The Bihar Industrial Area Development Authority Act, - 1974

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The Bihar Industrial Area Development Authority  

Act, - 1974 

 
AN ACT TO PROVIDE FOR PLANNED DEVELOPMENT OF INDUSTRIAL 

AREAS AND PROMOTION OF INDUSTRIES AND MATTERS APPERTINENT 

THERETO 
 

Be it enacted by the Legislature of the State of Bihar in the twenty fifth ear 

of the Republic of India as follows :- 

CHAPTER  I 
 

Short Title, Extent and Commencement:- 

1. This Act may be called the Bihar Industrial Area Development Authority Act, 

1974. 
2. It extends to the whole of the State of Bihar. 

Definitions 

In this Act, unless the context otherwise requires: 

(a) “amenity” includes roads water-supply, street lighting, drainage, sewerage, school, 

housing, hospital and recreation facilities and such other convenience and facility 

as the State Government may, by notification in the Official Gazette, specify to 

bean amenity for the propose of this Act; 

(b) “building” includes any structure of creation of part of structure or creation which 

is intended to be used for residential, industrial, commercial, or other purposes, 

whether in actual use or not; 

(c) “development” with its grammatical variations means the carrying out of building, 

engineering or any other operations in, on, over or under land or the making of any 

material change in any building or land including  the provision of accommodation 

for carrying on industrial activities with or without accommodation for residential 

purposes or other activities and with all proper facilities for public works, 

recreation, amenity and other basic requirements for establishments of industries 

and includes re-redevelopment:  

(d) the word “industry” would have the same meaning as has been assigned to it under 

section 2, clause (3) of the Bihar State Aid to Industries Act. 1956. 

(e) “development area” means any area declared to be a development area under  

section 4.  

(f) “industrial area”means an area for which an Authority is constituted under section 3 

(g) “regulation” means a regulation made under this Act by the Authority constituted 

under Section 3. 

(h) “rule” means a rule made under this Act by the State Government. 

(i) “prescribed” means prescribed in the rule framed by the State Government under 

this Act. 

 

 

 



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CHAPTER  II 

 

 Industrial area development authority-aims and objects 

3. (1) The State Government may at any time after commencement of this Act,   

  constitute by notification, an Authority for any area or areas for development  

  and promotion of industry (herein-after in this Act referred to as the Authority). 

Explanation- The State Government may set up one or more Authorities or 

 one Authority for one or more areas in the State under this Act. Such an 

 Authority will be known as “(name of the area) Industrial Area Development 

 Authority” 

(2) The Authority shall be a body corporated by the name aforesaid having 

 perpetual succession and a common seal with powers to acquire, hold  and 

 dispose of properties, both movable and immovable, and to contract and 

 shall by the said name sued and be sued. 

(3) (I) Any such Authority shall consist of a Chairman, a Managing 

 Director and five other Directors who shall be appointed by the State 

 Government and who shall hold their office, on terms and conditions to 

 be prescribed in this behalf, at the pleasure of the State Government. 

 (II) The Chairman of the Authority shall be a Government servant not  below 

 the rank of a Commissioner or any other person who may be nominated by 

 the Government. 

 (III) The State Government may, if it is found to be expedient, appoint 

 the same person as Chairman and Managing Director of the Authority. 

 (4)  The Managing Director shall be a whole– time officer and the Chief 

 Executive of the Authority and shall perform, among others, the 

 following duties under the general guidance of the Chairman: 

 (a)  he shall receive all the moneys on behalf of the Authority and issue 

 receipt and maintain proper account for the same. 

 (b) he shall draw money from the fund of the Authority for 

 disbursement of salaries, allowances and meeting the expenses of the 

 Authority; 

 (c) he shall authenticate any order of the Authority; 

 (d) he shall perform any order, duty that may be assigned to him by the 

 Authority or the State Governemnt from time to time. 

  



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4. Declaration of areas as development area.- (1) The State Government may by 

 a notification in the official Gazette declare any area adjacent to an area a 

 "development area" for the purposes of this Act after taking into 

 consideration any objection that may be raised in the manner prescribed in 

 the rules; 

 Provided that no objections need be invited for any area already declared as 

 "controlled area" under sub-section (1) of Section 3 of the Bihar Restriction 

 of uses of Land Act, 1948. 

 (2) After an area has been notified as development area under sub-section 

 (1) of Section 4 of this Act, no person or company or business house or 

 anybody (including a department of the State Government) shall undertake 

 or carry out any construction, modification or demolition of any structure or 

 building within such development area without the prior approval of the 

 Authority in accordance with the procedure laid down in the rules  prescribed. 

 (3) Unless otherwise stipulated in the Rules, the procedure regarding 

 application for permission to build, excavate or lay out any means of access, 

 and grant and refusal of such permission shal be according to the provisions 

 of the Bihar Restriction of Uses of Land Act. 1948 in this behalf. 

5. Establishment.- The Authority shall have its own establishment for which it 

shall frame Regulations with prior approval of the State Government. 
 

