Report No. 26

Appendix II

Notes on Clauses

Clause 1

Part B States.-The new Act will apply to the whole of India except the State of Jammu and Kashmir. The existing Provincial Insolvency Act, 1920, does not extend to territories which were comprised in Part B States before the 1st November, 1956. But there is no reason why the Act should not apply to those territories.1

Scheduled districts.-The Provincial Insolvency Act, 1920, does not extend to areas formerly known as "scheduled districts". It is, however, unnecessary to make any such exception, initially, in the new Act. The legislative practice, which is in conformity with the intentions of the framers of the Constitution, is not to make any such exception in Acts of Parliament. There is, however, a power under the Constitution to exclude the application of Acts to certain areas. So far as tribal areas in Assam are concerned, the Governor can, under paragraph 12(1)(b) of the Sixth Schedule to the Constitution, notify that the Act will not apply to any autonomous district or region, or will apply subject to modifications. Similarly, so far as scheduled areas in other States are concerned, the Governor can, under paragraph 5(1) of the Fifth Schedule to the Constitution, notify that a particular "Act of Parliament" will not apply to a scheduled area, or will apply subject to modifications.

Goa, etc.-As to Goa, Pondicherry, Nagaland, etc., if it is intended to exclude the application of the Act, the question may be considered by Government.

1. See body of the Report, para. 4.