FOOD CORPORATIONS ACT 1964
EmailTHE FOOD CORPORATIONS ACT, 1964
ACT No. 37 OF 1964
10thDecember, 1964
An Act to provide for the establishment of Food Corporations forthe purpose of trading in foodgrains and other foodstuffs and for mattersconnected therewith and incidental thereto
BE it enacted by Parliament in the FifteenthYear of the Republicof India as follows: –
CHAPTER I
PRELIMINARY
1.Short title, extend andcommencement: (1) ThisAct may be called the Food Corporations Act, 1964.
(2) It extends to the whole of India 1 [*].
(3) It shall come into force onsuch date 2 as the Central Government may, by notification inthe Official Gazette, appoint.
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1. The words "except theState of Jammu and Kashmir"omitted by the Food Corporations (Amendment) Act, 1972 (67 of 1972) Section 2.
2. 17-12-1964 – VideNotification No. G. S. R.1808, dated 16th December, 1964, Gazette of India,Extraordinary, Part II, Section 3 (i), p.869.
2.Definitions: In this Act, unless thecontext otherwise requires, –
(a) "Corporation"means the Food Corporation of Indiaestablished under section 3;
(b) "FoodCorporation" means the Food Corporation of India established under section 3or a State Food Corporation established under section 17;
1 [(bb) "foodstuffs"includes edible oilseeds and oils,]
(c) "prescribed"means prescribed by rules made under this Act;
(d) "scheduled bank"means a bank for the time being included in the Second Schedule to the ReserveBank of India Act, 1934 (2 of 1934);
(e) "State FoodCorporation" means a State Food Corporation established under section 17.
(f) "year" means the financial year.
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1. Clause (bb) inserted by theFood Corporations (Amendment) Act, 1972 (67 of 1972) Section 3.
CHAPTER II
THE FOOD CORPORATION OF INDIA
3.Establishment of FoodCorporation of India: (1) With effect from such date1 as the Central Government may, by notification inthe Official Gazette, specify in this behalf the Central Government shallestablish for the purposes of this Act a Corporation known as the FoodCorporation of India.
(2) The Corporation shall be abody corporate with the name aforesaid, having perpetual succession and acommon sea with power, subject to the provisions of this Act, to acquire, holdand dispute of property and to contract, and may, by that name, sue and besued.
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1. 1-1-1965 – Vide NotificationNo. G. S. R. 1809, dated 16th December, 1964, Gazette of India, Extraordinary,Part II, Section 3 (i), p.869.
4.Offices and agencies: (1) The head office of theCorporation shall be at Madrasor at such other place as the Central Government may, by notification in theOfficial Gazette, specify.
1 [(2) The Corporation may establish offices or agencies at otherplaces in or outside India:
Provided that no such office oragency shall be established at any place outside India without the previous approvalof the Central Government.]
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1. Substituted for the originalSub-section (2) by the Food Corporations (Amendment) Act, 1972 (67 of 1972)Section 4.
5.Capital of Corporation: (1) The original capital ofthe Corporation shall be such sum not exceeding one hundred crores of rupees asthe Central Government may fix.
(2) The Central Government mayfrom time to time increase the capital of the Corporation to such extend and insuch manner as that Government may determine.
(3) Such capital may beprovided by the Central Government from time to time after due appropriationmade by Parliament by law for the purpose and subject to such terms andconditions as may be determined by that Government.
6.Management:(1) The generalsuperintendence, direction and management of the affairs and business of theCorporation shall vest in a board of directors which may exercise all suchpowers and do all such acts and things as may be exercised or done by theCorporation under this Act.
(2) The board of directors, indischarging its functions, shall act on business principles having regard tothe interests of the producer and consumer and shall be guided by suchinstructions on questions of policy as may be given to it by the CentralGovernment.
(3) If any doubt arises as towhether a question is or is not a question of policy, the decision of theCentral Government thereon shall be final.
7.Board of directors: (1) The board of directors ofthe Corporation shall consist of the following, namely : –
(a) a Chairman;
(b) three directors torepresent respectively the Ministries of the Central Government dealing with–
(i) food,
(ii) finance, and
(iii) co –operation;
(c) the managing director ofthe Central Warehousing Corporation established under section 3 of theWarehousing Corporations Act, 1962 (58 of 1962), ex officio;
(d) a managing director ;
(e) six other directors.
(2) All the directors of theCorporation other than director referred to in clause (c) of sub-section (1)shall be appointed by the Central Government.
(3) The managing director shall–
(a) exercise such powers andperform such duties as the board of directors may entrust or delegate to him;and
(b) receive such salary andallowances as the board of directors may, with the approval of the CentralGovernment, fix:
Provided that the firstmanaging director shall receive such salary and allowances as the CentralGovernment may fix.
(4) The term of office of, andthe manner of filling casual vacancies among, the directors of the Corporation,other than the director referred to in clause (c) of sub-section (1), and theother terms and conditions of appointment of the directors of the Corporationshall, subject to the provisions of sub-section (3), be such as may beprescribed.
8.Disqualification for officeof director: A personshall be disqualified for being appointed as, and for being, a director of theCorporation –
(a) if he is, or at any timehas been, adjudicated insolvent or has suspended payment of his debts or hascompounded with his creditors, or
(b) if he is of unsound mindand stands so declared by a competent court; or
(c) if he is or has beenconvicted of any offence which in the opinion of the Central Governmentinvolves moral turpitude ; or
(d) if he has been removed ordismissed from the services of the Government or a corporation owned orcontrolled by the Government ; or
(e) except in the case of theChairman or the managing director, if he is a salaried official of the FoodCorporation of Indiaor a State Food Corporation.
