The National Dairy Development Board Act, 1987
# THE NATIONAL DAIRY DEVELOPMENT BOARD ACT, 1987


# _________

 ARRANGEMENT OF SECTIONS

 _________

CHAPTER I

PRELIMINARY

# SECTIONS

1. Short title and commencement.
2. Declaration of National Dairy Development Board as an institution of national  importance.
3. Definitions.

CHAPTER II

THE NATIONAL DAIRY DEVELOPMENT BOARD

4. Incorporation of National Dairy Development Board.
5. Vesting of undertakings of Indian Dairy Corporation in National Dairy Development Board and

dissolution of Indian Dairy Corporation.

6. Effect of incorporation of National Dairy Development Board.
7. Saving of legal proceedings.

CHAPTER III

MANAGEMENT OF THE NATIONAL DAIRY DEVELOPMENT BOARD

8. Management of National Dairy Development Board and composition of its Board of  Directors.
9. Terms of office and conditions of service, etc., of Chairman and directors.
10. Meetings of Board.
11. Manner of transacting business of Board.
12. Management committees.
13. Allowances, etc., of members of management committees.
14. Delegation of powers to management committees, etc.
15. Delegation of powers to whole-time directors, etc.

CHAPTER IV

POWERS AND FUNCTIONS OF THE NATIONAL DAIRY DEVELOPMENT BOARD

16. Powers and functions of National Dairy Development Board.

CHAPTER V

PROVISIONS RELATING TO DIRECTORS AND EMPLOYEES OF THE NATIONAL DAIRY

DEVELOPMENT BOARD

17. Provisions regarding members of board of society and directors of dissolved company.
18. Provisions relating to officers and other employees of society and of dissolved company.
19. Power of Board to restructure and streamline organisational and functional set-up of National

Dairy Development Board to secure utmost efficiency in functioning.

20. Schemes regarding compensation to redundant employees, etc.
21. Compensation for transfer of employees not payable.
22. Provident fund, gratuity, welfare and other funds.

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CHAPTER VI

FINANCE, ACCOUNTS AND AUDIT

# SECTIONS

23. Borrowing powers of Board.
24. Grants and loans by Central Government.
25. Grants, donations, etc.
26. National Dairy Development Board Fund.
27. Preparation of accounts and balance-sheet.
28. Audit.
29. Reports to be laid before Parliament.
30. Power to call for repayment before agreed period.
31. Special provisions for enforcement of claims by National Dairy Development Board.

CHAPTER VII

MISCELLANEOUS

32. Defects in appointments not to invalidate acts, etc., of Board.
33. Protection of acts done in good faith.
34. Indemnity of directors.
35. Obligation as to fidelity and secrecy.
36. Recruitment of additional officers and other employees.
37. Liquidation only under orders of Central Government.
38. Delegation of certain powers by Central Government.
39. Transitional provisions for auditors.
40. Transitional provisions with regard to Chairman and Board.
41. Management or assistance to others to continue.
42. Mother Dairy to be a subsidiary unit of National Dairy Development Board.
43. Formation of companies with previous approval of Central Government.
44. [Omitted]
45. Returns.
46. Power to make schemes and regulations regarding service matters retrospectively.
47. Act to have overriding effect.
48. Power to make regulations.
49. Power to remove difficulties.
50. Schemes and regulations to be laid before Parliament.

THE SCHEDULE

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# THE NATIONAL DAIRY DEVELOPMENT BOARD ACT, 1987


# ACT NO. 37 OF 1987

[15th _September, 1987.]_

# An Act to declare the institution known as the National Dairy Development Board in the State of
 Gujarat to be an institution of national importance and to provide for its incorporation and for the vesting in that body corporate of the undertakings of the Indian Dairy Corporation with a view to provide for the administration and the carrying on of the functions to be performed by the body corporate more effectively throughout the country and for matters connected therewith and incidental thereto.

WHEREAS the National Dairy Development Board, a society formed and registered under the

Societies Registration Act, 1860 (21 of 1860) has been serving the country by the adoption of a
co-operative strategy, being a strategy evolved at Anand (Gujarat), for the economic development of the
rural masses and has been playing a vital role in improving the quality of life of the people through
co-operative effort;

AND WHEREAS the objects of the National Dairy Development Board are such as to make it an

institution of national importance and to constitute it as a body corporate;

AND WHEREAS the functions of the Indian Dairy Corporation, a company formed and registered under

the Companies Act, 1956 (1 of 1956), and the functions of the National Dairy Development Board are
complementary to each other and aimed at achieving common objectives;

AND WHEREAS it is necessary that the freedom and flexibility of operation hitherto available to the

National Dairy Development Board should continue to be available to it so as to enable it to perform its
functions more effectively and to play a wider and increasingly important role in serving the nation;

AND WHEREAS it is considered necessary to vest the undertakings of the Indian Dairy Corporation in

the National Dairy Development Board and to dissolve the said Corporation with a view to provide for
the administration and the carrying on of the functions to be performed by the body corporate more
effectively.

BE it enacted by Parliament in the Thirty-eighth Year of the Republic of India as follows:—

CHAPTER I

PRELIMINARY

**1. Short title and commencement.—(1) This Act may be called the National Dairy Development**

Board Act, 1987.

(2) It shall come into force on such date[1] as the Central Government may, by notification in the

Official Gazette, appoint.

