PUNJAB MILK BOARDS ORDINANCE, 1963

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THE PUNJAB MILK BOARDS ORDINANCE, 1963 
(XXXVIII of 1963) 
CONTENTS 
CHAPTER I 
Preliminary 
1. Short title, extent and commencement. 
2. Definitions. 
CHAPTER II 
Establishment of Milk Board 
3. Establishment and incorporation of the Board. 
4. Constitution of the Board. 
5. Appointment of Chairman. 
6. Appointment of Project Director. 
7. Qualification and removal of Chairman. 
8. Appointment of officers, etc. 
9. Fees and T.A. for non-official Members. 
10. Recruitment conditions of service and disciplinary powers. 
11. Meetings of the Board. 
12. Forwarding of agenda, etc., to Government. 
13. Delegation of powers. 
CHAPTER III 
Functions and Powers of the Board 
14. Functions of the Board and scheme. 
15. Power to make Order. 
CHAPTER IV 
Plans, Projects and Schemes 
16. Preparation of plans. 
17. Development Scheme and Projects. 
18. Subsidiary organization. 
19. Commercial transactions. 
CHAPTER V 
Finance 
20. Milk Board Fund. 
21. Power of the Board to borrow money. 
22. Custody and investment of funds. 
23. The budget. 
CHAPTER VI 
Rules and Regulations 
24. Powers to make rules. 
25. Power to make regulations. 
CHAPTER VII 
Supplemental Provisions 
26. Chairman, etc., deemed public servants. 
27. Contribution by the Board towards leave, allowances and pension of 
Government servants. 
28. Penalties. 
29. Authority for prosecution. 
30. Recovery of dues. 
31. The powers of the Chairman as to institution, etc., of legal proceedings 
and obtaining legal advice. 
32. Indemnity of the Board, etc. 
33. Notice of suit against the Board. 
34. Mode of proof of the Board’s records. 
35. Restriction in the summoning of the Board servants to produce 
documents. 
36. Validation of acts and proceedings. 
37. General powers of the Board to pay compensation. 
CHAPTER VIII 
Audit and Accounts 
38. Accounts and Audit. 
39. Annual report. 
CHAPTER IX 
Dissolution 
40. Dissolution of the Board. 
 
 
TEXT 
1
THE 
2
[PUNJAB] MILK BOARDS ORDINANCE, 1963 
(XXXVIII of 1963) 
[20 November 1963] 
An 
Ordinance 
to regulate the production and marketing of milk and milk products in 
3
[the Punjab]. 
Preamble.– WHEREAS it is expedient to regulate the production and marketing of 
milk and milk products in certain areas of 
4
[the Punjab]; 
 AND WHEREAS the Provincial Assembly of West Pakistan is not in session 
and the Governor of West Pakistan is satisfied that circumstances exist which render 
immediate legislation necessary; 
 NOW, THEREFORE , in pursuance of the powers conferred on him under 
clause (1) of Article 79 of the Constitution, the Governor of West Pakistan is pleased 
to make and promulgate the following Ordinance:– 
CHAPTER I 
Preliminary 
1. Short title, extent and commencement .– (1) This Ordinance may be called 
the 
5
[Punjab] Milk Boards Ordinance, 1963. 
 (2) It extends to the whole of the Province of 
6
[the Punjab] except the Tribal 
Areas. 
 (3) This section shall come into force at once and the remaining provisions 
shall come into force in such area or areas and on such date or dates as 
Government may, by notification in the Official Gazette, specify in this behalf. 
2. Definitions.– In this Ordinance, unl ess the context otherwise requires, the 
following expressions shall have the meanings hereby respectively assigned to 
them, that is to say– 
(a) “Board” means a milk Board established under this Ordinance; 
(b) “Chairman” means the Chairman of the Board; 
 
1This Ordinance was promulgated by the Governor of West Pakistan on November 20, 1963 , approved by the Provincial 
Assembly of West Pakistan, on December 30, 1963  under clause (3) of Article 79 of the Constitution of the Islamic Republic of 
Pakistan (1962), published in the Gazette of West Pakistan (Extraordinary), dated November 20, 1963, pp. 4455-4468.  
