ANDHRA PRADESH
(TELANGANA AREA) STATE AID TO (SMALL SCALE AND COTTAGE) INDUSTRIES ACT, 1956 [1]THE
ANDHRA PRADESH (TELANGANA AREA) STATE AID TO (SMALL SCALE AND COTTAGE)
INDUSTRIES ACT, 1956 [Act No. 07 of 1956] [4th April, 1956] An Act to regulate State Aid to Small-Scale and Cottage
Industries. Whereas it is expedient to
regulate the giving of aid by the Government to Small-Scale and Cottage
Industries in the [2][Telangana
area of the State of Andhra Pradesh]; Be it enacted in the
Seventh Year of Our Republic as follows: (1)
This Act may be called [3][the
Andhra Pradesh (Telangana Area) State Aid to (Small-Scale and Cottage)
Industries Act, 1956.] (2)
It shall extend to the whole of [4][the
Telangana area of the State of Andhra Pradesh.] (3)
It shall come into force on the date of its publication in the
Official Gazette. In this Act unless there is
anything repugnant to the subject or context,-- (a)
'Board' means the Board constituted under section 4. (b)
'cottage industry' means any industry carried on by any family
which forms the normal occupation whether whole-time or part-time, of any
family, with the help of any or all of its members and in which such family
invest a sum not exceeding Rupees Ten Thousand. (c)
'prescribed' means prescribed by rules made under this Act. (d)
'small-scale industry' means any industry carried on by the aid of
power and employing not exceeding fifty persons, or carried on without the aid
of power but employing more than fifty and less than hundred persons and in
which a sum exceeding Rupees Ten Thousand but below Rupees Five Lakhs is invested. (e)
[5][* * * *] The State Government may
appoint any officer or other person to perform all or any of the functions of
the Director of Industries [6][*
* *] under this Act. (1)
[7][The
State Government may constitute for the area to which this Act extends a Board
to be called the Board of Industries consisting of such members as the State
Government may nominate. The State Government shall nominate one of such
members as the Chairman thereof. (2)
The Board shall assist the State Government in dealing with
applications for the grant of State Aid under this Act. (3)
No member shall vote on or take part in the discussion of any
question coming up for consideration at a meeting of the Board, if the question
is one in which
he has any direct or indirect pecuniary interest by himself or his partner or
in which he is interested professionally on behalf of a client or as agent for
any person other than the State Government or a local authority. (4)
The term of office of the members of the Board shall be such as
the State Government may determine.] (1)
No aid shall be given by the State Government to any small-scale
industry or cottage industry except in accordance with the provisions of this
Act. (2)
Nothing contained in sub-section (1) shall prevent the Industrial
Trust Fund from giving aid to Small-Scale Industry and Cottage Industry. (1)
The small-scale industry or cottage industry to which aid may be
given under this Act, shall be such as has an important bearing on the economic
development of the country and shall be? (a)
new or nascent industry, or (b)
industry to be newly introduced into areas where such industry is undeveloped;
or (c)
old or established industry: Provided that aid shall not
be given to any industry specified under clause (c) unless the State Government
is satisfied that special reasons exist for giving such aid. (2) No such
aid shall be given to any joint stock company unless the same is registered in
India on a rupee capital: Provided further that every
receipt of aid under this Act shall make such provision for the training of
apprentices as the State Government may, from time to time, prescribe. (3) The decision
of the State Government as to whether the conditions of this section are
fulfilled shall be final and shall not be called in question in any Court of
Law. Subject to the provisions
of this Act and of the rules made thereunder, the State Government shall have
power to grant aid to any small-scale industry or cottage industry in one or
more of the following ways:-- (i)
by granting a loan for one or more of the following purposes: (i)
purchase of land and erection of buildings; (ii)
purchase of tools, and appliances; (iii)
purchase of raw materials; (iv)
working capital or other incidentals necessary for the purpose of
carrying on the industry; (ii) by
guaranteeing a cash credit, overdraft or fixed advance with a bank; (iii) by paying
a subsidy, in the case of cottage industry for any purpose, and in the case of
small-scale industry for the conduct of research or the purchase of machinery; (iv) by
subscribing for shares or debentures; (v) for
guaranteeing a minimum return on part of the capital of a joint stock company; (vi)
