Khadi and Village Industries Act, Gujarat.Year 2006

1. (1) This Act may be called the Gujarat Khadi and Village Industries Act, 2006.
2. (2) It extends to the whole of the State of Gujarat.

In this Act, unless the context otherwise requires,-

1. (a) "Board" means the Khadi and Village Industries Board constituted under this section 3;
2. (b) "Khadi" means any cloth woven on handlooms in India from cotton, silk or woollen yarn, handspun in India or from a mixture of any two or all of such yarns and certified as khadi by the Khadi and Village Industries Commission established under the Khadi and Village Industries Commission Act, 1956;
3. (c) "member" means a member of the Board, whether an official or a non-official, and includes the Chairman, the Vice-Chairman and a Member-Secretary of the Board;
4. (d) "prescribed" means prescribed by rules;
5. (e) "regulations" means regulations made under this Act ;
6. (f) "rules" means rules made under this Act ;
7. (g) "village industry" means, -
   • (i) any industry located in a rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed fifty thousand rupees or such other sum as may, by notification in the Official Gazette, be specified from time to time by the State Government: Provided that any industry specified in the Schedule and located in an area other than a rural area and recognised as a village industry prior to coming into force of this Act shall notwithstanding anything contained in this sub-clause, continue to be a village industry under this Act;
   • (ii) any other non-manufacturing unit established for the sole purpose of promoting, maintaining, assisting, servicing (including other units) or managing any village industry;
   • (iii) any other industry specified in this behalf by the State Government, by notification in the Official Gazette, in consultation with the Board. Explanation. - For the purpose of this clause, -

1. (1) "fixed capital investment" includes investment in plant and machinery and land and building of an industry;
2. (2) "rural area" means the area comprised in any village, and includes the area comprised in any town, the population of which does not exceed twenty thousand or such other figure as the State Government may, by notification in the Official Gazette, specify from time to time.

1. (1) The State Government may, by notification in the Official Gazette, establish a Board for the whole of the State to be called the Gujarat State Khadi and Village Industries Board.
2. (2) The Board shall be a body corporate having perpetual succession and a common seal and may sue and be sued in its corporate name and shall be competent to acquire, hold and dispose of property, both moveable and immoveable and to contract and do all things necessary for the purposes of this Act.
3. (3) The head quarters of the Board shall be at such place as the State Government may, by notification in the Official Gazette, specify.

1. (1) The Board shall consist of non-official members, one from each district of the State, in addition to the official members appointed by the State Government. The non-official members may be chosen from amongst the persons who, in the opinion of the State Government are qualified as having had experience and capacity in matters relating to development of khadi and village industries. One of the members of the Board shall be appointed by the State Government as the Chairman of the Board. The State Government may appoint one of the other members as the Vice-Chairman and shall also appoint one or two of the remaining members as it thinks fit as the Member-secretary or Member-secretaries, as the case may be, of the Board. The Chairman and other members of the Board shall hold office for such period as the State Government may, by general or special order, direct.
2. (2) The Chairman or any other member of the Board may at any time resign his office by submitting his resignation to the State Government.
3. (3) The Chairman and other members shall receive such emoluments as may be prescribed.

A person shall be disqualified for being appointed as, or for being, a member of the Board, if such person,-

1. (a) is or is found to be a lunatic or a person of unsound mind and stands so declared by the Competent Court; or
2. (b) is adjudged insolvent; or
3. (c) has been convicted of an offence involving moral turpitude; or
4. (d) has any financial interest in any subsisting contract made with or in any work being done by the Board, except as a share holder (other than a Director) in a company as defined in section 3 of the Companies Act, 1956: Provided that where he is a shareholder, he shall disclose to the State Government the nature and extent of shares held by him in such a company;
5. (e) has any financial interest in any business dealing by the Board with any village industry; or
6. (f) being an office bearer of a village industry is held responsible by the Board for any default in payment of its dues by village industry to the Board ; or
7. (g) holds any office of profit under the Board; or
8. (h) has directly or indirectly, by himself or his partner or by a member of his family, any share or interest in any transaction of loan or money borrowed by any village industry from the Board; or
   • (i) has directly or indirectly, by himself or his partner or by a member of his family, any share or interest in any work done by the order of the Board; or
9. (j) has remained absent from three consecutive meetings of the Board without the leave of the Board.

