The Oil Industry (Development) Act, 1974
# THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974                          
 Last Updated 17-3-2020

 ________

 ARRANGEMENT OF SECTIONS                                  

________

CHAPTER I

PRELIMINARY

SECTIONS

1. Short title and extent.

2. Definitions.


CHAPTER II

THE OIL INDUSTRY DEVELOPMENT BOARD

3. Establishment and constitution of the Board.

4. Conditions of service of members.

5. Secretary, officers, consultants and employees of the Board.

6. Functions of the Board.

7. Principles and conditions of assistance.

8. Power to call for repayment before agreed period.

9. Special provisions for enforcement of claims by the Board.

10. Power of Board to appoint Directors of oil industrial concern.

11. Effect of notified order appointing Director.

12. Powers and duties of the Directors.

13. No right to compensation for loss of office.

14. Application of Act 1 of 1956.

CHAPTER III

FINANCE, ACCOUNTS AND AUDIT

15. Duties of excise.

16. Crediting of proceeds of duty to Consolidated Fund of India.

17. Grants and loans by the Central Government.

18. Oil Industry Development Fund.

19. Power to borrow.

20. Accounts and audit.

CHAPTER IV

CONTROL BY THE CENTRAL GOVERNMENT

21. Power to require persons engaged in oil industry to maintain and produce books, accounts and

records relating to business and inspection thereof.

22. Directions by the Central Government.

22A. [Omitted.].

1


-----

CHAPTER V

MISCELLANEOUS

SECTIONS

23. Penalties.

24. Other penalties.

25. Offences by companies.

26. Jurisdiction of courts.

27. Previous sanction of Central Government.

28. Protection of action taken in good faith.

29. Dissolution of the Board.

30. Act to have overriding effect.

31. Power to make rules.

THE SCHEDULE.

2


-----

# THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974

 ACT NO. 47 OF 1974

[26th September, 1974.]

# An Act to provide for the establishment of a Board for the development of oil industry and for
 that purpose to levy a duty of excise on crude oil and natural gas and for matters connected therewith.

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

CHAPTER I

PRELIMINARY

**1. Short title and extent.—(1) This Act may be called the Oil Industry (Development) Act, 1974.**

(2) It extends to the whole of India.

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

(a) “assistance” means assistance rendered under section 6;

(b) “Board” means the Oil Industry Development Board established under section 3;

(c) “Chairman” means the Chairman of the Board;

(d) “court” means the High Court or the Court of Judicial Commissioner within the local limits of

whose jurisdiction the defendant or respondent carries on the whole or a substantial part of his
business, and where the Central Government has, by notification in the Official Gazette, and subject
to such restrictions, limitations and conditions, as it thinks fit, empowered any court of civil
jurisdiction subordinate to the High Court or, as the case may be, the Court of the Judicial
Commissioner, to exercise all or any of the powers conferred by this Act, such court;

(e) “crude oil” means petroleum in its natural state before it is refined or otherwise treated but

from which water and foreign substances have been extracted;

(f) “fertilisers” means such oil based chemical compounds which when employed in agriculture

provide either single or multiple plant nutrients in any one or more of the forms of nitrogen,
phosphorus and potash;

(g) “member” means a member of the Board and includes the Chairman;

(h) “mineral oil” includes petroleum and natural gas;

(i) “natural gas” means gas consisting primarily of hydrocarbons obtained from oil wells or gas

wells;

(j) “oil industrial concern” means any company, corporation or co-operative society, which is

engaged or which is to engage in any activity referred to in clause (k);

(k) “oil industry” includes all activities by way of prospecting or exploring for or production of

mineral oil, refining, processing, transportation, storage, handling and marketing, of mineral oil,
production and marketing of all products, down-stream of an oil refinery and the production of
fertilisers and petro-chemicals and all activities directly or indirectly connected therewith;

(l) “petro-chemicals” means chemicals, whether organic or inorganic, derived from petroleum

including crude oil, natural gas, condensates, refined petroleum fractions and refinery gases;

(m) “petroleum product” means any commodity made from petroleum or natural gas and includes

refined crude oil, processed crude petroleum, residuum from crude petroleum cracking stock,
uncracked fuel oil, fuel oil, treated crude oil residuum, casing head gasoline, natural gas gasoline,

3


-----

naphtha, distillate gasoline, kerosene, bitumen, asphalt and tar, waste oil, blended gasoline,
lubricating oil, blends or mixture of oil with one or more liquid products or by-products derived from
oil or gas and blends or mixtures of two or more liquid products or by-products derived from oil
condensate and gas or petroleum hydrocarbons not specified hereinbefore;

(n) “prescribed” means prescribed by rules made under this Act.