2Substituted for the words  “West Pakistan”  by the Punjab Laws (A daptation) Ord er, 19 74 (1 of 19 74) (w.e.f. 14.8.1973), 
published in the Punjab Gazette (Extraordinary), dated November 20, 1974, pp . 1425-A-1425-PP, Article 2 read with Second 
Schedule, Part III, Serial No. 70. 
3Ibid. 
4Ibid. 
5Ibid. 
6Ibid. 
(c) “Depot” means premises where milk or milk products are processed, 
manufactured or sold by the Board; 
(d) “Government” means the 
1
[Provincial Government of the Punjab]; 
(e) “Local area” means the area to which the provisions of this Ordinance 
have been applied; 
(f) “member” means a member of the Board; 
(g) “milch animals” mean cows, buffaloes, sheep and goats; 
(h) “milk” means normal mammary secretion obtained from one or more 
milkings of milch animals without any addition thereto or extraction 
therefrom an d includes milk treated to conform to such standard as 
may be prescribed; 
(i) “milk products” means the products exclusively derived from milk; 
(j) “owner” means owner of milch animals producing milk used exclusively 
for his own household consumption; 
(k) “prescribed” means prescribed by rules made under this Ordinance; 
(l) “producer” means a producer of milk, other than the owner, who sells 
all or a part of milk produced by him; 
(m) “Project Director” means the Project Director appointed under section 
6; 
(n) “scheme” means a scheme prepared under this Ordinance. 
CHAPTER II 
Establishment of Milk Board 
3. Establishment and incorporation of the Board .– (1) As soon as  may be 
after the commencement of this Ordinance in any local area, there shall be 
established a milk Board to carry out the purposes of this Ordinance in that area. 
(2) The Board shall be a body corporate having perpetual succession and a 
common seal, with power, subject to the provisions of this Ordinance, to acquire, 
hold and dispose of property,  both movable and immovable, and shall by the said 
name sue and be sued. 
4. Constitution of the Board.– (1) The Board shall consist of such Members as 
may be appointed by Government. 
 (2) A Member shall, unless sooner removed by Government, hold office for 
a term of three years and may be re -appointed for such period or periods as 
Government may, from time to time, specify. 
 (3) A casual vacancy shall be filled by Government and a Member 
appointed to such vacancy shall hold office for the un -expired term of  his 
predecessor. 
 
1Substituted for the words  “Government of West Pakistan” by the Punjab Laws (Adaptation) Order, 1974 (1 of 1974) (w.e.f. 
14.8.1973), published in the Punjab Gazette (Extraordinary), dated November 20, 1974, pp . 1425-A-1425-PP, Article 2 read 
with Second Schedule, Part III, Serial No. 70. 
 (4) The Board in discharging its functions shall be guided by such 
directions as Government may, from time to time, give. 
 (5) If the Board fails to obey any direction under sub -section (4), 
Government may remove the Members and reconstitute the Board 
1
[:] 
 
2
[Provided that no order of removal shall be passed without giving the Board 
an opportunity of being heard, and showing cause against the removal.] 
5. Appointment of Chairman .– (1) Government shall appoint one of the 
Members to be the Chairman. 
 (2) The Chairman shall be the Chief Executive of the Board. 
6. Appointment of Project Director .– (1) For each local area there shall be 
appointed by Government a Project Director on such terms and conditions as may 
be determined by Government. 
 (2) The Project Director shall be responsible for the execution of the 
schemes and the implementation of the decisions of the Board. 
 (3) The Project Director shall be the Secretary of the Board. 
7. Qualification and removal of Chairman .– (1) No person sha ll be or shall 
continue to be a Member who– 
(a) is or has at any time been convicted of an offence involving moral 
turpitude; or 
(b) is or has at any time been adjudicated insolvent; or 
(c) is or has at any time been disqualified for employment in, or dism issed 
from, the service of the State; or 
(d) is a minor; or 
(e) is found to be a lunatic or of unsound mind; or 
(f) has direct financial interest in the matters falling within the purview of 
the Board; or 
(g) has a bad reputation. 
