NATIONAL FILM CORPORATION OF SRI LANKA

(1) There shall be established a corporation which shall be called the National Corporation of Sri Lanka (hereinafter referred to as ” the Corporation “), and which shall consist of the persons who are for the time being members of the Corporation under section 3.

(2) The Corporation shall by the name assigned to it by subsection (1) be a body corporate and shall have perpetual succession and a common seal and may sue and be sued in its corporate name.

(a) to import films, photographic equipment and material or accessories necessary for the production or exhibition of films;

(b) to export films, including the purchase and stocking of such films for the purpose of such exportation;

(c) to distribute and supply films, photographic equipment and material or accessories for the production or exhibition of films;

(d) to establish, install and operate studios and cinemas and to provide facilities for the production of films in Sri Lanka;

(dd) to ensure the provision by cinemas and studios of adequate services and facilities necessary for the convenience and safety of patrons of, and workers in, cinemas and studios;

(e) to engage in and to assist financially or otherwise in the production of films in Sri Lanka;

(f) to promote, encourage and develop the film industry and maintain high standards in regard to films produced in Sri Lanka, by-

(g) to promote and expand the demand for and trade in films produced in Sri Lanka both within and outside Sri Lanka,

(h) to conduct market research on films in Sri Lanka and outside Sri Lanka;

(i) to foster co-operation and co-ordination among persons connected with or engaged in the film industry in and outside Sri Lanka;

(j) to advise the Minister on matters connected with the film industry.

(a) acquire in any manner whatsoever and hold and take or give on lease or hire, mortgage, pledge, sell or otherwise dispose of, any movable or immovable property;

(b) acquire, establish, install and operate studios and cinemas;

(bb) to control, supervise and inspect cinemas and studios or institutions engaged in the film industry;

(bbb) to control the establishment and installation of cinemas;

(c) acquire by purchase or otherwise any rights or privileges considered necessary for the purpose of the business of the Corporation ;

(d) exercise the exclusive right to import, sell, hire, supply and distribute films, equipment and raw material necessary for the production and exhibition of films;

(e) export films produced in Sri Lanka;

(f) engage in the production of films either alone or in collaboration with any other organization or person;

(g) register, inspect, control and regulate contracts and agreements relating to the production of films in Sri Lanka,

(h) appoint, employ, remunerate and have disciplinary control over its officers, servants and agents;

(i) establish and maintain provident funds, and provide welfare and recreational facilities for its employees;

(j) make rules in respect of the administration of the affairs of the Corporation;

(k) delegate to any Director, officer or agent of the Corporation any such function as may be considered necessary for the efficient transaction of its business ;

(l) levy fees or charges for services, facilities or equipment provided by the Corporation;

(m) establish, maintain and operate training institutions for technicians, artistes or other personnel engaged in or connected with the film industry for the purpose of advancing the skill of such persons;

(n) provide credit facilities production of films ; and

(o) adopt all such measures as may be considered necessary for, conducive or incidental to the attainment of the objects of the Corporation,

(1) The Corporation shall have a Board of Directors consisting of-

(2) A person shall be disqualified for being appointed, or for continuing, as a Director-

(3)

(4) Where a Director appointed under paragraph (b) of subsection (1) is, by reason of illness or other infirmity or absence from Sri Lanka, temporarily unable to perform the duties of his office, the Minister may, having regard to the provisions of that paragraph, appoint any person to act in his place.

(1) Every Director appointed under paragraph (b) of subsection (1) of section 7 shall, unless he vacates office earlier by death, resignation or removal, hold office for a period of three years.

(2) Every ex officio Director shall hold office as long as he holds the post by virtue of which he was appointed as a Director.

(1) The Minister may, if he considers it expedient to do so, remove, by Order published in the Gazette, any Director appointed under paragraph (b) of subsection (1) of section 7 without reasons stated.

(2) A Director in respect of whom an Order under subsection (1) is made by the Minister shall vacate his office on the date of the publication of such Order in the Gazette.

(3) The removal of any Director under subsection (1) shall not be called in question in any court.

(1) Rules may be made under this Act in respect of the meetings of the Corporation and the quorum for and the procedure to be followed at such meetings.

(2) The financial year of the Corporation shall be the period of twelve months commencing on the first day of January.

(1) The Board of Directors may delegate to the Chairman or any other Director or any employee of such Board any of its powers and duties.