CHAPTER II

THE OIL INDUSTRY DEVELOPMENT BOARD

**3. Establishment and constitution of the Board.—(1) With effect from such date as the Central**

Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established
for the purposes of this Act a Board to be called the Oil Industry Development Board.

(2) The Board shall be a body corporate by the name aforesaid having perpetual succession and a

common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to
contract, and shall by the said name sue and be sued.

(3) The Board shall consist of the following members, namely:—

(a) not more than three members to be appointed by the Central Government to represent the

Ministry or Ministries of the Central Government dealing with petroleum and chemicals;

(b) two members to be appointed by the Central Government to represent the Ministry of the

Central Government dealing with finance;

(c) not more than five members to be appointed by the Central Government to represent the

Corporations, being Corporations owned or controlled by the Central Government, engaged in
activities referred to in clause (k) of section 2;

(d) two members of whom one shall be appointed by the Central Government from amongst

persons who, in the opinion of that Government, have special knowledge or experience of oil industry
and the other shall be appointed by that Government to represent labour employed in the oil industry;

(e) the Secretary to the Board, ex officio.

(4) The Central Government shall appoint the Chairman of the Board.

(5) The term of office of the members of the Board (other than the members appointed by virtue of

office) and the manner of filling vacancies among, and the procedure to be followed in the discharge of
their functions by, the members shall be such as may be prescribed.

(6) Subject to such conditions and restrictions as may be prescribed, the Board may constitute

Standing Committees or _ad hoc Committees for exercising any power or discharging any duty of the_
Board or for inquiring into, reporting and advising on, any matter which the Board may refer to them:

Provided that a Standing Committee shall consist exclusively of members of the Board.

(7) No act or proceeding of the Board or of any Committee constituted under sub-section (6) shall be

invalidated merely by reason of—

(a) any vacancy in, or any defect in the constitution of, the Board or such Committee; or

(b) any defect in the appointment of a person acting as a member of the Board or such

Committee; or

(c) any irregularity in the procedure of the Board or such Committee not affecting the merits of

the case.

**4. Conditions of service of members.—Every person appointed as a whole-time member of the**

Board shall be entitled to such salary and allowances and such conditions of service in respect of leave,
pension, provident fund and other matters as may, from time to time, be fixed by the Central Government
and the other members of the Board and such of the members of any ad hoc Committee constituted under

4


-----

sub-section (6) of section 3 as are not members of the Board shall be entitled to such allowances, if any,
and such other conditions of service, as may be prescribed.

**5. Secretary, officers, consultants and employees of the Board.—(1) The Central Government**

shall appoint a Secretary to the Board.

(2) Subject to rules made in this behalf, the Secretary shall exercise such powers and perform such

duties as may be prescribed or as may be delegated to him by the Board.

(3) The Secretary shall be entitled to such salary and allowances and such conditions of service in

respect of leave, pension, provident fund and other matters as may, from time to time, be fixed by the
Central Government.

(4) Subject to such conditions and restrictions as may be prescribed, the Board may appoint such

consultants as may be necessary for the performance of its functions on such terms and conditions as it
may determine from time to time.

(5) Subject to such conditions and restrictions as may be prescribed, the Board may appoint such

other officers and employees as may be necessary for the performance of its functions and pay them such
salaries and allowances as it may determine from time to time.

**6. Functions of the Board.—(1) Subject to the provisions of this Act and the rules made thereunder,**

the Board shall render, in such manner, to such extent and on such terms and conditions as it may deem
fit, financial and other assistance for the promotion of all such measures as are, in its opinion, conducive
to the development of oil industry.

