The Assam Aid to Industries (Small and Cottage Industries) Act, 1955 Complete Act - Bare Act

ASSAM AID TO INDUSTRIES (SMALL AND COTTAGE INDUSTRIES)
ACT, 1955

[Published in the Assam Gazette, dated the 11th January, 1956.]

Industrial loans are granted from year to year for the development and starting of various Small and Cottage Industries in the State. The demand for industrial loans are increasing year by year. The Government of India have recently granted loans to this State Government for the grant of such loans and are even prepared to bear the losses incurred on a prorata basis without any extent of limit, if such loans are granted on liberalised terms and conditions which are taken up now.

The issue of industrial loans in Assam is so far governed by a set of Rules which are not statutory and there is not Act for the purpose. The default instalments of the loans are realised according to the provisions made under Rule 8 of the Rules and the registered agreements executed by the borrowers. Such loans are recovered as a public demand under the Bengal Public Demands Recovery Act. It is therefore necessary to bring an Act to enable the Government to realise the dues as arrears of land revenue. [Published in the Assam Gazette, Part V, dated 9th November, 1955] page - 83.

AMENDING ACT - THE ASSAM ACT NO. XV OF 1956

Under the provisions made under Section 4(1) of the State Aid to Industries (Small and Cottage Industries) Act, 1955 loans upto Rs. 20,000 only can be sanctioned by the Cottage Industries Department and applications for loans over that amount are required to be passed on to the State Financial Corporation. In cases, however, where the industrial concern is not found eligible for accommodation from Corporation, the Cottage Industries Department may consider such applications upto a limit of Rs. 50,000. But the Co-operative Societies being composed of a number of individuals generally require more capital than what an individual requires. The industries taken up by the Co-operative Societies are also larger than industries taken up by the individuals and as such a Co-operative Society usually required more than Rs. 20,000 for developing the industries.

The Government of India have offered assistance to State Governments for issuing loans to Small Industries at 3 percent interest per annum only and State Government are authorised to issue loans upto Rs. 50,000 in each case and upto Rs.1 Lakh in special cases. The Co-operative Societies will be deprived of the benefit offered by the Government of India if they are required to approach the State Financial Corporation for loan exceeding Rs. 20,000.

It is, therefore, proposed to amend Section 4(1) of the existing State Aid to Industries (Small and Cottage Industries) Act, 1955, allowing loans exceedings Rs. 20,000 to the Co-operative Societies. [Published in the Assam Gazette Extraordinary, dated 8-3-1956] page-71.

AMENDING ACT - THE ASSAM ACT NO. III OF 1960

Formerly, Government business in respect of Cottage Industries including Sericulture and Weaving was transacted in the Directorate of Cottage Industries with one Director. Now there are two

Directorates placed under two independent Directors, viz., the Director of Industries and the Director of Sericulture and Weaving. It is, therefore, felt necessary to empower both the Directors to carryout the purposes of the principal Act. It is also proposed to provide for grant of loans to political sufferers without security upto a maximum of Rs. 5,000 (Rupees five thousand only) to a single individual. [Published in the Assam Gazette Extraordinary, dated 8.4.1959] page-58.

AMENDING ACT - THE ASSAM ACT NO. XXX OF 1960

The Government of India have revised the definition of Small Scale Industries. As such, for the sake of uniformity, it is proposed to amend the existing definition in the Assam Aid to Industries (Small and Cottage Industries) Act, 1955. The former definition of a small scale industrial unit was subject to man-power employed which is proposed to be done away with by the revised one. [Published in the Assam Gazette, Part V, dated 19th October, 1960] page 154.

AMENDING ACT - THE ASSAM ACT NO. VII OF 1970

In order to assist unemployed Engineer/Technologist/Technician who are keen and capable of setting up Small Scale Industry but are unable to do so owing to inadequate financial resources of their own, it is considered necessary to make provisions for loans on personal bond of applicants as to enable them to set up Small Scale Industry. The facility of the provision will be available to unemployed Technologist/Technician/Engineer provided the entrepreneur has no other industry of his own and/or is not a partner in any other business concern and his project is technically sound and economically viable.

