INDUSTRIAL DEVELOPMENT & REGULATION ACT & OTHER BUSINESS LAWS by : DR. T.K. JAIN AFTERSCHO☺OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india FOR – PGPSE PARTICIPANTS mobile : 91+9414430763 5 DECEMBER 09
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What is registration and licencing ? Sec. 10 Schedule I of IDRA gives a list of industries, where registration and licensing is compulsory (that was called licence raj) – while registration, the company is given some installed capacity – the company should not produce beyond that capacity (it looks ridiculous now). SSIs and exempted units are not required to go for registration. 5 DECEMBER 09
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Central advisory council ?
The government sets up a central advisory council & development council under sec. 5 of IDRA to advise the government on industrial promotion.
5 DECEMBER 09
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Where to set up a new unit
As per IDRA - 25 KM away from urban areas having population of 1 million. However, state government and environment ministry norms must also be followed. Location policy must be followed 5 DECEMBER 09
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How to get environment clearances ? Large projects ( 1000 or more persons in office / 50000 liters of discharge of sewage / investment of Rs. 50 Crores or more / hospitals / townships etc. ) require EIA clearances however, SSIs are exempted from EIA clearances 5 DECEMBER 09
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What is COB licence
COB = carry on business This licence is required when an SSI exceeds its limits and reaches medium or large enterprise limits apply for this with fees (Rs. 2500)- apply to Department of Industrial Development 5 DECEMBER 09
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What is IEM?
Industrial Entrepreneur Memorandum – when a unit is not required to obtain licence, it has to file IEM.
5 DECEMBER 09
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Briefly discuss the circumstances circumstances in which the Central Government can assume management or control of an industrial undertaking. Under section 18A to 18F, the government has the power to takeover any industrial undertaking (after investigation investigation unde section section 15) – when it finds that that the company is not running properly / when the company is flouting the directions of central government given under Sec. 16. All the management persons will vacate their office and all contracts with bad intentions will stand cancelled thereafter.
5 DECEMBER 09
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Case : P K Bhattacharya v/s Indian Machinary company 1986
The provisions under chapter IIIA does not intend to create government ownership – but gives a temporary control to government so that the situation can be improved.
5 DECEMBER 09
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Can the government takeover a company without investigation?
Yes – under section 18AA when : 1. the company is closed for at least 3 months 2. the compnay has been managed recklessly and has been grossly mismanaged.
5 DECEMBER 09
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Case : Swadeshi Cotton Mills 1981
In such cases (sec. 18AA) rule of audi alterem partem (pre decision hearing) must be followed another rule of natural justice : nemo debet esse judex in propria causa (no body should be judge in his own case) should also be followed. 5 DECEMBER 09
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How do you compute the value of plant and machinery for the purpose of registering a factory as MSME Unit? Micro enterprise : investment in plant and machines less than 25 lakhs Small enterprise : investment in plant and machines less than 2 crores, but more than 25 lakhs Medium enterprise : investment in plant and machines 2 -to 5 Crores.
5 DECEMBER 09
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Exclusion of certain machines : Following machines are not counted while taking the value of Plant and Machinery : fire fighting equipments generator set / transformers tools / spare parts / moulds etc cost of installation / wiring/ cables etc. bank charges / service charge transportation charges 5 DECEMBER 09
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What are the penalties under IDRA ? Sec. 10 (1) : if industrial undertaking is not registered Sec. 11 (1) : if licence is not obtained Sec. 13(1) : if COB licence is not obtained failure to comply sec. 16 Sec. 18G : if orders regarding supply / distribution etc. Are not followed penalty : 5000 + 6 month jail + 100 per day. 5 DECEMBER 09
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What are the provisions of Micro, Small and Medium Enterprises Development Act relating to delayed payments. Sec. 15 : the buyer has to make payment in 45 days. If delay : pay interest @ 3 times the bank rate announced by RBI Sec. 18 : parties can refer their dispute to MSME fecilitation council for arbitration 5 DECEMBER 09
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