily cruel manner; or]

⁵[(m) Solely with a view to providing entertainment

(i) Confines or causes to be confined any animal (including tying of an animal as a bait in a tiger or other sanctuary) so as to make it an object of prey for any other animal; or

(ii) Incites any animal to fight or bait any other animal; or]

(n) ⁶[x x x] Organizes, keeps, uses or acts in the management of, any place for animal fighting or for the purpose of baiting any animal or permits or offers any place to be so used or receives money for the admission of any other person of any place kept or used for any such purposes; or

(o) Promotes or takes part in any shooting match or competition wherein animals are released from captivity for the purpose of such shooting; he shall be punishable ⁷[in the case of a first offence, with fine which shall not be less than, ten rupees but which may extend to fifty rupees, and in the case of a second or subsequent offence committed within three years of the previous offence, with fine which shall not be less than twenty-five rupees but which may extend to one hundred rupees or with imprisonment for a term which may extend to three months, or with both.]

(2) For the purposes of sub-section (1) an owner shall be deemed to have committed an offence if he has failed to exercise reasonable care and supervision with a view to the prevention of, such offence:

Provided that where on owner is convicted of permitting cruelty by reason only of having failed to exercise such care and supervision, he shall not be liable to imprisonment without the option of a fine.

(3) Nothing in this section shall apply to-

(a) The dehorning of cattle, or the castration or branding or nose-roping of any animal, in the prescribed manner; or

(b) The destruction of stray dogs in lethal chambers or ⁸[by such other methods as may be prescribed.] or

(d) Any matter dealt with in Chapter IV; or

(e) The commission or omission of any act in the course of the destruction or the preparation for destruction of any animal as food for mankind unless such destruction or preparation was accompanied by the infliction of unnecessary pain or suffering.

——————–

1. Subs. by Act 26 of 1982, S. 10 (a) (i) for the words “employs in any work or labour any animal which, by reason of any disease”.

2. Subs. by Act 26 of 1982; S. I0 (a (ii) for the words “any domestic or captive animal”.

3. Subs. by Act 26 of 1982, S. 10(a)(iii) for the words “any captive animal”.

4. Subs. by Act 26 of 1982; S. 10(a)(iv) for the original clause.

5. Subs. by Act 26 of 1982; S. 10(a)(v) for the original clause.

6. The words “for the purpose of his business” omitted by Act 26 of 1982, S. 10(a)(vi).

7. Subs. by Act 26 of 1982; S. 10(a)(vii) for the portion beginning with the words “in the case of a first offence” and ending with the words “or with both”.

8. Subs. by Act 26 of 1982, S. 10(b), for the words “by other methods with a minimum of suffering.”

Section 12. Penalty for practising phooka or doom dev.

If any person performs upon any cow or other milch animal the operation called phooka or ¹[doom dev or any other operation (including injection of any substance) to improve lactation which is injurious to the health of the animal] or permits such operation being performed upon any such animal in his possession or under his control, he shall be punishable with fine which may extend to one thousand rupees, or with imprisonment for a term which may extend to two years, or with both, and the animal on which the operation was performed shall be forfeited to the Government.

——————–

1. Subs. by Act 26 of 1982; S. 11, for the words “doom dev”.

Section 13. Destruction of suffering animals.

(1) Where the owner of an animal is convicted of an offence under section 11, it shall be lawful for the court, if the court is satisfied that it would be cruel to keep the animal alive, to direct that the animal be destroyed and to assign the animal to any suitable person for that purpose, and the person to whom such animal is so assigned shall, as soon as possible, destroy such animal or cause such animal to be destroyed in his presence without unnecessary suffering; and any reasonable expense incurred in destroying the animal may be ordered by the court to be recovered from the owner as if it were a fine :

Providing that unless the owner assents thereto, no order shall be made under this section except upon the evidence of a veterinary officer in charge of the area.

(2) When any magistrate, commissioner of police or district superintendent of police has reason to believe that an offence under section 11 has been committed in respect of any animal, he may direct the immediate destruction of the animal, if in his opinion, it would be cruel to keep the animal alive.

(3) Any police officer above the rank of a constable or any person authorised by the State Government in this behalf who finds any animal so diseased or so severely injured or in such a physical conditions that in his opinion it cannot be removed without cruelty, may, if the owner is absent or refuses his consent to the destruction of the animal, forthwith summon the veterinary officer in charge of the area in which the animal is found, and if the veterinary officer certifies that the animal is mortally injured or so severely injured or in such a physical condition that it would be cruel to keep it alive, the police officer or the person authorised, as the case may be, may, after obtaining orders from a magistrate, destroy the animal injured or cause it to be destroyed ¹[in such manner as may be prescribed.]

(4) No appeal shall lie, from any order of a magistrate for the destruction of an animal.

——————–

1. Ins. by Act 26 of 1982, S. 12

Section 14. Experiments on animals.

Nothing contained in this Act shall render unlawful the performance of experiments (including experiments involving operations) on animals for the purpose of advancement by new discovery of physiological knowledge or of knowledge which will be useful for saving or for prolonging life or alleviating suffering or for combating any disease, whether of human beings, animals or plants.

Section 15. Committee for control and supervision of experiments on animals.

(1) If at any time, on the advice of the Board, the Central Government is of opinion that it is necessary so to do for the purpose of controlling and supervision experiments on animals, it may, by notification in the official Gazette, constitute a Committee consisting of such number of officials and non-officials, as it may think fit to appoint thereto.

(2) The Central Government shall nominate one of the Members of the Committee to be its Chairman.

(3) The Committee shall have power to regulate its own procedure in relation to the performance of its duties.

(4) The funds of the Committee shall consist of grants made to it from time to time by the Government and of contributions, donations, subscriptions, bequests, gifts and the like made to it by any person.

Section 15 A. Sub-Committees.

¹[Sub-Committees. (1) The Committee may constitute as many subcommittees as it thinks fit for exercising any power or discharging any duty of the Committee or for inquiring into or reporting and advising on any matter which the Committee may refer.

(2) A sub-committee shall consist exclusively of the Members of the Committee.]

——————–

1. Ins. by Act 26 of 1982, S. 13.

Section 16. Staff of the Committee.

Subject to the control of the Central Government, the Committee may appoint such number of officers and other employees as may be necessary to enable it to exercise its powers and perform its duties, and may determine the remuneration and other terms and conditions of service of such officers and other employees.

Section 17. Duties of the Committee and power of the Committee to make rules relating to experiments on animals.

(1) It shall be the duty of the Committee to take all such measures as may be necessary to ensure that animals are not subjected to unnecessary pain or suffering before, during or after the performance of experiments on them, and for that purpose it may, by notification in the Gazette of India and subject to the condition of previous publication, make such rules as it may think fit in relation to the conduct of such experiments.

¹[(1A) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for the following, matters, namely:

(a) The registration of’ persons or institutions carrying on experiments on animals;

(b) The reports and other information which shall be forwarded to the Committee by persons and institutions carrying on experiments on animals.]

(2) In particular, and without prejudice to the generality of the foregoing power, rules made by the Committee shall be designed to secure the following Objects, namely:

(a) That in cases where experiments are performed in any institution, the responsibility therefor is placed on the person in charge of the institution and that, in cases where experiments are performed outside an institution by individuals, the individuals are qualified in that behalf and the experiments are performed on their full responsibility;

(b) That experiments are performed with due care and humanity, and as far as possible experiments involving operations are performed under the influence of some anaesthetic of sufficient power to prevent the animals feeling pain;

(c) That animals which, in the course of experiments under the influence of anaesthetics, are so injured that their recovery would involve serious suffering, are ordinarily destroyed while still insensible;

(d) That experiments on animals are avoided wherever it is possible to do so; as for example, in medical schools, hospitals, colleges and the like, if other teaching devices such as books, models, films and the like may equally suffice;

(e) That experiments on larger animals are avoided when it is possible to achieve the same results by experiments upon small laboratory animal like guineapigs, rabbits, frogs and rats;

(f) That, as far as possible, experiments are not performed merely for the purpose of acquiring manual skill;

(g) That animals intended for the performance of experiments are properly looked after both before and after experiments;

(h) That suitable records are maintained with respect to experiments performed on animals.

(3) In making any rules under this section, the Committee shall be guided by such directions as the Central Government (consistently with the object for which the Committee is set up) may give to it, and the Central Government is hereby authorised to give such directions.

(4) All rules made by the Committee shall be binding on all individuals performing experiments outside institutions and on person’s incharge of institutions in which experiments are performed.

——————–

1. Ins. by Act 26 of 1982, S. 14.

Section 18. Power of entry and inspection.

For the purpose of ensuring that the rules made by it are being complied with, the Committee may authorise any of its officers or any other person in writing to inspect any institution or place where experiments are being carried on and report to it as a result of such inspection, and any officer or person so authorised may-

(a) Enter at any time considered reasonable by him and inspect any institution or place in which experiments on animals are being carried on; and

(b) Require any person to produce any record kept by him with respect to experiments on animals.

Section 19. Power to prohibit experiments on animals.

If the Committee is satisfied, on the report of any officer or other person made to it as a result of any inspection under section 18 or otherwise, that the rules made by it under section 17 are not being complied with by any person or institution carrying on experiments on animals, the Committee may, after giving an opportunity to the person or institution of being heard in the matter, by order, prohibit the person or institution from carrying on any such experiments either for a specified period or indefinitely, or may allow the person or institution to carry on such experiments subject to such special conditions as the Committee may think fit to impose.

Section 20. Penalties.

If any person-

(a) Contravenes any order made by the Committee under section 19; or

(b) Commits a breach of any condition imposed by the Committee under that section; he shall be punishable with fine which may extend to two hundred rupees, and, when the contravention or breach of condition has taken place in any institution the person in charge of the institution shall be deemed to be guilty of the offence and shall be punishable accordingly.

Section 21. Exhibit, and “train” defined.

In this Chapter, “exhibit means exhibit or any entertainment to which the public are admitted through sale of tickets, and “exhibitor” and “train for the purpose of any such exhibition, and the expressions “exhibitor” and “trainer” have respectively the corresponding meanings.

Section 22. Restriction on exhibition and training of performing animals.

No person shall exhibit or train –

(i) Any performing animal unless he is registered in accordance with the provisions of this chapter;

(ii) As a performing animal, any animals, which the Central Government may, by notification in the official Gazette, specify as an animal, which shall not be exhibited or trained as a performing animal,

Section 23. Procedure for registration.

(1) Every person desirous of exhibiting or training any performing animal shall, on making an application in the prescribed form to the prescribed authority and on payment of the prescribed fee, be registered under this Act unless he is a person who, by reason of an order made by the court under this Chapter, is not entitled to be so registered.

(2) An application for registration under this Chapter shall contain such particulars as to the animals and as to the general nature of the performance in which as may which the animals are to be exhibited or for which they are to be trained as may be prescribed, and the particulars so given shall be entered in the register maintained by the prescribed authority.

(3) The prescribed authority shall give to every person whose name appears on the register kept by them, a certificate of registration in the prescribed form containing the particulars entered in the register.

(4) Every register kept under this Chapter shall at all reasonable times be open for inspection on payment of the prescribed fee, and any person shall, on payment of the prescribed fee, be entitled to obtain copies thereof or make extracts therefrom.

(5) Any person whose name is entered provisions of any order made under this Act by any court, be entitled, on making an application for the purpose, to have the particulars entered in the register with respect to him varied, and where any such particulars are so varied, the existing certificate shall be cancelled and a new certificate issued.

Section 24. Power of court to prohibit or restrict exhibition and training of performing animals.

(1) Where it is proved to the satisfaction of any magistrate on a complaint made by a police officer or any off the prescribed authority referred to in section 23, that the training or exhibition of any performing animal has been accompanied by unnecessary pain or suffering and should be prohibited or allowed only subject to conditions, the court may make an order against the person in respect of whom the complaint is made, prohibiting the training or exhibition or imposing such conditions in relation thereto, as may be specified by the order.

(2) Any court by which an order is made under this section, shall cause a copy of the order to be sent, as soon as may be after the order is made, to the prescribed authority by which the person against whom the order is made is registered, and shall cause the particulars of the order to be endorsed upon the certificate held by that person, and that person shall produce his certificate on being so required by the court for the purposes of endorsement, and the prescribed authority to which a copy of an order is sent under this section shall enter the particulars of the order in that register.

Section 25. Power to enter premises.

(1) Any person authorised in writing by the prescribed authority referred to in section 23 and any police officer not below the rank of a sub-inspector may-

(a) Enter at all reasonable times and inspect any premises in which any performing animals are being trained or exhibited or kept for training or exhibition, and any such animals found therein; and

(b) Require any person who, he has reason to believe is a trainer or exhibitor of performing animals to produce his certificate of registration.

(2) No person or police officer referred to in sub-section (1) shall be entitled under this section to go on or behind the stage during a public performance of performing animals.

Section 26. Offences.

If any person–

(a) Not being registered under this Chapter, exhibits or trains any performing animal; or

(b) Being registered under this Act, exhibits or trains any performing animal with respect to which or in a manner with respect to which, he is not registered; or

(c) Exhibits or trains as a performing animal, any animal which is not to be used for the purpose by reason of a notification issued under clause (ii) of section 22; or

(d) Obstructs or wilfully delays any person or police officer referred to in section 25 in the exercise of powers under this Act as to entry and inspection; or

(e) Conceal any animal with a view to avoiding such inspection; or

(f) Being a person registered under this Act, on being duly required in pursuance of this Act to produce his certificate under this Act, fails without reasonable excuse so to do; or

(g) Applies to be registered under this Act when not entitled to be so registered. He shall be punishable on conviction with fine, which may extend to five hundred rupees, or with imprisonment, which may extend to three months, or with both.

Section 27. Exemptions.

Nothing contained in this Chapter shall apply to-

(a) The training of animals for bona fide military or police purpose or the exhibition of any animal so trained; or

(b) Any animals kept in any zoological garden or by any society or association, which has for its principal object the exhibition of animals for educational or scientific purposes.

Section 28. Saving as respects manner of killing prescribed by religion.

Nothing contained in this Act shall render it an offence to kill any animal in a manner required by the religion of any community.

Section 29. Power of court to deprive person convicted of ownership of animal.

(1) If the owner of any animal is found guilty of any offence under this Act the court upon his conviction thereof, may, if it thinks fit, in addition to any other punishment make an order that the animal with respect to which the offence was committed shall be forfeited to Government and may, further, make such order as to the disposal of the animal as it thinks fit under the circumstances.

(2) No order under sub-section (1) shall be made unless it is shown by evidences to a previous conviction under this Act or as to the character of the owner or otherwise as to the treatment of the animal that the animal, if left with the owner, is likely to be exposed to further cruelty.

(3) Without prejudice to the provisions contained in sub-section (1), the court may also order that a person convicted of an offence under this Act shall, either permanently or during such period as is fixed by the order, be prohibited from having the custody of any animal of any kind whatsoever, or as the court thinks fit of any animal of any kind or species specified in the order.

(4) No order under sub-section (3) shall be made unless-

(a) It is shown by evidence as to a previous conviction or as to the character of the said person or otherwise as to the treatment of the animal in relation to which he has been convicted that an animal in the custody of the said person is likely to be exposed to cruelty;

(b) It is stated in the complaint upon which the conviction was made that it is the intention of the complainant upon the conviction of the accused to request that an order be made as aforesaid; and

(c) The offence for which the conviction was made was committed in an area in which under the law for the time being in force a licence is necessary for the keeping of any such animal as that in respect of which the conviction was made.

(5) Notwithstanding anything to the contrary contained in any law for the time being in force, any person in respect of whom an order is made under subsection (3) shall have no right to the custody of any animal contrary to the provisions of the order, and if he contravenes the provisions of any order, he shall be punishable with fine which may extend to one hundred rupees, or with imprisonment for a term which may extend to three months, or with both.

(6) Any court, which has made an order under sub-section (3), may at any time, either on its own motion or on application made to it in this behalf, rescind or modify, such order.

Section 30. Presumption as to guilt in certain cases.

If any person is charged with the offences of killing a goat, cow or its progeny contrary to the provisions of clause (i) of sub-section (1) of section 11, and it is proved that such person had in his possession, at the time the offence is alleged to have been committed, the skin of any such animal as is referred to in this section with any part of the skin of the head attached thereto, it shall be presumed until the contrary is proved that such animal was killed in a cruel manner.

Section 31. Cognoscibility of offences.

Notwithstanding anything contained in the Code or Criminal Procedure, 1898, (5 of 1898) an offence punishable under clause (1)or clause (n) or clause (o) of sub-section (1) of section 11 or under section 12 shall be a cognizable offence within the meaning of that Code.

Section 32. Powers of search and seizure.

(1) If a police officer not below the rank of sub inspector or any person authorised by the State Government in this behalf has reason to believe that an offence under clause (1) of sub-section 11 in respect of any such animal as is referred to in section 30 is being, or is about to be, or has been, committed in any place, or that any person has in his possession the skin of any such animal with any part of the skin of the head attached thereto, he may enter and search such place or any place in which he has reason to believe any such skin to be, and may seize such skin or any article or thing used for intended to be used in the commission of such offence.

(2) If a police officer not below the rank of sub-inspector, or any person authorised by the State Government in this behalf, has reason be believe that phooka or ¹[doom dev or any other operation of the nature referred to in section 12] has just been, or is being, performed on any animal within the limits of his jurisdiction, he may enter any place in which he has reason to believe such animal to be, and may seize the animal and produce it for examination by the veterinary officer in charge of the area in which the animal is seized.

——————–

1. Subs, by Act 26 of 1982 S. 15 for the words “doom dev”.

Section 33. Search Warrants.

(1) If a magistrate of the first or second class or a presidency magistrate or a sub-divisional magistrate or a commissioner of police or district superintendent of police, upon information in writing, and after such inquiry as he thinks necessary, has reason to believe that an offence under this Act is being, or is about to be, or has been committed in any place, he may either himself enter and search or by his warrant authorise any police officer not below the rank of sub-inspector to enter and search the place.

(2) The provisions of the Code or Criminal Procedure, 1898, (5 of 1898) relating to searches shall so far as those provisions can be made applicable, apply to searches under this Act.

Section 34. General power of seizure for examination.

Any police officer above the rank of a constable or any person authorised by the State Government in this behalf, who has reason to believe that an offence against his Act has been or is being, committed in respect of any animal, may, if in his opinion the circumstances so require, seize the animal and produce the same for examination by the nearest magistrate or by such veterinary officer as may be prescribed, and such police officer or authorised person may, when seizing the animal, require the person in charge thereof to accompany it to the place of examination.

Section 35. Treatment and care of animals.

(1) The State Government, may be general or special order appoint infirmaries for the treatment and care of animals in respect of which offences against this Act have been committed, and may authorise the detention therein of any animal pending its production before a magistrate.

(2) The magistrate before whom a prosecution for an offence against this Ac has been instituted may direct that the animals concerned shall be treated and care for in an infirmary, until it is fit to perform its usual work or is otherwise fit for discharge, or that it shall be sent to a pinjrapole, or if the veterinary officer in charge of the area in which the animal is found or such other veterinary officer as may be authorised in this behalf by rules made under this Act certifies that it is incurable or cannot be removed without cruelty, that it shall be destroyed.

(3) An animal sent for care and treatment to an infirmary shall not, unless the magistrate directs that it shall be sent to a pinjrapole or that it shall be destoryed, be released from such place except upon a certificate of its fitness for discharge issued by the veterinary officer in charge of the area in which the infirmary is situated or such other veterinary officer as may be authorised in this behalf by rules made under this Act.

(4) The cost of transporting the animal to an infirmary or pinjrapole and of its maintenance and treatment in an infirmary, shall be payable by the owner of the animal in accordance with a scale of rates to be prescribed by the district magistrate, or, in presidency-towns, by the commissioner of police;

Provided that when the magistrate so orders on account of the poverty of the owner of the animal, no charge shall be payable for the treatment of the animal.

(5) Any amount payable by an owner of an animal under sub-section (4) may be recovered in the same manner as an arrear of land revenue.

(6) If the owner refuses or neglects to remove the animal within such time as a magistrate may specify, the magistrate may direct that the animal be sold and that the proceeds of the sale be applied to the payment of such cost.

(7) The surplus, if any, of the proceeds of such sale shall, on application made by the owner within two months from the date of the sale, be paid to him.

Section 36. Limitation of prosecutions.

A prosecution for an offence against this Act shall not be instituted after the expiration of three months from the date of the commission of the offence.

Section 37. Delegation of powers.

The Central Government may, by notification in the Official Gazette, direct that all or any of the powers exercisable by it under this Act, may, subject to such conditions as it may think fit to impose, be also exercisable by any State Government.

Section 38. Power to make rules.

(1) The Central Government may, by notification in the Official Gazette, and subject to the condition of previous publication, make rules to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, the Central Government may wake rules providing for all or any of the following matters, namely:

(a) The ¹[x x x] conditions of service of members of the Board, the allowances payable to them and the manner in which they may exercise their powers and discharge their functions;

²[(aa) The manner in which the persons to represent municipal corporations are to be elected under clause (e) of sub-section (1) of section 5;],

(b) The maximum load (including any load occasioned by the weight of passengers) to be carried or drawn by any animal;

(e) The conditions to be observed for preventing the overcrowding of animals;

(d) The period during which, and the hours between which, any class of animals shall not be used for draught purposes;

(e) Prohibiting the use of any bit or harness involving cruelty to animals;

³[(ea) The other methods of destruction of stray dogs referred to in clause (b) of sub-section (3) of section 11;

(eb) The methods by which any animal which cannot be removed without cruelty may be destroyed under sub-section (3) of section 13;]

(f) Requiring persons carrying on the business of a farrier to be licensed and registered by such authority as may be prescribed and levying a fee for the purpose;

(g) The precautions to be taken in the capture of animals for purposes of sale, export or for any other purpose, and the different appliances or devices that may alone be used for the purpose; and the licensing of such capture and the levying of fees for such licences;

(h) The precautions to be taken in the transport of animals whether by rail, road, inland, waterway, sea or air and the manner in which and the cages or other receptacles in which they may be so transported;

(i) Requiring persons owning or in charge of premises in which animals are kept or milked to register such premises, to comply with such conditions as may be laid down in relation to the boundary walls or surroundings of such premises, to permit their inspection for the purpose of ascertaining whether any offence under this Act is being or has been committed therein, and to expose in such premises copies of section 12 in a language or languages commonly understood in the locality;

(j) The form in which applications for registration under Chapter V may be made, the particulars to be contained therein, the fees payable for such registration and the authorities to whom such applications may be made;

⁴[ja) The fees which may be charged by the Committee constituted under section 15 for the registration of persons or institutions carrying on experiments on animals or for any other purpose;]

(k) The purpose to which fines realised under this Act may be applied, including such purposes as the maintenance of infirmaries, pinjrapole and veterinary hospitals;

(l) Any other matter which was to be, or may be prescribed.

(3) If any person contravenes, or abets the contravention of, any rules made under this section, he shall be punishable with fine which may extend to one hundred rupees, or with imprisonment for a term which may extend to three months, or with both.

⁵[x x x ]

——————–

1. The words “terms and” omitted by Act 26 of 1982, S, 16 (a) (i).

2. Ins. by Act 26 of 1982; S. 16 (a) (ii)

3. Ins. by Act 26 of 1982; S. 16 (a) (iii).

4. Ins. by Act 26 of 1982. S. 16(a) (iv).

5. “Sub-section (4) of the Principal Act” omitted by Act 26 of 1982, S. 16(b)

Section 38 A. Rules and Regulations to be laid before Parliament.

¹[Rules and Regulations to be laid before Parliament. Every rule made by the Central Government or by the Committee constituted under section 15 and every regulation made by the Board 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 regulation, as the case may be, should not be made, the rule or regulation shall there after 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 or regulation.]

——————–

1. Ins by Act 26 of 1982, S. 17.

Section 39. Persons authorised under Section 34 to be public servants.

Every person authorised by the Sate Government under section 34 shall be deemed to be a public servant within the meaning of section 21 of the Indian Panel Code.

Section 40. Indemnity.

No suit, prosecution or other legal proceeding shall lie against any person who is, or who is deemed to be, a public servant within the meaning of section 21 of the Indian Panel Code in respect of anything in good faith done or intended to be done under this Act.

Section 41. Repeal of Act 11 of 1890.

Where in pursuance of a notification under sub-section (3) of section 1 any provision of this Act comes into force in any State, any provision of the Prevention of Cruelty to Animals Act, 1890 (11 of 1890), which corresponds to the provision so coming into force, shall thereupon stand repealed.

Payment of Bonus Act

November 30, 2014

Section 1. Short title, extent, and application

(1) This Act may be called the Payment of Bonus Act,1965

(2) It extends to the whole of India [Note: The words “except the State of Jammu and Kashmir” omitted by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September,1971).

(3) Save as otherwise provided in this Act, it shall apply to -

(a) Every factory; and

(b) Every other establishment in which twenty or more persons are employed on any day during an accounting year:

[(Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided that the appropriate Government may, after giving not less than two months’ notice of its intention so to do, by notification in the official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class establishments [including an establishment being a factory within the meaning of sub-clause (ii) of Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification ; so however, that number of persons so specified shall in no case be less than ten.]

(4) Save as otherwise provided in this Act, the provisions of this Act shall in relation to a factory or other establishment to which this Act applies, have effect in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year:

[(Note: Added by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971) Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year:]

[(Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to sub-section (3), the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year or, as the case may be, the reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year shall in relation to such establishment or class of establishments, be construed as a reference to the accounting year specified in such notification and every subsequent accounting year.]

(5) An establishment to which this Act applies [Note: The words, brackets, letter and figure “under Cl. (b) of sub-section (3)” omitted by Act 23 of 1976, Sec.8 (w.e.f. 25th September, 1975)] shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty [(Note: Ins. by Act 23 of 1976, Sec-3, (w.e.f. 25th September, 1975) or, as the case may be, the number specified in the notification issued under the proviso to sub-section (3)].

NOTES

Section 1 and 2 of Payment of Bonus (Amendment) Act No.43 of 1977 provides as under :

1. Shot title and commencement – (1) This Act may be called the Payment of Bonus (Amendment) Act, 1977.

(2) It shall come into force on the third day of September, 1977.

2. Act 21 of 1965 to have modified effect for a particular period – The Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act) shall, -

(a) In relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Act and

(b) In relation to a banking company and the Industrial Reconstruction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Act,

Have effect in respect of the accounting year commencing on any day in the year 1976 [and in respect of the accounting year commencing on any day in the year 1977], as if the amendments specified in Sections 3 to 19 has been made in that Act.

Explanation – In this section, the expressions “banking company” and “accounting year” shall have the meanings respectively assigned to them in clauses (8) and (1) of Section 2 of the principal Act”.

Section 2. Definitions

In this Act, unless the context otherwise requires, -

(1) “Accounting year” means -

(i) In relation to a corporation, the year ending on the day on which the books and accounts of the corporation are to be closed and balanced :

(ii) In relation to a company, the period in respect of which any profit and loss account of the company laid before it in annual general meeting is made up, whether that period is a year or not; (iii) In any other case -

(a) The year commencing on the 1st day of April ; or

(b) If the accounts of an establishment maintained by the employer thereof are closed and balanced on any day other than the 31st day of March, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced :

Provided that an option once exercised by the employer under para. (b) of this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit :

(2) “Agricultural income” shall have the same meaning as in the Income-tax Act ; (3) “Agricultural income-tax law” means any law for the time being in force relating to the levy of tax on agricultural income ; (4) “Allocable surplus” means -

(a) In relation to an employer, being a company [(Note: Ins. by Act 66 of 1980 (w.e.f. 21st August,1980) (other than a banking company)] which has not made the arrangements prescribed under the Income-tax Act for the declaration and payment within Indian of the dividends payable out of its profits in accordance with the provisions of Sec.194 of that Act, sixty-seven per cent of the available surplus in an accounting year ;

(5) In any other case, sixty per cent of such available surplus ; (Note: Certain words omitted by Act 23 of 1976, Sec.4 (w.e.f. 25th September, 1975)

(6) “Available surplus” means the available surplus computed under Sec.5 ;

(7) “Award” means an interim or a final determination of any industrial dispute or of any question relating thereto ny any Labour Court. Industrial Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947 (14 of 1947), or by any other authority constituted under any corresponding law relating to investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under Sec. 10-A of that Act or under that law;

(8) “Banking company” means a banking company as defined in Sec.5 of the Banking Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Bank) Act, 1959 (38 of 1959), [(Note: Ins. by Act 23 of 1976 Sec.4 (w.e.f. 25th September, 1975) any corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970), [Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980) any corresponding new bank constituted under Sec.3 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] any co-operative bank as defined in Cl. (bii) of Sec.2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking institution which may be notified in this behalf by the Central Government.

(9) “Company” means any company as defined in Sec.3 of the Companies Act, 1956 (1 of 1956), and includes a foreign company within the meaning of Sec.591 of that Act;

(10) “Co-operative society” means a society registered or deemed to be registered under the Co-operative Societies Act, 1912 (2 of 1912), or any other law for the time being in force in any State relating to co-operative societies;

(11) “Corporation” means any body corporate established by or under any Central, Provincial or State Act but does not include a company or a co-operative society :

(12) “Direct tax” means -

(a) Any tax chargeable under – (i) The Income-tax Act;

(ii) The Super Profits Tax Act, 1963 (14 of 1963);

(iii) The Companies (Profits) Surtax Act, 1964 (7 of 1964);

(iv) The agricultural income-tax law; and

(b) Any other tax which, having regard to its nature or incidence, may be declared by the Central Government, by notification in the official Gazette to be a direct tax for the purposes of this Act;

(13) “Employee” means any person (other than an apprentice) employed on a salary or wage not exceeding [(Note: Subs. by Act No.67 of 1985, Sec.2, for the words “one thousand and six hundred rupees” (w.e.f. 7th November, (1985)) two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;

(14) “Employer” includes -

(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and (ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;

(15) “Establishment in private section” means any establishment other than an establishment in public sector;

(16) “Establishment in public sector” means an establishment owned, controlled or managed by-

(a) A Government company as defined in Sec. 617 of the Companies Act,

1956 (1 of 1956) ; (b) A corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by -

(i) The Government; or

(ii) The Reserve Bank of India; or

(iii) A corporation owned by the Government or the Reserve Bank of India ;

(17) “Factory” shall have the same meaning as in Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948) ;

(18) “Gross profits” means the gross profits calculated under Sec.4 ;

(19) “Income-tax Act” means the Income-tax Act, 1961 (43 of 1961) ;

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

(21) “Salary or wage” means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living, but does not include -

(i) Any other allowance which the employee is for the time being entitled to

(ii) The value of any house accommodation or of such of light, water, medical attendance or other amenity or of any service of any confessional supply of food grains or other articles;

(iii) Any traveling concession;

(iv) Any bonus (including incentive, production and attendance bonus) ;

(v) Any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employees under any law for the time being in force ;

(vi) Any retrenchment compensation or any gratuity or other retirement benefit payable to the employees or any ex gratia payment made to him ;

(vii) Any commission payable to the employee.

(viii) Any commission payable to the employee.

Explanation – Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employees.

(22) Words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act.

Section 3. Establishments to include departments, undertakings and branches

Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act :

Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or breach shall be treated as separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.

NOTES

When there is integral link and unity of management between the two division of a company it cannot be said as a separate undertaking although it is 60 miles away from one division. Gawlior Rayon Silk Mfg. Co. v. Industrial Tribunal 1975 Lab. I.C. 820.

Section 4. Computation of gross profits.

The gross profits derived by an employer from an establishment in respect of any accounting year shall -

(a) In the case of a banking company, be calculated in the manner specified in the First Schedule ; (b) In any other case, be calculated in the manner specified in the Second Schedule.

Section 5. Computation of available surplus

The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in Sec.6.

[(Note: Added by Act 8 of 1969, Sec.2) Provided that the available surplus in respect of the accounting year commencing on any day in the year 1968 and in respect of every subsequent accounting year shall be the aggregate of -

(a) The gross profits for that accounting year after deducting therefrom the sums referred to in Section 6; and (b) An amount equal to the difference between -

(i) The direct tax, calculated in accordance with the provisions of Section 7, in respect of an amount equal to the gross profits of the employer for the immediately preceding accounting year; and

(ii) The direct tax, calculated in accordance with the provisions of Section 7, in respect of an amount equal to the gross profits of the employer for such preceding accounting year after deducting therefrom the amount of bonus which the employer has paid or is liable to pay to his employees in accordance with the provisions of this Act for that year.]

NOTES

The burden of proving that the depreciation claimed is the correct amount admissible under Section 32 (1) of Income-tax Act lies on the party claiming such amount. Workmen of National and Grindlays Bank Ltd. v. National and Grindlays Bank Ltd., AIR 1976 S.C. 611.

Section 6. Sums deductible from gross profits

The following sums shall be deducted from the gross profits as prior charges, namely:

(a) Any amount by way of depreciation admissible in accordance with the provisions of sub-section (1) of Section 32 of the Income-tax Act, or in accordance with the provisions of the agricultural Income-tax law, as the case may be : Provided that where an employer has been paying bonus of his employees under a settlement or an award or agreement made before the 29th May, 1965, and subsisting on that date after deducting from the gross profits notional normal depreciation, then the amount of depreciation to be deducted under this clause shall, at the option of such employer (such option to be exercised once and within one year from that date) continue to be such notional normal depreciation;

(b) Any amount by way of [(Note: Subs. by Act 66 of 1980) development rebate or investment allowance or development allowance] which the employer is entitled to deduction from his income under the Income-tax Act; (c) Subject to the provisions of Section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during the year;

(d) Such further sums as are specified in respect of the employer in the [(Note: Ibid) Third Schedule].

Section 7. Calculation of direct tax payable by the employer

(Note: Subs. by Act 68 of 1969) Any direct tax payable by the employer] for any accounting year shall, subject to the following provisions, be calculated at the rates applicable to the income of the employer for that year, namely:

(a) In calculating such tax no account shall be taken of -

(i) Any loss incurred by the employer in respect of any previous accounting year and carried forward under any law for time being in force relating to direct taxes ;

(ii) Any arrears of depreciation which the employer is entitled to add to the amount of the allowance for depreciation for any following accounting year or years under sub-section (2) of Section 32 of the Income-tax Act ;

(iii) Any exemption conferred on the employer under Section 84 of the Income-tax Act or of any deduction The Orient Tavern which he is entitled under sub-section (1) of Section 101 of that Act, as in force immediately before the commencement of the Finance Act, 1965 (10 of 1965) ;

(b) Where the employer is a religious or a charitable institution to which the provisions of Section 32 do not apply and the whole or any part of its income is exempt from tax under the Income-tax Act, then, with respect The Orient Tavern the income so exempted, such institution shall be treated as if it were a company in which the public are substantially interested within the meaning of that Act ;

(c) Where the employer is an individual or a Hindu undivided family, the tax payable by such employer under the Income-tax Act shall be calculated on the basis that the income derived by him from the establishment is his only income ;

(d) Where the income of any employer includes any profits and gains derived from the export of any goods or merchandise out of India any rebate on such income is allowed under any law for the time being in force relating to direct taxes, then, no account shall be taken of such rebate ;

(e) No account shall be taken of any rebate [(Note: Subs. by Act 66 of 1980) other than development rebate or investment allowance or development allowance)] or credit or relief or deduction (not hereinafter mentioned in this section) in the payment of any direct tax allowed under nay law for the time being in force relating to direct taxes or under the relevant annual Finance Act, for the development of any industry.

Section 8. Eligibility for bonus

Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

Section 9. Disqualification for bonus

Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-

(a) Fraud; or (b) Riotous or violent behaviour while on the premises of the establishment; or

Section 10. Payment of minimum bonus

Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year:

Provided that there an employee has not employed fifteen years of age at the beginning of the accounting year, the provision of this section shall have effect in relation to such employee as if for the words “one hundred rupees”, the words “sixty rupees” were substituted.

Section 11. Payment of maximum bonus

(1) Where in respect of any accounting year referred to in Sec.10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.

(2) In computing the allocable surplus under this section, the amount set on or the amount set-off under the provisions of Sec.15 shall be taken into account in accordance with the provisions of that section.

Section 12. Calculation of bonus with respect to certain employees

Where the salary or wage of an employee exceeds one thousand and six hundred rupees per mensem, the bonus payable to such employee under Sec.10, or as the case may be, under Sec.11, shall be calculated as if his salary or wage were one thousand and six hundred rupees per mensem.

Section 13. Proportionate reduction in bonus in certain cases

Where an employee has not worked for all the working days in an accounting year, the minimum bonus of one hundred rupees or, as the case may be, of sixty rupees, if such bonus is higher than 8.33 per cent of his salary or wage for the days he has worked in that accounting year, shall be proportionately reduced.

NOTES

Working days – Words ‘working day in any accounting year’ – meaning of – factory working in a particular season only and not during the whole year in such a case the ‘working days’ only mean those days of the year during which the employee concerned is actually allowed to work. (Shakkar Mills Mazdoor Sangh v. Gwalior Sugar Co. Ltd., 1985 JLJ 294 = AIR 1985 SC 758).

Section 14. Computation of number of working days.

For the purposes of Sec. 13, an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which -

(a) He has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947) or under any other law applicable to the establishment ;

(b) He has been on leave with salary or wage;

(c) He has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(d) The employee has been on maternity leave with salary or wage, during the accounting year.

Section 15. Set-on and set-off of allocable surplus

(1) Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under Sec.11, the, the excess shall, subject to a limit of twenty per cent of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set-on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus in the manner illustrated in the Fourth Schedule.

(2) Where for any accounting year, there is no available surplus or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under Section 10, and there is no amount or sufficient amount carried forward and set on under sub-section (1) which could be utilized for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set-off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year in the manner illustrated in the Fourth Schedule.

(3) The principle of set-on and set-off as illustrated in the Fourth Schedule shall apply to all other cases not covered by sub-section (1) or sub-section (2) for the purpose of payment of bonus under this Act.

(4) Where in any accounting year any amount has been carried forward and set-on or set-off under this section, then, in calculating bonus for the succeeding accounting year, the amount of set-on or set-off carried forward from the earliest accounting year shall first be taken into account.

Section 16. Special provisions with respect to certain establishments

(1) Where an establishment is newly set up, whether before or after the commencement of this Act, the employees of such establishment shall be entitled to be paid bonus under this Act in accordance with the provisions of sub-section (1-A), (1-B) and (1-C).

(1-A) In the first five accounting years following the accounting year in which the employee sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment and such bonus shall be calculated in accordance with the provisions of this Act in relation to that year, but without applying the provisions of Sec.15.

(1-B) For the sixth and seventh accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of Sec.15 shall apply subject to the following modifications namely :

(i) For the sixth accounting year – Set on or set-off, as the case may be, shall be made in the manner illustrated in the [(Note: Subs. by Act 66 of 1980, (w.e.f. 25th September,1975) Fourth Schedule] taking into account the excess or deficiency, if any, as the case may be, of the allocable surplus set-on or set-off in respect of the fifth and sixth accounting year ;

(ii) For the seventh accounting year – Set-on or set-off, as the case may be, shall be made in the manner illustrated the [(Note: Subs. by Act 66 of 1980, (w.e.f. 25th September,1975) Fourth Schedule] taking into account the excess of deficiency, if any, as the case may be, of the allocable surplus set-on or set-off in respect of the fifth, sixth and seventh accounting years.

(1-C) From the eighth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of Sec.15 shall apply in relation to such establishment as they apply in relation to any other establishment.

Explanation I – For the purpose of sub-section (1), an establishment shall not be deemed to be newly set up merely by reason of a change in its location, management, name or ownership.

Explanation II – For the purpose of sub-section (1-A), an employer shall not be deemed to have derived profit in any accounting year unless -

(a) He has made provision for that year’s depreciation, to which he is entitled under the Income-tax Act or, as the case may be, under the agricultural income-tax law ; and (b) The arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set-off against his profits.

Explanation III – For the purposes of sub-sections (1-A), (1-B) and (1-C) sale of the goods produced or manufactured during the course of the trail running of any factory or of the prospecting stage or an oil-field shall not be taken into consideration and where any question arises with regard to such production or manufacture, the decision of the appropriate Government, made after giving the parties reasonable opportunity of representing the case, shall be final and shall not be called in question by any court or other authority.]

(2) The provisions of [(Note: Subs. by Act 23 of 1976, (w.e.f. 25th September, 1975) sub-sections (1), (1-A), (1-B) and (1-C) shall, so far as may be, apply to new departments or undertakings or branches set up by existing establishments :

Provided that if an employer in relation to an existing establishment consisting of different departments or undertakings or branches (whether or not in the same industry) set up at different periods has, before the 29th May, 1965, been paying bonus to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertakings or branches (whether set up before or after that date) on the basis of the consolidated profits computed as aforesaid.

Section 17. Adjustment of customary or interim bonus against bonus payable under the Act.

Where in any accounting year -

(a) An employer has paid any puja bonus or other customary bonus to an employees ; or (b) An employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable;

Then, the employer shall be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the balance.

Section 18. Deduction of certain amounts from bonus payable under the Act.

Where in any accounting year, an employee is found guilty of misconduct causing financial loss to the employer, then, it shall, be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act in respect of that accounting year only and the employee shall be entitled to receive the balance, if any.

Section 19. Time-limit for payment of bonus

[(Note: Subs. by Act 23 of 1976, (w.e.f. 25th September, 1975) All amounts] payable to an employee by way of bonus under this Act shall be paid in cash by hi employer.

(a) Where there is a dispute regarding payment of bonus pending before any authority under Sec.22, within a month from the date on which the award becomes enforceable or the settlement comes into operation, in respect of such dispute; (b) In any other case, within a period of eight months from the close of the accounting year :

Provided that the appropriate Government or such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extend the said period of eight months to such further period or periods as it thinks fit ; so, however, that the total period so extended shall not in any case exceed two years.

(Note: Sub-sections (2) to (7) inserted by Act 68 of 1972, Sec.4 omitted by Act 23 of 1976, Sec.13 (w.e.f. 25th September, 1975).

(Note: Sub-section (8) inserted by Act 39 of 1973, Sec.4, omitted by Act 55 of 1973, Sec.2 (w.e.f. 1st September, 1973).

NOTES

Sub-Section (8) of Section 19 was omitted by Payment of Bonus (Amendment) Act No. 55 of 1973 w.e.f. 1.9.1973 and Section 3 of the above Amendment Act is given below:

3. Portion of bonus credited in the provident fund account to be refunded. – Where in pursuance of the provisions of Section 19 of the principal Act, any portion of the bonus paid to an employee in respect of the accounting year commencing on any day in the year 1972 has been remitted by the employer before the commencement of this Act to the authority maintaining the provident fund account of such employee for crediting the same in that account, such authority shall, notwithstanding anything contained in any other law (including any scheme) for the time being in force, refund such portion to the employee”.

Section 20. Application of Act to establishments in public section in certain cases

[(Note: Renumbered by Act 66 of 1980)1] If in any accounting year an establishment in public section sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both is not less than twenty per cent of the gross income of the establishment in public sector for that year, then, the provisions of this Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.

[(Note: Ins. by Sec.11, ibid) (2) Save as otherwise provided in sub-section (1), nothing in this Act shall apply to employees employed by any establishment in public sector.]

