Section 39 in The State Financial Corporations Act, 1951
39. Power to give instructions to Financial Corporation on questions of policy .-
(1)In the discharge of its functions, the Board shall be guided by such instructions on question of policy as may be given to it by the State Government [in consultation with][, and after obtaining the advice of,] [ Inserted by Act 77 of 1972, Section 26 (w.e.f. 30-12-1972).][the ] [Inserted by Act 56 of 1956, Section 23 (w.e.f. 1.10.1956). ][Small Industries Bank] [ Substituted by Act 39 of 2000, Section 28, for " Development Bank" (w.e.f. 5.9.2000).].(2)If any dispute arises between the State Government and the Board as to whether a question is or is not a question of policy, the decision of the State Government shall be final.[(2-A) Nothing contained in sub-section (1) and sub-section (2) shall apply in a case where a State Government holds less than fifty-one per cent. of the equity shares in the Financial Corporation.(2-B) Notwithstanding the equity share holding of a Financial Corporation by a State Government, the State Government may advise the Financial Corporations on the matters of policy.] [ Inserted by Act 39 of 2000, Section 28 (w.e.f. 5.9.2000).](3)If the Board fails to carry out the instructions on the question of policy laid down by the State Government [under sub-section (1) of this section or the instructions given to the Board under sub-section (4) of section 37-A] [ Inserted by Act 48 of 1983, Section 6 (w.e.f. 30.12.1983).], the State Government shall have the power to supersede the Board and appoint a new Board in its place to function until a properly constituted Board is set up, and the decision of the State Government as to the grounds for superseding the Board shall not be questioned in any Court.
