The Punjab State Aid to Industries Act, 1935

 
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The Punjab State Aid to Industries Act, 1935 
 
Act 5 of 1935 
 
 
 
 
 
 
 
 
Keyword(s): 
Borrower, Cottage Industry, Village Industry 
 
 
TIE PUNJAR STfiI'E AlD TO 1NI)USTHF-S hC'I'. 1935 
Punjab Act V of 1935 
Preamble 
TABLE OF CONYE-WS 
cm 1 
Preliminary 
Seclions 
1. - Sbon rille, exlent and commencement. 
2. Defiii lions. 
3. 
4. 
5. 
6. 
7. 
8. 
9. 
10. 
ti. 
12. 
13. 
14. 
15. 
' 16. 
CHAPTER TI 
Esmbllshdlcni of Board 01 Indusaies. 
Procedure In default of elcction of members. 
Vice-Chairman. 
Elecuon and appointmenu to be nodfied in Official Gazette. 
Tcm~ of ofr~cc. 
Kcmval of memkrs. 
Casual vacancies. 
Allowances and fees. 
President a[ meerings. 
In~ercsted members nok lo vole. 
Power af 13oard ro make icgualtibns. 
Supersession of Duard. 
Duty or Board. 
Documents and rcpurls ro be lmlisbed to Ute Smtc Oovcmment 
UIWR 111 
General Yrouisiont; Regarding the Giving of State Aid 
Forrns of State Aid. 
lndustnes to wlrich scverd fam~s of S~le Aid may be given. 
Applicauulls for Slalr: hid. 
PUNJAH STATE ND TO INDUSTRIES 
ACT, 1935 
PUNJAB ACT V OF 1935 
/Received the assetlr of His Excellency the Governor on the 
71h December; 1935, and that of His Excellency the Wceroy 
and the Governor-General on the 19th January, 1936, 
and was first published in the Punjub Gazette, 
Extraordinmy, of the 2 5th Junuary, 1 936. ] 
L. For Stalemcnl of Objects and Reasons, scc Putljab GazcUe, 1938, Part I, page 
1120, and Tor Proceedings in Assembly, scc Punjab Legislalivc Assembly 
Deba~cs. Votumc W, page 139. 
2. For Slakmcn of Objccls and Reasons, scc Punjab Gazettc, 1939, Exuaordimy, 
page 502, and for Proceedings in Assembly, scc Punjab Legislativc Asscmbly 
Debatcs, Volurnc X, pages 230-237 and Volume XI, pagcs 237 md 485-5 13 
arid volumc XI-A, pages 88-99. , 
3. For Sla~ernent of Objccts and Reasons. see Punjab govern men^ Gazc~ie 
(Extraordinay). datcd 2nd November, 1953. 
4. For Slate of Objects and Reasons, sec Punjab Govcrnrncnt Gazette 
(Exuaordinary), dated 241h Jdy, 1957. 
5. For Statement of Objccls and Heasons are Punjab Government Gazclte 
(Extraordinary), 1935, pagcs 66-67. fo; rcporl of Select Cornmitree, see he 
Punjab Gucttc, 1935. Part V, Pages 3 1 -33; and lor proceedings in Council, 
see Punjah Legislalive Council Dcbates, Volume XXVII, pagcs 42-59, 
922-939, 971-1003, 1233-1238. 
I 
Year 
1935 
2 
No. 
V 
3 
Shor~ title 
The Punjab SUE 
Aid to Lndusuies 
Acr, 1935 
4 
Wbcrhcr rcpcalcd or otherwise 
dfcctcd by legislation 
Amended by Government ol India 
(Adaptation of Indian Laws) Order{ 1337 
Amcnded by Punjab Act VI of 1938> 
Amcndcd by Punjab Act LlI of 1940 
Amended by thc Indian Independence 
(Adaptauon of Bengal and Punjab Acts) 
Order of 1948. (G.G.O. 40) 
Amcndcd by he Adaptation of Laws Order, 
1950 
Amended by be AdaptaLion of Laws [l'hird 
Amendmcnl) Ordcr of 195 1 
Amendcd by Punjab Act No. 39 of 1953~ 
Extended Lo the rerritorics which 
immcdialely before Lhe 1st November, 1956, 
were comprised in me State of htiala and 
East +jab SLalcs Unioa by Punjab ACL 23 
of 1957 
254 ST~ AID m INDIISTRIFS [I935 : Pb. Act V 
An Act to encourage the development or Endustries 
in 6[Hary~a] by the grant of State aid. 
Preamble WIIEREAS it is expedient further to improve and regulate the giving 
of Stare aid for induslrial purposcs ; 
1 
And whereas the previous sanction of the Governor-General required 
under sub-sec tion (3) of section 80-A of the Ciovernmenl of India Act 
and thc previous sanction of Ihc Governor required under section 80-C 
of thc said Act have bccn obtained ; 
3 2 
Ti is hereby enactcd as follows :- 
4 
hmended by Punjab Acr 12 of 1359' 
hmended by Haryana Adapladon or Laws 
Order, 1968 
hmend5d by Haryana ACL 46 
of 1973 
Amcnd* by Haryana ACI 26 
or 1975 
~mend:d by Haryana ACL 15 
of 1978 
CHAPTER I 
Preliminary 
Short title, 1. (1) This Act may be called the Punjah Stale Aid to Industries 
:xtenr and Act, 1935. mrnmmcment 
1. For Stalement of Objecls and Reasons, see Pluijah Government Gazetre, 
IExwdnrdinary), darcd 20h April, 1959. 
2. Sw IIryana Government Gazetre (Extraordinary), daled fie 291h Octobcr, 
1968. 