(2) Without prejudice to the generality of the provisions of sub-section (1), the Board may render

assistance under that sub-section by—

(a) making grants or advancing loans to any oil industrial concern or other person who is engaged

or is to engage in any activity referred to in clause (k) of section 2;

(b) guaranteeing on such terms and conditions as may be agreed upon loans raised by any oil

industrial concern or other person which are repayable within a period not exceeding twenty-five
years and are floated in the market or loans raised by an oil industrial concern or other person from
any bank which is a scheduled bank, or a State co-operative bank, as defined in the Reserve Bank of
India Act, 1934 (2 of 1934);

(c) guaranteeing on such terms and conditions as may be agreed upon deferred payments due

from any oil industrial concern or other person in connection with import of capital goods from
outside India or in connection with purchase of capital goods within India by such concern or other
person;

(d) guaranteeing on such terms and conditions as may be agreed upon loans raised from, or credit

arrangements made with, any bank or financial institution in any country outside India by any oil
industrial concern or other person in foreign currency:

Provided that no such guarantee shall be given without the prior approval of the Central

Government;

(e) underwriting the issue of stock, shares, bonds or debentures by any oil industrial concern and

retaining as part of its assets any stock, shares, bonds or debentures which it may have to take up in
fulfilment of its obligations thereto;

(f) acting as agent for the Central Government or, with its approval, for any overseas financial

organisation or credit agency in the transaction of any business with any oil industrial concern in
respect of loans or advances granted, or debentures subscribed by the Central Government or such
organisation or agency;

(g) subscribing to the stock or shares of any oil industrial concern;

(h) subscribing to the debentures of any oil industrial concern repayable within a period not

exceeding twenty-five years from the date on which they are subscribed to:

5


-----

Provided that nothing contained in this clause shall be deemed to preclude the Board from

subscribing to the debentures of any oil industrial concern, the amounts outstanding thereon may be
convertible at the option of the Board into stock or shares of that concern within the period the
debentures are repayable.

_Explanation.—In this clause, the expression “amounts outstanding thereon” used in relation to_

any loan or advance shall mean the principal, interest and other charges payable on such loan or
advance as at the time when the amounts are sought to be converted into stock or shares.

(3) Without prejudice to the generality of the provisions of sub-section (1), the measures for the

promotion of which the Board may render assistance under that sub-section may include measures for or
by way of—

(a) prospecting for and exploration of mineral oil within India (including the continental shelf

thereof) or outside India;

(b) the establishment of facilities for production, handling, storage and transport of crude oil;

(c) refining and marketing of petroleum and petroleum products;

(d) the manufacture and marketing of petro-chemicals and fertilisers;

(e) scientific, technological and economic research which could be, directly or indirectly, useful

to oil industry;

(f) experimental or pilot studies in any field of oil industry;

(g) training of personnel, whether in India or outside, engaged or to be engaged in any field of oil

industry, and

such other measures as may be prescribed.

(4) The Board may charge such fees or receive such commission as it may deem appropriate for any

services rendered by it in the exercise of its functions.

(5) The Board may transfer for consideration any instrument relating to loans or advances granted by

it to any oil industrial concern or other person.

(6) The Board may do all such things as may be incidental to or consequential upon the discharge of

its functions under this Act.

**7. Principles and conditions of assistance.—(1) Before rendering any assistance to any oil industrial**

concern or other person, the Board shall have regard to such directions as the Central Government may
issue in this behalf and shall satisfy itself that—

(a) such assistance is not contrary to such directions; and

(b) such assistance is necessary as a matter of priority in the interests of the development of oil

industry.

(2) In rendering any assistance to any oil industrial concern or other person, the Board shall impose

such conditions as may be prescribed and may also impose such additional conditions as it may think
necessary or expedient for protecting the interests of the Board and for securing that the assistance
rendered by it is put to the best use by such concern or other person.