1. (1) The members of the Board other than ex-officio members, shall hold office during the pleasure of the State Government.
2. (2) The members of the Board other than ex-officio member may resign from his office by tendering his resignation in writing to the State Government and such resignation shall take effect from the date of acceptance by the State Government.

Whenever any vacancy occurs in the office of a member of the Board other than ex-officio member, by reason of death, resignation or otherwise, it shall be filled in by the State Government as early as may be practicable after occurrence of such vacancy.

1. (1) The Board shall meet at least once in every three months, at such time and place and shall observe such rules of procedure in regard to the transaction of its business at its meetings (including quorum at such meetings) as may be provided by the regulations.
2. (2) All the questions at a meeting of the Board shall be decided by a majority of the members present and voting and, in the event of an equality of votes, the Chairman shall have and exercise a second or casting vote.

No act or proceeding of the Board or any of its committee shall be invalidated merely by reason of -

1. (a) any vacancy therein, or any defect in the constitution thereof, or
2. (b) any disqualification of or any defect in the appointment of a person acting as a member thereof, or
3. (c) any irregularity in its procedure not affecting the merits of the case.

The Board may associate itself with any person whose assistance or advise is required in performing any of its functions under this Act and such person shall have right to take part in the discussion of the Board for the relevant purpose but shall not have right to vote.

1. (1) The Board may, subject to any rules made in this behalf, constitute one or more committees as it may consider necessary for the purpose of discharging of its functions and duties efficiently, for any work or for a particular khadi and village industry or for any specified local area.
2. (2) The constitution of any such committee, the powers, duties and functions of the committee and the jurisdiction of the committee shall be such as may be determined by the Board.

1. (1) The State Government shall appoint an officer as it may think fit to be the Executive Officer to manage the affairs of the Board.
2. (2) The powers, functions and duties of the Executive Officer shall be such as be fixed by the Board with the prior approval of the State Government.
3. (3) The Board may, subject to any rules as to creation of posts or payment of salaries made in this behalf, appoint such other officers and employees sub-ordinate to the Executive Officer as it may think fit for the efficient performance of its functions.
4. (4) The officers and employees appointed under sub-section
5. (3) shall be entitled to receive such salaries and allowances and shall be governed by such terms and conditions of service as may be determined by regulations.
6. (5) The officers and employees of the Board shall perform such functions as may be imposed upon them by general or special order issued by the

Power to make contracts

1. (1) The Board may enter into and perform all such contracts as it may consider necessary or expedient for carrying out any of the purposes of this Act.
2. (2) Every contract shall be made on behalf of the Board by the Chairman or an officer authorised by the Board in this behalf and be entered into in such manner as may be prescribed.

1. (1) It shall be the duty of the Board to encourage, organize, develop and regulate khadi and village industries and perform such functions as the State Government may prescribe from time to time.
2. (2) Without prejudice to the generality of the provisions of sub-section (1), the Board shall also discharge and perform all or any of the following duties and functions, namely:-
   • (a) to start, encourage, assist and carry on khadi and village industries and to carry on trade or business in such industries and in the matters incidental to such trade or business;
   • (b) to help the people by providing them with work in their homes and to give loans and other form of monetary help to individuals or societies or institutions on such terms and conditions as may be prescribed;
   • (c) to encourage establishment of co-operative societies for khadi and village industries;
   • (d) to conduct training centers and to train people thereat with a view to equipping them with the necessary knowledge for starting or carrying on khadi and village industries; (e)
     • (i) to manufacture tools and implements required for carrying on khadi and village industries and to manufacture the products of such industries,
     • (ii) to arrange for the supply of raw materials and tools and implements required for the said purpose, and
     • (iii) to sell and to arrange for the sale of the products of the said industries;
   • (f) to arrange for publicity and popularizing of finished products of khadi and village industries by opening stores, shops, emporia or exhibitions and to take similar measures for the purpose;
   • (g) to endeavour to educate public opinion and to impress upon the people the advantages of patronizing the products of khadi and village industries;
   • (h) to seek and obtain advice and guidance of experts in khadi and village industries;
     • (i) to undertake and encourage research work in connection with khadi and village industries and to carry on such activities as are incidental and conducive to the objects of this Act; and
   • (j) to discharge such other duties and to perform such other functions as the State Government may direct for the purpose of carrying out the objects of this Act.