(2) The Chairman, other Director or employee to whom any of the powers or duties of the Board have been delegated under subsection (1) shall exercise or perform the powers or duties so delegated subject to the general or special directions of the Board.

(1) The Minister shall appoint a Chairman of the Board of Directors from among the Directors. The Chairman shall be the chief executive officer of the Corporation.

(2) If the Chairman is, by reason of illness or other infirmity or absence from Sri Lanka, temporarily unable to perform the duties of his office, the Minister may appoint one of the Directors to act in his place.

(3) The Minister may, without assigning a reason, terminate the appointment of the Chairman. The termination of the appointment of the Chairman shall not be called in question in any court.

(4) The Chairman may resign the office of Chairman by letter addressed to the Minister.

(5) Subject to the provisions of subsection (3) and subsection (4), the term of office of the Chairman shall be the period of his membership of the Board of Directors.

(1) The seal of the Corporation shall be in the custody of the Board of Directors.

(2) The seal of the Corporation may be altered in such manner as may be determined by the Board of Directors.

(3) The seal of the Corporation shall not be affixed to any instrument or document except in the presence of a Director who shall sign the instrument or document in token of his presence.

(1) Subject to the other provisions of this Act, the Corporation may-

(2) Rules may be made under this Act in respect of all or any of the matters referred, to in subsection (1).

(3) At the request of the Corporation, any officer in the public service may, with the consent of that officer and the Secretary to the Ministry charged with the subject of Public Administration, be temporarily appointed to the staff of the Corporation for such period as may be determined by the Corporation with like consent or be permanently appointed to such staff.

(4) Where any officer in the public service is temporarily appointed to the staff of the Corporation, subsection (2) of section 9 of the Motor Transport Act, No. 48 of 1957*, shall mutatis mutandis apply to and in relation to him.

(5) Where any officer in the public service is permanently appointed to the staff of the Corporation, subsection (3) of section 9 of the Motor Transport Act, No. 48 of 1957*, shall mutatis mutandis apply to and in relation to him.

(1) The initial capital of the Corporation shall be ten million rupees.

(2) The amount of the initial capital of the Corporation shall be paid to the Corporation out of the Consolidated Fund in such installments as the Minister in charge of the subject of Finance may, after consultation with the Minister, determine.

(3) The capital of the Corporation may be increased from time to time by such amount as may be determined by resolution of Parliament and that amount shall be paid out of the Consolidated Fund.

(4) The capital of the Corporation contributed by the Government by way of grants shall not be reduced except in such manner as may be determined by resolution of Parliament.

(5) The Board of Directors may request the Minister for such advances from the Consolidated Fund as may be necessary for meeting the obligations of the Corporation or the discharge of its duties under this Act and the Minister may in consultation with the Minister in charge of the subject of Finance authorize such advances as may be required by way of loan carrying interest, repayable in such installments and under such terms and conditions as may be determined by the Minister in charge of the subject of Finance.

(a) the working and establishment expenses (including allocations to the insurance reserve and depreciation reserve), in connexion with the exercise and performance of the powers and duties of the Corporation, properly chargeable to revenue account and the payment of taxes;

(b) the interest on any temporary loan raised by the Corporation;

(c) any sums required to be transferred to any sinking fund or redemption fund; and

(d) the interest on, and the repayment of, the principal of any Government loan to the Corporation.

(1) The net surplus for any year out of the revenue of the Corporation after defraying the charges mentioned in section 28, and after payment of the contribution to the Consolidated Fund, may be appropriated by the Board of Directors for any or all of the following purposes with the approval of the Minister given with the concurrence of the Minister in charge of the subject of Finance:-

(2) No debits against or transfers out of the reserves mentioned in subsection (1) shall be made by the Board of Directors except with the approval of the Minister given with the concurrence of the Minister in charge of the subject of Finance.

(1) The Board of Directors shall cause proper accounts of the income and expenditure of the Corporation and of all its other transactions to be kept and shall prepare an annual statement of accounts and statistics relating to the business of the Corporation in such form and containing such particulars as the Minister with the concurrence of the Minister in charge of the subject of Finance may from time to time specify.

(2) The accounts of the Corporation for each financial year shall be submitted to the Auditor-General for audit within four months of the close of the financial year. For the purpose of assisting him in the audit of such accounts, the Auditor-General may employ the services of any qualified auditor or auditors who shall act under his direction and control.