**2. Declaration of National Dairy Development Board as an institution of national**

**importance.—Whereas the objects of the National Dairy Development Board at Anand in the State of**
Gujarat are such as to make the institution one of national importance, it is hereby declared that the
National Dairy Development Board is an institution of national importance.

1. 12th October, 1987, vide notification No. S.O. 898(E), dated 12th October, 1987, see Gazette of India, Extraordinary, Part II,
sec. 3(i).

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**3. Definitions.—In this Act, unless the context otherwise requires,—**


(a) “appointed day” means the date of commencement of this Act;


(b) “Board” means the Board of Directors of the National Dairy Development Board;


(c) “Chairman” means the Chairman of the National Dairy Development Board;


(d) “Companies Act” means the Companies Act, 1956 (1 of 1956);


(e) “director” means a director of the National Dairy Development Board, and includes the

Chairman;

(f) “foodstuffs” means such of the foodstuffs as are included in the definition of

essential commodities as contained in clause (a) of section 2 of the Essential Commodities
Act, 1955 (10 of 1955);

(g) “Indian Dairy Corporation” means the Indian Dairy Corporation, a company formed and

registered under the Companies Act, and having its registered office at Baroda in the State of Gujarat.


(h) “milk product” means—

(i) sterilised, standardised, recombined, toned, double-toned, skimmed, flavoured or acidified

milk;


(ii) ice-cream;


(iii) cream;

(iv) cheese;


(v) butter;


(vi) milk powders;


(vii) weaning foods with milk and infant milk foods;


(viii) malted milk foods with or without cocoa powder;


(ix) ghee;


(x) anhydrous milk fat and butter oil;


(xi) casein;


(xii) any other product containing milk or all or any of the milk products specified above

which the Central Government may, by notification in the Official Gazette, specify in this behalf;

(i) “National Dairy Development Board” means the National Dairy Development Board

incorporated under section 4;


(j) “prescribed” means prescribed by regulations made under this Act;


(k) “restructuring and streamlining”, in relation to the organisational and functional set-up of the

National Dairy Development Board, includes—


(i) opening or closing of units or offices;


(ii) revision of the organisational and functional set-up;


(iii) declaration of staff required;


(iv) integration of posts, fixation of seniority and pay scales;


(v) integration of required personnel in the revised set-up and issuance of appointment orders

in that behalf;


(vi) declaration or demarcation of duties and responsibilities attendant to posts;


(vii) declaration of posts equivalent to one another; and


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(viii) any other matter that may be necessary of incidental to meet the organisational or

functional needs of the National Dairy Development Board;

(l) “society” means the National Dairy Development Board, a society formed and registered

under the Societies Registration Act, 1860 (21 of 1860) and functioning as such immediately before
the appointed day;

(m) words and expressions used herein and not defined, but defined in the Companies Act, have


the meanings respectively assigned to them in that Act.


CHAPTER II

THE NATIONAL DAIRY DEVELOPMENT BOARD

**4. Incorporation of National Dairy Development Board.—(1) The National Dairy Development**

Board is hereby constituted a body corporate by the same name, and as such body corporate, it shall have
perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold
and dispose of property and to contract, and shall, by that name, sue and be sued.

(2) The head office of the National Dairy Development Board shall be at Anand in the State of

Gujarat.

(3) The National Dairy Development Board may establish units, offices, branches or agencies at any

such place in or outside India as it may consider necessary.

**5. Vesting of undertakings of Indian Dairy Corporation in National Dairy Development Board**

**and dissolution of Indian Dairy Corporation.—(1) On and from the appointed day, subject to the other**
provisions of this Act, all the undertakings of the Indian Dairy Corporation shall stand transferred to and
vest in the National Dairy Development Board.

(2) Notwithstanding anything contained in the Companies Act, the Indian Dairy Corporation shall, on

and from the appointed day, stand dissolved by virtue of the provisions of this Act.

**6. Effect of incorporation of National Dairy Development Board.—On and from the appointed**

day,—

(a) all properties and assets, movable and immovable, of, or belonging to, the society and the

Indian Dairy Corporation (hereinafter referred to as the dissolved company) shall vest in the National
Dairy Development Board;

(b) all the rights, debts, liabilities, interests, privileges and obligations of the society and the

Indian Dairy Corporation shall stand transferred to, and be the rights, liabilities, interests, privileges
and obligations of, the National Dairy Development Board;

(c) without prejudice to the provisions of clause (b), all debts, liabilities and obligations incurred,

all contracts entered into and all matters and things engaged to be done by, with or for, the society or
the dissolved company, immediately before the appointed day for or in connection with their
purposes, shall be deemed to have been incurred, entered into, or engaged to be done by, with or for,
the National Dairy Development Board;

(d) all sums of money due to the society and the dissolved company, immediately before the

appointed day, shall be deemed to be due to the Board;

(e) every subsidiary or the society and the dissolved company shall become the subsidiary of the

National Dairy Development Board;

(f) every organisation, which was being managed immediately before the appointed day by the

society or, as the case may be, by the dissolved company, shall be managed by the National Dairy
Development Board for such period to such extent and in such manner as the circumstances may
require;

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(g) every organisation which was getting financial, managerial or technical assistance from the

society or the dissolved company, immediately before the appointed day, may continue to be given
financial, managerial or technical assistance, as the case may be, by the National Dairy Development
Board, for such period, to such extent and in such manner as the National Dairy Development Board
may deem fit;

(h) the amount representing the capital of the dissolved company shall form part of the funds of

the National Dairy Development Board;

(i) any reference to the society or, as the case may be, to the dissolved company, in any law other

than this Act or in any contract or other instrument, shall be deemed to be reference to the National
Dairy Development Board.