 (2) 
3
[Government may, af ter giving the Chairman or a Member an  
opportunity of being heard and showing cause against the proposed action,  by order 
in writing, remove the Chairman or the Member, if  he–] 
(a) refuses or fails to discharge or becomes, in the opinion of Government, 
incapable of discharging his responsibilities under this Ordinance; or 
(b) has, in the opinion of Government, abused his position as Chairman or 
Member; or 
 
1Replaced for full stop by the West Pakistan Laws (Amendment) Ordinance, 1965 (XXXIV of 1965), published in the Gazette of 
West Pakistan (Extraordinary), dated November 2, 1965, pp. 5607-5614, s. 3 read with Second Schedule, Serial No. 18. 
2Added by the Ordinance ibid. 
3Substituted for the words and commas “Government may, by order in writing, remove the Chairman or a Member if he” by the 
Ordinance ibid. 
(c) has knowingly acquired or continued to hold without the permission in 
writing of Government direc tly or indirectly, or through a partner, any 
share or interest in any contract or employment with or by or on behalf 
of the Board or in any land or property which, in his knowledge, is likely 
to benefit or has benefitted as a result of the operations of the Board; 
(d) has absented himself from three consecutive meetings of the Board 
without the leave of Government in the case of Chairman, or of the 
Chairman in the case of a Member. 
8. Appointment of officers, etc .– (1) The Board may appoint such officers, 
advisors and servants as it considers necessary for the efficient performance of its 
functions on such terms and conditions as it may deem fit in accordance with the 
scheme approved by Government. 
 (2) The Chairman may, in cases of urgency, appoint such off icers, 
advisors or servants and on such terms and conditions as he thinks fit: 
Provided that every such appointment shall be reported to the Board without 
unreasonable delay and shall not continue beyond six months unless approved by 
the Board. 
9. Fees and  T.A. for non -official Members .– A Member, not being a 
Government servant, shall be paid such fees and travelling allowance for attending 
meetings of the Board as may be prescribed. 
10. Recruitment conditions of service and disciplinary powers .– (1) 
Procedure for the appointment of officers and servants of the Board and the terms 
and conditions of their service shall be such as may be provided by regulations. 
 (2) Subject to rules and regulations, the Board shall be competent to take 
disciplinary action against its officers and servants. 
11. Meetings of the Board.– (1) The meetings of the Board shall be held at such 
times and at such places and as often as may be necessary, so however that the 
Board meets at least once in three months. 
 (2) The quorum at a m eeting of the Board shall be one -half of the total 
number of Members, a fraction counting as one. 
 (3) The meetings of the Board shall be presided over by the Chairman, 
and in the absence of the Chairman by the Member authorized by him in writing in 
that behalf, or in default of such authorization, by the person elected for the purpose, 
by the Members present from amongst themselves. 
 (4) All questions which come up before the Board at a meeting shall be 
decided by a majority of votes. Each Member including the Chairman, shall have one 
vote, but in the event of equality of votes, the Chairman shall have a second or 
casting vote. 
 (5) The minutes of every meeting of the Board, stating among other things 
the names of the Members present, shall be drawn up and recorded in a book to be 
kept for the purpose, and shall be signed by the person presiding at the meeting and 
such book shall be open to inspection by the Members. 
12. Forwarding of agenda, etc., to Government .– (1) The Chairman shall 
forward to Government  a copy each of the agenda, working paper and the minutes 
of every meeting of the Board within fifteen days of the date on which the meeting is 
held. 
 (2) Government may require the Board to furnish– 
(a) any returns, statements, estimates, statistics or ot her information 
regarding any matter under the control of the Board; or 
(b) a report on any such matter; 
and the Board shall comply with any such requisition without undue delay. 
13. Delegation of powers.– (1) The Board may delegate to the  Chairman or any 
Member, Project Director or officer, any of its powers  under this Ordinance or the 
rules or regulations. 
 (2) The Chairman may likewise delegate to any Member, Project Director 
or officer any of his powers, under this Ordinance or the rules or regulations,  not 
being a power delegated to him by the Board under sub-section (1). 