Further, to liberalise the terms and conditions for issue of loans to industrialists, for proper development of Small Scale and Cottage Industries in the State, it has been considered necessary to raise the quantum of loan admissible on the security of one or more sureties in addition to a personal bond from Rs. 2,500 to Rs. 5,000. It is also considered necessary to state explicitly the necessity of furnishing personal bond by the applicant when loan is sanctioned to him on the security of one or more sureties. [Published in the Assam Gazette, Part V, dated 25th March, 1970] page 5.

AMENDING ACT - THE ASSAM ACT NO. XIX OF 1973

With a view to better utilisation of and maximisation of coverage by the limited resources available for giving loans to small entrepreneurs, it is proposed to give loans from the side of Government normally upto Rs. 7,500 in cases of unemployed engineers, technologists/technicians upto to Rs. 5,000 in other cases; to give some funds to the Assam Financial Corporation for giving loans exceeding these limits and upto Rs. 10,000; and to refer applications for loans exceeding Rs. 10,000 to that Corporation for consideration from out of its own resources. As it is proposed to restrict loans to be given from the side of Government to Rs. 5,000/, Rs. 7,000 only as mentioned above it is proposed to abolish the Cottage Industries Board. By amendment of the Rules it is proposed to decentralise the loan sanctioning authority to the district level. This would also expedite disposal of loan applications. [Published in the Assam Gazette, Part V, dated 18th July, 1973] page - 57.

AMENDING ACT - THE ASSAM ACT NO. I OF 1998

The Assam Aid to Industries (Small & Cottage Industries) Bill, 1997 seeks by way of amendment to remove certain difficulties and to provide facilities to handicraft artisans and handicapped persons under the provision of the existing Assam Aid to Industries (Small & Cottage Industries) Act.

The Assam Aid to Industries (Small & Cottage Industries) Act, 1955 was enacted in the year 1956 and subsequently amended from time to time viz. in 1956, 1960, 1970 & 1973. Under the provision of the Act, loan upto Rs. 20,000/- subsequently reduced to Rs. 7,500/- were given to Small Industries, Cottage Industries, Political Sufferers, unemployed agencies.

The act is now implemented at the district level. Purpose of the Act suggested that it was enacted in the days when Banking network was totally inadequate and the Govt. sponsored schemes like PMRY was not in existence. In the field level, however due to resource problem the allocation under this schemes was found insufficient, hence the alloted amount is distributed amongst the applicant and on an average applicant received meagre Rs. 2000/-.

In view of above, the Act was suggested for complete reorientation. Morever taking into consideration the present scenario and development made in the banking network, it was neither necessary nor desirable for the Govt., to directly grant loan to enterpreneurs. However the fact that certain categories of individuals like artisans and physically handicapped persons engaged in traditional cottage industries do not receive adequate support from Bank. It was felt necessary to amend the Act to include only those categories and exclude others. [Published in the Assam Gazette Extraordinary, dated 29th December, 1997] page - 2708.

LIST OF AMENDING ACTS, THE PROVISIONS OF WHICH

HAVE BEEN INCORPORATED IN ITS DUE PLACES

AND THEREFORE NOT PRINTED SEPARATELY

1. The Assam Act No. I of 1998 (w.e.f. 17.2.1998).

2. The Assam Act No. XIX of 1973 (w.e.f. 27.12.1973).

3. The Assam Act No. VII of 1970 (w.e.f. 11.7.1970).

4. The Assam Act No. XXX of 1960 (w.e.f. 2.12.1960.)

5. The Assam Act No. III of 1960 (w.e.f. 24.2.1960).

6. The Assam Act No. XV of 1956 (w.e.f. 30.5.1956).

An Act to provide for the grant of loan for the development of Small and Cottage Industries in Assam.

Whereas it is expedient to provide for the grant of loan for the development of Small and Cottage Industries in Assam.

It is hereby enacted in the Sixth Year of the Republic of India as follows-

(1) This Act may be called the Assam Aid to Industries (Small and Cottage Industries) Act, 1955.

(2) It extends to the whole of Assam.

(3) It shall come into force at once (With effect from 11-1-1956, Published in the Assam Gazette, dated the 11th January, 1956).

