STATE AGRICULTURAL CREDIT CORPORATIONS ACT

THE STATE AGRICULTURAL CREDIT CORPORATIONSACT, 1968

ACT No. 60 OF 1968

29th December, 1968

An Act to provide for the establishment inthe States and Union territories of Agricultural Credit Corporation and formatters connected therewith or incidental thereto

BE it enacted by Parliament in theNineteenth Year of the Republic of India as follows: –

CHAPTER I

PRELIMINARY

1.Short title and commencement: (1) ThisAct may be called the State Agricultural Credit Corporations Act, 1968

(2) It shall come into force on such dateas the Central Government may, by notification in the Official Gazette,appoint, and different dates may be appointed for different States or fordifferent Union territories.

2.Definitions:In this Act, unless thecontext otherwise requires, –

(a) "agricultural marketingsociety" means a co-operative society the objects of which include themarketing of agriculture produce;

(b) "agricultural operation"includes animal husbandry, dairy farming, pisciculture and poultry farming.

Explanation: The expression"pisciculture" includes the development of fisheries, both inland andmarine, catching of fish and all activities connected therewith or incidentalthereto;

(c) "agricultural processingsociety" means a co-operative society the objects of which include theprocessing of agricultural produce;

(d) "agricultural produce"includes the produce of an agricultural operation;

(e) "appropriate Government"means; –

(i) in relation to any Corporationestablished in a Union territory, the Central Government, and

(ii) in relation to any Corporationestablished at any other place, the State Government.

(f) "banking company" has themeaning assigned to it in clause (c) of section 5 of the Banking RegulationAct, 1949 (10 of 1949);

(g) "Board" means the Board ofdirectors of the Corporation;

(h) "co-operative farmingsociety" means a co-operative society the objects of which include thecultivation of land on a co-operative basis;

(i) "Corporation", in relation toa State or Union territory, means the Agricultural Credit Corporationestablished under section 3 in that State or Union territory, as the case maybe;

1 [(ii) "corresponding new bank"means a corresponding new bank constituted under section 3 of the BankingCompanies (Acquisition and Transfer of Undertakings) Act, 1970;]

(j) "director" means member ofthe Board;

(k) "Food Corporation" means theFood Corporation of India established under the Food Corporations Act, 1964(37of 1964);

(l) "prescribed" means prescribedby rules made under this Act;

(m) "Reserve Bank" means theReserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2of 1984);

(n) "subsidiary banks" has themeaning assigned to it in the State Bank of India (Subsidiary Banks) Act,1959(38 of 1959);

(o) "Central Co-operative Bank","Co-operative Society", "Primary Agricultural CreditSociety", "Scheduled Bank", "State Bank" and"State Co-operative Bank", have the meanings respectively assigned tothem in section 2 of the Reserve Bank of India Act, 1934(2 of 1934).

____________________

1. Clause (ii) inserted by the BankingCompanies (Acquisition and Transfer of Undertakings) Act, 1969 (22 of 1969)Section 25 (5) (a).

CHAPTER II

INCORPORATION OF STATE AGRICULTURAL CREDITCORPORATION AND THEIR CAPITAL

3.Establishment of State AgriculturalCredit Corporation: (1) The appropriate Government may, by notification in theOfficial Gazette, establish in any State or Union territory an AgriculturalCredit Corporation under such name as may be specified in the notification;

Provided that no such Corporation shall beestablished in any State or Union territory other than the States of Assam,Bihar, Orissa, Rajasthan and West Bengal and the Union territories of Manipurand Tripura, except with the previous approval of the Central Government and nosuch approval shall be given by the Central Government except afterconsultation with the Reserve Bank.

(2) The Corporation established under thisAct shall be a body corporate by the name specified in the notificationreferred to in sub-section (1), 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 that name sue or be sued.

4.Head office and other offices: (1) TheCorporation shall establish head office at such place in the State or Unionterritory as the appropriate Government may, after consultation with theReserve Bank, specify;

(2) The Corporation may, after consultationwith the appropriate Government, establish offices or agencies at other placesin the State or Union territory, as the case may be.

5.Share capital and share holders: (1) Theauthorised capital of each Corporation shall be such sum as the appropriateGovernment may initially fix but it shall, in no case, be less than one crorerupees or more than five crores of rupees;

Provided that where the authorised capitalinitially fixed is less than five crores of rupees, the appropriate Governmentmay, from time to time, increase the authorised capital to such sum notexceeding five crores of rupees.

