The Industries (Development and Regulation) Act, 1951
The Industries (Development and Regulation) Act, 1951: Overview
This Act was enacted by the Indian Parliament to regulate and develop certain industries in India, aiming to ensure balanced growth and control over essential industries in the public interest. It gives the government the power to control industrial development and regulate industries that are important for the economy.
Objectives of the Act
Promote industrial development — Ensure planned and balanced industrial growth.
Regulate industrial activities — Control the production, supply, and distribution of important industrial products.
Licensing system — Introduce licensing requirements for industries specified in the Act.
Control monopolies — Prevent concentration of economic power in a few hands.
Protect public interest — By regulating essential industries and ensuring availability of essential goods.
Key Provisions of the Act
1. Declaration of Industries
The Central Government can declare certain industries as "scheduled industries" (listed in the First Schedule).
These industries are subject to regulation and control under the Act.
2. Licensing
To start or carry on a business in scheduled industries, a person or company must obtain a license from the government.
Licensing aims to control production and prevent overproduction or monopolies.
3. Control of Industrial Undertakings
The government can regulate production, supply, distribution, and pricing of goods produced by scheduled industries.
It can also direct companies to provide information or submit returns.
4. Penalties
The Act prescribes penalties for violations such as carrying on a scheduled industry without a license or failure to comply with government directions.
Important Sections in Brief
Section 2: Definitions including "scheduled industry."
Section 3: Power of the Central Government to declare scheduled industries.
Section 6: Requirement of license for carrying on scheduled industries.
Section 10: Power of the government to give directions to license holders.
Section 11: Penalties for contravention of provisions.
Section 12: Power to seize goods or articles produced unlawfully.
Relevant Case Laws
1. Bharat Bank Ltd. v. Union of India (1969)
Issue: Scope of government control under the Industries Act.
Held: The Supreme Court held that the Act confers wide powers on the government to regulate industries, including licensing and control measures.
It emphasized that such regulation is within constitutional powers, especially for industries declared as essential.
2. Dalmia Cement Ltd. v. Union of India (1962)
Issue: Licensing requirement and its validity.
Held: The court upheld the government’s power to require licenses under the Act.
It ruled that licensing is a reasonable restriction to control the development of industries in the public interest.
3. M/s. Haridas Exports Ltd. v. Union of India (1982)
Issue: Validity of government’s directions to an industrial undertaking.
Held: The court recognized the government’s authority under Section 10 to give directions regarding production and distribution.
It reiterated the importance of such control in the context of economic planning.
4. M/s. Nagpur Electric Supply Co. Ltd. v. State of Maharashtra (1967)
Issue: Applicability of licensing and regulation under the Act.
Held: The Supreme Court observed that licensing provisions apply only to scheduled industries and not others.
The decision clarified the scope and limits of government control under the Act.
Summary
The Industries (Development and Regulation) Act, 1951 regulates development and control of important industries.
It allows the government to declare industries as scheduled and impose licensing requirements.
The Act gives the government broad powers to regulate production, supply, and distribution.
Penalties are prescribed for violations.
Courts have upheld the validity of the Act and government’s regulatory powers as reasonable and necessary for public welfare and economic planning.
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