(3) For the purpose of meeting the expenses incurred by him in the audit of the accounts of the Corporation, the Auditor- General shall be paid by the Corporation such remuneration as the Minister may, with the concurrence of the Minister in charge of the subject of Finance, determine. Any remuneration received from the Corporation by the Auditor-General shall, after deducting any sums paid by him to any qualified auditor or auditors employed by him for the purposes of such audit, be credited to the Consolidated Fund.

(1) The Auditor-General and any person assisting the Auditor-General in the audit of the accounts of the Corporation shall have access to all such books, deeds, contracts, accounts, vouchers and other documents of the Corporation as the Auditor-General may consider necessary for the purposes of the audit, and shall be furnished by the Corporation and officers of the Corporation with such information within their knowledge as may be required for such purposes.

(2) The Auditor-General shall examine the accounts of the Corporation and furnish a report:-

(3) The Auditor-General shall transmit his report to the Corporation within four months of the receipt of the accounts of the Corporation by him.

(4) For the purposes of this section, the expression ” qualified auditor ” means-

(1) The Board of Directors shall, as soon as possible after the end of each financial year of the Corporation, make to the Minister a report on the exercise and performance by such Board of its powers and duties during that year and on its policy and programme. Such report for any year shall set out any direction given by the Minister to the Board of Directors during that year.

(2) The Board of Directors shall, on receipt of the Auditor-General’s report in respect of any year, cause a copy of each of the following documents relating to that year to be transmitted to the Minister:-

(3) The Minister shall lay copies of the documents transmitted to him under subsection (2) before Parliament before the end of the year next following the year to which such report and accounts relate.

(1) Where any immovable property whatsoever, other than notified property, is required to be acquired for any purpose of the Corporation and the Minister, by Order published in the Gazette, approves of the proposed acquisition, that property shall be deemed to be required for a public purpose and may accordingly be acquired under the Land Acquisition Act and be transferred to the Corporation.

(2) Any sum payable for the acquisition of any immovable property under the Land Acquisition Act for the Corporation shall be paid by the Corporation.

(1) Any officer of the Corporation authorized by the Minister may, by notice (in this Act referred to as a “notice of claim”) published in the Gazette declare that such movable or immovable property, other than money, as has been, or is being, or is, or was intended to be, used by any person for the purpose of engaging in or carrying on any business which is similar or substantially similar to any business of the Corporation, is required for the purposes of the Corporation. Such property is in this Act referred to as ” notified property “.

(2) The publication of a notice of claim made under subsection (1) in respect of any property shall be conclusive proof that such property is required for the purposes of the Corporation.

(3) Where a notice of claim is published under subsection (1), any officer of the Corporation authorized by the Minister may from time to time, by notice (in this Act referred to as a ” notice of disclaimer “) published in the Gazette, disclaim the need, for the purposes of the Corporation, of the whole or any part of the property included in the notice of claim and specified in the notice of disclaimer.

(4) No person shall lease, hypothecate, alienate, transfer or dispose of in any manner whatsoever to any person, other than the Corporation, the whole or any part of-

(5) Any lease, hypothecation, alienation, transfer -or disposal made or effected in contravention of the provisions of subsection (4) shall be null and void, and shall be of no force or avail in law.

(6) Any person shall, if requested by any authorized officer so to do, furnish to such person as shall be specified in the request information with regard to any movable or immovable property included in a notice of claim as shall be so specified.

(7) Any person who-

(8) For the purposes of this section, the expression ” authorized officer ” means the Chairman of the Board of Directors, or any Director or officer of the Corporation authorized in that behalf by such Chairman.

(a) cause a report to be prepared as to the condition of any notified property;

(b) cause a copy of such report to be sent by registered post to persons having an interest in the property to which the report relates ; and

(c) requite such persons to notify in writing to the Chairman whether or not they agree with such report and if they are not in agreement, to specify any objections they may have and the grounds of such objections and to produce all documents relied on by them in support of such objections.

(1) The Minister may, by Order (in this Act referred to as a “vesting Order”) published in the Gazette, vest in the in Corporation, with effect from such date as shall be specified in the Order, any such notified property as has not been disclaimed by a notice of disclaimer.

(2) Before a vesting Order takes effect, the Minister may from time to time, after consultation with the Board of Directors, alter, by Order published in the Gazette, the date on which such vesting Order takes effect.