**7. Saving of legal proceedings.—If, on the appointed day, there is pending any suit, arbitration,**

appeal or other legal proceedings of whatever nature by or against the society or the dissolved company,
the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the
incorporation of the National Dairy Development Board under section 4 or dissolution of the Indian Dairy
Corporation under section 5, as the case may be, but the suit, arbitration, appeal or other proceedings may
be continued, prosecuted and enforced by or against the National Dairy Development Board in the same
manner and to the same extent as it would or may have been continued, prosecuted and enforced by or
against the society or the dissolved company, as the case may be, if this Act had not been passed.

CHAPTER III

MANAGEMENT OF THE NATIONAL DAIRY DEVELOPMENT BOARD

**8. Management of National Dairy Development Board and composition of its Board of**

**Directors.—(1) The general superintendence, direction, control and management of the affairs and**
business of the National Dairy Development Board shall vest in a Board of Directors, which shall
exercise all powers and do all acts and things which may be exercised or done by the National Dairy
Development Board.

(2) The Board of Directors of the National Dairy Development Board shall consist of the following,

namely:—

(a) a Chairman;

(b) one director from amongst the officials of the Central Government;

(c) two directors from amongst the Chairmen of the State Co-operative Dairy Federations;

(d) whole-time directors, not more than three in number, from amongst the executives of the

highest grade of the National Dairy Development Board;

(e) one director, being an expert, from outside the National Dairy Development Board.

(3) The Chairman and the director referred to in clause (b) of sub-section (2) shall be nominated by

the Central Government and the directors referred to in clauses (c), (d) and (e) of sub-section (2) shall be
nominated by the Central Government after consultation with the Chairman:

Provided that the Chairman and the director referred to in clause (e) of sub-section (2) shall be

persons professionally qualified in one or more specialities, namely, dairying, animal husbandry, rural
economics, rural development, business administration or banking.

(4) The Board may associate with itself, in such manner, on such terms and for such purposes as it

may deem fit, any person whose assistance or advice it may desire in complying with any of the
provisions of this Act, and a person so associated shall have the right to take part in the discussions of the
Board relevant to the purposes for which he has been associated but shall not have the right to vote.

**9. Terms of office and conditions of service, etc., of Chairman and directors.—(1) The Chairman**

shall be the Chief Executive of the National Dairy Development Board and shall hold office for such
period as the Central Government may determine and any person so nominated shall be eligible for
renomination.

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(2) Notwithstanding anything contained in sub-section (1), the Central Government shall have the

right to terminate the services of the Chairman, at any time before the expiry of the period determined
under that sub-section, by giving him notice of not less than three months in writing or three months’
salary and allowances in lieu thereof, and the Chairman shall also have the right to relinquish his office, at
any time before the expiry of the period specified under that sub-section, by giving to the Central
Government notice of not less than three months in writing.

(3) The Chairman shall receive such salary and allowances as may be determined by the Central

Government.

(4) Where an executive of the National Dairy Development Board has been nominated under section

8 as a whole-time director thereof, such nomination shall be without prejudice to his continuance as an
executive of the National Dairy Development Board and he may be continued as such executive on his
ceasing to be a director.

(5) The directors nominated under clause (c) of sub-section (2) of section 8 shall hold office for such

period not exceeding one year at a time as the Central Government may determine, and the directors
nominated under clauses (d) and (e) of sub-section (2) of section 8 shall hold office for such period as the
Central Government may determine.

(6) Every director, other than the Chairman, shall hold office during the pleasure of the Central

Government.

(7) The directors referred to in clauses (b), (c) and (e) of sub-section (2) of section 8 shall be paid

such allowances as the Central Government may determine.

**10. Meetings of Board.—(1) The Board shall meet at the head office of the National Dairy**

Development Board or any of its offices at such times as the Chairman may direct, and shall observe such
rules of procedure in regard to the transaction of business at its meetings (including the quorum at its
meetings) as may be prescribed.

(2) The Chairman or, if he is unable to attend a meeting of the Board, any other director nominated by

the Chairman in this behalf and, in the absence of such nomination or where there is no Chairman, any
director chosen by the directors present from among themselves, shall preside at the meeting.

(3) All questions which come up before any meeting of the Board shall be decided by a majority of

votes of the directors present and voting, and in the event of an equality of votes, the Chairman or the
person presiding shall have the right to exercise a second or casting vote.

(4) Save as otherwise provided in sub-section (3), every director of the Board shall have one vote.

**11. Manner of transacting business of Board.—(1) Subject to the provisions of this Act, the Board**

shall, in the discharge of its functions, act on sound business principles with due regard to public interest.

(2) Save as otherwise prescribed, the Chairman shall have the powers of general superintendence,

direction, control and management of the affairs and business of the National Dairy Development Board,
and he may exercise all other powers and do all acts and things which may be exercised or done by the
Board.

(3) The Chairman may, when he is unable to discharge his functions by reason of his being away or

otherwise, authorise any whole-time director to discharge all or any of his functions for a temporary
period.

(4) In the absence of the Chairman and of an authorised whole-time director as referred to in

sub-section (3), for whatsoever reason, the powers of the Chairman may be exercised by the senior-most
of the whole-time directors referred to in clause (d) of sub-section (2) of section 8.

