The Industries (Development and Regulation) Act, 1951

An industry is the production of goods or related services within an economy. The development and regulation has been discussed and dealt under the Industries (Development and Regulation) Act, (IDRA), came into force from 8th May 1952 under a notification of the Central Government published in the Gazette of India.

APPLICABILITY- The Act extends to whole of India including the state of Jammu & Kashmir with a view to being under Central and regulation of a number of important industries, the activities of which affect the country as a whole and the development of which must be governed by economic factors of all India importance.

• The provision of the Act apply to industrial undertaking, manufacturing any of the articles mentioned in the first schedule.

OBJECTIVE:

The main objectives of the Act are to empower the Government:-

1. to take necessary steps for the regulation and development of important industries: The Act brings under the control of the Central Government the development and regulation of a number of important industries listed m the first schedule attached to the Act as the activities of such industries will affect the country as a w о e and, therefore, the development of such important industries must be governed by the economic factors of all India importance.
   
2. to implement the Industrial Policy: The Act provides the necessary means to the Central Government in order to implement its industrial policy.
   
3. to regulate the pattern and direction of industrial development;
   
4. to control the activities, performance and results of industrial undertakings in the public interest: A system of licensing is introduced under the Act to regulate planning and future development of new undertaking on sound and balance lines and may be deemed expedient in the opinion of the Central Government.

SCOPE OF THE ACT:

An industrial undertaking (also called a factory) for the purpose of the Act is the one where manufacturing process is being carried on:

1. With the aid of power provided that fifty or more workers are working or were working on any day of the preceding twelve months; or
   
2. Without the aid of power provided that one hundred or more workers are working or were working on any day of the preceding twelve months.
   
3. The Act applies only on industrial undertakings. Trading houses and financial institutions are outside the purview of the Act.

EXEMPTION FROM THE ACT:

The Act empowers the Central Government to grant exemption from this Act in certain cases Section 29B of the Act provides that if the Central Government is of opinion that it would not be in public interest to apply all or any provision of this Act to any industrial undertaking, then the Central Government, by notification in the Official Gazette, may exempt any industrial undertaking or class of industrial undertakings from the operation of all or any of the provision of this Act.

PROVISIONS OF THE ACT

This Act has thirty one sections, and all of them can be classified into three broad categories depending upon the purposes they seek to serve:

1. Preventive Provisions:
   • Registration and Licensing: Section 10 provides that the owner of every industrial undertaking other than the Central Government shall get his undertaking registered within a specified period, the industrial undertaking of which the Central Government is the owner. On registration, the owner shall be issued a certificate of registration containing the production capacity of the industrial undertaking and other particulars.
   • Investigation: Section 15 empowers the Central Government to cause an investigation into an industrial undertaking on the happening of
     1. A substantial fall or likely fall, in the volume of production in respect of any article or class of articles relating to particular undertaking or an industry; or
     2. A deterioration or likely deterioration in the quality of the product which could have been or can be avoided; or
     3. A rise or likely rise (unjustifiable) in price of any article or class of articles; or
     4. When it becomes necessary to take action of the conservation of any resources of national importance which are utilised by any undertakings or
     5. Where any industrial undertaking, scheduled or otherwise, is being managed in a manner highly deter-mental to the scheduled industry concerned or to public interest.
     1. Registration was obtained by misrepresentation of an essential fact; or\
     2. Undertaking has ceased to be registrable by reason of any exemption granted under the Act, or
     3. Registration has become useless or ineffective.
     • Taking over management or control: Section 18A of the Act provides that the Central Government may by a notified order authorise any person or body a person’s to take over the management or to exercise control over a specified industrial undertaking if the Central Governmental is of the opinion that the concerned industrial undertaking has failed to comply with directions issued by the government.
     • Control of supply, price and distribution of certain commodities: Section 18FA empowers the Central Government to authorise any person or body of person with permission of the High Court concerned to take over the management or control of industrial undertakings owned by the companies in liquidation provided that the Central Government is of opinion that there are possibilities of running or restarting such undertakings for maintaining or increasing the production, supply or distribution of articles or class of articles in the public interest. The period of such takeover is to be 5 years, to be extended 6 times of two years each. No state government or local authority can take over the management or control of a scheduled undertaking.

     PENALTIES-

     Section.24- The Act contains penalties for contravention of the provisions of the Act and for making false statement by any person under the provisions of the Act. The penalty for contravention is
     

     • Imprisonment upto six months, or
       
     • a fine upto Rs. 5,000 or both.
       In case of continuing contravention the person may be punished with an additional fine which may extend to Rs. 500 for everyday during which the contravention continues after the conviction for first contravention.
       
     • Penalty for making false statement is imprisonment upto three months or a fine which may extend to Rs. 2,000 or both.
       

     IMPORTANT DEFINITIONS:

     Scheduled Industry means any of the industries specified in the First Schedule of IDRA, 1951.

     Industrial Undertaking means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government.

     Factory means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on— with the aid of power, provided that 50 or more workers are working or were working thereon on any day of the preceding twelve months; or without the aid of power, provided that 100 or more workers are working or were working thereon on any day of the preceding twelve months and provided further that in no part of such premises any manufacturing process is being carried on with the aid of power.