The Inter-State Corporations Act, 1957

This Act may be called the Inter-State Corporations Act, 1957.

In this Act, "inter-State corporation" means any body corporate constituted under anyof the Acts specified in the Schedule and functioning in two or more States by virtue of section 109 of theStates Reorganisation Act, 1956 (37 of 1956),1[or of any other enactment relating to reorganisation ofStates.]

If it appears to the Government of a State inany part of which an inter-State corporation is functioning that the inter-State corporation should bereconstituted and reorganised as one or more inter-State corporations or that it should be dissolved, theState Government may frame a scheme for such reconstitution and reorganisation or such dissolution, asthe case may be, including proposals regarding the transfer of the assets, rights and liabilities of theinter-State corporation to any other corporations or State Governments and the transfer or re-employmentof employees of the inter-State corporation and forward the scheme to the Central Government.

(1) On receipt of a scheme forwarded to itunder section 3, the Central Government may, after consulting the State Governments concerned, approvethe scheme with or without modifications and give effect to the scheme so approved by making suchorder as it thinks fit. (2) An order made under sub-section (1) may provide for all or any of the following matters,namely: (a) the dissolution of the inter-State corporation; (b) the reconstitution and reorganisation in any manner whatsoever of the inter-State corporationincluding the constitution, where necessary, of new corporations; (c) the area in respect of which the reconstituted corporation or new corporation shall functionand operate; (d) the transfer, in whole or in part, of the assets, rights and liabilities of the inter-Statecorporation (including the rights and liabilities under any contract made by it) to any othercorporations or State Governments and the terms and conditions of such transfer; (e) the substitution of any such transferee for the inter-State corporation, or the addition of anysuch transferee, as a party to any legal proceeding to which the inter-State corporation is a party; andthe transfer of any proceedings pending before the inter-State corporation to any such transferee; (f) the transfer or re-employment of any employees of the inter-State corporation to, or by, anysuch transferee and subject to the provisions of section 111 of the States ReorganisationAct, 1956 (37 of 1956),1[or of any other enactment relating to reorganisation of States] the terms andconditions of service applicable to such employees after such transfer or re-employment; (g) the adaptations or modifications of the Act under which the inter-State corporation wasconstituted, whether by way of repeal or amendment, as may be necessary or expedient to give effectto the approved scheme; (h) such incidental, consequential and supplementary matters as may be necessary to give effectto the approved scheme. (3) Where an order is made under this section transferring the assets, rights and liabilities of anyinter-State corporation, then, by virtue of that order, such assets, rights and liabilities of the inter-Statecorporation shall vest in, and be the assets, rights and liabilities of, the transferee. (4) Every order made under this section shall be published in the Official Gazette and the Act underwhich the inter-State corporation was constituted shall have effect subject to the provisions of the orderand the adaptations and modifications made thereby until altered, repealed or amended by the competentLegislature of a State. 2[(5) Every order made under this section shall be laid, as soon as may be after it is made, before eachHouse of Parliament, while it is in session, for a total period of thirty days which may be comprised inone session or in two or more successive sessions, and if, before the expiry of the session immediatelyfollowing the session or the successive sessions aforesaid, both Houses agree in making any modificationin the order or both Houses agree that the order should not be made, the order shall thereafter have effectonly in such modified form or be of no effect, as the case may be; so, however, that any such modificationor annulment shall be without prejudice to the validity of anything previously done under that order.]

The Central Government may, bynotification in the Official Gazette, specify in the Schedule any Act under which a body corporateconstituted for a State is functioning in two or more States by virtue of section 109 of the StatesReorganisation Act, 1956 (37 of 1956),1[or of any other enactment relating to reorganisation of States]and on the issue of such notification, the Schedule shall be deemed to be amended by the inclusion of thesaid Act therein.