Section 21. Recovery of bonus due from an employer

Where any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement, the employee himself, or any other person authorised by him in writing in this behalf, or in the case of the death of the employee, his assignee or heirs may, without prejudice to any other mode of recovery made an application to the appropriate Government for the recovery, of the money due to him, and if the appropriate Government or such authority as the appropriate Government may specify in this behalf is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue:

Provided that every such application shall be made within one year from the date on which the money became due to the employee from the employer:

Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period.

Explanation – In this section and in [(Note: Subs. by Act 66 of 1980, (w.e.f. 21st August, 1980) Secs. 22, 23, 24 and 25], “employee” includes a person who is entitled to the payment of bonus under this Act but who is no longer in employment.

Section 22. Reference of dispute under this Act.

Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Dispute Act, 1947 (14 of 1947), or of any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act or, as the case may be, such law, save as otherwise expressly provided, apply accordingly.

Section 23. Presumption about accuracy of balance-sheet and profit and loss account of corporations and companies

(1) Where, during the course of proceedings before any arbitrator or tribunal under the Industrial Disputes Act, 1947 (14 of 1947), or under any corresponding law relating to investigation and settlement of industrial disputes in force in a State (hereinafter in this section [(Note: Subs. by Act 23 of 1976, Sec.16 for land in Secs.24 and 25, (w.e.f. 25th September, 1975) and in [(Note: Subs. by Act 66 of 1980, (w.e.f. 21st August, 1980) [Secs. 24 and 25]] referred to as the “said authority”) to which any dispute of he nature specified in Sec.22 has been referred, the balance-sheet and the profit and loss account of an employer, being a corporation or a company (other than a banking company), duly audited by the Comptroller and Auditor-General of India or by auditors duly qualified to act as auditors of companies under sub-section (1) of Sec.226 of the Companies Act,, 1956 (1 of 1956), are produced before it, then the said authority may presume the statements and the particulars contained in such balance-sheet and profit and loss account to be accurate and it shall not be necessary for the corporation or the company to prove the accuracy of such statements and particulars by the filing of an affidavit or by any other mode:

Provided that where the said authority is satisfied that the statements and particulars contained in the balance-sheet or the profit and loss account of the corporation or the company are not accurate, it may take such steps as it thinks necessary to find out the accuracy of such statements and particulars.

(2) When an application is made to the said authority by any trade union being a party to the dispute or where there is not trade union, by the employees being a party to the dispute, requiring any clarification relating to any item in the balance-sheet or the profit and loss account, it may, after satisfying itself that such clarification is necessary, by order, direct the corporation or, as the case may be, the company, to furnish to the trade union or the employees such clarification within such time as may be specified in the direction and the corporation or, as the case may be, the company shall comply with such direction.

Section 24. Audited accounts of banking companies not to be questioned

(1) Where any dispute of the nature specified in Sec.22 between an employer, being a banking company, and its employees has been referred to the said authority under that section and during the course of proceedings the accounts of the banking company duly audited are produced before it, the said authority shall not permit any trade union or employees to question the correctness of such accounts, but the trade union or the employees may be permitted to obtain from the banking company such information as is necessary for verifying the amount of bounds due under this Act.

(2) Nothing contained in sub-section (1) shall enable the trade union or the employees to obtain any information which the banking company is not compelled to furnish under the provisions of Sec. 34-A of the Banking Regulation Act, 1949 (10 of 1949).

Section 25. Audit of accounts of employers, not being corporations or companies

(1) Where any dispute of the nature specified in Section 22 between an employer, not being a corporation or a company, and his employees has been referred to the said authority under that section and the accounts of such employer audited by any auditor duly qualified to act as auditor of Companies under sub-section (1) of Section 226 of the Companies Act, 1956 (1 of 1956), are produced before the said authority, the provisions of Section 23, shall, so far as may be, apply to the accounts so audited.

(2) When the said authority finds that the accounts of such employer have not been audited by any such auditor and it is of opinion that an audit of the accounts of such employer is necessary for deciding the question referred to it, then it may, by order, direct the employer to get his accounts audited within such time as may be specified in the direction or within such further time as it thinks fit and thereupon the employer shall comply with such direction.

(3) Where an employer fails to get the accounts audited under sub-section (2) the said authority may, without prejudice to the provisions of Sec.28 get the accounts audited by such auditor or auditors as it thinks fit.

(4) When, the accounts are audited under sub-section (2) or sub-section (3) the provisions of Sec.23 shall, so far as may be, apply to the accounts so audited.

(5) The expenses of, and incidental to, any audit under sub-section (3) (including the remuneration of the auditor or auditors) shall be determined by the said authority (which determination shall be final) and paid by the employer and in default of such payment shall be recoverable from the employer in the manner provided in Sec.21

Section 26. Maintenance of register, records, etc.

Every employer shall prepare and maintain such registers, records and other documents in such form and in such manner as may be prescribed.

Section 27. Inspectors

(1) The appropriate Government may, by notification in the official Gazette, appoint such persons as it thinks fit to be Inspectors for the purpose of this Act and may define the limits within which they shall exercise jurisdiction.

(2) Require an employer to furnish such information as he may consider necessary ; (a) At any reasonable time and with such assistance, if any, as he thinks fit, enter any establishment or any premises connected therewith and require any one found in charge thereof to produce before him for examination any accounts, books, registers and other documents relating to the employment of persons or the payment of salary or wage or bonus in the establishment;

(b) Examine with respect to any matter relevant to any of the purposes aforesaid, the employer, his agent or servant or any other person found in charge of establishment or any premises connected therewith or any person whom the Inspector has reasonable cause to believe to be or to have been an employee in the establishment ;

(c) Make copies of, or take extracts from, any book, register or other document maintained in relation to the establishment;

(d) Exercise such other powers as may be prescribed.

(3) Every Inspector shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860).

(4) An person required to produce any accounts, book, register or other document or to give information by an Inspector under sub-section (1) shall be legally bound to do so.

[(Note: Subs. by Act 66 of 1980 (w.e.f. 21st August, 1980) (5) Nothing contained in this section shall enable an Inspector to require a banking company to furnish or disclose any statement or information or to produce, or give inspection of, any of its books of account or other documents, which a banking company cannot be compelled to furnish, disclose, produce or give inspection of, under the provisions of Sec. 34-A of the Banking Regulation Act, 1949( 10 of 1949)].

Section 28. Penalty – If any person

(a) Contravenes any of the provisions of this Act or any rule made thereunder; or (b) To whom a direction is given or a requisition is made under this Act fails to comply with the direction or requisition.

He shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Section 29. Offences by companies

(1) If the person committing an offence under this Act 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 business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

provided that nothing contained in sub-section (1), 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, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also 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.

Section 30. Cognizance of offences:

(1) No court shall take cognizance of any offence punishable under this Act, save on complaint made by or under the authority of the appropriate Government, [(Note: Ins. by ibid, See.16) or an officer of that Government (not below the rank of a Regional Labour Commissioner in the case of an officer of the Central Government and not below the rank of a labour commissioner the case of an officer of the State Government) specially authority in this behalf by that Government.]

(2) No Court inferior to that of a presidency magistrate or a magistrate of the first class shall try any offence publishable under this Act.

Section 31. Protection of action taken under the Act.

No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government for anything which is in good faith done or intended to be done in pursuance of this Act or any rule made thereunder.

Section 31-A. Special provision with respect to payment of bonus linked with production or productivity

Notwithstanding anything contained in this Act, -

(i) Where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), or (ii) Where the employees enter into any agreement with their employer after such commencement,

For payment of an annual bonus linked with production or productivity in lieu of bonus based on profits payable under this Act, then, such employees shall be entitled to receive bonus due to them under such agreement or settlement, as the case may be :

[(Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980)) Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under Sec.10 shall be null and void in so far as it purports to deprive them of such right :]

[(Note: Subs. by ibid) Provided further that] such employees shall not be entitled to be paid such bonus in excess of twenty per cent, of the salary or wage earned by them during the relevant accounting year.]

Section 32. Act not to apply to certain classes of employees.

Nothing in this Act shall apply to -

(i) Employees employed by any insurer carrying on general insurance business and the employees employed by the Life Insurance Corporation of India ;

(ii) Seaman as defined in Cl. (42) of Sec.3 of the Merchant Shipping Act, 1958 (44 of 1958) ;

(iii) Employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), and employed by registered or listed employers ;

(iv) Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority ;

(v) Employees employed by -

(a) The Indian Red Cross Society or any other institution of a like nature (including its branches) ;

(b) Universities and other educational institutions;

(c) Institutions (including hospitals, chambers of commerce and society welfare institutions) established not for purposes of profit;

(i) Employees employed through contractors on building operations ;

(ii) (Note: Clause (vii) omitted by Act 66 of 1980, (w.e.f. 21st August, 1980)

(iii) Employees employed by the Reserve Bank of India ;

(iv) Employees employed by -

(a) The Industrial Finance Corporation of India;

(b) By Financial Corporation established under Sec.3, or any Joint Financial Corporation established under Sec. 3-A of the State Financial Corporations Act, 1951 (63 of 1951) ;

(d) [(Note: Subs. by Act 61 of 1981) the National Bank for Agriculture and Rural Development;]

(e) the Unit Trust of India;

(f) the Industrial Development Bank of India;

(Note: Omitted by Act 66 of 1980, (w.e.f. 21st August, 1980))

(g) Any other financial institution [(Note: Ins. by ibid) Other than a banking company], being an establishment in public sector, which the Central Government may, by notification in the official Gazette, specify having regard to -

(i) Its capital structure;

(i) Its objectives and the nature of its activities; (ii) The nature and extent of financial assistance or any concession given to it by the Government; and

(iii) Any other relevant factor;

(i) (Note: Clause (x) omitted by Act 23 of 1976, Sec.20, (w.e.f. 25th September, 1975)

(ii) Employees employed by inland water transport establishments operating on routes passing through any other country.

NOTES

Applicability of the provisions of the Bonus Act to employees the Defence ministry canteen stores department. It was held that canteen stores department is an “establishment” engaged in any industry carried on by or under the authority of any department of the Central Government. (Radhu-k-Kallde of Bombay v. Union of India and other (1986) 1 S.C.J.5).

Section 33. Act to apply of certain pending dispute regarding payment of bonus.

Rep. by the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), Section 21 (w.e.f. 25th September, 1975).

Section 34. Employees and employers not to be precluded from entering into agreements for grant of bonus under a different formula.

Nothing contained in this Act shall be construed to preclude employees employed in any establishment or class of establishments from entering into agreements with their employer for granting them an account of bonus under a formula which is different for that under this Act :

Provided that no such agreement shall have effect unless it is entered into with the previous approval of the appropriate Government:

Provided further that any such agreement whereby the employees relinquish their right to receive the minimum bonus under sub-section (2-A) of Section 10 shall be null and void in so far as it purports to deprive them of such right:

Provided also that such employees shall not be entitled to be paid bonus in excess of -

(a) 8.33 per cent of the salary or wage earned by them during accounting year if the employer has no allocable surplus in the accounting year or the amount of such allocable surplus is only so much that, but for the provisions of sub-section (2-A)of Section 10, it would entitle the employees only to receive an amount of bonus which is less than the aforesaid percentage, or (b) Twenty per cent, of the salary or wage earned by them during the accounting year.

NOTES

Employer and workmen enter into settlement before Conciliation Officer on 9th October, 1972 within the meaning of Sec.34 (3) of Payment of Bonus Act – On a reference before the tribunal workmen claims three month Salary as customer’s bonus or 2% of salary as per the Act – Validity of award directing payment of three months basic wages as on 31st March 1972 instead of 31st March 1970 in term 1 of the Settlement. (Dishergarh Power Supply Co., Ltd. v. The Workmen of Dishergarh Power Supply Co., Ltd., (1986) 3 SCJ 247).

Section 34-A. – Effect of laws and agreements inconsistent with the Act.

Subject to the provisions of Sections 31-A and 34, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.

Section 35. Saving

Nothing contained in this Act shall be deemed to affect the provisions of the Coal Mines Provident Fund and Bonus Schemes Act, 1948 (46 of 1948), or of any scheme made there under.

Section 36. Power of exemption

If the appropriate Government, having regard to the financial position and other relevant circumstances of any establishment or class of establishments, is of opinion that it will 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 for such period as may be specified therein and subject to such conditions as it may think fit to impose, such establishment or class of establishments from all or any of the provisions of this Act.

NOTE

The Court has jurisdiction to consider whether the powers under Section 36 has been properly exercised by the Government.

Consideration of the profits for one previous year cannot amount to consideration of “the financial position” of an establishment within the terms of Section 36 of the Bonus Act. (M/s, Fashan Electric Dry Cleaners v. The Government of A.P. (1977) 1 An. A.W.R.27).

Section 37. Power to remove difficulties

Rep. by the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), Section 23 (w.e.f. 25th September, 1975).

Section 38. Power of make rules.

(1) The Central Government may make rules for the purpose of carrying into effect the provision of this Act.

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

(a) The authority for granting permission under the proviso to sub-clause (iii) of Cl. (I) of Sec.2 ;

(b) The preparation of registers, records and other document and the form and manner in which such registers, records and documents may be maintained under Sec.26 ;

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

(3) 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 [(Note: Subs. by Act 23 of 1976, (w.e.f. 25th September, 1975) or in two or more successive session], and if before the expiry of the session [(Note: Subs. by Sec.21, ibid, (w.e.f. 25th September, 1975) 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.

Section 39. Application of certain laws not barred.

Save as otherwise expressly provided, the provisions of this Act shall be in addition to and not in derogation of the industrial Disputes Act, 1947 (14 of 1947) or any corresponding law relating The Orient Tavern investigation and settlement of industrial disputes in force in a State.

Section 40. Repeal and saving

(1) The Payment of Bonus Ordinance, 1965 (3 of 1965) is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under this Act as if this Act commenced on the 29th May, 1965.

Schedules

THE FIRST SCHEDULE

[See Sc.4 (a)]

Composition of Gross Profits

Accounting Year Ending ……….

Item No.	Particulars	Amount of sub-items	Amount of main items	Remarks
1	2	3	4	5
1.	Net Profit as shown in the profit and loss Account after making usual and necessary provisions
2.	Add back provision for:

Bonus to employees
Depreciation
Development Rebate Reserve

(If, and to the extent, charged to Profit and Loss Account)

Any other reserves.

(If, and to the extent, charged to Profit and Loss Account)

Total of item No. Rs. 3.Add back also:

(a) Bonus paid to employees in respect of previous accounting years.

(If, and to the extent, charged to Profit and Loss Account)

(b) The amount debited in respect of gratuity paid or payable to employees in excess of the aggregate of –

The amount, if any, paid to, or provided for payment to, an approved gratuity fund ; and
The amount actually paid to employees on their retirement or on termination of their employment for any reason.

(d) Capital expenditure (other than capital expenditure on scientific research which is allowed to as a deduction under any law for the time being in force relating to direct taxes) and capital losses (other than losses on sale of capital assets on which depreciation has been allowed for income-tax).

(If, and to the extent, charged to Profit and Loss Account)

(e) Any amount certified by the Reserve Bank of India in terms of sub-section (2) of Sec.34-A the Regulation Act, 1949 (10 of 1949)

(f) Losses of, or expenditure relating to any business situated outside India. Total of Item No.3 Rs.4.Add also income, profits or gains (if any) credited directly to published or disclosed reserves, other than –

(i) Capital receipts and capital profits (including profits on the sale of capital assets on which depreciation has not been allowed for income-tax);

(ii) Profits of and receipts relating to, any business situated outside India ;

(iii) Income of foreign banking companies from investments outside India. Net total Item No.4 Rs.5.Total of Item Nos. 1,2,3 and 4. Rs.6.Deduct :

(If, and to the extent, credited to Profit and Loss Account)

(a) Capital receipts and capital profits (other than profits on the sale of assets) on which depreciation has been allowed for income-tax.

(b) Profits of, and receipts relating to any business situated outside India.

(d) Expenditure or losses (if any) debited directly to published or disclosed reserves, other than –

Capital expenditure and capital losses (other than losses on sale of capital assets on which depreciation has not been allowed for income-tax);
Loses of any business situated outside India.

(e) In the case of foreign banking companies proportionate administrative (overhead) expenses of Head Office allocable to Indian business.

(If, and to the extent, credited to Profit and Loss Account)

(f) Refund of any excess direct tax paid for previous accounting years, relating to bonus, depreciation, or development rebate, if written back.

(If, and to the extent, credited to Profit and Loss Account)

(g) Cash subsidy, if any, given by the Government or by any body corporate established by any law for the time being in force of by any other agency through budgetary grants, whether given directly or through any agency for specified purposes and the proceeds of which are reserved for such purposes.

(If, and to the extent, credited to Profit and Loss Account) Total of Item No.6 Rs. 7.Gross Profits for purposes of bonus (Item No.5 minus Item No.6) Rs.

Explanation – In sub-item (b) of item 3, “approved gratuity fund” has the same meaning assigned to it in Cl. (5) of Sec.2 of the Income-tax Act.

[THE SECOND SCHEDULE]

[(Note: Subs. by ibid, Sec.19)

See Sec. 4 (b)]

Computation of Gross Profits

Accounting Year ending …………

Item No.	Particulars	Amount of sub-items	Amount of main items	Remarks
1.	Net Profit as per Profits and Loss Account.
2.	Add back provision for :

Bonus to employees.
Depreciation.
Direct taxes, including the provision (if any) for previous accounting years. (If, and to the extent, charged to Profit and Loss Account.)
[(Note: Subs. by Act 66 of 1980, Sec.19) Development rebate/Investment allowance/Development allowance reserve.] (If, and to the extent, charged to Profit and Loss Account.)
Any other reserves

Total of Item No.2 Rs.3.Add back also:

(If, and to the extent, charged to Profit and Loss Account.)

(a) Bonus paid to employees in respect of previous accounting years.

[(aa) (Note: Ins. by Act 23 of 1976, Sec.26 (w.e.f. (25^th September, 1975)) The amount debited in respect of gratuity paid or payable to employees in excess of the aggregate of –

The amount, if any, paid to, or provided for payment to, an approved gratuity fund ; and
The amount actually paid to employees on their retirement or on termination of their employment for any reason.]

(b) Donations in excess of the amount admissible for income-tax.

(c) Any annuity due, or commuted value of any annuity paid, under the provisions of Sec. 280-D of the Income-tax Act during the accounting year.

(d) Capital expenditure (other than capital expenditure on scientific research which is allowed as deduction under any law for the time being in force relating to direct taxes) and capital losses (other than losses on sale) of Capital assets on which depreciation has been allowed for income-tax or agricultural income-tax).

(e) Losses of, or expenditure relating to, any business situated outside India. Total of Item No.34.Add also Income, profits or gains (if any) credited directly to reserves, other than –

Capital receipts and capital profits including profits on the sale of capital assets on which depreciation has not been allowed for income-tax or agricultural income-tax ;
Profits of, and receipts relating to, any business situated outside India ;
Income of foreign concerns from investments outside India.

Net total of Item No.45.Total of Item Nos. 1,2,3 and 4. 6.Deduct :

(a) Capital receipts and capital profits (other than profits on the sale of assets on which depreciation has been allowed for income-tax or agricultural income-tax).

(b) Profits of, and receipts relating to, any business situated outside India.

(d) Expenditure or losses (if any) debited directly to reserves, other than –

Capital expenditure and capital losses (other than losses on sale of capital assets on which depreciation has not been allowed for income-tax or agricultural income-tax) ;
Losses of any business situated outside India.

(e) In the case of foreign concerns proportionate administrative (over head) expenses of Head Office allocable to Indian business.

(In the proportion of Indian Gross Profit (Item No.7) to Total World Gross Profit (as per Consolidated Profit and Loss Account, adjusted as in Item No.2 above only).

(f) Refund of any direct tax paid for previous accounting years and excess provision, if any, of previous accounting years relating to bonus, depreciation, taxation or development rebate or development allowance, if written back.

(Ins. by s 26. (w.e.f. 25^th September, 1975)

(g) [(Note: Subs. by Act 23 of 1976) Cash subsidy, if any, given by the Government or by body corporate established by any law for the time being in force or by any other agency for specified purposes and the proceeds of which are reserved for such purposes.]

Total of Item No.6 Rs. 7. Gross Profits for purposes of bonus (item No.5 minus Item No.6) Rs.

[(Ins. by s 26. (w.e.f. 25th September, 1975) Explanation – In sub-item (aa) of Item 3, “approved gratuity fund” has the same meaning assigned to it in Cl. (5) of Sec.2 of the Income-tax Act.

THE THIRD SCHEDULE]

[See Sec.6 (d)]

Item No.	Category of employer	Further sums to be deducted
(1)		(3)
1.	[(Note: Subs. by ibid, Sec.20) Company, other than a banking company]	The dividends payable on its preference share capital for the accounting year calculated at the actual rate at which such dividends are payable]; 8.5 percent of its paid-up equity share capital as at the commencement of the accounting year ; 6 percent of its reserves shown in its balance-sheet as at the commencement of the accounting year, including any profit carried forward from the previous accounting year : Provided that where the employer is a foreign company within the meaning of Sec.591 of the Companies Act, 1956 (1 of 1956) the total amount to be deducted under this Item shall be 8.5 per cent on the aggregate of the value of the net fixed assets and the current assets of the company in India after deducting the amount of its current liabilities (other than any amount shown as payable by the company to its Head Office whether towards any advance made by the Head Office or otherwise or any interest paid by the Company to its Head Office) in India.
2.	(Note: Ins. by Act 66 of 1980, (w.e.f. 21^st August, 1980).	The Dividends payable on its preference share capital for the accounting year calculated at the rate at which such dividends are payable ; 7.5 per cent of its paid-up equity share of capital as at the commencement of the accounting year ; 5 per cent of its reserves shown in its balance-sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year ; Any sum which, in respect of the accounting year, is transferred by it- To a reserve fund under sub-section (1) of Sec.17 of the banking Regulation Act, 1949 (10 of 1949) ; or To any reserves in India in pursuance of any direction or advice given by the Reserve Bank of India, Whichever is higher : Provided that where the banking company is foreign company within the meaning of Sec.591 of the Companies Act, 1956 (1 of 1956), the amount to be deducted under this item shall be the aggregate of – The dividends payable to its preference shareholders for the accounting year at the rate at which such dividends are payable on such amount as bears the same proportion to its total preference share capital as its total working funds in India bear to its total world working funds ; 7.5 per cent, of such amount as bears the same proportion to its total paid-up equity share capital as its total working funds in India bear to its total working funds ; 5 per cent of such amount as bears the same proportion to its total disclosed reserves as its total working funds in India bear to its total working funds ; any sum which, in respect of the accounting year, is deposited by it with the Reserve Bank of India under sub-clause (ii) of Cl. (b) of sub-section (2) of Sec.11 of the Banking Regulation Act, 1949 (10of 1949), not exceeding the amount required under the aforesaid provision to be so deposited.]
3.	Corporation	8.5 per cent of its paid-up capital as at the commencement of the accounting year ; 6 per cent of its reserves, if any, shown in its balance-sheet as at commencement of the accounting year including any profits carried forward from the previous accounting year.
4.	Co-operative-society	8.5 per cent, of the capital invested by such society in its establishment from its books of accounts at the commencement of the accounting year ; Such sum as has been carried forward in respect of the accounting year to reserve fund under any law relating to co-operative societies for the time being in force.
5.	Any other employer not failing under any of the aforesaid categories.	8.5 per cent, of the capital invested by him in his establishment as evidenced from his books of accounts at the commencement of the accounting year ;

Provided that where such employer is a person to whom Chapter XXII-A of the Income-tax Act applies the annuity deposit payable by him under the provisions of that chapter during the accounting year shall also be deducted :

Provided further that where such employer is a firm, an amount equal to 25 per cent, of the gross profits derived by it from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of Cl. (a) of Sec.6 by way of remuneration to all the partners taking part in the conduct of business of establishment shall also be deducted, where oral or written, provides for the payment of remuneration to any such partner, and –

The total remuneration payable to all such partners is less than the said 25 per cent, the amount payable, subject to a maximum of forty-eight thousand rupees to each such partner ; or
The total remuneration payable to all such partners is higher than the said 25 percent. Such percentage, or a sum calculated at the rate of forty-eight thousand rupees to each such partner, which ever is less.

Shall be deducted under this proviso :

Provided also that where such employer is an individual or a Hindu undivided family, –

An amount equal to 25 per cent of the gross profits derived by such employer from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of Cl. (a) of Sec.6, or
Forth-eight thousand rupees whichever is less, by way of remuneration to such employer, shall also be deducted.

6.Any employer failing under Item No.1 or Item No.3 or Item No.4 or Item No.5 and being a licensee within the meaning or the Electricity (Supply) Act, 1948 (54 of (1948).In additional the sums deductible under any of the aforesaid Items, such sums as are required to be appropriated by the licensee in respect of the accounting year to a reserve under the Sixth Schedule to that Act shall also be deducted.

Explanation – The expression “reserves” occurring in column (3) against Item Nos. [(Note: Omitted by Act 23 of 1976, and by Act 43 of 1977, Sec.19 (w.e.f. 3rd July 1977) 1 (iii), 2 (ii), and 3 (ii)] shall not include any amount set apart for the purpose of –

(i) Payment of any direct tax which, according to the balance-sheet, would be payable.

(ii) Meeting any depreciation admissible in accordance with the provisions of Cl. (a) of Sec.6 ;

(iii) Payment of dividends which have been declared but shall include -

(a) Any amount, over and above the amount referred to in Cl. Of payment of any direct tax; and

(b) Any amount set apart for meeting any depreciation in excess of the amount admissible in accordance with the provisions of Cl. (a) of Sec.6].

THE FOURTH SCHEDULE]

(See Secs. 15 and 16)

In this Schedule, the total amount of bonus equal to 8.33 per cent of the annual salary or wage payable to all the employees is assumed to be Rs.1,04,167. Accordingly, the maximum bonus to which all the employees are entitled to be paid (twenty per cent of the annual salary or wage of all the employees) would be Rs. 2,50,000.

Year	Amount equal to sixty percent or sixty-seven percent, as the case may be, or available surplus allocable as bonus.	Amount payable as bonus	Set on or set off the year carried forward		Total set on or set off carried forward
1	2	3	4		5
Rs. Rs. Rs. Rs. Of year
1.	1,04,167	1,04,167**	Nil	Nil
2.	6,35,000	2,50,000*	Set on 2,50,000*	Set on 2,50,000	(2)
3.	2,20,000	2,50,000* (inclusive of 30,000 from year-2)	Nil	Set on 2,20,000	(2)
4.	3,75,000	2,50,000*	Set on 1,25,000	Set on 2,20,000 1,25,000	(2) (4)
5.	1,40,000	2,50,000* (inclusive of 1,10,000 from year-2)	Nil	Set on 1,10,000 1,25,000	(2) (4)
6.	3,10,000	2,50,000*	Nil 60,000	Set on + 1,25,000 63,300	(2) (4) (6)
7.	1,00,000	2,50,000* (inclusive of 1,25,000 from year-4 and 25,000 from year-6)	Nil	Set on 35,000	(6)
8.	Nil (due to loss)	1,04,167** (inclusive of 35,000 from year-6	Set off 69,167	Set off 69,167	(8)
9.	10,000	1,04,167**	Set off 94,167	Set off 69,167 94,167	(8) (9)
10.	2,15,000	1,04,167** (after setting off 69,167 from year-8 and 41,666 from year-9)	Nil	Set off	(9)

Notes: * Maximum

** Minimum

The balance of Rs.1,10,000 set on from Year-2 lapses.

Rules – Introduction

No. G.S.R. 2367, dated the 21st August, 1975 (Note: Published in the Gazette of India, Pt. II, Sec.3 (I) dated 30th August,1975 p.2580) – In exercise of the powers conferred by Sec.38 of the Payment of Bonus Act,1965 (XXI of 1965), and in super session of the Payment of Bonus Rules, 1965, the Central Government hereby makes the following rules namely

(See Rules 1 to 5)

1. Short title and commencement -

(1) These rules may be called the Payment of Bonus Rules, 1965

(2) These shall come into force at once on the date of their publication in the official Gazette.

2. Definitions – In these rules, -

(a) “Form” means a form appended to these rules; (b) “Act” means the Payment of Bonus Act, 1965(XXI of 1965) ;

3. Authority for granting permission for change of accounting year -

The prescribed authority for the purposes of the proviso to para. (b) of sub-clause (iii) of Cl. (1) of Sec.2 shall be-

(a) In the case of an establishment in relation to which the Central Government is the appropriate Government under the Act, the Chief Labour Commissioner (Central); (b) In any other case, the Labour Commissioner of the State in which the establishment is situated.

4. Maintenance of registers. -

Every employer shall prepare and maintain the following registers, namely:

(a) A register showing the computation of the allocable surplus referred to in Cl. (4) of Sec.2 in Form A ;

(b) A register showing the set-on and set-off of the allocable surplus, under Sec.15, in Form B ;

(c) A register showing the details of the amount of bonus due to each of the employees, the deductions under Secs.17 and 18 and the amount actually disbursed, in Form C.

5. Annual returns -

Every employer shall send a return in Form D to the Inspector so as to reach the said form to the Inspector within 30 days after the expiry of the time limit specified in Sec. 19 for payment of bonus.

Sale of Goods Act

November 30, 2014

Section 1. Short title, extent and commencement

(1) This Act may be called the 2** Sale of Goods Act, 1930.

3[(2) It extends to the whole of Pakistan.]

(3) It shall come into force into force on the first day of July, 1930

1. For Statement of Objects and Reasons and for Report of Special Committee. See Gazette of India, 1929 Pt. V.p. 163: for Report of Select Committed, see ibid., 1930, Pt. V. p.1. This Act has been applied to Phulera in the Excluded Area of Upper Tanawal to the extent the Act is applicable in the N.-W.F.P. subject to certain modifications, and also extended to the Excluded Area of Upper Tanawal (N.-W.F.P.) other than Phulera with effect from such date and subject to such modifications as may be notified, see N.-W.F.P. (Upper Tanawal) (Excluded Area) Laws Regulations, 1950.

It has also been extended to the Leased Areas of Balochistan, see the Leased Areas of Balochistan, see Gazette of India, 1937, Pt. I. p. 1499.

2. The word “Indian” omitted by the Federal Laws (Revision and Declaration) Act, 1951 (26 of 1951), S.3. and Second Schedule.

3. Subs. by the Central Laws (Statute Reforms) Ordinance, 1960 (21 of 1960). S.3. and Second Sched. (with effect from the 14th October, 1955), for subsection (2) which was amended by the A.O., 1949 and Act 26 of 1951.

Section 2. Definitions.

In this Act, unless there is anything repugnant in the subject or context, -

(1) “buyer” means a person who buys or agrees to buy goods;

(2) “delivery” means voluntary transfer of possession from one person to another;

(3) goods are said to be in a “deliverable state” when they are in such state that the buyer would under the contract be bound to take delivery of them;

(4) “document of title to goods” includes a bill of lading, dock- warrant, warehouse keeper’s certificate, wharfingers’ certificate, railway receipt, warrant or order for the delivery of goods and any other document used in ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented;

(5) “fault” means wrongful act or default;

(6) “future goods” means goods to be manufactured or produced or acquired by the seller after the making of the contract of sale;

(7) “goods” means every kind of movable property other than actionable claims and money; and includes 4[electricity, water, gas,] stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;

(8) a person is said to be “insolvent” who has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether he has committed and act of insolvency or not;

(9) “mercantile agent” means a mercantile agent having in the customary course of business as such agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods, or to raise money on the security of goods;

(10) “price” means the money consideration for a sale of goods;

(11) “property” means the general property in goods, and not merely a special property;

(12) “quality of goods” includes their state or condition;

4. Ins. by the Sale of Goods (Amendment) Ordinance, 1962 (47 of 1962), S,2 with effect from the 7th June, 1962)

(13) “Seller” means a person who sells or agrees to sell goods;

(14) “specific goods” means goods identified and agreed upon at the time a contract of sale is made; and

(15) expressions used but not defined in this act and defined in the Contract Act, 1872 (IX of 1872), have the meanings assigned to them in that Act.

Section 3. Application of provisions of Act of 1872.

The unrepealed provisions of the Contract Act, 1872 (IX of 1872), save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to contracts for the sale of goods.

CHAPTER II – FORMATION OF THE CONTRACT

Contract of Sale

Section 4. Sale and agreement to sell.

(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional

(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called in agreement to sell.

(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.

Formalities of the Contract

Section 5. Contract of sale how made.

(1) A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by installments, or that the delivery or payment or both shall be postponed.

(2) Subject to the provisions of any law for the time being in force a contract of sale may be made in writing or by word of mouth, or partly in writing and party by word of mouth or may be implied from the conduct of the parties.
Subject-matter of Contract

Section 6. Existing or future goods.

(1) The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods.

(2) There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen.

(3) Where by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.

Section 7 Goods perishing before making of contract.

Where there is a contract for the sale of specific goods, the contract is void if the goods without the knowledge of the seller have, at the time when the contract was made, perished or become so damaged as no longer to answer to their description in the contract.

Section 8. Goods perishing before sale but after agreement to sell.

Where there is an agreement to sell specific goods, and subsequently the goods without any fault on the part of the seller or buyer perish or become so damaged as no longer to answer to their description in the agreement before the risk passes to the buyer, the agreement is thereby avoided.

The Price

Section 9. Ascertainment of price.

(1) The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner thereby agreed or may be determined by the course of dealing between the parties.

(2) Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case.

Section 10. Agreement to sell at valuation.

(1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party cannot or does not make such valuation, the agreement is thereby avoided:

Provided that, if the goods or any part thereof have been delivered to and appropriated by the buyer, he shall pay a reasonable price thereof.

(2) Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain a suit for damages against the party in fault.

Conditions and Warranties

Section 11. Stipulation as to time.

Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.

Section 12. Condition and warranty.

(1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition of a warranty.

(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contact as repudiated.

(3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to claim for damages but not to a right to reject the goods and treat the contract as repudiated.

(4) Whether a stipulation in contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.

Section 13. When condition to be treated as warranty,

(1) Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated.

(2) Where a contract of sale is not severable and the buyer has accepted the goods are part thereof 5*** the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.

(3) Nothing in this section shall affect the case of any condition or warranty fulfilment of which is excused by law by reason of impossibility or otherwise.

Section 14. Implied undertaking, as to title, etc.

In a contract of sale, unless the circumstances of the contract are such as to show a different intention there is -

(a) an implied condition on the part of the seller that, in the case of sale, he has a right to sell the goods and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass;

5. The words and comma “or where the contract is for specific goods the property in which has passed to the buyer,” omitted by the Sale of Goods (Amendment) Ordinance, 1962 (47 of 1962), S.3 (with effect from the 7th June, 1962).

(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods;

(c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.

Section 15. Sale by description.

Where there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description; and, if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.

Section 16. Implied conditions as to quality or fitness.

Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or
fitness for any particular purpose of goods supplied under a contract of sale, except as follows:-

(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or products or not), there is an implied condition that the goods shall be reasonably fit for such purposes:

Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose

(2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality:

Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.

(3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.

(4) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.

[16-A. Seller to inform buyer to defect in goods sold. – Notwithstanding anything contained in section 16, and save where the parties have entered into a agreement to the contrary, the seller shall be under an obligation to inform the buyer of any defect in the goods sold at the time of the contract, except in a case where the defect the defect is obviously known to the buyer.]

Section 17. Sale by sample.

(1) A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied, to that effect.

(2) In the case of a contract for sale by sample there is an implied condition -

(a) That the bulk shall correspond with the sample in quality;

(b) that the buyer shall have a reasonable opportunity of comparing the bulk with the sample;

(c) that the goods shall be free from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.

CHAPTER III – EFFECTS OF THE CONTRACT

Transfer of Property as between Seller and Buyer

Section 18. Goods must be ascertained.

Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.

Section 19. Property passes when intended to pass.

(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend in to the transferred.

(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstance of the case.

(3) Unless a different intention appears, the rules contained in section 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.

Section 20. Specific goods in a deliverable state.

Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed.

6. S.16-A, inserted by Sale of Goods (Amendment) Act (XVIII of 1994), S.2 with effect from 23-10-1994.

Section 21. Specific goods to be put into a deliverable state.

Where there is a contract for the sale of specific goods and the seller is bound to do something of the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.

Section 22. Specific goods in a deliverable state, when the seller has to do anything thereto in order to ascertain price.

Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof.

Section 23. Sale of unascertained goods and appropriation.

(1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer, Such assent may be express or implied, and may be given either before or after the appropriation is made.

(2) Delivery to carrier. – Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier to other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right to disposal, he is deemed to have unconditionally appropriated the goods to the contract.

Section 24. Goods sent on approval or “on sale or return”.

When goods are delivered to the buyer on approval or “on sale or return” of other similar terms, the property therein passes to the buyer -

(a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;

(b) if he does not signify his approval or acceptance to the seller but retains the does without giving of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time.

Section 25. Reservation of right of disposal.

(1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, be the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to a buyer, or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.

(2) Where goods are shipped or are dispatched by railway and are by the bill of lading or by railway receipt deliverable to the order of the seller or his agent the seller is prima facie deemed to reserve the right of disposal].

(3) Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and ⁸[bill of landing or railway receipt] to the buyer together, to secure acceptance or payment of the bill of exchange, the buyer is bound to return the 9[bill of lading or railway receipt] if he does not honour the bill of exchange and if he wrongfully retains the 10[bill of lading or railway receipt] the
property in the goods does not pass to him.

Section 26. Risk prima facie passes with property.

Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not:

Provided that, where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault:

Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.

Transfer of Title

Section 27. Sale by person not the owner

Subject to the provisions of this Act and of any other law for the time being in force, where goods are sole by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell:

7. Subs. by the Sale of Goods (Amendment) Ordinance, 1962 (47 of 1962), S.4 (with effect from the 7th June 1962), for the original subsection (2).

8. Subs. by the Sale of Goods (Amendment) Ordinance, 1962 (47 of 1962), S.4 with effect from the 7th June, 1962), for “bill of lading”

9. Subs. by the Sale of Goods (Amendment) Ordinance, 1962 (47 of 1962), S.4 (with effect from the 7th June, 1962), for “bill of lading”.

10. Subs. by the Sale of Goods (Amendment) Ordinance, 1962 (47 of 1962), S.4 (with effect from the 7th June, 1962), for “bill of lading”.

Provided that, where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same; provided that the buyer acts in goods faith and has not at the time of the contract of sale notice that the seller has not authority to sell.

Section 28. Sale by one of joint owners.

If one of several joint owners of goods has the sole possession of the by permission of the co-owners, the property in the goods is transferred to any person who buys them of such joint owner in good faith and has not at the time of the contract of sale notice that the seller has not authority to sell.

Section 29. Sale by person in possession under voidable contact.

When the seller of goods has obtained possession thereof under a contract voidable under section 19 or section 19-A of the Contract Act, 1872, but the contract has not been rescinded at the time of the sale, the buyer acquires a goods title to the goods, provided he buys them in goods faith and without notice of the seller’s defect of title.

Section 30. Seller or buyer in possession after sale.

(1) Where a person, having sold goods, continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person or by mercantile agent acting for him, of the goods or documents of title under any sale, pledge or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same.

(2) Where a person, having bought or agreed to buy goods, obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge or other disposition thereof to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods shall have effects as if such lien or right did not exist.

CHAPTER IV – PERFORMANCE OF THE CONTRACT

Section 31. Duties of seller and buyer.

It is duty of the seller to deliver the goods of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.

Section 32. Payment and delivery are concurrent conditions.

Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and wiling to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.

Section 33. Delivery.

Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorised to hold them on his behalf.

Section 34. Effect of part delivery.

A delivery of party of goods, in progress of the delivery of the whole, has the same effect, for the purpose of passing the property in such goods, as a delivery of the whole; but a delivery of part of the goods, with an intention of severing it from the whole, does not operate as a delivery of the remainder.

Section 35. Buyer to apply for delivery

Apart from any express contract, the seller of goods is not bound to deliver them until the buyer applies for delivery.

Section 36. Rules as to delivery.

(1) Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, goods sold are to be delivered at the place at which they are at the time of the sale, and goods agreed to be sold are to be delivered at the place at which they are at the time of the agreement to sell, or if not them in existence, at the place at which they are manufactured or produced.

(2) Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.

(3) Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf:

Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to goods.

(4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact.

(5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller.

Section 37. Delivery of wrong quantity.

(1) Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accept the goods so delivered he shall pay for them at the contract rate.

(2) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods included in the contract and reject the rest, or 11[if the goods delivered are such that it is difficult or time consuming to separate the quantity contracted for,] he may reject the whole. If the buyer accept the whole of the goods so delivered, he shall pay for them at the contract rate.

(3) Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest, or may reject the whole.

(4) The provisions of this section are subject to any usage of trade, special agreement or course of dealing between the parties.

38. Instalment delivery.(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by installments.

(2) Where there is a contract for the sale of goods to be delivered by stated installments which are to be separately paid for and the seller makes no delivery or defective delivery in respect of one or more installments, or the buyer neglects or reduces to take delivery of or pay for one or more installments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract, or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated.

Section 39. Delivery to carrier or wharfinger.

(1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer or delivery of the goods to a wharfinger for sale custody, is a prima facie deemed to be delivery of the goods to the buyer.

(2) Unless otherwise authorised by the buyer, the seller shall make such contract with the carrier or wharfinger on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the seller omits so to do and the goods are lost or damaged in course of transit or whilst in the custody of the wharfinger, the buyer may decline to treat the delivery to the carrier or wharfinger as a delivery to himself, or may hold the seller responsible in damages.

(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, in circumstances in which it is usual to insure, the seller shall such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails so to do, the goods shall be deemed to be at his risk during such sea transit.

11. Inserted by Sale of Goods (Amendment) Act (XVIII of 1994), S.3 w.e.f. 23-10-1994.

Section 40. Risk where goods are delivered at distant place.

Where the seller of goods agrees to deliver them at his own risk at a place other than where they, are when sold, the buyer shall, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.

Section 41. Buyer’s right of examining the goods.

(1) Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.

Section 42. Acceptance.

The buyer is deemed to have accepted the goods when he intimates to the seller, that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them.

Section 43. Buyer not bound to return rejected goods.

Unless otherwise agreed, where goods are delivered to the buyer and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses to accept them.

Section 44. Liability of buyer for neglecting or refusing delivery of goods.

When the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods:

Provided that nothing in this section shall affect the rights of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.

CHAPTER V – RIGHT OF UNPAID SELLER AGAINST THE GOODS

Section 45. “Unpaid seller” defined.

(1) The seller of goods is deemed to be an “unpaid seller” within the meaning of this Act

(a) when the whole of the price has not been paid or tendered;

(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise.

(2) In this Chapter, the term “seller” includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of landing has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.

Section 46. Unpaid seller’s rights.

(1) Subject to the provisions of the Act and of any law for the time being in force, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implications of law

(a) a lien on the goods for the price while he is in possession of them;

(b) in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them;

(2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer.
Unpaid Seller’s Lien

Section 47. Seller’s lien.

(1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:-

(a) where the goods have been sold without any stipulation as to credit;

(b) where the goods have been sold on credit, but the term of credit has expired;

(2) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.

Section 48. Part delivery.

Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part delivery has been made under such circumstance as to show an agreement to waive the lien.

Section 49. Termination of lien.

(1) The unpaid seller of goods loses his lien thereon -

(a) when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods;

(b) when the buyer or his agent lawfully obtains possession of the goods;

(2) The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained a decree for the price of the goods.
Stoppage in Transit

Section 50. Right of stoppage in transit.