**12. Management committees.—(1) The Board may from time to time constitute such number of**

management committees as it may deem fit for the purpose of assisting the Board in the efficient
discharge of its functions.

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(2) A management committee shall consist of such number of persons (whether directors or

otherwise) as its members as the Board may determine, subject to the condition that in every such
committee either the Chairman or a whole-time director shall be a member thereof.

(3) Every management committee shall function under the general control, direction and

superintendence of the Board, and for such duration and in such manner as the Board may direct.

(4) The minutes of every meeting of the management committees shall, as soon as may be, be laid

before the Board.

**13. Allowances, etc., of members of management committees.—(1) The members of any**

management committee, other than the Chairman and whole-time directors, may be paid such allowances,
if any, as may be prescribed, for attending the meetings of the management committee or for attending to
any other work of the National Dairy Development Board.

(2) All other matters pertaining to the conduct of proceedings of the management committees shall be

such as may be prescribed.

**14. Delegation of powers to management committees, etc.—(1) The Board may delegate to any**

management committee or to any member thereof or to any officer of the National Dairy Development
Board, subject to such conditions and limitations, if any, as may be specified by the Board, such of its
powers and functions under this Act as it may deem necessary for the efficient discharge of its functions.

(2) The Board may, if it considers it necessary so to do in the public interest, delegate any of its

powers and functions, subject to such conditions and limitations, if any, as may be specified by it, to a
co-operative federation at the National or State level, or to any organisation owned, managed, controlled
or assisted by the National Dairy Development Board.

**15. Delegation of powers to whole-time directors, etc.—The Board may, from time to time, by**

order, delegate, subject to such general and special conditions as it may deem fit to impose, the powers of
appointment, termination, suspension and dismissal from service of any employee of the National Dairy
Development Board,—

(a) who is drawing a salary in such higher grade as may be prescribed, to a whole-time director,

and

(b) who is drawing a salary in any grade, other than a higher grade prescribed under clause (a), to

such officer of the National Dairy Development Board as it may deem fit:

Provided that in relation to employees falling under clause (b), the Chairman may, if he considers it

necessary or expedient so to do, perform the functions of the Board under this section.

CHAPTER IV

POWERS AND FUNCTIONS OF THE NATIONAL DAIRY DEVELOPMENT BOARD

**16. Powers and functions of National Dairy Development Board.—(1) Subject to the provisions of**

this Act,—

(a) it shall be the duty and function of the National Dairy Development Board to promote plan

and organise programmes for the purposes of development of dairy and other agriculture based and
allied industries and biologicals on an intensive and nation-wide basis and to render assistance in the
implementation of such programmes;

(b) it shall be the responsibility of the National Dairy Development Board to adopt the

co-operative strategy in a more effective manner on an intensive and nation-wide basis and to take
such steps as may be necessary for the purposes aforesaid; and

(c) the National Dairy Development Board may take such measures for carrying out the said

purposes, and for the exercise of its powers and the performance of its functions and responsibilities
under this Act, as it may consider necessary.

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(2) In particular, and without prejudice to the generality of the foregoing provisions, the measures

referred to therein may provide for—

(a) facilitating research and promotional activities in the fields of dairying, immunology, animal

husbandry, agriculture and horticulture;

(b) imparting technological know-how to such organisations in the co-operative or public sector

as are engaged in the production, procurement, preservation or marketing of milk and milk products;

(c) facilitating the training of personnel for absorbing and utilising the technical know-how that

may be imparted;

(d) designing, planning, promoting developing, constructing, sponsoring and setting up of dairy

industries and undertaking any other related promotional activity including the financing of the same;

(e) providing consultancy and managerial services and the execution of any project on a turn-key

basis or otherwise, furnishing integral services such as storage, transportation, processing, distribution
of milk and milk products and to serve as a lead institution with reference to milk and milk products;

(f) adopting such measures as may be practicable—

(i) for the conservation of milk and milk products by avoidance of waste at all stages or

otherwise;

(ii) to assist primary producers of milk and milk products and persons in the co-operative and

public sector to get incentive prices; and

(iii) to build up a national milk grid;

(g) recommending to Government, as and when necessary, the maximum and minimum prices to

be fixed for the purchase or sale of milk and, if so required, assist in the enforcement of it;

(h) functioning as a channelising agency in respect of import and export of milk and milk

products and of milch animals or bulls;

(i) providing financial, technical, administrative, managerial or other assistance or taking such

measures as may be necessary—

(A) for the development (if required by the import of quality semen) and preservation of high

yielding cattle;

(B) for adopting improved methods of cattle breeding;

(C) for increasing production and supply of better and improved animal feed including

fodder; and

(D) generally for the enhancement of the cattle wealth of the country;

(j) processing, promoting or financing technological, industrial or economic research in milk and

milk products in such manner as the Board may deem fit by the utilisation of available institutions or
otherwise;

(k) financing, in such manner as the Board may deem appropriate (including contribution to

capital), of co-operative federations, co-operative unions or co-operative enterprises or of any scheme
in the co-operative or public sector intended to stimulate the production, preservation, distribution
and consumption of milk and milk products nation-wide;

(l) regulating the dairy and allied industries and functioning as regulatory authority therefor, as

may be required by the Central Government;