9.Removal and resignation ofdirectors: (1) The Central Governmentmay, at any time, after consultation with the Corporation, remove the managingdirector from office after giving him a reasonable opportunity of showing causeagainst the proposed removal.
(2) The board of directors mayremove any director from office who –
(a) is or has become subject toany of the disqualifications mentioned in section 8; or
(b) is absent without leave ofthe board of directors from more than three consecutive meetings thereofwithout cause sufficient, in the opinion of the board, to exonerate his absence
(3) A director of the Corporation may resign hisoffice by giving notice thereof in writing to the Central Government and onsuch resignation being accepted, he be deemed to have vacated his office.
10.Meetings: (1) The board of directors ofthe Corporation shall meet at such times and places and shall observe suchrules of procedure in regard to the transaction of business as its meetings(including the quorum at meetings) as may be provided by regulations made bythe Corporation under this Act.
(2) The Chairman of the boardor, if for any reason he is unable to attend any meeting, any other directorelected by the directors present at the meeting, shall preside at the meeting.
(3) All questions which come upbefore any meeting of the board shall be decided by a majority of the votes ofthe directors present and voting, and, in the event of an equality of votes,the Chairman or in his absence, the person presiding, shall have and exercise asecond or casting vote.
11.Advisory Committees: (1) The Central Governmentmay, in consultation with the Corporation, by notification in the OfficialGazette, constitute one or more Advisory Committees consisting of such personsand on such terms and conditions as may be prescribed.
(2) It shall be the duty of anysuch Advisory Committee to advise the Central Government or the Corporation inregard to any matter connected with the purposes of this Act in respect ofwhich its advice is sought by the Central Government, or, as the case may be,by the Corporation.
(3) The expenses in relation tothe Advisory Committees shall be met by the Corporation.
12.officers and other employeesof Corporation: (1) TheCentral Government shall, after consultation with the Corporation, appoint aperson to be the Secretary of the Corporation.
(2) Subject to such rules asmay be made by the Central Government in this behalf, the Corporation mayappoint such other officers and employees as it considers necessary for theefficient performance of its functions.
(3) The methods of appointment,the conditions of service and the scales of pay of the officers and otheremployees of the Corporation shall –
(a) as respects the Secretary,be such as may be prescribed ;
(b) as respects the otherofficers and employees, be such as may be determined by regulations made by theCorporation under this Act.
1 [12A.Special provisions for transfer of Government employee tothe Corporation in certain cases: (1) Where the Central Government hasceased or ceases to perform any functions which under section 13 are functionsof the Corporation, it shall be lawful for the Central Government to transfer,by order and with effect from such date or dates (which may be eitherretrospective to any date not earlier than the 1st January, 1965, or prospective) as may be specified in the order, to the Corporationany of the officers or employees servingin the Department of the CentralGovernment dealing with food or any of its subordinate or attached"offices" and engaged in the performance of those functions:–
Provided that no order underthis sub–section shall be made in relation to any officer or employee insuch Department office who has, in respect of the proposal of the CentralGovernment to transfer such officer or employee to the Corporation, intimatedwithin such time as may be specified in this behalf by that Government, hisintention of not becoming an employee of the Corporation.
(2) In making an order undersub– section (1), the Central Government shall, as far as may be, takeinto consideration the functions which the Central Government has ceased orceases to perform and the areas in which such functions have been or areperformed.
(3) An officer of otheremployee transferred by an order made under sub– section (1) shall onand from the date of transfer, cease to be an employee of the Central Governmentand become an employee of the Corporation with such designation as theCorporation may determine and shall, 2 [subject to the provisions of sub–sections (4), (4A),(4B), (4C), (5) and (6)], be governed by the regulations made by theCorporation under this Act as respects remuneration and other conditions ofservice including pension, leave and provident fund, and shall continue to bean officer or employee of the Corporation unless and until his employment Iterminated by the Corporation.
(4) Every officer or otheremployee transferred by an order made under sub– section (1) shall,within six months from the date of transfer, exercise his option in writing tobe governed, –
(a) by the scale of payapplicable to the post held by him under the Government immediately before thedate of transfer or by the scale of pay applicable to the post under theCorporation to which he is transferred.