by making a grant on favourable terms of land, raw material,
firewood or water, which is the property of the State; (vii)
by supplying at concessional rates electric energy from a source
which is the property of the State; (viii)
by supplying equipment on hire-purchase provided the party
requiring the equipment makes an initial payment of 20 per cent of the cost
thereof. (1)
Any person desiring to obtain a loan or other aid for any
small-scale industry or cottage industry shall make his application to the
Director of Industries in such form and shall furnish such information as may
be prescribed. (2)
Every application for aid of a sum exceeding Rupees Three Thousand
shall be placed before the Board for advice. (3)
No aid shall be granted under this Act, if the Board by a
resolution supported by not less than six members at a meeting advises the
rejection of the application. (1)
The State Government may delegate to the Director of Industries
its powers to grant aid under section 7 up to Rupees Three Thousand in any
single case. (2)
The decision of the Director of Industries, to grant or not to
grant aid in any case under sub-section (1), shall not be called in question in
any Court of Law. (3)
The powers conferred on the State Government by section 12 may
also be exercised by the Director of Industries in cases where aid is granted
by the Director under sub-section (1). No aid under this Act shall
be given to any small-scale industry or cottage industry except to the extent
and in the manner specified hereunder: (a)
Rupees One Thousand on the personal security of the person
applying for aid. (b)
Over Rupees one Thousand but upto Rupees Five Thousand on the
personal security of the person applying for aid with two sureties provided
thirty per cent of the sum advanced is used as capital expenditure over which
the State Government shall have the first charge. (c)
Over Rupees Five Thousand and up to Rupees Twenty-five Thousand in
the security of the immovable property of the person applying for aid to the
extent of seventy-five per cent on the market value thereof: Provided that half of the
loan is used as capital expenditure over which the State Government shall have
the first charge. In any case in which a loan
has been applied for under this Act, the applicant, and at any time during the
currency of a loan that had been granted under it, the grantee, shall be
bound-- (a)
to comply with any general or special order of the State
Government relative to the inspection of the premises, buildings, or plant or
stock in hand of the industrial business or enterprise; (b)
to permit the inspection of all accounts relative to the
industrial business or enterprise; (c)
to furnish full returns of all products manufactured or sold both
as regards description and quantity; (d)
to maintain such special accounts or to furnish such statements as
the State Government may from time to time require; (e)
to submit the accounts of the industrial business or enterprise to
such audit as the State Government may prescribe. In any case in which a loan
or loans is or are granted under this Act amounting to Rupees Ten Thousand or
upwards, the State Government shall and in any other case may, take power to
ensure such control over the industry as shall suffice in its opinion to
safeguard its interest. (1)
Every loan granted under this Act shall be made repayable by
instalments within such period from the date of the actual advance of the loan,
or when the loan is advanced in instalments from the date of payment of the
last instalment, as may be fixed by the order granting the loan. (2)
The period fixed as aforesaid shall not exceed five years unless
the State Government shall, by general or special order, extend the same. Save as otherwise may be
prescribed nothing in sections 11 and 12 shall apply to any cottage industry
with a capital outlay not exceeding Two Thousand Rupees. The condition of
subscription for shares and debentures by the State Government or the guarantee
of a minimum return on the capital of any small-scale industry or cottage
industry by it shall be that small-scale industry or cottage industry shall be
subject to the conditions of section 11 in respect of inspections and returns
as well as of the provisions of section 12 in respect of Government control: Provided that-- (a)
for all shares subscribed by the State Government there must be
taken up and fully paid for not less than such number of shares as may be fixed
by special or general order of the State Government; (b)
for all capital on which a return is guaranteed by the State
Government there shall be paid up not less than an equal amount of capital
which carries no guarantee. The condition of a grant of
subsidy or of any payment under guarantee of a minimum return on the paid-up
capital or of the grant of a land belonging to the State Government, raw