(m) adopting measures for the development and co-ordination of organisations in the production

of milk and milk products so as to enable the primary producers thereof to become participants in,
and beneficiaries of, the development and growth of dairy and allied industries;

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(n) collecting and compiling relevant data and statistics necessary for the efficient management of

the national milk grid and national milch herd and on any other matter relating to dairying and allied
industries;

(o) promoting publicity on the research and development of dairy and allied industries;

(p) promoting and developing production, grading and marketing of milk and milk products in

various parts of the country;

(q) co-operating with international organisations and foreign experts and for functioning as the

agent of the Central Government for the reception, utilisation and disbursement of any gift of milk
and milk products and any other foodstuffs;

(r) building up of a reserve of buffer stock of basic commodities;

(s) promoting the export of milk and milk products where, in the opinion of the Board, it is so

required to avoid waste or to otherwise serve the public interest and generally for exporting any
article produced, processed or promoted by it;

(t) acquiring, holding and disposing of any property for the purposes of its business;

(u) transferring the whole or any part of its managerial, technical or other functions in relation to

any organisations receiving assistance from the National Dairy Development Board to the recipient
organisation;

(v) advancing or lending money upon security of movable or immovable property or otherwise;

(w) borrowing money in such manner and upon such security as the Board may deem fit;

(x) carrying on, either by itself or through any other organisations, any other business or class of

business, in a case where such business or class of business was being carried on by the society or the
dissolved company immediately before the appointed day;

(y) promoting and encouraging co-operative effort among those engaged in the production of

milk and milk products and other foodstuffs;

(z) levying fees or other charges for any assistance given or services rendered by the National

Dairy Development Board;

(za) carrying on any other business or doing any other act or thing as may be necessary,

incidental or conducive to further the objectives of the National Dairy Development Board under this
Act.

(3) If, immediately before the appointed day, either the society or the dissolved company

was engaged in the production, research and development, processing, marketing, import, export
or other activities, or had been rendering any service or assistance, in relation to any article or
product, other than milk and milk products or the dairy industry, then, notwithstanding anything
contained in this Act or in any other law, the National Dairy Development Board may engage in the
production, research and development, processing, marketing, import, export or other activities, or render
such other services or assistance in relation to the said article or product as may be required, and the
provisions of sub-sections (1) and (2) shall, so far as may be, apply in relation to that article or product, as
if any reference therein to milk and milk products or to dairy and allied industries had been a reference to
that article or product or service or activity.

(4) Where the Central Government or the Government of any State considers that, having regard to

the special expertise of the National Dairy Development Board and the needs of the public, it is necessary
or advisable to entrust the National Dairy Development Board with any activity, other than that to which
the foregoing sub-sections apply, it may, entrust such activity to the National Dairy Development Board,
whereupon it shall be competent for the National Dairy Development Board to carry on such activity.

(5) Without prejudice to the generality of the foregoing powers, it shall be competent for the National

Dairy Development Board to participate, with the prior approval of the Central Government, in any other
organisation, financially, managerially or in any other manner.

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CHAPTER V

PROVISIONS RELATING TO DIRECTORS AND EMPLOYEES OF THE NATIONAL DAIRY DEVELOPMENT BOARD

**17. Provisions regarding members of board of society and directors of dissolved**

**company.—Every person holding office as a member of the board of the society, or as a director of the**
dissolved company, immediately before the appointed day, shall, on and from that day, cease to hold
office as such member or director.

**18. Provisions relating to officers and other employees of society and of dissolved**

**company.—Subject to the provisions of section 19, every full-time officer or other employee, holding**
office immediately before the appointed day, in the society or the dissolved company, shall, on and from
the appointed day, become an officer or other employee, as the case may be, of the National Dairy
Development Board and shall hold office or service in the National Dairy Development Board on the
same terms and conditions of service as he would have had under the society or the dissolved company,
as the case may be, and shall continue to do so unless and until his terms and conditions of service are
duly altered by the Board.

**19. Power of Board to restructure and streamline organisational and functional set-up of**

**National Dairy Development Board to secure utmost efficiency in functioning.—(1) Notwithstanding**
anything contained in this Chapter, the National Dairy Development Board may make such orders or take
such action as may be necessary for restructuring and streamlining the organisational and functional
set-up of the National Dairy Development Board to secure utmost efficiency in its functioning, and the
Board shall, for achieving this object, be competent to declare any officer or other employee or any class
of officers or other employees to be redundant if it finds them redundant by way of being surplus or
otherwise due to duplication of posts of the same nature, or absence of the special expertise required for
the post in the revised set-up, or the non-availability of posts in a particular office or unit of the National
Dairy Development Board and it is not practicable to accommodate him in the type of post in the
particular grade.

(2) Nothing in this Chapter shall preclude the Board, if it is considered necessary for the purpose of

rationalising the conditions of service of the officers and other employees so transferred to it, to change
their designation, conditions of service or the scales of pay applicable to them or to reallocate their duties
and functions.

**20. Schemes regarding compensation to redundant employees, etc.—(1) The officers or other**

employees declared as redundant in pursuance of section 19, shall be dealt with in accordance with such
scheme or schemes as the Board may, with the previous approval of the Central Government, make in this
behalf and different schemes may be made in relation to different classes or categories of officers and
other employees.