In this Act unless there is anything repugnant in the subject or context-

(a) 'Borrower' means a person to whom a loan has been granted under this Act and includes the heirs, successors, assigns and sureties of a borrower;

["(b) 'Director' means

(i) the Director of Industries, Assam in respect of Small or Cottage Industries other than Small or Cottage Industries under Sericulture and Weaving; and

(ii) the Director of Sericulture and Weaving, Assam in respect of Small or Cottage Industries under Sericulture and Weaving';] (Substituted clause "(b)" of Section 2, by the Assam Act No. III of 1960 (w.e.f. 24-2-1960) S.1)

(c) 'Government' means the Government of the State of Assam;

(d) 'Loan' means a loan granted under this Act;

(e) 'Prescribed' means prescribed by rules made under this Act;

(f) 'Sanctioning Authority' means the authority who sanctions loan;

["(g)'] Deleted clause "(g)" of Section 2, and the existing clauses (h) and (i) re-numbered as clauses (a) and (h) respectively, by the Assam Act No. I of 1998 (w.e.f. 17-2-1998) S.2(i) 'Cottage Industry' means an industry conducted by the member of a family or groups or organisation of artisans with or without the aid of hired labour;

["(h)"] Deleted clause "(g)" of Section 2, and the existing clauses (h) and (i) re-numbered as clauses (a) and (h) respectively, by the Assam Act No. I of 1998 (w.e.f. 17-2-1998) S.2(i) 'Security' means property mortgaged by the borrower against the loan taken from Government in shape of land, buildings, the assets of the industry and personal security and surety;

["(i) 'artisan' means a person engaged in production of handicraft items;

(j) ˜handicraft' means an item produced by a worker skillfully using the limbs with the aid of handtools and frames;

(k) 'handicapped person' means a person suffering from some disabilities or disorder;

(l) 'disability' means-

(i) blindness;

(ii) low vision;

(iii) leprosy cured;

(iv) hearing impairment;

(v) locomotor disability;

(vi) mental retardation;

(vii) mental illness.

(m) 'blindness' refer to a condition where a person suffer from any of the following conditions, namely-

(i) total absence of sight; or

(ii) visual acuity not exceeding 6/ 60 or 20/ 200 (snellen) in the better eye with correcting lances; or

(iii) limitation of the field of vision subtending an angle of 20 or worse.

(n) 'hearing impairment' means loss 60 decibels or more in the better ear in the conversational range of frequencies;

(o) leprosy cured person' means any person who has been cured of leprosy but is suffering from-

(i) loss of sensation in hand or feet as well as loss of sensation and paresis in the eye-lid but with no manifest deformity;

(ii) manifest deformity and paresis but having sufficient mobility in their hand and feet to enable them to engage in normal economic activity;

(iii) extreme physical deformity as well as advance age which prevents him from undertaking any gainful occupation.

(p) locomotor disability' means disability of the bones, joints or muscles leading to substantial restriction of the movement of the limbs or any form of cerebral palsy;

(q) 'mental illness' means any disorder other than mental retardation;

(r) 'mental retardation' means a condition of arrested or incomplete development of mind of a person which is specially characterised by subnormality of intelligence;

(s) 'person with disability' means a person suffering not less than 40% of any disability as certified by a Medical Authority;

(t) 'persons with low vision' means a person with impairment of visual functioning even after treatment or standard refractive correction but who uses or is potentially capable of using vision for the planning or execution of a task with appropriate assistive device;

(u) 'medical authority' means any hospital or institution as may be specified by the Government, by notification for the purposes of this Act."] (Deleted clauses "(j)", "(k)"and "(l)" and after the clause "(h)" as re-numbered the new clauses "(i), "(j)", "(k), "(l)". "(m)", "(n)", "(o)", "(p)", "(q)", "(r)", "(s)", "(t)" and "(u)" inserted in Section 2, by the Assam Act No. I of 1998 (w.e.f. 17-2-1998) S. 2(ii).

Note- Before Substitution clause "(b)" of Section 2, read as follows-

"(b) Director of Cottage Industries' means the Director of Cottage Industries, Assam;"

Note (1)- Before deletion clause "(g)" of Section 2, which was substituted by the Assam Act No. XXX of 1960 (w.e.f. 2-12-1960). read as follows -

"(g) 'Small Industry' means an industrial unit with a capital investment of not more than Rs. 5 Lakhs irrespective of the number of persons employed;"

Note (2)- Original clause "(g)" ran thus -

"(g) 'Small Industry' means an industrial unit employing less than 50 workers if using power, and less than 100 workers if not using power, and having capital assets of less than Rs. 5 Lakhs."