(3) A vesting Order shall have the effect of giving the Corporation absolute title to any property specified in the Order with effect from the date specified therein and free from all encumbrances.

(1) The Minister may by Order (in this Act referred to as a ” requisitioning Order”) published in the Gazette, requisition, with effect from such date as shall be specified in the Order, any notified property as is movable or immovable property in order that it may be temporarily used by the Corporation for the purposes of any business of the Corporation.

(2) Before a requisitioning Order takes effect the Minister may from time to time, after consultation with the Board of Directors, alter, by Order published in the Gazette, the date on which such requisitioning Order takes effect.

(3) A requisitioning Order shall have the effect of authorizing the Corporation, with effect from the date specified in the Order, to take possession of the property specified in the Order and to use such property temporarily for the purposes of any business of the Corporation.

(4) Where any property is requisitioned by a requisitioning Order, the Minister may, by Order (hereinafter in this Act referred to as “derequisitioning Order”) published in the Gazette, derequisition such property with effect from such date as shall be specified in the derequisitioning Order.

(5) Before a derequisitioning Order takes effect, the Minister may from time to time, after consultation with the Board of Directors, alter by Order published in the Gazette, the date on which such derequisitioning Order takes effect.

(6) Where, immediately before the date on which any property is requisitioned for the Corporation, a person, other than the owner of such property, was entitled to possession of such property under the terms of a lease, that lease shall be deemed for all purposes to have expired on that date.

(7) Where any property is derequisitioned by a derequisitioning Order, such Order shall be deemed to have the effect of reviving any lease subsisting on the date on which the property was requisitioned, and any question which may arise as to any right, title or interest, in or over that property shall be determined accordingly.

(1) Notwithstanding that any movable or immovable property has vested in the Corporation by virtue of a vesting Order, the Minister may, at any time before a determination as to compensation is made in respect of that property under this Act, by subsequent Order published in the Gazette (in this section referred to as a ” divesting Order”) revoke that vesting Order.

(2) The following provisions shall apply in any case where a vesting Order in respect of any movable or immovable property is revoked by a divesting Order:-

(3) The preceding provisions of this section shall have effect notwithstanding anything in any other provision of this Act or in any other written law.

(1) Any officer of the Corporation specially or generally authorized in that behalf by the chairman of the Board of behalf by the Chairman of the Board of Directors may take possession of any property vested in or requisitioned for the Corporation.

(2) Any officer of the Corporation authorized in that behalf by the Chairman of the Board of Directors shall, by notice given to the person in occupation or in possession of any property vested in or requisitioned for the Corporation or exhibited in some conspicuous place on or in the vicinity of such property,-

Where such property is a motor vehicle, the notice aforesaid may be given to the registered owner of that vehicle within the meaning of the Motor Traffic Act instead of being given to the person in possession of that motor vehicle.

(3) Any notice required to be given to any person under the preceding provisions of this section shall be deemed to be given to him if such notice is sent to him by registered letter.

(4) Any person who contravenes any requirement of any notice given to him under this section shall be guilty of an offence under this Act.

(1) Every person who-

(2) Where an officer authorized by the Chairman of the Board of Directors under section 41 to take possession of any property for and on behalf of the Corporation is unable or apprehends that he will be unable to take possession of such property because of any obstruction or resistance that has been or is likely to be offered, he shall, on his making an application in that behalf to the Magistrate ‘s Court having jurisdiction over the place where that property is ordinarily kept or situated, be entitled to an order of the Court directing the Fiscal to deliver possession of that property to him for and on behalf of the Corporation.

(3) Where an order under subsection (2) is issued to the Fiscal by a Magistrate’s Court, he shall forthwith execute that order and shall in writing report to the Court the manner in which that order was executed.

(4) Where an order under subsection (2) is issued to the Fiscal by a Magistrate’s Court the execution of such order shall not be stayed in any manner by reason of any step taken or proposed to be commenced in any court with a view to questioning, varying or setting aside such order.

(5) For the purpose of executing an order issued by a Magistrate’s Court under subsection (2), the Fiscal or any person acting under his direction may use such force as may be necessary to enter any place where any movable property to which that order relates is kept and seize such movable property, or to enter any land, building, structure or other immovable property to which that order relates and eject any person in occupation thereof, and to deliver possession of such movable property, land, building, structure or other immovable property to the person who is authorized to take possession thereof for and on behalf of the Corporation.