(b) by the leave, providentfund, retirement or other terminal benefits admissible to employee of theCentral Government in accordance with the rules and orders of the CentralGovernment as amended from time to time or the leave, provident fund or otherterminal benefits admissible to the employees of the Corporation under theregulations made by the Corporation under his Act,
and such option once exercisedshall be final:
Provided that the optionexercised under clause (a) shall be applicable only in respect of the post towhich such officer or employee is transferred to the Corporation and onappointment to a higher post under the Corporation, he shall be eligible onlyfor the scale of pay applicable to such higher post:
Provided further that ifimmediately before the date of his transfer any such officer or employee isofficiating in a higher post under the Government either in a leave vacancy orin any other vacancy of a specified duration, his pay, on transfer, shall beprotected for the unexpired period of such vacancy and thereafter he shall beentitled to the scale of pay applicable to the post under the Government towhich he would have reverted or to the scale of pay applicable to the postunder the Corporation to which he is transferred, whichever he may opt:
Provided also that when anofficer or other employee serving in the Department of the Ministry of theCentral Government dealing with food or in any of its attached or subordinateoffices is promoted to officiate in a higher post in the Department or officesubsequent to the transfer to the Corporation of any other officer or employeesenior to him in that Department or office before such transfer, the officer orother employee who is promoted to officiate in such higher post shall, ontransfer to the Corporation, be entitledonly to the scale of pay applicable to the post he would have held but for suchpromotion or the scale of pay applicable to the post under the Corporation towhich he is transferred, whichever he may opt:
3 [(4A) Notwithstanding anything contained in sub–section(4), –
(a) every officer or otheremployee in respect of whom an order of transfer under sub–section (1)had been made before the date of commencement of the Food Corporations(Amendment) Act, 1977 (hereafter in this section referred to as the appointedday) shall, whether or not he had exercised the option under sub–section(4) before the appointed day, exercise such option within six months from theappointed day; and
(b) every officer or otheremployee in respect of whom an order of transfer under sub–section (1)may be made after the appointed day shall, within six months from the date ofsuch order, exercise his option under sub–section (4),
and in each such case suchoption once exercised shall be final :
Provided that where an officeror other employee having exercised an option under sub–section (4)before the appointed day –
(i) has died or retired beforethe appointed day, or dies or retires after the appointed day, beforeexercising the option as required bythis sub–section, or
(ii) does not exercise theoption as required by this sub–section,
the option already exercised by him shall bedeemed to have been validly exercised by him under sub–section (4).
(4B) Where an officer or otheremployee –
(a) has died or retired, ordies or retires, after an order of transfer under sub–section (1) inrespect of such officer or other employee is made but before exercising theoption under sub–section (4) or, as the case may be, as required by sub–section(4A); or
(b) has died or retired, ordies or retires, before an order of transfer under sub–section (1) inrespect of such officer or other employee is made,
he shall, notwithstandinganything contained in sub–section (4) or sub–section (4A), —
(i) in a case falling underclause (a), be deemed to have exercised an option under sub–section (4);and
(ii) in a case falling underclause (b), be deemed to have been transferred under sub–section (1) andexercised an option under sub–section (4),
to be governed by the leave,provident fund, retirement or other terminal benefits admissible to theemployees of the Central Government in accordance with the rules and orders ofthe Central Government as amended from time to time:
Provided that nothing in clause(a) of this sub–section shall apply to an officer or other employee who has, before theappointed day, been paid the terminal benefits as admissible to the employeesof the Corporation under the regulations made by the Corporation under thisAct, unless such officer or other employee refunds in a lump sum within sixmonths from the appointed day the amount of contributions made by theCorporation towards such terminalbenefits :
Provided further that nothing in clause (a) of thissub–section shall apply to an officer or other employee who hasintimated, under the proviso to sub–section (1), his intention of notbecoming an employee of the Corporation.
(4C) Where an officer or otheremployee has exercised an option under sub–section (4), or exercises, oris deemed to have exercised, an option under that sub–section, read withsub–section (4A) or sub–section (4B), to be governed by theleave, provident fund, retirement or other terminal benefits admissible to theemployees of the Central Government, such benefits shall be calculated on thebasis of the pay and allowances drawn by him in the Corporation.]
(5) No officer or otheremployee transferred by an order made under sub– section (1), –
(a) shall be dismissed orremoved by an authority subordinate to that competent to make a similar orequivalent appointment under the Corporation as may be specified in theregulations made by the Corporation under this Act ;
4 [(b) shall be dismissed orremoved or reduced in rank except after an inquiry in which he has beeninformed of the charges against him and given a reasonable opportunity of beingheard in respect of those charges;]
5 [Provided that where it isproposed after such inquiry to impose upon him any such penalty, such penaltymay be imposed on the basis of the evidence adduced during such inquiry and itshall not be necessary to give such person any opportunity of makingrepresentation on the penalty proposed;]
5 [Provided further that] thisclause shall not apply, –
(i) where an officer oremployee is dismissed or removed or reduced in rank on the ground of conductwhich has led to his conviction on a criminal charge; or
(ii) where the authorityempowered to dismiss or remove an officer or employee or to reduce him in rankis satisfied that for some reason, to be recorded by that authority in writing,it is not reasonably practicable to hold such inquiry; or
(iii) to an officer or employeewho, after transfer to the Corporation, is appointed to a higher post under theCorporation in response to an open advertisement and in competition withoutsiders.
(6) if, in respect of any suchofficer or employee as aforesaid, a question arises whether it is reasonablypracticable to hold such inquiry as is referred to in sub–section (5),the decision thereon of the authority empowered to dismiss or remove him or toreduce him in rank shall be final.
(7) Nothing contained in sub–section(1) shall apply to the members of the Central Secretariat Service or any otherservice or to persons on deputation to the Department referred to in that sub–sectionor to any of its attached or subordinate offices from any Ministry of theCentral Government or from any State Government or from any organisation.]
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1. Section 12A inserted by theFood Corporations (Amendment) Act, 1968 (57 of 1968) Section 2.
2. Substituted for the words,figures, and brackets "subject to the provisions of sub–sections(4), (5) and (6)" by the Food Corporations (Amendment) Act, 1977 (12 of1977) Section 2 (i).
