State Financial Corporations Act, 1951
3A. Establishment of Joint Financial Corporations
(1) Notwithstanding anything contained in section 3, two or more
States may, after consultation with the Development Bank, enter into an
agreement that there shall be one Financial Corporation for the group of States
participating in the agreement and if the agreement is published in the
Official Gazette of each of those States, the Central Government may, by
notification in the Official Gazette, establish a Joint Financial Corporation
to serve and needs of those States under such name as may be specified in the
notification.
(2) An inter-State agreement under sub-section (1) among the
participating States may-
(a) provide for the fixation of the authorized
capital of the Joint Financial Corporation, the number of fully paid-up shares
into which it shall be divided and the allocation among the participating
States of the shares to be distributed under clause (a) of sub-section (3) of
section 4;
(b) provide for the sharing of the liability
for the guarantee under section 6 or section 7 or section 8;
(c) provide for the number of Directors to be
nominated to the Board by each participating State Government;
(d) provide for the apportionment among the
participating States of expenditure in connection with the Joint Financial
Corporation;
(e) [Omitted by Act No. 43 of 1985]
(f) determine which of the participating State
Governments shall exercise the several functions of the State Government under
this Act, and references in this act to the State Government, in relation to
the Joint Financial Corporation, shall save as otherwise expressly provided, be
construed accordingly;
(g) provide for consultation among the
participating States either generally or with reference to particular matters
arising under this Act;
(h) make such incidental and consequential
provisions, not inconsistent with this Act, as may be deemed necessary or
expedient for giving effect to the agreement.
(3) The Joint Financial Corporation shall be a body corporate by
the name notified under sub-section (1), having perpetual succession and a
common seal, with power, subject to the provisions of this Act, to acquire,
hold and dispose of property and shall by the said name sue and be sued.
(4) Any reference in this Act to "State" in relation
to a Joint Financial Corporation established for two or more States, shall be
construed as a reference to each such State.