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OIL AND NATURAL GAS COMMISSION ACT, 1959
STATEMENT OF OBJECT AND REASON:
"The establishment of the Oil and Natural Gas Commission in August, 1956. was the first concrete step taken by Government to carry out inter alias geological and geophysical surveys for discovering petroleum resources in the country and developing them in the public sector. The Commission was organized, in the first instance as an ordinary Government Department; but even within this short period of less than three years, the size of this organisation and the volume of work handled by it have increased very rapidly. The magnitude of its programmes and activities is likely to increase further in the near future. In the light of the experience gained so far. it is felt that the powers already delegated to the Commission or a mere amplification of these powers would not suffice Exploration work in the public sector has reached a stage where for efficient and expeditious progress much more autonomy and elasticity are required than would be possible It the Commission continued to work as a Government Department. Oil industry being a highly integrated one, exploration work and exploitation should more appropriately be entrusted to an agency which can function more or less as a commercial agency in the private sector. The Bill accordingly proposes to convert the existing organisation into a statutory corporate body with the same nomenclature. Under the Bill the Commission will consist of not less than three members including the Chairman and one of these members will be exclusively in charge of the finances of that body. The Commission's main functions will be—(i) to organize and implement programmes for the development of petroleum resources: (ii) to carry out necessary surveys for the exploration of such resources and the drilling and other prospecting operations required for this purpose; (iii) to promote the production of petroleum and its refinement and the sale of petroleum and petroleum products produced by it; and (iv) to advise Government as and when advice is sought. The Commission will generally have full powers to carry out its functions under the Bill. The Bill makes adequate provision for the exercise of suitable control over the Commission. It has been provided that the previous approval of the Government should be obtained by the Commission before exercising its powers in respect of certain specific matters. The Commission will also be subject to the directions of Government in the discharge of its functions. Provision has also been made for financial control over the Commission. The submission of an annual statement of the programme and activities undertaken and likely to be under taken by the Commission, and of financial estimates in respect thereof has been made obligatory. IN addition, the funds of the Commission arc required to be deposited in the Reserve Bank or a Government Treasury or to be invested in securities approved by Government, and the scrutiny of the accounts of the Commission by the Comptroller and Auditor-General of India has been ensured. Parliament also will be kept in touch with the working of the Commission as the Bill requires copies of its annual report and the Comptroller and Auditor-General's audit report to be laid before both Houses of Parliament. The Bill also contains ancillary provisions in respect of various other matters like the transfer of staff, the vesting of properties in the Commssion, etc." — Gaz. of lnd„ 1959, Extra, Pt. II-
Sec. 2, page 600. Amending Act 38 of l962:— In the light of experience gained in the working of the Oil and Natural Gas Commission Act. 1959. it has become necessary to enhance the powers of the Oil and Natural Gas Commission as has been done in the case of other big public undertakings so that the Commission may function more effectively with speed and efficiency required for their increasing activity, Accordingly, it is proposed to give powers to the Commission to promote and form companies in accordance with the Companies Act, 1956, and to create without the previous approval of the Central Government posts carrying the salary or honorarium of not more than Rs. 2,250 per month. It is also proposed to enhance the Commission's powers in relation to reappropriation. The Bill is designed to give effect to these proposals—Gaz. of lnd„ 30-8-1962. Pt. II.Section 2, Extra, p.
An Act to provide for the establishment of a Commission for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it and for matters connected therewith. Be it enacted by Parliament in the Tenth Year of the Republic of India as follows:—
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
—
(1) This Act may be called THE OIL AND NATURAL GAS COMMISSION ACT. 1959.
(2) It extends to the whole of India 2[* * *].