3. Sub-section (4A), (4B) and(4C) inserted by the Food Corporations (Amendment) Act, 1977 (12 of 1977)Section 2 (ii).
4. Substituted for the formerclause (b) by the Food Corporations (Amendment) Act, 1982 (53 of 1982) Section2 (a).
5. The Proviso inserted by theFood Corporations (Amendment) Act, 1982 (53 of 1982) Section 2 (b).
6. Substituted for the words"Provided that" by the Food Corporations (Amendment) Act, 1982 (53 of1982) Section 2 (b).
13.Functions of Corporation: (1) Subject to the provisionsof this Act, it shall be the primary duty of the Corporation of undertake thepurchase, storage, movement, transport, distribution and sale of foodgrains andother foodstuffs.
(2) Subject as aforesaid, theCorporation may also, with the previous approval of the Central Government,–
(a) promote by such means as itthinks fit the production of foodgrains and other foodstuffs;
(b) set up, or assist in thesetting up of, rice mills, flour mills and other undertakings for theprocessing of foodgrains and other foodstuffs ; and
(c) discharge such otherfunctions as may be prescribed or as are supplemental, incidental orconsequential to any of the functions conferred on it under this Act.
14.Executive Committee andother committees: (1) The board of directors of the Corporation may constitute anExecutive Committee which shall consist of –
(a) the Chairman of the board;
(b) the managing director; and
(c) three other directors, ofwhom one shall be a non –official.
(2) The Chairman of the boardof directors shall be the Chairman of the Executive Committee.
(3) Subject to the generalcontrol, direction and superintendence of the board of directors, the ExecutiveCommittee shall be competent to deal with any matter within the competence ofthe Corporation.
(4) The board of directors mayconstitute such other committees whether consisting wholly of directors or whollyof other persons or partly of directors and partly of other persons as itthinks fit, for such purposes as it may decide.
(5) A committee constitutedunder this section shall meet at such times and places and shall observe suchrules of procedure in regard to the transaction of business at its meetings(including the quorum at meetings) as may be provided by regulations made bythe Corporation under this Act.
(6) The members of a committee(other than the directors of the board) shall be paid by the Corporation suchfees and allowances as may be fixed by it by regulations made under this Actfor attending the meetings of the committee and for attending to any other workof the Corporation.
15.Member of board or committeethereof not to vote in certain cases: A member of the board of directors of theCorporation or a committee thereof who has any direct or indirect pecuniaryinterest in any matter coming up for consideration at a meeting of the board ofdirectors of committee thereof, shall, as soon as possible after relevantcircumstances have come to his knowledge, disclose the nature of his interestat such meeting and the disclosure shall be recorded in the minutes of theboard or the committee, as the case may be, and the member shall not take any partin any deliberation or decision of the board or committee with respect to thatmatter.
CHAPTER III
BOARDS OF MANAGEMENT
16.Boards of Management, theirconstitution and functions: (1) The Central Government may on a request received in thisbehalf from the Central Government or Government concerned or otherwise, bynotification in the Official Gazette, establish a Board of Management for aState or two or more continuous States, if no State Food Corporation isfunctioning in such State or States.
(2) The head office of theBoard of Management shall be at such place the Central Government may, bynotification in the Official Gazette, specify.
(3) The Board of Managementshall consist of –
(a) a Chairman to be appointedby the board of directors of the Food Corporation of India;
(b) the senior –mostexecutive officer of the said Corporation employed at the head office of theBoard of Management; and
(c) not more than ten othermembers to be appointed by the board of directors of the said Corporation.
(4) The members of a Board ofManagement referred to in clauses (a) and (c) of section (3) shall hold officefor a term of two years and shall be eligible for re –appointment andthe other terms and conditions of their appointment shall be such as may beprescribed.
(5) The Board of Managementshall advise the Corporation on such matters as may be generally orspecifically referred to it and shall perform such other functions as theCorporation may delegate to it.
(6) The provisions of sections20, 21 and 25 shall, so far as may be, apply in relation to the members of aBoard of Management as they apply in relation to the members of the board ofdirectors of a State Food Corporation:
Provided that the reference to the GeneralManager in clause(e) of section 20 shall be construed as a reference to theofficer of the Corporation referred to in clause (b) of sub-section (3).
(7) The Food Corporation ofIndia may, after consultation with a Board of Management, appoint such staff asit considers necessary to enable that Board to perform its functions under thisAct.
(8) The Board of Managementmay, by order in writing, authorise any one or more of its members to exerciseand perform, subject to such conditions and limitations, if any, as may bespecified in the order, such of its powers and functions as it may think fit.
(9) The Board of Managementshall follow such procedure as may be provided by regulations made by the FoodCorporation of India under this Act.
(10) Where a Board ofManagement has been established –
(i) for a State, or
(ii) for two or more States,
then such Board shall standdissolved –
(a) in the case referred to inclause (i), on the establishment of a Food Corporation for that State, and
(b) in the case referred to inclause (ii), on the established of such Corporation for any one or more of suchStates.
(11) Where a Board ofManagement stands dissolved under clause (b) of sub-section (10), the CentralGovernment may establish a new Board of Management for the State or States forwhich no Food Corporation has been established.
(12) The expenses of the Boardof Management in the discharge of its functions under Act shall be met by theFoot Corporation of India.
CHAPTER IV
STATE FOOD CORPORATION
17.Establishment of State FoodCorporation: (1) TheCentral Government may, by notification in the Official Gazette and afterconsultation with the Government of a State, establish a Food Corporation forthat State under such name as may be specified in the notification.
