In­crease State Bank shall be guided by such


In­crease or reduction of the authorised capital can only be done by the Central Government.

Any increase of the issued capital is controlled by the Reserve Bank. The Reserve Bank shall, at all times, have not less than 50 per cent of the shares. Section 43 of the Act empowers the State Bank to appoint its of­ficers, advisers and employees and determine the terms and condi­tions of their appointment and service. An employee of the State Bank cannot be said to hold a civil post under the Union Government and, therefore, Articles 311 and 320 of the Constitution do not apply to him. Section 18 of the Act says that in the discharge or its functioning including those relating to a subsidiary bank, the State Bank shall be guided by such directions in matters of policy involving public interest, as the Central Govern­ment may, in consultation with the Governor of the Reserve Bank and the Chairman of the State Bank give to it. It further provides that all directions given by the Central Government shall be given through the Reserve Bank and, if any question arises whether a direction re­lates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final. The Bank, among its other duties, acts as the agent of the Reserve Bank of India for receiving, paying, collecting and remitting money, bullion and securities on behalf of any Government in India. Under section 40 of the Act the State Bank should furnish to the Central Government and the Reserve Bank within a stated time its balance sheet together with the Profit and Loss Account and the Auditor’s Report on the working of the State Bank during the period covered by the Accounts.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

The Central Government is vested with power to remove any difficulties in respect of certain matters by issuing specific orders and also in consultation with the Reserve Bank and by notification in the official Gazette, make rules to carry out the purposes of this Act. Having regard to the above provisions of the Act, the State Bank of India is a public authority. It is a Corporation.

It is also an authority within the meaning of Article 226 of the Constitution.

2. Life Insurance Corporation of India:

By establishing the Insurance Corporation the Life Insurance Corporation Act 31 of 1956, has nationalised the life insurance business in India. The preamble of the Act lies down that it is an Act to provide for the nationalisation of life insurance business in India by transferring all such business to a Corporation established for the purpose and to pro­vide for the regulation and control of the business of the Corporation and for matters connected therewith or incidental thereto. Under Sec­tion 2 (1) of the Act, “appointed day” means the date on which the Corporation is established under section 3.

Section 8 of the Act provides for establishment and incorpora­tion of Life Insurance Corporation of India. It states that with effect from such date as the Central Government may, by notification in the Official Gazette appoint, there shall be established a Corporation called the Life Insurance Corporation of India. The Corporation shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold and dispose of property, and may, by its name sue and is sued. So this sub-section (2) gives a per­sonality to the statutory corporation established under the Act.

Constitution of the Corporation:

Section 4 of the Act provides for the constitution of the Corporation. It lies down as fol­lows:—

Constitution of the Corporation:

(1) The Corporation shall consist of such number of persons not exceeding fifteen as the Central Government may think fit to appoint thereto and one of them shall be appointed by the Central Government to be the Chairman thereof. (2) Before appointing a person to be a member, the Central Government shall satisfy that the person will have no such financial or other interest as is likely to affect prejudicially the exercise or per­formance by him of his functions as a member, and the Central Government shall also satisfy itself from time to time with respect to every member that he has no such interest; and any person who is, or whom the Central Government proposes to appoint and who has consented to be a member shall, whenever required by the Central Government so to do, furnish to it such information as the Central Government considers necessary for the performance of its duties under this sub-section.

(3) A member who is, any way, directly or indirectly interested in a contract made or proposed to be made by the Corporation shall, as soon as possible after the relevant circumstances have come to his knowledge, disclose the nature of his interest to the Corporation; and the member shall not take part in any deliberation or discussion of the Corporation with respect to that contract.” Therefore, the appointing authority (or the creator of the Corpora­tion) is the Central Government.

Capital of the Corporation:

Section 5 of the Act states as fol­lows:- (1) The original capital of the Corporation shall be five crores of rupees provided by the Central Government after due appropriation made by Parliament by law for the purpose, and terms and conditions relating to the provisions of such capital shall be such as may be determined by the Central Government. (2) The Central Government may on the recommendation of the Corporation reduce the capital of the Corporation to such extent and in such manner as the Central Government may determine.”

Functions of the Corporation:

The functions of the Corpora­tion are enumerated in Section 6 of the Act which provides as fol­lows:- (1) Subject to the rules, if any, made by the Central Govern­ment in this behalf, it shall be the general duty of the Corporation to carry on life insurance business, whether in or outside India and the Corporation shall so exercise its powers under this Act as to secure that life insurance business is developed to the best advantage of the community.

(2) Without prejudice to the generality of the provisions con­tained in sub-section (1) but subject to the other provisions contained in this Act, the Corporation shall have power— (a) To carry on capital redemption business, annuity certain busi­ness, or reinsurance business in so far as such reinsurance business appertains to life insurance business; (b) Subject to the rules, if any, made by the Central Government in this behalf, to invest the funds of the Corporation in such manner as the Corporation may think fit and to take all such steps may be necessary or expedient for the protection or realization of any invest­ment, including the taking over of and administering any property of as security for the investment until a suitable opportunity arises or its disposal; (c) To acquire, hold and dispose of any property for the purpose if its business; (d) To transfer the whole or any part of the life insurance business carried on outside India to any other person or persons, if in the interest of the Corporation it is expedient so to do; (e) To advance or lend money upon the security of any movable or immovable property or otherwise; (f) To borrow or raise any money in such manner and upon such security as the Corporation may think fit: (g) To carry on either by itself or through any subsidiary any other business in any case such other business was being carried on by a subsidiary of an insurer whose controlled business has been transferred to and vested in the Corporation under this Act; (h) To carry on any other business which may seem to the Corporation to be capable of being conveniently carried on in connection with its business and calculated directly or indirectly to render profitable the business of the Corporation: (i) to do all such things as may be incidental or conducive to the proper exercise of any of the powers of the Corporation. (3) In the discharge of any of its functions the Corporation shall act so far as may be on business principles.”

3.

Damodar Valley Corporation:

The Damodar Valley Corporation is a statutory corporation which came into existence as a result of the passing of the Damodar Valley Corporation Act of 1941 which came into operation on 7-7-1948. This Corporation is controlled by the Government. It is a body corporate with perpetual succession and common seal. It consists of a Chairman and two members who are selected in consultation with the State Government of West Bengal and Bihar and are appointed by the Government of India. The members are the whole time servants of the Corporation and their remuneration and service condition are governed by the rules made by the Central Government. Its functions are:- (i) To promote and operate irrigation schemes, drainage, flood control, navigation, generation of electricity, water supply, etc.

, in the Damodar River Valley; (ii) To construct dams, reservoirs, power houses, barrages, etc., and to maintain them; (iii) To distribute electrical energy. It has a separate and independent existence and is a different en­tity from the Union and State Government. It discharges the functions of the Government. It has its own fund.

The Government alone provides the capital. It can sue or be sued. It is liable to pay tax on in­come and is a dealer under the Sales tax laws. The fact that the Government exercises a considerable amount of control does not mean that Article 311 of the Constitution applies to the Corporation.

The employees of Article 311 but they would be governed by the terms of their agreement which attract the Damodar Valley Corporation Service Regulations framed by the Corporation.

x

Hi!
I'm William!

Would you like to get a custom essay? How about receiving a customized one?

Check it out