(3) It shall come into force on such date3as the Central Government may, by notification in the Official Gazette, appoint
SECTION 02: DEFINITIONS
— In this Act, unless the context otherwise requires.—
(a) "chairman" means the chairman of the Commission;
(b) "Commission" means the Oil and Natural Gas Commission established under section 3-;
(c) "existing organisation" means the body set up in pursuance of the resolution of the Government of India, No 22/29/55-ONG. dated the 14th August 1956;
(d) "Fund" means the fund referred to in section 19;
(e) "member" means a member of the Commission and includes the chairman;
(f) "petroleum" has the same meaning4as in the Petroleum Act, 1934, and includes natural gas;
(g) "prescribed" means prescribed by rules made under this Act.
SECTION 03: ESTABLISHMENT AND INCORPORATION OF THE COMMISSION
—
(1) With effect from such date5as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established a Commission to be called the Oil and Natural Gas Commission.
(2) The Commission shall be a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property and to contract and shall by the said name sue and be sued
SECTION 04: COMPOSITION OF THE COMMISSION
The Commission shall consist of a chairman and not less than two, and not more than eight, other members appointed by the Central Government and the members may be required to render whole time or part-time service, as the Central Government may direct: Provided that one of the members shall be a whole-time Finance Member in charge of the financial matters relating to the Commission: Provided further that the Central Government may, if it thinks fit, appoint one of the members as vice chairman of the Commission.
SECTION 05: TERM OF OFFICE AND CONDITITIONS OF SERVICE OF MEMBERS
(1) The term of office and conditions of service of the chairman and other members shall be such as may be prescribed: Provided that the Central Government may—
(a) terminate the appointment of any whole -time member, who is not a servant of the Government, after giving him notice for a period of not less than three months or in lieu thereof on payment of an amount equal to his salary and allowances, if any, for a period of three months;
b) terminate the appointment of any part-time member who is not a servant of the Government after giving him notice for such period as maybe prescribed; and
(c) terminate at any time the appointment of any member who is a servant of the Government.)
(2) Any member may resign his office by giving notice in writing6[for such period as may be prescribed to the Central Government, and on such resignation being notified in the Official Gazette7by that Government, shall be deem- ed to have vacated his office.
(3) A casual vacancy -created by the resignation of a member under sub- section (2) or for any other reason may be filled by fresh appointment.
SECTION 06: DISQUALIFICATION FOR BEING APPOINTED OR FOR CONTINUING, — MEMBER OF THE COMMIASION
A person shall be disqualified for being appointed or for continuing as a member, if he has, directly or indirectly, any interest in a subsisting contract made with, or in any work being done for, the Commission.
SECTION 07: TEMPORARY ABSENCE OF MEMBER
—If any member is by infirmity or otherwise rendered temporarily incapable of carrying out his duties or is absent on leave or otherwise in circumstances not involving the vacation of his appointment, the Central Government may appoint another person to act in his place during his absence.
SECTION 08: VACANCIES, ETC., NOT TO INVALIDATE ACTS AND PROCEEDINGS OF THE COMMISSION
No act or proceeding of the Commission shall be invalid by reason only of the existence of any vacancy among its members or any defect in the constitution thereof.
SECTION 09: MEETINGS OF THE COMMISSION
(1) The Commission shall meet at such times and places and shall, subject to the provisions of sub-sections (2) and (3), observe such rules of procedure in regard to the transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made under this Act.
(2) The chairman or, in his absence, the vice-chairman, if any, or in the absence of the chairman and of the vice-chairman, if any, any member chosen by the members from among themselves, shall preside at a meeting of the Commission.
(3) All questions at a meeting of the Commission shall be decided by a majority of the votes of the members present and voting, and in the case of an equality of votes, the chairman or, in his absence, the person presiding, shall have a second or casting vote: Provided that the person presiding may, in his discretion, reserve any matter for the consideration of the Central Government.
SECTION 10: TEMPORARY ASSOCIATION OF PERSONS WITH THE COMMISSION FOR PARTICULAR PURPOSES
(1) The Commission may associate with itself in such manner and for such purposes, as may be provided by regulations made under this Act, any person whose assistance or advice it may desire in performing any of its functions under this Act.
(2) A person associated with it by the Commission under sub-section (1) for any purpose shall have a right to take part in the discussions of the Commission relevant to that purpose, but shall not have a right to vote at a meeting of the Commission and shall not be a member for any other purpose.