(2) A State Food Corporationestablished under sub-section (1) shall be a body corporate by the namenotified under that sub-section, having perpetual succession and a common sealwith power, subject to the provisions of this Act, to acquire, hold and disposeof property and to contract, and may, by the said name, sue and be sued.
(3) The head office of a StateFood Corporation shall be at such place within the State as may be notified bythe Central Government in the Official Gazette.
(4) Subject to the provisions ofthis Act, a State Food Corporation may perform such of the functions of theFood Corporation of India as that Corporation may delegate to it.
18.Capital of State FoodCorporation: (1) Thecapital of a State Food Corporation shall be such sum not exceeding ten croresof rupees as the Central Government may after consultation with the FoodCorporation of India, fix.
(2) The Central Government may,after such consultation, from time to time increase the capital of the StateFood Corporation to such extent and in such manner as that Government maydetermine.
(3) Such capital shall beprovided –
(a) by the Central Governmentafter due appropriation made by Parliament by law for the purpose, and
(b) by the Food Corporation ofIndia,
19.Management of State FoodCorporation: (1) Thegeneral superintendence, direction and management of the affairs and businessof a State Food Corporation shall vest in a board of directors which shallconsist of a Chairman, a General Manager and not more than ten other members,all of whom shall be appointed by the Food Corporation of India afterconsultation with the Central Government and the State Government.
(2) The General Manager shall–
(a) exercise such powers andperform such duties as the board of directors may entrust or delegate to him;and
(b) receive such salary andallowances and be governed by such terms and conditions of service as the boardof directors may, in consultation with the Food Corporation of India, fix.
(3) The board of directors, indischarging its functions, shall act on business principles regard to theinterests of procedure and consumer and shall be guided by such instructions onquestions of policy as may be given to it by the Food Corporation of India.
(4) If any doubt arises as towhether a question is or is nor a question of policy, the matter shall bereferred to the Central Government whose decision thereon shall be final.
(5) The members of the board ofdirectors, other than the General Manager, shall be entitled to receive by way ofremuneration or fees such sums as may be prescribed:
Provided that no officialmember shall be entitled to receive any remuneration other than any allowancesadmissible to him under the rules regulating his conditions of services.
(6) The terms of office of, andthe manner of filling casual vacancies among, the members of the board ofdirectors shall be such as may be prescribed.
20.Disqualification for officeof member of board of directors: A person shall be disqualified for being appointed as, and forbeing, a member of the board of directors of a State Food Corporation –
(a) if he is, or at any timehas bee, adjudicated insolvent or has suspended payment of his debts or hiscompounded with his creditors; or
(b) if he is of unsound mindand stands so declared by a competent court; or
(c) if he is or has beenconvicted of any offence which in the opinion of the Central Governmentinvolves moral turpitude; or
(d) if he has been removed ordismissed from the service of the Government or a corporation owned orcontrolled by the Government; or
(e) except in the case of theChairman or the General Manager, if he is a salaried official of the FoodCorporation of India or a State Food Corporation.
21.Removal and resignation ofmembers of board of directors: (1) The Food Corporation of India may, at any time, afterconsultation with the State Food Corporation, remove the General Manager fromoffice after giving him a reasonable opportunity of showing cause against theproposed removal.
(2) The Board of directors of aState Food Corporation may remove from office any member of that board who –
(a) is or has become subject toany of the disqualification mentioned in section 20, or
(b) is absent without leave ofthe board of directors from more than three consecutive meetings thereofwithout cause sufficient, in the opinion of the board, to exonerate hisabsence.
(3) A member of such board mayresign his office by giving notice thereof in writing to the Food Corporationof India and on such resignation being accepted, he shall be deemed to havevacated his office.
22.Meetings: (1) The board of directors ofa State Food Corporation shall meet at such times and places and shall observesuch rules of procedure in regard to the transaction of business at itsmeetings (including the quorum at meetings) as may be provided by regulationsmade by that Corporation under this Act.
(2) The Chairman of the boardof directors or, if for any reason he is unable to attend any meeting, anyother member of the board elected by the members of the board present at themeeting, shall preside at the meeting.
(3) All questions which come upbefore any meeting of the board of directors shall be decided by a majority ofthe votes of the members present and voting, and, in the event of an equalityof votes, the Chairman or in his absence, the person presiding shall have andexercise a second or casting vote.
23.Appointment of officers,etc., and their conditions of service: (1) A State Food Corporation may appoint such officersand other employees as it considers necessary for the efficient performance ofits functions.
(2) Every person employed by aState Food Corporation under this Act shall be subject to such conditions ofservice and shall be entitled to such remuneration as may be determined byregulations made by that Corporation under this Act.
24.Executive Committee andother committees: (1) The Board of directors of a State Food Corporation mayconstitute and Executive Committee which shall consist of –
(a) the Chairman of the boardof directors;
(b) the General Manager; and
(c) three other members of theboard of directors, of whom one shall be a non –official.
(2) The Chairman of the boardof directors shall be the Chairman of the Executive Committee.
(3) Subject to the generalcontrol, direction and superintendence of the board of directors, the ExecutiveCommittee shall be competence of the State Food Corporation.
(4) The board of directors mayconstitute such other committees, whether consisting wholly of members of theboard or wholly of other persons or partly of such members and partly of otherpersons as it thinks fit, for such purposes as it may decide.
(5) A committee constitutedunder this section shall meet at such times and places and shall observe suchrules of procedure in regard to the transaction of business at its meeting(including the quorum at meetings) as may be provided by regulations made bythe State Food Corporation under this Act.
