The Oil Industry (Development) Act, 1974

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The Oil Industry (Development) Act, 1974 (Act No. 47 of 1974) is the Act of Central Government and the object and reasons of this Act as explained under the Oil industry (Development) Bill, 1974 were including the programs for attaining self-reliance in petroleum and petroleum based raw materials., assuring necessary resources for executing of such  programs, and for levy of Cess on crude oil and natural gas for development of its Fund for providing financial assistance to the organizations in such development programs. The preamble of the Act shows it object to establish a Board for such development and other related purposes.

The first section of the Act deals with short titles and extension of the Act as the Act can be named as ‘The Oil Industry (Development) Act, 1974’ and should extend to the entire India. Further, section 2 is important so far as it is defining several important terminologies which are to be used while interpreting the provisions of this Act.

Section 3 is essential as to establishment of the Board. Such Board is to be established by the Central Government by publishing notification as to serve for the purposes of this Act. The Board is named under this provision as ‘Oil Industry Development Board’ and it should be a body corporate and should have all features of company as given under sub section (2) of the Act.  Sub Section (3) of this provision deals with constitution of this Board as the members of this Board to be included persons (not more than three) appointed by the Central Government for representation of Ministry of the Central Government dealing with petroleum and chemicals. Similarly the Central Government required to appoint two members for representing Ministry of the Central Government dealing with finance. Also members (not more than five in number) are to be appointed by Central Government for Corporations’ representation, which is being owned and controlled by the Central Government, and one member from the person having special knowledge or experience in Oil industry and another to be from labour employed in such industry. Lastly, a Secretary should also to be for the Board. And the Central Government is required under the provisions of this section to appoint Chairman of such Board. The terms of Office and provisions for filling vacancies, etc. are to be prescribed under this Act. Moreover, the provision of section 3(6) of the Act dealing with constitution of Standing Committees or Ad hoc Committees for enquiring and reporting and also advising on matters which such Board refers to it. Even such Committees required to exercise those functions and powers which are vested with Board under this Act. And the members of such Board should be same for those Committees. Section 4 deals service conditions of such members. Similarly, Section 5 of the Act prescribes provisions as to appointment of Secretary, officers, etc. of such Board. Section 6 enlisted number of functions which the Board should perform, including render financial and other assistants as to development of aforesaid industry.

Section 9 of the Act deals with special provisions applicable while dealing with the cases involving, breach of any agreement, defaults in re-payment of loan or installment thereof, etc. In all such cases as are given under this provision the Board through any of its officer duly authorized by it, can approach to the Court for any of reliefs enlisted under several clauses. Further sub sections of the provision are providing for procedures and interim reliefs and other relevant aspects.

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When an Oil Industry is taken over by the Board, the directors of such industrial concern to be appointed by Board by notified order published in the official gazette as per provisions of Section 10. The number of such directors are indefinite, depends upon choice of Board. And effect of such order for appointment of such directors is given under section 11 and powers and duties of such directors are given under 12th section of the Act.

Further section 15 of the Act makes provisions as to levy of cess on several items given under Schedule annexed with this Act. And section 18 is important as it is connected constitution and development of Fund by Industrial development namely, Oil Industry Development Fund and similarly, the same provision contained clauses shows the amounts which are to be credited to such fund and for what purposes the fund to be utilized. Similarly, Section 20 of the Act makes provisions as to maintenance of accounts and other records being relevant including annual statement of accounts, etc. by the Board.

Section 23, 24 and 25 of the Act dealt with penal provisions, where list of offences are given and punishments are also being prescribed for those offences. The jurisdiction of trying such offences is vested with Metropolitan Magistrate or Judicial Magistrate of First Class as per section 26 of the Act, and as per section 27 of the Act, the previous sanction of the Central Government is required for institution of proceedings against such offences. The immunity to the Central Government or Board or Committees constituted by such Board, against the proceeding either criminal or civil for the acts done in good faith, is given under section 28 of the Act.

The next important provision is given under section 29, where the provisions as to dissolution of the Board by the Central Government by its direction. The last important provision i.e. section 31 of the Act empowers the Central Government to make rules on the matters enlisted under this provision.

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by Faim Khalilkhan Pathan.