Note- Before deletion clauses "(j)" and "(k)" which was added by the Assam Act No. III of 1960 (w.e.f. 24-2-1960) and clause "(l)" was added by the Assam Act No. VII of 1970 (w.e.f. 11-7-1970) read as follows-

"(j) 'Political Sufferer' means-

(i) a person who was a detenue or an externee or was arrested and kept in jail either as convict or as an undertrial for a period of at least one month or who was fined in a court of law or whose property was confiscated or who was permanently disabled or who suffered grievous bodily injury for participation in any of the national movements;

(ii) a person-

(a) dismissed or removed from service;

(b) being a civil pensioner whose pension was forfeited;

(c) who resigned or had to resign from Government service, for participating in or his association with the national movement;

(iii) a person who boycotted his educational institution in response to the national movement, and continued in Congress work for the attainment of the independence of India till 1947;

(iv) a person who gave up his study due to his participation in the national movement of 1942 and resumed the same afterwards :

Provided that no such person shall be deemed to be a political sufferer if he had given an undertaing to the authority not to continue in any national movement, or if he had acted subsequently against the national movement.

Explanation.- (a) 'National movement' means the movements launched under the leadership of Mahatma Gandhi since 1921, or any other movement for the independence of India.

Explanation.- (b) 'Authority' means the Government for the time being, prior to the 15th August, 1947.

(k) "Registrar of Co-operative Society' shall be as defined in the Assam Co-operative Society Act, 1949" (Assam Act No. I of 1950);

(l) Unemployed Engineer/Technologist/Technician' means a person possessing either an engineering or a technological or at technical Degree of Diploma from any Government recognised institution but not employed for utilisation of his Engineering/Technological/Technical knowledge and skill and not owning any trade, industries or business of his own or in partnership with others and not having adequate financial resources of his own to set up any business, trade or any Small Scale Industry."

(1) The Director of Industries or any officer authorised in this behalf by the Government may sanction loan not exceeding such limit and on such terms and conditions as may be prescribed and any loan beyond the competence of the aforesaid officers shall be sanctioned by the Government. Loans upto Rs. 25,000/- in case of handicapped persons and upto Rs. 30,000/- in case of artisans may be issued by the Government.

Applications for the loan exceeding Rs. 30,000.00 should ordinarily be passed on to the State Financial Corporation for consideration. In cases, however, where the industrial concern is not found eligible for accommodation from the corporation the Government may consider such application upto a limit of Rs. 50,000.00.

(2) Loan may be granted for all or any of the following purposes, viz-

(i) For the purchase of a cottage industrial undertaking;

(ii) For the erection of additional machinery or for replacing old machinery of a cottage industry;

(iii) For the development of a new or nascent cottage industry and;

(iv) For providing the working capital such as the cost of new material, pay of operating staff etc. of cottage industry for a specified time.

(3) In case of cottage Industries owned by a Company or a co-operative society the State Government may assist in development of such Industries by participation in the share capital or by purchasing debentures issued by such company."] (Substituted Section "3" as earlier re-numbered" by the Assam Act No. I of 1998 (w.e.f. 17-2-1998.) S. 4)

Note (1) - Before substitution Section "3" as earlier re-numbered and it was substituted by the Assam Act No. XV of 1986, read as follows-

"3. "(1) "(a) No loan exceeding Rs. 20,000 shall be issued under this Act provided that nothing in this clause shall debar the Government for granting a loan exceeding such limit to a Co-operative Society and in case of an industrial concern other than Co-operative Societies when such concern is not found eligible for accommodation from the State Financial Corporation up to a limit of Rs. 50,000.

(b) The Director [...........] Deleted for the words "of Cottage Industries" by the Assam Act No. III of 1960) w.e.f. 24-2-1960) or any officer authorised by the Government in this behalf may sanction loans within such limit as prescribed."