(2) The scheme or schemes referred to in sub-section (1) may provide for—

(a) the quantum of compensation payable to any officer or other employee referred to in

sub-section (1) and the mode of payment thereof:

Provided that the compensation so payable shall in no case be less than that payable to him under

the service conditions applicable to him if his services were dispensed with;

(b) the quantum of arrears of salary or other emoluments, provident fund, gratuity or any other

amount that may be payable in accordance with the service conditions applicable to them;

(c) the provision for appeal for the aggrieved redundant officers and other employees and for the

appellate authority, being an officer not below the rank of a Joint Secretary to the Government of
India in the Ministry dealing with Agriculture;

(d) any other matter pertaining to the termination of service consequent on their being declared

redundant.

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**21. Compensation for transfer of employees not payable.—The transfer of the services of any**

officer or other employee of the society or of the dissolved company to the National Dairy Development
Board shall not entitle any such officer or other employee to any compensation under the Industrial
Disputes Act, 1947 (14 of 1947) or any other law for the time being in force, and no such claim shall be
entertained by any court, tribunal or other authority.

**22. Provident fund, gratuity, welfare and other funds.—(1) Where a provident fund has been**

established by the society or the dissolved company in respect of either of them for the benefit of the
officers or other employees and the same stands vested in a trust, the moneys and other assets standing to
the credit of each provident fund shall continue to be held in trust with the same objects as were
applicable before the appointed day and the trustees of such trusts immediately before the appointed day
shall, subject to the provisions of the trust deeds and the rules relating to the respective trusts, continue to
function as trustees in respect of the respective provident fund until and unless otherwise directed by the
National Dairy Development Board, and the rights relating to the said trusts shall, as from the appointed
day, vest in the National Dairy Development Board.

(2) Where any gratuity, welfare or other fund had been established by the society or the dissolved

company for the benefit of its officers or other employees and is in existence immediately before the
appointed day, all moneys and other assets standing to the credit of or relatable to such gratuity, welfare
or other fund shall vest in the National Dairy Development Board.

(3) Notwithstanding anything contained in sub-sections (1) and (2), the Board may give such

directions relating to the trusts or funds or take such other action as it may deem fit so as to bring about
uniformity or to effect integration in part or in whole in such trusts or funds.

(4) The Board may, having regard to the welfare of the officers and other employees or their families,

take such steps for the advancement of their health, education or other interests as may be prescribed and
create such institutions as may be required for the purpose.

(5) Nothing in the foregoing provisions of this section shall derogate the power of the Board to make

regulations for establishing or maintaining any provident fund, welfare fund, gratuity fund or other fund
for any of its officers or other employees.

CHAPTER VI

FINANCE, ACCOUNTS AND AUDIT

**23. Borrowing powers of Board.—The Board may, with the previous approval of the Central**

Government or in accordance with the terms of any general or special authority given to it by the Central
Government, borrow money from any source as it may deem fit for discharging all or any of its functions
under this Act.

**24. Grants and loans by Central Government.—The Central Government may, after due**

appropriation made by Parliament by law in this behalf, pay to the National Dairy Development Board by
way of grants or loans such sums of money as the Central Government may think fit for being utilised for
the purposes of this Act.

**25. Grants, donations, etc.—The National Dairy Development Board may receive gifts, grants,**

donations or benefactions from Government or any other source in or outside India and the same shall be
used by the Board for exercising its functions and discharging its responsibilities under this Act.

(2) The National Dairy Development Board shall not receive any gifts, grants, donations or

benefactions from a foreign government or any other source outside India except with the previous
approval of the Central Government.

**26. National Dairy Development Board Fund.—(1) The National Dairy Development Board shall**

maintain a Fund to be called the National Dairy Development Board Fund to which shall be credited—

(a) all sums of money vested in the National Dairy Development Board under Chapter II;

(b) all sums of money that may be provided by Government;

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(c) all fees and other charges received by the National Dairy Development Board;

(d) all sums of money generated from gift commodities by the National Dairy Development

Board or received by it by way of grants, donations, benefactions, bequests or transfers; and

(e) all sums of money received by the National Dairy Development Board in any other manner or

from any other source.

(2) All sums of money credited to the said Fund shall, subject to the regulations, if any, made in this

behalf, be deposited with the State Bank of India or any other nationalised bank.

_Explanation.—In sub-section “nationalised bank” means a corresponding new bank as defined in the_

Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980 (44 of 1980).

(3) The said Fund shall be applied towards meeting the administrative and other expenses of the

National Dairy Development Board, including expenses incurred in the exercise of the powers and the
discharge of its functions and responsibilities under section 16 or in relation to any of the activities
referred to therein or for anything relatable thereto.

**27. Preparation of accounts and balance-sheet.—(1) The balance-sheet and accounts of the**

National Dairy Development Board shall be prepared in such form and in such manner as may be
prescribed.

(2) The Board shall cause the books and accounts of the National Dairy Development Board to be

closed and balanced as on the 31st day of March each year or such other date as the Board may, with the
concurrence of the Central Government, decide.

**28. Audit.—(1) The accounts of the National Dairy Development Board shall be audited by auditors**

duly qualified to act as auditors of companies under the Companies Act, and the appointment of auditors
and remuneration payable to them shall be subject to the approval of the Central Government.

(2) Every auditor in the performance of his duties shall have at all reasonable times access to books,

accounts and other documents of the National Dairy Development Board.

(3) The auditors shall submit their report to the Board which shall forward a copy of their report to

the Central Government.

**29. Reports to be laid before Parliament.—The Central Government shall cause the report of the**

auditors under section 28 to be laid before both the Houses of Parliament as soon as may be after such
report is received by the Central Government.