**8. Power to call for repayment before agreed period.—Notwithstanding anything in any agreement**

to the contrary, the Board may, by notice in writing, require any oil industrial concern or other person to
which or to whom it has rendered any assistance to discharge forthwith in full its or his liabilities to the
Board—

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

given in the application for such assistance; or

(b) if the concern or other person has failed to comply with the terms of its or his contract with

the Board in the matter of such assistance; or

6


-----

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

debts or that proceedings for liquidation or in insolvency may be commenced in respect of such
concern or person; or

(d) if the property pledged, mortgaged, hypothecated or assigned to the Board as security is not

insured and kept insured by the concern or other 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; or

(e) if, without the permission of the Board, any machinery, plant or other equipment (whether or

not forming part of the security), is removed from the premises of the concern or other person without
being replaced; or

(f) if for any reason it is necessary to protect the interests of the Board.

**9. Special provisions for enforcement of claims by the Board.—(1) Where an oil industrial**

concern or other person, in breach of any agreement, makes any default in repayment of any loan or
advance or any instalment thereof or in meeting its or his obligations in relation to any other assistance
rendered by the Board or otherwise fails to comply with the terms of the agreement with the Board or
where the Board requires an oil industrial concern or other person to make immediate repayment of any
loan or advance and the concern or other 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 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

Board as security for the loan or advance; or

(b) for an ad interim injunction where there is apprehension of the machinery or the equipment

being removed from the premises of the oil industrial concern or other person without the permission
of the Board; or

(c) in the case of an oil industrial concern, for transferring the management of the concern to the

Board.

(2) An application under sub-section (1) shall state the nature and extent of the liability of the oil

industrial concern or other person to the Board, the ground on which it is made and such other particulars
as may be prescribed.

(3) When the application is for the relief mentioned in clause (a) or clause (b) of sub-section (1), the

court shall pass an ad interim order attaching the property or so much of the property of the oil industrial
concern or other person as would on being sold realise in the estimation of the court an amount equivalent
in value to the outstanding liability of the concern or other person to the Board together with costs of the
proceedings taken under this section with or without an ad interim injunction restraining the oil industrial
concern or other person from transferring or removing any machinery or equipment.

(4) Where the application is for the relief mentioned in clause (c) of sub-section (1), the court shall

grant an _ad interim injunction restraining the oil industrial concern from transferring or removing its_
machinery and equipment and issue a notice calling upon the concern to show cause on a date to be
specified in the notice why the management of the concern should not be transferred to the Board.

(5) Before passing any order under sub-section (3) or sub-section (4), the court may, if it thinks fit,

examine the officer making the application.

(6) At the same time as it passed an order under sub-section (3), the court shall issue to the oil

industrial concern or other person a notice accompanied by copies of the order, the application and the
evidence, if any, recorded by it, calling upon the concern or other person to show cause on a date to be
specified in the notice why the _ad interim order of attachment should not be made absolute or the_
injunction confirmed.

7


-----

(7) If no cause is shown before the date specified in the notice under sub-sections (4) and (6), the

court shall forthwith make the _ad interim order absolute and direct the sale of the attached property or_
transfer the management of the oil industrial concern to the Board or confirm the injunction.

(8) If cause is shown, the court shall proceed to investigate the claim of the Board and the provisions

of the Code of Civil Procedure, 1908 (5 of 1908) shall, so far as may be, apply to such proceedings.

(9) On an investigation made under sub-section (8), the court shall pass an order—

(a) confirming the order of attachment and directing the sale of the attached property, or

(b) varying the order of attachment so as to release a portion of the property from attachment and

directing the sale of the remainder of the attached property, or

(c) releasing the property from attachment, if it is satisfied that it is not necessary in the interests

of the Board, or

(d) confirming or dissolving the injunction, or

(e) transferring the management of the oil industrial concern to the Board or rejecting the claim

made in this behalf:

Provided that when making any order under clause (c), the court may make such other orders as it

thinks necessary to protect the interests of the Board, and, may apportion the costs of the proceedings in
such manner as it thinks fit:

Provided further that unless the Board intimates the court that it will not appeal against any order

releasing any property from attachment, such order shall not be given effect to until the expiry of the
period fixed under sub-section (12) within which an appeal may be preferred, or if an appeal is preferred,
unless the court empowered to hear appeals from the decisions of the said court otherwise directs, until
the appeal is disposed of.