The Board shall, for the purposes of carrying out its functions under this Act, have the following powers, namely:-

1. (a) to acquire and hold such moveable and immoveable property as it deems necessary and to lease, sell or otherwise transfer any such property: Provided that in the case of immoveable property, the aforesaid powers shall be exercised with the previous sanction of the State Government;
2. (b) to incur expenditure and undertake works in any area within its jurisdiction for carrying out the provisions of this Act and for framing and execution of such schemes as may be entrusted to it by the State Government, subject to the provisions of this Act and the rules made thereunder.

1. (1) The Board shall, once every year, prepare annual programme of work in such form and at such time of the year as may be prescribed and submit the same to the State Government for approval.
2. (2) The programme shall contain-
   • (a) particulars of the scheme which the Board proposes to execute whether in part or whole during the next year;
   • (b) particulars of any work undertaken which the Board proposes to execute during the next year for the purposes of carrying out its functions under this Act; and
   • (c) such other particulars as may be prescribed.

The State Government may approve and sanction the annual programme in whole or with such modifications as it deems fit.

The Board may prepare and submit a supplementary programme for the sanction of the State Government in such form and before such date as the State Government may prescribe and the provisions of section 17 shall apply to such supplementary programme.

The State Government may transfer buildings, land or any other property to the Board, whether moveable or immoveable, for use and management by the Board on such terms and conditions as the State Government may deem fit for the purposes of this Act.

1. (1) The Board shall have its own fund and all receipts of the Board shall be credited thereto, and all payments by the Board shall be made therefrom.
2. (2) The Board may accept grants, subventions, donations and gifts and receive loans from the Government or a local authority or any body or association, whether incorporated or not, or an individual for all or any of the purposes of this Act.
3. (3) The Board may spend such sum as it thinks fit for the performance of its functions under this Act and such a sum shall be treated as expenditure payable out of the fund of the Board.
4. (4) All moneys belonging to the fund of the Board shall be deposited in such manner as the State Government may, by a special or general order, direct.
5. (5) The accounts of the Board shall be operated by such officers jointly or individually as may be authorised by the Board.

All property, fund and other assets of the Board shall be held and applied by it subject to the provisions and for the purposes of this Act.

The State Government may, from time to time, make such grants, subventions, loans and advances to the Board for the purpose of performance of its functions under this Act, on such terms and conditions as the State Government may determine in each case.

The Board may, from time to time, with the previous sanction of the State Government and subject to the provisions of this Act and the rules made in this behalf and upon such conditions as the State Government may determine, borrow any sum required for the purposes of this Act.

The Board shall prepare its budget for the next financial year in such form and at such time in each financial year, as may be prescribed by the State Government. The budget shall contain a statement showing estimated receipts and expenditure on capital and revenue accounts of the Board according to the programme and the Schedule of the stock and forward same to the State Government.

1. (1) The State Government may approve and sanction the budget submitted to it under section 24 with such modifications as it deems proper.
2. (2) The Board may re-appropriate such amounts as may be necessary from one scheme to another scheme subject to the conditions that the cost of any scheme as originally sanctioned shall not be exceeded by more than 33 1/3 per cent.
3. (3) The Board may write off losses up to Rs.5000/- in individual cases and not exceeding Rs. 50,000/- in the aggregate in any financial year in cases falling under any or all of the following categories:-
   • (a) loss of irrecoverable value of stores or of public money due to theft, fraud or such other cause;
   • (b) loss of irrecoverable advance other than loans; and
   • (c) deficiency and depreciation in the value of stores.

The Board may prepare and submit a supplementary budget for the sanction of the State Government in such form and before such date as may be prescribed and the provisions of section 25 shall apply to such supplementary budget.

1. (1) The Board shall, prepare once in every year in such form and at such time as may be prescribed, an annual report giving true and complete account of its activities during the previous financial year along with a copy of the annual statement of accounts referred to in section 29 and shall submit the same to the State Government.
2. (2) The State Government, as soon as may be, after receipt of report under sub-section (1), cause the same to be laid before the State Legislature.

The Board shall, before such date, at such intervals, and in such manner, as the State Government may from time to time direct, submit to the State Government a report on such matters and such statistics and such returns as the State Government may direct.

1. (1) The Board shall maintain its accounts and prepare the annual statement of accounts shall be prepared in such form and in such manner as may be prescribed.
2. (2) The accounts of the Board shall be audited by an auditor, duly qualified to act as an auditor of companies under section 226 of the Companies Act, 1956, who shall be appointed by the Board after approval from the State Government.