(1) The Chairman of the Board of Directors, or any person authorized in that behalf by such Chairman, may

(2) Any person who fails, without reasonable cause, to comply with the provisions of subsection (1) (c) or subsection (1) (d), or who furnishes information knowing such information to be false, or obstructs any person in the exercise of the powers conferred on him by subsection (1) (a) or subsection (1) (b), shall be guilty of an offence under this Act.

(1) The amount of compensation to be paid under this Act any in respect of any property vested on any date in the Corporation shall be the actual price paid by the owner for the purchase of such property and an additional sum which is equal to the reasonable value of any additions and improvements made to such property by any person who had an interest in such property, or if such purchase price is not ascertainable, be an amount equal to the price which such property would have fetched if it had been sold in the open market on the day on which the property was vested in the Corporation :

Provided, however, that where such property consists of movable property a reasonable amount for depreciation shall be deducted from the amount which represents the price actually paid for its purchase by the person entitled to the compensation payable in respect of such property, if such compensation is based on such price.

(2) Where any interest in any movable or immovable property derived under the terms of any lease is vested in the Corporation, the amount of compensation to be paid under this Act shall be the actual price paid by the holder for the acquisition of such interest:

Provided that a proportionate amount shall be deducted on account of the period for which the holder has enjoyed such interest.

(1) The Board of Directors shall refer to the Chief Valuer the determination of the compensation payable in respect of any property, and such Valuer shall submit his determination to the Board of Directors for final decision thereon.

(2) The Chief Valuer shall, before making his determination of the compensation payable in respect of any property, give the person from whom that property was acquired or requisitioned for the Corporation, an opportunity to adduce before such Valuer, by himself or by a representative authorized by him in that behalf, evidence with regard to the value of that property.

(3) The Board of Directors shall communicate in writing to the person from whom any property was acquired or requisitioned for the Corporation the final decision of the compensation payable in respect of that property.

(4) The Board of Directors shall cause a notice to be published in the Gazette and in at least one Sinhala, one Tamil and one English newspaper, specifying the compensation that it proposes to pay in respect of any property, being the compensation determined by the Board of Directors, and inviting any person who had any interest in that property, immediately before that property was vested in or requisitioned for the Corporation and who claims any compensation in respect of that property, to communicate to the Chairman of the Board of Directors his claim in writing, stating the nature and the basis thereof, before such date as shall be specified in the notice.

(1) Where no claim to the compensation payable in respect of any property is received in response to the notice under section 52 from any person other than the person from whom that property was acquired or requisitioned for the Corporation, the Chairman of the Board of Directors shall cause such compensation, less any sum required by or under this Act to be deducted therefrom, to be paid to the person from whom that property was so acquired or requisitioned.

(2) Where any claim to compensation payable in respect of any such property is received in response to the notice under section 52 from any person other than the person from whom that property was acquired or requisitioned for the Corporation, then, if every such claimant and the person from whom that property was so acquired or requisitioned amicably agree in writing as to the persons entitled to the compensation and the apportionment of the compensation among them, the Chairman of the Board of Directors shall cause the compensation, less any sum required by or under this Act to be deducted therefrom, to be apportioned and paid to such person according to such agreement. If there is no such agreement, the Chairman of the Board of Directors shall cause the compensation, less any sums required by or under this Act to be deducted therefrom, to be paid to any District Court or Primary Court, according as the amount to be so paid exceeds or does not exceed one thousand five hundred rupees to be drawn by the persons entitled thereto.

(1) Where a person is entitled to compensation in respect of any property vested in or requisitioned for the Corporation, the Board of Directors shall pay from the amount of such compensation to the Commissioner-General of Inland Revenue any sum certified under the hand of the Commissioner-General of Inland Revenue to the Corporation to be due from such person as tax on income or profits, or as personal tax.

(2) For the purposes of this section, the expression ” compensation” includes any interest which has accrued due on such compensation.

(1) Subject to the provisions of section 58, on or after such date* (hereafter in this Act referred to as the “relevant date “) as the Minister may specify by Order published in the Gazette*, no person shall import into Sri Lanka or sell, supply or distribute within Sri Lanka any films, photographic equipment or any material, equipment or accessory necessary for the production or exhibition of films, without the written authority of the Chairman.