3. For Stalcment of Objects and ltedsons, sce Haryana Government Gazcitc 
(Extraordinary) dared the 6- 11-19731 page 2032. . , 
4. For S~atemcnk ol ~hjecls- an4 ,lteasons, see Haryana Governnienr Gweue 
(~xuaordinar~) dated be 21-7- 1975, page 858. 
5. For Slarement of Objccu nnd Reasons, scc I laryana Govemmcnt Gaic~te 
(Extraordinary) dated Ihc 3-3- 1978, pagc 3 18. 
6. Subniruted. for.he words "Wljab" by he Adaphuon of Laws Order, i968. 
... 
1935 : Pb. Act V ] STATE All) TD INDlfS'IRlES 
(3) It shaU come in to iorce '[in the principal territories] 
on such date3 as the '[Stale] Gove~mnenl rnay,hy notification, 
appcint in this behalf ' [and in the transferred territories on the 
24th July, 1957.1 
2. In this Acr, unless there is anything rcpugnanl in the Definirims. 
subject or contexi- 
(I) "Board" means thc Board of Industries constirutcd 
under section 3 of this Act; 
(2) "Borrower" means an individual, company or 
associa tion or body of individuals, whethcr 
incorporaled or not, Lo whom or to which State aid has 
been granled under Lhis Act; 
VII of (3) "Company" means a company as defmed in the Indian 
1913. Companies ACL, 1923;j 
(4) 'Director" meam the Director of Induslries, '[Hary anal 
6[and includes any officer aulhorized hy the State 
Government to perform all or any of the functions of 
the Director under his Act;] 
5 "industry" rncans any industrial busincss or cnlerprise 
conducted w underlaken either by an individual or by 
a company, association or body of individuals, whether 
incorporated or not; 
. '1161 "cotlage Industry" means any iridustry carried on by a 
worker in his -home and includes dairy farming, 
bee-keeping, lac-making and kccping a poultry farm; 
1. Subslituled for rhe words "Punjab" by rhc Adaplalion of Laws Order, 1968. 
2. Inserled by the Haryana Adaptation of Laws Order, 1968. 
3. The Act camc inlo force on 7th March, 1936,-vide Punjab Governrncnt 
NoLificalion No. 1021 -1 & Lm, dated 6th March, 1936. 
, , 
7815 
4. Substiiu tcd for Ihe word "kovincial" by Ihc Adaplation of Laws. Order, 1950 - 
5. See now Companies Act, 1956. 
6. Insened by Punjpb.Acr 12 of 1959. , 
7. Inserted by Punjab Act I11 of 1940, seclion 2 (i). ' - 
STA'IX d~ m INDIISTRIES [I935 : Pb. Act Y 
(7) "Village Industry" means any indusuy which forms rhe 
nomal occupation, whether whole-time or pal-time, of any 
class of lhc rural popula~ion of [he '[S tatell; 
2[(8) LLMa~hinery'' includes plant, apparatus, tools and orher 
appliances required for the purpose of' carrying on any 
industrial operation or process; 
'(9) "Prescribed" means prescribed by rules made under rhis Act. 
CHAPTER I1 
stablishmcnl ,3. (1) For carrying out the purposes or this Act, the '[State] 
Government shall, as soon as possible, after the commencement ;f this 
~dusmes. Act, establish a Board to be called the "Board of Industries" consisting 
of the fullbwing members, namely :- 
(a) Minister-in-Chargc 01 Induslries, 3[HaryanaJ; 
(b) the Director of Industries, 3[Haryana]; 
(c) '[three]rnembersto beappointedbythei[State]Government 
one of whom shall be a banking ex per^ ; 
[(d 6[lhreej members lo be elected by the 3[H~ana] Legislative 
Assembly from among their members, election being in 
accordance with lhe principle of proportional rcprcsentatioi~ 
by means of the single transferable vole.] 
(,)7* * * * * * * 
Cf) one member to be elected by the 31jHaryana] Chamber of 
Commerce; and 
(g) one member lo be elected' by the Indian Chamber of 
Commerce : 
1. Substituted for Ibe word "R-ovincc" by Uic Adaplation of Laws Order, 1950. 
2: Exisring claws (6) and (7) rcnum bered, rcspcctivel y as (8) and (9) by Punjab 
Act LII of 1940, section 2(2). 
3. Subs tiluted for the word "Fun jab" by the Haryana Adaptahon of Laws order, 
1968. 
4. Substi tuled for Ihe word "four" by the lndian Independence (Adapmlion of ~cngal 
and Punjab ACE) Order of 1948. (G.G.O. 4Oj. 
5. Substiwted for he old clausc (d) by Governmen1 of India (Adaplation of lndian 
I,aws) Order, 1937. - . 
6. Substituted for the word "five" by Lhe Indian Indepcndcnu: (A,daplauon of Bengal 
and Punjab Acts) Order of 1948. (G.G.O. 40). 
7. Omitted by be Indian Tndepe!~dcnce (Adaplation of Bengal and Punjab Acts) 
Order of 1948. (G.ti.O.40). , 
1935 : Pb. Act V ] .STATE AID m INDUSTRIB 257 
Provided that the Board shall have power ro invite [or consultation 
on any particular question before it, no1 more than ihrcc persons spccidy 
qual ificd to advisc on the martcr in question or having special knowtcdge 
of local conditions iri the area where the indusuy in question is situate. 
And provided fu~er that at any mwung of the Board the Minisler 
shall have power to invite any person for consultation on any parricular 
question. 
Any person so invited whethcr by the Board or by the Miniskr shaIl 
not have the right to vote. 
(2) Thc Miniskr-in-charge of Industries shall be ex-ofJscio 
Chairman and the Direclor shall be ex-oficio Smrcmy of thc Board. 
(3) '[Four] member of the Board shall form a quorum. 