(2) Loan may be granted for all or any of the following purposes, viz,-

(i) For the purchase of a Small or Cottage industrial undertaking;

(ii) For the erection of additional machinery or for replacing old machinery of a Small or Cottage Industry;

(iii) For the development of a new or nascent Small or Cottage Industry; and

(iv) For providing the working capital such as the cost of raw materials, pay of operating staff, etc., of a Small or Cottage Industry for a specified time."

(Added sub-section (3) by the Assam Act No. III of 1960 (w.e.f. 24-2-1960) "(3) In case of Small or Cottage Industries owned by a Company or a Co-operative Society, the State Government may assist in the development of such industries by participation in the share capital or by purchasing debentures issued by such Company."

Note (2) - This Section "3" was originaly numbered as Section "4", it was re-numbered as Section "3" by the Assam Act No. XIX of 1973 and earlier sub-section (1) of this Section "4" substituted by the Assam Act No. XV of 1956, read as follows -

(1) The Director of Cottage Industries, Assam or any officer authorised in this behalf by the Government may sanction loans not exceeding such limit ["and on such terms and conditions"] Inserted by the Assam Act No. XIX of 1973 (w.e.f. 27-12-1973) S. 3(1) as may be prescribed and any loan beyond the competence of the aforesaid officers shall be sanctioned by the Government. Loans upto ["Rs. 7,5000 in case of un-employed engineers/technologist/technicians and up to Rs, 5,000 in other cases"] Substituted for the words and figures "Rs. 20,000 only" by Ibid. S. 3(2) may be issued by the ["Government"] Substituted for the words "Cottage Industries Development" by Ibid. S.3(3). Applications for loans exceeding ["Rs. 10,000"] Substituted for the words and figures "Rs. 20,000" by Ibid. S. 3(4) should ordinarily be passed on to the State Financial Corporation for consideration. In cases however, where the industrial concern is not found eligible for accommodation from the Corporation, the ["Government"]3 may consider such applications upto a limit of Rs. 50,000."

Note (3) - Deleted Section 7, by the Assam Act No. III of 1960 (w.e.f. 24-2-1960) the existing Sections 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 re-numbered as Section 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 and again Section 3, deleted by the Assam Act No. XIX of 1973 (w.e.f. 27-12-1973) and the existing Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16, re-numbered as Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15, respectively.

Note (4) - Original Section 3, deleted as above read as follows-

"3. Constitution of Cottage Industries Board.-The State Government shall constitute a Board for advising the Cottage Industries Development for considering loan applications for amounts exceeding Rs. 5,000 and for reviewing generally the work, relating to industrial loans. The Board shall have representatives of the ["Government"] Substituted for the words "Cottage Industries Development" by the Assam Act No. XIX of 1973 (w.e.f. 27-12-1973.) S. 3 (3). Finance Department and the Financial Corporations amongst others."

["(1) ["Any handicapped person or

artisan"] Substituted for the words "Any person" by the Assam Act No. I of 1998 (with effect from 17-2-1998). S. 5 (1) may submit in the prescribed form and in the prescribed manner an application to the Director or to any other officer empowered in this behalf by the Government for loan in respect of [***]Deleted the words "Small or" in sub-section (1) of Section "4" by the Assam Act No. I of 1998 (with effect from 17-2-1998) S. 5 (ii) Cottage Industries."]Sub-section (1) of Section 4 [originally it was as Section 5] were Substituted by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 5.

(2) The officer receiving such application shall within such time as may be prescribed, conduct an enquiry on the particulars furnished with the application and forward the same if he is not competent to sanction the loan, with his report to the Government.

Note - Originally sub-section (1) as substituted read as follows-

"(1) Any person may submit in the prescribed form and in the prescribed manner an application for loan to the Director of Cottage Industries, Assam or to any other officer empowered in this behalf by the Government."

The Government or the authorities empowered to sanction the loan may grant loan to a cottage industry on the following terms-

(i) The grant of a loan is to be secured and repaid in the prescribed manner and upon such terms as may be fixed by the order granting it:

Provided that no such loan shall exceed upto a maximum of 75% of the total value of the security as prescribed :

Provided also that notwithstanding anything contained in this Act and subject to such rules as may be prescribed, the Director or the authority empowered to issue loan may sanction loan upto Rs. 25,000.00 on personal bond of the applicant and upto Rs. 30,000.00 on security of one or more sureties in addition to personal bond of the applicant.