SECTION 11: AUTHENTICATION OF ORDER AND OTHER INSTRUMENTS OF THE COMMISSION
All orders and decisions of the Commission shall be authenticated by the signature of the chairman or any other member authorised by the Commission in this behalf, and all other instruments issued by the Commission shall be authenticated by the signature of an officer of the Commission authorised in like manner in this behalf.
SECTION 12: STAFF OF THE COMMISSION
(1) Subject to the provisions of section 15-, the Commission may, for the purpose of enabling it efficiently to perform its functions or exercise its powers under this Act, appoint such number of employees as it may consider necessary.
(2) The functions and the terms and conditions of service of such employees shall be such as may be provided by regulations made under this Act.
SECTION 13: TRANSFER OF SERVICE OF EXISTING EMPLOYEES TO THE COMMISSION
(1) Subject to the provisions of this Act, every person employed by the existing organization immediately before the date of establishment8of the Commission shall, on and from such date, become an employee of the Commission with such designation as the Commission may determine and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions as he would have held the same on such date if the Commission had not been established and shall continue to do so unless and until his employment in the Commission is terminated or until such tenure, remuneration and terms and conditions are duly altered by the Com- mission : Provided that—
(a) the tenure, remuneration and terms and conditions of service of any such person shall not be altered to his disadvantage without the previous approval of the Central Government;
(b) any service rendered in the existing organization by any such person shall be deemed to be service under the Commission; and
(c) all persons employed by the Commission on the date of its establishment, who, immediately before such date, hold, in a permanent or quasi-permanent capacity, posts in connection with the affairs of the Union or of any State, but not posts in the existing organisation, shall be treated as Government servants on foreign service with the Commission.
(2) The Commission may employ any person who has become its employee under sub-section (1); in such capacity as it thinks fit, and every such emplo- yee shall be bound to discharge his functions accordingly.
SECTION 14: FUNCTIONS OF THE COMMISSION
(1) Subject to the provisions of this Act, the functions of the Commission shall generally be to plan, promote. organise and implement programmes for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it and to perform such functions as the Central Government may, from time to time, assign to the Commission.
(2) In particular and without prejudice to the generality of the foregoing provision, the
Commission may take such steps as it thinks fit—
(a) for the carrying out of geological and geophysical surveys for exploration of petroleum;
(b) for the carrying out of drilling and other prospecting derations to prove and estimate the reserves of petroleum;
(c) to undertake, encourage and promote such other activities as may lead to the establishment of such reserves;
(d) to undertake, assist or encourage and promote the production of petroleum from such reserves and its refining;
(e) for the transport and disposal of natural gas and refinery gases produced by the Commission: Provided that no industry, which will use any of these gases as a raw material, shall be set up by the Commission without the previous approval of the Central Government;
(f) to undertake, encourage and promote geological chemical and other scientific investigations whether in or outside the laboratory;
(g) to undertake, assist or encourage the collection, maintenance and publication of statistics, bulletins and monographs;
9[(gg) to promote and form companies in compliance with the requirements of the Companies Act, 1956, for any of the purposes aforesaid.]
(h) to perform any other function which is supplemental, incidental or con- sequential to any of the functions aforesaid or which may be prescribed
.