4. If by such date as may be fixed by Lhe 2[State] Government, 
any of [he bodies referred to in cIauses (d), (e), (f) and {g) of 
sub-section (I) of section 3 does not elect a mcmber to be elected by it 
under the provisions of that section, the 2[State] Government shall appoint 
a suilable person from among lhosc bodies lo be such member, and any 
person so appointed shall be deemed to be a mcmber, as if he had been 
duly electcd by the body faiiing to elect a member under the said 
provisions. 
5. The Hoard may from time lo time elect, for such period as it 
Lhinks fit, one of its members to be Vice-Chairman. 
6. The names of the Vice-Chairman and of the appointed and 
clecled membcrs of lhe Board shall be published by the 2[State] 
Governmen[ in he 3[0fficial Gar.xtte]. 
7. (I) Thc Vice-Chairman or any other appointed or clected 
member may resign his officc by giving notice in writing to the Chairinan. 
(2) (a) Subject lo the provisions of this Act an appointed 
member shalI hold office for '[five] ycars or unless the 2[State] 
Government otherwise directs; and an elected member shall hold office 
for 4[five] years or until such time as he ccses lo be a member of the 
body electing hini; whichevcr is shorter. to be a member of Ihe body 
electing him, whichever is shomr. 
I. Substituted for lhe word "five" by tbe Indian hdependencc (Adaplalion of 
Ben~al and Punjab Acts) Order or 1948, (G.G.O. 40). 
2. Subsiitutcd for rhe word "Prorincial" by rhc Adaptation oTLaws Order. 1950. 
Rocedurc in 
defaull of 
eleclion of 
mcrnbcrs. 
Electivns a11d 
appoinlmcnls 
to be nolified 
in OfficiaI 
Gazette. 
'l'errns of officc. 
3. Substituted for he words "Punjab Gmelte" by thc Governmen1 of India 
(Arlaphrion OK Indian Laws) Order, 1937. 
4. Subslituled Tor the words "three" by Punjab Act VI of 1938, secliot~ 2. 
258 STAI'E AID TD INDUSTRIFS 11935 : Pb. Act V 
[Provided thai in the case of mem bcrs elected under the provisions 
of scction 3- by bodics other than the =[Haryana) Legislative Assembly, 
the [em of membership shall, in any case terminate automatically on 
the dissolulion of the '[Haryana] Legislative Assembly.] 
(b) An outgoing member may, if orherwise qualified, he re- 
elected or re-appoinled. 
(3) Notwithstanding thc expiration of the term mentioned in 
sub-section (21, an appointed or clecled member shall continue to hold 
offlce untiI the vacancy caused by the expiration of the said term has 
been Wed, provided that no vacancy shall be allowcd LO remain unfillcd 
for more than six months. 
Rcmoval of 8. (1) The 3[State] (iovernment may, by notification, removc the 
members. Vice-Chainnan or any member of a Board if he- 
(a) refuses lo act or becomes incapable of acring as a mcmbcr 
of the Board ; 
(6) is declared insolvent ; 
(c) is convicted of any such offence or is subjected by a criminal 
courl LO any such order as in the opinion of the 3[Srare] 
Government implies a defecr of characler which unii ls him 
to conlinue to he a Vice-Chairman or member of the 
Board ; provided that beforc Iha 3[StatejGovemment notifies 
the removal of a member under this sub-scction, the reason 
for his proposed removal shall bc communicated LO the 
member concerned and he shall be given an opportunily of 
kndering an explanation in writing ; 
I. Added by Punjab ACL VI of 1938, section 2. 
2. Substituted for the word "Punjab" by the Haryana Adaptation of Laws 
Ordcr, 1968. 
3. Subslituted for be word "Provincial" by thc Adaptauon of Laws Order. 
1950. 
([I) without excuse, sufficienl in the opinion of Lhe '[State] 
Government is absent, wirhout the conscnt of the Board from 
morc lhan four consecutive meetings of the Board. 
(2) The '[State] Government may fix a period during which 
any person so rcmvved under clause (b) or (c) of sub-sec tion (1) of this 
section shall nor be eligible for re-appointmcn~ or re-elec tion. 
9. When the place of any appointed or elected member of a Board Casual 
becomes vacant by his removal, rcsignation or dealh, a new member vacancies. 
shall be appointed or elected in thc manner provided in section 3 : 
Provided that if the placc of any member elected by thc '1 Haryana] 
Legislative ZIAssembIy J becomes vacant, the 4[State] Governmen1 may 
nominate another '[* * * * * * *] member of thc [Haryanaj Legislaiivc 
2[Asscm bly] , in his placc : 
Provided further that any person so appointed, eleclcd or nominated 
under this section shall be subjecl to retirement at the same time as if he 
had becomc a member of Lhe Board on the day on which the member of 
the Board in whose placc he is appointed, elected or nominated was last 
appointed, elected or nominated a member of the Board : 
Provided further that no act of the Board or of its officers shall he 
deemed lo be invalid by reason only that the number of members of the 
Board at the time of the performance of such act was less than the numbcr 
provided by section 3. 
10. The members of the Board and the mernbcrs of Committees, Attowances 
which may be appointed by the Board, when necessary, shall be paid and fees. 
travelling aIIowances of the prescribed amount and on rhc prescribed 
conditions for attending meclings of the Board, or for performing any 
duty assigned to them by the Board for thc purposes of this Act. 
I 1. (I) The Chairman or in his absence the Vice-Chairman shall Preside111 at 
prcsidc at every meeting of the Board, and shall have a second or casling meetings. 
vote in all cases of equalily of votes. 
