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Industrial Finance Corporation Act, 1948


30. Special provisions for enforcement of claims by the Corporation.

  1. 3*[Where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any installment thereof 4*[or in meeting its obligations in relation to the guarantee given by the Corporation] or otherwise fails to comply with the terms of its agreement with the Corporation or where the Corporation requires an industrial concern to make immediate repayment of any loan or advance under section 29 and the industrial concern fails to make such repayment, then, without prejudice to the provisions 5*[of section 28 of this Act and] of section 69 of the Transfer of Property Act, 1882 (4 of 1882)], any officer of the Corporation generally or especially authorized by the Board in this behalf may apply to 6*[the Court] for one or more of the following reliefs, namely:-

  1. for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Corporation as security for the loan or advance, or

  2. for transferring the management of the industrial concern to the Corporation, or

  3. for an ad interim injunction where there is apprehension of the machinery or the equipment being removed from

  1. Subs. by Act 78 of 1952, s. 18, for certain original words.

  2. The words "in the opinion of the Board@ omitted by s. 18, ibid.

  3. Subs. by s. 19, ibid., for certain original words.

  4. Ins. by Act 74 of 1972, s. 17.5. Ins. by Act 28 of 1955, s. 20.6. Subs. by Act 74 of 1972, s. 17, for certain words.58.the premises of the industrial concern without the permission of the Board.

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

  2. When the application is for the reliefs mentioned in sub - clauses (a) and (c) of sub-section (1) 1*[the Court] shall pass an ad interim order attaching the security or so much of the property of the industrial concern as would on being sold realise 2*[in its estimation] an amount equivalent in value to the outstanding liability of the industrial concern to the Corporation together with the costs of the proceedings taken under this section with or without an ad interim injunction restraining the industrial concern from transferring or removing its machinery or equipment.

  3. Where the application is for the relief mentioned in sub - clause (b) of sub-section (1) 1*[the Court] shall grant an ad interim injunction restraining the industrial concern from transferring or removing its machinery or equipment and issue a notice calling upon the industrial concern to SHOW cause on a date to be specified in the notice why the management of the industrial concern should not be transferred to the Corporation.

  4. Before passing any order under sub-section (3) or sub-section (4), 1*[the Court] may, if 3*[it] thinks fit, examine the officer making the application.

  5. At the same time as 3*[it] passes an order sub-section (3), 1*[the Court] shall issue to the industrial concern a notice accompanied by copies of the order, the application 4*[and the evidence, if any, recorded by it calling upon the industrial concern to SHOW cause] on a date to be specified in the notice why the ad interim order of attachment should not be made absolute or the injunction confirmed.

  6. If no cause is shown on or before the date specified in the notice under sub-sections (4) and (6), 1*[the Court] shall forthwith make the ad interim order absolute and direct the sale of the attached property or transfer the management of the industrial concern to the Corporation or confirm the injunction.

  1. Subs. by Act 74 of 1972, s. 17, for "the District Judge".

  2. Subs. by Act 56 of 1974, s. 3 and Sch II, for "in his estimation".

  3. Subs. by s. 3 and Sch. II, ibid., for "he".

  4. Ins. by s. 3 and Sch. II, ibid., for certain words.

  1. 59.If cause is shown 1*[the Court] shall proceed to investigate the claim of the Corporation and the provision of the Code of Civil Procedure, 1908 (5 of 1908), shall as far as practicable apply to such proceedings.

  2. On an investigation made under sub-section (8) 1*[the Court] shall pass an order -

  1. confirming the order of attachment and directing the sale of the attached property, or

  2. varying the order of attachment so as to release a portion of the property from attachment and directing the sale of the remainder of the attached property, or

  3. releasing the property from attachment, if 2*[it] is satisfied that it is not necessary in the interest of the Corporation, or

  4. confirming or dissolving the injunction, or

  5. transferring the management of the industrial concern to the Corporation of rejecting the claim made in this behalf:

Provided that when making any order under clause (c), 1*[the Court] may make such further orders as 2*[it] thinks necessary to protect the interests of the Corporation, and may apportion the costs of the proceedings in such manner as 2*[it] thinks fit:

Provided further that unless the Corporation intimates to 1*[the Court] that it will not appeal against any order releasing any property from attachment, such order shall not be given effect to until the expiry of the period fixed under sub-section (11) within which an appeal may be preferred, or if an appeal is preferred, 3*[unless the Court empowered to hear appeals from the decisions of the said Court otherwise directs], until the appeal is disposed of.

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

4*[(10A) An order under this section transferring the management of an industrial concern to the Corporation shall be carried INTO effect,

  1. Subs. by Act 74 of 1972, s. 17, for "the District Judge".

  2. Subs. by Act 56 of 1974 s. 3 and Sch. II, for "he".

  3. Subs. by Act 74 of 1972, s. 7 for unless the High Court otherwise directs".

  4. Ins. by Act 28 of 1955, s. 20.60 as far as may be practicable, in the manner provided in the Code of Civil Procedure, 1908 (5 of 1908), for the possession of immovable property or the delivery of movable property in execution of a decree, as if the Corporation were the decree-holder.]

  1. Any party aggrieved by an order under sub-section (7) or sub-section (9) may, within thirty days from the date of the order,1*[appeal to the Court empowered to hear appeals from the decisions of the Court which passed the order and the appellate Court may] after hearing the parties pass such orders as it thinks proper.

  2. Nothing in this section shall be construed, where proceedings for liquidation in respect of the industrial concern have commenced before an application is made under sub-section (1) as giving to the Corporation any preference over the other creditors of the industrial concern not conferred on it by any other law.2* * * * *

  1. 3*[ For the removal of doubts, it is hereby declared that any Court competent to grant an ad interim injunction under this section shall also have the power to appoint a receiver and to exercise all other powers incidental there to.

  2. All proceedings (whether by way of suits or appeals or other proceedings) under this Act pending before a District Judge or an Additional District Judge of a High Court at the commencement of the Industrial Finance Corporation (Amendment) Act, 1972 (74 of 1972), shall, on such commencement, be proceeded with and disposed of as if this section had not been amended by the said Act.

  3. Every suit or other proceedings which are disposed of in accordance with the provisions contained in sub-section (15) or in respect of which time for appeal has not expired at the  commencement of the Industrial Finance Corporation (Amendment) Act, 1972 (74 of 1972), may, on such commencement, be appealed against as if this section had not been amended by the said Act.]

  1. Subs. by Act 74 of 1972, s. 17, for "appeal to the High Court, and upon such appeal, the High Court may".

  2. Sub-section (13) omitted by s. 17, ibid.

  3. Ins. by s. 17, ibid.



Industrial Finance Corporation Act, 1948 Back




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