Subject to the provisions of this Act, when the buyer of goods becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transit, that is to say, he may resume possession of the goods as long as they are in the course of transit, and may retain them until the payment or tender of the price.

Section 51. Duration of transit.

(1) Goods are deemed to be in course of transit from the time when they are delivered to a carrier or other bailee for the purpose of transmission to the buyer, until the buyer or his agent in that behalf takes delivery of them from such carrier or other bailee.

(2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end.

(3) If, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in possession of them as bailee for the buyer or his agent, the transit is at an end it is immaterial that a further destination for the goods may have been indicated by the buyer.

(4) If the goods are rejected by the buyer and the carrier or other bailee continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back.

(5) When goods are delivered to a ship chartered by the buyer, it is a question depending on the circumstances of the particular case, whether they are in the possession of the master as a carrier or as agent of the buyer.

(6) Where the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf, the transit is deemed to be at an end.

(7) Where part delivery of the goods has been made to the buyer or his agent in that behalf, the remainder of the goods may be stopped in transit, unless such part delivery has been given in such circumstances as to show an agreement to give up possession of the whole of the goods.

Section 52. How stoppage in transit is effected.

(1) The unpaid seller may exercise his right of stoppage in transit either by taking actual possession of the goods, or by giving notice of his claim to the carrier of other bailee in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the later case the notice, to be effectual, shall be given at such time and in such circumstances that the principal, by the exercise of reasonable diligence, may communicate it to his servant or agent in time to prevent a delivery to the buyer

(2) When notice of stoppage in transit is given by the seller to the carrier or other bailee in possession of the goods, he shall re-deliver the goods to or according to the directions of the seller. The expenses of such re-delivery shall be borne by the seller.
Transfer by Buyer and Seller

Section 53. Effect of sub-sale or pledge by buyer.

(1) Subject to the provisions of this Act, the unpaid seller’s right of lien or stoppage in transit is not affected by any sale or other disposition of the goods which the buyer may have made, unless the seller has assented thereto:

Provided that where a document of title to goods has been issued or lawfully transferred to any person as buyer or owner of the goods, and that person transfers the documents to a person who takes the documents in good faith and for consideration, then, if such last mentioned transfer was by way of sale, the unpaid seller’s right of lien or stoppage in transit is defeated, and if such last mentioned transfer was by way of pledge or other disposition for value, the unpaid seller’s right of lien or stoppage in transit can only be exercised subject to the rights of the transferee.

(2) Where the transfer is by way of pledge, the unpaid seller may require the pledge to have the amount secured by the pledge satisfied in the first instance, as far as possible, out of any other goods or securities of the buyer in the hands of the pledgee and available against the buyer.

Section 54. Sale not generally rescinded by lien or stoppage in transit.

(1) Subject to the provision of this section, a contract of sale is not rescinded by the mere exercise by an unpaid seller of his right of lien or stoppage in transit.

(2) Where the goods are of a perishable nature, or where the unpaid seller who has exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to re-sell, the unpaid seller may, if the buyer does not within a reasonable time pay or tender the price, re-sell the goods within a reasonable time and recover from the original buyer damages for any loss occasioned by his breach of contract, but the buyer shall not be entitled to any profit which may occur on the re-sale. If such notice is not given, the unpaid seller shall not be entitled to recover such damages and the buyer shall be entitled to the profit, if any, on the re-sale.

(3) Where in unpaid seller who has exercised his right of lien or stoppage in transit re-sells the goods, the buyer acquires a good title thereto as against the original buyer, notwithstanding that no notice of the re-sale has been given to the original buyer.

(4) Where the seller expressly reserves a right of re-sale in case the buyer should make default, and, on the buyer making default, re-sells the goods, the original contract of sale is thereby rescinded, but without prejudice to any claim which the seller may have for damages.

Chapter VI- SUITS FOR BREACH OF THE CONTRACT

Section 55. Suit of price.

(1) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.

(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.

Section 56. Damages for non-acceptance.

Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance.

Section 57. Damages for non-delivery.

Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer, may sue the seller for damages for non-delivery.

Section 58. Specific performance.

Subject to the provisions of Chapter II of the Specific Relief Act, 1877, in any suit for breach of contract to deliver specific or ascertained goods, the Court may, if it thinks fit, on the applications of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The decree may be unconditional, or upon such terms and conditions as to damages, payment of the price or otherwise, as the Court may deem just, and the application of the plaintiff may be made at any time before the decree.

Section 59. Remedy for breach of warranty.

(1) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only or such breach of warranty entitled to reject the goods; but he may—

(a) set up against the seller the breach of warranty in diminution or extinction of the price; or

(b) sue the seller for damages for breach of warranty

(2) The fact that a buyer has set up a breach of warranty in diminution or extinction of the price does not prevent him from suing for the same breach of warranty if he has suffered further damage.

Section 60. Repudiation or contract before due data

Where either party to a contract of sale repudiates the contract before the date of delivery, the other may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach.

Section 61. Interest by way of damages and special damages.

(1) Nothing in this Act shall affect the right of the seller or the buyer to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover the money paid where the consideration for the payment of it has failed.

(2) In the absence of a contact to the contract, the Court may award interest at such rate as it thinks fit on the amount of the price -

(a) to the seller in a suit by him for the amount of the price – from the date of the tender of the goods or from the date on which the price was payable;

(b) to the buyer in a suit by him for the refund of the price in case of a breach of the contract on the part of the seller – from the date on which the payment was made.

CHAPTER VII – MISCELLANEOUS

Section 62. Exclusion of implied terms and conditions.

Where any right, duty or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage is such as to bind both parties to the contract.

Section 63. Reasonable time a question of fact.

Where in this Act any reference is made to a reasonable time, the question what is a reasonable time is a question of fact.

Section 64. Auction sale.

In the case of a sale by auction -

(1) where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of a separate contract of sale;

(2) the sale is complete when the auctioneer announces its completion by the fail of the hammer or in other customary manner; and, until such announcement is made, any bidder may retract his bid;

(3) a right to bid may be reserved expressly by or on behalf of the seller and, where such right is expressly so reserved, but not otherwise, the seller or any one person on his behalf may, subject to the provisions hereinafter contained, bid at the auction;

(4) where the sale is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any parson to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person; and any sale contravening this rule may be treated as fraudulent by the buyer;

(5) the sale may be notified to be subject to a reserved or upset price;

(6) if the seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the buyer.

¹²[64-A. In contracts of sale amount of increased or decreased duty to be added or deducted. – In the event of any duty of customs or excise ¹³[or tax] on any goods being imposed, increased, decreased or remitted after the making of any contract for the sale of such goods without stipulation ¹⁴[as to the payment of duty or tax where duty or tax] was not chargeable at the time of the making of the contract, or for the sale of such goods ¹⁵[duty paid or tax paid where duty or tax] was chargeable at that time,

(a) if such imposition or increase so takes effect that 16[the duty or tax or increased duty or tax] as the case may be, or any part thereof, is paid, the seller may add so much to the contract price as will be equivalent to the amount paid ¹⁷[in respect of such duty or tax or increase of duty or tax] and he shall be entitled to be paid and to sue for and recover such addition, and

12. S.64-A ins. by the Indian Sale of Goods (Amendment) Act, 1940 (41 of 1940), S.2.
13. Ins. by the Sale of Goods (Amdt.) Act, 1956 (5 of 1956), S.2 (with effect from the 11th April, 1956).
14. Subs. ibid. (with effect from the 11th April, 1956) for “as to the payment of duty where duty”.
15. Subs. by the Sale of Goods (Amendment) Act, 1956), S.2 (with effect from the 11th April, 1956), for “duty paid where duty”.
16. Subs. by the Sale of Goods (Amendment) Act, 1956 (5 of 1956) (with effect from the 11th April, 1956), for “the duty or increased duty”.

(b) if such decrease or remission so takes effect that the decreased duty 18[or tax] only or no duty 19[or tax], as the case may be, is paid, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty 20[or tax] or remitted duty 21[or tax], and he shall not be liable to pay, or be sued for or in respect of, such deduction.]

²²[Explanation.—The word “tax” in this section means the tax payable under the Sales Tax Act, 1951].

Section 65. [Repeal].

-Rep. by the Repealing Act, 1938 (I of 1938), S.2. and Schedule.

Section 66. Savings.

-(1) Nothing in this Act or in any repeal effected thereby shall affect or be deemed to affect—

(a) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or

(b) any legal proceedings or remedy in respect of any such right, title, interest, obligation or liability, or

(d) any enactment relating to the sale of goods which is not expressly repealed by this Act, or

(e) any rule of law not inconsistent with this Act.

(2) The rules of insolvency relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge or other security.

17. Subs. by the Sale of Goods (Amendment) Act, 1956 (5 of 1956), (with effect from the 11th April, 1956), for “in respect of such duty or increase of duty”.
18. Ins. ibid. (with effect for the 11th April, 1956).
19. Ins. ibid. (with effect for the 11th April, 1956).
20. Ins. ibid. (with effect for the 11th April, 1956).
21. Ins. ibid. (with effect for the 11th April, 1956).
22. Explanation added ibid. (with effect from the 11th April, 1956).

entries relating to firms are to be made therein, and the mode in which such entries are to be amended or notes made therein.

(d) regulating the procedure of the Registrar when disputes arise;

(e) regulating the filing of documents received by the Registrar;

(f)prescribing conditions for the inspection of original documents;

(g) regulating the grant of copies;

(h) regulating the elimination of registers and documents;

(i) providing for the maintenance and form of an index to the Register of Firms; and

(j) generally, to carry out the purposes of this Chapter.

(3) All rules made under this section shall be subject to the conditions of previous publications:

19[Provided further that the fees payable for any service desired on the same day on which an application for the same is made may be double the aforesaid maximum fees.]

Chapter VIII-SUPPLEMENTAL

Section 72. Mode of giving public notice.

A public notice under this Act is given

(a) where it relates to the retirement or expulsion of a partner from a registered firm, or to the dissolution of a registered firm, or to the election to become or not to become a partner in a registered firm by a person attaining majority who was admitted as a minor to the benefits of partnership, by notice to the Registrar of Firms under section 63, and by publication in the 20[official Gazette] and in at least one vernacular newspaper circulating in the district where the firm to which in relates has its place or principal place of business, and

(b) in any other case, by publication in the 20[official Gazette] and in at least one vernacular newspaper circulating in the district where the firm to which it relates has its place or principal place of business.

Section 73. [Repeals.]

Rep. by the Repealing Act, 1938 (I of 1938), S.2 and Schedule.

19. Proviso added by Partnership (Amendment) Ordinance (XIX of 1981), S.3 dated 18-5-1981

20. Substituted by A.O., 1937, for “local official Gazette”.

Section 74. Savings.

Nothing in this Act or any repeal effected thereby shall affect or be deemed to effect -

(a) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or

(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation or liability, or anything done or suffered before the commencement of this Act, or

(d) any enactment relating to partnership not expressly repealed by this Act, or

(e) any rule of insolvency relating to partnership, or

(f) any rule of law not inconsistent with this Act.

SCHEDULE-

21[SCHEDULE I]
MAXIMUM FEES
[See subsection (1) of section 71]

Document or act in respect of which the fee is payable Maximum Fees

Statement under section 58 50

Statement under section 60 20

Intimation under section 61 20

Intimation under section 62 20

Notice under section 63 20

Application under section 64 20

Inspection of the Register of Firms under subsection (1) of

section 66 5

Inspection of documents relating to a firm under subsection
(2) of section 66 or any other document in the custody of the

Registrar of Firms 5

Copies from the Register of Firms Rs. 2 for each

100 words or part thereof.]

SCHEDULE II.—[ENACTMENTS REPEALED]. Rep. by the Repealing Act, 1938 (1 of 1938), section 2 and Schedule.

Cinematograph Act

November 30, 2014

Chapter I – Preliminary

Section 1. Shot title, extent and commencement.

ACT NO. 37 OF 1952 1* [21st March, 1952.]

An Act to make provision for the certification of cinematograph films for exhibition and for regulating exhibitions by means of cinematographs. Be it enacted by Parliament as follows:-

(1) This Act may be called the Cinematograph Act, 1952.

(2) Parts I, II and IV extends to the whole of India ¹[***] and Part III extends to ²[the Union territories] only.

(3) This Act shall come into force on such date³ as the Central Government may, by notification in the Official Gazette, appoint:

⁴[Provided that Parts I and II shall come into force in the State of Jammu and Kashmir only on such date after the commencement of the Cinematograph (Amendment) Act, 1973 (26 of 1973), as the Central Government may, by notification in the Official Gazette, appoint.]

——————————————————

1. The words “except the State of Jammu and Kashmir” omitted by Act 25 of 1973, sec. 2 (w.e.f. 28-5-1973).

2. Subs. by Act 3 of 1959, sec. 2, for “Part C States” (w.e.f. 12-3-1959).

3. Came into force on 28-7-1952, vide S.R.O. 1066, dated the 10th June, 1952, published in the Gazette of India, 1952, Pt. II, Sec. 3, p. 945.

4. The proviso added by Act 25 of 1973, sec. 2 (w.e.f. 28-5-1973).

Section 2. Definitions.

In this Act, unless the context other wise requires,-

(a) “adult” means a person who has completed his eighteenth year;

¹[(b) “Board” means the Board of Film Certification constituted by the Central Government under section 3;]

²[(bb) “certificate” means the certificate granted by the Board under section 5A;]

(d) “district magistrate”, in relation to a presidency-town, means the Commissioner of police;

³[(dd) “film” means a cinematograph film;]

(e) “place” includes a house, building, tent and any description of transport, whether by sea, land or air;

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

⁴[(g) “regional officer” means a regional officer appointed by the Central Government under section 5 and includes an additional regional officer and an assistant regional officer;

(h) “Tribunal” means the Appellate Tribunal constituted under section 5D.]

———————-

1. Subs. by Act 49 of 1981, sec. 2, for clause (b) (w.e.f. 1-6-1983).

2. Ins. by Act 49 of 1981, sec. 2 (w.e.f. 1-6-1983).

3.Ins. by Act 3 of 1959, sec. 3 (w.e.f. 12-3-1959).

4. Ins. by Act 49 of 1981, sec. 2 (w.e.f. 1-6-1983).

Section 2-A. Construction of reference to any law not in force or any functionary not in existence in the State of Jammu and Kashmir.

Any reference in this Act to any law which is not in force, or any functionary not in existence, in the state of Jammu and Kashmir, shall, in relation to that Stat, be construed as a reference to the corresponding law in force, or to the corresponding functionary in existence, in that State.

—-

1. Ins. by Act 25 of 1973, sec. 3 (w.e.f. 28-5-1973).

Chapter II – CERTIFICATION OF FILMS FOR PUBLIC EXHIBITION

Section 3. Board of Film Censors.

¹3. Board of Film Censors

(1) For the purpose of sanctioning films for public exhibition, the Central Government may, by notification in the official Gazette, constitute a Board to be called the ²[Board of Film Certification which shall consist of a Chairman and ³not less than twelve and not more than twenty five] other members appointed by the Central Government.

(2) The Chairman of the Board shall receive such salary and allowance as may be determined by the Central Government, and the other members shall receive such allowances or fees for attending the meetings of the Board as may be prescribed.

(3) The other terms and conditions of service of the members of the Board shall be such as may be prescribed

———————

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

2. Subs. by Act 49 of 1981, sec. 3, for “Board of Film Censors” (w.e.f. 1-6-1983)

3. Subs. by Act 49 of 1981, sec. 3, for “not more than nine” (w.e.f. 1-6-1983).

Section 4. Examination of films.

¹[4. Examination of films.—(1) Any person desiring to exhibit any film shall in the prescribed manner make an application to the Board for a certificate in respect thereof, and the Board may, after examining or having the film examined in the prescribed manner,—

(i) sanction the film for unrestricted public exhibition:²[***]

³[Provided that, having regard to any material in the film, if the Board is of the opinion that it is necessary to caution that the question as to whether any child below the age of twelve years may be allowed to see such a film should be considered by the parents or guardian of such child, the Board may sanction the film for unrestricted public exhibition with an endorsement to that effect; or]

(ii) sanction the film for public exhibition restricted to adults; or

⁴[(iia) sanction the film for public exhibition restricted to members of any profession or any class of persons, having regard to the nature, content and theme of the film; or]

⁵[(iii) direct the applicant to carry out such excisions or modifications in the film as it thinks necessary before sanctioning the film for public exhibition under any of the foregoing clauses; or]

(iv) refuse to sanction the film for public exhibition.

(2) No action under ⁶[the proviso to clause (i), clause (ii), clause (iia), clause (iii) or clause (iv)] of sub-section (1) shall be taken by the Board except after giving an opportunity to the applicant for representing his views in the matter.]

————————

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

2. The word “or” omitted by Act 49 of 1981, sec. 4 (w.e.f. 1-6-1983).

3. The proviso added by Act 49 of 1981, sec. 4 (w.e.f. 1-6-1983).

4. Ins. by Act 49 of 1981, sec. 4 (w.e.f. 1-6-1983).

5. Subs. by Act 49 of 1981, sec. 4, for clause (iii) (w.e.f. 1-6-1983).

6. Subs. by Act 49 of 1981, sec. 4, for “clause (ii), clause (iii) or clause (iv)” (w.e.f. 1-6-1983).

Section 5. ADVISORY PANELS.

¹5.ADVISORY PANELS-(1) For the purpose of enabling the Board of efficiently discharge its functions under this Act, the Central Government may establish at such regional centers as it thinks fit, advisory panels each of which shall consist of such number of persons being persons qualified in the opinion of the Central Government may think fit to appoint thereto.

(2) At each regional center there shall be as many regional officers as the Central Government may think fit to appoint and rule made in this behalf may provide for the association of regional officers in the examination of films.

(3) The Board may consult in such manner as may be prescribed any advisory panel in respect of any film for which an application for a certificate has been made.

(4) It shall be the duty of every such advisory panel whether acting as a body or in committees as may be provided in the rules made in this behalf to examine the film and to make such recommendations to the Board as it thinks fit.

(5) The members of the advisory panel shall not be entitled to any salary but shall receive such fees or allowances as may be prescribed.

————-

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

Section 5-A. CERTIFICATION OF FILMS.

¹[5A. Certification of films.—²[(1) If, after examining a film or having it examined in the prescribed manner, the Board considers that—

(a) the film is suitable for unrestricted public exhibition, or, as the case may be, for unrestricted public exhibition with an endorsement of the nature mentioned in the proviso to clause (i) of sub-section (1) of section 4, it shall grant to the person applying for a certificate in respect of the film a “U” certificate or, as the case may be, a “UA” certificate; or

(b) the film is not suitable for unrestricted public exhibition, but is suitable for public exhibition restricted to adults or, as the case may be, is suitable for public exhibition restricted to members of any profession or any class of persons, it shall grant to the person applying for a certificate in respect of the film an “A” certificate or, as the case may be, a “S” certificate.

and cause the film to be so marked in the prescribed manner:

Provided that the applicant for the certificate, any distributor or exhibitor or any other person to whom the rights in the film have passed shall not be liable for punishment under any law relating to obscenity in respect of any matter contained in the film for which certificate has been granted under clause (a) or clause (b).]

(2) A certificate granted or an order refusing to grant a certificate in respect of any film shall be published in the Gazette of India.

(3) Subject to the other provisions contained in this Act, a certificate granted by the Board under this section shall be valid throughout India for a period of ten years.]

—————–

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

2. Subs. by Act 49 of 1981, sec. 5, for sub-section (1) (w.e.f. 1-6-1983)

Section 5-B. PRICIPLES FOR GUIDANCE IN CERTIFYING FILMS.

¹[5B. Principles for guidance in certifying films.—(1) A film shall not be certified for public exhibition if, in the opinion of the authority competent to grant the certificate, the film or any part of it is against the interests of

²[the sovereignty and integrity of India] the security of the State, friendly relations with foreign States, public order, decency or morality, or involves defamation or contempt of court or is likely to incite the commission of any offence.

(2) Subject to the provisions contained in sub-section (1), the Central Government may issue such directions as it may think fit setting out the principles which shall guide the authority competent to grant certificates under this Act in sanctioning films for public exhibition.]

—————–

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

2. Ins. by Act 49 of 1981, sec. 6 (w.e.f. 1-6-1983).

Section 5-C. APPEALS.

¹[²5-C. APPEALS. –(1) Any person applying for a certificate in respect of a film who is aggrieved by any order of the Board -

(a) Refusing to grant a certificate ; or

(b) Granting only an “A” certificate ; or

(d) Granting only a “UA” certificate ; or

(e) Directing the applicant to carry out any excisions or modifications,may, within thirty days from the date of such order, prefer an appeal to the Tribunal :

Provided that the Tribunal may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the aforesaid period of thirty days, allow such appeal to be admitted within a further period of thirty days.

(2) Every appeal under this section shall be made by a petition in writing and shall be accompanied by a brief statement of the reasons for the order appealed against where such statement has been furnished to the appellant and by such fees, not exceeding rupees one thousand, as may be prescribed.

—————-

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

2. Subs. by Act 49 of 1981, sec. 7, for section 5C (w.e.f. 1-6-1983).

Section 5-D. CONSTITUTION OF APPELLATE TRIBUNAL.

¹5-D. CONSTITUTION OF APPELLATE TRIBUNAL.(1) For the purpose of hearing appeals against any order of the Board under Section 5-C, the Central Government shall, by notification in the Official Gazette, constitute an Appellate Tribunal.

(2) The head office of the Tribunal shall be at New Delhi or at such other place as the Central Government may, by notification in the Official Gazette, specify.

(3) Such Tribunal shall consist of a Chairman and not more than four other members appointed by the Central Government.

(4) A person shall not be qualified for appointment as the Chairman of the Tribunal unless he is a retired Judge of a High Court, or is a person who is qualified to be a Judge of a High Court.

(5) The Central Government may appoint such persons who, in its opinion, are qualified to judge the effect of films on the public, to be members of the Tribunal.

(6) The Chairman of the Tribunal shall receive such salary and allowances as may be determined by the Central Government and the members shall receive such allowances or fees as may be prescribed.

(7) Subject to such rules as may be made in this behalf, the Central Government may appoint a Secretary and such other employees as it may think necessary for the efficient performance of the functions of the Tribunal under this Act.

(8) The Secretary to, and other employees of, the Tribunal shall exercise such powers and perform such duties as may be prescribed after consultation with the Chairman of the Tribunal.

(9) The other terms and conditions of service of the Chairman and members of, and the Secretary to, and other employees of, the Tribunal shall be such as may be prescribed.

(10) Subject to the provisions of this Act, the Tribunal may regulate its own procedure.

(11) The Tribunal may, after making such inquiry into the matter as it

considers necessary, and after giving the appellant and the Board an opportunity of being heard in the matter, make such order in relation to a film as it thinks fit and the Board shall dispose of the matter in conformity with such order.

————————

1. Ins. by Act 49 of 1981, sec. 8 (w.e.f. 1-6-1983).

Section 5E-Suspension and revocation of certificate.

¹5E-Suspension and revocation of certificate.

Suspension and revocation of certificate- (1) Notwithstanding anything contained in sub section (2) of Section 6,the Central Government may, by notification in the Official Gazette, suspend a certificate granted under this Part, for such period as it thinks fit or may revoke such certificate if it is satisfied that-

(i) The film in respect of which the certificate was granted, was being exhibited in a form other than the one in which it was certified , or

(ii) The film or any part thereof it being exhibited in contravention of the provisions of this part rules made there under.

(2) Where a notification under sub-section (1) has been published, the Central Government may require the applicant for certificate or any other person to whom the rights in the film have passed, or both, to deliver up the certificate and all duplicate certificates, if any, granted in respect of the film to the Board or to any person or authority specified in the said notification.

(3) No action under this section shall be taken except after giving an opportunity to the person concerned for representing his views in the matter.

(4) During the period in which a certificate remains suspended under this section, the film shall be deemed to be an uncertified film.

————————–

1. Ins. by Act 49 of 1981, sec. 8 (w.e.f. 1-6-1983).

Section 5-F. REVIEW OF ORDERS BY CENTRAL GOVERNMENT.

(1) Where an applicant for a certificate or any other person to whom the rights in the film have passed, is aggrieved by any order of the Central Government under Section 5-E, he may, within sixty days of the date of publication of the notification in the Official Gazette, make an application to the Central Government for review of the order, setting out in such application the grounds on which he considers such review to be necessary:

Provided that the Central Government may, if it is satisfied that the applicant for a certificate or that other person was prevented by sufficient cause from filing an application for review within the aforesaid period of sixty days, allow such application to be filed within a further period of sixty days.

(2) On receipt of the application under sub-section (1), the Central Government may, after giving the aggrieved person a reasonable opportunity of being heard, and after making such further inquiry, as it may consider necessary, pass such order as it thinks fit, confirming, modifying or reversing its decision and the Board shall dispose of the matter in conformity with such order.

————————-

1.Ins. by Act 49 of 1981, sec. 8 (w.e.f. 1-6-1983).

Section 6. Revisional powers of the Central Government.

¹[6. Revisional powers of the Central Government.—(1) Notwithstanding anything contained in this Part, the Central Government ²[may, of its own motion, at any stage,] call for the record of any proceeding in relation to any film which is pending before, or has been decided by, the Board, ³[or, as the case may be, decided by the Tribunal (but not including any proceeding in respect of any matter which is pending before the Tribunal)] and after such inquiry, into the matter as it considers necessary, make such order in relation thereto as it thinks fit, and the Board shall dispose of the matter in conformity with such order:

Provided that no such order shall be made prejudicially affecting any person applying for a certificate or to whom a certificate has been granted, as the case may be, except after giving him an opportunity for representing his views in the matter:

³[Provided further that nothing in this sub-section shall require the Central Government to disclose any fact which it considers to be against public interest to disclose.]

(2) Without prejudice to the powers conferred on it under sub-section (1), the Central Government may, by notification in the Official Gazette, direct that—

(a) a film which has been granted a certificate shall be deemed to be an uncertified film in the whole or any part of India; or

(b) a film which has been granted a “U” certificate ³[or a “UA” certificate or a “S” certificate] shall be deemed to be a film in respect of which an “A” certificate has been granted; or

⁴[(c) the exhibition of any film be suspended for such period as may be specified in the direction:]

⁵[Provided that no direction issued under clause (c) shall remain in force for more than two months from the date of the notification.]

(3) No action shall be taken under clause (a) or clause (b) of sub-section (2) except after giving an opportunity to the person concerned for representing his views in the matter.

(4) During the period in which a film remains suspended under clause (c) of sub-section (2), the film shall be deemed to be an uncertified film.]

—————–

1. Section 3, 4, 5, 5A, 5B, 5C and 6 subs. by Act 3 of 1959, sec. 4, for sections 3, 4, 5 and 6 (w.e.f. 12-3-1959).

2. Subs. by Act 49 of 1981, sec. 9, for ‘‘may at any stage’’ (w.e.f. 1-6-1983).

3. Ins. by Act 49 of 1981, sec. 9 (w.e.f. 1-6-1983).

4. Ins. by Act 19 of 1953, sec. 2 (w.e.f. 16-5-1953).

5. Subs. by Act 19 of 1953, sec. 2, for the proviso (w.e.f. 16-5-1953).

Section 6-A.-Information and documents to be given to distributors and exhibitors with respect to certified films.

¹ 6-A.-Information and documents to be given to distributors and exhibitors with respect to certified films. Information and documents to be given to distributors and exhibitors with respect to certified films – Any person who delivers any certified film to any distributor or exhibitor shall, in such manner as may be prescribed, notify to the distributor or exhibitor, as the case may be, the title, the length of the film, the number and the nature of the certificate granted in respect thereof and the conditions, if any, subject to which it has been so granted, and any other particulars respecting the film which may be prescribed.

²[***]

1. Ins. by Act 19 of 1953, sec. 3 (w.e.f. 16-5-1953).

2. Section 6B omitted by Act 56 of 1984, sec. 2 (w.e.f. 27-8-1984) Earlier section 6B was inserted by Act 49 of 1981, sec. 10 (w.e.f. 1-6-1983).

Section 7. Penalties for contraventions of this Part.

¹[(1) If any person—

(a) exhibits or permits to be exhibited in any place—

(i) any film other than a film which has been certified by the board as suitable for unrestricted public exhibition or for public exhibition restricted to adults ²[or to members of any profession or any class of persons] and which, when exhibited, displays the prescribed mark of the Board and has not been altered or tampered with in any way since such mark was affixed thereto,

(ii) any film, which has been certified by the Board as suitable for public exhibition restricted to adults, to any person who is not an adult, ³[***].

²[(iia) any film which has been certified by the Board as suitable for public exhibition restricted to any profession or class of persons, to a person who is not a member of such profession or who is not a member of such class, or]

(b) without lawful authority (the burden of proving which shall be on him), alters or tampers with in any way any film after it has been certified, or

(c) fails to comply with the provision contained in section 6A or with any order made by the Central Government or by the Board in the exercise of any of the powers or functions conferred on it by this Act or the rules made thereunder,

⁴[⁵[he shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to one lakh rupees, or with both, and in the case of a continuing offence with a further fine which may extend to twenty thousand rupees for each day during which the offence continues:

Provided that a person who exhibits or permits to be exhibited in any place a video film in contravention of the provisions of sub-clause (i) of clause (a) shall be punishable with imprisonment for a term which shall not be less than three months, but which may extend to three years and with fine which shall not be less than twenty thousand rupees, but which may extend to one lakh rupees, and in the case of a continuing offence with a further fine which may extend to twenty thousand rupees for each day during which the offence continues:

Provided further that a court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three months, or a fine of less than twenty thousand rupees]]:

⁶[Provided further that] notwithstanding anything contained in section 29 of the Code of Criminal Procedure, 1973 (2 of 1974), it shall be lawful for any Metropolitan Magistrate, or any Judicial Magistrate of the first class specially empowered by the State Government in this behalf, to pass a sentence of fine exceeding five thousand rupees on any person convicted of any offence punishable under this Part:

⁷[Provided also] that no distributor or exhibitor or owner or employee of a cinema house shall be liable to punishment for contravention of any condition of endorsement of caution on a film certified as “UA” under this Part.]

(2) If any person is convicted of an offence punishable under this section committed by him in respect of any film, the convicting court may further direct that the film shall be forfeited to the Government.

(3) The exhibition of a film, in respect of which an “A” certificate ⁸[or a “S” certificate or a “UA” certificate] has been granted, to children below the age of three years accompanying their parents or guardians shall not be deemed to be an offence within the meaning of this section.

————————

1. Subs. by Act 19 of 1953, sec. 4, for sub-section (1) (w.e.f. 16-5-1953).

2. Ins. by Act 49 of 1981, sec. 11 (w.e.f. 1-6-1983).

3. The word “or” omitted by Act 49 of 1981, sec. 11 (w.e.f. 1-6-1983).

4. Subs. by Act 49 of 1981, sec. 11, for certain words (w.e.f. 1-6-1983).

5. Subs. by Act 56 of 1984, sec. 3, for certain words (w.e.f. 27-8-1984).

6. Subs. by Act 56 of 1984, sec. 3, for “Provided that” (w.e.f. 27-8-1984).

7. Subs. by Act 56 of 1984, sec. 3, for “Provided further” (w.e.f. 27-8-1984).

8. Ins. by Act 49 of 1981, sec. 11 (w.e.f. 1-6-1983).

Section 7-A. Power of seizure.

¹[7A. Power of seizure.—(1) Where a film in respect of which no certificate has been granted under this Act is exhibited, or a film certified as suitable for public exhibition restricted to adults is exhibited to any person who is not an adult or a film is exhibited in contravention of any of the other provisions contained in this Act or of any order made by the Central Government ²[,the Tribunal] or the Board in the exercise of any of the powers conferred on it, any police officer may, ³[***] enter any place in which he has reason to believe that the film has been or is being or is likely to be exhibited, search it and seize the film.

(2) All searches under this Act shall be carried out in accordance with the provisions of the ⁴[Code of Criminal Procedure, 1973 (2 of 1974)], relating to searches.

————————–

1. Ins. by Act 3 of 1959, sec. 5 (w.e.f. 12-3-1959).

2. Ins. by Act 49 of 1981, sec. 12 (w.e.f. 1-6-1983).

3. Certain word omitted by Act 49 of 1981, sec. 12 (w.e.f. 1-6-1983).

4. Subs. by Act 49 of 1981, sec. 12, for “Code of Criminal Procedure, 1898 (5 of 1898)” (w.e.f. 1-6-1983).

Section 7-B. Delegation of powers by Board [(Note:- Original S. 7-B, renumbered as sub-section.

¹[7B. Delegation of powers by Board.—²[(1)] The Central Government may, by general or special order, direct that any power, authority or jurisdiction exercisable by the Board under this Act shall, ³[in relation to the certification of the films under this Part] and subject to such condition, if any, as may be specified in the order, be exercisable also by the Chairman or any other member of the Board, and anything done or action taken by the Chairman or other member specified in the order shall be deemed to be a thing done or action taken by the Board.]

⁴¹[(2) The Central Government may, by order and subject to such conditions and restrictions as may be prescribed, authorise the regional officer to issue provisional certificates.]

————————–

1. Ins. by Act 3 of 1959, sec. 5 (w.e.f. 12-3-1959).

2. Section 7 renumbered as sub-section (1) thereof by Act 49 of 1981, sec. 13 (w.e.f. 1-6-1983).

3. Subs. by Act 49 of 1981, sec. 13, for “in relation to such matters” (w.e.f. 1-6-1983).

4. Ins. by Act 49 of 1981, sec. 13 (w.e.f. 1-6-1983).

Section 7–C. Power to direct exhibition of films for examination.

¹ Power to direct exhibition of films for examination – For the purpose of exercising any of the powers conferred on it by this Act, the Central Government,² the Tribunal or the Board may require any film to be exhibited before it or before ³ any persons or authority (Note:- Subs. by Act 49 of 1981 specified by it in this behalf.

———————-

1. Ins. by Act 3 of 1959, sec. 5 (w.e.f. 12-3-1959).

2. Ins. by Act 49 of 1981, sec. 14 (w.e.f. 1-6-1983).

3. Subs. by Act 49 of 1981, sec. 14, for “any person” (w.e.f. 1-6-1983).

Section 7-D.Vacancies, etc., not to invalidate proceeding.

¹ Vacancies, etc., not to invalidate proceeding – No act or proceeding of ²[the Tribuna the Board or of any advisory panel shall be deemed to be invalid by reason only of a vacancy in, or any defect in the constitution of [the Tribuna (Note:- Ins. by ibid)] the Board or panel, as the case may be.

——————–

1. Ins. by Act 3 of 1959, sec. 5 (w.e.f. 12-3-1959).

2. Ins. by Act 49 of 1981, sec. 15 (w.e.f. 1-6-1983).

Section 7-E.Members of the Board and advisory panels, to be public servants.

¹ Members of the Board and advisory panels to be public servants – All members of ²the [the Tribunal, the Board and of any advisory panel shall, when acting or purporting to act in pursuance of any of the provisions of this Act, be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code (45 of 1860).

———————–

1. Ins. by Act 3 of 1959, sec. 5 (w.e.f. 12-3-1959).

2. Ins. by Act 49 of 1981, sec. 16 (w.e.f. 1-6-1983).

Section 7-F.Bar of legal proceedings.

¹7-F.Bar of legal proceedings.Bar of legal proceedings -

No suit or other legal proceeding shall lie against ²the Central Government, [the Tribunal, the Board, advisory panel or any officer or member of³the Central Government,the Tribunal, the Board or advisory panel, as the case may be, in respect of anything which is in good faith done or intended to be done under this Act.]

———————-

1. Ins. by Act 3 of 1959, sec. 5 (w.e.f. 12-3-1959).

2. Subs. by Act 49 of 1981, sec. 17, for “the Central Government, the Board” (w.e.f. 1-6-1983).

3. Subs. by Act 49 of 1981, sec. 17, for “the Central Government, the Board or” (w.e.f. 1-6-1983).

Section 8. Power to make rules.

(1) The Central Government may, by notification in the Official Gazette, make rules for the purpose of carrying into effect the provisions of this Part.

¹(2) [(Note:- Subs. by Act 49 of 1981 (w.e.f. 1-6-1983) In particular, and without prejudice to the generality of the foregoing power, rules made under this section may provide for-

(a) The allowance or fees payable to the members of the Board.

(b) The terms an conditions of service of the members of the Board.

(c) The manner of making an application to the Board for a certificate and the manner in which a film has to be examined by the Board and the fees to be levied therefore.

(d) The association of regional officers in the examination of films, the conditions and restrictions subject to which regional officers may be authorised under Section 7-B to issue provisional certificates and the period of validity of such certificates.

(e) The manner in which the Board may consult any advisory panel in respect of any film.

(f) The allowance or fees payable to the members of advisory panel

(g) The marking of the films

(h) The allowances or fees payable to the members of the Tribunal

(i) The powers and duties of the Secretary to, and other employee of, the

Tribunal.

(j) The other terms and conditions of service of the Chairman and members of, and the Secretary to, and other employees of, the Tribunal

(k) The fees payable by the appellant to the Tribunal in respect of an appeal;

(l) The conditions (including conditions relating to the length of films in general or any class of films, in particular) subject to which any certificate may be granted, or the circumstances in which any certificate shall be refused.

(m) Any other matter which is required to be or may be prescribed.]

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

——————-

1. Subs. by Act 49 of 1981, sec. 18, for sub-section (2) (w.e.f. 1-6-1983).

2. Subs. by Act 25 of 1973, sec. 4, for sub-section (3) (w.e.f. 28-5-1973).

Section 9. Power to exempt.

The Central Government may, by order in writing exempt, subject to such conditions and restrictions, if any, as it may impose, the exhibition of any film or class of films from any of the provisions of this Part or of any rules made there under.

———————–

1. For such general exemption, see Gazette of India, 1952, Pt. II, Sec. 3, pp. 1578-1581.

Chapter III – REGULATION OF EXHIBITIONS BY MEANS OF CINEMATOGRAPHS

Section 10. Cinematograph exhibitions to be licensed.

Save as otherwise provided in this Part, no person shall give an exhibition by means of a cinematograph elsewhere that in a place licensed under this Part or otherwise than in compliance with any conditions and restrictions imposed by such liecnes.

Section 11. Licensing authority.

The authority having power to grant licences under this Part (hereinafter referred to as the licensing authority) shall be the district magistrate.

Provided that the State Government may, by notification in the Official Gazette, constitute, for the whole or any part of a ¹ Union territory], such other authority as it may specify in the notification to be the licensing authority for the purposes of this Part.

—————

1. Subs. by Act 58 of 1960, sec. 3 and Sch. II, for “Part C State” (w.e.f. 26-12-1960).

Section 12. Restrictions on powers of licensing authority.

(1) The licensing authority shall not grant a licence under this Part, unless it is satisfied that-

(a) The rules made under this Part have been substantially complied with, and

(b) Adequate precautions have been taken in the place, in respect of which the licence is to be given, to provide for the safety of persons attending exhibitions therein.

(2) Subject to the foregoing provisions of this section and to the control of the State Government, the licensing authority may grant licence under this Part to such persons s that authority thinks fit an on such terms and conditions and subject to such restrictions as it may determine.

(3) Any person aggrieved by the decision a licensing authority refusing to grant a licence under this Part may, within such time as may be prescribed, appeal to the State Government or to such officer as the State Government may speicfy in this behalf and the State Government or the officer, as the case may be, may make such order in the case as it or he thinks fit.

(4) The Central Government may, form time to time, issue directions to licensees generally or to any licensee in particular for the purpose of regulating the exhibition of any film or class of films, so that scientific films, films intended for educational purposes, films dealing with news and current events, documentary films or indigenous films secure and adequate opportunity of being exhibited, and where any such directions have been issued those directions shall be deemed to be additional conditions and restrictions subject to which the licence has been granted.

Notes

The exprssion “may” used in sub section (2) cannot be read as “shall” Tajdin Facerbhai v. Union Territory of Goa, AIR 1965 Goa 158.

If the licensing authority does not surrender its own judgement to the Government it is entitled in law to give weight to the opinion of the Government. Tajdin Facerbhai v. Union Territory of Goa, AIR 1965 Goa 158.

Where the appellant authority without passing any written order directed the Distrcit Magistrate to inform the petitioner that it was not possible to grant the licene as various directs were found under Cinematograph Rules, the order was fit to be set aside and a direction ws given to the Government to dispose of the appeal as per law. Tajdin Facerbhai v. Union Territory of Goa, AIR 1971 Goa 27.

The final order which the appellate passes in appeal is a quasi-judicial order. When it is a quasi-judicial order it must be a speaking order. Reasons must be given by the appellate authority for allowing or dismissing the appeal. Tajdin Facerbhai v. Union Territory of Goa, AIR 1971 Goa 27.

During the pendency of an application under sub section (3) of Section 12 a writ petition is maintainable. Tajdin Facerbhai v. Union Territory of Goa, AIR 1967 Goa158.

Section 13. Power of Central Government or local authority to suspend exhibition of films in certain cases.

(1) The Lieutenant- Governor or, as the case may be, the Chief Commissioner, in respect of the ¹ whole or any part of a Union territory], and the district magistrate in respect of the district within his jurisdiction, any, if he is of opinion that any film which is being publicly exhibited is likely to cause a breach of the peace, by order, suspend the exhibition of the film and during such suspension the film shall be deemed to be an uncertified film in the State, part or district, as the case may be.

(2) Where an order under sub section 91)has been issued by the Chief Commissioner or a district magistrate, as the case may be a copy thereof, together with a statement of reasons therefore, shall forthwith be forwarded by the person making the same to the Central Government, and the Central Government may either confirm or discharge the order.

(3) An order made under this section shall remain in tore for a period of two months from the date thereof, but the Central Government may, if it is of opinion that the order should continue in force, direct that the period of suspension shall be extended by such further period as it thinks fit.

———

1. Subs. by Act 58 of 1960, sec. 3 and Sch. II, for “whole Part C State or any part thereof” (w.e.f. 26-12-1960).

Section 14. Penalties for contravention of this Part.

If the owner of person in charge of a cinematograph uses the same or allows it to be used, or if he owner or occupier of any place permits that place to be used in contravention of the provision of this Part or of the rules made there under, or of the condition and restrictions upon or subject to which any licence has been granted under this Part, he shall be punishable with fine which may extend to one thousand d rupees and, in the case of a continuing offence, with a further fine which may extend to one hundred rupees for each day during which the offence continues.

Section 15. Power to revoke licence.

Where the holder of a licence has been convicted of an offence under Section 7 or Section 14, the licence may be revoked by the licensing authority.

Section 16. Power to make rules.

¹(1)] The Central Government may, by notification in the Official Gazette, make rules-

(a) Prescribing the terms, conditions and restrictions, if any, subject to which licences may be grated under this part.

(b) Providing for the regulation of cinematograph exhibitions for securing the public safety.

(c) Prescribing the time within which and the conditions subject to which an appeal under sub section (3) of Section 12 may be preferred.

²(2) Every rule made by the Central Government under this Part shall be laid, as soon s 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 session aforesaid, both Houses agree that the rule should be me made, the rule shall thereafter have effect only in such modified form or be of no effect, the case maybe, so, however, that any such modification or annulment shall be without prejudice the validity of anything previously done under that rule.

