The Act is said to be “The Rehabilitation Finance Administration Act, 1948”. It was enacted on 23rd March, 1948. It extends to whole India except Jammu and Kashmir. Basic purpose of enacting the act was, to form a Rehabilitation Finance Administration to give financial support on proper satiation so to enable the displaced person to settle in business or industry. For the purpose of the act “borrower means, an individual, company, association, or body of individuals, whether incorporated or not, to whom a loan has been advanced under this Act”.
For distribution of finance central government will form a corporation which will be known as “Rehabilitation Finance Administration” to give financial support to person who are incapacitate to reconcile in business or industry or any portion of that business or industry. This Rehabilitation finance administration is separate corporate entity which has its own common seal and can hold or dispose off the property both movable and immovable and enter into contract and can be sue or sued with its own name. Such administration will have its head office in Delhi and can open its branches with permission for so from central government.
Committee forming administration is a chairman who is appointed by central government known as chief administrator; four members are appointed by central government as officials, four members nominated by central government as non-officials. This administration shall have advisory board to give advice to administration if they think will even form regional committee which can provide advice to branch if formed by administration. Such advice committee will not have more than fifteen members which are nominated by central government.
Administration will get support in way money from central government at proper interval for purpose to advance loans not exceeding twelve crores and fifty lakhs of rupees and also for purpose to meet liability which can occur due to losses for loan taken. Money lended by central government to administration, they are asked to pay three percent interest of money taken by administration to central government.
Loan which is given by central government has its own limits that are they cannot have loan more then prescribe limits. Administration shall demand interest from borrower at rate not more then six percent and such loan will not exceeding of fifteen years and can take security for loan as administration think. If administration feels that if anyone has given wrong or misleading information for advancing loan, if borrower fails to comply with terms prescribe in agreement for loan taken, if borrower is not able to pay debts or is called as insolvent then administration can at any time call for repayment of loan taken before agreed period and such loan can be recovered by way of rule given in contract or by way of land revenue, or take charge of there business or industry.
Administration has to maintain books of accounts and is required to prepare annual statements of all profit and loss and balance sheet, which is then audited by comptroller and auditor general and after inspecting books such report is send to central government which will in further brought before house of parliament.
Chief administration can after permission in writing ask to inspect books of accounts but is not allowed or such chief administration cannot communicate such information outside. If anyone does so then such person is liable for punishment with imprisonment of six months and fine of five thousand rupees or both. Thus, central government can after certain interval if necessary direct administration regarding functions of administration and even for the purpose of the act administration is exempted from paying any taxes.
by Samata. H. Joshi.