CHAPTER  III 
 

          Powers and Duties of the Authority 
 

6. General duties and powers of the Authority.- (1) Subject to the provisions of 

this Act. the Authority shall be responsible or the planned development of the 

Industrial Areas (including preparation of the Master Plan of the area) and 

promotion of industries in the area and other amenities incidental thereto. 

 (2) The Authority shall be responsible for planning, development and 

 maintenance of the Industrial Area and amenties thereto and allotment of 

 land, execution of lease, and cancellation of such  allotment or lease, 

 realization of fees, rent, charges and matters connected thereto. 

 2. (a) In case necessary effective steps are not taken within the fixed period 

 to establish the industry, the authority shall in such condition, cancel the 

 allotment of allotted plot/shed and also forfeit the amount deposited in this 

 connection. The authority shall, before cancelling the allotment allow one 

 monthtime to the allottee to put up his case. the allottee on being dissatisfied 

 with the order of the Authority may file an appeal to the State Governemnt 

 within one month and the State Government shall, after due consideration 

 dispose it of within two months from the date of receipt of the appeal. 



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 (b)The authority shall, after cancellation of allotment of the plot/shed take 

 possession of the said plot/shed. 

  (3) The State Government may from time to time entrust the authority with 

 any other work that is connected with planned development, maintenance of 

 the Industrial Area and its amenities and matters connected there to. 

 (4) The Authority shall have the powers of the Commissioners of 

 Municipality as specified in Section 196, 197, 198, 199, 200, 201 and 202 

 the Bihar and Orissa Municipal Act, 1922, for purposes of removal 

 encroachment on roads, house gullies any land in the development area and 

 properties of the Authority. 

 (5) The State Government, may be notification in the Official Gazette vest 

 the Authority or the Chairman or the Managing Director with power under 

 any other Act for planning, development and maintenance of civil amenities 

 like housing and schools and vacation of encroachment, etc. that are 

 exercisable by any local authority or statutory body or State agency under 

 any law for the time being in force in this regard. 

 (6)where, in the opinion of the Authority, as a consequence of any 

 development having been executed by the Authority in any development 

 area the value of any property in that area which has been benefited by the 

 development has increased, the Authority may, with the prior approval of the 

 State Government, levy upon the owners of the property or any person 

 having interest therein a betterment charge in respect of the increase in value 

 of the property resulting from the execution of the development:  

  Provided that no betterment charge shall be levied in respect of land 

 owned by the State or Central Government. 

 (7) Such betterment charge shall be an amount in respect of any property 

 situated in a development area, equal to one-third of the amount by which 

 the value of the property on the completion of the execution of the 

 development scheme, estimated as if the property were clear of building 

 exceeds the value of the property prior to such execution estimated in like 

 manner : 

 (8) The Authority may, in addition to the grants loans, advances subsidies 

 that may by received from the State Government; also borrow from any 

 source, with the prior approval of the State Government. 

  



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7. Financial Powers 

 (1) The Authority shall have and maintain its own fund to which shall be 

 credited; 

 (a) All moneys received by the Authority from the State Government by way 

 of grants, loans advances or otherwise; 

 (b) All fees, rents, charges, levies and fines received by the Authority under 

 this Act, 

 (c) All moneys received by the Authority from disposal of its movable and 

 immovable assets; 

 (d) All moneys received by the Authority by way of loan from financial and 

 other institutions and debentures floated for the execution of a scheme or 

 schemes of  the Authority duly approved by the State Government. 

 (2) Unless the State Government otherwise directs, all moneys received by 

 the Authority shall be credited to its fund which shall be kept with the State 

 Bank of India and/or one or more of the Nationalized Banks and drawn as 

 and when required by the Authority. 

8. Budget:- 

 (1) The Authority shall prepare a budget every year in respect of the 

 financial year next ensuring, showing the estimated receipts and 

 expenditures of the Authority and shall forward to the State government 

 such number of copies thereof as may be prescribed by Rules and the State 

 Government may issue any directive as may be considered expenditure for 

 the purpose of this Act. 

 (2) The Authority shall maintain proper account and other relevant records 

 and prepare an annual statement of accounts including a balance sheet. 

 (3) The accounts of the Authority shall be subject to audit annually by the 

 Accountant General, Bihar and any expenditure incurred by him in 

 connection with such audit will by payable the Authority to the Accountant 

 General, Bihar. The Accountant General shall have the privileges and 

 authority in connection with audit of the accounts of the Authority as he is 

 entitled to in connection with audit of the Government accounts. 

 (4) The accounts of the Authority as certified by Accountant General, Bihar, 

 or any other person appointed by him in this behalf together with the audit 

 report shall be forwarded every year to the State Government along with an 

 annual report.  
 

CHAPTER IV 

9. Miscellaneous provision 

 (1) The State Government may acquire any land required for the purpose of 

 the Authority, which shall be deemed to be “Public purpose” under the land 

 Acquisition Act, 1894. 