material, firewood or water on favourable terms or for the supply from a State
Government source of electric energy at concessional rates shall ordinarily be that an
amount equal to the sum paid or to the value of the grant or concession as
fixed at the time when it is made shall be repaid to the State Government at
the close of a fixed term of years if within that term the small-scale industry
or cottage industry shall be shown to be paying interest or a dividend upon the
capital invested in excess of such rate as the State Government may fix. No subsidy to an industry
other than a cottage industry exceed 40 per cent of the cost of the research or
of the cost of the machinery as the case may be. No recipient of aid shall
pay any dividend or distribute or take any profits in excess of such percentage
rate upon the amount of the capital of the small-scale industry or cottage
industry as the State Government may fix from time to time until the conditions
on which the aid has been granted are fulfilled. The balance of the profits,
after setting aside proper amounts for depreciation or obsolescence of plant
and buildings, and for the payment of interest on debenture of loans, shall be
carried to a reserve fund to be utilised in such manner as the State Government
may approve. (1)
All moneys payable under this Act, including any interest
chargeable thereon and costs, if any, incurred, if not paid when due, may be
recovered from the person aided and his surety, if any, under the law for the
time being in force as if they were arrears of land revenue. (2)
When any sum due as aforesaid is paid by the surety or is
recovered from him or out of his property under sub-section (1) the Collector
shall, on the application of the surety, so far as possible recover the same
from the person aided and pay the same to the surety. If the State Government
decides for reasons to be recorded in writing to terminate aid in respect of a
small-scale industry or cottage industry on any of the following grounds: (i)
that any portion of the aid given has been misapplied for; (ii) that
there has been a breach by the person in receipt of the aid of the provisions
of this Act, or of any rules made thereunder or of any condition of the grant;
or (iii) that the
application on which the aid has been granted contained, or was accompanied by,
any material statement by the applicant which he knew to be false or any
intentional concealment by him of any material fact, which in the opinion of
the State Government, it was his duty to disclose, or that any such false
statement or concealment was intentionally made in any inquiry under this Act,
by or with connivance of the applicant or in any return under this Act, or in
reply to any requisition for information under this Act; or (iv)
that the small-scale industry or cottage industry is being managed
in such a manner as to endanger the repayment of the value of the aid granted
thereto repayable under this Act; the State Government may make an order that
the aid be terminated and notwithstanding anything contained elsewhere in this
Act, or in any other enactment, may proceed to recover from the grant as
arrears of land revenue, (v)
the whole amount of any loan outstanding together with such
interest as may be due thereon, or (vi)
in cases where the aid is given otherwise than by loan, the money
value of the grant as fixed at the time when it was made, together with interest
at a rate not exceeding twelve and half per cent from the date of the grant
till the date of realisation, and (vii)
in the cases mentioned in sub-section (a) or sub-section (b) the
cost of recovery, and if the State Government so directs, the cost of an inquiry
made in connection therewith, and such order shall be final. The State Government may
charge in respect of applications, inquiries, inspections and audit by
whomsoever made under this Act, such fees, if any, as may be prescribed. Any such aid as is referred
to in section 7 given by the State Government to any industry prior to the
commencement of this Act, shall, on the issue of an order to that effect by the
State Government in the Official Gazette be deemed to be aid given under this
Act, and on the issue of such order all the provisions of this Act, and of any
rules made thereunder shall apply to such aid and such industry as if such aid
was given to such industry under this Act. Nothing in this Act, shall
be held to debar the State Government-- (a)
from starting or conducting any small-scale industry or cottage
industry; (b)
from assisting a small-scale industry or cottage industry by
agreements to purchase on business terms, the whole or a portion of the
products of the same; (c)
from assisting a small-scale industry or cottage industry by
giving gratis or on favourable terms, the services of Government officials or