(10) An order of attachment or sale of property shall be carried into effect, as far as may be

practicable, in the manner provided in the Code of Civil Procedure, 1908 (5 of 1908) for the attachment
or sale of property in execution of a decree, as if the Board were the decree-holder.

(11) An order under this section transferring the management of an oil industrial concern to the Board

shall be carried into effect, as far as may be practicable, in the manner provided in the Code of Civil
Procedure, 1908 (5 of 1908) for the possession of immovable property or the delivery of movable
property in execution of a decree, as if the Board were the decree-holder.

(12) Any party aggrieved by an order under sub-section (7) or sub-section (9) may, within thirty days

from the date of the order, appeal to the court empowered to hear appeals from the decisions of the court
which passed the order and the appellate court may after hearing the parties pass such orders as it thinks
proper.

(13) Nothing in this section shall be construed, where proceedings for liquidation or in insolvency in

respect of the oil industrial concern or other person have commenced before an application is made under
sub-section (1) as giving to the Board any preference over the other creditors of the concern or other
person not conferred on it by any other law.

(14) For the removal of doubts, it is hereby declared that any court competent to grant an ad interim

injunction under this section shall also have the power to appoint a receiver and to exercise all other
powers incidental thereto.

**10. Power of Board to appoint Directors of oil industrial concern.—When the management of an**

oil industrial concern is taken over by the Board, the Board may, by order notified in the Official Gazette,
appoint as many persons as it thinks fit to be the Directors of that concern and nothing in the Companies
Act, 1956 (1 of 1956) or in any law or instrument relating to the concern, in so far as it makes, in relation
to a Director, any provision for the holding of any share qualification, age limit, restrictions on the
number of directorships, retirement by rotation or removal from office shall apply to any Director
appointed by the Board under this section.

8


-----

**11. Effect of notified order appointing Director.—On the issue of a notified order under**

section 10—

(a) all persons holding office as Director of the oil industrial concern or in charge of the

management of such concern immediately before the issue of the notified order shall be deemed to
have vacated their offices as such;

(b) the Directors appointed under section 10 shall take such steps as may be necessary to take into

their custody or under their control the property, effects and actionable claims to which the oil
industrial concern is, or appears to be, entitled and all the property and effects of the concern shall be
deemed to be in the custody of the Directors as from the date of the notified order;

(c) the Directors appointed under section 10 shall for all purposes be the Directors of the oil

industrial concern duly constituted under the Companies Act, 1956 (1 of 1956) and shall alone be
entitled to exercise all the powers of the Directors of the concern, whether such powers are derived
from the said Act or from the memorandum or articles of association of the concern or from any other
source.

**12. Powers and duties of the Directors.—(1) Subject to the control of the Board, the Directors**

appointed under section 10 shall take such steps as may be necessary for the purpose of efficiently
managing the business of the oil industrial concern and shall exercise such powers and perform such
duties as may be prescribed.

(2) Without prejudice to the generality of the powers vested in them under sub-section (1), the

Directors appointed under section 10 may, with the previous approval of the Board, make an application
to a court for the purpose of cancelling or varying any contract or agreement entered into, at any time
before the issue of the notified order under section 10, between the oil industrial concern and any other
person and the court may, if satisfied after due inquiry that such contract or agreement had been entered
into in bad faith and is detrimental to the interests of the concern, make an order cancelling or varying
(either unconditionally or subject to such conditions as it may think fit to impose) that contract or
agreement and the contract or agreement shall accordingly stand cancelled or, as the case may be, have
effect as so varied.

**13. No right to compensation for loss of office.—(1) Notwithstanding anything contained in any**

law for the time being in force, no Director or other person in charge of the management of an oil
industrial concern immediately before the issue of a notified order under section 10 in respect of such
concern shall be entitled to any compensation for the loss of office or for the premature termination under
this Act of the contract entitling him to be in charge of such management.