 (2) The State Government may, by a deed of lease, transfer, on terms and 

 conditions as may be decided by the State Government, to the Authority any 

 developed or undeveloped land vested in the State of Bihar for the purpose  of 

 development or use in accordance with the provision of this  

 Act. 



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 (3) If any land so placed at the disposal of the Authority under sub-section  (2) is 

 required at any time by the State Government, the Authority shall restore it to the 

 State Government. 

 

10. Every Director and every officer and employee of the Authority Shall be 

 deemed to be a public servant within the meaning of Section-21 of the 

 Indian Penal Code. 

11. Any money due to the Authority on account of fees, rent or charges, or 

 disposal of land, building or other properties, moveable and immovable, or 

 by way of rents and profits, may be recovered by the Authority as arrears of 

 land revenue under the Bihar Public Demands Recovery Act, 1914. 
 

12. (1) Any person who violates any order of the Authority in respect of removal 

 of any structure or encroachment or uses any land or building in 

 contravention of any regulation framed by the Authority in this behalf shall 

 be punishable with fine which may extend up to Rs. 10,000/- or simple 

 imprisonment for a term which may extend to six months or both and in case 

 of continuing offence with further fine which may extent to Rs. 100/- for 

 every day after conviction. 
 

 (2) All fines realized in connection with prosecution under this Act shall be 

 paid to the Authority. 

 (3) No Court below the rank of a Magistrate of the First Class shall try any 

 offence under this Act. 

13. Save as aforesaid, the provisions of this Act and Rules and Regulations 

 made thereunder shall have effect not withstanding anything inconsistent 

 therewith contained in any other law in force in the State. 

14. The State Government may, by notification in the Official Gazette, make 

 rules to carry out the purposes of this Act and in particular provide for: 
 

(a)  removal of encroachments on lands belonging to the Authority; 

(b)  removal of unauthorized structures;  

(c)  demolition of buildings which may interfere with the planning or which 

may have been erected in contravention of the Regulations of the 

Authority; 

(d)  the submission of reports and returns by the Authority to the State 

Government on matters relating to the duties, power responsibilities of 

the Authority; 

(e)  the issue of directions by the State Government laying down broad 

principles for the fulfillment of aims and objects of the Act. 
 

15. The Authority may, with the prior approval of the State Government, by a 

 Resolution published in the Official Gazette, make Regulations to carry out 

 the purposes of this Act. 
 

16. No suit, prosecution or other legal proceeding shall lie against any person for 

 any action which is in good faith done or intended to be done under this Act 

 or any rule regulations made thereunder.  
 



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17. When the State Government is satisfied that the purpose for which the 

 Authority was established under this Act has been substantially achieved so 

 as to render the continuance of the Authority unnecessary, the Government 

 may, by notification in the Official Gazette declare that the Authority shall 

 be dissolved with effect from such date as may be specified in the 

 notification and the Authority shall be deemed to be dissolved accordingly 

 from the said date and all the properties, funds and dues realizable by the 

 Authority along with its liabilities shall devolve upon the State Government.  

 

18. Repeal and savings – (1) The Bihar Industrial Area Development Authority 

 Ordinance 1974 (Bihar Ordinance No. 80, 1974) is hereby repealed. 

 (2) Not withstanding such repeal, anything done or any action taken in 

 exercise of any power confered by or under the said Ordinance shall be 

 deemed to have been done or taken in the exercise of power conferred by or 

 under the Act as if this Act were in force on the day of which such thing was 

 done or action was taken. 
 

  
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BIHAR INDUSTRIAL AREA DEVELOPMENT AUTHORITY 

(AMENDMENT) ACT, 1991 

 

A ACT TO AMEND THE BIHAR INDUSTRIAL AREA 

DEVELOPMENT AUTHORITY ACT, 1974 

 

Be it enacted by the legislature of the State of Bihar in the forty second year 

of the Republic of India as follows:- 

Short title and commencement – 

(1) This Act may be called the Bihar Industrial Area Development Authority 

(Amendment) Act, 1991. 

(2) It shall come into force with retrospective effect. 

Amendment of section– 6 of Bihar Act 16 of 1974:- In the Bihar Industrial Area 

Development Act, 1974 (Bihar Act 16, 1974), after sub-section (2) of section 6 

following new sub-sections shall be added, namely:- 

(2-a) In case necessary effective steps are not taken within the fixed period 

to establish the industry, the authority shall in such condition, cancel the allotment 

of allotted plot/shed and also forfeit the amount deposited in this connection. The 

authority shall, before cancelling the allotment, allow one month time to the 

allottee to put up his case. The allottee on being dissatisfied with the order of the 

authority may file an appeal to the State Government within one month and the 

State government shall, after due consideration, dispose it off within two months 

from the date of receipt of the appeal. 

(2-b) The authority shall, after cancellation of allotment of the plot/shed, 

take possession of said plot/shed.” 

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