1. Subslirulcd For ae word "Provincial" by me Adaplalion of Laws Order, 1950. 
2. Subsb tutcd f~r ihe word "Council" by Ihe Govcmmen~ of India Order, 1950. 
3. Subslituted Tor he word "Punjab by the Adaplauon of Laws Order, 1968. 
4. Substituted for the word " Provincial" by the Ahplalion of Laws (Adapta~ion 
or Indian Laws) Order 1937. 
5. The word "Non-Official" was omitted by Lhc Governmcnl of Tndia (Adapmdon 
of Indian Laws) Order, 1937. 
260 STATE AID IU INDUSTRIB [I935 : Pb. Acf V 
interesred 
members not 
to vae. 
Powcr of 
13oard to 
make 
regulations. 
Supersession 
or Board. 
(2) in thc abscnce of borh chc Chairman and thc Vicc-Chairman 
ihe members prcsenl at any meeung may elect one of lheir member to 
preside. who shall have a second or casting vote in all cases of cquality 
of votes. 
12. No member of the Board shall vote on any question coming 
before he Board for consideration in which (olhenvjsc than in its general 
application to all persons and properties within the '[Stare]) he has a 
pecuniary interest. 
Explanation. - In case of any question arising whether a member 
has or has not a pecuniary interest, the decision of the Chairman shall be 
Iinal. 
13. .(I) The Board may make regulalions consislcn t with this Act 
and ~e rulcs thcreundcr for the carrying of all or any of its purposes. 
2 In particular and without prejudice to the gentrdty of the 
foregoing power, the Board may make regulations regulating or 
determining all or any of the following matters, narncly :- 
(i) the time and placc of its meeting ; 
(ii) hemanner in which noticc of mcctirtg shdf be given ; 
(iii) the conduct of proceedings at meetings ; 
(iv) the division of duties among the members of the Board; and 
(v) theappoinlment,dutiesmdprocedurt:ofspecialCommittecs 
consisting wholly of members of the Roard or partly of such 
members and partly of olher persons. 
14. (I) If at any time it appears to the 2[Starc] Government lhal 
the Board is not properly performing Lhe duties imposed upon it by or 
under this Act, the 2[State] Governmen1 may, after considering any 
explanahon offered by the Board, by an order in wriung specifying the 
reasons for so doing, dissolve the Board and direcl that the vacancies 
shall thereupon be filled by election in respect of elecred mcmbers and 
by appoinunent in respecr of appointed mcmbers in the rnanncr indicated 
I 
above. 
1. substiruled for he word "Province" by me Ahptatiuu oi Laws Order, 1950. 
2. Subsliluted for Ihe word "Provincial" by the AdaptaCion of Laws Order, 1950. 
1935 : Pb. Act V 1 .WAIF AID TI INDUSIUIL$ 26 1 
(2) From the date of an order undcr sub-section (1) until the 
vacancies arc filled, all powers and duiies of the Board shall be exercised 
and performed by such person in such manner as the '[State] Government 
may direct. 
15. 11 shall be the duty of thc Board- 
(u) to reporc to the '[State] Government aftcr such enquiry, if 
any, as it deems necessary or as may bc required by this Act, 
on applications for State %d tha hay be ieferred to it for 
advice by the ' [State] Gov~rnment;'~[or any officer authorized 
in this behall by it]; 
(b) La advise the ![State] ~obernmenl on any matiers Ulat may 
, - 
be referred to it : 
6[Providcd that the State Government shall not sanction State 
Aid wilhout reference to the Board except in the case of a 
loan :- 
(a) sanctiuncd for the payment of Central Sales Tax; or 
(b) the amount of which does no1 exceed ten thousand 
rupees.) , - 
16. If the '[state] ~6iernment so directs; the Secrbtary shall 
lorward to the [S htd Government any document and prepare and submit 
any report relaring to the work of the Board. 
CHAPTER- IU , 
' : :GENERAL PROV[SIONS REGARDING . , GGLV~NG 
OF STATE AID , , 
47. The forms of the stau: aid which ,. . may be givcn may include, 
he following, namely,:.-- , * .. . , .. 
- 'I 
(11) the grant oP a loan ; 
, , (b) , the grant sale or lease ol land, raw matend, firc-wdod, wekr 
or any olher property 2[vestcd] in 3[~ovcmrnentl'for the 
purpdses'ol the "[State] ; 
, , 
1. Subslituted lor ~e word "Provincial" by hc Adaptation ol Laws Ordcr, 1950. 
2. Substitu~cd fora& words;:'of thc Local Government" by lhe Governrnen~ of 
India (Adapration or Indian taws) Order, 1937. 
3. Substiruled for thc words "13s Majesty" by. rhe Adaplation of Laws Ordcr, 
- 1950. 
4. Subsriluled Tor be word "Provi?ce" by Ihe Adaplalion bf laws Ordcr, 1950. 
5. hscned by Punjab &L 12'0~ 1959. ' 
.: I 
6. Snbsrituled by I-Iaryana Act I5 of 1978. 
8. 
Duly of 
Board. 
Documcnls 
and rep or^ 10 
be Furnishcd 
LO he S~atc 
Governmcnr. 
FO~S or S~R 
aid. 
,262 AID TO INDUSTRIES [I935 : Pb. Act V 
'[(c) the paymenr of a subsidy, in the cast of a cottage industry 
or village industry for any purpose ; and in thc casc of any 
o&er industry for the conduct of research or thc purchase af 
machinery] ; 
(d) the suppIy of machinery on the hire-purchase system; 
,' (e) thc guarantee of a rninhurn return on the whole or part of 
thc capital of a joint slock -, company , invested in an industry. 
hdusrries lo 18. State ai-d rnay be givcn to- 
wliicb several 
forms of (a) a new or nasccn~ indusuy; 
Slate aid may (b) an indusuy to be newly e-stablishcd in an area where such bc given. 
, industries are undeveloped; , . .. , 
(c) a cottage industry '[or village industry]; or 
(d) an industry w,hich needs revival, or development'by modem 
methods. 
