The Ministry of Shipping (MoS) of the Government of India
proposes to introduce the Draft Central Port Authorities Bill, 2016
(Draft Bill) with a view to allow more autonomy and flexibility to
port authorities of major ports in India and to bring about
transparency and professionalism in their governance mechanisms.
The Draft Bill seeks to replace the existing legislative framework
as under the Major Port Trusts Act, 1963 (the Act) in order to
bring about all such necessary amendments. In this regard, the MoS
in its press release dated June 10, 2016 reports certain salient
features of the Draft Bill in comparison with the Act, as
(i) Simplification of Composition of the Board:
The Draft Bill provides that the Board shall comprise of only 9
members, including independent members in comparison with 17
– 19 members of the trust under the Act, in order to simplify
decision making processes and also to improve efficiency. The Board
under the Draft Bill shall also comprise of 3 functional heads of
major ports and shall include a government nominee member and a
labour nominee member in order to provide proper representation
from all stakeholders in the decision making process.
(ii) General provisions pertaining to the
Board: The Draft Bill makes a distinction between
'port related use of land' and 'non – port
related use of land'. It provides that the Board shall have the
power to lease land for 'port related use of land' for up
to 40 years and for 'non – port related use of land'
for up to 20 years. Lease of land for periods of time beyond such
threshold shall be subject to approval of the Government of India.
The Draft Bill provides greater autonomy to the Board by empowering
it to raise financing by way of loans, appoint consultants, execute
contracts and create posts of service. The Board has been delegated
power to raise finance and issue security for the purpose of
meeting its capital expenditure and working capital requirements.
The Draft Bill introduces the concepts of Corporate Social
Responsibility (CSR), duties of the members of the Board,
disqualification of the members of the Board and conduct of
meetings of the Board through video – conferencing and other
audio – visual procedures in keeping with the requirements of
the Companies Act, 2013. The power of the Government of India to
take over the control of the functions of the port authority has
been limited to situations involving 'grave emergency' and
in cases of repeated defaults by the Board in performance of its
duties. Further, the port authority shall be deemed to be a
'local authority' within the meaning of such term under the
General Clauses Act, 1897 so that it can prepare appropriate
(iii) Obligations of the Board: The Board has
to maintain books of accounts and financial statements in
accordance with the Companies Act, 2013 and / or rules as specified
by the Government of India. The Draft Bill introduces the concept
of internal audit of the activities of the Board in keeping with
the requirements of the Companies Act, 2013.
(iv) Tariff Authority for Major Ports (TAMP):
The Draft Bill removes the function of regulation of tariff by the
TAMP as provided under the Act. In this regard, the Board shall be
delegated the power to fix the scale of rates for service and
assets. It also provides for creation of an independent review
board, to perform the residual function of the TAMP under the Act
i.e. to look into disputes between the ports and the public private
partnerships (PPP) concessionaires, to review stressed PPP
projects, suggest measures to revive such projects and to look into
complaints regarding services rendered by the ports / private
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The Ministry of Corporate Affairs notified on June 5, 2015 that certain provisions of the Companies Act, 2013 shall not apply to private limited companies or shall apply with such exceptions or modifications as directed in the notification.
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