10[(3) * • * * * ]
SECTION 15: POWERS OF THE COMMISSION
The Commission may exercise all such powers as may be necessary or expedient for the purpose of carrying out its functions under this Act :11[Provided that before exercising its powers in respect of the following matters, it shall obtain the previous approval of the Central Government, namely:—
(a) the creation of any post, the salary or honorarium of which would either be more than such amount as may be prescribed, or where no such amount has been prescribed, more than rupees two thousand seven hundred and fifty or be on a -scale the maximum of which exceeds such amount as may be prescribed or where no such amount has been prescribed, exceeds rupees two thousand seven hundred and fifty, and the appointment of12[any person other than the person preferred to in clause (aa)] to any such post;
13[(aa) the employment, whether by fresh appointment, re-employment, extension of service or otherwise, of any person who has attained the age of fifty-eight years to a post, where the pay (including pension and pensionary equivalent of retirement benefits) of the post exceeds 2,500 rupees per mensern or where the minimum of the pay scale of the post, proposed to be given to such person is 2,500 rupees or more per men- sem;]
(b) the implementation of any scheme or proposal which will involve a capital expenditure exceeding such amount as may be prescribed, or where no such amount has been prescribed, exceeding fifty lakhs of rupees:
(c) the disposal of any property, right or privilege the original or book value of which exceeds such amount as may be prescribed, or where no such amount has been prescribed, exceeds ten lakhs of rupees.]
SECTION 16: CAPITAL OF THE COMMISSION
(1) All non-recurring expenditure in" curred by the Central Government for or in connection with the existing organisation up to the date of establishment of the Commission and declared to be capital expenditure by that Government, shall be treated as capital expenditure provided by that Government to the Commission, and shall be brought into the books of the Commission.
(2) The Central Government may, after due appropriation made by Parliament in this behalf, provide any further capital that may be required by the Commission for the carrying on of the business of the Commission or for any purpose connected therewith on such terms and conditions as that Government may determine
SECTION 17: VESTING OF PROPERTY IN THE COMMISSION
All property acquired and all works constructed or under construction by or on behalf of the Central Government for the purposes of the existing organisation up to the date of establishment of the Commission shall, on such date, vest in the Commission and all income derived and all expenditure incurred in this behalf shall be brought into the books of the Commission.
SECTION 18: COMMISSION TO HAVE RIGHTS, LIABILITIES AND OBLIGATIONS OF THE CENTRAL GOVERNMENT IN CERTAIN CASES
All rights, liabilities and obligations of the Central Government which, whether arising out of any contract or otherwise, were acquired or incurred by it in connection with the existing organisation- or for any of the purposes referred to in this Act, before the date of establishment14of the Commission shall be deemed to have been acquired or incurred by the Commission and shall be the rights, liabilities and obligations respectively of the Commission.
SECTION 19: FUND OF THE COMMISSION
(1) The Commission shall have its own Fund and all receipts of the Commission, whether from grants made by the Central Government or otherwise, shall be carried thereto and all payments by the Commission made there from.
(2) The Commission may extend such sums as it thinks fit for performing its functions under this Act and such sums shall be treated as expenditure payable out of the Fund.
(3) All monies of the Commission shall be deposited in the Reserve Bank of India or with the agents of that Bank15[or in a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970or in such other bank as may be prescribed, or in a Government Treasury, or be invested in such securities as may be approved by the Central Government
SECTION 20: BORROWING OF MONEY
The Commission may, with the previous approval of the Central Government, borrow money in the open market or otherwise for the purposes of carrying out its functions under this Act.
SECTION 21: BUDGET
(1) (a) The Commission shall, by such date in each year as may be prescribed, submit to the Central Government for approval a budget in the prescribed form for the next financial year, showing the estimated receipts and expenditure, and the sums which would be required from- the Central Government, during that financial year
(b) If any sum granted by the Central Government remains wholly or partly unspent in any financial year, the unspent sum may be carried forward to the next financial year and taken into account in determining the sum to be provided by the Central Government for that year.
(2) Subject to the provisions of sub-section (3), no sum shall be expended by or on behalf of the Commission unless the expenditure is covered by provision in the budget approved by the Central Government. (3) The Commission may sanction any reappropriation from one head of expenditure to another or from a provision made for one scheme to that for another: Provided that, except with the previous approval of the Central Government—
(a) no reappropriation from the head 'loan' to another head of expenditure and vice versa in the budget shall be sanctioned by the Commission;
(b) no reappropriation which has the effect of augmenting the provision under any head of expenditure as approved by the Central Government by more than twenty per cent.16[***] shall be made.
SECTION 22: ANNUAL REPORTS, ACCOUN
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