Industrial Reconstruction Bank of India Act,1984
Act No : 62
Section :
Prohibited business.
19. Prohibited business.- (1) The Reconstruction Bank shall not enter into any kind of business with any industrial concern, of which any of the directors of the Reconstruction Bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of the Reconstruction Bank together hold substantial interest: Provided that this sub-section shall not apply to any industrial concern if any director of the Reconstruction Bank-- (i) is nominated as a director of the Board of such concern by Government, or a Government company, or by the Reconstruction Bank or by a corporation established by any other law, or (ii) is elected as a director on the Board of such industrial concern by virtue of shares held in that industrial concern by Government, or a Government company, or by the Reconstruction Bank or by a corporation established by any other law, by reason only of such nomination or election, as the case may be. Explanation I.--"Government company" has the meaning assigned to it in section 617 of the Companies Act, 1956 (1 of 1956), Explanation II.--"Substantial interest", in relation to any industrial concern, means the beneficial interest held by one or more of the directors of the Reconstruction Bank or by any relative [as defined in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956)] of such director whether singly or taken together, in the shares of the industrial concern, the aggregate amount paid-up on which either exceeds five lakhs of rupees or five per cent. of the paid-up share capital of the industrial concern, whichever is the lesser. (2) The provisions of sub-section (1)-- (i) shall not apply to any industrial concern as specified therein if the Reconstruction Bank is satisfied that it is necessary in the public interest to enter into business with that concern, and entering into any kind of business with such industrial concern shall be in accordance with and subject to such conditions and limitations as may be provided for in the regulations; 564 (ii) shall apply only so long as the conditions precedent to such disability as set out in the said sub-section continue.
Read All Comments
