Section 13 of The Lalit Kala Akadami (Taking Over of Management) Act, 1997
- (1)If the Central Government is satisfied, after such inquiry as it may think fit, that any contract or agreement entered into at any time within one year immediately preceding the commencement of this Act, between the society and any other person, in so far as such contract or agreement relates to the management of the society, has been entered into in bad faith, or is detrimental to the interests of the society, it may make an order cancelling or varying (either unconditionally or subject to such conditions as it may think fit to impose) such contract or agreement and thereafter the contract or agreement shall have effect accordingly: Provided that no contract or agreement shall be cancelled or varied except after giving to the parties to the contract or agreement a reasonable opportunity of being heard.
- (2)Any person aggrieved by an order under sub-section (1) may make an application to the High Court at Delhi for the variation or reversal of such order and thereupon such court may confirm, modify or reverse such order.
Summary
- The Central Government can cancel or change (vary) a contract or agreement made by the society if it is satisfied, after doing an inquiry, that the contract was made in bad faith (with dishonest intent) or is bad for the society.
- This power only applies to contracts entered into within one year before this Act started (commenced) and that relate to the management of the society.
- The cancellation or change can be unconditional or have conditions attached.
- Before making such an order, the Central Government must give the parties to the contract a reasonable opportunity of being heard (a chance to explain their side).
- Anyone who is unhappy (aggrieved) with the government's order can apply to the High Court at Delhi, and the court can confirm, modify, or reverse the order.
Practical examples
FAQ
1. Who has the power to cancel or change contracts under Section 13?
The Central Government has this power if it is satisfied, after conducting an inquiry, that a contract was made in bad faith or hurts the interests of the society.
2. Does this power apply to any contract ever made by the society?
No, it only applies to contracts relating to the management of the society that were entered into within one year immediately before the Act started.
3. Can the government cancel a contract immediately without talking to the parties?
No, the government cannot cancel or change a contract without giving the parties involved a reasonable opportunity of being heard.
4. What can a person do if they do not agree with the government's decision to cancel or change their contract?
Any person unhappy with the decision can make an application to the High Court at Delhi to change or reverse the order.
Test yourself
Q1.Under Section 13, who has the power to cancel or vary a contract entered into in bad faith?
Q2.Within what time frame before the commencement of the Act must the contract have been entered into for Section 13 to apply?
Q3.What must the Central Government do before cancelling or varying a contract under Section 13?
Q4.If a person is unhappy with an order made by the Central Government under Section 13, where can they apply for relief?
Q5.What can the High Court at Delhi do when it receives an application from an unhappy party under Section 13?