**30. Power to call for repayment before agreed period.—Notwithstanding anything contained in**

any agreement to the contrary, the Board may, by notice in writing, require any person to which the
National Dairy Development Board or the society or the dissolved company has granted any loan or
advance, to discharge forthwith in full, its liabilities to the Board,—

(a) if it appears to the Board that any false or misleading information in any material particular

was given in the application for the loan or advance; or

(b) if the person has failed to comply with the terms of its contract in the matter of the loan or

advance; or

(c) if there is a reasonable apprehension that the person is unable to pay his debts or that

proceedings for liquidation may be commenced in respect thereof; or

(d) if the property pledged, mortgaged, hypothecated or assigned as security for the loan or

advance is not insured and kept insured by the person to the satisfaction of the Board (or depreciates
in value to such an extent that, in the opinion of the Board, further security to the satisfaction of the
Board should be given and such security is not given after demand); or

(e) if, without due permission, any machinery, plant or other equipment (whether forming part of

security or not) is removed from the concerned premises without being replaced; or

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(f) if it appears to the Board that any condition in the loan agreement relating to the supply of

goods or implementation of the project is being substantially violated; or

(g) if, for any other reason, the Board considers it necessary so to do for protecting the interests of

the National Dairy Development Board.

**31. Special provisions for enforcement of claims by National Dairy Development**

**Board.—(1) Where any person, in breach of any agreement, makes any default in the repayment of any**
loan or advance or any instalment thereof (or in meeting its obligations in relation to the guarantee given
by the National Dairy Development Board) or otherwise fails to comply with the terms of agreement with
the Board or where the Board requires any person to make immediate repayment of any loan or advance
under section 30 and the person fails to make such repayment, then, without prejudice to the provisions of
section 69 of the Transfer of Property Act, 1882 (4 of 1882), any officer of the National Dairy
Development Board, generally or specially authorised by the Board in this behalf, may apply to the court
for one or more of the following reliefs, namely:—

(a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the

National Dairy Development Board as security for the loan or advance; or

(b) for transferring the management of any organisation to the National Dairy Development

Board; or

(c) for an _ad interim injunction where there is apprehension that the machinery or other_

equipment is being removed from the premises of the organisation without due permission.

(2) The procedure for making an application under sub-section (1) and for the disposal thereof shall

be such as may be prescribed.

CHAPTER VII

MISCELLANEOUS

**32. Defects in appointments not to invalidate acts, etc., of Board.—No act or proceeding of the**

Board or of any committee of the National Dairy Development Board shall be questioned on the ground
merely of the existence of any vacancy in, or defect in the constitution of, the Board or the committee, as
the case may be.

**33. Protection of acts done in good faith.—No suit or other legal proceeding shall lie against the**

National Dairy Development Board or any director or any officer or other employee of the Board or any
other person authorised by the Board to discharge any functions under this Act, for any loss or damage
caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance
of this Act or of any other law or provision having the force of law.

**34. Indemnity of directors.—Every director shall be indemnified by the National Dairy**

Development Board against all losses and expenses incurred by him, in, or in relation to, the discharge of
his duties, except such as are caused by his own wilful act or default.

**35. Obligation as to fidelity and secrecy.—(1) The Board shall not, except as otherwise required by**

this Act or any other law, divulge any information relating to, or to the affairs of, the National Dairy
Development Board or of the society or of the dissolved company except in circumstances in which it is
in accordance with the law or practice and usage customary among financial institutions, necessary or
appropriate for the Board to divulge such information.

(2) Every director, member of a committee, auditor or officer or other employee of the National Dairy

Development Board shall, before entering upon his duties, make a declaration of fidelity and secrecy in
the form set out in the Schedule.

**36. Recruitment of additional officers and other employees.—Nothing contained in Chapter V**

shall be deemed to prejudice the right of the National Dairy Development Board to create such number of
additional posts or to appoint such number of additional officers or other employees as it may consider
necessary or desirable for the efficient discharge of the functions of the National Dairy Development
Board and where any such officer or other employee is appointed, the terms and conditions of service,
including inter se seniority, may also be determined by the Board.

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**37. Liquidation only under orders of Central Government.—No provision of any law relating to**

the winding up of companies or corporations shall apply to the National Dairy Development Board and it
shall not be placed in liquidation save by an order of the Central Government and in such manner as it
may direct.

**38. Delegation of certain powers by Central Government.—(1) The Central Government may, on**

the recommendation of the National Dairy Development Board, if satisfied that it is necessary so to do in
the public interest, make any scheme for the purpose of enabling the National Dairy Development Board
to undertake and perform any of the activities or functions of the Central Government relatable to dairy,
foodstuffs and connected industries, particularly with reference to matters related to the development of
the national milk grid by the regulation of the production, procurement, marketing, export-import,
maintenance of standards or such like activities (including the collection and compilation of statistics and
relevant data).

(2) Every scheme made under sub-section (1) shall be published in the Official Gazette and may

contain such conditions, restrictions or limitations as the Central Government may deem fit to impose.

**39. Transitional provisions for auditors.—Any auditor appointed in relation to the society or the**

dissolved company, functioning immediately before the appointed day, may, notwithstanding anything
contained in this Act, be continued by the National Dairy Development Board for such period and on
such terms as may be considered necessary.

