Section 64 of The Bihar Reorganisation Act, 2000
Provisions as to Bihar State Financial Corporation.
- (1)The Bihar State Financial Corporation established under the State Financial Corporation Act, 1951 (63 of 1951) shall, on and from the appointed day, continue to function in those areas in respect of which it was functioning immediately before that day, subject to the provisions of this section and to such directions as may, from time to time, be issued by the Central Government.
- (2)Any directions issued by the Central Government under sub-section (1) in respect of the Corporation may include a direction that the said Act, in its application to the Corporation, shall have effect subject to such exceptions and modifications as may be specified in the direction.
- (3)Notwithstanding anything contained in sub-section (1) or sub-section (2), the Board of Directors of the Corporation may, with the previous approval of the Central Government and shall, if so required by the Central Government, convene at any time after the appointed day a meeting for the consideration of a scheme for the reconstitution or reorganisation or dissolution, as the case may be, of the Corporation, including proposals regarding the formation of new Corporation, and the transfer thereto of the assets, rights and liabilities of the existing Corporation, and if such a scheme is approved at the general meeting by a resolution passed by a majority of the shareholders present and voting, the scheme shall be submitted to the Central Government for its sanction.
- (4)If the scheme is sanctioned by the Central Government either without modifications or with modifications which are approved at a general meeting, the Central Government shall certify the scheme, and upon such certification, the scheme shall, notwithstanding anything to the contrary contained in any law for the time being in force, be binding on the corporations affected by the scheme as well as the shareholders and creditors thereof.
- (5)If the scheme is not so approved or sanctioned, the Central Government may refer the scheme to such Judge of the High Court at Patna and Jharkhand as may be nominated in this behalf by the Chief Justice thereof, and the decision of the Judge in regard to the scheme shall be final and shall be binding on the corporations affected by the scheme as well as the shareholders and creditors thereof.
- (6)Nothing in the preceding provisions of this section shall be construed as preventing the Government of the States of Bihar and Jharkhand from constituting, at any time on or after the appointed day, a State Financial Corporation for that State under the State Financial Corporations Act, 1951 (63 of 1951).
Summary
- Keeps the Financial Corporation working in its current areas across both states under Central guidance.
- Allows the Board of Directors to propose a plan for restructuring, splitting, or closing the corporation.
- Requires a majority of shareholders, who are the people owning part of the company, to vote for any such plan at a meeting.
- Requires the Central Government to officially certify and approve the plan before it becomes binding.
- Sets a rule that if the plan is rejected, a High Court Judge from Patna and Jharkhand makes a final decision.
- Confirms that both states can still create their own separate Financial Corporations at any time.
Practical examples
FAQ
1. Who has the final say if a reorganization plan for the Financial Corporation is not approved under Section 64 of the Bihar Reorganisation Act?
Under Section 64 of the Bihar Reorganisation Act, 2000, a Judge of the High Court at Patna and Jharkhand nominated by the Chief Justice makes the final, binding decision.
2. What kind of vote is needed from shareholders under Section 64 of the Bihar Reorganisation Act, 2000?
Section 64 of the Bihar Reorganisation Act, 2000, requires a resolution passed by a majority of the shareholders who are present and voting at the meeting.
3. Does the Central Government control the Financial Corporation under the Bihar Reorganisation Act?
Yes, Section 64 of the Bihar Reorganisation Act, 2000, states the corporation functions subject to directions issued from time to time by the Central Government.
Test yourself
1.Under Section 64 of The Bihar Reorganisation Act, 2000, what happens once a reorganization scheme is certified by the Central Government?
2.Who nominates the High Court Judge who decides on a failed scheme under Section 64 of The Bihar Reorganisation Act, 2000?
3.According to Section 64 of The Bihar Reorganisation Act, 2000, what can a proposed scheme include?
4.Under Section 64 of The Bihar Reorganisation Act, 2000, if the states want to create their own separate Financial Corporations before the old one is dissolved, can they?