(ii) Government or the authority empowered to issue loan may lease machineries and equipments necessary for the purpose of the industry to the applicant on hire purchase system on execution of the Bond in the prescribed form."] Substituted Section "5" [ as originally it was numbered Section 6) by the Assam Act No. I of 1998 (with effect from 17-2-1998) S. 6 facilities to handicraft artisans and handicapped persons the Government suggested complete reorientation therefore the Amending Assam Act No. I of 1998 made several amendments in the banking network.

Note - Before substitution of Section "5" read as follows-

Provided that no such loan shall exceed upto a maximum of 75 percent of the total value of the security as prescribed. [...] Omitted in the First proviso the words "Security may also included personal security" by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 6 (1)

Substituted second "proviso" by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 6(iii) "Provided also that notwithstanding anything contained in this Act, and subject to such rules as may be prescribed, the Director or the authority empowered to issue loan may sanction loans upto one thousand rupees on personal bond of the applicant and upto ["Five thousand rupees"] Substituted for the words "two thousand and five hundred rupees" by the Assam Act No. VII of 1970 (with effect from 11-7-1970) S. 3 (1) (a) on the security of one or more sureties ["in addition to the personal bond of the applicant" :] Added at the end of second proviso the words "in addition to the personal bond of the applicant" by the Assam Act No. VII of 1970 (w.e.f. 11-7-1970) S. 3 (1) (b).

Note - Before substituted Second proviso read as follows-

"Provided also that notwithstanding anything contained in this Act, and subject to such rules as may be prescribed, the Director of Cottage Industries may in cases of loans not exceeding Rs. 1,000 issue the loan only on the personal security of the borrower, with or without a surety or sureties.

Government or the authority empowered to issue loan may lease machineries and equipments necessary for the purpose of the industry to the applicant on hire purchase system, on execution of the bond in the prescribed form" :

*** "Provided that Government or the authority empowered to issue loan may sanction such loan on the personal bond of the applicant and one or more personal sureties as considered adequate and reasonable subject to a maximum of Rs. 7,500 in case of political sufferers who are certified as such by the competent authority and who are in need of rehabilitation through productive work.

A political sufferer who is in receipt of a pension from the State Government for participation in any National Movement shall not be entitled to the benefit of this proviso:

Provided further that the Government or the authority empowered to issue loan may sanction such loan without security to a Co-operative Society owning Small or Cottage Industries upto a maximum of fifteen times of the paid-up share capital of such Co-operative Society subject to production of a certificate from the Registrar of Co-operative Societies, Assam.".

*** Added new "provisons" by the Assam Act No. III of 1960 (w.e.f. 24-2-1960) S. 6(3).

*** "Provided further that the Government or the authority empowered to issue loan may sanction such loan on the personal bond of the applicant and one more guarantor in addition to personal bond subject to a maximum of Rs. 7,500 in case of unemployed Engineer/Technologist/Technician who are in need of financial assistance for setting up Small Scale Industries."

*** Added new fifth "proviso" by the Assam Act No. VII of 1970 (with effect from 11-7-1970) S. 3 (2).

The Grant of a loan is to be secured and repaid in the prescribed manner and upon such terms as may be fixed by the order granting it:

Any person authorised in this behalf by the Director [***](Deleted the words "of Cottage Industries" in Section 6 as re-numbered by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 8) may enter any place, or premises for inspecting any land, constructions, machineries, appliances, materials or stock-in-trade purchased, hired or created or proposed to be purchased, hired or created by the borrower with the loan granted to him.

Notwithstanding anything contained in this Act or the Rules made hereunder, the Government or the Director [...](Deleted the words "of Cottage Industries" in Section 7 as re-numbered by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 9) if the loan is sanctioned by an authority other than the Government, may for reasons to be recorded in writing, terminate the agreement for loan and direct the borrower to repay all the amounts due thereunder within such time as may be fixed on any of the following grounds-

(i) that any portion of the loan given has been misapplied; or

(ii) that there has been a breach by the borrower of the provisions of this Act or of any rule made thereunder or of any condition of the grant; or.