**40. Transitional provisions with regard to Chairman and Board.—The Chairman of the society,**

holding office immediately before the appointed day, shall be the Chairman of the National Dairy
Development Board until a Chairman is nominated in accordance with the provisions of this Act and he
shall be competent to perform the functions of the Board until the constitution of the Board under this
Act.

**41. Management or assistance to others to continue.—For the removal of doubts, it is hereby**

declared that where, before the appointed day, either the society or the dissolved company was managing
any other organisation or rendering any technical or other assistance to any organisation or person, the
National Dairy Development Board may continue to render the same or similar service to such extent, for
such period and with such modifications as the Board may deem fit.

**42. Mother Dairy to be a subsidiary unit of National Dairy Development Board.—The**

undertaking known as the Mother Dairy, Delhi, shall, on and from the appointed day, become a
subsidiary unit of the National Dairy Development Board but shall retain its separate character, unless
otherwise decided by the Board.

**43. Formation of companies with previous approval of Central Government.—(1) Where the**

Board considers it necessary so to do, for the implementation of any of its objectives, it may, subject to
the previous approval of the Central Government form one or more companies either by itself or in
conjunction with any of its subsidiaries or with any other undertaking.

(2) Where any company has been formed in pursuance of sub-section (1),—

(a) in the case of a company formed by the Board by itself or along with its subsidiaries, it may

contribute such capital, transfer such of its assets or render such assistance, as may be required, so as
to enable the company so formed to function; and

(b) in any other case, it may contribute capital, transfer assets or render assistance in such manner

and to such extent as the Board may deem fit subject to specific previous approval of the Central
Government in that regard.

**44. [Exemption from tax on income]** _Omitted by Act_ 20 of 2002 (20 of 2002) s.162

_(w.e.f. 1-4-2003)._

**45. Returns.—The National Dairy Development Board shall furnish, from time to time, to the**

Central Government such returns as the Central Government may require.

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**46. Power to make schemes and regulations regarding service matters retrospectively.—Any**

scheme or regulation made under this Act in relation to conditions of service or like matters of officers or
other employees of the National Dairy Development Board, may be made retrospectively from any date
not earlier than the appointed day.

**47. Act to have overriding effect.—The provisions of this Act shall have effect notwithstanding**

anything inconsistent therewith contained in the Companies Act, the Industrial Disputes
Act, 1947 (14 of 1947) or any other law for the time being in force or in any instrument having effect by
virtue of any law other than this Act, or in any decree or order of any court, tribunal or other authority.

**48. Power to make regulations.—(1) The Board may, by notification in the Gazette of India, make**

regulations not inconsistent with the provisions of this Act and the schemes made thereunder, to provide
for all matters for which provision is necessary or expedient for the purpose of giving effect to the
provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may

provide for all or any of the following matters, namely:—

(a) the procedure to be followed for the transaction of business at the meetings of the Board and

the number of members which shall form quorum at a meeting under sub-section (1) of section 10;

(b) the allowances to be paid to the members of any management committee, other than the

Chairman and whole-time directors, for attending the meetings of the management committee or for
attending to any other work of the National Dairy Development Board under sub-section (1) of
section 13 and the other matters pertaining to the conduct of proceedings of the management
committees under sub-section (2) of that section;

(c) the higher grade for the purposes of clause (a) of section 15;

(d) the particulars of the steps for the advancement of the health, education or other interests of

the officers and other employees or their families as referred to in sub-section (4) of section 22;

(e) the matters of detail regarding establishment or maintenance of funds referred to in

sub-section (5) of section 22;

(f) the conditions subject to which sums of money are to be deposited under sub-section (2) of

section 26;

(g) the form and manner in which the balance-sheet and accounts of the National Dairy

Development Board shall be prepared under sub-section (1) of section 27;

(h) the procedure for making an application under sub-section (1) of section 31 and for the

disposal thereof under sub-section (2) of that section;

(i) conditions of service of officers and other employees;

(j) any other matter which is to be, or may be, prescribed.

**49. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of**

this Act, the Central Government may, by order, published in the Official Gazette, make such provisions
not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:

Provided that no such order shall be made after the expiry of five years from the appointed day.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each

House of Parliament.

**50. Schemes and regulations to be laid before Parliament.—Every scheme and every regulation**

made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament,
while it is in session, for a total period of thirty days which may be comprised in one session or in two or
more successive sessions, and, if, before the expiry of the session immediately following the session or
the successive sessions aforesaid, both Houses agree in making any modification in the scheme or
regulation or both Houses agree that the scheme or regulation should not be made, the scheme or
regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be;
so, however, that any such modification or annulment shall be without prejudice to the validity of
anything previously done under that scheme or regulation.

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# THE SCHEDULE

[See section 35 (2)]

_Declaration of fidelity and secrecy_

I, ................. do hereby declare that I will faithfully, truly, and to the best of my skill and ability

execute and perform the duties required of me as Chairman, director, member of committee, auditor,
officer or other employee (as the case may be) of the National Dairy Development Board and which
properly relate to the office or position held by me in or in relation to the National Dairy Development
Board.

I further declare that I will not communicate or allow to be communicated to any person not legally

entitled thereto any information relating to the affairs of any person having any dealing with the National
Dairy Development Board nor will I allow any such person to inspect or have access to any books or
documents belonging to or in the possession of the National Dairy Development Board and relating to the
business of the National Dairy Development Board or the business of any person having any dealing with
the National Dairy Development Board.

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