CHAPTER III 
Functions and Powers of the Board 
14. Functions of the Board and scheme .– (1) The functions of the Board shall 
be to ensure that an adequate supply of milk and milk product s of good quality is 
available to the consumers of milk and milk products in the local area and for that 
purpose to prepare and execute schemes for regulating production, marketing and 
distribution of milk and milk products. 
 (2) Without prejudice to the g enerality of the foregoing provisions, any 
such scheme may provide for all or any of the following, namely:– 
(a) purchase and collection of milk from the producers; 
(b) establishment of Centres for the collection and testing of milk; 
(c) haulage of collected milk to the factory and its processing; 
(d) marketing, distribution and sale of milk and milk products and 
establishment of depots therefor; 
(e) purchase, sale and distribution of concentrates and fodder; 
(f) organizing the producers of milk on co-operative basis; 
(g) sale or letting for hire to the producers of milk and milk products, any 
plant, machinery, vehicle or other equipment necessary for the 
production of milk and milk products; 
(h) establishment of producers colonies where the producers of mil k can 
be removed and provided housing and other facilities for themselves 
and their livestock; 
(i) acquisition and maintenance of lands, buildings, plants, machinery, 
vehicles or other equipment required for any scheme or for any other 
purpose of this Ordinance; 
(j) stimulating dairy development or milk consumption. 
 (3) A scheme prepared by the Board shall be submitted to Government for 
approval and shall not be implemented or executed wholly or partly before such 
approval has been obtained. 
 (4) Government may sanction or may refuse to sanction, or may return for 
reconsideration any scheme submitted to it or may call for such further details or 
information about the scheme or may direct such further examination of the scheme 
as it may consider necessary. 
 (5) When a scheme has been approved by Government, the Board shall, 
before proceeding to implement any part thereof, publish for general information the 
scheme or its salient features in such manner as may be prescribed. 
15. Power to make Order .– (1) The B oard may, with the previous approval of 
Government, by Order published in the Official Gazette and in such local 
newspapers as the Chairman may think fit,– 
(a) fix the prices above which various grades or qualities of milk or milk 
products shall not be sold; 
(b) prohibit production, marketing or sale of milk and milk products, which 
are below such standard of quality as may be specified; 
(c) fix the prices above which various grades or qualities of raw milk shall 
not be purchased; 
(d) require the registrati on of cattle with such authority, in such manner 
and on payment of such fees, as may be specified; 
(e) prohibit the keeping of cattle except under such conditions as may be 
specified; 
(f) require the registration of the producers of milk with such authorit y, in 
such manner and on payment of such fees, as may be specified; 
(g) prohibit distribution or sale, or collection for distribution or sale of milk 
and milk products by any person except under and in accordance with 
a licence issued in this behalf by such authority, in such manner and on 
payment of such fees, as may be specified; 
(h) direct that all milk brought for sale from outside shall be sold only to the 
Board in such manner or on payment of such fees and at such places 
as may be specified; 
(i) provide for– 
(i) the prescription of methods to be followed in the preparation, 
treatment, carriage, deposit, storage and sale of milk and milk 
products; 
(ii) the inspection of premises, production plants, stores, and 
anything used for any purpose specified in sub-clause (i); 
(iii) keeping of books and records by various categories of persons 
engaged in any functions under this Ordinance; 
(iv) the labelling of milk and milk products; 
(v) the prescription of containers to be used for milk and milk 
products. 
CHAPTER IV 
Plans, Projects and Schemes 
16. Preparation of plans .– Subject to the provisions of this Ordinance and the 
rules and regulations, the Board shall, with the previous approval in writing of  
Government, prepare outline of a plan or plans for the execution of its objectives. 
17. Development Scheme and Projects .– The Board shall prepare schemes 
and projects on pro forma prescribed by Government for development schemes and 
submit them for the approval of Government, in such manner as may be prescribed. 
18. Subsidiary organisation.– The Board may set up special subsidiary 
organizations with the prior approval of Government as may be necessary for 
execution of schemes or projects or delegate or entrust to any such organization 
such of its powers and functions as it thinks fit. 