Application 19. Applications for State aid shall be made to the Dircctor in 
stare aid- . slich form, and shall contain such information as may be prescribed. 
. CHAPTER IV , ,. 
PROVISIONS REGULATING THE GIVING 01: Spa AD ' 
-. , , 
OlHERWISE THAN BY THE SUPPLY OF MACHINERY 
ON THE HIRE-PURCHASE SYSIEM 
Power to grant 20. Loansgran~dunderthischaptershdlbesubjectto thesanction 
Ibans. of the >[State] Government given after consultation with the Finance 
r)cparhneht, providcd that h regard to loans not exceeding a: prescribed 
amount, the 3[State] Government may make rules delegating their powers 
to such authority or officer as hey deem fit. . .. . 
Securiry for 21. 'I(!) (a) On he accep~ancc or an application' for a loan, the 
repaymen[- applican~ shall execute a deed in the prmcribed form,,'bndcrtaking to 
apply the loan to the purpose for which, and to fulfil the conditions on 
which, Ihe loan is granled, rendeag himself &d such propeay as may 
have been specified in the deed as security,, including machinery 
,... . - , . 
1. Subsumled for the old clause, by Punjab ACI III or 1940, secbon 3. . 
2. Inserted by Punjab Acr I11 of 1940, section 3-A. - 
3. Substitulcd for Lhc word "Rovincial" by the ~da&&m of 1,aws Order, i950. 
' ,' 
4. Substituted for clausc (I) by he Yunjab ACL 39 of 1953. 
, , .. .. . 
1935 : Pb. Act V ] . ST.4TE AID TO INDUSTRIES 263 
purchased or any building constructed with the aid of rhe loan. and in 
the cvcnt of such propefiy being found insulficient, rendering thc whole 
of his property liable for the repayment of the loan wilh intercsl and 
costs, if any, incurred by rhe State Government in making or rccovcring 
the loan. 
(b) No transfer, assignment, or charge made or created after the 
cxccution of the deed, in relation to the property specified herein or 
machinery purchased or building constructed with the aid of the loan, 
shall be valid against, the State Government unless it has been made or 
creakd wilh the previous consent in writing of he authority sanctioning 
thc loan.] 
(2) When the application has been made by a fm or,campany the 
deed shall be executed by a duly authorized representative thereof ,-dnd 
the deed shall thereupon be deemed binding on the said firm or company . . , 
and the property of the said firm or company shall bc liablc for Lhc 
rcpaymcn t 01 thc loan in he same manner as if thc loan had bcen granted . . lo an individual. , .. 
22. The loan, togelher with aU interest due thereon, if my; shall Loan how 
bc repayable either in a lump sum or by instalmenb as may be provided repayab1e. 
for in'the deed executed by the borrower under section 21. 
23. (l]Whenanyl~anorinslalmentor interesCthekonfallsdue Noiiceiopay. 
and is not paid on or before Ihe due date or when a loan has been'declarkd 
immediately repayable under section 27, the officer empowered by the 
I [State] Gdvement in this behalf may causc ro bc scrvcd on the borrower 
a noLicc in Ihe..prescribed manner ,calling upon him to pay the sums-due . 
wilhin such lime as may be fixed therein. 
(2) Such notice shall contain an intimalion that in case of deraull 
the said officer will issue a declaration in the prescribed form showing 
the ainount of the debt due and the. property mentioned in the deed as 
liable to satisfy the same. . . 
24. (1) If within bc lime so fixed, the sums due are not paid. the ~m~~~ of 
officer empowered under section 23 may issue the declaration as dcclaralion. 
described in sub-section (2) or the sank 'section. and such declaration 
shall be published in the 2[0fficial Gazette]. 
1. Substituted for he word "Provincial" by the Adaptadon of Laws Orclcr, 1950. 
2. Substirulcd for me word "C;.xzette" by lhc Government of 111dia (Adaptation 
of Indian Laws) Order, 1937: . 
264 STATE AID TO INDUSTRIES [I935 : Pb. Act V 
(2) Such declaration shall be conclusive evidcncc of i!s contenrs, 
and shall not be called into question in any court by Ihc borrower, his 
heirs, IegaI representatives or assigns, '[or by any member of his family 
if he belongs to a Joint Hindu family] 2[nor shall any right, principle or 
rule arising from or under the personal or customary law applicable to 
ihc said persons or any or them, nor anything contained in the =Punjab 
Alienafion of Land Act;1900, affccr the validity or effectiveness of a 
mortgage cxecuted or 01 a declaration published under this Act, or the 
procedure therein provided for enforcement thereof.] 
(3) Such declaration may be produced by the said'omcer, or by 
such othcr person as he may either generally or specially appoinl in that 
behalf before the principal civil court of original jurisdiction, within thc 
local limits of whose jurisdiction any of the property liable for Ihe deb! 
due is situate in the same manner as a decree of which exccuuon is 
sought. 
%ecution of 25. When declaration has been recdvcd by a civil court under 
icclarauon. section 24, the court shall immediately at tach the propeny menlioned in 
the declaration and shaIl pass an order directing that; unless the amount 
mentioned in the declaration is paid within such time, not exceeding f 
two months, as the court may consider reasonable; it may be recovered 
.by saie of the properly mentioned in the declaration as if it weTe a decrcc 
for thc payment of moncy passed by the said court in, the exercise of its 
ordinary civil jutisdiction. .. 
nspeclion and 26. Znanycase~inwhichanapplica~ionforaloanbasbccnmade 
etums. under his Chapter the applicant, and at any rime during-thecurrency of: 
. . 
a loan that has bccn granted the borrower, shall he bound-. 