(6) The members of a committee(other than the directors of the board) shall be paid by the State FoodCorporation such fees and allowances as may be fixed by it by regulations madeunder this Act, for attending the meetings of the committee and for attendingto any other work of that Corporation.
25.Member of board or committeethereof not to vote in certain cases: A member of the board of directors of a State FoodCorporation or a committee thereof who has any direct or indirect pecuniaryinterest in any matter coming up for consideration at a meeting of the board ofdirectors or committee thereof, shall, as soon as possible after relevantcircumstances have come to his knowledge, disclose the nature of his interestat such meeting and the disclosure shall be recorded in the minutes of theboard or the committee, as the case may be, and the member shall not take anypart in any deliberation or decision of the board or the committee with respectto that matter.
CHAPTER V
FINANCE, ACCOUNTS AND AUDIT
26.Submission of programme ofactivities and financial estimates: (1) A Food Corporation shall, before thecommencement of each year, prepare a statement of programme of its activitiesduring the forthcoming year as well as a financial estimate in respect thereof.
(2) The statement preparedunder sub-section (1) shall, not less than three months before the commencementof each year, be submitted for approval –
(a) in the case of the FoodCorporation of India, to the Central Government;
(b) in the case of a State FoodCorporation, to the Food Corporation of India.
(3) The statement and thefinancial estimate of a Food Corporation referred to in sub-section (1) may,with the approval of the Central Government, in the case of the FoodCorporation of India, or with the approval of the Food Corporation of India inthe case of a State Food Corporation, be revised by the Food Corporation.
27.Borrowing powers of FoodCorporation: 1 [(1) A Food Corporation may, for the purpose of carrying out itsfunctions under this Act, –
(a) take advances againststocks of foodgrains or other foodstuffs held by it, or borrow money —
(i) from any schedule bank, or
(ii) from any other bank orfinancial institution approved by the Central Government in this behalf, or
(iii) from any otherauthority, organisation or institution orfrom the public on such terms and conditions as may be approved by the CentralGovernment; or
(b) issue and sell bonds anddebentures carrying interest at such rates as may be fixed by the CentralGovernment at the time the bonds or debentures are issued:
2 [Provided that the amountborrowed by a Food Corporation under clause (b) shall not at any time exceedten times the paid-up capital and the reserve fund established under section33.]]
(2) TheCentral Government may guarantee the loans and advances taken by a FoodCorporation under sub-section (1) as to the re –payment of principal andthe payment of interest thereon and other incidental charges.
2 [(3) AFood Corporation may, for the purpose of carrying out its functions under thisAct, also borrow money from the Central Government, and that Government may,after due appropriation made by Parliament by law in this behalf, pay to theFood Corporation such sums of money by way of loan on such terms and conditionsas that Government may determine.]
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1.Substituted for the original Sub-section (1) by the Food Corporations(Amendment) Act, 1988 (36 of 1988) Section 2.
2.Substituted for the former Proviso by the Food Corporations (Amendment) Act, 2001 (27 of 2001)Section 2 (w. r. e. f. 22-5-2001).
2.Sub-section (3) inserted by the Food Corporations (Amendment) Act, 1972 (67 of1972) Section 5.
28.Lendingby Food Corporation on security of food grains: A Food Corporation may lendor advance money to any person engaged in the production of food grains uponthe security of food grains or such other security as may be prescribed, forany purpose connected with such production.
29.Powerto enter into agreement for purchase of foodgrains after harvest: (1) AFood Corporation may enter into agreement with any grower of food crops for thepurchase of foodgrains after the harvest of such crops and any such agreementmay provide that any sum payable by the Corporation to the grower under suchagreement shall be payable to any scheduled bank or other financing agencynominated by the grower in this behalf to such extent as may be specified inthe agreement.
(2) Thescheduled bank or other financing agency referred to in sub-section (1) may, onthe basis of any agreement referred to in that sub-section, lend money to agrower of food crops who has entered into such agreement.
30.Guaranteeby Food Corporation: A Food Corporation may, upon such termsand conditions as it may think fit, guarantee any loan referred to insub-section (2) of which is re –payable within a period not exceedingfive years.
31.Fundsof Food Corporation: (1) A Food Corporation shall have its ownfund and all receipts of the Corporation shall be credited thereto and allpayments of the Corporation shall be met therefrom.
(2)Such fund shall be applied for meeting all administrative expenses of the FoodCorporation and for carrying out the purposes of this Act.
32.Investmentof funds: A FoodCorporation may invest its funds in the securities of the Central Government orany State Government or in such other manner as may be prescribed.
33.Allocationof surplus profits: (1) A Food Corporation shall establish areserve fund to which shall be credited every year such portion of its annualprofits as that Corporation thinks fit.
(2)After making provision for such reserve fund and for bad and doubtful debts,depreciation in assets and all other matters which are usually provided for bycompanies registered and incorporated under the Companies Act, 1956 (1 of1956), the balance of its annual net profits shall be paid –
(a) inthe case of the Food Corporation of India, to the Central Government, and
(b) inthe case of a State Food Corporation, to the Central Government and the FoodCorporation of India in the same proportion as the capital provided by them.
1 [34.Accountsand audit: (1) A Food Corporationshall maintain proper accounts and other relevant records and prepare an annualstatement of accounts including the profit and loss account and the balancesheet in such form as may be prescribed by the Central Government inconsultation with the Comptroller and Auditor-General of India.
