Special provisions for enforcement of claims by the Board

Section 9 of the Oil Industry (Development) Act, 1974 deals with special provisions for enforcement of claims by the Board. 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 t The Act came into force on 26 Sep 1974.

(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) 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.

Section 9, The Oil Industry (Development) Act, 1974 (Act 47 of 1974).