(a) to comply with any general or special order of the 1)irector 
relaling to the inspection of: the premises, buildings. 
machinery 'And stcjck-in -hand of thc indusky ;' . , , 
(b) LO permit the inspeclion of all accounts relative to the 
industry ; 
' I' 
(c) to furnish full returns of all prod~ctsman~iactured or sold; 
both as regards description and quantity ; . . 
-. 
1. lnscrred by Punjab AcL ,111 of 1940, section 4(a). 
2. Inserted by Punjab Acl HI of 1940. section 4@). :, 
3. Repealed by Adaptahon of Laws ~rnendmen~ Ordcr or 1951. 
1935 : Yb. Acl V 1 STNE AID m INDUSTRIES 265 
(dl to maintain such special accounts and to furnish such 
statements as Ihe Direcror may from lime to time require; 
and 
(e) 10 submil the account5 of Ihc industry to such audit as thc 
Ilirector may prescribe. 
27. It Ihe Director, afkr any inspection provided for in section 
26, js not satisfied that the money lent is being applied to lhc purpose or 
purposes for which the loan was granted or that the conditions on which 
[he loan was- granted are being duly fulfilled, he may declare. 
notwithstanding anything contained in the deed executed under section 
21 that the loan is immediately repayable and shall give notice of such 
declaration to the borrower. 
28. If at any time during Ihe currency of the Ioan, ~e value of the 
security falls below the outstanding balance of the loan, the Dircctor 
may eilher proceed to recoverin the manner laid down in sections 23,24 
and 25 so much of such -balance as is not adequaiely covered by the lhcn 
cxisting value of the security or accept such additional or collateral 
s~curily as he may deem suIficicnl. 
29.. If the borrower fails to comply with-any order under clause 
(a) of section- 26 or does not permit or; obstructs the inspection of the 
accounls rclative ro the industry or makes default in respect of any or the 
particulars sepcified in clauses (c), (d) and (e) of the said section, or if 
the borrower disposes of any profirs in contravention of the provisions 
of section 33, the Director may, after considering any representation the 
borrower may make withiri such time as the '[State] CiovcmmenL may 
allow in this behalf, proceed. 10 recovcr the loan in thc manner laid 
down in seclions 23.24 and 25. 
30. Within fif'lcen days of the reccipt of a notice under sectioas 
27.28 or-29, he borrower may appeal against such ardcr to the '[State] 
Government and the decision of thc '[State] Governmen1 thereon shall 
be final. 
31. The conditions of a grlarantee by the '[S tak] Government of 
a minimum return on the whole or of the capital of a joint stock 
company shall bc- 
a} tha~ Lhe industry shall be subject to the conditions of seclion 
26 in respect of inspection, returns and accounts ; 
PenaIrv for 
dcfaulr in 
applying dle 
loan. 
Powcr LO 
adjusL securiry 
during 
currency of 
loan. 
Powcr lo 
recover loans. 
Govcnunen~ 
guarantee of a 
minimum 
return. 
1. Substiluted Tor Lhe word "Provincial" by the Adaptation of Laws Order, 1950. 
Subsidies. 
(b) thal a minimum portion of the authorized capilal or rhc 
industry Lo be fixed according to the circumstances of each 
case has been subscribed and paid in cash; 
(c) that no such guarantee shall in any case cxtend beyond a 
period of 5 years ; 
(dl that during the period Lo which the. guqantcc exlends . ihc 
'[Slate] Ciovernrncnl may impose on such persons as ir 
considers to be dircclly concerned in the promolion of ihe 
company, a condilion that if they transfer any of thcir shares 
without the consent of the ' [State] Govcrnment, they shall 
be liable joinrly and severally to rerund to lhe '[State] 
Government any sums paid lo lhe company in fulPhent of 
thc guarantee ; 
(e) that the '[State] Government silaH be enritIed to recover the 
wholc or vy part of the sum paid by the '[State] Govcrnmcnt 
on account 01 such guarantee with interest at che rate in force 
on the date of the agrmment far loans granted under Lhe 
Land Improvement Loans Acr, 1883, at any rime after such 
period as may have been laid down in the agreement. 1 
provided that the '[State] Government is satisfied that the 
company is paying or is able to pay intcrcst or a dividend 
upon the capiral shown as-paid up in exccss of such rate as 
may be fixed in the agreement and such recovcry shall be 
made in the manner Iaid down in Scctions 23:24 and 25- : 
, , 
provided that the ~bm'recoverable by Lhe '[Sfate] Govcrnment 
in any one year shall not exceed a sum cqual to half the net -. . 
profits made by the company in the preceding year in excess 
of the sum required for the payment of intcrcst or dividend 
a1 the rate fixed in hc agreement. 
32. 2[A subsidy to a cottage industry or a village industry for any 
purpose and a subsidy to any other indusu for the conduct or research 
or for purchase of machinery may be granted by thc '[State] ~o~emment 
on such conditions as may bc prescribed in that behalf.] 
I. Subslimled for Ihc word "Provincial" by the Adaplalion of Laws Ordcr, 1950. 
2. Subsululed for the old sdon by hnjab kc1 III 01 1940, secuon 5. 
1935 : Pb. Act V ] STATE AID rn INDUSTRIES 267 
33. No borrower shall pay any dividend or dislribute or takc any Uisposal of 
profits in excess of such percentage ratc upon the arnoun t of the capital pro fils 
conditions on of the industry as ihe '[State] Govcmmenr may from me to timc fix, whjchSlaE aid 
un ti1 Ulc conditions on which he Slate aid has bcen granted are fulfilled, is given 
fulfilled 
34. Norwi thsianding anything contained elsewhere in rhis Chapter, Gov~~-I-I~~L 
Ihe '[Sraa] Government may, by the appointment 01 ils own directors or CO"UO' Of 
aided otherwise exercise such control over die conduct of the h~ldustry to which 
the Stale aid has been given as shdl suffice in ils opinion to safeguard its 
interests, provided lhat such right has been expressly rcserved by 
igrcemenl at Lhe time the aid was granted. 