1. (1) The State Governemt may if it thinks fit give directions to the Board for carrying out execution of any of the provisions of the Act and the Board shall bound by such directions.
2. (2) Where the Board makes persistent default in complying with or in giving effect to any directions given to it by the State Government under sub-section (1), it shall be lawful for the State Government to dissolve the Board under section 38.

1. (1) Every member of the Board or its committee shall be personally liable for the loss, waste, or misapplication of any money or other property of the Board to which he has been party, or which has been caused or facilitated by his misconduct or gross neglect of his duty as a member.
2. (2) If after giving the member concerned a reasonable opportunity for showing cause to the contrary, an officer authorised by the State Government is satisfied that the loss, waste or misapplication of any money or other property of the Board is a direct consequence of misconduct or gross negligence on his part, the officer so authorised shall, by an order in writing, direct such member to pay to the Board before a fixed date, the amount required to be reimbursed to it for such loss, waste or misapplication.
3. (3) If the amount is not so paid, it shall be recovered as an arrears of land revenue and credited to the fund of the Board.
4. (4) Any person aggrieved by the decision or action of the officer so authorised may apply to the District Court within one month of the decision or action for redressal of his grievance and that court may, after taking such evidence as it thinks necessary, confirm, modify or remit the payment to the Board.

1. (1) Where, an officer authorised in this behalf by the State Government is of the opinion that any person, who in his capacity as a member, officer, employee or secretary of the Board had, in his custody, any record, money or other property belonging to the Board, is after his retirement, removal or suspension from office, as the case may be, not likely to deliver such record or property or pay such money, the officer may, by a written order, require that the record, property or money so detained, be delivered or paid to the Board forthwith.
2. (2) If any such person as aforesaid shall not deliver the record or the property or pay the money as directed, the officer so authorised may cause him to be apprehended and may send him with a warrant in such form as may be prescribed to be confined in a civil jail till he delivers the record or property or pays the money : Provided that no such person shall be so detained in confinement for a period longer than one calendar month.
3. (3) It shall be lawful for the officer so authorised-
   • (a) for recovering any such money to direct that such money be recovered as an arrears of land revenue and on such direction being given, such money shall be recoverable as an arrears of land revenue from such person;
   • (b) for recovering any such record or property to issue a search warrant and to exercise all such powers with respect thereto as may lawfully be exercised by the Magistrate under the provisions of Chapter VII of the Code of Criminal Procedure, 1973.
4. (4) No action under sub-section
5. (1) or
6. (2) shall be taken unless reasonable opportunity has been given to the person concerned to show cause why such action should not be taken against him.

Where any sum due to the Board in accordance with the terms of a contract or otherwise or any sum payable in connection therewith, has not been paid, such sum shall, without prejudice to any other remedy provided by law, be recoverable as an arrears of land revenue on a certificate in the prescribed form being issued by the Board to the Collector.

The Members of the Board or its Committee and officers and employees of the Board when acting or purporting to the act in pursuance of any of the provisions of this Act, rules or regulations made thereunder shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.

No suit, prosecution or other legal proceedings shall lie against the Board or any member or officer or employee of the Board for anything which is in good faith done or intended to be done in pursuance of the provisions of this Act or any rules or regulations made thereunder.

1. (1) The State Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.
2. (2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide for all or any of the following matters, namely :-
   • (a) The emoluments of Chairman and members of the Board under section 4;
   • (b) the manner in which contracts shall be entered into under section 13;
   • (c) the functions of the Board under section 14 and terms and conditions for loan and monetary help and such form and such time for submission of annual programme;
   • (d) the other particulars of the annual programme under section 16;
   • (e) the form in which and the date before which the supplementary programme shall be submitted under section 18;
   • (f) the form in which and the date before which the supplementary budget shall be submitted under section 26;
   • (g) the manner in which the annual report shall be prepared and forwarded to the State Government under section 27;
   • (h) the manner of maintenance of accounts and preparation of anual statement of accounts under section 29;
     • (i) any other matter which is or may be prescribed under this Act.
3. (3) All rules made under this section shall be laid for not less than thirty days before the State Legislature as soon as possible after they are made, and shall be subject to rescission by the State Legislature or to such modifications as the State Legislature may make during the session in which they are so laid or the session immediately following.
4. (4) Any rescissions or modifications so made by the State Legislature shall be published in the Official Gazette, and shall thereupon take effect.

