Section 6 of The Faridabad Development Corporation Act, 1956
A person shall be disqualified for being appointed or for continuing as a member of the Corporation if he has, directly or indirectly, any interest in a subsisting contract made with, or in any work being done, for, the Corporation except as a shareholder (other than a director) in an incorporated company: Provided that where he is a shareholder, he shall disclose to the Central Government the nature and extent of shares held by him in such company.
Summary
- A person is disqualified from being appointed as a member if they have a direct or indirect financial interest in any active contract with the Corporation.
- A person is also disqualified from continuing as a member if they acquire such an interest while serving.
- Having an interest in work being done for the Corporation also causes disqualification.
- An exception is made for people who merely own shares in an incorporated company that does business with the Corporation.
- This exception does not apply if the person is a director of that incorporated company.
- If a member is a shareholder in such a company, they must disclose the type and amount of shares they hold to the Central Government.
Practical examples
FAQ
1. Can someone who has an active contract with the Corporation be appointed as a member?
No, any direct or indirect interest in an active contract with the Corporation disqualifies a person from being appointed or continuing as a member.
2. Is a person disqualified if they own shares in a company that does business with the Corporation?
No, holding shares in an incorporated company does not cause disqualification, as long as the person is not a director of that company.
3. What must a shareholder member do if their company has a contract with the Corporation?
The member must disclose the nature and extent of the shares they hold in that company to the Central Government.
4. What happens if a sitting member is appointed as a director of a company that has a contract with the Corporation?
The member will be disqualified from continuing as a member of the Corporation because the shareholder exception does not apply to directors.
Test yourself
Q1.Under Section 6 of The Faridabad Development Corporation Act, 1956, which of the following situations would disqualify a person from being appointed as a member?
Q2.What is the exception to the disqualification rule regarding business interests under Section 6 of The Faridabad Development Corporation Act, 1956?
Q3.Under the proviso to Section 6 of The Faridabad Development Corporation Act, 1956, what must a member do if they hold shares in a company that has a contract with the Corporation?
Q4.If a sitting member of the Corporation under The Faridabad Development Corporation Act, 1956, takes a direct interest in work being done for the Corporation, what is the consequence?