, 235. Notwithstanding anything contained in seclions 23, 24 and Mebod of 
25, any amounl payable to Lhc State Government under this Act or by recOve~ Of 
virt-ue of a contract entercd into under this Act including interest and money due. 
-costs, j f any, 3[shall] be recoverable as arrcars of land revenue.]. 
CHAPTER V 
36. NO machinery shall be supplied by the '[Stare] Government Percenlage or 
on the hirc-purc hase system unless the applicant therefor deposits with lo bC: 
dejmsilcd by he Direclot such percentage of the cost there01 as may be prescribed, binr and furnishes security Tor the unpaid portion of such cost in the same 
manner as for a loan granted under the provisions of Chapter IV. 
. 37. Whcn an application is allowed. the ~irectof shdl, subject to pluuculns LO 
andinaccordancewithanyrulcsthatmay bemadeunderthisAct,make bcsPcifi*in 
an ,order specifying the following particul;irs, namely :- . order when 
appIication is 
(a) ke amount of each instalmcnl of rcnl to be paid for rhe hire allowed. 
of the machinery and the number of such instalrnents to be 
paid beForc ihe machincryshall become the p~opcrQ of the 
hirer; , 
. (b) the anlount of intcres~, if any, to be paid with each ins talmcnr 
of renl on the remaining unpaid instalrnents ; 
(cJ the dates on which and the manner in which thc aforesaid 
paymcnls shall bc made ; md 
, - 
1. Subslitu~ed for be word "Provincial" by the Adap~ation of Laws Ordcr, 1950. 
2. Substiruled for section 35 by Punjab Acl39 of 1953. 
3. Subs[imred hy Haryana Act 46 of 1973. 
268 S'UIE AID 'IU I~USIIUES [I935 : Pb. Act V 
(d) such olher particulars as may bc prescribed. - 
Condilions of 38. Until-lhc hiring is terminated in lhc manner hcrcinafter 
supply of provided, the following provisions shall apply, namely :- 
machinery on - 
birc purchase 
svs~ern . 
(a) The hirer shall pay punctually and wirhout dcrnand Ihe 
instalmenis ol rent and amount of intresr specified in rhc -, ----- 
order referred to in secLion 37. 
(b) The hirer shall retain the machinery in h~ own possession 
in good and serviceable order and condition and shall not, 
without the prcvious written consent of Ihe Dircctor, makc 
any addition thereto or alteralion thcrcin, nor removc [he 
machinery or any part thereof from [he premises specified 
in Ihe application for the supply thereof. 
(c) The machinery shall remain lhe sole and absolute 
of the 2[Govergmcnt]], and any transfer thcreof or rtssigmcnr 
of any right, tit@ or interest herein or the creation of any 
mortgage encumbrance or any oher charge thereon by [he 
hirer shall be void as against the 3[Stak] Government unlcss 
it has been made with the previous written consent of lhe 
Director. 
(dl The machinery shall not be lia5le to distraint, attachment or ' , 
saie by any process under any law for the time being in force, 
otherwise than under this Act. 
(e) The machincry shall bear a metal plate in the prescribed 
form, and any who ~illl~ll~ rcrnoves or defaccs such 
piate shall be liable to a fine not exceeding five hundred 
rupees. It shall be presumed until the contrary is proved that 
mach_ineq bearing such metal plate is the [property of the 
2[Government]] hired out under this Chapter. 
(D The hirer shall permil [he Director or any au thorixcd 
by the Director in this behalf to inspecl Ihe machinery a1 all - 
reasmable times, and the Director or such other person shall 
havc all such POWC~S of entry as may be necessary for the 
purpose of making an inspection. 
1. Subs(ituted for thc words "properly of the Local Govemrnenr" by lllc 
Government of India (Adaptation of Indim Laws) Order, 1937. . , 
2. Subsumred for Ihe word "Crown" by the Adaptation of Laws Order, 1950. 
3. Substituted for the word "Provincial" by the Adaprarion of Laws Order, 1950. 
(8) In addition to thc Iorcgoing conditions thc hires shall bc 
bound by such olher conditions consistent therewith as may 
bc prescribed by rules made under this Act, or may be 
imposed by the Director in any parlicular case. 
39. If the hirer makes default in paying Lhe rent of the machinery Consequences 
or any sum payable as interesl or any other charges due from him under of dehult by 
this Chap~r or fails lo comply with any of thc conditions which are hirer. 
contained in, or may be imposed under section 38, Ihe Director may, 
after giving him 16 days' notice terminalc lhc hiring and he or any othcr 
officer authorized by him in this behalf may hereupon enter the premises 
in which rhe machinery is for the time being kept, whcther such premiscs 
belong lo the hirer or not and seize-and rake away the same. 
40. (1) If thc machinery is seized and taken away under sccrion Oplion of 
39  he hirer shall have the option to be exercised wihh one month alter hirer to 
purc hasc such a seizure or such longer period as may be allowed by the Director machinery 
in this- bchall. of purchasing the same by payment to the Director of Ihc ,,i,,d for 
un-paid balance of the cost thcrccf, together with such other amounts as default. 
may be due, and the cost ol and expenscs incidental to such scizure and 
removal. I 
(2) If within ~hc period specified in sub-section (I) the hirer 
.does noicxcrcise rhe option of purchase, the Director shall proceed lo 
dispose of the machinery. 