—————-

1. Section 11 renumbered as sub-section (1) thereof by Act 49 of 1981, sec. 19 (w.e.f. 1-6-1983).

2. Ins. by Act 49 of 1981, sec. 19 (w.e.f. 1-6-1983).

Section 17. Power to exempt.

The Central Government may by order in writing exempt,¹ subject to such conditions and restrictions as it may impose, any cinematograph exhibition or class or cinematograph exhibitions from any of the provisions of this part or of any rules made there under.

Notes

As the expression Central Government in relation to anything done before the constitution means the Governor-General or Governor-General in Council, it is obvious that the Notification of 1942 issued by the Chief Commissioner of Delhi under Section 9 of Cinematograph Act, 1918 must be deemed to have been issued by the Central Government. It cannot be said to be inconsistent with the Act of 1952.

———————

1. For such general exemptions, see Gazette of India, 1954, Pt. II, Sec. 3, p. 240, Gazette of India, 1955, Pt. II, Sec. 3, p. 310.

Chapter IV – REPEAL

Section 18. Repeal.

The cinematograph Act, 1918 (2 of 1918), is hereby repealed.

Provided that in relation to part A states and Part B states the repeal shall have effect only in so far as the said Act relates to the sanctioning of cinematograph films for exhibition.

Note

The wording of section 18 shows that the repeal of the Cinematograph Act, 1918 is confined to that portion of the old Act which is covered by Part II of the new Act. Section 6 is one of the repealed sections, but the issuing of the licences and the procedure provided therefore cannot be said to come within the wording of the repealing section. Bharat Bhushan v.p. C. Saxena, AIR 1955 All 82.

Customs Tariff Act

November 30, 2014

Section 1. Short title, extent and commencement.

1. This Act may be called the Customs Tariff Act, 1975.

2. It extends to the whole of India.

3. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Section 2. Duties specified in the Schedules to be levied.

The rates at which duties of customs shall be levied under the Customs Act, 1962 (52 of 1962), are specified in the First and Second Schedules.

Section 3. Levy of additional duty equal to excise duty.

1. Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article.

*Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the official gazette, specify the rate of additional duty having regard to the excise duty for the time being leviable on a like alcoholic liquor produced are manufactured in different states, are, if a like alcoholic liquor is not produced or manufactured in any state, then, having regard to excise duty which would be leviable for the time being in different states on the class or description of alcoholic liquor to which such imported alcoholic liquor belongs.

Explanation.- In this section, the expression “the excise duty for the time being leviable on a like article if produced or manufactured in India” means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India, or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.

2. For the purpose of calculating under this section, the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in Section 14 of the Customs Act, 1962 (52 of 1962), be the aggregate of —

i. the value of the imported article determined under sub-section (1) of the said Section 14 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and

ii. any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include (with retrospective effect from 1st day of March 2002)-

a. the special additional duty referred to in section 3(A)

b. the safeguard duty referred to in section 8B and 8C;

c. the countervailing duty referred to in section 9.

d. anti-dumping duty referred to in section 9A and

e. the duty referred to in sub section (1).

(i) In relation to which it is required, under the provisions of the standards of Weights and Measures Act, 1976 or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such article; and

(ii) where the like article produced or manufactured in India, or in case where such like article is not so produced or manufactured, then, the class or description of articles to which the imported article belongs, is the goods specified by notification in the Official Gazette under sub-section (1) of section 4A of the Central Excise Act, 1944.

Explanation:- Where on any imported article more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purposes of this section.

3. If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article whether on such article duty is leviable under sub-section (1) or not such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf.

4. In making any rules for the purposes of sub-section (3), the Central Government shall have regard to the average quantum of the excise duty payable on the raw materials, components or ingredients used in the production or manufacture of such like article.

5. The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

6. The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties, shall, so far as may be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act.

Section 3A. Special additional duty.

1. Any article which is imported into India shall in addition be liable to a duty (hereinafter referred to in this section as the special additional duty), which shall be levied at a rate to be specified by the Central Government, by notification in the Official Gazette, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India :

Provided that until such rate is specified by the Central Government, the special additional duty shall be levied and collected at the rate of eight per cent of the value of the article imported into India.

Explanation.- In this sub-section, the expression “maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India” means the maximum sales-tax, local tax, other charges for the time being in force, which shall be leviable on a like article, if sold or purchased in India, or if a like article is not so sold or purchased which shall be leviable on the class or description of articles to which the imported article belongs.

2. For the purpose of calculating under this section the special additional duty on any imported article, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 (52 of 1962) or section 3 of this Act, be the aggregate of-

i. the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be;

ii. any duty of customs chargeable on that article under section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include (with retrospective effect from 1st day of March 2002) -

a. the safeguard duty referred to in section 8B and 8C;

b. the countervailing duty referred to in section 9.

c. anti-dumping duty referred to in section 9A;

d. special additional duty referred to in sub-section (1) and

iii. the additional duty of customs chargeable on that article under section 3 of this Act.

The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties shall, so far as may be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act.

Nothing contained in this section shall apply to any article, which is chargeable to additional duties levied under sub-section (1) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957).

Section 4. Levy of duty where standard rate and preferential rate are specified.

1. Where in respect of any article a preferential rate of revenue duty is specified in the First Schedule, or is admissible by virtue of a notification under Section 25 of the Customs Act, 1962 (52 of 1962), the duty to be levied and collected shall be at the standard rate, unless the owner of the article claims at the time of importation that it is chargeable with a preferential rate of duty, being the produce or manufacture of such preferential area as is notified under sub-section (3) and the article is determined, in accordance with the rules made under sub-section (2), to be such produce or manufacture.

2. The Central Government may, by notification in the Official Gazette, make rules for determining if any article is the produce or manufacture of any preferential area.

3. For the purposes of this section and the First Schedule, “preferential area” means any country or territory which the Central Government may, by notification in the Official Gazette, declare to be such area.

4. Notwithstanding anything contained in sub-section (1), where the Central Government is satisfied that, in the interests of trade including promotion of exports, it is necessary to take immediate action for discontinuing the preferential rate, or increasing the preferential rate to a rate not exceeding the standard rate, or decreasing the preferential rate, in respect of an article specified in the First Schedule, the Central Government may, by notification in the Official Gazette, direct an amendment of the said Schedule to be made so as to provide for such discontinuance of, or increase or decrease, as the case may be, in the preferential rate.

5. Every notification issued under sub-section (3) or sub-section (4) shall, as soon as may be after it is issued, be laid before each House of Parliament.

Also see Notification 101/82-Cus., dated 1-4-1982

Section 5. Levy of a lower rate of duty under a trade agreement.

1. Whereunder a trade agreement between the Government of India and the Government of a foreign country or territory, duty at a rate lower than that specified in the First Schedule is to be charged on articles which are the produce or manufacture of such foreign country or territory, the Central Government may, by notification in the Official Gazette, make rules for determining if any article is the produce or manufacture of such foreign country or territory and for requiring the owner to make a claim at the time of importation, supported by such evidence as may be prescribed in the said rules, for assessment at the appropriate lower rate under such agreement.

2. If any question arises whether any trade agreement applies to any country or territory, or whether it has ceased to apply to India or any foreign country or territory, it shall be referred to the Central Government for decision and the decision of the Central Government shall be final and shall not be liable to be questioned in any court of law.

Section 6. Power of Central Government to levy protective duties in certain cases.

1. Where the Central Government, upon a recommendation made to it in this behalf by the Tariff Commission established under the Tariff Commission Act, 1951 (50 of 1951), is satisfied that circumstances exist which render it necessary to take immediate action to provide for the protection of the interests of any industry established in India, the Central Government may, by notification in the Official Gazette, impose on any goods imported into India in respect of which the said recommendation is made, a duty of customs of such amount, not exceeding the amount proposed in the said recommendation, as it thinks fit.

2. Every duty imposed on any goods under sub-section (1) shall, for the purposes of this Act, be deemed to have been specified in the First Schedule as the duty leviable in respect of such goods.

3. Where a notification has been issued under sub-section (1), the Central Government shall, unless the notification is in the meantime rescinded, have a Bill introduced in Parliament, as soon as may be, but in any case during the next session of Parliament following the date of the issue of the notification to give effect to the proposals in regard to the continuance of a protective duty of customs on the goods to which the notification relates, and the notification shall cease to have effect when such Bill becomes law, whether with or without modifications, but without prejudice to the validity of anything previously done thereunder :

Provided that if the notification under sub-section (1) is issued when Parliament is in session, such a Bill shall be introduced in Parliament during that session :

Provided further that where for any reason a Bill as aforesaid does not become law within six months from the date of its introduction in Parliament, the notification shall cease to have effect on the expiration of the said period of six months, but without prejudice to the validity of anything previously done thereunder.

Section 7. Duration of protective duties and power of Central Government to alter them.

1. When the duty specified in respect of any article in the First Schedule is characterized as protective in Column (5) of that Schedule, that duty shall have effect only up to and inclusive of the date, if any, specified in that Schedule.

2. Where in respect of any such article the Central Government is satisfied after such inquiry as it thinks necessary that such duty has become ineffective or excessive for the purpose of securing the protection intended to be afforded by it to a similar article manufactured in India and that circumstances exist which render it necessary to take immediate action, it may, by notification in the Official Gazette, increase or reduce such duty to such extent as it thinks necessary.

3. Every notification under sub-section (2), insofar as it relates to increase of such duty, shall be laid before each House of Parliament if it is sitting as soon as may be after the issue of the notification, and if it is not sitting within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder.

4. For the removal of doubts, it is hereby declared that any notification issued under sub-section (2), including any such notification approved or modified under sub-section (3), may be rescinded by the Central Government at any time by notification in the Official Gazette.

Section 8. Emergency power of Central Government to increase or levy export duties.

1. Where, in respect of any article, whether included in the Second Schedule or not, the Central Government is satisfied that the export duty leviable thereon should be increased or that an export duty should be levied, and that circumstances exist which render it necessary to take immediate action, the Central Government may, by notification in the Official Gazette, direct an amendment of the Second Schedule to be made so as to provide for an increase in the export duty leviable or, as the case may be, for the levy of an export duty, on that article.

2. The provisions of sub-sections (3) and (4) of Section 7 shall apply to any notification issued under sub-section (1) as they apply in relation to any notification increasing duty issued under sub-section (2) of Section 7.

Section 8A. Emergency power of Central Government to increase im port duties.

1. Where in respect of any article included in the First Schedule, the Central Government is satisfied that the import duty leviable thereon under section 12 of the Customs Act, 1962 (52 of 1962) should be increased and that circumstances exist which render it necessary to take immediate action, it may, by notification in the Official Gazette, direct an amendment of that Schedule to be made so as to provide for an increase in the import duty leviable on such article to such extent as it thinks necessary:

Provided that the Central Government shall not issue any notification under this sub-section for substituting the rate of import duty in respect of any article as specified by an earlier notification issued under this sub-section by that Government before such earlier notification has been approved with or without modifications under sub-section (2).

2. The provisions of sub-sections (3) and (4) of section 7 shall apply to any notification issued under sub-section (1) as they apply in relation to any notification increasing duty issued under sub-section (2) of section 7.

Section 8B. Power of Central Government to impose safeguard duty.

1. If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any article is imported into India in such increased quantities and under such conditions so as to cause or threatening to cause serious injury to domestic industry, then, it may, by notification in the Official Gazette, impose a safeguard duty on that article:

Provided that no such duty shall be imposed on an article originating from a developing country so long as the share of imports of that article from that country does not exceed three per cent or where the article is originating from more than one developing countries, then, so long as the aggregate of the imports from all such countries taken together does not exceed nine percent of the total imports of that article into India.

* Provided further that the Central Government may, by notification in the Official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from any country or territory into India, from payment of the whole or part of the safeguard duty leviable thereon.

2. The Central Government may, pending the determination under sub-section (1), impose a provisional safeguard duty under this sub-section on the basis of a preliminary determination that increased imports have caused or threatened to cause serious injury to a domestic industry :

Provided that where, on final determination, the Central Government is of the opinion that increased imports have not caused or threatened to cause serious injury to a domestic industry, it shall refund the duty so collected :

Provided further that the provisional safeguard duty shall not remain in force for more than two hundred days from the date on which it was imposed.

* (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any safeguard duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred per cent. export-oriented undertaking or a unit in a free trade zone or in a special economic zone.

Explanation:- For the purposes of this section, the expressions “hundred per cent. export-oriented undertaking”, “free trade zone” and “special economic zone” shall have the meanings assigned to them in Explanation 2 to sub-section (1) of section 3 of Central Excise Act, 1944.

3. The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

4. The duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such imposition :

Provided that if the Central Government is of the opinion that the domestic industry has taken measures to adjust to such injury or threat thereof and it is necessary that the safeguard duty should continue to be imposed, it may extend the period of such imposition :

Provided further that in no case the safeguard duty shall continue to be imposed beyond a period of ten years from the date on which such duty was first imposed.

5. The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for safeguard duty may be identified and for the manner in which the causes of serious injury or causes of threat of serious injury in relation to such articles may be determined and for the assessment and collection of such safeguard duty.

6. For the purposes of this section, -

a. “developing country” means a country notified by the Central Government in the Official Gazette for the purposes of this section;

b. “domestic industry” means the producers -

i. as a whole of the like article or a directly competitive article in India; or

ii. whose collective output of the like article or a directly competitive article in India constitutes a major share of the total production of the said article in India;

c. “serious injury” means an injury causing significant overall impairment in the position of a domestic industry;

d. “threat of serious injury” means a clear and imminent danger of serious injury.

7. Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.

Section 8C. Power of Central Government to impose transitional product specific safeguard duty on imports from the people’s Republic of China.

1. Notwithstanding anything contained in section 8B,

if the Central government after conducting such enquiry as it deems fit, is satisfied that any article is imported into India, from the people’s Republic of China, in such condition so as to cause or threatening to cause market disruption to domestic industry, then it may, by notification in the official Gazette, impose a safeguard duty on that article:

Provided that the central government may, by notification in the official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from people’s republic of China into India, from payment of the whole or part of the safeguard duty leviable thereon.

2. The Central government may, pending the determination under sub-section (1), impose a provisional safeguard duty under this sub-section on the basis of a preliminary determination that increased imports have caused or threatened to cause market disruption to a domestic industry:

Provided that where, on final determination, the Central government is of the opinion that increased imports have not caused or threatened to cause market disruption to a domestic industry, it shall refund the duty so collected:

Provided further that the provisional safeguard duty shall not remain in force for more than two hundred days from the date on which it was imposed.

3. Notwithstanding anything contained in sub- (1) and (2), a notification issued under sub-section (1) or any safeguard duty imposed under sub-section (2) , unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred percent. Export-oriented undertaking or a unit in a free trade zone or in a special economic zone.

Explanation:-For the purpose of this section , the expressions “hundred percent. Export-oriented undertaking”, “free trade zone” and “special economic zone” shall have the meanings respectively assigned to them in Explanation 2 to sub-section (1) of section 3 of the central Excise Act, 1944.

4. The duty chargeable under this section shall be in addition to any other duty imposed under this act or under any other law for the time being in force.

5. The duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such imposition;

Provided that if the Central government is of the opinion that such article continues to be imported into India, from people’s Republic of china, in such increased quantities so as to cause or threatening to cause market disruption to domestic industry and the safeguard duty should continue to be imposed, it may extend the period of such imposition for a period not beyond the period of ten years from the date on which the safeguard duty was first imposed.

6. The central Government may, be notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for safeguard duty may be identified and for the manner in which the cause of market disruption or cause of threat of markets disruption in relation to such articles may be determined and for the assessment and collection of such safeguard duty.

7. For the purpose of this section,-

” domestic industry” means the producers—

i. as a whole of a like article or a directly competitive article in India ; or

ii. Whose collective output of a like article or a directly competitive article in India constitutes a major share of the total production of the said article in India;

a. ” Market disruption” shall be caused whenever imports a like article or a directly competitive article produced by the domestic industry, increase rapidly, either absolutely or relatively, so as to be a significantly cause of material injury, or threat of material injury, to the domestic industry;

b. “Threat of market disruption” means a clear and imminent danger of market disruption.

8. Every notification issued under this section shall, as son as may be after it is issued, be laid before each house of Parliament;

Refund of additional duty of Customs in certain cases.

1. Notwithstanding anything contained in section 25 of the Customs Act, barge mounted power plants, falling under heading 98.01 of the First Schedule to the Customs Tariff Act, shall be deemed to have been exempted from the whole of the additional duty of Customs leviable thereon under sub-section (1) of section 3 of the customs Tariff Act, within the period commencing from the 8th December,2000 and ending with the 28th february,2002 (both the dates inclusive) and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, barge mounted power plants shall be deemed to be, and always to have been, exempted from the said additional duty of customs as if the exemption given by this sub-section had been in force at all material times.

2. For the purpose of sub-section (1), the central Government shall have and shall be deemed to have the power to exempt the goods referred to in the said sub-section with retrospective effect as the Central Government had the power to exempt the said goods under sub-section (1) of section 25 of the customs act, retrospectively at all material times.

3. Refund shall be made of all such additional duty of customs which have been collected but which would have not been so collected if the exemption referred to in sub-section (1 had been in force at all material times.

4. Notwithstanding anything contained in section 27 of the Customs Act, an application for the claim of refund of the additional duty of customs under sub-section (3) shall be made with in six months from the date on which the Finance Bill, 2002 receive the assent of the President.

Section 9. Countervailing duty on subsidized articles.

1. Where any country or territory pays, bestows, directly or indirectly, any subsidy upon the manufacture or production therein or the exportation therefrom of any article including any subsidy on transportation of such article, then, upon the importation of any such article into India, whether the same is imported directly from the country of manufacture, production or otherwise, and whether it is imported in the same condition as when exported from the country of manufacture or production or has been changed in condition by manufacture, production or otherwise, the Central Government may, by notification in the Official Gazette, impose a countervailing duty not exceeding the amount of such subsidy.

Explanation. - For the purposes of this section, a subsidy shall be deemed to exist if -

a. there is financial contribution by a Government, or any public body within the territory of the exporting or producing country, that is, where -

i. a Government practice involves a direct transfer of funds (including grants, loans and equity infusion), or potential direct transfer of funds or liabilities, or both;

ii. Government revenue that is otherwise due is foregone or not collected (including fiscal incentives);

iii. a Government provides goods or services other than general infrastructure or purchases goods;

iv. a Government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions specified in clauses (i) to (iii) above which would normally be vested in the Government and the practice in, no real sense, differs from practices normally followed by Governments; or

b. a Government grants or maintains any form of income or price support, which operates directly or indirectly to increase export of any article from, or to reduce import of any article into, its territory, and a benefit is thereby conferred.

2. The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the amount of subsidy, impose a countervailing duty under this sub-section not exceeding the amount of such subsidy as provisionally estimated by it and if such countervailing duty exceeds the subsidy as so determined, -

a. the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such countervailing duty; and

b. refund shall be made of so much of such countervailing duty which has been collected as is in excess of the countervailing duty as so reduced.

3. Subject to any rules made by the Central Government, by notification in the Official Gazette, the countervailing duty under sub-section (1) or sub-section (2) shall not be levied unless it is determined that -

a. the subsidy relates to export performance;

b. the subsidy relates to the use of domestic goods over imported goods in the export article; or

c. the subsidy has been conferred on a limited number of persons engaged in manufacturing, producing or exporting the article unless such a subsidy is for-

i. research activities conducted by or on behalf of persons engaged in the manufacture, production or export;

ii. assistance to disadvantaged regions within the territory of the exporting country; or

iii. assistance to promote adaptation of existing facilities to new environmental requirements.

4. If the Central Government, is of the opinion that the injury to the domestic industry which is difficult to repair, is caused by massive imports in a relatively short period, of the article benefiting from subsidies paid or bestowed and where in order to preclude the recurrence of such injury, it is necessary to levy countervailing duty retrospectively, the Central Government may, by notification in the Official Gazette, levy countervailing duty from a date prior to the date of imposition of countervailing duty under sub-section (2) but not beyond ninety days from the date of notification under that sub-section and notwithstanding anything contained in any law for the time being in force, such duty shall be payable from the date as specified in the notification issued under this sub-section.

5. The countervailing duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force.

6. The countervailing duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of subsidization and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension:

Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the countervailing duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.

7. The amount of any such subsidy as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the identification of such article and for the assessment and collection of any countervailing duty imposed upon the importation thereof under this section.

8. Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.

Section 9A. Anti-dumping duty on dumped articles.

1. Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article.

Explanation. - For the purposes of this section, -

a. “margin of dumping”, in relation to an article, means the difference between its export price and its normal value;

b. “export price”, in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6);

c. “normal value”, in relation to an article, means-

i. the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or

ii. when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either -

a. comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

b. the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and gen eral costs, and for profits, as determined in accordance with the rules made under sub-section (6):

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

2. The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin as so determined : -

a. the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such anti-dumping duty; and

b. refund shall be made of so much of the anti-dumping duty which has been collected as is in excess of the anti-dumping duty as so reduced.

* (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred per cent. export-oriented undertaking or a unit in a free trade zone or in a special economic zone.

article under inquiry, is of the opinion that -

i. there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and

ii. the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously under-mine the remedial effect of the anti-dumping duty liable to be levied,

the Central Government may, by notification in the Official Gazette, levy anti-dumping duty retrospectively from a date prior to the date of imposition of anti-dumping duty under sub-section (2) but not beyond ninety days from the date of notification under that sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the notification.

4. The anti-dumping duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force.

5. The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension :

Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.

6. The margin of dumping as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified, and for the manner in which the export price and the normal value of, and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty.

7. Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.

8. The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, relating to non-levy, short levy, refunds and appeals shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act.

Section 9AA. Refund of anti-dumping duty in certain cases.

1. Where an importer proves to the satisfaction of the Central Government that he has paid any anti-dumping duty imposed under sub-section (1) of section 9A on any article, in excess of the actual margin of dumping in relation to such article, he shall be entitled to refund of such excess duty :

Provided that such importer shall not be entitled to refund of so much of such excess duty under this sub-section which is refundable under sub-section (2) of section 9A.

Explanation - For the purposes of this sub-section, the expressions, “margin of dumping”, “export price” and “normal value” shall have the meanings respectively assigned to them in the Explanation to sub-section (1) of section 9A.

2. The Central Government may, by notification in the Official Gazette, make rules to -

i. provide for the manner in which and the time within which the importer may make application for the purposes of sub-section (1;

ii. authorise the officer of the Central Government who shall dispose of such application on behalf of the Central Government within the time specified in such rules; and

iii. provide the manner in which the excess duty referred to in sub-section (1) shall be -

(A) determined by the officer referred to in clause (ii); and

(B) refunded by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, after such determination.

Section 9B. No levy under section 9 or section 9A in certain cases.

1. Notwithstanding anything contained in section 9 or section 9A,-

a. no article shall be subjected to both countervailing duty and anti-dumping duty to compensate for the same situation of dumping or export subsidization;

b. the Central Government shall not levy any countervailing duty or anti-dumping duty -

i. under section 9 or section 9A by reasons of exemption of such articles from duties or taxes borne by the like article when meant for consumption in the country of origin or exportation or by reasons of refund of such duties or taxes;

ii. under sub-section (1) of each of these sections, on the import into India of any article from a member country of the World Trade Organisation or from a country with whom Government of India has a most favoured nation agreement (hereinafter referred as a specified country), unless in accordance with the rules made under sub-section (2) of this section, a determination has been made that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India; and

iii. under sub-section (2) of each of these sections, on import into India of any article from the specified countries unless in accordance with the rules made under sub-section (2) of this section, a preliminary findings has been made of subsidy or dumping and consequent injury to domestic industry; and a further determination has also been made that a duty is necessary to prevent injury being caused during the investigation:

Provided that nothing contained in sub-clauses (ii) and (iii) of clause (b) shall apply if a countervailing duty or an anti-dumping duty has been imposed on any article to prevent injury or threat of an injury to the domestic industry of a third country exporting the like articles to India;

c. the Central Government may not levy -

i. any countervailing duty under section 9, at any time, upon receipt of satisfactory voluntary undertakings from the Government of the exporting country or territory agreeing to eliminate or limit the subsidy or take other measures concerning its effect, or the exporter agreeing to revise the price of the article and if the Central Government is satisfied that the injurious effect of the subsidy is eliminated thereby;

ii. any anti-dumping duty under section 9A, at any time, upon receipt of satisfactory voluntary undertaking from any exporter to revise its prices or to cease exports to the area in question at dumped price and if the Central Government is satisfied that the injurious effect of dumping is eliminated by such action.

2. The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which any investigation may be made for the purposes of this section, the factors to which regard shall be at in any such investigation and for all matters connected with such investigation.

Section 9C. Appeal.

1. An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal).

2. Every appeal under this section shall be filed within ninety days of the date of order under appeal:

Provided that the Appellate Tribunal may entertain any appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

3. The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against.

4. The provisions of sub-sections (1), (2), (5) and (6) of section 129C of the Customs Act, 1962 (52 of 1962) shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962 (52 of 1962).

5. Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member.

Section 10. Rules to be laid before Parliament.

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

Section 11. Power of Central Government to alter duties under certain circumstances.

1. Where the Central Government is satisfied that it is necessary so to do for the purpose of giving effect to any agreement entered into before the commencement of this Act with a foreign Government, it may, by notification in the Official Gazette, increase or reduce the duties referred to in section 2 to such extent as each case may require :

Provided that no notification under this sub-section increasing or reducing the duties as aforesaid shall be issued by the Central Government after the expiration of a period of one year from the commencement of this Act.

2. Every notification issued under sub-section (1) shall, as soon as may be after it is issued, be laid before each House of Parliament.

Section 12. Repeal and saving.

1. The Indian Tariff Act, 1934 (32 of 1934), and the Indian Tariff (Amendment) Act, 1949 (1 of 1949), are hereby repealed.

2. Notwithstanding the repeal of any of the Acts mentioned in sub-section (1), anything done or any action taken (including any notification published and any rules and orders made or deemed to have been made under the provisions of those Acts and in force immediately before the commencement of this Act) shall, insofar as such thing or action is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the provisions of this Act and shall continue in force accordingly until superseded by anything done or any action taken under this Act.

Section 13. Consequential amendment of Act 52 of 1962.

In the Customs Act, 1962, in sub-section (1) of Section 12 and in sub-section (1) of Section 14, for the words and figures “Indian Tariff Act, 1934″, the words and figures “Customs Tariff Act, 1975″ shall be substituted.

Limitation Act

November 30, 2014

Section 1. Short title, extent, and commencement

1. This Act may be called the Limitation Act,1963.

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

3. It shall come into force on such date as the Central Government may be notification in the Official Gazette, appoint.

Section 2. Definitions:

In this Act, unless the context otherwise requires.

(a) “applicant” includes

(i) petitioner;

(ii) any person from or through whom an applicant derives his right to apply;

(iii) any person whose estate is represented by the applicant as executor, administrator or other representative;

(b) “application” includes a petitions;

(d) “bond” includes any instrument whereby a person obliges himself to pay money to another on condition that the obligation shall be void if a specified act is performed, or is not performed as the case may be;

(e) “defendant” includes

(i) any person from or through whom a defendant derives his liability to be sued;

(ii) any person whose estate is represented by the defendant as executor, administrator or other representative;

(f) “easement” includes a right not arising from contract, by which one person is entitled to remove and appropriate for his own profit any part of the soil belonging to another or anything growing in, or attached to, or subsisting upon the land of another;

(g) “foreign country’” means any country other than India;

(h) “good faith” nothing shall be deemed to be done in good faith which is not done with due care and attention;

(i) “plaintiff” includes

(i) any person from or through whom a plaintiff derives his right to sue; (ii) any person whose estate is represented by the plaintiff as executor, administrator or other representative;

(j) “period of limitation” means the period of limitation prescribed for any suit, appeal or application by the Schedule, and “prescribed period” means the period of limitation computed in accordance with the provisions of this Act;

(k) “promissory-note” means any instrument whereby the maker engages absolutely to pay a specified sum of money to another at time therein limited, or on demand, or at sight;

(l) “suit” does not include an appeal or an application;

(m) “tort” means a civil wrong which is not exclusively the breach of a contract or the breach of trust;

(n) “trustee” does not include a benamidar, a mortgage remaining in possession after the mortgage has been satisfied, or a person in a wrongful possession without title.

Part 3 – Limitation of Suits, Appeals and Applications

Section 3. Bar of limitation

(1) Subject to the provisions contained in sections 4 to 24 (inclusive) every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as defense;

(1) For the purposes of this Act,

(a) A suit is instituted,

(i) in an ordinary case, when the plaint is presented to the proper officer;

(ii) in the case of a pauper, when his application for leave to sue is a pauper is made; and

(ii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

(b) any claim by way of a set-off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted-

(i) in the case of a set-off, on the dame date as the suit in which the set off is pleaded;

(ii) in the case a counter claim, on the date on which the counter claim is made in court;

(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court

Section 4. Expiry of prescribed period when court is closed

When the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court reopens.

Explanation – A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.

Section 5.Extension of prescribed period in certain cases

Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908) may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

Explanation – The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section

Section 6.Legal disability

Where a person entitled to institute a suit or make an application for the execution of a decree is, at the time from which the prescribed period is to be reckoned, a minor or insane, or an idiot, he may institute the suit or make the application within the same period after the disability has ceases, as would otherwise have been allowed from the time specified therefore in the third column of the Schedule.

(2) Where such person is, at the time from which the prescribed period it to be reckoned, affected by two such disabilities, or where, before his disability has ceased, he is affected by another disability, he may institute the suit or make the application within the same period after both disabilities have ceased, as would otherwise have been allowed from the time so specified.

(3) Where the disability continues up-to the death of that person, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been allowed from the time so specified.

(4) Where the legal representative referred to in sub-section (3) is, at the date of the death of the person whom he represents. affected by any such disability, the rules contained in sub-sections (1) and (2) shall apply.

(5) Where a person under disability dies after the disability ceases but within the period allowed to him under this section, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been available to that person had he not died.

Explanation – For the purposes of this section ‘minor’ includes a child in the womb.

Notes – This section corresponds with section 6 of the old Act with some changes.

Section 7. Disability of one of several persons

Where one of several persons jointly entitled to institute a suit or make an application for the execution of a decree is under any such disability, and a discharge can be given without the concurrence of such person, time will run against them all; but, where no such discharge can be given, time will not run as against any of them until one of them becomes capable of giving such discharge without the concurrence of the others or until the disability has cased.

Explanation I – This section applies to a discharge from every kind of liability, including a liability in respect of any immovable property.

Explanation II – For the purposes of this section, the manager of a Hindu undivided family governed by the Mitakshara law shall be deemed to be capable of giving a discharge without the concurrence of the other members of the family only if he is in management of the joint-family property.

Section 8. Special exceptions

Nothing in section 6 or in section 7 applies to suits to enforce rights of pre-emotion, or shall be deemed to extend, for more than three years from the cessation of the disability or the death of the person affected thereby the period of limitation for any suit or application.

Section 9. Continuous running of time

Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it:

Provided that where letters of administration to the estate of a creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the administration continues.

Section 10. Suits against trustees and their representatives

Notwithstanding anything contained in the foregoing provisions of this Act, no suit against a person in whom property has become vested if trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof or for an account of such property or proceeds, shall be barred by any length of time.

Explanation – For the purposes of this section any property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose and the manager of the property shall be deemed to be the trusted thereof.

Section 11. Suits on contracts entered into outside the territories to which the Act extends

(1) Suits instituted in the territories to which this Act extends on contracts entered into the State of Jammu and Kashmir or in a foreign country shall be rules of limitation contained in this Act.

(2) No rule of limitation in force in the State of Jammu and Kashmir or in a foreign country shall be a defense to a suit instituted in the said territories on a contract entered into in that State or in a foreign country unless –

(a) the rule has extinguished the contract; and

(b) the parties were domiciled in that State or in the foreign country during the period prescribed by such rule.

Part 3 – Computation of Period of Limitation

Section 12. Exclusion of time in legal proceedings

(1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned shall be excluded.

(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.

(3) Where a decree or order is appealed from or sought to be revised or reviewed, or when an application is made for leave to appeal from a decree or order the time requisite for obtaining a copy of the judgment on which the decree or order is founded shall also be excluded.

(4) In computing the period of limitation for an application to set aside an award, the time requisite for obtaining a copy of the award shall be excluded.

Explanation – In computing under this section the time requisite for obtaining a copy of a decree or an order, any time taken by the court to prepare the decree or order before an application for copy thereof is made shall not be excluded.

Section 13. Exclusion of time in cases where leave to sue or appeal as a pauper is applied for

In computing the period of limitation prescribed for any suit or appeal in any case where an application for leave to sue or appeal as a pauper has been made and rejected, the time during which the applicant has been prosecuting in good faith his application for such leave shall be excluded, and the court may, on payment of the court-fees prescribed for such suit or appeal, treat the suit or appeal as having the same force and effect as if the court-fees had been paid in the first instance.

Section 14. Exclusion of time of proceeding bona fide in court without jurisdiction

(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of the appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a count of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court of other cause of a like nature.

Explanation – For the purpose of this section, –

(a) In excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;

(b) Plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;

(c) Misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.

Related Judgements

FERRO ALLOYS CORPORATION LTD. v. RAJHANS STEEL LTD.

Section 15. Exclusion of time in certain other cases

(1) In computing the period of limitation for any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded.

(2) In computing the period of limitation for any suit of which notice has been given, or for which the previous consent or sanction of the Government or any other authority is required, in accordance with the requirements of any law for the time being in force, the period of such notice or, as the case may be, the time required for obtaining such

consent or sanction shall be excluded.

Explanation – In excluding the time required for obtaining the consent or sanction of the Government or any other authority, the date on which the application was made obtaining the consent or sanction and the date of receipt of the order of the Government or other authority shall both be counted.

(3) In computing the period of limitation for any suit or application for execution of decree by any receiver of interim receiver appointed in proceedings for the adjudication of a person as an insolvent or by any liquidator or provisional lipuidator appointment in proceedings for the winding up of a company, the period beginning with the date of institution of such proceeding and ending with the expiry of three months from the date of appointment of such receiver or liquidator, as the case may be, shall be excluded.

(4) In computing the period of limitation for a suit for possession by a purchaser at a sale in execution of a decree, the time during which a proceeding to set aside the sale has been prosecuted shall be excluded.

(5) In computing the period of limitation for any suit the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government, shall be excluded.

Related Judgements

FERRO ALLOYS CORPORATION LTD. v. RAJHANS STEEL LTD.

Section 16. Effect of death on or before the accrual of the right to sue

(1) Where a person who would, if he were living, have a right to institute a suit or make an application dies before the right accrues, or where a right to institute a suit or make an application accrues only on the death of a person, the period of limitation shall be computed from the time when there is a legal representative of the deceased capable of instituting such suit or making such application.

(2) Where a person against whom, if he were living, a right to institute a suit or make an application would have accrued dies before the right accrues, or where a right to institute a suit or make an application against any person accrues on the death of such person, the period of limitation shall be computed from the time when there is a legal representative of the deceased against whom the plaintiff may institute such suit or make such application.

(3) Nothing in sub-section (1) or sub-section (2) applies to suits to enforce rights of preemption or to suit for the possession of immovable property or of a hereditary office.

Section 17. Effect of fraud or mistake

(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act-

(a) The suit or application is based upon the fraud of the defendant or respondent or his agent; or

(b) The knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or

(d) Where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him;

The period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, has discovered it, or in the case of concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:

Provided that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against or set aside any transaction affecting, any property which-

(i) In the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been committed, or

(ii) In the case of mistake, has been purchased for valuable consideration subsequently to the transaction in which the mistake was made, by a person who did not know, or have reason to believe, that the mistake had

been made, or

(iii) In the case of a concealed document, has been purchased for valuable consideration by a person who was not a party to the concealment and, did not at the time of purchase know, or have reason to believe, that the document had been concealed.

(2) Where a judgment-debtor has, by fraud or force, prevented the execution of a decree or order within the period of limitation, the court may, on the application of the judgment-creditor made after the expiry of the said period extend the period for execution of the decree or order:

Provided that such application is made within one year from the date of the discovery of the fraud or the cessation of force, as the case may be.

Section 18. Effect of acknowledgment in writing

(1) Where before the expiration of the prescribed period for a suit or application in respect or any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derived his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing thee acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act,1872 ( 1 of 1872), oral evidence of its contents shall not be received.

Explanation – For the purposes of this section, –

(a) An acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or night;

(b) The word “signed” means signed either personally or by an agent duly Authorised in this behalf ; and

(c) An application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.

NOTES – It is not necessary that an acknowledgment within Section 18 must contain a promise pay or should amount to a promise to pay. (Subbarsadya v.Narashimha, AIR 1936 Mad.939)

The above section corresponds to S.19 of the old Act and makes slight changes.

Section 19. Effect of payment on account of debt or of interest on legacy

Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly Authorised in this behalf, a fresh period of limitation shall be computed from the time when payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January,1928, an acknowledgment of the payment appears in the hand-writing of, or in a writing signed by the person making the payment.

Explanation – For the purposes of this section, –

(a) Where mortgaged land is in the possession of the mortgage, the receipt of the rent of produce of such land be deemed to be a payment;

(b) “Debt” does not include money payable under a decree or order of a court.

Related Judgements

FERRO ALLOYS CORPORATION LTD. v. RAJHANS STEEL LTD.

Section 20. Effect of acknowledgment or payment by another person

(1) The expression “agent duly Authorised in this behalf” in sections 18 and 19 shall in the case of a person under disability, include his lawful guardian, committee or manager or an agent duly Authorised by such guardian, committee or manager to sign the acknowledgment or make the payment. (2) Nothing in the said sections renders one of several joint contractors, partners, executors or mortgages chargeable by reason only of a written acknowledgment signed by, or of a payment made by, or by the agent of, any other or others of them.

(3) For the purposes of the said sections, –

(a) an acknowledgment signed or a payment made in respect of any liability by, or by the duly Authorised agent of, any limited owner of property who is governed by Hindu Law, shall be a valid acknowledgment or payment, as the case may be, against a reversionary succeeding to such liability; and

where a liability has been incurred by, or on behalf of a Hindu undivided family as such, an acknowledgment or payment made by, or by the duly Authorised agent or, the manager of the family for the time being shall be deemed to have been made on behalf of the whole family.

Section 21. Effect of substituting or adding new plaintiff or defendant

(1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was made a party:

Provided that were the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.

(2) Nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the tendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff.

Section 22. Continuing breaches and torts

In the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of limitation beings to run at every moment of the time during the breach or the tort, as the case may be, continues.

Section 23. Suits for compensation for acts not actionable without special damage

In the case of suit for compensation for an act which does not give rise to a cause of action unless some specific injury actually results there from, the period of limitation shall be computed from the time when the injury results.

Section 24. Computation of time mentioned in instrument

All instruments shall for purposes of this Act, be deemed to be made with reference to the Gregorian calendar.

Part 4 – Acquisition of ownership by possession

Section 25. Acquisition of easement by prescription

(1) Where the access and use of light or air to and for any building have been peaceable enjoyed there with as an easement, and as of right, without interruption and for twenty years, and where any way or watercourse or the use of any water or any other easement (whether affirmative or negative) has been peaceably and openly enjoyed by any person claiming title thereto as an easement and as of right without interruption and for twenty years, the right to such access and use of light or air, way, watercourse, use of other easement shall be absolute and indefeasible.

(2) Each of the said periods of twenty years shall be taken to be a period ending within two years next before the institution of the suit wherein claim to which such period relates is contested.

(3) Where property over which a right is claimed under sub-section (1) belongs to the Government that sub-section shall be read as if for the words “twenty years” the words “thirty years” were substituted.

Explanation – Nothing is an interruption within the meaning of the section, unless where there is an actual discontinuance of the possession or enjoyment by reason of an obstruction by the act of some person other than the claimant and unless such obstruction is submitted to or acquiesced in for one year after the claimant has notice thereof and of the person making or authorizing the same to be made.

Section 26. Exclusion in favour of reversionary of servant tenement

Where any land or water upon, over or from, which any easement has been enjoyed or derived has been held under or by virtue of any interest for life or in terms of years exceeding three years from the granting thereof the time of the enjoyment of such easement during the continuance of such interest or term shall be excluded in the computation of the period of twenty years in case the claim is, within three years next after the determination of such interest or term, resisted by the person entitled on such determination to the said land or water.

Section 27. Extinguishments of right to property

At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.

Part 5 – Miscellaneous

Section 28. Amendment of Certain Acts. (Repealed)

Section 29. Savings

(1) Nothing in this Act, shall affect section 25 of the Indian Contract Act,1872.

(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any sit, appeal or application by any special or local law, the provisions contained in section 5 to 24 (inclusive shall apply only in so far, as and to the extent to which, they are not expressly excluded by such special or local law.

(3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law.

(4) Sections 25 and 26 and the definition of “easement” in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act,1882 may for the time being extend.

Section 30. Provision for suits, etc., for which the prescribed period is shorter than the period prescribed by the Indian Limitation Act,1908

Notwithstanding anything contained in this Act, (a) any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act,1908, may be instituted within a period of (Note: Substituted for the words “five years” by Act No.10 of 1969) (Seven years) next after the commencement of this Act or within the period prescribed for such suit by the Indian Limitation Act,1908, whichever period expires earlier;

(Note: Substituted for the Words “five years” by Act No.10 of 1969)

[Provided that if in respect of any such suit, the said period of seven years expires earlier than the period of limitation prescribed therefore under the Indian Limitation Act,1908 and the said period of seven years together with so much of the period of limitation in repeat of such suit under the Indian Limitation Act,1908, as has already expired before the commencement of this Act is shorter than the period prescribed for such suit under this Act, then, the suit may be instituted within the period of limitation prescribed therefore under this Act].

(b) any appeal or application for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908 may be preferred or made within a period of ninety days next after the commencement of this Act or within the period prescribed for such appeal or application by the Indian Limitation Act,1908, whichever period expires earlier.

Section 31. Provision as to barred or pending suits, etc.

Nothing in this Act shall,

(a) enable any suit, appeal or application to be instituted, preferred or made for which the period of limitation prescribed by the Indian Limitation Act,1908, expired before the commencement of this Act; or

(b) affect any suit, appeal or application instituted, preferred or made before, and pending at, such commencement.

Section 32. Repeal

Rep. By the Repealing and Amending Act,1974 (56 of 1974), section 2 and Schedule I.

Schedule – Period of Limitations

Division I – Suits

PART I – Suits Relating to Accounts

*SL. NO.*	*DESCRIPTION OF SUIT*	*PERIOD OF LIMITATION*	*TIME FROM WHICH PERIOD BEGINS TO RUN*
1.	For the balance due on a mutual, open and current account where there have been reciprocal demands between the parties.	Three years	The close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account.
2.	Against a factor for an account	Three years	When the account is during the continuance of the agency, demanded and refused or, where no such demand is made, when the agency terminates.
3.	By a principal against his agent for movable property received by the latter and not accounted for.	Three years	When the account is during the continuance of the agency, demanded and refused or, where no such demand is made, when the agency terminates.
4.	Other suits by principals against agents for	Three years	When the neglect or misconduct becomes known to the plaintiff.
5.	For an account and a share of the profits of dissolved partnership	Three years	The date of the dissolution.

