Chapter II ESTABLISHMENT AND CONSTITUTION OF THE BOARD.

(1) With effect from such date as the State Government may, by notification in the Karnataka Gazette appoint in this behalf, there shall be established for the purposes of this Act, a Board by the name of the Karnataka State Khadi and Village Industries Board. (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 and hold property both movable and immovable and to contract and do all things necessary for the purposes of this Act.

(1) (a) The Board shall consist of the following members, namely:— (i) one person from each district of the State, appointed by the State Government; (ii) the Additional Director of Industries and Commerce and ex-officio Additional Registrar of Co-operative Societies, Directorate of Industries and Commerce; (iii) an officer of the Finance Department not below the rank of a Deputy Secretary nominated by the State Government; (iv) an officer of the Department of Commerce and Industries not below the rank of a Deputy Secretary nominated by the State Government; (v) the State Director, Khadi and Village Industries Commission; (vi) the Financial Adviser and Chief Accounts Officer of the Board; and (vii) the Chief Executive Officer of the Board. (b) one of the members shall be appointed by the State Government as the Chairman of the Board. (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: Provided that the resignation shall not take effect until it is accepted. (3) The Chairman, and other members shall receive such allowances as may be prescribed and the allowances shall be paid from the funds of the Board. (4) Subject to the pleasure of the State Government and sub-section (4A), the term of office and the terms and conditions of service of the Chairman and other members of the Board shall be such as may be prescribed. (4A) The State Government may, from time to time grant to the Chairman such leave as may be prescribed and may appoint any other member to act for the Chairman during such leave and such member shall, while so acting, for the purposes of this Act, be deemed to be the Chairman. (5) The Chairman and other members shall be eligible for reappointment.

5. Disqualification for appointment on the Board. A person shall be disqualified for being appointed, or for continuing, as a non-official member of the Board, if he,— (a) does not wear khadi; or (b) holds any office of profit under the Board; or (c) is of unsound mind and stands so declared by a competent court; or (d) is an undischarged insolvent or has applied for being adjudged an insolvent; or (e) has been convicted of an offence, which involves, in the opinion of the State Government, moral turpitude; or (f) has directly or indirectly by himself, by his wife or son or by any partner, any share or interest in any subsisting contract or employment with, by, or on behalf of, the Board; or (g) is a secretary or manager or other salaried officer of any incorporated company or any co-operative society which has any share or interest in any contract or employment with, by, or on behalf of, the Board: Provided that a person shall not be disqualified under clauses (f) and (g), or be deemed to have any share or interest in any contract or employment with, by, or on behalf of, the Board, by reason only of,— (i) his, or of the incorporated company or of a co-operative society of which he is a secretary, manager or other salaried officer, having a share or interest in any newspaper in which any advertisement relating to any affairs of the Board is inserted, or (ii) his being a share-holder of such a company or society, if he has disclosed to the State Government the nature and extent of the share held by him from time to time.

6. Removal or suspension of a member of the Board. (1) The State Government may, after such inquiry as may be necessary, remove from office the Chairman or any other non-official member, if he,— (a) refuses to act; or (b) has become incapable of acting; (c) has abused his position in the Board so as to render his continuance on the Board detrimental to its interest; or (d) fails, without such reason as may in the opinion of the State Government be sufficient, to attend three consecutive meetings of the Board; or (e) ceases to reside in the State of Karnataka; or (f) has since his appointment incurred any of the disqualifications specified in section 5; or (g) is otherwise unsuitable to continue on the Board. (2) No order of removal under sub-section (1) shall be made, unless the non-official member concerned has been given an opportunity to submit his explanation to the State Government: Provided that a non-official member may be suspended by the State Government pending an enquiry against him. (3) A non-official member who has been removed under clause (c) or (f) of sub-section (1) shall not be eligible for appointment to the Board as non-official member or in any other capacity.

7. Vacancy of Members. If a non-official member tenders his resignation in writing to the State Government, and if it is accepted by the State Government, he shall cease to be a non-official member from the date of such acceptance.

7A. Filling of a casual vacancy. Where a vacancy occurs on account of removal, resignation, death or otherwise of a person appointed as a non-official member, the vacancy shall be filled by the State Government by appointment of a new non-official member and the person so appointed shall hold office for the remainder of the term of the non-official member in whose place he is appointed.

8. Proceedings presumed to be good and valid. No act or proceeding of the Board shall be invalidated merely by reason of any vacancy in its membership on account of resignation, death or removal.

9. Appointment of members of staff of Board and conditions of their service. (1) The State Government shall appoint an officer not below the rank of a Deputy Commissioner of a District to be the Chief Executive Officer of the Board. (2) The State Government may, from among officers of the Central Government or the State Government appoint a Financial Adviser and Chief Accounts Officer to the Board. (3) The remuneration, allowances and conditions of service of the Chief Executive Officer and the Financial Adviser and Chief Accounts Officer shall be such as the State Government may specify, and their remuneration and allowances shall be paid from the funds of the Board. (4) Subject to such rules as may be prescribed, the Board may appoint such members of the staff as it may consider necessary. (5) The remuneration, allowances and other conditions of service of the members of the staff of the Board shall be such as may be prescribed.

10. Appointments of Committees. Subject to any rules made under section 31, the Board may from time to time appoint one or more Committees for the purpose of securing efficient discharge of its functions and in particular for the purpose of securing that the said functions are exercised with due regard to the circumstances and requirements of any particular village industry. Such Committees may be appointed for any particular area.

The Board shall meet and shall from time to time make arrangements with respect to the date, time, notice, management and adjournment of its meetings as it thinks fit. Such meeting shall be held at least once in every two months.

12. Power to make contracts. (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 and every contract shall be made on behalf of the Board by the Chairman: Provided that,— (a) no contract involving an expenditure of Rs. 1,00,000 and more shall be made without the previous sanction of the State Government, (b) (i) no contract involving an expenditure of Rs. 10,000 and more shall, subject to clause (a), be made without the previous sanction of the Board, (ii) no estimate or tender involving an expenditure of Rs. 10,000 and more shall, subject to clause (a), be sanctioned or accepted without the previous sanction of the Board. (2) Every contract made by the Chairman on behalf of the Board shall, subject to the provisions of this section, be entered into in such manner and form as may be prescribed. (3) A contract not executed in the manner provided in this section and the rules made thereunder shall not be binding on the Board.