(2) Theaccounts of a Food Corporation shall be audited annually by the Comptroller andAuditor-General of India and any expenditure incurred by him in connection withsuch audit shall be payable by the Food Corporation to the Comptroller andAuditor-General of India.
(3) TheComptroller and Auditor-General of India and any person appointed by him inconnection with the audit of the accounts of a Food Corporation shall have thesame rights, privileges and authority in connection with such audit as theComptroller and Auditor-General has in connection with the audit of Governmentaccounts and, in particular, shall have the right to demand the production ofbooks, accounts, connected vouchers and other documents and papers and toinspect any office of the Food Corporation.
(4) Theaccounts of a Food Corporation as certified by the Comptroller andAuditor-General of India or any other person appointed by him in this behalftogether with the audit report thereon shall be forwarded annually by theComptroller and Auditor-General of India to, –
(i) theFood Corporation concerned;
(ii)where the accounts relate to a State Food Corporation, also to the FoodCorporation of India;
(iii)the Central Government,
andthat Government shall, as soon thereafter as may be, cause the same to be laidbefore both Houses of Parliament.]
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1.Substituted for the original Section 34 by the Food Corporations (Amendment)Act, 2000 (12 of 2000) Section 2.
35.Annualreport on the working of Food Corporation: (1) A Food Corporationshall, as soon as possible after the end of each year, submit to the CentralGovernment an annual report on the working and affairs of the Corporation.
(2) TheCentral Government shall, as soon as may be after the receipt of such report,cause such report and the audit report received under section 34 1[together with any comments thereon or supplement thereto by the Comptrollerand Auditor–General of India] to be laid before both Houses ofParliament.
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1.Inserted by the Food Corporations (Amendment) Act, 1972 (67 of 1972) Section 7.
CHAPTER VI
MISCELLANEOUS
36.Vacancies,etc., not to invalidate acts or proceedings of Food Corporation, etc: (1) Noact or proceeding of a Food Corporation or a committee thereof or a Board ofManagement shall be invalid by reason only of the existence of any vacancy in,or any defect in the constitution of, the board of directors of the FoodCorporation or such committee or Board of Management.
(2) Noact done by any person acting in good faith as a member of a board of directorsof a Food Corporation or of a Board of Management shall be deemed to be invalidby reason only of his disqualification for being appointed as, or for being, amember of such board of directors or Board of Management.
37.Delegation: A FoodCorporation may, by general or special order in writing, delegate to theChairman or any other member of the board of directors or the Secretary orother officer of the Corporation, subject to such conditions and limitations,if any, as may be specified in the order, such of its powers and functionsunder this Act as it may deem necessary.
38.Declarationof fidelity and secrecy: Every director, member of an AdvisoryCommittee or other committee, auditor, officer or other employee of a FoodCorporation and every member of a Board of Management and its staff shall,before entering upon his duties, make a declaration of fidelity and secrecy inthe form set out in the Schedule.
39.Indemnityof directors: (1) Every member of the board of directors of a FoodCorporation and of a Board of Management shall be indemnified by theCorporation against all losses and expenses incurred by him in the discharge ofhis duties except such as are caused by his own wilful act or default.
(2) Amember of the board of directors of a Food Corporation or a Board of Managementshall not be responsible for any other member or for any officer or otheremployee of the Corporation or Board of Management or for any loss or expenseresulting to the Corporation from the insufficiency or deficiency of value of,or title to, any property or security acquired or taken on behalf of the Corporationin good faith, or by the insolvency or wrongful act of any person underobligation to the Corporation or by anything done in good faith, in theexecution of the duties of his office or in relation thereto.
40.Protectionof action taken under this Act: No suit or other legal proceeding shalllie against a Food Corporation or any member of the board of directors thereofor any officer or other employee thereof or any member of a Board of Managementor its staff or any other person authorised by a Food Corporation or a Board ofManagement to discharge any functions under this Act for any loss or damagecaused or likely to be caused by anything which is in good faith done orintended to be done in pursuance of this Act.
41.offences: (1)Whoever, without the consent in writing of a Food Corporation, uses its name inany prospectus or advertisement, shall be punishable with imprisonment for aterm which may extend to six months, or with fine which may extend to onethousand rupees, or with both.
(2) Nocourt shall take cognizance of any offence under sub-section (1) except on acomplaint in writing by an officer authorised in this behalf by the FoodCorporation concerned.
42.Provisionrelating to income -tax, super -tax, etc: For the purposes of the Income–tax Act, 1961 (43 of 1961), or any other enactment for the time being inforce relating to income –tax, super –tax or any other tax onincome, profits or gains, a Food Corporation shall be deemed to be a companywithin the meaning of the Income –tax Act, 1961, and shall be liable totax accordingly on its income, profits and gains.
43.Windingup of Food Corporation: No provision of law relating to thewinding up of companies or corporations shall apply to a Food Corporation andit shall not be placed in liquidation save by order of the Central Governmentand in such manner as that Government may direct.
44.Powerto make rules: (1) the Central Government may, by notification inthe Official Gazette, make rules to carry out the purposes of this Act.