PART II – Suits relating to Contracts


*SL. NO.*			*DESCRIPTION OF SUIT*			*PERIOD OF LIMITATION*			*TIME FROM WHICH PERIOD BEGINS TO RUN*
6.			For a seaman’s wages			Three years			The end of the voyage during which the wages are earned.
7.			For wages in the case of any other person.			Three years			When the wages accrue due.
8.			For the price of food or drink sold by the keeper of a hotel, tavern or lodging house.			Three years			When the food or drink is delivered
9.			For the price of lodging			Three years			When the price becomes payable .
10.			Against a carrier for compensation for non-delivery of or delay in delivering goods.			Three years			When the loss or injury occurs.
11.			Against a carrier for compensation for losing or injuring goods.			Three years			When the goods ought to be delivered.
12.			For the hire of animals, vehicles, boats or household furniture.			Three years			When the hire becomes payable.
13.			For the balance of money advance in payment of goods to be delivered.			Three years			When the goods ought to be delivered.
14.			For the price of goods sold and delivered when no fixed period of credit is agreed upon.			Three years			The date of delivery of the goods.
15.			For the price of goods sold and delivered to be paid for after the expiry of a fixed period of credit.			Three years			When the period of credit expires.
16.			For the price of goods sold and delivered to be paid for by a bill of exchange, no such bill being given.			Three years			When the period of the proposed bill elapses.
17.			For the price of trees or growing crops sold by the plaintiff to the defendant where not fixed period of credit is agreed upon.			Three years			The date of the sale.
18.			For the price of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment.			Three years			When the work is done.
19.			For money payable for money lent.			Three years			When the loan is made.
20.			Like suit when the lender has given a cheque for the money.			Three years			When the cheque is paid.
21.			For money lent under an agreement that it shall be payable on demand.			Three years			When the loan is made.
22.			For money deposited under an agreement that it shall be payable on demanded, including money of a customer in the hands of his banker so payable.			Three years			When the demand is made.
23.			For money payable by the defendant to he plaintiff for money received by the defendant, for the plaintiff’s use.			Three years			When the money is paid.
24.			For money payable to the plaintiff for money paid for the defendant.			Three years			When the money is received.
25.			For money payable for interest upon money due from the defendant to the plaintiff.			Three years			When the interest becomes due.
26.			For money payable to the plaintiff for money found to be due from the fedendant to the plaintiff on accounts stated between them			Three years			When the accounts are stated in writing signed by the defendant or his agent duly Authorised in this behalf, unless where the debt is, by a simultaneous agreement in writing signed as aforesaid made payment at a future time, and then when that time arrives.
27.		For compensation for breach of a promise to do anything at a specified time, or upon the happening of a specified contingency.		Three years				When the time specified arrives or the contingency happens.
28.		On a single bond where a day is specified for payment		Three years				The day so specified.
29.		On a single bond, where no such day is specified.		Three years				The date of executing the bond.
30.		On a bond subject to a condition		Three years				When the condition is broken.
31.		On a bill of exchange or promissory-note payable at a fixed time after date.		Three years				When the bill or note falls due.
32.		On a bill of exchange payable at sight, or after sight but not at a fixed time.		Three years				When the bill is presented.
33.		On a bill of exchange accepted payable at a particular place.		Three years				When the bill is presented at that place.
34.		On a bill of exchange or promissory-note payable at a fixed time after sight or after demand.		Three years				When the fixed time expires.
35.		On a bill of exchange or promissory note payable on demand and not accompanied by any writing restraining or postponing the right to sue.		Three years				The date of the bill or note.
36.		On a promissory-note or bond payable by installments.		Three years				The expiration of the first term of payment as to the part then payable; and for the other parts, the expiration of the respective terms of payment.
37.		On a promissory-note or bond payable by installments which provides that, if default be made in payment of one or more installments, the whole shall be due.		Three years				When the default is made unless where the payee or obligee waives the benefit of the provision and then when fresh default is made in respect of which there is no such waiver.
38.		On a promissory-note given by the maker to a third person to be delivered to the payee after a certain event should happen.		Three years				The date of the delivery to the payee.
39.		On a dishonored foreign bill where protest have been made and notice given.		Three years				When the notice is given.
40.		By the payee against the drawer of a bill of exchange, which has been dishonored by non-acceptance.		Three years				The date of refusal to accept.
41.		By the acceptor of an accommodation-bill against the drawer.		Three years				When the acceptor pays.
42.		By a surety against the principal debtor.		Three years				When the surety pays the creditor.
43.		By a survey against a crusty.		Three years				When the surety pays anything in excess of his own share.
44. (a)		On a policy of insurance when the sum insured is payable after proof of the death has been given to or received by the insurers.		Three years				The date of the death of the deceased, or where the claim on the policy is denied, either partly or wholly, the date of such denial.
44. (b)		On a policy of insurance when the sum insured is payable after proof of the loss has been given to or received by the insurers.		Three years				The date of the occurrence causing the loss, or where the claim on the policy is denied either partly or wholly, the date of such denial.
45.		By the assured to recover preemie paid under a policy violable at the election of the insurers.		Three years				When the insurers elect to avoid the policy.
46.	Under the Indian Succession Act,1925 (39 of 1925), section 360 of Sec. 361, to compel a refund by a person to whom an executor or administrator has paid a legacy or distributed assets.				Three years		The date of the payment or distribution.
47.	For money paid upon on existing consideration which afterwards fails.				Three years		The date of failure.
48.	For contribution by a party who has paid the whole or more then his share of the amount due under a joined decree, or by a sharer in a joint estate who has paid the whole or more than his share of the amount of revenue due from himself and his co-sharers.				Three years		The date of the payment in excess of the plaintiff’s own share.
49.	By a co-trustee to enforce against the estate of a deceased trustee a claim for contribution.				Three years		When the right to contribution accrues.
50.	By the manager of joint estate of an undivided family for contribution, in respect of payment made by him on account of the estate.				Three years		The date of the payment.
51.	For the profits of immovable property belonging to the plaintiff which have been wrongfully received by the defendant.				Three years		When the profits are received.
52.	For arrears of rent.				Three years		When the arrears become due.
53.	By a vendor of immovable property for personal payment of up-paid purchase money.				Three years		The time fixed for completing the sale, or (where the title is accepted after the time fixed for completion) the date of the acceptance.
54.	For specific performance of a contract.				Three years		The date of fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.
55.	For compensation for the breach of any contract, express or implied, not herein specially provided for.				Three years		When the contract is broken or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs or (where the breach is continuing) when it ceases.

PART III-Suits relating to Declarations

56.	To declare the forgery of an instrument issued or registered.	Three years	When the issue or registration becomes known to the plaintiff.
57.	To obtain a declaration that an alleged adoption is invalid, or never, in fact, took place.	Three years	When the alleged adoption becomes known to the plaintiff.
58.	To obtain any other declaration.	Three years	When the right to sue first accrues.

PART IV – Suits relating to Declarations.

59.	To cancel or set aside an instrument or decree or for the rescission of a contract.	Three years	When the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first becomes known to him.
60.	To set aside a transfer of property made by the guardian of a ward
(a)	By the ward who has attained majority;	Three years	When the ward attains majority.
(b)	By the ward’s legal representative	Three years
	When the ward dies within three years from the date of attaining majority;		When the ward attains majority.
	When the ward dies before attaining majority	Three years	When the ward dies.
61.	By a mortgagor -
	(a) to redeem or recover, possession of immovable property mortgaged;	Thirty years	When the right to redeem or to recover possession accrues.
	(b) to recover possession of immovable property mortgaged and afterwards transferred by the mortgage for a valuable consideration.	Twelve years	When the transfer becomes known to plaintiff.
	(c) to recover surplus collection received by the mortgage after the mortgage has been satisfied.	Three years	When the mortgagor reenters on the mortgaged property.

PART V – Suits relating to Immovable Property


62.	To enforce payment of money secured by a mortgage or otherwise charged upon immovable property.	Twelve years	When the money sued for becomes due.
63.	By a mortgage
	(a) for foreclosure;	Thirty years	When the money secured by the mortgage becomes due.
	(b) for possession of immovable property mortgaged.	Twelve years	When the mortgage becomes entitled to possession.
64.	For possession of immovable property based on previous possession and not on title, when the plaintiff while in possession of the property has been dispossessed.	Twelve years	The date of dispossession.
65.	For possession of immovable property or any interest therein based on title.	Twelve years	When the possession of the defendant becomes adverse to the plaintiff.
Explanation – for the purposes of this article -
	(a) Where the suit is by a remainder-man, a reversionary (other than a landlord); or a devisee the possession of the defendant shall be deemed to become adverse only when the estate of the remainder man, reversionary or devisee, as the case may be falls into possession;
	(b) Where the suit is by a Hindu or Muslim entitled to the possession of immovable property on the death of a Hindu or Muslim female the possession of the defendant shall be deemed to become adverse only when the female dies.
	(c) Where the suit is by a purchaser at a sale in execution of a decree when the judgment-debtor was out of possession at the date of the sale, the purchaser shall be deemed to be a representative of the judgment-debtor who was out of possession.
66.	For possession of immovable property when the plaintiff has become entitled to possession by reason of any forfeiture or breach of condition.	Twelve years	When the forfeiture is incurred or the condition is broken.
67.	By a landlord to recover possession from a tenant.	Twelve years	When the tenancy is determined.

PART VI – Suits relating to movable property

68.	For specific movable property lost, or acquired by theft, or dishonest misappropriation or conversion.	Three years	When the person having the right to the possession of the property first learns in whose possession it is.
69.	For other specific movable property.	Three years	When the property is wrongfully taken.
70.	To recover movable property deposited or pawned from a depositary or pawnee.	Three years	The date of refusal after demand.
71.	To recover movable property deposited or pawned, and afterwards brought from the deposited or pawned, and afterwards brought from the depositary or pawnee for a valuable consideration.	Three years	When the sale becomes known to the plaintiff.

PART VII – Suits relating to torts

72.	For compensation for doing or for omitting to do an act alleged to be in pursuance of any enactment in force for the time being in the territories to which this Act extends.	One year	When the act or omission takes place.
73.	For compensations for false imprisonment.	One year	When the imprisonment ends.
74.	For compensation for malicious prosecution.	One year	When the plaintiff is acquitted or the prosecution is otherwise terminated.
75.	For compensation for libel.	One year	When the libel is published.
76.	For compensation for slander.	One year	When the words are spoken or if the words are not actionable in themselves, when the special damage complained of results.
77.	For compensation for loss of service occasioned by the seduction of the plaintiff’s servant or daughter.	One year	When the loss occurs.
78.	For compensation for inducing a person to break a contract with the plaintiff.	One year	The date of the breach.
79.	For compensation for anillegal, irregular or excessive distress.	One year	The date of the distress.
80.	For compensation for wrongful seizure or movable property under legal process.	One year	The date of the seizure.
81.	By executors, administrators or representatives under the Legal Representatives Suits Act,1855.	One year	The date of the death of the person wronged.
82.	By executors, administrators or representatives under the Indian Fatal Accidents Act,1855.	Two years	The date of the death of the person killed.
83.	Under the Legal Representative Suits Act,1855 against an executor, and administrator or any other representative.	Two years	When the wrong complained of is done.
84.	Against one who, having a right to use property for specific purposes, perverts it to other purposes.	Two years	When the perversion first becomes known to the person injured thereby.
85.	For compensation for obstructing a way or a water course.	Three years	The date of the obstruction.
86.	For compensation for diverting a water course.	Three years	The date of the diversion.
87.	For compensation for trespass upon immovable property.	Three years	The date of the trespass.
88.	For compensation for infringing copyright or any other exclusive privilege.	Three years	The date of the infringement.
89.	To restrain waste.	Three years	When the waste begins.
90.	For compensation for injury caused by an injunction wrongfully obtained.	Three years	When the injunction ceases.
91.	For compensation -
	(a) for wrongfully taking or detaining any specific movable property lost, or acquired by theft, or dishonest misappropriation or conversion.	Three years	When the person having the right to the possession of the property first learns in whose possession it is.
	(b) for wrongfully taking or injuring or wrongfully detaining any other specific movable property.	Three years	When the property is wrongfully taken or injured, or when the detainee’s possession becomes unlawful.

PART VIII – Suits relating to trust and trust property

92.	To recover possession of immovable property conveyed or bequeathed in trust and afterwards transferred by the trustee for a valuable consideration.	Twelve years	When the transfer becomes known to the plaintiff.
93.	To recover possession of immovable property conveyed or bequeathed in trust and afterwards transferred by the trustee for a valuable consideration.	Three years	When the transfer becomes known to the plaintiff.
94.	To set aside a transfer to immovable property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment, made by a manager thereof for a valuable consideration.	Twelve years	When the transfer becomes known to the plaintiff.
95.	To set aside a transfer of movable property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment, made by a manager thereof for a valuable consideration.	Three years	When the transfer, becomes known to the plaintiff.
96.	By the manager of a Hindu, Muslim and Buddhist religious or charitable endowment to recover possession of movable or immovable property comprised in the endowment which has been transferred by a previous manager for a valuable consideration.	Twelve years	The date of death, resignation or removal of the transfer or the date of appointment of the plaintiff as manager of the endowment, whichever is later.

PART IX – Suits relating to miscellaneous matters

97.	To enforce a right of preemption whether the right is founded on law or general usage or on special contract.	One year	When the purchaser takes under the sale sought to be impeached, physical possession of the whole or part of the property sold, or, where the subject matter of the sale does not admit of physical possession of the whole or part of the property, when the instruments of sale is registered.
98.	By a person against whom an order referred to R.63 or rule 103 of Order XXI of the Code of Civil Procedure, 1908 or an order under section 28 of the Presidency Small Cause Courts Act,1882 has been made, to establish the right which he claims o the property comprised in the order.	One year	The date of the final order.
99.	To set aside a sale by a civil or revenue court or a sale for arrears of Government revenue or for any demand recoverable as such arrears.	One year	When the sale is confirmed or would otherwise have become final and conclusive had no such suit been brought.
100.	To alter or set aside any decision r order of a civil court any proceeding other than a suit of any act or order of an officer of Government in his official capacity.	One year	The date of the final decision or order by the court or the date of the act or order of the officer, as the case may.
101.	Upon a judgment including a foreign judgment, or a recognizance.	Three years	The date of the judgment or recognisance.
102.	For property which the plaintiff has conveyed while insane.	Three years	When the plaintiff is restored to sanity and has knowledge of the conveyance.
103.	To make good out of the general estate of a deceased trustee the loss occasioned by a breach of trust.	Three years	The date of the trustee’s death or if the loss has not then resulted, the date of the loss.
104.	To establish a periodically recurring right.	Three years	When the plaintiff is first refused the enjoyment for the right.
105.	By a Hindu for arrears of maintenance.	Three years	When the arrears are payable.
106.	For a legacy or for a share of a residue bequeathed by a testator or for a distributive share of the property of an intestate against an executor or an administrator or an administrator or some other person legally charged with the duty of distributing the estate.	Twelve years	When the legacy or share becomes payable or deliverable.
107.	For possession of a hereditary office.Explanation – A hereditary office is possessed when the properties thereof are usually received, or (if there are no properties) when the duties thereof are usually performed.	Twelve years	When the defendant takes possession of the office adversely to the plaintiff.
108.	Suit during the life of a Hindu r Muslim female by a Hindu or Muslim who, if the female died at the date of instituting the suit, would be entitled to the possession of land, to have an alienation of such land made by the female declared to be void except for her life or until her re-marriage.	Twelve years	The date of the alienation.
109.	By Hindu governed by Mitakshara Law to set aside his father’s alienation or ancestral property.	Twelve years	When the Aileen takes possession of the property.
110.	By a person excluded from a joint-family property to enforce a right to share therein.	Twelve years	When the exclusion becomes known to the plaintiff.
111.	By or on behalf of any local authority for possession of any public street or road or any part thereof from which it has been dispossessed or of which it has discontinued the possession.	Thirty years	The date of the dispossession or discontinuance.
112.	Any suit (except a suit before the Supreme Court in the exercise of its original jurisdiction) by or on behalf of the Central Government, or any State Government including the Government of the State of Jammu and Kashmir.	Thirty years	When the period of limitation would begin to run under this Act against a like suit by a private person.

PART X – Suits for which there is no prescribed period

113.

Any suit for which no period of limitation is provided elsewhere in this Schedule.

Three years

When the right to sue accrues.

Division II

*SL. NO.*	*DESCRIPTION OF SUIT*	*PERIOD OF LIMITATION*	*TIME FROM WHICH PERIOD BEGINS TO RUN*
114.	Appeal from an order of acquittal, -
	(a) under sub-section (1) or sub-section (2) of section 417 of the Code of Criminal Procedure,1898;	Ninety days	The date of the order appealed from.
	(b) under sub-section (3) of Section 417 of the that Code.	Thirty days	The date of the grant of Special leave.
115.	Under Code of Criminal Procedure,1898
	(a) From a sentence of death passed by a court of section or by a High Court in the exercise of its original Criminal Jurisdiction.	Thirty days	The date of the sentence
	(b) From any other sentence or any order not being an order of acquittal -
	(i) to the High Court	Sixty days	The date of the sentence or order.
	(ii) to any other Court	Thirty days	The date of the sentence or order.
116.	Under the Code of Civil Procedure,1908
	(a) To a High Court from any decree or order;	Ninety days	The date of the decree or order.
	(b) To any other court from any decree or order.	Thirty days	The date of the decree or order.
117.	From a decree or order of any High Court to the same Court.	Thirty days	The date of the decree or order.

Division III – Applications

PART I

*SL.NO.*	*DESCRIPTION OF SUIT*	*PERIOD OF LIMITATION*	*TIME FROM WHICH PEROID BEGINS TO RUN*
118.	For leave to appear and defend a suit under summary procedure.	Ten days	When the summons is served.
119.	Under the Arbitration Act,1940
	(a) For the filing in court of an award;	Thirty days	The date of service of the notice of the making of the award;
	(b) For setting aside an award or getting an award remitted for reconsideration.	Thirty days	The date of the service of the notice of the filing of the award.
120.	Under the Code of Civil Procedure,1908, to have the legal representative of a deceased plaintiff or appellant or of a deceased defendant or respondent, made a party.	Ninety days	The date of the death f the plaintiff, appellant, defendant or respondent, as the case may be;
121.	Under the same Code for an order to set aside an abatement.	Sixty days	The date of abatement.
122.	To restore a suit or appeal or application for review or revision dismissed for default of appearance or for want of prosecution or for failure to pay costs of service of process or to furnish security for costs.	Thirty days	The date of dismissal.
123.	To set aside a decree passed ex prate or to rehear an appeal decree or head ex prate.Explanation – For the purpose of this article, substituted service under rule 20 of Order V of the Code of Civil Procedure, 1908 shall not be deemed to be due service.	Thirty days	The date of the decree or where the summons or notice was not duly served when the applicant had knowledge of the decree.
124.	For a review of judgment by a court other than the Supreme Court.	Thirty days	The date of the decree or order.
125.	To record an adjustment or satisfaction of a decree.	Thirty days	When the payment or adjustment is made.
126.	For the payment of the amount of a decree by installments.	Thirty days	The date of the decree.
127.	To set aside a sale in execution of a decree, including any such application by a judgment-debtor.	Thirty days	The date o the sale.
128.	For possession by on dispossessed of immovable property and disputing the right f the decree-holder or purchaser at a sale in execution of a decree.	Thirty days	The date of the dispossession.
129.	For possession after removing resistance or obstruction of delivery of possession of immovable property decreed or sold in execution f a decree.	Thirty days	The date of resistance or obstruction.
130.	For leave to appeal as a pauper -
	(a) To thee High Court;	Sixty days	The date of decree appealed from.
	(b) To any other Court;	Thirty days	The date of decree appealed from.
131.	To any court for the exercise of its powers of revision under the Code of Civil Procedure,1908, or the Code of Criminal Procedure, 1898.	Ninety days	The date of the decree or order of sentence sought to be revised.
132.	To the High Court for a certificate of fitness to appeal to the Supreme Court under Clause (1) of Article 132, Article 133 or sub-clause (c) of clause (e) of Article 134 of thee Constitution or under any other law for the time being in force.	Sixty days	The date of the order or sentence.
133.	To the Supreme Court for Special leave to appeal,
	(a) In a case involving death sentence;	Sixty days	Th date of the judgment, final order or sentence.
	(b) In a case where leave to appeal was refusedby the High Court;	Sixty days	The date of the order of refusal.
	(c) In any other case.	Ninety days	When date of the judgment or order.
134.	For delivery of possession by a purchaser of immovable property at a sale in execution of a decree.	One year	When the sale becomes absolute.
135.	For the enforcement of a decree granting a mandatory injunction.	Three years	The date of the decree or where a date is fixed for performance, such date.
136.	For the execution of any decree (other than a decree granting a mandatory injunction) or order of any civil court.	Twelve years	Where the decree or order becomes enforceable or where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring period, when default in making the payment or delivery in respect of which execution is sought, takes place:Provided that an application for the enforcement or execution of a decree granting a perpetual injunction shall not be subject to any period of limitation.

PART II

Other applications

137.

Any other application for which no period of limitation is provided elsewhere in this Division.

3 yrs

When the right to apply accrues.

Arbitration and Conciliation Act

November 30, 2014

Section 1. Short title, extent and commencement.

(1) This Act may be called the Arbitration and Conciliation Act, 1996.

(2) It extends to the whole of India:

Provided that Parts I, III and IV shall extend to the State of Jammu and Kashmir only in so far as they relate to international commercial arbitration or, as the case may be, international commercial conciliation.

Explanation.—In this sub-section, the expression “international commercial conciliation” shall have the same meaning as the expression “international commercial arbitration” in clause (f) of sub-section (1) of section 2, subject to the modification that for the word “arbitration” occurring therein, the word “conciliation” shall be substituted.

(3) It shall come into force on such date1 as the Central Government may, by notification in the official Gazette, appoint.

—————

1. Came into force on 22-8-1996 vide G.S.R. 375 (E), dated 22nd August, 1996.

Section 2. Definitions.

(1) In this Part, unless the context otherwise requires,—

(a) “arbitration” means any arbitration whether or not administered by permanent arbitral institution;

(b) “arbitration agreement” means an agreement referred to in section 7;

(d) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators;

(e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

(f) “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is—

(i) an individual who is a national of, or habitually resident in, any country other than India; or

(ii) a body corporate which is incorporated in any country other than India; or

(iii) a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or

(iv) the Government of a foreign country;

(g) “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting;

(h) “party” means a party to an arbitration agreement.

Scope

(2) This Part shall apply where the place of arbitration is in India.

(3) This Part shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration.

(4) This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.

(5) Subject to the provisions of sub-section (4), and save in so far as is otherwise provided by any law for the time being in force or in any agreement in force between India and any other country or countries, this Part shall apply to all arbitrations and to all proceedings relating thereto.

Construction of references

(6) Where this Part, except section 28, leaves the parties free to determine a certain issue, that freedom shall include the right of the parties to authorise any person including an institution, to determine that issue.

(7) An arbitral award made under this Part shall be considered as a domestic award.

(8) Where this Part—

(a) refers to the fact that the parties have agreed or that they may agree, or

(b) in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules referred to in that agreement.

(9) Where this Part, other than clause (a) of section 25 or clause (a) of sub-section (2) of section 32, refers to a claim, it shall also apply to a counter-claim, and where it refers to a defence, it shall also apply to a defence to that counter-claim.

Section 3. Receipt of written communications.

(1) Unless otherwise agreed by the parties,—

(a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and

(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee’s last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.

(2) The communication is deemed to have been received on the day it is so delivered.

(3) This section does not apply to written communications in respect of proceedings of any judicial authority.

Section 4. Waiver of right to object.

A party who knows that—

(a) any provision of this Part from which the parties may derogate, or

(b) any requirement under the arbitration agreement,has not been omplied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.

Section 5. Extent of judicial intervention.

Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.

Section 6. Administrative assistance.

In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Section 7. Arbitration agreement.

(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in—

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

Section 8. Power to refer parties to arbitration where there is an arbitration agreement.

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration

may be commenced or continued and an arbitral award made.

Section 9. Interim measures, etc. by Court.

A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court—

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:—

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the court to be just and convenient,and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

Section 10. Number of arbitrators.

(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.

(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.

Section 11. Appointment of arbitrators.

(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.

(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.

(4) If the appointment procedure in sub-section (3) applies and—

(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

(6) Where, under an appointment procedure agreed upon by the parties,—

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final.

(8) The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to—

(a) any qualifications required of the arbitrator by the agreement of the parties; and

(b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator.

(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.

(10) The Chief Justice may make such scheme1 as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him.

(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justices of different High Courts or their designates, the Chief Justice or his designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request.

(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to ‘‘Chief Justice’’ in those sub-sections shall be construed as a reference to the ‘‘Chief Justice of India’’.

(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court itself is the Court referred to in that clause, to the Chief Justice of that High Court.

Scope

It is well settled that where an arbitrator is named in the arbitration agreement, the provisions of section 11 of the Act are not attracted and the court will not have jurisdiction to try and decide the petition filed by party for appointment of another arbitrator; Kamla Solvent v. Manipal Finance Corpn. Ltd., AIR 2001 Mad 440.

Under section 11, there is no provision fixing any time limit except under sub-section (5) which provides the time limit of 30 days from the receipt of the request from the party for appointment of an arbitrator. Under sub-section (6) no such time limit have been fixed. It is required under the procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment; Ansal Properties & Industries Ltd. v. Himachal Pradesh State Electricity Board, AIR 1997 Arb LR 11.

Existence of arbitration clause and validity of reference

The existence of the arbitration clause and the validity of reference shall only be decided by the Arbitrator. It is also within the domain of the Arbitrator to decide whether the claim of the petitioner has already been settled on full satisfaction; Navratandas & Co. (P) Ltd. v. Tata Iron & Steel Co., AIR 2006 Jhar 7.

—————

1. See Appointment of Arbitrators by the Chief Justice of India Scheme, 1996, published in the Gazette of India, Extra., Pt. III, Sec. 1, dated 16th May, 1996.

Section 12. Grounds for challenge.

(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.

(2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in sub-section (1) unless they have already been informed of them by him.

(3) An arbitrator may be challenged only if—

(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or

(b) he does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

Section 13. Challenge procedure.

(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.

(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.

(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.

(5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34.

(6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.

Section 14. Failure or impossibility to act.

(1) The mandate of an arbitrator shall terminate if—

(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and

(b) he withdraws from his office or the parties agree to the termination of his mandate.

(2) If a controversy remains concerning any of the grounds referred to inclause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.

(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.

Section 15. Termination of mandate and substitution of arbitrator.

(1) In addition to the circumstances referred to in section 13 or section 14, the mandate of an arbitrator shall terminate—

(a) where he withdraws from office for any reason; or

(b) by or pursuant to agreement of the parties.

(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal.

(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.

Section 16. Competence of arbitral tribunal to rule on its jurisdiction.

(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,—

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.

(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.

(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.

(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.

(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.

Section 17. Interim measures ordered by arbitral tribunal.

(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.

(2) The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1).

Section 18. Equal treatment of parties.

The parties shall be treated with equality and each party shall be given a full opportunity to present his case.

Section 19. Determination of rules of procedure.

(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

Section 20. Place of arbitration.

(1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

Section 21. Commencement of arbitral proceedings.

Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.

Section 22. Language.

(1) The parties are free to agree upon the language or languages to be used in the arbitral proceedings.

(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall determine the language or languages to be used in the arbitral proceedings.

(3) The agreement or determination, unless otherwise specified, shall apply to any written statement by a party, any hearing and any arbitral award, decision or other communication by the arbitral tribunal.

(4) The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

Section 23. Statement of claim and defence.

(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.

(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

Section 24. Hearings and written proceedings.

(1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials:

Provided that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held.

(2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property.

(3) All statements, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.

Section 25. Default of a party.

Unless otherwise agreed by the parties, where, without showing sufficient cause,—

(a) the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral tribunal shall terminate the proceedings;

(b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant;

(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.

Section 26. Expert appointment by arbitral tribunal.

(1) Unless otherwise agreed by the parties, the arbitral tribunal may—

(a) appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and

(b) require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report.

Section 27. Court assistance in taking evidence.

(1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence.

(2) The application shall specify—

(a) the names and addresses of the parties and the arbitrators;

(b) the general nature of the claim and the relief sought;

(i) the name and address of any person to be heard as witness or expert witness and a statement of the subject-matter of the testimony required;

(ii) the description of any document to be produced or property to be inspected.

(3) The Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.

(4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.

(5) Persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences in suits tried before the Court.

(6) In this section the expression “Processes” includes summonses and commissions for the examination of witnesses and summonses to produce documents.

Section 28. Rules applicable to substance of dispute.

(1) Where the place of arbitration is situate in India,—

(a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India;

(b) in international commercial arbitration,—

(i) the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;

(ii) any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules;

(iii) failing any designation of the law under clause (a) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.

(2) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.

(3) In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

Section 29. Decision making by panel of arbitrators.

(1) Unless otherwise agreed by the parties, in arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made by a majority of all its members.

(2) Notwithstanding sub-section (1), if authorised by the parties or all the members of the arbitral tribunal, questions of procedure may be decided by the presiding arbitrator.

Section 30. Settlement.

(1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.

(2) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.

(3) An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award.

(4) An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.

Section 31. Form and contents of arbitral award.

(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.

(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.

(3) The arbitral award shall state the reasons upon which it is based, unless—

(a) the parties have agreed that no reasons are to be given, or

(b) the award is an arbitral award on agreed terms under section 30.

(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.

(5) After the arbitral award is made, a signed copy shall be delivered to each party.

(6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.

(7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.

(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.

(8) Unless otherwise agreed by the parties,—

(a) the costs of an arbitration shall be fixed by the arbitral tribunal;

(b) the arbitral tribunal shall specify—

(i) the party entitled to costs,

(ii) the party who shall pay the costs,

(iii) the amount of costs or method of determining that amount, and

(iv) the manner in which the costs shall be paid.

Explanation.—For the purpose of clause (a), “costs” means reasonable costs relating to—

(i) the fees and expenses of the arbitrators and witnesses,

(ii) legal fees and expenses,

(iii) any administration fees of the institution supervising the arbitration, and

(iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award.

Section 32. Termination of proceedings.

(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,

(b) the parties agree on the termination of the proceedings, or

(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.

Section 33. Correction and interpretation of award; additional award.

(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties—

(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.

(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the arbitral award.

(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

(5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.

(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section (5).

(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section.

Section 34. Application for setting aside arbitral award.

(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section

(2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if—

(a) the party making the application furnishes proof that—

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not

in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that—

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

Explanation.—Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section

33, from the date on which that request had been disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

Section 35. Finality of arbitral awards.

Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.

Section 36. Enforcement.

Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.

Section 37. Appealable orders.

(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—

(a) granting or refusing to grant any measure under section 9;

(b) setting aside or refusing to set aside an arbitral award under
section 34.

(2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.—

(a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Section 38. Deposits.

(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it expects will be incurred in respect of the claim submitted to it:

Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.

(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:

Provided that where one party fails to pay his share of the deposit, the other party may pay that share:

Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter-claim, as the case may be.

(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties, as the case may be.

Section 39. Lien on arbitral award and deposits as to costs.

(1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.

(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.

(3) An application under sub-section (2) may be made by any party unless the fees demanded have been fixed by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be entitled to appear and be heard on any such application.

(4) The Court may make such orders as it thinks fit respecting the costs of the arbitration where any question arises respecting such costs and the arbitral award contains no sufficient provision concerning them.

Section 40. Arbitration agreement not to be discharged by death of party thereto.

(1) An arbitration agreement shall not be discharged by the death of any party thereto either as respects the deceased or as respects any other party, but shall in such event be enforceable by or against the legal representative of the deceased.

(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was appointed.

(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action is extinguished by the death of a person.

Section 41. Provisions in case of insolvency.

(1) Where it is provided by a term in a contract to which an insolvent is a party that any dispute arising thereout or in connection therewith shall be submitted to arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far as it relates to any such dispute.

(2) Where a person who has been adjudged an insolvent had, before the commencement of the insolvency proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then, if the case is one to which sub-section (1) does not apply, any other party or the receiver may apply to the judicial authority having jurisdiction in the insolvency proceedings for an order directing that the matter in question shall be submitted to arbitration in accordance with the arbitration agreement, and the judicial authority may, if it is of opinion that, having regard to all the circumstances of the case, the matter ought to be determined by arbitration, make an order accordingly.

(3) In this section the expression “receiver” includes an Official Assignee.

Section 42. Jurisdiction.

Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.

Section 43. Limitations.

(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in Court.

(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21.

(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.

(4) Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.

Section 44. Definition.

In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960—

(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and

(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.44. Definition.—In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960— (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and (b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.

Section 45. Power of judicial authority to refer parties to arbitration.

Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Section 46. When foreign award binding.

Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.

Section 47. Evidence.

(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court—

(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

(b) the original agreement for arbitration or a duly certified copy thereof; and

(2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation.—In this section and all the following sections of this Chapter, “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.

Section 48. Conditions for enforcement of foreign awards.

(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or

(b) the enforcement of the award would be contrary to the public policy of India.

Explanation.—Without prejudice to the generality of clause (b) of this section, it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.

(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of sub-section (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

Section 49. Enforcement of foreign awards.

Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court.

Section 50. Appealable orders.

(1) An appeal shall lie from the order refusing to—

(a) refer the parties to arbitration under section 45;

(b) enforce a foreign award under section 48, to the court authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Section 51. Saving.

Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.

Section 52. Chapter II not to apply.

Chapter II of this Part shall not apply in relation to foreign awards to which this Chapter applies.

Section 53. Interpretation.

In this Chapter “foreign award” means an arbitral award on differences relating to matters considered as commercial under the law in force in India made after the 28th day of July, 1924,—

(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second Schedule applies, and

(b) between persons of whom one is subject to the jurisdiction of some one of such Powers as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, and of whom the other is subject to the jurisdiction of some other of the Powers aforesaid, and

(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by like notification, declare to be territories to which the said Convention applies, and for the purposes of this Chapter an award shall not be deemed to be final if any proceedings for the purpose of contesting the validity of the award are pending in the country in which it was made.

Section 54. Power of judicial authority to refer parties to arbitration.

Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a dispute regarding a contract made between persons to whom section 53 applies and including an arbitration agreement, whether referring to present or future differences, which is valid under that section and capable of being carried into effect, shall refer the parties on the application of either of them or any person claiming through or under him to the decision of the arbitrators and such reference shall not prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.

Section 55. Foreign awards when binding.

Section 56. Evidence.

(1) The party applying for the enforcement of a foreign award shall, at the time of application, produce before the Court—

(a) the original award or a copy thereof duly authenticated in the manner required by the law of the country in which it was made;

(b) evidence proving that the award has become final; and

(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c) of sub-section (1) of section 57 are satisfied.

(2) Where any document requiring to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Section 57. Conditions for enforcement of foreign awards.

(1) In order that a foreign award may be enforceable under this Chapter, it shall be necessary that—

(a) the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;

(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;

(c) the award has been made by the arbitral tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;

(d) the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;

(e) the enforcement of the award is not contrary to the public policy or the law of India.

Explanation.—Without prejudice to the generality of clause (e), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.

(2) Even if the conditions laid down in sub-section (1) are fulfilled, enforcement of the award shall be refused if the Court is satisfied that—

(a) the award has been annulled in the country in which it was made;

(b) the party against whom it is sought to use the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not properly represented;

(c) the award does not deal with the differences contemplated by or falling within the terms of the submission to arbitration or that it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that if the award has not covered all the differences submitted to the arbitral tribunal, the Court may, if it thinks fit, postpone such enforcement or grant it subject to such guarantee as the Court may decide.

(3) If the party against whom the award has been made proves that under the law governing the arbitration procedure there is a ground, other than the grounds referred to in clauses (a) and (c) of sub-section (1) and clauses (b) and (c) of sub-section (2) entitling him to contest the validity of the award, the Court may, if it thinks fit, either refuse enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal.

Section 58. Enforcement of foreign awards.

Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of the Court.

Section 59. Appealable orders.

(1) An appeal shall lie from the order refusing—

(a) to refer the parties to arbitration under section 54; and

(b) to enforce a foreign award under section 57, to the court authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Section 60. Saving.

Section 61. Application and scope.

(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.

(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.

Section 62. Commencement of conciliation proceedings.

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.

(2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.

(3) If the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.

Section 63. Number of conciliators.

(1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.

(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.

Section 64. Appointment of conciliators.

(1) Subject to sub-section (2),—

(a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole conciliator;

(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;

(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.

(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular,—

(a) a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or

(b) the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person:

Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

Section 65. Submission of statements to conciliator.

(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.

(2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.

(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.

Explanation.—In this section and all the following sections of this Part, the term “conciliator” applies to a sole conciliator, two or three conciliators as the case may be.

Section 66. Role of conciliator.

(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.

(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.

(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.

(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.

Section 67. Role of conciliator.

(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.

Section 68. Administrative assistance.

In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Section 69. Communication between conciliator and parties.

(1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.

(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.

Section 70. Disclosure of information.

When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate:

Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.

Section 71. Co-operation of parties with conciliator.

The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.

Section 72. Suggestions by parties for settlement of dispute.

Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

Section 73. Settlement agreement.

(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Section 74. Confidentiality.

Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

Section 75. Termination of conciliation proceedings.

The conciliation proceedings shall be terminated—

(a) by the signing of the settlement agreement by the parties on the date of the agreement; or

(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or

(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.

Section 76. Resort to arbitral or judicial proceedings.

The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

Section 77. Costs.

(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.

(2) For the purpose of sub-section (1), “costs” means reasonable costs relating to—

(a) the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties;

(b) any expert advice requested by the conciliator with the consent of the parties;

(d) any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.

(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.

Section 78. Deposits.

(1) The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub-section (2) of section 78 which he expects will be incurred.

(2) During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party.

(3) If the required deposits under sub-sections (1) and (2) are not paid in full by both parties within thirty days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties, effective on the date of that declaration.

(4) Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the parties.

Section 79. Role of conciliator in other proceedings.

Unless otherwise agreed by the parties,—

(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings;

(b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

Section 80. Admissibility of evidence in other proceedings.

The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings,—

(a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;

(b) admissions made by the other party in the course of the conciliation proceedings;

(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

Section 81. Power of High Court to make rules.

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 82. Removal of difficulties.

Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 83. Power to make rules.

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

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

Section 84. Repeal and savings.

(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.

(2) Notwithstanding such repeal,—

(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force;

(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act.

Section 85. Repeal of Ordinance 27 of 1996 and Saving.

(1) The Arbitration and Conciliation (Third) Ordinance, 1996 (27 of 1996) is hereby repealed.

(2) Notwithstanding such repeal, any order, rule, notification or scheme made or anything done or any action taken in pursuance of any provision of the said Ordinance, shall be deemed to have been made, done or taken under the corresponding provisions of this Act.

THE FIRST SCHEDULE

(See section 44)

CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

ARTICLE I

1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

2. The term “arbitral awards” shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.

3. When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any State may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State. It may also declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration.

ARTICLE II

1. Each Contracting State shall recognise an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of defined legal relationship, whether contractual or not, concerning a subject-matter capable of settlement by arbitration.

2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative and incapable of being performed.

ARTICLE III

Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

ARTICLE IV

1. To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply—

(a) the duly authenticated original award or a duly certified copy thereof;

(b) the original agreement referred to in article II or a duly certified copy thereof.

2. If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

ARTICLE V

1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that—

(a) the parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of that country; or

(b) the recognition or enforcement of the award would be contrary to the public policy of that country.

ARTICLE VI

If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

ARTICLE VII

1. The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.

2. The Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927 shall cease to have effect between Contracting States on their becoming bound and to the extent that they become bound by this Convention.

ARTICLE VIII

1. This Convention shall be open until 31st December, 1958 for signature on behalf of any Member of the United Nations and also on behalf of any other State which is or hereafter becomes member of any specialised agency of the United Nations, or which is or hereafter becomes a party to the Statute of the International Court of Justice, or any other State to which an invitation has been addressed by the General Assembly of the United Nations.

2. This Convention shall be ratified and the instrument of ratification shall be deposited with the Secretary-General of the United Nations.

ARTICLE IX

1. This Convention shall be open for accession to all States referred to in

article VIII.

2. Accession shall be effected by the deposit of an instrument of accession with the Secretary-General of the United Nations.

ARTICLE X

1. Any State may, at the time of signature, ratification or accession, declare that this Convention shall extend to all or any of the territories for the international relations of which it is responsible. Such a declaration shall take effect when the Convention enters into force for the State concerned.

2. At any time thereafter any such extension shall be made by notification addressed to the Secretary-General of the United Nations and shall take effect as from the ninetieth day after the day of receipt by the Secretary-General of the United Nations of this notification, or as from the date of entry into force of the Convention for the State concerned, whichever is the later.

3. With respect to those territories to which this Convention is not extended at the time of signature, ratification or accession, each State concerned shall consider the possibility of taking the necessary steps in order to extend the application of this Convention to such territories, subject, where necessary for constitutional reasons, to the consent of the Governments of such territories.

ARTICLE XI

In the case of a federal or non-unitary State, the following provisions shall apply:—

(a) with respect of those articles of this Convention that come within the legislative jurisdiction of the federal authority, the obligations of the federal Government shall to this extent be the same as those of Contracting States which are not federal States;

(b) with respect to those articles of this Convention that come within the legislative jurisdiction of constituent States or provinces which are not, under the constitutional system of the federation, bound to take legislative action, the federal Government shall bring such articles with a favourable recommendation to the notice of the appropriate authorities of constituent States or provinces at the earliest possible moment;

(c) a federal State Party to this Convention shall, at the request of any other Contracting State transmitted through the Secretary-General of the United Nations, supply a statement of the law and practice of the federation and its constituent units in regard to any particular provision of this Convention, showing the extent to which effect has been given to that provision by legislative or other action.

ARTICLE XII

1. This Convention shall come into force on the ninetieth day following the date of deposit of the third instrument of ratification or accession.

2. For each State ratifying or acceding to this Convention after the deposit of the third instrument of ratification or accession, this Convention shall enter into force on the ninetieth day after deposit by such State of its instrument of ratification or accession.

ARTICLE XIII

1. Any Contracting State may denounce this Convention by a written notification to the Secretary-General of the United Nations. Denunciation shall take effect one year after the date of receipt of the notification by the Secretary-General.

2. Any State which has made a declaration or notification under article X may, at any time thereafter, by notification to the Secretary-General of the United Nations, declare that this Convention shall cease to extend to the territory concerned one year after the date of the receipt of the notification by the Secretary-General.

3. This Convention shall continue to be applicable to arbitral awards in respect of which recognition or enforcement proceedings have been instituted before the denunciation takes effect.

ARTICLE XIV

A Contracting State shall not be entitled to avail itself of the present Convention against other Contracting States except to the extent that it is itself bound to apply the Convention.

ARTICLE XV

The Secretary-General of the United Nations shall notify the States contemplated in article VIII of the following:—

(a) signatures and ratifications in accordance with article VIII;

(b) accessions in accordance with article IX;

(d) the date upon which this Convention enters into force in accordance with article XII;

(e) denunciations and notifications in accordance with article XIII.

ARTICLE XVI

1. This Convention, of which the Chinese, English, French, Russian and Spanish texts shall be equally authentic, shall be deposited in the archives of the United Nations.

2. The Secretary-General of the United Nations shall transmit a certified copy of this Convention to the States contemplated in article XIII.