41. If the Dkctor terminates Ihi: hiring under secrion 39 and Ihe LiabiliLy of 
hirer does not ~urchase the machinery under sc'don 40, the hirer shall hirer on 
not be entilled lo the refund-of the-sum deposited by him under section "rminauon of 
hiring under 36 or lo the refund or remission or any payment made by or due from 24 
him during the hiring, and shall be liable to pay such amount, if any, as , and 25. 
the UirecLor may determine in respect of any loss caused by the disposal 
of the machinery under sub-section (2) of section 40. 
42. When, after credil has been given for the amount deposired of hiring on under section 36, the hirer has paid in full all he instalmenls ol rent paymenL 
mentioned in' clause (a) of section 37 and ihe amount of interest, costs ,,,, ,f 
and other chargw payaMc by him under his Chapter he shall become machinery. 
rhe owner of the machinery and shall thereupon remove from thc samc 
STAE AID m ~N~USTRIFS 11935 : Pb. Act V 
the metal plate mentioned in clause (el of section 38 : 
Provided that if at any time during the hiring the hirer pays in 
advance the remaining instalmerits 01 renl Lhe interest pay able in respect 
thereof shall be remittcd. 
'a~aIty for 
i 
43. If the hirer wilfully omits, after receiving due notice, to remove 
lo ,rcmovaI or Ihe metal plate from any machinery which has become his propcny under 
7 pP'"t" scction 42, he shaIl be liable to a fine not exceeding j'lfty rupecs. 
m 
;urns due 44. All sums payable under this chapter shall be recoverable in 
nder bis the same way as loans under Chaplcr IV. 
:covcmblc as 
3ans under 
Ibaprcr TV. ., , 
CHAPTER VI 
am SUPPIL~K 
:indiLy of 3[45. (1) The decision of the State Government, or the decision of 
lccisions of the Uirector against which an appeal lies to the State Governmen1 but is 
;talc not filed within the specified period, as to whether the conditions laid hvernmen t 
md bar of down in or under any of the provisions of this Act have been satisfied, 
uils and shall be final, and no civil court shall have the jurisdiction to entertain 1 
lroceedings in any suit or proceedings in respect thereof.] 
3vil and . 
:riminal (2) No prosecution, suit or other proceeding shall Lie against any 
:OUIIS. Government offcer or other authority veslcd with powers undci this Act 
for anything in good faith done or inlendcd lo be done thercundc; 
.oms undcr 2[4S-A. All loans granted under the Patiala and East Punjab States 
'ePsu Act U Union S talc Aid to Industries AcL, 2007 (Act No. 1 of 2007 Bk.) shall be 
f2007 lo be deemed to be granted under and in accbrdance with the provisions of ccmed Lo be 
ranled undcr this Act and shall be recoverable in the same manner in which loans 
6s Act. granted under this Act are recoverable.]. 
?ewer to 46. (1) The '[State] Government may, after prcvious publication, 
"c rules- make rules consistent with this Act for -the carrying out of all or any of 
. , irs purposes. 
(2) In particular &d without prejudice to the generality of 
Ihc foregoing power, the l [S tatel Government may make rules regulating 
or determining all or any. of the following matters, namely :- 
1. Subslituted for the word "Provincial" by Ihc Adaplalion of Laws Ordcr, 1950. 
2. lnserted by Dunjab Acl23 of 1957. 
3. Subsbtu~ed by Ilaryana Act 26 of 1975. 
1935 : Pb. Act V ] STA'I'E AID M INDUSIWES 27 1 
(a) electior! of members of the Hoard under cIauscs (e), (f) and 
(g) of sub-section (1) of section 3 ; 
(b) regulating the havelling allowance under section 10 ; 
(c) lhe manner of making application for Stale aid under section 
19 ; 
(d) the delegalion of power to give loans under section 20 ; 
(e) the lorn of decd to be executed undcr seclion 2 1 ; 
(fl the naturc and amounr of the security to be taken under 
sections 21 and 36 for the duc application and repayment of 
the Slate aid or renb together wilh all iriterest due thcreon, 
iT any, and the rate of interest a1 which and the conditions 
under which S~ale aid may be granted : 
Provided that where the security consists wholly or in part of the 
premises, machinery, stock, stores or other property, present 
or future, movable or immovable of [he industry concerned, 
then the whole of such properly present and future, movable 
and immovabIe, may be made liable for the recovery of the 
loan and all interest due thereon. if any ; 
(g) the inspcclion under section 26 of the premises, buildings, 
machinery and stock-in-hand and the mode of kceping and 
auditing the account and of furnishing returns of any jnduslty 
in respect of which Slate aid has been given ; 
(h) themanner inand the placeat whichnolicesororder~smay 
be served on any borrower; 
(il the form of the declaralion LO bc used under seclion 24; 
(j) the fixing of the period for the repayrncnt of loans; 
(kJ Ihc application under section 33 of profits in the case in which 
the conditions on which State aid ha$ been given, have not 
been fulfilled ; 
(I) the appointment and functions of directors appointed by the 
l [State] Governrncnt undcr section 34 and the prescrj bing of 
other methods of control of industries to which Stare aid has 
been given ; 
I. Subsriturerl for be word "Provincial" by Ihc Adaplalion of Laws Order, 1950. 
272 S'rATE AID TU INDUSIRIFS [I935 : Pb. Act V 
(m) the percentage of the cosl of machinery lo be dcposiled under 
section 36 ; 
(nJ the addirionaI particulars to be specified in the grder referred 
lo in section 37 and the condilions on which machinery may 
be supplied on the hire-purchasc syskrn ; 
0 the fornl of the metal plate referred ro in clause (el of scction 
38; 
(p] the form of notice undcr scction 39 ; 
{g] the rccovery of any sums payable under this Act; and 
(r) all other matters'oertaining to the .working of this Act. 
47. The Punjab IndusLrial Loans Act, 1923, is hereby repealed. 

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