(2) Nothing contained in sub-section (1) shall affect the right of any Director or other person referred

to therein to recover from the oil industrial concern moneys recoverable otherwise than by way of such
compensation.

**14. Application of Act 1 of 1956.—(1) Where the management of an oil industrial concern, being a**

company as defined in the Companies Act, 1956, is taken over by the Board, then, notwithstanding
anything contained in the said Act or in the memorandum or articles of association of such concern,—

(a) it shall not be lawful for the shareholders of such concern or any other person to nominate or

appoint any person to be a Director of such concern;

(b) no resolution passed at any meeting of the shareholders of such concern shall be given effect

to unless approved by the Board;

(c) no proceeding for the winding up of such concern or for the appointment of a receiver in

respect thereof shall lie in any court, except with the consent of the Board.

(2) Subject to the provisions contained in sub-section (1) and to the other provisions contained in this

Act and subject to such other exceptions, restrictions and limitations, if any, as the Central Government
may, by notification in the Official Gazette, specify in this behalf, the Companies Act, 1956 (1 of 1956)
shall continue to apply to such concern in the same manner as it applied thereto before the issue of the
notified order under section 10.

9


-----

CHAPTER III

FINANCE, ACCOUNTS AND AUDIT

**15. Duties of excise.—(1) There shall be levied and collected, as a cess for the purposes of this Act,**

on every item specified in column 2 of the Schedule, which is produced in India (including the
continental shelf thereof) and—

(a) removed to a refinery or factory; or

(b) transferred by the person by whom such item is produced to another person,

a duty of excise at such rate not exceeding the rate set forth in the corresponding entry in column 3 of the
Schedule, as the Central Government may, by notification in the Official Gazette, specify:

Provided that until the Central Government specifies by such notification the rate of the duty of

excise in respect of crude oil (being an item specified in the Schedule) the duty of excise on crude oil
under this sub-section shall be levied and collected at the rate of rupees sixty per tonne.

(2) Every duty of excise leviable under sub-section (1) on any item shall be payable by the person by

whom such item is produced, and in the case of crude oil, the duty of excise shall be collected on the
quantity received in a refinery.

(3) The duties of excise under sub-section (1) on the items specified in the Schedule shall be in

addition to any cess or duty leviable on those items under any other law for the time being in force.

(4) The provisions of the Central Excises and Salt Act, 1944 (1 of 1944) and the rules made

thereunder, including those relating to refunds and exemptions from duties shall, as far as may be, apply
in relation to the levy and collection of duties of excise leviable under this section and for this purpose the
provisions of that Act shall have effect as if that Act provided for the levy of duties of excise on all items
specified in the Schedule.

**16. Crediting of proceeds of duty to Consolidated Fund of India.—The proceeds of the duties of**

excise levied under section 15 shall first be credited to the Consolidated Fund of India and the Central
Government may, if Parliament by appropriation made by law in this behalf, so provides, pay to the
Board from time to time, from out of such proceeds, after deducting the expenses of collection, such sums
of money as it may think fit for being utilised exclusively for the purposes of this Act.

**17. Grants and loans by the Central Government.—The Central Government may also, after due**

appropriation made by Parliament by law in this behalf, pay to the Board by way of grants or loans such
sums of money as the Central Government may consider necessary.

**18. Oil Industry Development Fund.—(1) There shall be formed a Fund to be called the Oil**

Industry Development Fund and there shall be credited thereto—

(a) any sums of money paid under section 16 or section 17;

(b) any grants that may be made by any person or institution for the purposes of this Act;

(c) any borrowings by the Board;

(d) the sums, if any, realised by the Board in carrying out its functions or in the administration of

this Act.

(2) The Fund shall be applied—

(a) for meeting the salaries, allowances, honoraria and other remuneration of the officers and

other employees of the Board and of the advisers, consultants or other agencies whose services are
availed of by the Board;

(b) for meeting the other administrative expenses of the Board;

(c) for rendering assistance under section 6;

(d) for repayment of any loans taken by the Board or for meeting other liabilities under this Act.