THE SECOND SCHEDULE

(See section 53)

PROTOCOL ON ARBITRATION CLAUSES

The undersigned, being duly authorised, declare that they accept, on behalf of the countries which they represent, the following provisions:—

1. Each of the Contracting States recognises the validity of an agreement whether relating to existing or future differences between parties subject respectively to the jurisdiction of different Contracting States by which the parties to a contract agree to submit to arbitration all or any differences that may arise in connection with such contract relating to commercial matters or to any other matter capable of settlement by arbitration, whether or not the arbitration is to take place in a country to whose jurisdiction none of the parties is subject.

Each Contracting State reserves the right to limit the obligation mentioned above to contracts which are considered as commercial under its national law. Any Contracting State which avails itself of this right will notify the Secretary-General of the League of Nations in order that the other Contracting States may be so informed.

2. The arbitral procedure, including the constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place.

The Contracting States agree to facilitate all steps in the procedure which require to be taken in their own territories, in accordance with the provisions of their law governing arbitral procedure applicable to existing differences.

3. Each Contracting State undertakes to ensure the execution by its authorities and in accordance with the provisions of its national laws of arbitral awards made in its own territory under the preceding articles.

4. The Tribunals of the Contracting Parties, on being seized of a dispute regarding a contract made between persons to whom Article I applies and including an Arbitration Agreement whether referring to present or future differences which is valid in virtue of the said article and capable of being carried into effect, shall refer the parties on the application of either of them to the decision of the Arbitrators.

Such reference shall not prejudice the competence of the judicial tribunals in case the agreement or the arbitration cannot proceed or becomes inoperative.

5. The present Protocol, which shall remain open for signature by all States, shall be ratified. The ratification shall be deposited as soon as possible with the Secretary-General of the League of Nations, who shall notify such deposit to all the Signatory States.

6. The present Protocol will come into force as soon as two ratifications have been deposited. Thereafter it will take effect, in the case of each Contracting State, one month after the notification by the Secretary-General of the deposit of its ratification.

7. The present Protocol may be denounced by any Contracting State on giving one year’s notice. Denunciation shall be effected by a notification addressed to the Secretary-General of the League, who will immediately transmit copies of such notification to all the other Signatory States and inform them of the date on which it was received. The denunciation shall take effect one year after the date on which it was notified to the Secretary-General, and shall operate only in respect of the notifying State.

8. The Contracting States may declare that their acceptance of the present Protocol does not include any or all of the under-mentioned territories: that is to say, their colonies, overseas possessions or territories, protectorates or the territories over which they exercise a mandate.

The said States may subsequently adhere separately on behalf of any territory thus excluded. The Secretary-General of the League of Nations shall be informed as soon as possible of such adhesions. He shall notify such adhesions to all Signatory States. They will take effect one month after the notification by the Secretary-General to all Signatory States.

The Contracting States may also denounce the Protocol separately on behalf of any of the territories referred to above. Article 7 applies to such denunciation.

THE THIRD SCHEDULE

(See section 53)

CONVENTION OF THE EXECUTION OF FOREIGN ARBITRAL AWARDS

Article 1.—(1) In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.

(2) To obtain such recognition or enforcement, it shall, further, be necessary—

(a) that the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;

(b) that the subject-matter of the award is capable of settlement by arbitration under the law of the country in which the award is sought to be relied upon;

(c) that the award has been made by the Arbitral Tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;

(d) that the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition, appeal or pourvoi en cassation (in the countries where such forms of procedure exist) or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;

(e) that the recognition or enforcement of the award is not contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon.

Article 2.—Even if the conditions laid down in Article 1 hereof are fulfilled, recognition and enforcement of the award shall be refused if the court is satisfied—

(a) that the award has been annulled in the country in which it was made;

(b) that the party against whom it is sought to use the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not properly represented;

(c) that the award does not deal with the differences contemplated by or falling within the terms of the submission to arbitration or that it contains decisions on matters beyond the scope of the submission to arbitration.

If the award has not covered all the questions submitted to the arbitral tribunal, the competent authority of the country where recognition or enforcement of the award is sought can, if it thinks fit, postpone such recognition or enforcement or grant it subject to such guarantee as that authority may decide.

Article 3.—If the party against whom the award has been made proves that, under the law governing the arbitration procedure, there is a ground, other than the grounds referred to in Article 1(a) and (c), and Article 2(b) and (c), entitling him to contest the validity of the award in a Court of Law, the Court may, if it thinks fit, either refuse recognition or enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal.

Article 4.—The party relying upon an award or claiming its enforcement must supply, in particular—

(1) the original award or a copy thereof duly authenticated, according to the requirements of the law of the country in which it was made;

(2) documentary or other evidence to prove that the award has become final, in the sense defined in Article 1(d), in the country in which it was made;

(3) when necessary, documentary or other evidence to prove that the conditions laid down in Article 1, paragraph (1) and paragraph (2) (a) and (c), have been fulfilled.

A translation of the award and of the other documents mentioned in this Article into the official language of the country where the award is sought to be relied upon may be demanded. Such translations must be certified correct by a diplomatic or consular agent of the country to which the party who seeks to rely upon the award belongs or by a sworn translator of the country where the award is sought to be relied upon.

Article 5.—The provisions of the above Articles shall not deprive any interested party of the right of availing himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.

Article 6.—The present Convention applies only to arbitral awards made after the coming into force of the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923.

Article 7.—The present Convention, which will remain open to the signature of all the signatories of the Protocol of 1923 on Arbitration Clauses, shall be ratified.

It may be ratified only on behalf of those Members of the League of Nations and Non-Member States on whose behalf the Protocol of 1923 shall have been ratified.

Ratification shall be deposited as soon as possible with the Secretary-General of the League of Nations, who will notify such deposit to all the signatories.

Article 8.—The present Convention shall come into force three months after it shall have been ratified on behalf of two High Contracting Parties. Thereafter, it shall take effect, in the case of each High Contracting Party, three months after the deposit of the ratification on its behalf with the Secretary-General of the League of Nations.

Article 9.—The present Convention may be denounced on behalf of any Member of the League or Non-Member State. Denunciation shall be notified in writing to the Secretary-General of the League of Nations, who will immediately send a copy thereof, certified to be in conformity with the notifications, to all the other Contracting Parties, at the same time informing them of the date on which he received it.

The denunciation shall come into force only in respect of the High Contracting Party which shall have notified it and one year after such notification shall have reached the Secretary-General of the League of Nations.

The denunciation of the Protocol on Arbitration Clauses shall entail, ipso facto, the denunciation of the present Convention.

Article 10.—The present Convention does not apply to the colonies, protectorates or territories under suzerainty or mandate of any High Contracting Party unless they are specially mentioned.

The application of this Convention to one or more of such colonies, protectorates or territories to which the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, applies, can be effected at any time by means of a declaration addressed to the Secretary-General of the League of Nations by one of the High Contracting Parties.

Such declaration shall take effect three months after the deposit thereof.

The High Contracting Parties can at any time denounce the Convention for all or any of the Colonies, Protectorates or territories referred to above. Article 9 hereof applied to such denunciation.

Article 11.—A certified copy of the present Convention shall be transmitted by the Secretary-General of the League of Nations to every Member of the League of Nations and to every Non-Member State which signs the same.

The Court Fees Act

November 30, 2014

INTRODUCTION

With the establishment of courts a system was evolved for the payment of fees for adjudication of the cases. The rates of stamp fees livable in courts and offices established beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Fort William, Madras and Bombay, and in proceedings on the appellate side of High Court, were fixed by Act XXVI of 1867 which were, to the great extent, tentative. Within a span of about two years the experience gained of their working seems to be conclusive as to their repressive effect on the general litigation of the country. It was thought necessary to make a general reduction in the rates on the institution of civil suits, and to revert tot he principle of maximum fee which obtained under the former law. It was proposed to reduce the valuation for the computation of the livable on suits relating to land under temporary settlement or land exempt from the payment of revenue to the Government. In order to rectify the repressive effect and in future there may be no confusion between stamp-revenue proper and the revenue derived from what have heretofore been termed judicial stamps, a comprehensive Bill was introduced.

STATEMENT OF OBJECTS AND REASONS

“The rates of stamp fees livable in Courts and offices established beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Fort William, Madras and Bombay and in proceedings on the appellate side of such High Courts, were as fixed by Act XXVI of 1867, to a great extent tentative.

The experience gained of their working during the two years in which they have been in force, seems to be conclusive as to their repressive effect on the general litigation of the country. It is, therefore, thought expedient to make a general reduction in the rates now chargeable on the institution of civil suits, and to revert to the principle of maximum fee which obtained under the former law.

It is proposed also to reduce the valuation fixed by the existing law for the computation of the fee livable on suits relating to land under temporary settlement or land exempt from the payment of revenue to the Government which is believed to be at least relatively excessive as compared with the valuation of permanently settled land; and to provide for the valuation of suits relating to mere parcels of land which, though forming part of estates under settlement, bear no specific allotment of any portion of the assessment of Government revenue on such estates, at the estimated selling price of such land, as was the rule in those cases under Act X of 1862.

The want of some fixed valuation applicable to certain classes on suits, as for example, suits instituted between landlord and tenant to recover a right of occupancy or enforce adjustment, or suits for maintenance or for an annuity the subject-matter of which though not absolutely indeterminable, is certainly not susceptible of ready determination, has given rise to much uncertainty and variety in the procedure adopted by the several Courts in such cases; and the amendment of the existing law in this respect is felt to be urgently called for.

In deference to the strong objections entertained by the local authorities in certain Provinces to the retention of the retention of the fee imposed on the presentation of certain petitions in the Criminal Courts, it is proposed to reduce the amount of such fee from one rupee to eight annas.

The uniform exaction of a fee of eight annas in the case of all petitions addressed to a Revenue Officer or a Magistrate, works harshly in its application to such communications when presented by persons having dealings or transactions with the Government in relation to such transactions. Equitable considerations require that petitions of this kind should be excepted from the operation of the general rule, and the Bill makes suitable provision for such cases.

The ad valorem fee now chargeable on summary suits instituted under Act XVI of 1838 and the Bombay Act (5 of 1864), is represented as working unsatisfactorily, and the substitution of a fixed rate is recommended.

It is to be observed that an award in such cases is liable to be set aside by a judgment passed in regard to the same matter in a regular suit; hence it appears more equitable to treat these summary suits as miscellaneous applications and to subject them to a similar fixed institution fee.

As the Bill provides for a considerable reduction of the fees heretofore chargeable on civil suits of small amount, it seems unnecessary to maintain the present distinction between the Courts of Cantonment Joint Magistrates and other Civil Courts in respect of the amount of fee livable on the institution of such suits.

It is proposed also to exempt suits instituted in a Military Court of Requests from the payment of any fee. The constitution of such Courts is peculiar; they form no part of the regular machinery employed in the general administration of justice, the present measure therefore is inapplicable to them. Moreover, the suitor in such Courts is placed at this disadvantage as compared with suitors in the ordinary Civil Courts that, although he may gain his case, he is unable to recover the costs which he has incurred in prosecuting his claim; hence the incidence of the taxation imposed by the levy of an institution fee in such cases is inequitable.

Suits for the restitution of wives, which are of common occurrence in Punjab are held to be some what excessively taxed under the present law, which prescribes that in suits the money value of the subject-matter of which cannot be estimated, fixed fee of Rs.10 shall be levied; the Bill substitutes for that rate in such cases, a special fee of Rs.5.

The clause in Act XXVI of 1867, exempting Advocates of a High Court from the obligation of presenting to any Court a written authority empowering them to Act in any case pending in such Court is excluded from the Bill. Such a provision appears to be beyond the scope of an enactment for regulating the levy of Court-fees. It is, moreover, open to the objection that it conflicts with section 18 of the Civil Procedure Code and consequently creates some doubt as to the intention of the Legislature.

As some measures of compensation for the loss of revenue which is expected to result from the general reduction of fees, it is proposed to discontinue the refund of any portion of the amount, levied on the first institution of suits, and also to raise the fees heretofore chargeable on probates and letters of administration granted under the Indian Succession Act, and on certificates issued under Act XXVII of 1860, to the ad valorem rates livable under the English law in like cases.

The abolition of refunds is justified by the consideration that for all practical purposes in the majority of cases, the plaintiff, whose suit has not gone beyond the stage at which under the present law he is entitled to recover a moiety of the institution fee, has gained as much through the Court’s agency as the suitor whose case has proceeded to a decision, and that, therefore, on the principle on which all Court-fees are adjusted, the former should contribute in equal proportion with the latter to the maintenance of the Courts from whose action both derive an equal benefit.

In lieu of the existing rates of process-fees, which vary according to the distance of the Court by which the processes are issued from the place where they are to be served or executed, it is proposed to levy, by means of stamps, a uniform rate in all cases. All suitors will thus be required to contribute in equal proportion to the maintenance of the establishment employed in the serving of processes, without reference to the length of time occupied in each service and the consequent amount of work rendered on behalf of each person at whose instance any process is served or executed.

Such a provision is in accordance with the modern system under which the charges in the Postal and Electric and Telegraph Departments are regulated, and is also more equitable to the general community.

The incorporation of the High Court-Fees Act (XV of 1868) with and the transfer of so much of the provisions of the Parsi Marriage and Divorce Act, 1865, the Native Converts’ Marriage Dissolution Act, 1866, the Punjab Tenancy Act, 1868, the the Indian Divorce Act and the Indian Income-tax Act, as relate to the levy of stamp fees in judicial proceedings, to the present Bill appear to be conducive to public convenience, as the whole of the existing law relating to fees livable in all courts of justice will thus be contained in one enactment.

With the same object this Bill purports to effect a complete re-arrangement of the provisions of the existing law on this subject, a similar classification of instruments chargeable with Court-fees to that which obtains in the General Stamp Act having been adopted, and the rules for determining the value of the subject-matter of certain suits being transferred from the Schedule where they are to be found in Act XXVI of 1867 to the body of the proposed Act.

Lastly, that for the future there may be no confusion between stamp-revenue proper and the revenue derived from what have heretofore been termed judicial stamps the proceeds of the proposed enactment are to be designated Court-fees, and the Bill is entitled accordingly.”

ACT 7 OF 1870

The Bill was passed and it got its assent on 11th March, 1870 and became an Act under short title and numbers THE COURT FEES’ ACT, 1870 (7 OF 1870). It came into force on 1st April, 1870

LIST OF AMENDING ACTS AND ADAPTATION ORDERS

Act 14 of 1870.

1.	Act 14 of 1870.
2.	Act 20 of 1870.
3.	Act 8 of 1871.
4.	Act 15 of 1872.
5.	Act 13 of 1875.
6.	Act 18 of 1884.
7.	Act 6 of 1889.
8.	Act 7 of 1889.
9.	Act 11 of 1889.
10.	Act 13 of 1889.
11.	Act 8 of 1890.
12.	Act 12 of 1891.
13.	Act 11 of 1899.
14.	Act 25 of 1899.
15.	Act 10 of 1901.
16.	Act 6 of 1905.
17.	Act 5 of 1908.
18.	Act 7 of 1910.
19.	Act 14 of 1911.
20.	Punjab Act 1 of 1912.
21.	Act 17 of 1914.
22.	Act 38 of 1920.
23.	Punjab Act 7 of 1922.
24.	Act 19 of 1922.
25.	Act 11 of 1923.
26.	Act 18 of 1923.
27.	A.O. 1937.
28.	A.O. 1948.
29.	A.O. 1950
30.	Adaptation of Laws (No.2) Order, 1956.

Chapter I – Preliminary

Section 1. Short title.

This Act may be called the Court Fees’ Act, 1870.

Extent of Act. – It extends to the whole of India except [(Note: Subs. by the Adaptation of Laws (No.2) Order, 1956, for “Part B States”) the territories which, immediately before the 1st November, 1956, were comprised in Part B States].

Commencement of Act. – And it shall come into force on the first day of April, 1870.

Section 1A. (Note: Ins. by the A.O. 1937) Definition of ‘Appropriate Government”.

In this Act “the Appropriate Government” means, in relation to fees or stamps relating to documents presented or to be presented before any officer serving under the Central Government, that Government, and in relation to any other fees or stamps, the State Government.]

COMMENTS

The enactment of the Act is intended to provided revenue to the State. It has been held that this is a fiscal statute and like identical legislations its provisions and connotations must be construed in its strict sense. Chief Inspector of Stamps, U.P. vs Mahant Lakshmi Narain – Air 1970 All 488.

Section 2. [“Chief Controlling Revenue-authority” defined.]

Rep. by the A.O. 1937.

Chapter II – Fees in the High Court and in the Courts of small causes at the Presidency-Towns

Section 3. Levy of fees in High Courts on their original sides.

The fees payable for the time being to the clerks and officers (other than the sheriffs and attorneys) of [(Note: Subs. by the A.O. 1950, for “the Courts which are High Courts for the purposes of the Government of India Ct,1935″) the [(Note: Subs by the Adaptation of Laws (No.2) Order, 1956, for “High Court for Part A States”) High Courts other than those of Kerala. Mysore and Rajasthan].

Or chargeable in each of such Courts under No.11 of the First, and Nos. 7,12,14, (Note: The number “16”, rep. by Act 12 of 1891, s.2 and Sch.1) 20 & 21 of the Second Schedule to this act annexed;

Levy of Fees in Presidency Small Cause Courts. – and the fees the time being chargeable in the Courts of Small Causes at Levy of the Presidency-towns, (Note: See the Presidency Small Cause Courts Act, 1882 (15 of 1882) and their several offices;

Shall be collected in manner hereinafter appearing.

Section 4. Fees on documents filed, etc., in High Courts in their extraordinary jurisdiction;

No document of any of the kinds specified in the First or Second Schedule to this Act annexed, as chargeable with fees, shall be filed, exhibited or recorded in, or shall be received or furnished by, any of the said High Courts in any case coming before such Courts in the exercise of its extraordinary original civil jurisdiction ; or in the exercise of its extraordinary original criminal jurisdiction ;

In their appellate jurisdiction ; – or in the exercise of its jurisdiction as regards appeals from the [(Note: Subs. by Act 19 of 1922, s.2, for “Judgment of two”) judgement (other than judgements passed in the exercise of the ordinary original civil jurisdiction of the Court) of one] or more Judges of the said Court, or of a division Court ;

Or in the exercise of its jurisdiction as regards appeals from the Courts subject to its superintendence ;

As Courts of reference and revision. – or in the exercise of its jurisdiction as a Court of reference or revision’

Unless in respect of such document there be paid a fee of an amount not less than that indicated by either of the said Schedules as the proper fee for such document.

COMMENTS

It has been held that a final decree for future mesne profits passed under Order XX Rule 12(2) CPC is like an award and does not amount to a decree under section 2(2) of The Code of Civil Procedure 1908 and is not a decree as stipulated under Schedule II of the Act. Diwan Brothers vs Central Bank of India – 1976 (2) ALR (SC) Summary.

Section 5. Procedure in case of difference as to necessity or amount of fee.

When any difference arises between the officer whose duty it is to see that any fee is paid under this Chapter and any suitor or attorney, as to the necessity of paying a fee or the amount thereof, the question shall, when the difference arises in any of said High Courts, be referred to the taxing-officer, whose decision thereon shall be final, except when the question is, in his opinion, one of general importance, in which case he shall refer it to the final decision of the Chief Justice of such High Court, or of such Judge of the High Court as the Chief Justice shall appoint either generally or specially in this behalf.

When any such difference arises in any of the said Courts of Small Causes, the question shall be referred to the Clerk of the Court, whose decision thereon shall be final, shall refer it to the final decision of the first Judge of such Court.

COMMENTS

It has been held that under section 5 the order or judgement of the Taxing Judge is final and not appeal is maintainable against such an order or judgement. S.Rm. Ar. S.Sp. Sathappa Chettiar vs S.Rm. Ar. Rm. Ramanathan Chettiar AIR 1958 SC 245.

Chapter III – Fees in other courts and in public offices

Section 6. Fees on documents filed, etc., in Mofussil Courts or in public Offices.

Except in the Courts hereinbefore mentioned, no document of any of the kinds specified as chargeable in the First or Second Schedule to this Act annexed shall be filed, exhibited or recorded in any Court of Justice, or shall be received or furnished by any public officer, unless in respect of such document there be paid a fee of an amount not less than that indicated by either of the said Schedules as the proper fee for such document.

COMMENTS

It has been held that while exercising the inherent powers the Court should apply Section 6 as court fee has to be paid on the documents received by the court, For this purpose the court may afford an opportunity to the party to pay such court fee. Netramani Dibya vs Dasarthi Misra – AIR 1986 Orissa 235.

Section 7. Computation of fees payable in certain suits

The amount of fee payable under this Act in the suits next hereinafter mentioned shall be computed as follows :-

For money:- In suits for money (including suits for damages or compensation, or arrears of maintenance, of annuities, or of other sums payable periodically) – according to the amount claimed ;

For maintenance and annuities:- In suits for maintenance and annuities or other sums payable periodically – according to the value of the subject-matter of the suit, and such value shall be deemed to be ten times the amount claimed to be payable for one year.

For other moveable property having a market-value:- In suits for moveable property other than money, where the subject-matter of the suit, and such value shall be deemed to be ten times the amount claimed to be payable for one year ;

In suits –

For moveable property of no market-value:- for moveable property where the subject-matter has no market-value, as, for instance, in the case of documents relating to title,

To enforce a right to share in joint family property:- to enforce the right to share in any property on the ground that it is joint family property,

For a declaratory decree and consequential relief:- to obtain a declaratory decree or order, where consequential relief is prayed,

For an injunction:- to obtain an injunction.

For easements:- for a right to some benefit (not herein otherwise provided for) to arise out of land, and

For accounts:- for accounts – according to the amount at which the relief sought is valued in the plaint or memorandum of appeal.

In all such suits the plaintiff shall state the amount at which he values the relief sought (Note: The words “and the provision of the Code of Civil Procedure, section thirty-one, shall apply as if, for the word claim,” ‘the words relief sought’ were substituted” rep. by Act 12 of 1891, s.2 and Sch.I)

For possession of land, houses and gardens ; – In suits for the possession of land, houses and gardens – according to the value of the subject – matter ; and such value shall be deemed to be -

Where the subject-matter is land, and

Where the land forms an entire estate, or a definite share of an estate, paying annual revenue to Government, or forms part of such an estate and is recorded in the Collector’s register as separately assessed with such revenue ; and such revenue is permanently settled – ten times the revenue so payable ;

Where the land forms an entire estate, or a definite share of an estate, paying annual revenue to Government, or forms part of such estate and is recorded as aforesaid ; and such revenue is settled, but not permanently –

five times the revenue so payable ;

Where the land pays no such revenue, or has been partially exempted from such payment, or is charged with any fixed payment in lieu of such revenue, and net profits have arisen from the land during the year next before the date of presenting the plaint – fifteen times such net profits ; but where no such net profits have arisen therefrom – the amount at which the Court shall estimate the land with reference to the value of similar land in the neighbourhood;

Where the land forms part of an estate paying revenue to Government, but is not a definite share of such estate and is not separately assessed as above-mentioned – the market-value of the land: proviso as to Bombay Presidency: – Provided that, in the territories subject to the (Note: See paragraph 8 of the A.O. 1937. In view of this provision the expression “Governor of Bombay in Council” has been left unmodified) Governor of Bombay in Council, the value of the land shall be deemed to be—

Where the land is held on settlement for a period not exceeding thirty years and pays the full assessment to Government—a sum equal to five times the survey-assessment ;

Where the land is held on a permanent settlement, or on a settlement for any period exceeding thirty years, and pays the full assessment to Government—a sum equal to ten times the survey assessment ; and

Where the whole or any part of the annual survey-assessment is remitted—sum computed under paragraph (1) or paragraph (2) of this proviso, as the case may be, in addition to ten times the assessment, or the portion of assessment, so remitted.

Explanation. – The word “estate”, as used in this paragraph, means any land subject to the payment of revenue, for which the proprietor or a farmer or ryot shall have executed a separate engagement to Government, or which, in the absence of such engagement, shall have been separately assessed with revenue ;

for houses and gardens:- where the subject-matter is a house or garden-according to the market-value of the house or garden;

To enforce a right of pre-emption:- In suits to enforce a right of pre-emption-according to the value [computed in accordance with paragraph (v) of this section] of the land, house or garden in respect of which the right is claimed ;

For interest of assignee of land-revenue ; In suits for the interest of an assignee of land-revenue fifteen times his net profits as such for the year next before the date of presenting the plaint ;

To set aside an attachment ; In suits to set aside an attachment of land or of an interest in land or revenue-according to the amount for which the land or interest was attached :

Provided that, where such amount exceeds the value of the land or interest, the amount of fee shall be computed as if the suit were for the possession of such land or interest ;

(ix) To redeem; In suits against a mortgage for the recovery of the property mortgaged, to foreclose ; and in suits by a mortgage to foreclose the mortgage, or, where the mortgage is made by conditional sale, to have the sale declared absolute – according to the principal money expressed to be secured by the instrument of mortgage ;

(x) for specific performance ; – In suits for specific performance — Of a contract of sale-according to the amount of the consideration;

Of a contract of mortgage—according to the amount agreed to be secured;

Of a contract of lease-according to the aggregate amount of the fine or premium (if any) and of the rent agreed to be paid during the first year of the term;

Of an award—according to the amount or value of the property in dispute ;

(xi) between landlord and tenant.—In the following suits between landlord and tenant ;-

For the delivery by a tenant of the counterpart of lease,

To enhance the rent of a tenant having a right of occupancy,

For the delivery by a landlord of a lease,

(Note: Ins. by Act 6 of 1905, s.2(1)) For the recovery of immovable property from a tenant, including a tenant holding over after the determination of a tenancy]

To contest a notice of ejectment.

To recover the occupancy of [(Note: Subs. by s.2(2), ibid, for “land”) immovable property] from which a tenant has been illegally ejected by d the landlord, and

For abatement of rent — According to the amount of the rent of the [immovable property] to which the suit refers, payable for the year next before the date of presenting the plaint.

COMMENTS

In general the court fee has to be decided on the basis of the subject matter of the suit and the appeal arising therefrom. It shall not be substantially affected by the claim as set out in the relief by the plaintiff. In Re. Thriupathiammal AIR 1956 Mad 179.

It has been held that the question of court fee must be decided having regard to the averments made in the plaint itself and the contentions raised in the written statement or the final decision on merits cannot affect the same. Sathappa Chettiar vs Ramanathan Chettiar.

It has been held that when the plaintiff paid advalorem court fee in a suit for recovery of a specific calculated amount as damages on account of leakage of cooking gas cylinder leading to accident the valuation was correct. Bhagwant Sarup vs Himalary Gas Co. – AIR 1985 HP 41

It has been held that in a suit for partition the share claimed by the plaintiff would determine the court fee and not he property as a whole. Rakesh Chandra Das vs Khan Bahadur Abdul Majid Choudhary AIR 1982 Gauhati 82.

It has been held that valuation as set up the plaintiff in the plaint of the suit is conclusive and final. Kesho Mahton vs Ayodhya Mahton – AIR 1983 PAT 67.

It has been held that section 7 (iv) (f) is applicable to a suit for dissolution of partnership at will and rendition of accounts in as much as it is a suit for accounts and value for jurisdiction and court fee is the same advalorem court fee to be paid under Section 7. Madan Mohan Sharma vs Uttam Singh Bagga – AIR 1985 J &K 87.

The Code of Civil Procedure empowers the court to make up deficiency of court fees and under Order VII Rule 11 it is provided that the plaint shall be rejected where the relief claimed is undervalued, and the plaintiff on being required by the court to correct the valuation within a time to be fixed by the court fails to do so. It has bee held in such cases where the valuation made by the plaintiff in respect of the suit property is unreasonable and arbitrary the court can exercise its powers vested in it under Order VII Rule 11 CPC, Mana Das vs Kisto Das – AIR 1983 Patna 272.

The Delhi High Court has held that if plaintiff files a suit for declarations and injunctions and the reliefs claimed therein are wholly independent of each other then the suit is not governed by Section 7(iv) (c). S.C. Malik vs Surender Nath Puri – 1991 Rajdhani Law Reporter (NOTE) 85.

It has been held that the words “Subject Matter” used in the Section include relief or reliefs. Managing Director. Hafiz vs Mustt Noorjahan – AIR 1989 GAU 13.

It has been held that in a single suit for recovery filed by a Bank against the defendant borrower pertaining to separate accounts in its different branches court fee has to be paid on each of the accounts separately. Bank of India vs Vinod Kumar Bhalla – AIR 1988 Delhi 79.

It has been held that Paragraph (iv) of Section 7 of the Court Fees Act gives a right to the plaintiff in any of the suits mentioned in the clauses of that paragraph to place any valuation that he likes on the reliefs he seeks, subject, however to any rules made under Section 9 of the Suit Valuation Act and the court has no power to interfere with the plaintiff’s valuation. Shiela Devi vs Kishan Lal Katra – ILR (1974) 2 Delhi (FB) 491 Commercial Aviation & Travel Co. vs Vinal Pannalal – AIR 1988 SC 1636.

Section 8. Fee on memorandum of appeal against order relating to compensation.

The amount of fee payable under this Act on a memorandum of appeal against an order relating to compensation under any Act for the time being in force for the (Note: See now the Land Acquisition Act,1894 (1 of 1894)) acquisition of land for public purposes, shall be computed according to the difference between the amount awarded and the amount claimed by the appellant.

COMMENTS

It has been held that the amount of court fee payable on a memorandum of appeal against an order relating to compensation for the acquisition of land for public purposes is to be computed only on difference between amount of compensation awarded and the amount claimed and not on the amount of valuation. Abun Naser vs Special Tehsildar, L.A. – AIR 1986 Madras 229.

Section 9. Power to ascertain nett profits of market-value

If the Court sees reason to think that the annual nett profits or the market-value of any such land, house or garden as is mentioned in section 7, paragraphs (v) and (vi) have or has been wrongly estimated, the Court may, for the purpose of computing the fee payable in any suit therein mentioned, issue a commission as may be necessary, and to report thereon to the Court.

Section 10. Procedure where nett profits or market-value wrongly estimated.

(I) If in the result of any such investigation the Court finds that the nett profits or market-value have or has been wrongly estimated, the Court, if the estimation has been excessive, may in its discretion refund the excess paid as such fee : but, if the estimation has been insufficient, the Court shall require the plaintiff to pay so much additional fee as would have been payable had the said market-value or nett profits been rightly estimated.

(II) In such case the suit shall be stayed until the additional fee is paid. If the additional fee is not paid within such time as the Court shall fix, the suit shall be dismissed.

(Note: Cl. (iii) rep. by Act 12 of 1891, s.2 and Sch. I.)

Section 11. Procedure in suits for mesne profits or account when amount decreed exceeds amount claimed.

In suits for mesna profits or for immovable property and mesne profits, or for an account, if the profits or amount decreed are or is in excess of the profits claimed or the amount at which the plaintiff valued the relief sought, the decree shall not be executed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits or amount so decreed shall have been paid to the proper officer.

Where the amount of mesne profits is left to be ascertained in the course of the execution of the decree, if the profits so ascertained exceed the profits claimed, the further execution of the decree shall be stayed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits so ascertained is paid. If the additional fee is not paid within such time as the Court shall fix, the suit shall be dismissed.

COMMENTS

It has been held that a separate application to raise objection with regard to under valuation of deficiency in court fee is not required and such objection can be contemplated from the written statement. Panna Lal vs Mohan Lal – AIR 1985 Raj 178.

It has been held that if the amount of mesne profits to be awarded after ascertaining the same exceed the pecuniary jurisdiction of the court the suit must be transferred to a court of competent jurisdiction. Siya Saran Singh vs Jamuna Devi – AIR 1987 PAT I.

It has been held that objection in respect to pecuniary jurisdiction must be raised at the earliest opportunity. Sml. Baba Dai vs Muneshwar Jha – AIR 1985 PAT 67.

It has been held that there is no provision either in the Code of Civil Procedure 1908 or in the Court Fees Act 1870 for decreeing any amount of compensation paid or received while the suit is pending adjudication or for the payment of court fees after decree has been passed. Usha Sales Ltd. vs Smt. Aruna Gupta – AIR 1988 (NOC) 74 Delhi.

Section 12. Decision of questions as to valuation

(I) Every question relating to valuation for the purpose of determining the amount of any fee chargeable under this Chapter on a plaint or memorandum of appeal, shall be decided by the Court in which such plaint or memorandum, as the case may be, is filed, and such decision shall be final as between the parties to the suit.

But whenever any such suit comes before a Court of appeal, reference or revision, if such Court considers that the said question has been wrongly decided, to the detriment of the revenue, it shall require the party by whom such fee has been paid to pay so much additional fee as would have been payable had the question been rightly decided, and the provisions of section 10, (ii), shall apply.

COMMENTS

It has held in a suit for partition where plaintiff was in possession that valuation for jurisdiction is the market value of plaintiff’s share and the same is applicable in its appeal therefrom as well. Pamban Kayakkal Vatsalam vs Pamban Kayakkal Kanmudi – AIR 1982 KER 304.

It has been that the order for remanding the case on the ground of non-payment of requisite court fee is illegal where no such objection was raised before the trail court. Pargat Singh vs U.O.I – AIR 1981 Delhi 328.

It has been that even if the plaint is deficiently stamped the appellate court could not reverse the trail court’s judgement on this acore alone. It is improper to decline granting of relief if requisite court fee was not fixed thereupon. Harbhajan Singh vs Prakash Kaur – AIR 1984 (NOC) 1 ALL.

Section 13. Refund of fee paid on memorandum of appeal.

If an appeal or plaint, which has been rejected by the lower Court on any of the grounds mentioned in the (Note: See now the Code of Civil Procedure, 1908 (Act 5 of 1908)) Code of Civil Procedure, is ordered to be received, or if a suit is remanded in appeal on any of the grounds mentioned in section 351 of the same Code, for a second decision by the lower Court, the Appellate Court shall grant to the appellant a certificate, authorizing him to receive back from the Collector the full amount of fee paid on the memorandum of appeal :

Provided that, if, in the case of a remand in appeal, the order of remand shall not cover the whole of the subject-matter of the suit, the certificate so granted shall not authorize the appellant to receive back more than so much fee as would have been originally payable on the part or parts of such subject-matter in respect whereof the suit has been remanded.

COMMENTS

It has been held that refund of court of fee could be ordered even where a case is remanded under the amended provisions of order XLI Rule 23 CPC. State of U.P. vs Chandra Bhushan Misra – AIR 1980 SC 591. It has been held that where a suit is transferred to the High Court under Cl. 13 of Letters Patent Court fee cannot be refunded. The official Receiver. Coimbatore vs Sar Gounder – AIR 1980 MAD 269.

Section 14. Refund of fee on application for review of judgement.

Where an application for a review of judgement is presented on or after the ninetieth day from the date of the decree, the Court unless the delay was caused by the applicant’s laches, may, in its discretion, grant him a certificate authorizing him to receive back from the Collector so much of the fee paid on the application as exceeds the fee which would have been payable had it been presented before such day.

Section 15. Refund where Court reverses or modifies its former decision on ground of mistake.

Where an application for a review of judgement is admitted, and where, on the rehearing, the Court reverses or modifies its former decision on the ground of mistake in law or fact, the applicant shall be entitled to a certificate from the Court authorizing him to receive back from the Collector so much of the fee paid on the [(Note: Subs. by Act 20 of 1870, s.1, for “plaint or memorandum of appeal”.) application] as exceeds the fee payable on any other application to such Court under the Second Schedule to this Act, No.1, clause (b) or clause (d).

But nothing in the former part of this section shall entitle the applicant to such certificate where the reversal or modification is due, wholly or in part, to fresh evidence which might have been produced at the original hearing.

Section 16. [Additional fee where respondent takes objection to unappealed part of decree.]

Rep. By the Code of Civil Procedure, 1908 (Act 5 of 1908). S.156 and Sch. V.

Section 17. Multifarious suits.

Where a suit embraces two or more distinct subjects, the plaint or memorandum of appeal shall be chargeable with the aggregate amount of the fees to which the plaints or memoranda of appeal in suits embracing separately each of such subjects would be liable under this Act.

Nothing in the former part of this section shall be deemed to affect the power conferred by the (Note: See now the Code of Civil Procedure, 1908 (Act 5 of 1908) Code of Civil Procedure, section 9.

Section 18. Written examinations of complainants.

When the first or only examination of a person who complaints of the offence of wrongful confinement, or of wrongful restraint, or of any offence other than an offence for which police-officers may arrest without a warrant, and who has not already presented a petition on which fee has been levied under this Act, is reduced to writing under the provisions of the (Note: See now the Code of Criminal Procedure, 1973 (Act 2 of 1974) Code of Criminal Procedure, the complainant, shall pay a fee of eight annas, unless the Court thinks fit to remit such payment.

Section 19. Exemption of certain documents.

Nothing contained in the Act shall render the following documents chargeable with any fee :-

Power-of-attorney to institute or defend a suit when executed [(Note: Subs. by the A.O. 1950, for “by an officer, warrant-officer, non-commissioned officer or private of Her Majesty’s Army”) by a member of any of the Armed Forces of the Union] not in civil employment.

Note: Cl. (ii) rep. by Act 12 of 1891, s.2 and Sch. I). Written statements called for by the Court after the first hearing of a suit.

(Note: Cl. (iv) rep. by Act 13 of 1889, s.2 and Sch.)

Plaints in suits tried by (Note: See the Madras Village Courts Act,1889 (Madras Act 1 of 1889)) Village Munsiffs in the Presidency of Fort St. George.

Plaints and processes in suits before District Panchayats in the same Presidency.

Plaints in suits before Collectors under Madras Regulation XII of 1816.

Probate of a will, letters of administration, [(Note: Subs. by Act 7 of 1889, s.13(2), for “and certificate mentioned in the First Schedule of this Act annexed, No.12″) and, save as regards debts and securities, a certificate under Bombay Regulation VIII of 1827], where the amount or value of the property in respect of which the probate or letters or certificate shall be granted does not exceed one thousand rupees.

Application or petition to a Collector or other officer making a settlement of land-revenue, or to a Board of Revenue, or a Commissioner of Revenue, relating to matters connected with the assessment of land, or the ascertainment of rights thereto or interests therein, if presented previous to the final confirmation of such settlement.

Application relating to a supply for irrigation of water belonging to Government.

Application for leave to extend cultivation, or to relinquish land, when presented to an officer of land-revenue by a person holding, under direct engagement with Government, land of which the revenue is settled but not permanently.

Application for service of notice of relinquishment of land or of enhancement of rent.

Written authority to an agent to distrain.

First application (other than a petition containing a criminal charge or information) for the summons of a witness or other person to attend either to give evidence or to produce a document, or in respect of the production or filing of an exhibit not being an affidavit made for the immediate purpose of being produced in Court.

Bail-bonds in criminal cases, recognizance’s to prosecute or give evidence, and recognizance’s for personal appearance or otherwise.

Petition, application, charge or information respecting any offence, when presented, made or laid to or before a police-officer, or to or before the Heads of Villages or the Village Police in the territories respectively subject to the Governors in Council of Madras and Bombay.

Petition by a prisoner, or other person in duress or under restraint of any Court or its officers.

Complaint of a public servant (as defined in the Indian Penal Code), a municipal officer, or an officer or servant of a Railway Company.

Application for permission to cut timber in Government forests, or otherwise relating to such forests.

Application for the payment of money due by Government to the applicant.

Petition of appeal against the chaukidari assessment under (Note: The Bengal Chaukidari Act, 1856) Act No.20 of 1856, or against any municipal tax.

Applications for compensation under any law for the time being in force relating to the acquisition of property for public purposes.

Petitions presented to the Special Commissioner appointed under (Note: The Chota Nagpur Tenures Act, 1869) Bengal Act No.2 of 1869 (to ascertain, regulate and record certain tenures in Chota Nagpur).

[(Note: Subs. by Act 15 of 1872, s.2, for the original clause.) Petitions under the Indian Christian Marriage Act, 1872, sections 45 and 48.]

Chapter III A – Probates, letters of administration and certificates of administration

Section 19A. Relief where too high a court-fee has been paid.

Where any person on applying for the probate of a will or letters of administration has estimated the property of the deceased to be of greater value than the same has afterwards proved to be, and has consequently paid too high a court-fee thereon, if within six months after the true value of the property has been ascertained, such person produces the probate or letters to the Chief Controlling Revenue Authority [(Note: Subs. by Act 10 of 1901, s.3(1), for “of the Province”) for the local area] in which the probate or letters has or have been granted,

And delivers to such Authority a particular inventory and valuation of the property of the deceased, verified by affidavit or affirmation.

And if such Authority is satisfied that a greater fee was paid on the probate or letters than the law required,

The said Authority may –

(a) Cancel the stamp on the probate or letters, if such stamp has not been already cancelled :

(b) Substitute another stamp for denoting the court-fee which should have been paid thereon; and

Make an allowance for the difference between them as in the case of spoiled stamps, or repay the same in money, at his discretion.

Section 19B. Relief where debts due from a deceased person have been paid out of his estate.

Whenever it is proved to the satisfaction of such Authority that an executor or administrator has paid debts due from the deceased to such an amount as, being deducted out of the amount or value of the estate, reduces the same to a sum which, if it had been the whole gross amount or value of the estate, would have occasioned a less court-fee to be paid on the probate or letters of administration granted in respect of such estate than has been actually paid thereon under this Act,

Such Authority may return the difference, provided the same be claimed within three years after the date of such probate or letters.

But when, by reason of any legal proceeding, the debts due from the deceased have not been ascertained and paid, or his effects have not been recovered and made available, and in consequence thereof the executor or administrator is prevented from claiming the return of such difference within the said term of three years, the said Authority may allow such further time for making the claim as may appear to be reasonable under the circumstances.

Section 19C. Relief in case of several grants.

Whenever (Note: The word “such” rep. by Act 12 of 1891, s.2 and Sch.I) a grant of probate or letters of administration has been or is made in respect of the whole of the property belonging to an estate, and the full fee chargeable under this Act has been or is paid thereon, no fee shall be chargeable under the same Act when a like grant is made in respect of the whole or any part of the same property belonging to the same estate.

Whenever such a grant has been or is made in respect of any property forming part of an estate, the amount of fees then actually paid under this Act shall be deducted when a like grant is made in respect of property belonging to the same estate, identical with or including the property to which the former grant relates.

Section 19D. Probates declared valid as to trust-property though not covered by court-fee.

The probate of the will, or the letters of administration of the effects, of any person deceased heretofore or hereafter granted shall be deemed valid and available by his executors or administrators for recovering, transferring or assigning any moveable or immovable property whereof or whereto the deceased was possessed or entitled, either wholly or partially as a trustee, notwithstanding the amount or value of such property is not included in the amount or value of the estate in respect of which a court-fee was paid on such probate or letters of administration.

Section 19E. Provision for case where too low a court-fee has been paid on probates, etc.