(2)Without prejudice to the generality of the foregoing power, such rules mayprovide for –
(a) theterms of office of, and the manner of filling casual vacancies among, and theother terms and conditions of appointment of, the directors of the Corporation;
(b) thecomposition of Advisory Committees and the terms and conditions of services ofmembers thereof;
(c) theadditional functions which the Corporation may perform;
(d) theremuneration or fees payable to the members of directors of a State FoodCorporation and the term of office of, and the manner of filling casualvacancies among, such members;
(e) thesecurities (other than foodgrains) upon which a Food Corporation may lend oradvance money;
(f) themanner in which a Food Corporation may invest its funds;
(g) theform of the annual statement of accounts and the balance –sheet to theprepared by a Food Corporation;
(h) anyother matter which has to be or may be prescribed.
(3)Every rule made by the Central Government under this section be laid as soon asmay be after it is made, before each House of Parliament while it is in sessionfor a total period of thirty days 1 [whichmay be comprised in one session or in two or more successive sessions, and ifbefore the expiry of the session immediately following the session or thesuccessive session aforesaid,], both Houses agree in making any modification inthe rule or both Houses agree that the rule should not be made, the rule shallthereafter have effect only in such modified form or be of no effect, as thecase may be; so however that any such modification or annulment shall bewithout prejudice to the validity of anything previously done under that rule.
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1.Substituted for the words "which may be comprised in one session or in twosuccessive sessions, and it, before the expiry of the session in which it is solaid or the session immediately following" by the Food Corporations(Amendment) Act, 1982 (53 of 1982) Section 3.
45.Powerof Food Corporation to make regulations: (1) A Food Corporation may,with the previous sanction of the Central Government, by notification in theOfficial Gazette, make regulations not inconsistent with this Act and the rulesmade thereunder, to provide for all matters for which provision is necessary orexpedient for the purpose of giving effect to the provisions of this Act.
1 [(1A)The power to make regulations under this section shall include the power togive retrospective effect from a date not earlier than the date of commencementof this Act, to the regulations or any of them but no retrospective effectshall be given to any regulation so as to prejudicially affect the interests ofany person to whom such regulation may be applicable]
(2)Without prejudice to the generally of the foregoing power, such regulations mayprovide for –
(a) themethods of appointments, the conditions of service and the scales of pay of theofficers and employees of a Food Corporation, other than the Secretary of theFood Corporation of India;
(b) theduties and conduct of officers and employees of a Food Corporation, other thanthe Secretary aforesaid;
(c) thefunctions and duties which may be entrusted or delegated to the managingdirector or, as the case may be, the General Manager, of a Food Corporation;
(d) thetimes and places at which meetings of a Food Corporation or any committeethereof shall be held and the procedure to be followed thereat;
(e) thefees and allowances payable to the members of a committee under sub-section (6)of section 14 of sub-section (6) of section 24;
(f)generally, the efficient conduct of the affairs of a Food Corporation.
(3) TheCentral Government may, by notification in the Official Gazette, rescind anyregulation which it has sanctioned and thereupon such regulation shall cease tohave effect.
(4) Anyregulation which may be made by the Food Corporation of India under this Actmay be made by the Central Government within three months from theestablishment of that Corporation and any regulation which may be made by aState Food Corporation under this Act may be made by the Food Corporation ofIndia within three months from the establishment of such State FoodCorporation; and any regulation so made may be altered or rescinded by the FoodCorporation concerned in the exercise of its powers under this Act.
2 [(5)Every regulation made under this act shall be laid, as soon as may be after itis made before each House of Parliament while it is in session, for a totalperiod of thirty days which may be comprised in one session or in two or moresuccessive sessions, and if, before the expiry of the session immediatelyfollowing the session or the successive sessions aforesaid both Houses agree inmaking any modification in the regulation or both Houses agree that the regulationshould not be made the regulation shall thereafter have effect only in suchmodified form or be of no effect, as the case may be so however, that any suchmodification or annulment shall be without prejudice to the validity ofanything preciously done under that regulation.]
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1.Sub-section (1A) inserted by the Food Corporations (Amendment) Act, 1982 (53 of1982) Section 4 (a).
2.Sub-section (5) inserted by the Food Corporations (Amendment) Act, 1982 (53 of1982) Section 4 (b).
1 [46.Validation:No regulation made or purporting to have been made with retrospectiveeffect, under section 45 before the commencement of the Food Corporations(Amendment) act, 1982 shall be deemed to be invalid or ever to have beeninvalid merely on the ground that such regulation was made with retrospectiveeffect and accordingly every such regulation and any action taken or thing donethereunder shall be as valid and effective as if the provisions of section 45as amended by the Food Corporations (Amendment) Act, 1982, were in force at allmaterial times when such regulation was made or action or thing was taken ordone.]
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1.Section 46 inserted by the Food Corporations (Amendment) Act, 1982 (53 of 1982)Section 5.
THE SCHEDULE
(See section 38)
DECLARATION OF FIDELITY AND SECRECY
I, ______________, declare that I willfaithfully, truly and to the best of my judgement, skill and ability executeand perform the duties which are required of me as director, member of ______________FoodCorporation of India committee, officer, employee or auditor (as the case maybe) of the ______________or as member of the Board of Management at –FoodCorporation under the Food Corporation of India and which properly relate tothe office or position in or in relation to that Corporation held by me.
Ifurther declare that I will not communicate or allow to be communicated to anyperson not legally entitled thereto any information relating to the affairs ofthe said Corporation or to the affairs of any person having any dealing withthe said Corporation nor will I allow any person not legally entitled asaforesaid to inspect or have access to any books or documents belonging to, orin the possession of, the said Corporation and relating to the business of thesaid Corporation or the business of any person having any dealing with the saidCorporation.
(Signature) ______________
Signedbefore me.