19. Commercial transactions .– The Board may enter into commercial 
transactions with any person or organization. 
CHAPTER V 
Finance 
20. Milk Board Fund.– (1) There shall be a fund to be known as the  “Milk Board 
Fund” vested in the Board wh ich shall be utilized by the Board to meet charges in 
connection with its functions under this Ordinance, including the payment of salaries 
and other remunerations to the Project Director, officers, advisers and servants of 
the Board. 
 (2) The Milk Board Fund shall consist of– 
(a) grants made by Government; 
(b) loans obtained from Government; 
(c) grants made by Local Bodies as required by Government; 
(d) loans obtained by the Board with the special or general sanction of 
Government; 
(e) foreign aid and loan s obtained with the previous sanction of the 
1
[Federal] Government; 
(f) all fees, including the licence fees, received by the Board; and 
(g) all other sums received by the Board. 
21. Power of the Board to borrow money .– The Board shall be deemed to be a 
local authority under the Local Authorities Loans Act, 1914 (Act IX of 1914), for the 
purpose of borrowing money under that Act, and the making and execution of any 
 
1Substituted for the word “Central” by the Punjab Laws (Adaptation) Order, 1974 (1 of 1974) (w.e.f. 14.8.1973), published in the 
Punjab Gazette (Extraordinary), dated November 20, 1974, pp. 1425-A-1425-PP, Article 2 read with Second Schedule, Part III, 
Serial No. 70. 
scheme or project under this Ordinance shall be deemed to be a work which such 
authority is l egally authorised to carry out; provided that no foreign loan shall be 
obtained without the previous sanction of Provincial Government and the 
1
[Federal] 
Government. 
22. Custody and investment of funds .– (1) The Board may keep money in any 
treasury, sub-treasury or a bank approved by Government. 
 (2) Nothing in sub-section (1) shall be deemed to preclude the Board from 
investing any such moneys as are not required for immediate expenditure in any of 
the securities described in section 20 of the Trusts Act, 1882 (Act II of 1882), or 
placing them in fixed deposit with a bank approved by Government. 
23. The budget .– The Board shall prepare its annual budget estimates and 
submit the same to Government by the prescribed date and Government may modify 
the said estimates to such extent as it may consider necessary. 
CHAPTER VI 
Rules and Regulations 
24. Powers to make rules .– (1) Government may, by notification in  the Official 
Gazette, make rules for the purpose of giving effect to the provisions of this 
Ordinance. 
 (2) In particular, and without prejudice to the generality of the foregoing 
power, such rules may provide for– 
(a) the carrying out of continuous evaluation by Government of the work of 
the Board; 
(b) the re-appropriation of funds within the sanctioned budget; 
(c) the maintenance of liaison between the Board and other bodies and 
authorities concerned with administration and development, including 
the local councils constituted under the Basic Democracies Order, 
1959 (P.O. 18 of 1959); 
(d) the powers, duties and functions of the Project Director; and 
(e) any other matter required by the provisions of this Ordinance to be 
prescribed. 
25. Power to make regulations .– (1) Subject to the provisions of this Ordinance 
and the rules, the Board may, by notification in  the Official Gazette, and with the 
previous approval in writing of Government, make regulations for carrying out the 
purposes of this Ordinance. 
 (2) In particular and without prejudice to the generality of the foregoing 
power, such regulations may provide for– 
(a) the appointment of committees to consider particular matter or matters; 
(b) the investment of moneys by the Board; 
 
1Ibid. 
(c) the meetings of the Board; 
(d) methods of ensuring continuous evaluation by the Board of its 
schemes and projects; 
(e) the determination of the terms and conditions of service of the officers 
and servants of the Board; 
(f) the mode of operation and expenditure of the funds of the Board; and 
(g) any other matters required by the provisions of this Ordinance to be 
provided by regulations. 
CHAPTER VII 
Supplemental Provisions 
26. Chairman, etc., deemed public servants .– The Chairman, every Member, 
the Project Director and every officer, adviser and servant of the Board shall be 
deemed to be a public servant within the meaning of secti on 21 of the Pakistan 
Penal Code (Act XLV of 1860). 
