Amendment status not verified — confirm the current text below against the official source.
(1) The Development Bank shall not enter into any kind of business with any industrial concern, of which any of the directors of the Development Bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of the Development Bank together hold substantial interest: Provided that this sub-section shall not apply to any industrial concern if any director of the Development Bank-- (i) is nominated as a director of the Board of such concern by Government, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or by a Corporation established by any other law; or (ii) is elected on the Board of such concern by virtue of shares held in the concern by Government, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) or by a Corporation established by any other law, by reason, only of such nomination or election as the case may be. Explanation.-- "Substantial interest", in relation to an industrial concern, means the beneficial interest held by one or more of the directors of the Development Bank or by any relative as defined in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956), of such director, whether singly or taken together, in the shares of the industrial concern, the aggregate amount paid-up on which either exceeds five lakhs of rupees or five per cent. of the paid up share capital of the industrial concern, whichever is the lesser. (2) The provisions of sub-section (1)-- (i) shall not apply to any industrial concern as specified therein if the Development Bank is satisfied that it is necessary in the public interest to enter into business with that concern, and entering into any kind of business with such industrial concern shall be in accordance with and subject to such conditions and limitations as may be prescribed; (ii) shall not apply to any transaction relating to the business entered into prior to the commencement of the Industrial Development Bank of India (Amendment) Act, 1972, and all such business and any transaction in relation thereto may be implemented or continued as if that Act had not come into force; (iii) shall apply only so long as the conditions precedent to such disability as set out in the said sub-section continue.] Ins. by Act 75 of 1972, sec. 4.