(2) On or after the relevant date, no person shall, except with the written authority of the Chairman of the Board of Directors, exhibit any film which has not been distributed through the Corporation.

(3) A certificate under the hand of the Chairman of the Board of Directors that any person has not complied with the provisions of subsection (2) shall be received in any proceedings as conclusive evidence of such non-compliance.

(1) No person other than the Corporation who on the relevant date, was carrying on business as exhibitor of films or as importer, seller, supplier or distributor of any films, photographic equipment or any equipment or accessory for the production or exhibition of films shall terminate the employment of any person (hereafter referred to as an” employee “) employed by him except with the written approval of the Commissioner, and otherwise than in accordance with the terms and conditions subject to which such approval is granted. A person who was carrying on the business referred to in the preceding provisions of this subsection is hereafter in this section referred to as an ” employer”.

(2) The following provisions shall apply in the case of the exercise of the powers conferred on the Commissioner to grant his approval to an employer terminating the employment of any employee :-

(3) Where, on or after the relevant date, any employer has granted or grants to any employee, in addition to any benefit such employee was or would be entitled to receive in the ordinary course of his employment, any ex gratia gratuity or compensation or other benefit (hereafter in this subsection referred to as ” ex gratia benefits “), then, every person who was an employee of that employer on the relevant date, shall be entitled, with the approval of the Commissioner given upon application in that behalf made by such person, to receive the same ex gratia benefits so however that the amount thereof shall be as determined by the Commissioner. The preceding provisions of this subsection shall apply to any person notwithstanding that he ceased or ceases to be an employee of that employer after the relevant date, “for any reason whatsoever other than misconduct. Any approval or determination of the Commissioner under the preceding provisions of this subsection shall be final and conclusive, and shall not be called in question in any court, whether by way of writ or otherwise.

(4) Where an ex gratia gratuity or compensation or other benefit is granted by any employer to an employee, such employer shall furnish to the Commissioner, within thirty days of the grant thereof, full details of the gratuity, compensation or other benefit so granted. Such details shall be furnished in such form and manner as may be determined by the Commissioner.

(5) In this section, ” Commissioner” means the Commissioner of Labour, and includes a Deputy Commissioner of Labour.

(1) The Corporation may make rules in respect of all or any matters for which rules are authorized or required by this Act to be made.

(2) No rule made by the Corporation under this Act shall have effect until it has been approved by the Minister.

(1) The Minister may make regulations for the purpose of carrying out or giving effect to the principles and provisions of this Act.

(2) Without prejudice to the generality of the powers conferred by subsection (1), the Minister may make regulations in respect of all or any of the following matters:-

(3) Every regulation made by the Minister under this Act shall be published in the Gazette and shall come into operation on the date of such publication or on such later date as may be specified in the regulation.

(4) Every regulation made by the Minister shall, as soon as convenient after the date of its publication, be brought before Parliament for approval. Any regulation which is not so approved shall be deemed to be rescinded as from the date of disapproval but without prejudice to anything previously done thereunder.

(1) Every person who-

(2) Every person who commits an offence under this Act shall on conviction after summary trial before a Magistrate be liable to imprisonment of either description for a period not exceeding one year or to a fine not exceeding one thousand rupees or to both such fine and imprisonment, and the Magistrate may order the forfeiture of any property in respect of which the offence was committed.

(3) Notwithstanding anything to the contrary in the First Schedule to the Code of Criminal Procedure Act, every offence under this Act shall be a cognizable offence within the meaning of that Act.

(a) if that body of persons is a body corporate, every director and officer of that body corporate, or

(b) if that body of persons is a firm, every partner of that firm, shall be deemed to be guilty of that offence :

(1) No suit or prosecution shall lie-

(2) Any expense incurred by the Corporation in any suit or prosecution brought by or against the Corporation before any court shall be paid out of the funds of the Corporation, and any costs paid to, or recovered by, the Corporation in any such suit or prosecution shall be credited to the funds of the Corporation.

(3) Any expense incurred by any such person as is referred to in paragraph (b) of subsection (1) in any suit or prosecution brought against him before any court in respect of any act which is done or purported to be done by him under this Act or on the direction of the Board of Directors shall, if the court holds that such act was done in good faith, be paid out of the funds of the Corporation, unless such expense is recovered by him in such suit or prosecution.