27. Contribution by the Board towards leave, allowances and pension of 
Government servants.– The Board shall be liable to pay such contributions for the 
leave, allowances and pension of any person in the services of Government or the 
1
[Federal] Government and employed as Project Director, adviser, officer or servant 
of the Board as may be required by the conditions of his service under such 
Government, to be paid to him or on his behalf. 
28. Penalties.– Whoever contravenes or fails to comply with any order made 
under section 15 shall be punished with imprisonment for a term not exceeding six 
months or with fine not exceeding one thousand rupees or with both. 
29. Authority for prosecution .– No Court shall ta ke cognizance of any offence 
punishable under this Ordinance, except on the complaint of the Chairman or some 
person authorised by the Board or by the Chairman by general or special order in 
this behalf. 
30. Recovery of dues .– The Chairman or any person ge nerally or specially 
authorized by him may apply to the competent authority for the recovery of any sum 
due under this Ordinance or by agreement made under this Ordinance and the said 
authority shall thereupon proceed to recover the sum as if it were an ar rear of land 
revenue. 
31. The powers of the Chairman as to institution, etc., of legal proceedings 
and obtaining legal advice .– The Chairman may, subject to the control of the 
Board– 
(i) institute, defend or withdraw from legal proceedings under this 
Ordinance; 
(ii) compound any offence against this Ordinance; 
 
1Substituted for the word “Central” by the Punjab Laws (Adaptation) Order, 1974 (1 of 1974) (w.e.f. 14.8.1973), published in the 
Punjab Gazette (Extraordinary), dated November 20, 1974, pp. 1425-A-1425-PP, Article 2 read with Second Schedule, Part III, 
Serial No. 70. 
(iii) admit, compromise or withdraw any claim made under this Ordinance; 
and 
(iv) obtain such legal advice and assistance as he may, from time to time, 
deem it necessary or expedient to obtain or as h e may be desired by 
the Board to obtain, for any of the purposes referred to in the foregoing 
clauses of this section, or for securing the lawful exercise or discharge 
of any power or duty vested in or imposed upon the Board or any 
officer or servant of the Board. 
32. Indemnity of the Board, etc .– No suit shall be maintainable against the 
Board, the Chairman, Project Director or any officer, adviser or servant of the Board, 
or any person acting under the direction of the Board, or of the Chairman, Project 
Director or any officer or servant of the Board in respect of anything done lawfully 
and in good faith and with due care and attention under this Ordinance. 
33. Notice of suit against the Board .– (1) No suit shall be instituted against the 
Board, the Chairman, Project Director, any person associated with the Board, or any 
officer, adviser or servant of the Board, or any person acting under the direction of 
the Board or of  the Chairman, Project Director or any officer or servant of the Board 
in respect of an act purporting to be done under this Ordinance, until the expiration of 
two months next after notice in writing has been, in the case of the Board left at its 
office, and in any other case delivered to or left at the office or place of abode of the 
person to be sued, explicitly stating the cause of action, the nature of the relief 
sought, the amount of compensation claimed, and the name and place of abode of 
the intending plaintiff; and in case the suit is filed, the plaint shall contain a statement 
that such notice has been so delivered or left. 
 
1
[Provided that where any such suit is instituted without delivering or leaving 
such notice as aforesaid or before the expiration of the said period of two months or 
where the plaint does not contain a statement that such notice has been so delivered 
or left, the plaintiff shall not be entitled to any costs.] 
 (2) If the Board or other person referred to in sub -section (1) shall before 
the action is commenced, have tendered, in the opinion of the Court, sufficient 
amends to the plaintiff, the plaintiff shall not recover any sum in excess of the 
amount so tendered and shall also pay all costs incurred by the defendant after such 
tender. 
 (3) No action such as is described in sub -section (1) shall, unless it is an 
action for the recovery of immovable property or for a declaration of the title thereto 
be commenced otherwise than within six months next after the accrual of the cause 
of action: 
 Provided that nothing in sub -section (1) shall be construed to apply to a suit  
wherein the only relief claimed is an injunction of which the object would be defeated 
by the giving of the notice or the postponement of the commencement of the suit or 
proceedings. 