1. (1) The Board may, with the previous approval of the State Government by notification in the Official Gazette, make regulations consistent with this Act and the rules made thereunder, for enabling it to perform its functions under this Act.
2. (2) In particular, and without prejudice to the generality of the foregoing provision, such regulations may provide for all or any of the following matters, namely :–
   • (a) the procedure and disposal of its business;
   • (b) remuneration, allowances and other conditions of service of officers and servants of the Board;
   • (c) functions and duties of the officers and servants of the Board;
   • (d) functions of committees and the procedure to be followed by such committees in the discharge of their functions.
3. (3) All regulations made under this section shall be laid before the State Legislature as soon as may be after they are made, and shall be subject to such rescission by the State Legislature or to such modifications as the State Legislature may make during the session in which they are laid, or the session immediately following.
4. (4) Any rescission or modification so made by the State Legislature shall be published in the Official Gazette, and shall thereupon take effect.

1. (1) If it appears to the State Government necessary or expedient that the Board should be reconstituted or reorganised in any manner whatsoever or that the Board may be dissolved, the State Government may, after consulting the Board, by an order published in the Official Gazette, provide for the reconstitution, reorganisation or dissolution of the Board with effect from such date as may be specified in the order.
2. (2) Any order made under sub-section (1), may, in particular, provide for all or any of the following matters, namely :–
   • (a) the dissolution of the Board ;
   • (b) the reconstitution or reorganisation, in any manner whatsoever, of the Board including the establishment, where necessary, of new Board ;
   • (c) the area in respect of which the reconstituted Board or new Board or amalgamated Board shall function or operate;
   • (d) the transfer, in whole or in part, of the assets, rights and liabilites of the Board (including the rights and liabilities under any contract made by it) and the terms and conditions of such transfer;
   • (e) the transfer or re-employment of any officer and employees of the Board to, or by, any such transferee and the terms and conditions of service applicable to such officers and employees after such transfer or re-employment; and
   • (f) such incidental consequential and supplementary matters as may be necessary for the reconstitution, reorganisation or dissolution of the Board.
3. (3) Where an order is made under this section transferring the assets, rights and liabilities of the Board, then, by virtue of that order, such assets, rights and liabilities of the Board shall vest in, and be the asset, rights and liabilities, of the transferee.
4. (4) Every order made under this section shall be laid before the State Legislature, as soon as may be, after it is made. Explanation.- For the purpose of this section, mere appointment of additional members in a Board shall not be deemed to be reconstitution or reorganisation of that Board.

1. (1) If any difficulty arises in giving effect to the provisions of this Act, the State Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act appear to it to be necessary or expedient for removing the difficulty: Provided that no such order shall be made under this section after the expiry of a period of two years from the commencement of this Act.
2. (2) Every order made under sub-section
3. (1) shall be laid, as soon as may be, after it is made, before the State Legislature.

For the avoidance of doubt, it is hereby declared that nothing in this Act shall apply to or be deemed to apply to any industry, the control of which by the Union is declared by the Parliament by law to be expedient in the public interest.

1. (1) The Bombay Khadi and Village Industries Act, 1960, in its application to the State of Gujarat is hereby repealed : Provided that such repeal shall not affect the previous operation of the said Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder and subject thereto, anything done or any action taken including any appointment, notification, notice, order, rule, form or certificate in exercise of any powers conferred by or under the said Act, shall, so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in exercise of the powers, conferred by or under the Act, as if this Act were in force on the date on which such thing was done or action was taken and all arrears of tax and other amount due at the commencement of this Act may be recovered as if they had accrued under this Act.
2. (2) Without prejudice to the provisions contained in sub-section
3. (2) and subject thereto, section 7 of the Bombay General Clauses Act, 1904 shall apply in relation to the repeal of the said Act as if the said Act had been enacted within the meaning of the said section 7.

( See section 2 ) Khadi Industry: Khadi means any cloth woven on handloom in India, from cotton, silk or woolen yarn hand spun in India or from mixture of any two or all of such yarns. Village Industries : Group- I : Mineral Based Industry : (1) Cottage Pottery Industry (2) Lime Stone, Lime shell and other lime products industry (3) Stone cutting, crushing, carving and engraving for Temples and Buildings