10


-----

1[(e) for meeting any expenditure incurred by any Central Public Sector Undertaking in the oil

and gas sector, on behalf of the Central Government;

(f) for meeting expenditure on any scheme or activity by the Central Government relating to oil

and gas sector.]

**19. Power to borrow.—Subject to such rules as may be made in this behalf, the Board shall have the**

power to borrow on the security of the Oil Industry Development Fund or any other asset for carrying out
the purposes of this Act.

**20. Accounts and audit.—(1) The Board shall maintain proper accounts and other relevant records**

and prepare an annual statement of accounts, including the profit and loss account and the balance-sheet
in such form as may be prescribed by the Central Government in consultation with the Comptroller and
Auditor-General of India.

(2) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India at

such intervals as may be specified by him and any expenditure incurred in connection with such audit
shall be payable by the Board to the Comptroller and Auditor-General.

(3) The Comptroller and Auditor-General of India and any person appointed by him in connection

with the audit of the accounts of the Board shall have the same rights and privileges and authority in
connection with such audit as the Comptroller and Auditor-General has in connection with the audit of
Government accounts and, in particular, shall have the right to demand the production of books, accounts,
connected vouchers and other documents and papers and to inspect any of the offices of the Board.

(4) The accounts of the Board as certified by the Comptroller and Auditor-General of India or any

other person appointed by him in this behalf together with the audit report thereon shall be forwarded
annually to the Central Government and that Government shall cause the same to be laid before each
House of Parliament.

CHAPTER IV

CONTROL BY THE CENTRAL GOVERNMENT

**21. Power to require persons engaged in oil industry to maintain and produce books, accounts**

**and records relating to business and inspection thereof.—The Central Government may, by order**
notified in the Official Gazette, require all persons engaged in oil industry or any class of such persons—

(a) to maintain such books, accounts and records relating to their business as may be specified in

the order;

(b) to produce such books, accounts and records for inspection and to furnish such information

relating thereto to such officer or authority and at such times or in such circumstances as may be
specified in the order.

**22. Directions by the Central Government.—The Board shall carry out such directions as may be**

issued to it from time to time by the Central Government for the efficient administration of this Act.

**22A. [Exemption from liability to pay income-tax.] Omitted by the Finance Act, 2002 (20 of 2002),**

_s. 159 (w.e.f. 11-5-2002)._

CHAPTER V

MISCELLANEOUS

**23. Penalties.—Any person who,—**

(a) being required under this Act to produce any books, accounts or records or furnish any

information, fails to produce such books, accounts or records or fails to furnish such information or
furnishes information which is false, and which he either knows or believes to be false, or does not
believe to be true; or

1. Ins. by Act 7 of 2017, s. 140 (w.e.f. 1-4-2017).

11


-----

(b) obstructs any member or any officer or other employee of the Board or any person authorized

in this behalf by the Central Government or by the Board in the exercise of any power conferred or in
the discharge of any duty imposed on him by or under this Act, shall be punishable with
imprisonment which may extend to one year, or with fine which may extend to five thousand rupees,
or with both.

**24. Other penalties.—Whoever contravenes or attempts to contravene or abets the contravention of**

any of the provisions of this Act or of any rule made thereunder (other than the provisions for the
contravention of which section 23 applies), shall be punishable with imprisonment for a term which may
extend to three months, or with fine which may extend to five hundred rupees, or with both.

**25. Offences by companies.—(1) Where an offence under this Act has been committed by a**

company, every person who, at the time the offence was committed, was in charge of, and was
responsible to, the company for the conduct of the business of the company as well as the company shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any

punishment, if he proves that the offence was committed without his knowledge or that he exercised all
due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been

committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other
officer of the company, such director, manager, secretary or other officer shall also be deemed to be
guilty of that offence and shall be liable to be proceeded against and punished accordingly.

_Explanation.—For the purposes of this section—_

(a) “company” means any body corporate and includes a firm or other association of

individuals; and

(b) “director”, in relation to a firm, means a partner in the firm.

**26. Jurisdiction of courts.—No court inferior to that of a Metropolitan Magistrate or a Magistrate of**

the first class shall try any offence punishable under this Act.