 
1Added by the Punjab Milk Boards (Amendment) Ord inance, 1985  (XXVI of 19 85), published in the Punjab Gazette 
(Extraordinary), dated February 23, 1985, s. 2. 
34. Mode of proof of the Board’s records .– A copy of any receipt, applic ation, 
plan, notice, order, entry in a register or other documents in the possession of the 
Board shall, if duly certified by the legal keeper thereof, or other person authorized 
by the Board in this behalf, be received as prima facie evidence of the exist ence of 
the entry or document and shall be admitted as evidence of the matter s and 
transaction therein recorded in every case where and to the same extent, as the 
original entry or document would, if produced, have been admissible to prove such 
matters. 
35. Restriction in the summoning of the Board servants to  produce 
documents.– Neither the Chairman nor the Project Director, any adviser, officer, or 
servant of the Board shall in any legal proceedings to which the Board is not a party 
be required to produc e an y register or documents the contents of which can be 
proved under the preceding section by a certified copy, or to appear as a witness to 
prove the matters and transactions, recorded therein unless by order of the Court 
made for special cause. 
36. Validation of acts and proceedings .– (1) No act done or proceedings taken 
under this Ordinance shall be questioned on the ground merely of– 
(a) the existence of any vacancy in, or any defect in the constitution of the 
Board; or 
(b) any person having ceased to be a  Member has continued to act as 
such; or 
(c) any omission, defect or irregularity not affecting the merits of the case. 
 (2) Every meeting of the Board, the minutes of the proceedings of which 
have been duly signed as prescribed in clause (5) of sectio n 11  shall be taken to 
have been duly convened and to be free from all defects and irregularities. 
37. General powers of the Board to pay compensation .– In any case not 
otherwise expressly provided for in this Ordinance, the Board may with the prior 
approval of Government pay reasonable compensation to any person who sustains 
damage by reason of the exercise of any of the powers vested under this Ordinance 
in the Board or the Chairman, Project Director or any officer or servant of the Board. 
CHAPTER VIII 
Audit and Accounts 
38. Accounts and Audit .– (1) The Board shall maintain proper accounts and 
other relevant records and prepare annual statement of accounts including the profit 
and loss account and balance -sheet in accordance with such general directions as  
may be issued, and in such form as may be specified by Government in consultation 
with the Accountant-General, West Pakistan or the Comptroller and Auditor -General, 
hereinafter in this section referred to as the Auditor-General. 
 (2) The accounts of the B oard shall be audited by an auditor who shall be 
chartered accountant within the meaning of the Chartered Accountants Ordinance, 
1961 (Ordinance X of 1961) and appointed for the purpose by the Board with the 
previous approval in writing of Government. 
 (3) Notwithstanding, the audit provided for in sub -section (2) the  Auditor-
General shall audit or cause to be audited the accounts of the Board. 
 (4) The Board shall produce all accounts books and connected documents 
and furnish such explanation and informat ion as the Auditor-General may require at 
the time of audit. 
 (5) A statement of its accounts audited by the chartered accountant 
referred to in sub -section (2) shall be forwarded to Government by the Board as 
soon as possible after the end of every financial year. 
39. Annual report.– The Board shall, as soon as possible after the end of every 
financial year, submit an annual report to Government on the conduct of its affairs for 
that year. 
CHAPTER IX 
Dissolution 
40. Dissolution of the Board.– (1) Government may, by notification in the Official 
Gazette declare that a Board shall be dissolved from such date as may be specified 
in the notification and thereupon the Board shall stand dissolved on that date. 
 (2) From the said date– 
(a) all properties, funds and  dues which immediately before the said date 
were vested in or were realizable by the Board shall vest in and be 
realizable by Government; 
(b) all liabilities which immediately before the said date were enforceable 
against the Board shall be assumed by, an d be enforceable against 
Government; and 
(c) for the purpose of completing the execution of any scheme or project 
sanctioned under this Ordinance which has not been fully executed by 
the Board and of realizing properties, funds and dues referred to in 
clause (a ) the functions of the Board shall be discharged by 
Government.