Where any person on applying for probate or letters of administration has estimated the estate of the deceased to be of less value than the same has afterwards proved to be, and has in consequence paid too low a court-fee thereon, the Chief Controlling Revenue-authority [(Note: Subs. by Act 10 of 1901, S.3(1), for “of the Province”) for the local area] in which the probate or letters has or have been granted, may, on the value of the estate of the deceased being verified by affidavit or affirmation, cause the probate or letters of administration to be duly stamped on payment of the full court-fee which ought to have been originally paid thereon in respect of such value and of the further penalty, if the probate or letters is or are produced within one year from the date of the grant, of five times, or if it or they is or are produced after one year from such date, of twenty times, such proper court-fee, without deduction of the court-fee originally paid on such probate or letters :

Provided that, if the application be made within six months after the ascertainment of the true value of the estate and the discovery that too low a court-fee was at first paid on the probate or letters, and if the said Authority is satisfied that such fee was paid in consequence of a mistake or of its not being known at the time that some particular part of the estate belonged to the deceased, and without any intention of fraud or to delay the payment of the proper court-fee, the said Authority may remit the said penalty, and cause the probate or letters to be duly stamped on payment only of the sum wanting to make up the fee which should have been at first paid thereon.

Section 19F. Administrator to give proper security before letters stamped under section 19E.

In case of letters of administration on which too low a court-fee has been paid at first, the said Authority shall not cause the same to be duly stamped in manner aforesaid until the administrator has given such security to the Court by which the letters of administration have been granted as ought by law to have been given on the granting thereof in case the full value of the estate of the deceased had been than ascertained.

Section 19G. Executors, etc., not paying full court-fee on probates, etc., within six months after discovery of under-payment.

Where too low a court-fee has been paid on any probate or letters of administration in consequence of any mistake, or of its not being known at the time that some particular part of the estate belonged to the deceased, if any executor or administrator acting under such probate or letters does not, within six months (Note: The words and figures “after the first day of April, 1875, or” omitted by Act 12of 1891, s.2 and Sch.I) after the discovery of the mistake or of any effects not known at the time to have belonged to the deceased, apply to the said Authority and pay what is wanting to make up the court-fee which ought to have been paid at first on such probate or letters, he shall forfeit the sum of one thousand rupees and also a further sum at the rate of ten rupees per cent, on the amount of the sum wanting to make up the proper court-fee.]

Section 19H. Notice of applications for probate or letters of administration to be given to Revenue-authorities; and procedure thereon.

(1) Where an application for probate or letters of administration is made to any Court other than a High Court, the Court shall cause notice of the application to be given to the Collector.

(2) Where such an application as aforesaid is made to a High Court, the High Court shall cause notice of the application to be given to the Chief Controlling Revenue-authority [(Note: Subs. by Act 10 of 1901, s.3(2), for “of the Province”) for the local area in which the High Court is situated].

(3) The Collector within the local limits of whose revenue-jurisdiction the property of the deceased or any part thereof is, may at any time inspect or cause to be inspected, and take or cause to be taken copies of, the record of any case in which application for probate or letters of administration has been made ; and if, on such inspection or otherwise, he is of opinion that the petitioner has under estimated the value of the property of the deceased, the Collector may, if he thinks fit, require the attendance of the petitioner (either in person or by agent) and take evidence and inquire into the matter in such manner as he may think fit, and, if he is still of opinion that the value of the property has been under-estimated, may require the petitioner to amend the valuation.

(4) If the petitioner does not amend the valuation to the satisfaction of the Collector, the Collector may move the Court before which the application for probate or letters of administration was made, to hold an inquiry into the true value of the property :

Provided that no such motion shall be made after the expiration of six months from the date of the exhibition of the inventory required by section 277 of the (Note: See now the Indian Succession Act, 1925 (39 of 1925) Indian Succession Act, 1865, or, s the case may be, by section 98 of the Probate and Administration Act, 1881.

(5) The Court, when so moved as aforesaid, shall hold, or cause to be held, an inquiry accordingly, and shall record a finding as to the true value, as near as may be, at which the property of the deceased should have been estimated. The Collector shall be deemed to be a party to the inquiry.

(6) For the purposes of any such inquiry, the Court or person authorized by the Court to hold the inquiry may examine the petitioner for probate or letters of administration on oath (whether in person or by commission), and may take such further evidence as may be produced to prove the true value of the property. The person authorized as aforesaid to hold the inquiry shall return to the Court the evidence taken by him and report the result of the inquiry, and such report and the evidence taken by him and report the result of the inquiry, and such report and the evidence so taken shall be evidence in the proceeding, and the Court may record a finding in accordance with the report, unless it is satisfied that it is erroneous.

(7) The finding of the Court recorded under sub-section (5) shall be final, but shall not bar the entertainment and disposal by the Chief Controlling Revenue-authority of any application under section 19E.

(8) The State Government may make rules for the guidance of Collectors in the exercise of the powers conferred by sub-section (3).

COMMENTS

It has been that for valuation of property in respect of an application for letters of administration the court cannot decide the same without carrying out an inquiry. Lakshmi Prasak vs Badri Ram – AIR 1985 PAT 119.

It has been held that it is incumbent upon the Collector to afford an opportunity by giving notice to the petitioner and hearing him for probate. Only after such hearing the Collector can make the valuation of property in question. Trambak Lal Dayalal Kothari vs L.K. Dey – AIR 1982 CAL 217.

Section 19-I. Payment of court-fees in respect of probates and letters of administration.

(1) No order entitling the petitioner to the grant of probate or letters of administration shall be made upon an application for such grant until the petitioner has filed in the Court a valuation of the property in the form set forth in the Third Schedule, and the Court is satisfied that the fee mentioned in No.11 of the First Schedule has been paid on such valuation.

(2) The grant of probate or letters of administration shall not be delayed by reason of any motion made by the Collector under section 19H, sub-section (4).

COMMENT

It has been held that all the assets have to be incorporated in the Schedule as stipulated in this section no matter the petitioner claims against one of the items more fully set out in the Will. Smt. Kamala Rajamanikkam vs Smt. Sushila Thakur Dass – AIR 1983 ALL 90.

Section 19J. Recovery of penalties, etc.

(1) Any excess fee found to be payable on an inquiry held under section 19H, sub-section (6), and any penalty or forfeiture under section 19G may, on the certificate of the Chief Controlling Revenue-authority, be recovered from the executor or administrator as if it were an arrear of land-revenue by any Collector (Note: The words “in any part of British India” omitted by the A.O. 1948).

(2) The Chief Controlling Revenue-authority may remit the whole or any part of any such penalty or forfeiture as aforesaid, or any part of any penalty under section 19E or of any court-fee which ought to have been paid.

Section 19K. Sections 6 and 28 not to apply to probates or letters of administration

Nothing in section 6 or section 28 shall apply to probates or letters of administration.]

Chapter IV – Process Fees

Section 20. Rules as to costs of processes

The High Court shall, as soon as may be, make rules as to the following matters:-

The fees chargeable for serving and executing processes issued by such Court in its appellate jurisdiction and by the other Civil and Revenue Courts established within the local limits of such jurisdiction;

The fees chargeable for serving and executing processes issued by the Criminal Courts established within such limits in the case of offences other than offences for which police-officers any arrest without a warrant: and

The remuneration of the peons and all other persons employed by leave of a Court in the service or execution of processes.

The High Court may from time to time alter and add to the rules so made.

Confirmation and publication of rules – All such rules, alterations and additions shall, after being confirmed by the State Government (Note: The words “and sanctioned by the governor General of India in Council” omitted by Act 38 of 1920, s.2 and Sch.I) be published in the Official Gazette, and shall there-upon have the force of law.

Until such rules shall be so made and published, the fees now leviable for serving and executing processes shall continue to be levied, and shall be deemed to be fees leivable under this Act.

Section 21. Tables for process fees.

A table in the English and Vernacular languages, showing the fees chargeable for such service and execution, shall be exposed to view in a conspicuous part of each Court.

Section 22. Number of peons in District and subordinate Courts

Subject to rules to be made by the High Court and approved by the State Government (Note: The words “and the Governor General of India in Council” omitted by s.2 and Sch.I. ibid) every District Judge and every Magistrate of a District shall fix, and may from time to time alter, the number of peons necessary to be employed for the service and execution of processes issued out of his Court and each of the courts subordinate thereto.

Number of peons in Mofussil Small Cause Courts – and for the purpose of this section, very Court of Small Causes established under (Note: See now the Provincial Small Cause Courts Act, 1887 (9 of 1887) Act No.11 of 1865 (to consolidate and amend the law relating to Courts of Small Causes beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature) shall be deemed to be subordinate to the Court of the District Judge.

Section 23. Number of peons in Revenue Courts

Subject to rules to be framed by the Chief Controlling Revenue-authority and approved by the State Government, (Note: The words “and the governor General of India in Council,” omitted by Act 38 of 1920, s.2 and Sch.I, Pt. I) every officer performing the functions of a Collector of a District shall fix, and may from time to time alter, the number of peons necessary to be employed for the service and execution of processes issued out of his Court or the Courts subordinate to him.

Section 24. [Process served under this Chapter to be held to be process within meaning of Code of Civil Procedure.]

Rep. by the Amending Act, 1891 (12 of 1891), s.2 and Sch. I.

Chapter V – Of the Mode of Levying fees

Section 25. Collection of fees by stamps

All fees referred to in section 3 or chargeable under this Act shall be collected by stamps.

Section 26. Stamps to be impressed or adhesive

The stamps used to denote any fees chargeable under this Act shall be impressed or adhesive, or partly impressed and party adhesive, as the [(Note: Subs. by the A.O. 1937, for “L.G.” which had been subs. by Act 38 of 1920. s.2 and Sch.I, Pt I, for “Governor General of India in Council”.) Appropriate Government] may, by notification in the Official Gazette, from time to time direct.

Section 27. Rules for supply, number, renewal and keeping accounts of stamps

The [(Note: Subs. by the A.O. 1937, for “L.G.”)] Appropriate Government] may, from time to time, make rules for regulating -

(a) The supply of stamps to be used under this Act;

(b) The number of stamps to be used for denoting any fee chargeable under this Act;

(d) The keeping accounts of all stamps used under this Act:

Provided that, in the case of stamps used section 3 in a High Court, such rules shall be made with the concurrence of the Chief Justice of such Court.

All such rules shall be published in the Official Gazette, and shall thereupon have the force of law.

Section 28. Stamping documents inadvertently received

No document which ought to bear a stamp under this Act shall be of any validity, unless and until it is properly stamped.

But, if any such document is through mistake or inadvertence received, filed or used in any Court or office without being properly stamped, the presiding Judge or the head of the office, as the case may be, or, in the case of a High Court, any Judge of such Court, may, if he thinks fit, order that such document be stamped as he may direct; and, on such document being stamped accordingly, the same and every proceeding relative thereto shall be as valid as if it had been properly stamped in the first instance.

Section 29. Amended document

Where any such document is amended in order merely to correct a mistake and to make it conform to the original intention of the parties, is shall not be necessary to impose a fresh stamp.

Section 30. Cancellation of stamp

No document requiring a stamp under this Act shall be filed or acted upon in any proceeding in any Court or office until the stamp has been cancelled.

Such officer as the Court or the head of the office may from time to time appoint shall, on receiving any such document, forthwith effect such cancellation by punching out the figure-head so as to leave the amount designated on the stamp untouched, and the part removed by punching shall be burnt or otherwise destroyed.

Chapter VI – Miscellaneous

Section 31. [Repayment of fees paid on applications to Criminal Courts.]

Rep. by the Code of Criminal Procedure (Amendment) Act, 1923 (18 of 1923) s.163.

Section 32. [Amendments of Act 8 of 1859 and Act 9 of 1896.]

Rep. by the Amending Act, 1891 (12 of 1891) s.2 and Sch.I

Section 33. Admission in criminal cases of documents for which proper fee has not been paid

Whenever the filing or exhibition in a Criminal Court of a document in respect of which the proper fee has not been paid is, in the opinion of the presiding Judge, necessary to prevent a failure of justice, nothing contained in section 4 or section 6 shall be deemed to prohibit such filing or exhibition.

Section 34. Sale of stamps

(1) The [(Note: Subs. by the A.O. 1937, for “L.G.”) Appropriate Government] may from time to time make rules for regulating the sale of stamps to be used under this Act, the person by whom alone such sale is to be conducted, and the duties and remuneration of such persons.

(2) All such rules shall be published in the Official Gazette, and shall there upon have the force of law.

(3) Any person appointed to sell stamps who disobeys any rule made under this section, and any person not so appointed who sells or officers for sale any stamp, shall be punished with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.

Section 35. Power to reduce or remit fees

The [(Note: Subs. by the A.O. 1937, for “L.G” which had been subs. by Act 38 of 1920, s.2 and Sch.I, Pt.I, for “Governor General of India in Council”) Appropriate Government] may, from time to time by notification in the Official Gazette, reduce or remit, in the whole or in any part of [(Note: Subs. by Act 38 of 1920, s.2 and Sch.I, for “British India”) the territories under its administration], all or any of the fees mentioned in the First and Second Schedules to this Act annexed, and may in like manner cancel or vary such order.

Section 36. Saving of fees to certain officers of High Courts

Nothing in Chapters II and V of this Act applies to the Commission payable to the Accountant General of the High Court of Fort William, or to the fees which any officer of a High Court is allowed to receive in addition to a fixed salary.

SCHEDULES

SCHEDULE I

Ad valorem fees

Number

Proper fee

1. Plaint, [(Note: Ins. by Act 5 of 1908, s.155 and Sch.IV) Written statement pleading a set-off or counterclaim] or memorandum of appeal (not otherwise provided for in this Act) [(Note: Ins. by Act 5 of 1908, s.155 and Sch.IV) or of cross-objection] presented to any Civil or Revenue Court except those mentioned in section 3.]

2. Plaint (Note: The words “or memorandum of appeal” rep. by Act 20 of 1870, s.I) in a suit for possession under [(Note: Subs. by Act 12 of 1891, s.2 and Sch.II, for “Act No.14 of 1859 (to provide for the limitation of suits), section 15.”) the Specific Relief Act, 1877 (Note: See now the Specific Relief Act, 1963 (47 of 1963), section 9].

3. (Note: The words and figure “3. Petition under the Indian Registration Act, section fifty-three” omitted by Act 8 of 1871, s.2 and Sch.I)

4. Application for reivew of judgment, if presented on or after the ninetieth day from the date of the decree.

5. Application for review of judgment, if presented before the ninetieth day from the dae of the decree.

6. Copy or translation of a judgment or order not being, or having the force of, a decree.

7. Copy of decree or order having the force of a decree.

8. Copy of any document liable to stamp-duty under the Indian Stamp Act, 1879 (Note: See now the Indian Stamp Act, 1899 (2 of 1899)) when left by any party to a suit or proceeding in place to a suit or proceeding in place of the original withdrawn.

9. Copy of any revenue or judicial proceeding or order not otherwise provided for by this Act, or copy of any account, statement, report or the like, taken out of any Civil or Criminal or Revenue Court of office, or from the office of any chief officer charged with the executive administration of a division.

10. (Note: Article 10 omitted by Act 8 of 1890, s.2 and Sch.)

11. [(Note: Subs. by Act 7 of 1889, s.13(I), for the original Articles 11 and 12.) Probate of a will or letters of administration with or without will annexed.

12. Certificate under the Succession Certificate Act, 1889 (Note: See now the Indian Succession Act, 1925 (39 of 1925))

12A. Certificate under the Regulation of the Bombay Code No. VIII of 1827.

13. (Note: Originally ins. by the Punjab Courts Act, 1884 (18 of 1884), s.71, as amended by the Punjab Courts Act, 1899 (25 of 1899), s.6, Article 13 was rep. in the Punjab by s.5 of the Punjab courts (Amendment) Act, 1912 (Punjab Act 1 of 1912); but it has since been received in this form by the Court-fees (Punjab Amendment) Act, 1922 (Punjab Act 7 of 1922) Application to the (Note: Subs. by the A.O. 1948, for “High Court of Judicature at Lahore”) High Court of Punjab] for the exercise of its jurisdiction under section 44 of the Punjab Courts Act, 1918 or to the Court of the Financial Commissioner of Punjab for the exercise of its revisional jurisdiction under section 84 of the Punjab Tenancy Act, 1887.

(Note: Article 14 omitted by the A.O. 1937.

(Note: Article 15 rep. by Act 11 of 1923, s.3 and Sch.II)

When the amount or value of the subject-matter in dispute does not exceed five rupees.When such amount or value exceeds five rupees, for every five rupees, or part thereof, in excess of five rupees, up to one hundred rupees.When such amount of value exceeds one hundred rupees, for every ten rupees, or part thereof, in excess of one hundred rupees, up to one thousand rupees.When such amount or value exceeds one thousand rupees, for every one hundred rupees, or part thereof, in excess of one thousand rupees, up to five thousand rupees.When such amount or value exceeds five thousand rupees, for every two hundred and fifty rupees, or part thereof, in excess of five thousand rupees, up to ten thousand rupees.

When such amount or value exceeds ten thousand rupees, for every five hundred rupees, or part thereof, in excess of ten thousand rupees, up to twenty thousand

When such amount or value exceeds twenty thousand rupees, for every one thousand rupees, or part thereof, in excess of twenty thousand rupees, up to thirty thousand rupees.

When such amount or value exceeds thirty thousand rupees, for every two thousand rupees, or part thereof, in excess of thirty thousand rupees. up to fifty thousand rupees.

When such amount or value exceeds fifty thousand rupees, for every five thousand rupees, or part thereof, in excess of fifty thousand rupees:

Provided that the maximum fee leviable on a plaint or memorandum of appeal shall be three thousand rupees.

When such judgement or order is passed by any Civil Court other than a High Court, or by the presiding officer of any Revenue Court or Office, or by any other Judicial or Executive Authority –

(a) If the amount or value of the subject-matter is fifty or less than fifty rupees.

(b) If such amount or value exceeds fifty rupees.

When such judgement or order is passed by a High Court

When such decree or order is made by any Civil Court other than a High Court, or by any Revenue Court –

(a) If the amount or value of the subject-matter of the suit wherein such decree or order is made is fifty or less than fifty rupees.

(b) If such amount or value exceeds fifty rupees.

When such decree or order is made a High Court.

(a) When the stamp-duty chargeable on the original does not exceed eight annas.

(b) In any other case.

For every three hundred and sixty words or fraction of three hundred and sixty words.

(Note: Article 10 omitted by Act 8 of 1890, s.2 and Sch.)

[(Note: Subs. by Act 7 of 1910, s.2(I)) When the amount or value of the property in respect of which the grant of probate or letters is made exceeds one thousand rupees, but does not exceed ten thousand rupees.

When such amount or value exceeds ten thousand rupees, but does not exceed fifty thousand rupees.

When such amount or value exceeds fifty thousand rupees.

Provided that when, after the grant of a certificate under the Succession Certificate Act, 1889 (Note: See now the Indian Succession Act, 1925 (39 of 1925) or under the Regulation of the Bombay Code No. VIII of 1827, in respect of any property included in an estate, a grant of probate or letters of administration is made in respect of the same estate, the fee payable in respect of the latter grant shall be reduced by the amount of the fee paid in respect of the former grant.

In any case

[(Note: Subs. by Act 7 of 1910, s. 2(ii) (1) As regards debts and securities.

(2) As regards other property in respect of which the certificate is granted –

When the amount or value of such property exceeds one thousand rupees, but does not exceed ten thousand rupees.

When such amount or value exceeds ten thousand rupees, but does not exceed fifty thousand rupees.

When such amount or value exceeds fifty thousand rupees.

When the amount or value of the subject-matter in dispute does not exceed twenty-five rupees.

When such amount or value exceeds twenty-five rupees.

(Note: Article 14 omitted by the A.O. 1937.

(Note: Article 15 rep. by Act 11 of 1923, s.3 and Sch.II)

Six annas.

Twelve annas.

Five rupees.

Ten rupees.

Fifteen rupees.

Twenty rupees.

Twenty-five rupees.

A fee of one-half the amount prescribed in the foregoing scale.

The fee leviable on the plaint or memorandum of appeal.

One-half of the fee leviable on the plaint or memorandum of appeal.

Four annas.

Eight annas.

One rupee.

Eight annas.

One rupee.

Four rupees.

The amount of the duty chargeable on the original.

Eight annas.

(Note: Article 10 omitted by Act 8 of 1890, s.2 and Sch.)

Two per centum on such amount or value.

Two and one-half per centum on such amount or value.

Three per centum on such amount or value.

Two per centum on the amount or value of any debt or security specified in the certificate under section 8 of the Act, and three per centum on the amount or value of any debt or security to which the certificate is extended under section 10 of the Act.

Notes. – (1) The amount of a debt is its amount, including interest, on the day on which the inclusion of the debt in the certificate is applied for, so far as such amount can be ascertained.

(2) Whether or not any power with respect to a security specified in a certificate has been conferred under the Act, and, where such a power has been so conferred, whether the power is for the receiving of interest or dividends on, or for the negotiation or transfer of, the security, or for both purposes, the value of the security is its market-value on the day on which the inclusion of the security in the certificate is applied for, so far as such value can be ascertained.

The same fee as would be payable in respect of a certificate under the Succession Certificate Act, 1889 (Note: See now the Indian Succession Act, 1925 (39 of 1925)) or in respect of an extension of such a certificate, as the case may be

Two per centum on such amount or value .

Two and one-half per centum on such amount or value.

Three per centum on such amount or value]

Two rupees.

The fee leviable on a memorand of appeal.

(Note: Article 14 omitted by the A.O. 1937.

(Note: Article 15 rep. by Act 11 of 1923, s.3 and Sch.II)

Table of Rates of ad valorem Fees Leviable on the institution of suits.

When the amount or value of the subject-matter exceeds	But does not exceed	Proper fee
Rs.	Rs.	Rs.	A.	P.
-	5	0	6	0
5	10	0	12	0
10	15	0	2	0
15	20	1	8	0
20	25	1	14	0
25	30	1	4	0
30	35	2	10	0
35	40	2	0	0
40	45	3	6	0
45	50	3	12	0
50	55	3	2	0
55	60	4	8	0
60	65	4	14	0
65	70	4	4	0
70	75	5	10	0
75	80	5	0	0
80	85	6	6	0
85	90	6	12	0
90	95	6	2	0
95	100	7	8	0
100	110	7	4	0
110	120	8	0	0
120	130	9	12	0
130	140	10	8	0
140	150	11	4	0
150	160	12	0	0
160	170	1	12	0
170	180	2	8	0
180	190	13	4	0
190	200	14	0	0
200	210	15	12	0
210	220	15	8	0
220	230	16	4	0
230	240	17	0	0
240	250	18	12	0
250	260	18	8	0
260	270	19	4	0
270	280	20	0	0
280	290	21	12	0
290	300	21	8	0
300	310	22	4	0
310	320	23	0	0
320	330	24	12	0
330	340	24	8	0
340	350	25	4	0
350	360	26	0	0
360	370	27	12	0
370	380	27	8	0
380	390	28	4	0
390	400	29	0	0
400	410	30	12	0
410	420	30	8	0
420	430	31	4	0
430	440	32	0	0
440	450	33	12	0
450	460	33	8	0
460	470	34	4	0
470	480	35	0	0
480	490	36	12	0
490	500	36	8	0
500	510	37	4	0
510	520	38	0	0
520	530	39	12	0
530	540	39	8	0
540	550	40	4	0
550	560	42	0	0
560	570	42	12	0
570	580	43	8	0
580	590	44	4	0
590	600	45	0	0
600	610	45	12	0
610	620	46	8	0
620	630	47	4	0
630	640	48	0	0
640	650	48	12	0
650	660	49	8	0
660	670	50	4	0
670	680	51	0	0
680	690	51	12	0
690	700	52	8	0
700	710	53	4	0
710	720	54	0	0
720	730	54	12	0
730	740	55	8	0
740	750	56	4	0
750	760	57	0	0
760	770	57	12	0
770	780	58	8	0
780	790	59	4	0
790	800	60	0	0
800	810	60	12	0
810	820	61	8	0
820	830	62	4	0
830	840	63	0	0
840	850	63	12	0
850	860	64	8	0
860	870	65	4	0
870	880	66	0	0
880	890	66	12	0
890	900	67	8	0
900	910	68	4	0
910	920	69	0	0
920	930	69	12	0
930	940	70	8	0
940	950	71	4	0
950	960	72	0	0
960	970	72	12	0
970	980	73	8	0
980	990	74	4	0
990	1,000	75	0	0
1,000	1,100	80	0	0
1,100	1,200	85	0	0
1,200	1,300	90	0	0
1,300	1,400	95	0	0
1,400	1,500	100	0	0
1,500	1,600	105	0	0
1,600	1,700	110	0	0
1,700	1,800	115	0	0
1,800	1,900	120	0	0
1,900	2,000	125	0	0
2,000	2,100	130	0	0
2,100	2,200	135	0	0
2,200	2,300	140	0	0
2,300	2,400	145	0	0
2,400	2,500	150	0	0
2,500	2,600	155	0	0
2,600	2,700	160	0	0
2,700	2,800	165	0	0
2,800	2,900	170	0	0
2,900	3,000	175	0	0
3,000	3,100	180	0	0
3,100	3,200	185	0	0
3,200	3,300	190	0	0
3,300	3,400	195	0	0
3,400	3,500	200	0	0
3,500	3,600	205	0	0
3,600	3,700	210	0	0
3,700	3,800	215	0	0
3,800	3,900	220	0	0
3,900	4,000	225	0	0
4,000	4,100	230	0	0
4,100	4,200	235	0	0
4,200	4,300	240	0	0
4,300	4,400	245	0	0
4,400	4,500	250	0	0
4,500	4,600	255	0	0
4,600	4,700	260	0	0
4,700	4,800	265	0	0
4,800	4,900	270	0	0
4,900	5,000	275	0	0
5,000	5,250	285	0	0
5,250	5,500	295	0	0
5,500	5,750	305	0	0
5,750	6,000	315	0	0
6,000	6,250	325	0	0
6,250	6,500	335	0	0
6,500	6,750	345	0	0
6,750	7,000	355	0	0
7,000	7,250	365	0	0
7,250	7,500	375	0	0
7,500	7,750	385	0	0
7,750	8,000	395	0	0
8,000	8,250	405	0	0
8,250	8,500	415	0	0
8,500	8,750	425	0	0
8,750	9,000	435	0	0
9,000	9,250	445	0	0
9,250	9,500	455	0	0
9,500	9,750	465	0	0
9,750	10,000	475	0	0
10,000	10,500	490	0	0
10,500	11,000	505	0	0
11,000	11,500	520	0	0
11,500	12,000	535	0	0
12,000	12,500	550	0	0
12,500	13,000	565	0	0
13,000	13,500	580	0	0
13,500	14,000	595	0	0
14,000	14,500	610	0	0
14,500	15,000	625	0	0
15,000	15,500	640	0	0
15,500	16,000	655	0	0
16,000	16,500	670	0	0
16,500	17,000	685	0	0
17,000	17,500	700	0	0
17,500	18,000	715	0	0
18,000	18,500	730	0	0
18,500	19,000	745	0	0
19,000	19,500	760	0	0
19,500	20,000	775	0	0
20,000	21,000	795	0	0
21,000	22,000	815	0	0
22,000	23,000	835	0	0
23,000	24,000	855	0	0
24,000	25,000	875	0	0
25,000	26,000	895	0	0
26,000	27,000	915	0	0
27,000	28,000	935	0	0
28,000	29,000	955	0	0
29,000	30,000	975	0	0
30,000	34,000	995	0	0
34,000	36,000	1,035	0	0
36,000	38,000	1,055	0	0
38,000	40,000	1,075	0	0
40,000	42,000	1,095	0	0
42,000	44,000	1,115	0	0
44,000	46,000	1,135	0	0
46,000	48,000	1,155	0	0
48,000	50,000	1,175	0	0
50,000	55,000	1,200	0	0
55,000	60,000	1,225	0	0
60,000	65,000	1,250	0	0
65,000	70,000	1,275	0	0
70,000	75,000	1,300	0	0
75,000	80,000	1,325	0	0
80,000	85,000	1,350	0	0
85,000	90,000	1,375	0	0
90,000	95,000	1,400	0	0
95,000	1,00,000	1,425	0	0
1,00,000	1,05,000	1,450	0	0
1,05,000	1,10,000	1,475	0	0
1,10,000	1,15,000	1,500	0	0
1,15,000	1,20,000	1,525	0	0
1,20,000	1,25,000	1,550	0	0
1,25,000	1,30,000	1,575	0	0
1,30,000	1,35,000	1,600	0	0
1,35,000	1,40,000	1,625	0	0
1,40,000	1,45,000	1,650	0	0
1,45,000	1,50,000	1,675	0	0
1,50,000	1,55,000	1,700	0	0
1,55,000	1,60,000	1,725	0	0
1,60,000	1,65,000	1,750	0	0
1,65,000	1,70,000	1,775	0	0
1,70,000	1,75,000	1,800	0	0
1,75,000	1,80,000	1,825	0	0
1,80,000	1,85,000	1,850	0	0
1,85,000	1,90,000	1,875	0	0
1,90,000	1,95,000	1,900	0	0
1,95,000	2,00,000	1,925	0	0
2,00,000	2,05,000	1,950	0	0
2,05,000	2,10,000	1,975	0	0
2,10,000	2,15,000	2,000	0	0
2,15,000	2,20,000	2,025	0	0
2,20,000	2,25,000	2,050	0	0
2,25,000	2,30,000	2,075	0	0
2,30,000	2,35,000	2,100	0	0
2,35,000	2,40,000	2,125	0	0
2,40,000	2,45,000	2,150	0	0
2,45,000	2,50,000	2,175	0	0
2,50,000	2,55,000	2,200	0	0
2,55,000	2,60,000	2,225	0	0
2,60,000	2,65,000	2,250	0	0
2,65,000	2,70,000	2,275	0	0
2,70,000	2,75,000	2,300	0	0
2,75,000	2,80,000	2,325	0	0
2,80,000	2,85,000	2,350	0	0
2,85,000	2,90,000	2,375	0	0
2,90,000	2,95,000	2,400	0	0
2,95,000	3,00,000	2,425	0	0
3,00,000	3,05,000	2,450	0	0
3,05,000	3,10,000	2,475	0	0
3,10,000	3,15,000	2,500	0	0
3,15,000	3,20,000	2,525	0	0
3,20,000	3,25,000	2,550	0	0
3,25,000	3,30,000	2,575	0	0
3,30,000	3,35,000	2,600	0	0
3,35,000	3,40,000	2,650	0	0
3,40,000	3,45,000	2,675	0	0
3,45,000	3,50,000	2,700	0	0
3,50,000	3,55,000	2,725	0	0
3,55,000	3,60,000	2,750	0	0
3,60,000	3,65,000	2,775	0	0
3,65,000	3,70,000	2,800	0	0
3,70,000	3,75,000	2,825	0	0
3,75,000	3,80,000	2,850	0	0
3,80,000	3,85,000	2,875	0	0
3,85,000	3,95,000	2,900	0	0
3,95,000	4,00,000	2,925	0	0
4,00,000	4,05,000	2,950	0	0
4,05,000	4,10,000	2,975	0	0
4,10,000		3,000	0	0

SCHEDULE II

FIXED FEES

Number

Proper fee

1. Application or petition

1A. [(Note: Ins. by Act 14 of 1911, s.2) Application to any Civil Court that records may be called for from another Court.

2. Application for leave to sue as a pauper.

3. Application for leave to appeal as a pauper.

4. Plaint or memorandum of appeal in a suit to obtain possession under (Note: The Bombay Courts of Adalat Act, 1838.) Act No.16 of 1838, or [(Note: Subs. by Act 12 of 1891, s.2 and Sch. II, for “Bombay Act No. 5 of 1864 (to give Mamlatdars Courts jurisdiction in certain cases to maintain existing possession or to restore possession to any party dispossessed otherwise than by cause of law) the (Note: See now the Mamlatdars Courts Act 1906 (Bom. Act 2 of 1906) Mamlatdars Courts Act, 1876].

5. Plaint or memorandum of appeal in a suit to establish or disprove a right of occupancy.

6. [(Note: Subs. by Act 17 of 1914, s.2 and Sch.I, for certain words.) Bail-bond orother instrument of obligation given in pursuance of an order made by a Court of Magistrate under any section of the Code of Criminal Procedure, 1898, or the Code of Civil Procedure, 1908, and not otherwise provided for by this Act]

7. Undertaking under section 49 of the Indian Divorce Act,1869.

(Note: Articles 8 and 9 omitted by Act 12 of 1891, s.2 and Sch.I)

10. Mukhatarnama or Wakalatnama.

11. Memorandum of appeal when the appeal is not (Note: The words “from an order rejecting a plaint or” omitted by Act 5 of 1908, s.155 and Sch. IV) from a decree or an order having the force of a decree, and is presented-

12. Caveat.

13. Application under (Note: Act 10 of 1859 rep. by the Bengal Tenancy Act, 1885 (8 of 1885) in those portions of the Lower Provinces to which that Act extends; in the Chota Nagpur Division (except Manbhum and the Tributary Mahals) by the Chota Nagpur Landlord and Tenant Procedure Act, 1879 (Ben. 1 of 1879), [now rep. by the Chota Nagpur Tenancy Act, 1908 (Ben. 6 of 1908)]; in the Province of Agra by Act 18 of 1873; and in the C.P. by the C.P. Tenancy Act, 1883 (9 of 1883). Act No.10 of 1859, section 26, or (Note: Bengal Act 6 of 1862 rep. by the Bengal Tenancy Act, 1885 (8 of 1885) so far so it affected those portions of the Lower Provinces to which that Act extends; and in the Chota Nagpur Division (except Manbhum and the Tributary Mahals) by the chota Nagpur Landlord 5and Tenant Procedure Act, (Ben. 1 of 1879) [rep. by the Chota Nagpur Tenancy Act, 1908 (Ben. Of 1908)]. Bengal Act No.6 of 1862, section 9, or (Note: Bengal Act 8 of 1869 rep. by the Bengal Tenancy Act, 1885 (8 of 1885) Bengal Act No.8 of 1869, ssection 37.

14. Petition in a suit under the Native Converts Marriage Dissolution Act, 1866.

(Note: Article 15 omitted by Act 5 of 1908, s.156 and Sch.V)

(Note: Article 16 omitted by Act 6 of 1889, s.18 (1)).

17. Plaint or memorandum of appeal in each of the following suits:-

(i) To alter or set aside a summary decision or order of any of the Civil Courts not established by Letters Patent or of any Revenue Court;

(ii) To alter or cancel any entry in a register of the names of proprietors of revenue paying estates;

(iii) To obtain a declaratory decree where no consequential relief is prayed;

(iv) To set aside an award;

(v) To set aside an adoption;

(vi) Every other suit where it is not possible to estimate at a money-value the subject matter in dispute, and which is not otherwise provided for by this Act.

18. Application under section 326 of the Code of Civil Procedure (Note: See now the Arbitration Act, 1940 (10 of 140)).

19. [(Note: Subs. by Act 5 of 1908, s.155 and Sch. IV, for the original entry) Agreement in writing stating a question for the opinion of the Court under the Code of Civil Procedure, 1908].

20. Every petition under the Indian Divorce Act, 1869, except petitions under section 44 of the same Act, and every memorandum of appeal under section 55 of the same Act.

21. Plaint or memorandum of appeal under the (Note: Se now the Parsi Marriage and Divorce Act, 1936 (3 of 1936) Parsi Marriage and Divorce Act, 1865.

(a) When presented to any officer of the Customs or Excise Department or to any Magistrate by any person having dealings with the Government, and when the subject-matter of such application relates exclusively to those dealings;or when presented to any officer of land revenue by any person holding temporarily settled land under direct engagement with Government, and when the subject-matter of the application or petition relates exclusively to such engagement;or when presented to any Municipal Commissioner under any Act for the time being in force for the conservancy or improvement of any place, If the application or petition relates solely to such conservancy or improvement;or when presented to any Civil Court other than a principal Civil Court of original jurisdiction (Note: The word “or any Cantonment Magistrate sitting as a court of Civil Judicature under Act No.3 of 1859″ rep. by Act 13 of 1889, s.2 and Sch.) or to any Court of Small Causes constituted under (Note: See now the Provincial Small Cause Courts Act,1887 (9 of 1887) Act No.11 of 1865 or under (Note: See now the Bengal, Agra and Assam Civil Courts Act, 1887 (12 of 1887), s.25)) Act No.16 of 1868, section 20 or to a Collector or other officer of revenue in relation to any suit or case in which the amount or value of the subject-matter is less than fifty rupees;

or when presented to any Civil, Criminal or Revenue Court, or to any board or executive officer for the purpose of obtaining a copy or translation of any judgment, decree or order passed by such Court, Board of Officer, or of any other document on record in such Court or Office.

(b) When containing a complaint or charge of any offence other than an offence for which police officers may, under the Criminal Procedure Code (Note: See now the Code of Criminal Procedure, 1973 (2 of 1974)) arrest without warrant and presented to any Criminal Court;

or when presented to Civil, Criminal or Revenue Court, or to a Collector, or any revenue officer having jurisdiction equal or subordinate to a Collector, or to any Magistrate in his executive capacity, and not otherwise provided for by this Act;

or to deposit in Court revenue or rent;

or for determination by a Court of the amount of compensation to be paid by a landlord to his tenant.

(c) When presented to a Chief Commissioner or other Chief Controlling Revenue or Executive Authority, or to a Commissioner of Revenue or Circuit, or to any chief officer charged with the executive administration of a division and not otherwise provided for by Act.

(d) When presented to a High Court.

When the Court grants the application and is of opinion that the transmission of such records involves the use of the post.

(a) When present to a District Court.

(b) When presented to a Commissioner or a High Court

(Note: Articles 8 and 9 omitted by Act 12 of 1891, s.2 and Sch.I)

When presented for the conduct of any one case –

(a) To any Civil or Criminal Court other than a High Court, or to any Revenue Court, or to any Collector or Magistrate, or other executive officer except such as are mentioned in clauses (b) and (c) of this number;

(b) To a Commissioner of Revenue, Circuit or Customs, or to any officer charged with the executive administration of a Division, not being the Chief Revenue or Executive Authority

(a) To any civil Court other than a High Court, or to any revenue Court or Executive Officer other than the High Court or Chief Controlling Revenue or Executive Authority;

To a High Court or Chief commissioner, or other Chief Controlling Executive or Revenue Authority.

(Note: Article 15 omitted by Act 5 of 1908, s.156 and Sch.V)

(Note: Article 16 omitted by Act 6 of 1889, s.18 (1)).

One annas.

Eight annas.

One rupee.

Two rupees.

Twelve annas in addition to any fee levied on the application under clause (a), clause (b) or clause (d) of Article 1 of this Schedule]

Eight annas.

One rupee.

Two rupees.

Eight annas.

(Note: Articles 8 and 9 omitted by Act 12 of 1891, s.2 and Sch.I)

Eight annas.

One rupee.

Two rupees.

Eight annas.

Two rupees.

Five rupees.

(Note: Article 15 omitted by Act 5 of 1908, s.156 and Sch.V)

(Note: Article 16 omitted by Act 6 of 1889, s.18 (1)).

Ten rupees.

Twenty rupees.

Prevention of Money Laundering Act

November 30, 2014

Section 1. Short title, extent and commencement

(1) This Act may be called the Prevention of Money Laundering Act, 2002.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Section 2. Definitions

(1) In this Act, unless the context otherwise requires,—

(a) “Adjudicating Authority” means an Adjudicating Authority appointed under sub-section (1) of section 6;

(b) “Appellate Tribunal” means the Appellate Tribunal established under section 25;

(d) “attachment” means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III;

(e) “banking company” means a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act;

(f) “Bench” means a Bench of the Appellate Tribunal;

(g) “Chairperson” means the Chairperson of the Appellate Tribunal;

(h) “chit fund company” means a company managing, conducting or supervising, as foreman, agent or in any other capacity, chits as defined in section 2 of the Chit Funds Act, 1982 (40 of 1982);

(i) “co-operative bank” shall have the same meaning as assigned to it in clause (dd) of section 2 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961);

(j) “Deputy Director” means a Deputy Director appointed under subsection (1) of section 49;

(k) “Director” or “Additional Director” or “Joint Director” means a Director or Additional Director or Joint Director as the case may be, appointed under sub-section (1) of section 49;

(l) “financial institution” means a financial institution as defined in clause (c) of section 45-1 of the Reserve Bank of India Act, 1934 (2 of 1934) and includes a chit fund company, a co-operative bank, a housing finance institution and a non-banking financial company;

(m) “housing finance institution” shall have the meaning as assigned to it in clause (d) of section 2 of the National Housing Bank Act, 1987 (53 of 1987);

(n) “intermediary” means a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

¹[(na) “investigation” includes all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidence;]

(o) “Member” means a Member of the Appellate Tribunal and includes the Chairperson;

(p) “Money-laundering” has the meaning assigned to it in section 3;

(q) “non-banking financial company” shall have the same meaning as assigned to it in clause (/) of section 45-1 of the Reserve Bank of India Act, 1934 (2 of 1934);

(r) “notification” means a notification published in the Official Gazette;

(s) “person” includes—

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm,

(v) an association of persons or a body of individuals, whether incorporated or not,

(vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and

(vii) any agency, office or branch owned or controlled by any of the above persons mentioned in the preceding sub-clauses;

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

(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property;

(v) “property” means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located;

(w) “records” include the records maintained in the form of books or stored in a computer or such other form as may be prescribed;

(x) “Schedule” means the Schedule to this Act;

(y) “scheduled offence” means—

(i) the offences specified under Part A of the Schedule; or

(ii) the offences specified under Part B of the Schedule if the total value involved in such offence is thirty lakh rupees or more.

(z) “Special Court” means a Court of Session designated as Special Court under sub-section (1) of section 43;

(za) “transfer” includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien;

(zb) “value” means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person.

(2) Any reference, in this Act or the Schedule, to any enactment or any provision thereof shall, in relation to an area in which such enactment or such provision is not in force, be construed as a reference to the corresponding law or the relevant provisions of the corresponding law, if any, in force in that area.

——————–

1. Ins. by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 3. Offence of money-laundering

Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.

Section 4. Punishment for money-laundering

Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees :

Provided that where the proceeds of crime involved in money-laundering relate to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted.

Section 5. Attachment of property involved in money-laundering

(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that—

(a) any person is in possession of any proceeds of crime;

(b) such person has been charged of having committed a scheduled offence: and

(c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter,

he may, by order in writing, provisionally attach such property for a period not exceeding ninety days from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule:

Provided that no such order of attachment shall be made unless, in relation to an offence under—

(i) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(ii) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.

(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier.

(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment.

Explanation.—For the purposes of this sub-section, “person interested” in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.

(5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.

Section 6. Adjudicating authorities, composition, powers, etc

(1) The Central Government shall, by notification, appoint one or more Adjudicating Authorities to exercise jurisdiction, power and authority conferred by or under this Act.

(2) An Adjudicating Authority shall consist of a Chairperson and two other Members:

Provided that one Member each shall be a person having experience in the field of law, administration, finance or accountancy.

(3) A person shall, however, not be qualified for appointment as Member of an Adjudicating Authority:—

(a) in the field of law, unless he—

(i) is qualified for appointment as District Judge; or

(ii) has been a Member of the Indian Legal Service and has held a post in Grade I of that service;

(b) in the field of finance, accountancy or administration unless he possesses such qualifications, as may be prescribed.

(4) The Central Government shall appoint a Member to be the Chairperson of the Adjudicating Authority.

(5) Subject to the provisions of this Act,—

(a) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;

(b) a Bench may be constituted by the Chairperson of the Adjudicating Authority with one or two Members as the Chairperson of the Adjudicating Authority may deem fit;

(c) the Benches of the Adjudicating Authority shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, by notification, specify;

(d) the Central Government shall, by notification, specify the areas in relation to which each Bench of the Adjudicating Authority may exercise jurisdiction.