**27. Previous sanction of Central Government.—No prosecution for any offence punishable under**

this Act shall be instituted except with the previous sanction of the Central Government.

**28. Protection of action taken in good faith.—No suit, prosecution or other legal proceeding shall**

lie against the Central Government or the Board or any committee constituted by the Board or any
member of the Board or of such committee or any officer or other employee of the Central Government
or of the Board or any agent of or any other person authorised by the Central Government or the Board,
for anything which is in good faith done or intended to be done under this Act or the rules made
thereunder.

**29. Dissolution of the Board.—(1) The Central Government may, if satisfied that it is necessary so**

to do in the public interest, direct by notification in the Official Gazette that the Board shall be dissolved
from such date and for such period as may be specified in the notification.

(2) When the Board is dissolved under the provisions of sub-section (1),—

(a) all members, notwithstanding that their term of office has not expired, shall, from the date of

dissolution, vacate their offices as such members;

(b) all powers and duties of the Board shall, during the period of dissolution, be exercised and

performed by such person or persons as the Central Government may appoint in this behalf;

(c) all funds and other properties vested in the Board shall, during the period of dissolution, vest

in the Central Government.

12


-----

(3) As soon as the period of dissolution expires, the Board shall be re-constituted in accordance with

the provisions of this Act.

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

anything inconsistent therewith contained in any enactment other than this Act.

**31. Power to make rules.—(1) The Central Government may, by notification in the Official Gazette,**

make rules to carry out the purposes of this Act.

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

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

(a) the term of office and other conditions of service of members, the manner of filling vacancies

among and the procedure to be followed in the discharge of their functions;

(b) the powers which may be exercised and the duties which shall be performed by the Secretary

to the Board;

(c) the circumstances in which and the authority by which a member may be removed;

(d) the holding of minimum number of meetings of the Board every year;

(e) the convening of meetings of the Board and of its committees, the procedure to be followed at

the meetings of the Board and of its committees for the conduct of business and the number of
members which shall form quorum at a meeting;

(f) the maintenance by the Board of records of business transacted by the Board and the

submission of copies thereof to the Central Government;

(g) the powers of the Board, its Chairman and other members, Secretary and committees of the

Board with respect to the incurring of expenditure;

(h) the conditions subject to which the Board may incur expenditure outside India;

(i) the preparation of budget estimates of receipts and expenditure of the Board and the authority

by which the estimates are to be sanctioned;

(j) the form and manner in which the accounts should be kept by the Board;

(k) the custody and investment of the funds of the Board;

(l) the conditions to be observed by the Board in borrowing money;

(m) the conditions subject to which and the manner in which contracts may be entered into by or

on behalf of the Board;

(n) the delegation to the Chairman, Secretary or members or officers of the Board of any of the

powers and duties of the Board under this Act;

(o) the additional measures for the promotion of which the Board may render assistance;

(p) the remuneration and other allowances payable to the person or persons referred to in

clause (b) of sub-section (2) of section 29;

(q) the fees which the Board may charge for any assistance or services rendered by it under this

Act;

(r) the staff which may be employed by the Board and the pay and allowances and leave and

other conditions of service of officers (other than those appointed by the Central Government) and
other employees of the Board;

(s) any other matter which is to be or may be prescribed or provided for by rules under this Act.

(3) Every rule made by the Central Government under this section 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

13


-----

making any modification in the rule or both Houses agree that the rule should not be made, the rule 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 rule.

14


-----

THE SCHEDULE

[See section 15 (1)]

Sl. No. Name of item The maximum rate at which duty of excise may be

collected

1. 2 3

1. Crude oil .   .   .   .   .    .   . 1[Rupees two thousand five hundred per tonne.]

2. Natural gas .   .   .   .    .   .   . 2[Rupees three hundred per thousand cubic maters.]

1. Subs. by Act 21 of 2006, s. 73, for “Rupees two thousand per tonne” (w.e.f. 18-4-2006).
2. Subs. by Act 11 of 1987, s. 106, for “Rupees fifty per thousand cubic metres” (w.e.f. 12-5-1987).

15


-----