(iii) that the application on which the loan has been granted contained or was accompanied by, any material statement by the borrower which he knew to be false or any intentional concealment by him of any material fact, which in the opinion of the Government or the Director of Cottage Industries, as the case may be, it was his duty to disclose or that any such false statement or concealment was intentionally made in any enquiry made under this Act or in reply, to any requisition for information under this Act; or

(iv) that the [...] (Deleted the words "Small or" in clause "(iv)" of Section 7, by the Assam Act No. I of 1998 (with effect from 17-2-1998) S. 7) Cottage Industry in question is being managed in such a manner as to endanger the repayment of the loan granted thereto and repayble under this Act, and in default of payment within the specified date proceed to recover from the borrower as an arrear of land revenue the whole amount of the outstanding loan, together with such interest as may be due thereon.

Note - Original Section 7 as deleted by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 7 and the existing Sections re-numbered as above the original Section 7, read as follows-

"7. Security.- Notwithstanding anything in the Section 5 all assets purchased with or created from the loan shall be deemed to be mortgaged or hypothecated, as the case may be, to the Government for the repayment of the loan with interest due thereon and the amount of the loan and the interest thereon shall be the first charge on such assets:

Provided that nothing in this sub-section shall affect the borrower's right to sell such articles of his stock-trade as are meant for sale to customers in the normal course of business."

Notwithstanding anything contained in this Act or the Rules made thereunder, the Government, where the Government is the sanctioning Authority, and the Director [***] (Deleted the words "of Cottage Industries" in Section 8 as re-numbered by the Assam Act No. III of 1960 (with effect from 24-2-1960) S. 10) in other cases, may postpone the realisation of any instalment of a loan or may extend the period of repayment of the loan in the manner it deem proper. However, the reasons for doing so will be stated in writing.

The owner of any [***] (Deleted the words "Small or" in Section 9 as re-numbered by the Assam Act No. I of 1998 (with effect from 17-2-1998) S. 8) Cottage Industry-

(i) when an application has been made for State loan to such industry; or

(ii) during the continuance of the State loan to such industry shall-

(a) comply with any general or special orders of the Government relating to the inspection of the premises, buildings or plant or stock-in-trade, employed or to be employed for the purposes of the industry;

(b) permit the inspection by the prescribed person of all accounts relating to the industry;

(c) submit the account relating to the industry to such audit as may be prescribed;

(d) furnish in the prescribed manner to all prescribed person full returns of all products manufactured and sold both as regards description and quantity;

(e) maintain such special account as may be prescribed; and

(f) furnish such statements as the Government may require.

The Government may charge in respect of application enquiries inspection and audit by whomsoever made under this Act, such, if any, as may be prescribed.

During the continuance of the State loan to a [***] (Deleted the words "Small or" in Section 11 as re-numbered by the Assam Act No. I of 1998 (with effect from 17-2-1998) S. 9. [Published in the Assam Gazette Extraordinary, dated 17th February, 1998] pp-182-186) Cottage Industry, the Government may, by appointing Directors or Inspectors take such steps as it deems advisable so to control the conduct of the Industry as to safeguard the interest of the Government therein.

All areas of moneys payable to the Government under this Act, including any interest chargeable thereon and cost, if any, incurred, shall be recoverable as an arrear of land revenue.

No suit, prosecution, or other legal proceedings shall be instituted against any person for anything in good faith done, or intended to be done in pursuance of this Act or any Rule made thereunder.

The decision of the Government as to whether the conditions imposed by or under any of the provisions of this Act have been satisfied shall be final.

(1) The Government may make rules for carrying out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing provisions, such rules may provide for all or any of the following matter, namely-

(a) The forms of application for loan, order of the sanctioning Authority, the bond, or any other instrument to be executed by the borrowers and notices and directions by the sanctioning Authority and other authorities.

(b) the terms and conditions of the loans and fixation of instalments;

(c) the fixation of the rate of interest;

(d) the extent, the manner of issue of loans and the procedure for realisations;

(e) the form and manner in which accounts and registers are to be maintained;

(f) the manner in which the grant of extension of time for repayment of the principal or interest may be granted;

(g) the manner and machinery for investigation into applications for loans and into proper utilisation of the loan money;

(h) the provision of audit and inspection, and maintenance of account and submissions of returns, etc., under Section 10;

(i) the fees referred to in Section 11; and

(j) generally all matters which are required by the Act to be prescribed.