experts either in the capacity of advisers or for a limited period for starting
or conducting such business or enterprise; (d)
from assisting a small-scale industry or cottage industry in connection
with industrial education or the training of apprentices; (e)
from assisting or aiding a small-scale industry or cottage
industry on such terms and conditions and in such manner as may be determined
by the State Government. (1)
The State Government may make rules to carry out all or any of the
purposes of this Act. (2)
In particular and without prejudice to the generality of the
foregoing power, it may make rules regulating all or any of the following
matters:-- (i)
the classes of small-scale industry or cottage industry to which
and the purposes for which aid may be given; (ii) the
quorum at the Board's meetings, the method of arriving at its decision, the
appointment of a Secretary and staff, the allowances payable to its members and
all other matters relative to the conduct of its business; (iii) the
manner of making applications for State aid and the information to be given in
such applications, provided that no such rules shall require any applicant or
grantee of aid to divulge any information relating to the technical details of
any process of any patent owned by him; (iv)the
manner of conducting inquiries and the matters to be specially inquired into in
dealing with applications for the State aid and the powers to be exercised by
the Director of Industries conducting such inquiries; (v) the mode
of ascertaining the value of the assets of a small-scale industry or cottage
industry or of any property offered as collateral security for a loan; (vi)the
inspection of the premises, buildings, plant and stock on hand and the accounts
of any small-scale industry or cottage industry for which State aid has been
granted; (vii) the mode
of keeping and auditing the accounts and of furnishing returns of any
small-scale industry or cottage industry in respect of which State aid has been
granted; (viii) prescribing
the methods of control of a small-scale industry or cottage industry in respect
of which State aid has been granted; (ix)the
application of profits in cases in which the conditions under which loans or
grants have been made have not been fulfilled; (x) [8]
Preamble - ANDHRA PRADESH (TELANGANA AREA) STATE AID TO (SMALL
SCALE AND COTTAGE) INDUSTRIES ACT, 1956PREAMBLE
(xi)the
fixing of the period for the repayment of loans and the conditions and dates of
the repayment of subsidies and grants;
(xii)
the recovery of any moneys due under this Act:
Provided that such rules
shall take effect and have the force of law from the date of their publication
in the official Gazette:
[9]Provided
further that such rules shall be laid on the table of the [10][*]
Legislative Assembly and may be amended by a resolution passed within one month
from the date of notification or, if the Assembly is not sitting on such date
within one month from the date of its next meeting.
Section 24 - Saving
Nothing in this Act shall
be deemed to apply to any industry declared to be a scheduled industry under
the Industries (Development and Regulations) Act, 65 of 1951 (Central Act 65 of
1951) or to affect any of the provisions of the said Act.
Section 25 - Repeal of Hyderabad Ordinance I of 1956
(1)
The Hyderabad State Aid to (Small-Scale and Cottage) Industries
Ordinance, 1956 (I of 1956) is hereby repealed.
(2)
Notwithstanding such repeal, anything done or any action taken in
the exercise of any power conferred by or under the said Ordinance shall be
deemed to have been done or taken in the exercise of the powers conferred by or
under this Act as if this Act were in force on the day on which such thing was
done or action was taken.
[1] Received
the assent of the Rajpramukh on 3rd April 1956 and published in the Hyderabad
Gazette Extraordinary on the 4th April, 1956.
[2] The words
"Hyderabad area of the State of Andhra Pradesh" were Substituted for
the words "State of Hyderabad" by the A.P.A.O. 1957 and these words
were Substituted for the words "Hyderabad area of the State of Andhra
Pradesh" by A.P. Act IX of 1961.
[3] Substituted
for the original short title by A.P. Act IX of 1961.
[4]
The words
"the Hyderabad area of the State of Andhra Pradesh" were Substituted
for the words "the State of Hyderabad" by the A.P.A.O. 1957 and these
words were Substituted for the words "the Hyderabad area of the State of
Andhra Pradesh" by A.P. Act IX of 1961.
[5] Cl. (e)
was omitted by the A.P.A.O. 1957.
[6] The words
"in the Government of Hyderabad" were omitted by ibid.
[7] Substituted
for S. 4 by ibid.
[8]
The word
"Hyderabad" was omitted by the A.P.A.O. 1957.
[9]
The word
"Hyderabad" was omitted by the A.P.A.O. 1957.
[10]
The word
"Hyderabad" was omitted by the A.P.A.O. 1957.