(6) Notwithstanding anything contained in sub-section (5), the Chairperson may transfer a Member from one Bench to another Bench.

(7) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit.

(8) The Chairperson and every Member shall hold office as such for a term of five years from the date on which he enters upon his office:

Provided that no Chairperson or other Member shall hold office as such after he has attained the age of sixty-two years.

(9) The salary and allowances payable to and the other terms and conditions of service of the Member shall be such as may be prescribed:

Provided that neither the salary and allowances nor the other terms and conditions of service of the Members shall be varied to his disadvantage after appointment.

(10) If, for reasons other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Adjudicating Authority from the stage at which the vacancy is filled.

(11) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office:

Provided that the Chairperson or any other Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

(12) The Chairperson or any other Member shall not be removed from his office except by an order made by the Central Government after giving necessary opportunity of hearing.

(13) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most Member shall act as the Chairperson of the Adjudicating Authority until the date on which a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(14) When the Chairperson of the Adjudicating Authority is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member shall discharge the functions of the Chairperson of the Adjudicating Authority until the date on which the Chairperson of the Adjudicating Authority resumes his duties.

(15) The Adjudicating Authority shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own procedure.

Section 7. Staff of Adjudicating Authorities

(1) The Central Government shall provide each Adjudicating Authority with such officers and employees as that Government may think fit.

(2) The officers and employees of the Adjudicating Authority shall discharge their functions under the general superintendence of the Chairperson of the Adjudicating Authority.

(3) The salaries and allowances and other conditions of service of the officers and employees of the Adjudicating Authority shall be such as may be prescribed.

Section 8. Adjudication

(1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18 if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3, he may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized under section 17 or section 18, the evidence on which he relics and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government:

Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person:

Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property.

(2) The Adjudicating Authority shall, after—

(a) considering the reply, if any, to the notice issued under sub-section (i);

(b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and

by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) arc involved in money-laundering:

Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering.

(3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or record seized under section 17 or section 18 and record a finding to that effect, such attachment or retention of the seized property or record shall—

(a) continue during the pendency of the proceedings relating to any scheduled offence before a court; and

(b) become final after the guilt of the person is proved in the trial court and order of such trial court becomes final.

(4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property.

(5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of the property or retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect.

(6) Where the attachment of any properly or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property.

Section 9. Vesting of property in Central Government

Where an order of confiscation has been made under sub-section (6) of section 8 in respect of any property of a person, all the rights and title in such property shall vest absolutely in the Central Government free from all encumbrances:

Provided that where the Adjudicating Authority, after giving an opportunity of being heard to any other person interested in the property attached under this Chapter, or seized under Chapter V, is of the opinion that any encumbrance on the property or lease-hold interest has been created with a view to defeat the provisions of this Chapter, it may, by order, declare such encumbrances or lease-hold interest to be void and thereupon the aforesaid property shall vest in the Central Government free from such encumbrances or lease-hold interest:

Provided further that nothing in this section shall operate to discharge any person from any liability in respect of such encumbrances which may be enforced against such person by a suit for damages.

Section 10. Management of properties confiscated under this Chapter

(1) The Central Government may, by order published in the Official Gazette, appoint as many of its officers (not below the rank of a Joint Secretary to the Government of India) as it thinks fit, to perform the functions of an Administrator.

(2) The Administrator appointed under sub-section (1) shall receive and manage the property in relation to which an order has been made under sub-section (6) of section 8 in such manner and subject to such conditions as may be prescribed.

(3) The Administrator shall also take such measures, as the Central Government may direct, to dispose of the property which is vested in the Central Government under section 9.

Section 11. Power regarding summons, production of documents and evidence, etc

(1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:—

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and documents; and

(f) any other matter which may be prescribed.

(2) All the persons so summoned shall be bound to attend in person or through authorised agents, as the Adjudicating Authority may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(3) Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

Section 12. Banking companies, financial institutions and intermediaries to maintain records

(1) Every banking company, financial institution and intermediary shall—

(a) maintain a record of all transactions, the nature and value of which may be prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month;

(b) furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed;

Provided that where the principal officer of a banking company or financial institution or intermediary, as the case may be, has reason to believe that a single transaction or series of transactions integrally connected to each other have been valued below the prescribed value so as to defeat the provisions of this section, such officer shall furnish information in respect of such transactions to the Director within the prescribed time.

(2) The records referred to in sub-section (1) shall be maintained for a period of ten years from the date of cessation of the transactions between the clients and the banking company or financial institution or intermediary, as the case may be.

Section 13. Powers of director to impose fine

(1) The Director may, either of his own motion or on an application made by any authority, officer or person, call for records referred to in sub-section (1) of section 12 and may make such inquiry or cause such inquiry to be made, as he thinks fit.

(2) If the Director, in the course of any inquiry, finds that a banking company, financial institution or an intermediary or any of its officers has failed to comply with the provisions contained in section 12, then, without prejudice to any other action that may be taken under any other provisions of this Act, he may, by an order, levy a fine on such banking company or financial institution or intermediary which shall not be less than ten thousand rupees but may extend to one lakh rupees for each failure.

(3) The Director shall forward a copy of the order passed under sub-section (2) to every banking company, financial institution or intermediary or person who is a party to the proceedings under that sub-section.

Section 14. No civil proceedings against banking companies, financial institutions, etc., in certain cases

Save as otherwise provided in section 13, the banking companies, financial institutions, intermediaries and their officers shall not be liable to any civil proceedings against them for furnishing information under clause (b) of sub-section (1) of section 12.

Section 15. Procedure and manner of furnishing information by banking company, financial institution and intermediary

The Central Government may, in consultation with the Reserve Bank of India, prescribe the procedure and the manner of maintaining and furnishing information under sub-section (1) of section 12 for the purpose of implementing the provisions of this Act.

Section 16. Power of survey

(1) Notwithstanding anything contained in any other provisions of this Act, where an authority, on the basis of material in his possession, has reason to believe (the reasons for such belief to be recorded in writing) that an offence under section 3 has been committed, he may enter any place—

(i) within the limits of the area assigned to him; or

(ii) in respect of which he is authorised for the purposes of this section by such other authority, who is assigned the area within which such place is situated,

at which any act constituting the commission of such offence is carried on, and may require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, such act so as to,—

(i) afford him the necessary facility to inspect such records as he may require and which may be available at such place;

(ii) afford him the necessary facility to check or verify the proceeds of crime or any transaction related to proceeds of crime which may be found therein; and

(iii) furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceedings under this Act.

Explanation.—For the purposes of this sub-section, a place, where an act which constitutes the commission of the offence is carried on, shall also include any other place, whether any activity is carried on therein or not, in which the person carrying on such activity states that any of his records or any part of his property relating to such act are or is kept.

(2) The authority referred to in sub-section (1) shall, after entering any place referred to in that sub-section immediately after completion of survey, forward a copy of the reasons so recorded along with material in his possession, referred to in that sub-section, to the Adjudicating Authority in a sealed envelope in the manner as may be prescribed and such Adjudicating Authority shall keep such reasons and material for such period as may be prescribed.

(3) An authority acting under this section may—

(i) place marks of identification on the records inspected by him and make or cause to be made extracts or copies therefrom,

(ii) make an inventory of any property checked or verified by him, and

(iii) record the statement of any person present in the place which may be useful for, or relevant to, any proceeding under this Act.

Section 17. Search and seizure

(1) Where the Director, on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person—

(i) has committed any act which constitutes money-laundering, or

(ii) is in possession of any proceeds of crime involved in money-laundering, or

(iii) is in possession of any records relating to money-laundering,

then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to—

(a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept;

(b) break open the lock of any door, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available;

(d) place marks of identification on such record or make or cause to be made extracts or copies therefrom;

(e) make a note or an inventory of such record or property;

(f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act:

Provided that no search shall be conducted unless, in relation to an offence under—

(a) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(b) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure, forward a copy of the reasons so recorded along with material in his possession, referred to in that subsection, to the Adjudicating Authority in a scaled envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such reasons and material for such period, as may be prescribed.

(3) Where an authority, upon information obtained during survey under section 16, is satisfied that any evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence :

Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section.

(4) The authority, seizing any record or property under this section, shall, within a period of thirty days from such seizure, file an application, requesting for retention of such record or property, before the Adjudicating Authority.

Section 18. Search of persons

(1) If an authority, authorised in this behalf by the Central Government by general or special order, has reason to believe (the reason for such belief to be recorded in writing) that any person has secreted about his person or in anything under his possession, ownership or control, any record or proceeds of crime which may be useful for or relevant to any proceedings under this Act, he may search that person and seize such record or property which may be useful for or relevant to any proceedings under this Act.

(2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure, forward a copy of the reasons so recorded along with material in his possession, referred to in that subsection, to the Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed, and such Adjudicating Authority shall keep such reasons and material for such period, as may be prescribed.

(3) Where an authority is about to search any person, he shall, if such person so requires, take such person within twenty-four hours to the nearest Gazetted Officer, superior in rank to him, or a Magistrate:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey undertaken to take such person to the nearest Gazetted Officer, superior in rank to him, or Magistrate’s Court.

(4) If the requisition under sub-section (3) is made, the authority shall not detain the person for more than twenty-four hours prior to taking him before the Gazetted Officer, superior in rank to him, or the Magistrate referred to in that sub-section:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of detention to the office of the Gazetted Officer, superior in rank to him, or the Magistrate’s Court.

(5) The Gazetted Officer or the Magistrate before whom any such person in brought shall, if he sees no reasonable ground for search, forthwith discharge such person but otherwise shall direct that search be made.

(6) Before making the search under sub-section (1) or sub-section (5), the authority shall call upon two or more persons to attend and witness the search, and the search shall be made in the presence of such persons.

(7) The authority shall prepare a list of record or property seized in the course of the search and obtain the signatures of the witnesses on the list.

(8) No female shall be searched by any one except a female.

(9) The authority shall record the statement of the person searched under sub-section (1) or sub-section (5) in respect of the records or proceeds of crime found or seized in the course of the search:

Provided that no search of any person shall be made unless, in relation to an offence under—

(a) Paragraph 1 of Part A or Paragraph 1 or Paragraph 2 or Paragraph 3 or Paragraph 4 or Paragraph 5 of Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(10) The authority, seizing any record or property under sub-section (1) shall, within a period of thirty days from such seizure, file an application requesting for retention of such record or property, before the Adjudicating Authority.

Section 19. Power to arrest

(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority in a scaled envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed.

(3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate’s Court.

Section 20. Retention of property

(1) Where any property has been seized under section 17 or section 18, and the officer authorised by the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded by him in writing) that such property is required to be retained for the purposes of adjudication under section 8, such property may be retained for a period not exceeding three months from the end of the month in which such property was seized.

(2) The officer authorised by the Director immediately after he has passed an order for retention of the property for purposes of adjudication under section 8 shall forward a copy of the order along with the material in his possession, referred to in sub-section (1), to the Adjudicating Authority in a scaled envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.

(3) On the expiry of the period specified in sub-section (1), the property shall be returned to the person from whom such property was seized unless the Adjudicating Authority permits retention of such property beyond the said period.

(4) The Adjudicating Authority, before authorising the retention of such property beyond the period specified in sub-section (1), shall satisfy himself that the property is prima facie involved in money-laundering and the property is required for the purposes of adjudication under section 8.

(5) After passing the order of confiscation under sub-section (6) of section 8, the Adjudicating Authority shall direct the release of all properties other than the properties involved in money-laundering to the person from whom such properties were seized.

(6) Notwithstanding anything contained in sub-section (5), the Director or any officer authorised by him in this behalf may withhold the release of any property until filing of appeal under section 26 or forty-five days from the date of order under sub-section (5), whichever is earlier, if he is of the opinion that such property is relevant for the proceedings before the Appellate Tribunal.

Section 21. Retention of records

(1) Where any records have been seized, under section 17, or section 18, and the Investigating Officer or any other officer authorised by the Director in this behalf has reason to believe that any of such records are required to be retained for any inquiry under this Act, he may retain such records for a period not exceeding three months from the end of the month in which such records were seized.

(2) The person, from whom records were seized, shall be entitled to obtain copies of records retained under sub-section (1).

(3) On the expiry of the period specified under sub-section (1), the records shall be returned to the person from whom such records were seized unless the Adjudicating Authority permits retention of such records beyond the said period.

(4) The Adjudicating Authority, before authorising the retention of such records beyond the period mentioned in sub-section (1), shall satisfy himself that the records arc required for the purposes of adjudication under section 8.

(5) After passing of an order of confiscation under sub-section (6) of section 8, the Adjudicating Authority shall direct the release of the records to the person from whom such records were seized.

(6) Notwithstanding anything contained in sub-section (5), the Director or any officer authorised by him in this behalf may withhold the release of any records until filing of appeal under section 26 or after forty-five days from the date of order under sub-section (5), whichever is earlier, if he is of the opinion that such records are relevant for the proceedings before the Appellate Tribunal.

Section 22. Presumption as to records or property in certain cases

(1) Where any records or property are or is found in the possession or control of any person in the course of a survey or a search, it shall be presumed that—

(i) such records or property belong or belongs to such person;

(ii) the contents of such records are true; and

(iii) the signature and every other part of such records which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, arc in that person’s handwriting, and in the case of a record, stamped, executed or attested, that it was executed or attested by the person by whom it purports to have been so stamped, executed or attested.

(2) Where any records have been received from any place outside India, duly authenticated by such authority or person and in such manner as may be prescribed, in the course of proceedings under this Act, the Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be, shall—

(a) presume, that the signature and every other part of such record which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person’s handwriting; and in the case of a record executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested;

(b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence.

Section 23. Presumption in inter-connected transactions

Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transactions form part of such inter-connected transactions.

Section 24. Burden of proof

When a person is accused of having committed the offence under section 3, the burden of proving that proceeds of crime are untainted property shall be on the accused.

Section 25. Establishment of Appellate Tribunal

The Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority and the authorities under this Act.

Section 26. Appeals to Appellate Tribunal

(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal.

(2) Any banking company, financial institution or intermediary aggrieved by any order of the Director made under sub-section (2) of section 13, may prefer an appeal to the Appellate Tribunal.

(3) Every appeal preferred under sub-section (1) or sub-section (2) shall be filed within a period of forty-five days from the date on which a copy of the order made by the Adjudicating Authority or Director is received and it shall be in such form and be accompanied by such fee as may be prescribed:

Provided that the Appellate Tribunal may, after giving an opportunity of being heard entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.

(4) On receipt of an appeal under sub-section (1) or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Adjudicating Authority or the Director, as the case may be.

(6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of filing of the appeal.

Section 27. Composition, etc., of Appellate Tribunal

(1) The Appellate Tribunal shall consist of a Chairperson and two other Members.

(2) Subject to the provisions of this Act,—

(a) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;

(b) a Bench may be constituted by the Chairperson with one or two Members as the Chairperson may deem fit;

(c) the Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, by notification, specify;

(d) the Central Government shall, by notification, specify the areas in relation to which each Bench of the Appellate Tribunal may exercise jurisdiction.

(3) Notwithstanding anything contained in sub-section (2), the Chairperson may transfer a Member from one Bench to another Bench.

(4) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit.

Section 28. Qualifications for appointment

(1) A person shall not be qualified for appointment as Chairperson unless he is or has been a Judge of the Supreme Court or of a ¹[High Court or is qualified to be a Judge of the High Court].

(2) A person shall not be qualified for appointment as a Member unless he—

(a) is or has been a Judge of a High Court; or

(b) has been a Member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or

(c) has been a member of the Indian Revenue Service and has held the post of Commissioner of Income-tax or equivalent post in that Service for at least three years; or

(d) has been a member of the Indian Economic Service and has held the post of Joint Secretary or equivalent post in that Service for at least three years; or

(e) has been a member of the Indian Customs and Central Excise Service and has held the post of a Joint Secretary or equivalent post in that Service for as least three years; or

(f) has been in the practice of accountancy as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949) or as a registered accountant under any law for the time being in force or partly as a registered accountant and partly as a chartered accountant for at least ten years:

Provided that one of the members of the Appellate Tribunal shall be from category mentioned in clause (i); or

(g) has been a member of the Indian Audit and Accounts Service and has held the post of Joint Secretary or equivalent post in that Service for at least three years.

(3) No sitting Judge of the Supreme Court or of a High Court shall be appointed under this section except after consultation with the Chief Justice of India.

²[(4) The Chairperson or a Member holding a post as such in any other Tribunal, established under any law for the time being in force, in addition to his being the Chairperson or a Member of that Tribunal, may be appointed as the Chairperson or a Member, as the case may be, of the Appellate Tribunal under this Act.]

——————–

1. The words “High Court” Subs. by the Act No. 20 of 2005 w.e.f. 21-5-2005.

2. Ins. by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 29. Omitted

¹[***]

——————–

1. Section 29 Omited by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 30. Conditions of service

The salary and allowances payable to and the other ¹[terms and conditions of service (including tenure of office)] of the Chairperson and other Members shall be such as may be prescribed:

Provided that neither the salary and allowances nor the other ¹[terms and conditions of service (including tenure of office)]of the Chairperson or any other Member shall be varied to his disadvantage after appointment.

——————–

1. The words “terms and conditions of service” Subs. by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 31. Vacancies

If, for reason other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Appellate Tribunal from the stage at which the vacancy is filled.

Section 32. Resignation and removal

(1) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office:

(2) The Chairperson or any other Member shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehaviour or incapacity, after an inquiry made by a person appointed by the President in which such Chairperson or any other Member concerned had been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.

Section 33. Member to act as Chairperson in certain circumstances

(1) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most Member shall act as the Chairperson until the date on which a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(2) When the Chairperson is unable to discharge his functions owing to absence, illness or any other cause, the seniormost Member shall discharge the functions of the Chairperson until the date on which the Chairperson resumes his duties.

Section 34. Staff of Appellate Tribunal

(1) The Central Government shall provide the Appellate Tribunal with such officers and employees as that Government may think fit.

(2) The officers and employees of the Appellate Tribunal shall discharge their functions under the general superintendence of the Chairperson.

(3) The salaries and allowances and other conditions of service of the officers and employees of the Appellate Tribunal shall be such as may be prescribed.

Section 35. Procedure and powers of Appellate Tribunal

(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure.

(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office;

(e) issuing commissions for the examination of witnesses or documents;

(f) reviewing its decisions;

(g) dismissing a representation for default or deciding it ex parte;

(h) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and

(i) any other matter, which may be, prescribed by the Central Government.

(3) An order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the powers of a civil court.

(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by that court.

(5) All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Appellate Tribunal shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974).

Section 36. Distribution of business amongst Benches

Where any Benches are constituted, the Chairperson may, from time to time, by notification, make provisions as to the distribution of the business of the Appellate Tribunal amongst the Benches and also provide for the matters which may be dealt with by each Bench.

Section 37. Power of Chairperson to transfer cases

On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairperson may transfer any case pending before one Bench, for disposal, to any other Bench.

Section 38. Decision to be by majority

If the Members of a Bench consisting of two Members differ in opinion on any point, they shall state the point or points on which they differ, and make a reference to the Chairperson who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal who have heard the case, including those who first heard it.

Section 39. Right of appellant to take assistance of authorised representative and of Government to appoint presenting officers

(1) A person preferring an appeal to the Appellate Tribunal under this Act may either appear in person or take the assistance of an authorised representative of his choice to present his case before the Appellate Tribunal.

Explanation.—For the purposes of this sub-section, the expression “authorised representative” shall have the same meaning as assigned to it under sub-section (2) of section 288 of the Income-tax Act, 1961 (43 of 1961).

(2) The Central Government or the Director may authorise one or more authorised representatives or any of its officers to act as presenting officers and every person so authorised may present the case with respect to any appeal before the Appellate Tribunal.

Section 40. Members, etc., to be public servants

The Chairperson, Members and other officers and employees of the Appellate Tribunal, the Adjudicating Authority, Director and the officers subordinate to him shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

Section 41. Civil court not to have jurisdiction

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Section 42. Appeal to High Court

Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.—For the purposes of this section, “High Court” means—

(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and

(ii) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.

Section 43. Special Courts

(1) The Central Government, in consultation with the Chief Justice of the High Court, shall for trial of offence punishable under section A by notification designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.

Explanation.—In this sub-section, “High Court” means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation.

(2) While trying an offence under this Act, a Special Court shall also try an offence other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial.

Section 44. Offences triable by Special Courts

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),—

(a) the scheduled offence and the offence punishable under section 4 shall be triable only by the Special Court constituted for the area in which the offence has been committed:

Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall contribute to try such scheduled offence; or

(b) a Special Court may, ¹[***] upon a complaint made by an authority authorised in this behalf under this Act take cognizance of the offence for which the accused is committed to it for trial.

(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section as if the reference to “Magistrate” in that section includes also a reference to a “Special Court” designated under section 43.

——————–

1. The words “upon perusal of police report of the facts which constitute an offence under thsis Act or” Omitted by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 45. Offences to be cognizable and non-bailable

¹[(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part-A of the Schedule shall be released on bail or on his own bond unless-]—

(a) every offence punishable under this Act shall be cognizable;

(b) no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless—

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there arc reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail :

Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs :

Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by—

(i) the Director; or

(ii) any officer of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.

²[(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.]

(2) The limitation on granting of bail specified in ³[***] of sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail.

——————–

1. Subs. by Act No. 20 of 2005 w.e.f. 21-5-2005.

2. Sub. Section (1A) Inserted by Act No. 20 of 2005 w.e.f. 21-5-2005.

3. The Words “clause (b) omitted by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 46. Application of Code of Criminal Procedure, 1973 to proceedings before Special Court

(1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) (including the provisions as to bails or bonds), shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the persons conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor:

Provided that the Central Government may also appoint for any case or class or group of cases a Special Public Prosecutor.

(2) A person shall not be qualified to be appointed as a Public Prosecutor or a Special Public Prosecutor under this section unless he has been in practice as an Advocate for not less than seven years, under the Union or a State, requiring special knowledge of law.

(3) Every person appointed as a Public Prosecutor or a Special Public Prosecutor under this section shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973 (2 of 1974) and the provisions of that Code shall have effect accordingly.

Section 47. Appeal and revision

The High Court may exercise, so far as may be applicable, all the powers conferred by Chapter XXIX or Chapter XXX of the Code of Criminal Procedure, 1973 (2 of 1974), on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court.

Section 48. Authorities under Act

There shall be the following classes of authorities for the purposes of this Act, namely :—

(a) Director or Additional Director or Joint Director,

(b) Deputy Director,

(d) such other class of officers as may be appointed for the purposes of this Act.

Section 49. Appointment and powers of authorities and other officers

(1) The Central Government may appoint such persons as it thinks fit to be authorities for the purposes of this Act.

(2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise the Director or an Additional Director or a Joint Director or a Deputy Director or an Assistant Director appointed under that sub-section to appoint other authorities below the rank of an Assistant Director.

(3) Subject to such conditions and limitations as the Central Government may impose, an authority may exercise the powers and discharge the duties conferred or imposed on it under this Act.

Section 50. Powers of authorities regarding summons, production of documents and to give evidence, etc

(1) The Director shall, for the purposes of section 13, have the same powers as arc vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely :—

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and documents; and

(f) any other matter which may be prescribed.

(2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.

(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

(5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act :

Provided that an Assistant Director or a Deputy Director shall not—

(a) impound any records without recording his reasons for so doing; or

(b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Director.

Section 51. Jurisdiction of authorities

(1) The authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, assigned, as the case may be, to such authorities by or under this act or the rules framed thereunder in accordance with such directions as the Central Government may issue for the exercise of powers and performance of the functions by all or any ot the authorities.

(2) In issuing the directions or orders referred to in sub-section (1), the Central Government may have regard to any one or more of the following criteria, namely:—

(a) territorial area;

(b) classes of persons;

(d) any other criterion specified by the Central Government in this behalf.

Section 52. Power of Central Government to issue directions, etc

The Central Government may, from time to time, issue such orders, instructions and directions to the authorities as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in execution of this Act shall observe and follow such orders, instructions and directions of the Central Government:

Provided that no such orders, instructions or directions shall be issued so as to—

(a) require any authority to decide a particular case in a particular manner; or

(b) interfere with the discretion of the Adjudicating Authority in exercise of his functions.

Section 53. Empowerment of certain officers

The Central Government may, by a special or general order, empower an officer not below the rank of Director of the Central Government or of a State Government to act as an authority under this Act:

Provided that the Central Government may empower an officer below the rank of Director if the officer of the rank of the Director or above are not available in a particular area.

Section 54. Certain officers to assist in inquiry, etc

The following officers are hereby empowered and required to assist the authorities in the enforcement of this Act, namely:—

(a) officers of the Customs and Central Excise Departments;

(b) officers appointed under sub-section (1) of section 5 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985);

(d) officers of the stock exchange recognised under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(e) officers of the Reserve Bank of India constituted under sub-section (1) of section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);

(f) officers of Police;

(g) officers of enforcement appointed under sub-section (1) of section 36 of the Foreign Exchange Management Act, 1999 (40 of 1999);

(h) officers of the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992(15 of 1992);

(f) officers of any other body corporate constituted or established under a Central Act or a State Act;

(g) such other officers of the Central Government, State Government, local authorities or banking companies as the Central Government may, by notification, specify, in this behalf.

Section 55. Definitions

In this Chapter, unless the context otherwise requires,—

(a) “contracting State” means any country or place outside India in respect of which arrangements have been made by the Central Government with the Government of such country through a treaty or otherwise;

(b) “identifying” includes establishment of a proof that the property was derived from, or used in the commission of an offence under section 3;

Section 56. Agreements with foreign countries

(1) The Central Government may enter into an agreement with the Government of any country outside India for—

(a) enforcing the provisions of this Act;

(b) exchange of information for the prevention of any offence under this Act or under the corresponding law in force in that country or investigation of cases relating to any offence under this Act;

and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) The Central Government may, by notification in the Official Gazette, direct that the application of this Chapter in relation to a contracting State with which reciprocal arrangements have been made, shall be subject to such conditions, exceptions or qualifications as are specified in the said notification.

Section 57. Letters of request to a contracting State in certain cases

(1) Notwithstanding anything contained in this Act or the Code of Criminal Procedure, 1973 (2 of 1974) if, in the course of an investigation into an offence or other proceedings under this Act, an application is made to a Special Court by the Investigating Officer or any officer superior in rank to the Investigating Officer that any evidence is required in connection with investigation into an offence or proceedings under this Act and he is of the opinion that such evidence may be available in any place in a contracting State, and the Special Court, on being satisfied that such evidence is required in connection with the investigation into an offence or proceedings under this Act, may issue a letter of request to the court or an authority in the contracting State competent to deal with such request to—

(i) examine facts and circumstances of the case,

(ii) take such steps as the Special Court may specify in such letter of request, and

(iii) forward all the evidence so taken or collected to the Special Court issuing such letter of request.

(2) The letter of request shall be transmitted in such manner as the Central Government may specify in this behalf.

(3) Every statement recorded or document or thing received under subsection (1) shall be deemed to be the evidence collected during the course of investigation.

Section 58. Assistance to a contracting State in certain cases

Where a letter of request is received by the Central Government from a court or authority in a contracting State requesting for investigation into an offence or proceedings under this Act and forwarding to such court or authority any evidence connected therewith, the Central Government may forward such letter of request to the Special Court or to any authority under the Act as it thinks fit for execution of such request in accordance with the provisions of this Act or as the case may be, any other law for the time being in force.

Section 59. Reciprocal arrangements for processes and assistance for transfer of accused persons

(1) Where a Special Court, in relation to an offence punishable under section 4, desires that—

(a) a summons to an accused person, or

(b) a warrant for the arrest of an accused person, or

(c) a summons to any person requiring him to attend and produce a document or other thing, or to produce a document or other thing, or to produce it, or

(d) a search warrant,

issued by it shall be served or executed at any place in any contracting State, it shall send such summons or warrant in duplicate in such form, to such Court, Judge or Magistrate through such authorities, as the Central Government may, by notification, specify in this behalf and that Court, Judge or Magistrate, as the case may be, shall cause the same to be executed.

(2) Where a Special Court, in relation to an offence punishable under section 4 has received for service o,~ execution—

(a) a summons to an accused person, or

(b) a warrant for the arrest of an accused person, or

(d) a search-warrant,

issued by a Court, Judge or Magistrate in a contracting State, it shall, cause the same to be served or executed as if it were a summons or warrant received by it from another Court in the said territories for service or execution within its local jurisdiction; and where—

(i) a warrant of arrest has been executed, the person arrested shall, be dealt with in accordance with the procedure specified under section 19;

(ii) a search warrant has been executed, the things found !r> this search shall, so far as possible be dealt with in accordance with the procedure specified under sections 17 and 18:

Provided that in a case where a summon or search warrant received from a contracting State has been executed, the documents or other things produced or things found in the search shall be forwarded to the Court issuing the summons or search warrant through such authority as the Central Government may, by notification, specify in this behalf.

(3) Where a person transferred to a contracting State pursuant to subsection (2) is a prisoner in India, the Special Court or the Central Government may impose such conditions as that Court or Government deems fit.

(4) Where the person transferred to India pursuant to sub-section (1) is a prisoner in a contracting State, the Special Court in India shall ensure that the conditions subject to which the prisoner is transferred to India arc complied with and such prisoner shall be kept in such custody subject to such conditions as the Central Government may direct in writing.

Section 60. Attachment, seizure and confiscation, etc., of property in a contracting State or India

(1) Where the Director has made an order for attachment of any property under section 5 or where an Adjudicating Authority has made an order confirming such attachment or confiscation of any property under section 8, and such property is suspected to be in a contracting State, the Special Court, on an application by the Director or the Administrator appointed under sub-section (1) of section 10, as the case may be, may issue a letter of request to a court or an authority in the contracting State for execution of such order.

(2) Where a letter of request is received by the Central Government from a court or an authority in a contracting State requesting attachment or confiscation of the property in India, derived or obtained, directly or indirectly, by any person from the commission of an offence under section 3 committed in that contracting State the Central Government may forward such letter of request to the Director, as it thinks fit, for execution in accordance with the provisions of this Act.

(3) The Director shall, on receipt of a letter of request under section 58 or section 59, direct any authority under this Act to take all steps necessary for tracing and identifying such property.

(4) The steps referred to in sub-section (3) may include any inquiry, investigation or survey in respect of any person, place, property, assets, documents, books of account in any bank or public financial institutions or any other relevant matters.

(5) Any inquiry, investigation or survey referred to in sub-section (4) shall be carried out by an authority mentioned in sub-section (3) in accordance with such directions issued in accordance with the provisions of this Act.

(6) The provisions of this Act relating to attachment, adjudication, confiscation and vesting of property in Central Government contained in Chapter III and survey, searches and seizures contained in Chapter V shall apply to the property in respect of which letter of request is received from a court or contracting State for attachment or confiscation of property.

Section 61. Procedure in respect of letter of request

Every letter of request, summons or warrant, received by the Central Government from and every letter of request, summons or warrant, to be transmitted to a contracting State under this Chapter shall be transmitted to a contracting State or, as the case may be, sent to the concerned Court in India and in such form and in such manner as the Central Government may, by notification, specify in this behalf.

Section 62. Punishment for vexatious search

Any authority or officer exercising powers under this Act or any rules made thereunder, who, without reasons recorded in writing,—

(a) searches or causes to be searched any building or place; or

(b) detains or searches or arrests any person,

shall for every such offence be liable on conviction for imprisonment for a term which may extend to two years or fine which may extend to fifty thousand rupees or both.

Section 63. Punishment for false information or failure to give information, etc

(1) Any person wilfully and maliciously giving false information and so causing an arrest or a search to be made under this Act shall on conviction be liable for imprisonment for a term which may extend to two years or with fine which may extend to fifty thousand rupees or both.

(2) If any person,—

(a) being legally bound to state the truth of any matter relating to an offence under section 3, refuses to answer any question put to him by an authority in the exercise of its powers under this Act; or

(b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an authority may legally require to sign; or

(c) to whom a summon is issued under section 50 either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce books of account or documents at the place or time,

he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure.

(3) No order under this section shall be passed by an authority referred to in sub-section (2) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.

Section 64. Cognizance of offences

(1) No court shall take cognizance of any offence under section 62 or sub-section (1) of section 63 except with the previous sanction of the Central Government.

(2) The Central Government shall, by an order either give sanction or refuse to give sanction within ninety days of the receipt of the request in this behalf.

Section 65. Code of Criminal Procedure, 1973 to apply

The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act.

Section 66. Disclosure of information

The Director or any other authority specified by him by a general or special order in this behalf may furnish or cause to be furnished to—

(i) any officer, authority or body performing any functions under any law relating to imposition of any tax, duty or cess or to dealings in foreign exchange, or prevention of illicit traffic in the narcotic drugs and psychotropic substances under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

(ii) such other officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify, by notification in the Official Gazette, in this behalf, any information received or obtained by such Director or any other authority, specified by him in the performance of their functions under this Act, as may, in the opinion of the Director or the other authority, so specified by him, be necessary for the purpose of the officer, authority or body specified in clause (/) or clause (if) to perform his or its functions under that law.

Section 67. Bar of suits in civil courts

No suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under this Act and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government for anything done or intended to be done in good faith under this Act.

Section 68. Notice, etc., not to be invalid on certain grounds

No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order, document or other proceeding if such notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.

Section 69. Recovery of fines

Where any fine imposed on any person under section 13 or section 63 is not paid within six months from the day of imposition of fine, the Director or any other officer authorised by him in this behalf may proceed to recover the amount from the said person in the same manner as prescribed in Schedule II of the Income-tax Act, 1961 (43 of 1961) for the recovery of arrears and he or any officer authorised by him in this behalf shall have all the powers of the Tax Recovery Officer mentioned in the said Schedule for the said purpose.

Section 70. Offences by companies

(1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention 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 containing in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of any company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section,—

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

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

Section 71. Act to have overriding effect

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

Section 72. Continuation of proceedings in the event of death or insolvency

(1) Where—

(a) any property of a person has been attached under section 8 and no appeal against the order attaching such property has been preferred; or

(b) any appeal has been preferred to the Appellate Tribunal, and—

(i) in a case referred to in clause (a), such person dies or is adjudicated an insolvent before preferring an appeal to the Appellate Tribunal; or

(ii) in a case referred to in clause (b), such person dies or is adjudicated an insolvent during the pendency of the appeal,

then, it shall be lawful for the legal representatives of such person or the official assignee or the official receiver, as the case may be, to prefer an appeal to the Appellate Tribunal or as the case may be, to continue the appeal before the Appellate Tribunal, in place of such person and the provisions of section 26 shall, so far as may be, apply, or continue to apply, to such appeal.

(2) Where—

(a) after passing of a decision or order by the Appellate Tribunal, no appeal has been preferred to the High Court under section 42; or

(b) any such appeal has been preferred to the High Court,— then—

(i) in a case referred to in clause (a), the person entitled to file the appeal dies or is adjudicated an insolvent before preferring an appeal to the High Court, or

(ii) in a case referred to in clause (b), the person who had filed the appeal dies or is adjudicated an insolvent during the pendency of the appeal before the High Court,

then, it shall be lawful for the legal representatives of such person, or the official assignee or the official receiver, as the case may be, to prefer an appeal to the High Court or to continue the appeal before the High Court in place of such person and the provision of section 42 shall, so far as may be, apply, or continue to apply to such appeal.

(3) The powers of the official assignee or the official receiver under subsection (1) or sub-section (2) shall be exercised by him subject to the provisions of the Presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920), as the case may be.

Section 73. Power to make rules

(1) The Central Government may, by notification, make rules for carrying out the provisions 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 form in which records referred to in this Act may be maintained;

(b) the manner in which the order and the material referred to in subsection (2) of section 5 to be maintained;

(d) the salaries and allowances payable to and other terms and conditions of service of Members of the Adjudicating Authority under sub-section (9) of section 6;

(e) the salaries and allowances payable to and other terms and conditions of service of the officers and employees of the Adjudicating Authority under sub-section (3) of section 7;

(f) the manner in which and the conditions subject to which the properties confiscated may be received and managed under sub-section (2) of section 10;

(g) the additional matters in respect of which the Adjudicating Authority may exercise the powers of a civil court under clause (a) of sub-section (1) of section 11;

(h) the nature and value of transactions in respect of which records shall be maintained under clause (a) of sub-section (1) of section 12;

(i) the time within which the information of transactions under clause (b) of sub-section (1) of section 12 shall be furnished;

(j) the manner in which records shall be verified and maintained by banking companies, financial institutions and intermediaries under clause (c) of sub-section (1) of section 12;

(k) the procedure and the manner of maintaining and furnishing information under sub-section (1) of section 12 as required under section 15;

(l) the manner in which the reasons and the material referred to in sub-section (2) of section 16 shall be maintained;

(m) the rules relating to search and seizure under sub-section (1) of section 17;

(n) the manner in which the reasons and the material referred to in sub-section (2) of section 17 shall be maintained;

(o) the manner in which the reasons and the material referred to in sub-section (2) of section 18 shall be maintained;

(p) the manner in which the order and the material referred to in subsection (2) of section 19 shall be maintained;

(q) the manner in which records authenticated outside India may be received under sub-section (2) of section 22;

(r) the form of appeal and the fee for filing such appeal, under subsection (3) of section 26;

(s) the salary and allowances payable to and the other ¹[terms and conditions of service (including tenure of office)] of the Chairperson and other Members of the Appellate Tribunal under section 30;

(t) the salaries and allowances and the conditions of service of the officers and employees of the Appellate Tribunal under sub-section (3) of section 34;

(u) the additional matters in respect of which the Appellate Tribunal may exercise the powers of a civil court under clause (i) of subsection (2) of section 35;

²[(ua) conditions subject to which a police officer may be authorised to investigate into an offence under sub-section (1-A) of Section 45]

(v) the additional matters in respect of which the authorities may exercise powers of a civil court under clause (f) of sub-section (1) of section 50;

(w) the rules relating to impounding and custody of records under subsection (5) of section 50;

(x) any other matter which is required to be, or may be, prescribed.

——————–

1. The words “terms and conditions of service” Subs. by Act No. 20 of 2005 w.e.f. 21-5-2005.

2. Sub. Sectioin (ua) Inserted by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 74. Rules to be laid before Parliament

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

Section 75. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty :

Provided that no order shall be made under this section after the expiry of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

Schedule

SCHEDULE

[See section 2(y)]

PART A

PARAGRAPH 1

OFFENCES UNDER THE INDIAN PENAL CODE

Section	Description of offence
121	Waging, or attempting to wage war or abetting waging of war, against the Government of India.
121A	Conspiracy to commit offences punishable by section 121 against the State.

PARAGRAPH 2

OFFENCES UNDER THE NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES ACT, 1985

Section	Description of offence
15	Contravention in relation to poppy straw.
18	Contravention in relation to opium poppy and opium.
20	Contravention in relation to cannabis plant and cannabis.
22	Contravention in relation to psychotropic substances.
23	Illegal import into India, export from India or transhipment of narcotic drugs and psychotropic substances.
24	External dealings in narcotic drugs and psychotropic sub-stances in contravention of section 12 of the Narcotic Drugs and Psychotropic Substances Act, 1985.
25A	Contravention of orders made under section 9A of ^he Narcotic Drugs and Psychotropic Substances Act, 1985.
27A	Financing illicit traffic and harbouring offenders.
29	Abetment and criminal conspiracy.

PART B

PARAGRAPH 1

OFFENCES UNDER THE INDIAN PENAL CODE

Section	Description of offence
302	Murder.
304	Culpable homicide not amounting to murder, if act by which the death is caused is done with the intention of causing death.
307	Attempt to murder.
308	Attempt to commit culpable homicide.
327	Voluntary causing hurt to extort property, or a valuable security, or to constrain to do anything which is illegal or which may facilitate the commission of the offence.
329	Voluntary causing grievous hurt to extort property, or a valuable security, or to constrain to do anything which is illegal or which may facilitate the commission of the of¬fence.
364A	Kidnapping for ransom, etc.
384 to 389	Offences relating to extortion.
392 to 402	Offences relating to robbery and dacoity.
467	Forgery of a valuable security, will or authority to make or transfer any valuable security, or to receive any money, etc.
489A	Counterfeiting currency notes or bank notes.
489B	Using as genuine, forged or counterfeit currency notes or bank notes.

PARAGRAPH 2

OFFENCES UNDER THE ARMS ACT, 1959

Section	Description of offence
25	To manufacture, sell, transfer, convert, repair or test or prove or expose or offer for sale or transfer or have in his possession for sale, transfer, conversion, repair, test or proof, any arms or ammunition in contravention of sec¬tion 5 of the Arms Act, 1959. To acquire, have in possession or carry any prohibited arms or prohibited ammunition in contravention of section 7 of the Arms Act, 1959. Contravention of section 24A of the Arms Act, 1959 relat¬ing to prohibition as to possession of notified arms in dis¬turbed areas, etc. Contravention of section 24B of the Arms Act, 1959 relat¬ing to prohibition as to carrying of notified arms in or through public places in disturbed areas. Other offences specified in section 25.
26	To do any act in contravention of any provisions of sec¬tion 3, 4, 10 or 12 of the Arms Act, 1959 in such manner as specified in sub-section (1) of section 26 of the said Act. To do any act in contravention of any provisions of sec¬tion 5, 6, 7 or 11 of the Arms Act, 1959 in such manner as specified in sub-section (2) of section 26 of the said Act. Other offences specified in section 26.
27	Use of arms or ammunitions in contravention of section 5 or use of any arms or ammunition in contravention of section 7 of the Arms Act, 1959.
28	Use and possession of fire arms or imitation fire arms in certain cases.
29	Knowingly purchasing arms from unlicensed person or for delivering arms, etc., to person not entitled to possess the same.
30	Contravention of any condition of a licence or any provi¬sions of the Arms Act, 1959 or any rule made thereunder.

PARAGRAPH 3

OFFENCES UNDER THE WILD LIFE (PROTECTION) ACT, 1972

Section	Description of offence
51 read with section 1 7A	Contravention of provisions of section 17A relating to prohibition of picking, uprooting, etc., of specified plants.
51 read with section 39	Contravention of provisions of section 39 relat¬ing to wild animals, etc., to be Government property.
51 read with section 44	Contravention of provisions of section 44 relat¬ing to dealings in trophy and animal articles with¬out licence prohibited.
51 read with section 48	Contravention of provisions of section 48 relat¬ing to purchase of animal, etc., by licensee.
51 read with section 49B	Contravention of provisions of section 49B re¬lating to prohibition of dealings in trophies, ani¬mal articles, etc., derived from scheduled animals.

PARAGRAPH 4

OFFENCES UNDER THE IMMORAL TRAFFIC (PREVENTION) ACT, 1956

Section	Description of offence
5	Procuring, inducing or taking person for the sake of prostitution.
6	Detaining a person in premises where prostitution is carried on.
8	Seducing or Soliciting for purpose of prostitution.
9	Seduction of a person in custody.

PARAGRAPH 5

OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT, 1988

Section	Description of offence
7	Public servant taking gratification other than legal remuneration in respect of an official Act.
8	Taking gratification in order, by corrupt or illegal means, to influence public servant.
9	Taking gratification for exercise of personal influence, with public servant.
10	Abetment by public servant of offences defined in section 8 or section 9 of the Prevention of Corruption Act, 1988.

1 … 115 116 117 118 119