Provided further that where the appropriateGovernment is not the Central Government, the initial fixation of theauthorised capital and any subsequent increase or reduction thereof, shall bemade with the prior approval of the Central Government

(2) The authorised capital of eachCorporation shall be divided into such number of shares as the appropriateGovernment may determine and shall be issued as fully paid-up shares to the partiesmentioned in sub-section (3) at such times and in such manner and to suchextent as the appropriate Government may determine and each of such sharesshall have the same face value.

(3) Out of the capital issued undersub-section (2) –

(a) in the case of a Corporationestablished in a State, the Central Government shall subscribe for thirtypercent of the share capital, and in the case of a Corporation shall subscribefor fifty percent of the share capital;

(b) the Reserve Bank shall subscribe fortwenty percent of the share capital;

Provided that none of the said partiesshall subscribe for more than fifteen percent, of the share capital.

(4) The parties referred to in sub-section(3) shall subscribe for the shares before such date as may be specified in thisbehalf by the Central Government by notification in the Official Gazette.

(5) Subject to the provisions ofsub-section (3), the Central Government shall determine the number of shareswhich are to be allotted to the parties referred to in clause (d) of thatsub-section;

Provided that if any of the partiesreferred to in clause (d) of sub-section (3) fails to subscribe, by the datespecified by the Central Government under sub-section (4), for any shareallotted to it, such share shall be subscribed for by the Central Government,the Reserve Bank and the appropriate Government in such proportions as may bedetermined by the Central Government;

Provided further that the shares subscribedfor by the Central Government, the Reserve Bank and the appropriate Government,in pursuance of the provisions of the foregoing proviso, may be transferred toany party who is eligible under clause (d) of sub-section (3) to subscribe forsuch shares in the first instance, so, however, that the total number of sharesheld by any of the parties referred to that clause does not exceed fifteenpercent, of the share capital of the Corporation

6.Restrictions on transfer of shares: Saveas otherwise provided in the second proviso to sub- section (5) of section 5,the shares of the Corporation shall not be transferable.

CHAPTER III

MANAGEMENT OF THE CORPORATION

7.Management: (1) The generalsuperintendence, direction and management of the affairs and business of theCorporation shall vest in a Board of directors who may be exercised all thepowers and discharge all the functions which may be exercised or discharged bythe Corporation other than those which are expressly directed or required bythis Act to be done by the Corporation in general meeting.

(2) The Board in discharging its functionsshall act on business principles, regard being had to public interest.

8.Corporation to be guided by directions ofCentral Government: In the discharge of its functions, the Corporation shall beguided by such directions in matters of policy involving public interest as theCentral Government may, in consultation with the Reserve Bank, give to it inwriting and, if any question arises whether a direction relates to a matter ofpolicy involving public interest, the decision of the Central Governmentthereon shall be final.

9.Constitution of Board: The Board ofdirectors of the Corporation shall consist of the following, namely:-

(a) one director to be nominated by theCentral Government who shall be the Chairman of the Board;

(b) two directors nominated by theappropriate Government, one of whom shall be a person who has special knowledgeof co- operation and who is not an employee of the Central or State Governmentor of the Reserve Bank, State Bank, subsidiary bank 1 [corresponding new bank],banking company, or Food Corporation;

(c) one director to be nominated by theReserve Bank;

(d) two directors to be elected in suchmanner as may be prescribed by the parties subscribing for shares in pursuanceof the provisions of clause (d0 of sub- section (3), and sub- section (5) ofsection 5;

(e) a managing director, to be appointed bythe Central Government and, except in the case of first appointment, afterconsultation with the Board:

Provided that, in appointing a managing directorof a Corporation established in a State, the Central Government may alsoconsult the Government of that State.

____________________

1. Inserted by the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) Section 20 (5)(b).

10.Managing director: (1) The managingdirector shall –

(a) be a whole – time officer of theCorporation;

(b) perform such duties as the Board may,by regulations or otherwise, assign to him;

(c) hold office for such term, notexceeding three years, as the Central Government may specify at the time of theappointment and be eligible for re- appointment;

(d) receive such salary and allowances andbe governed by such terms and conditions of service as the Central Governmentmay –

(i) in the case of first appointmentdetermine, or

(ii) in the case of any subsequentappointment, determine after consultation with the Board.

(2) The Central Government may, afterconsultation with the Board and for sufficient cause, remove the managingdirector from office.

Provided that no managing director shall beso removed unless he has been given an opportunity of showing cause against hisremoval.

(3) If the managing director is byinfirmity or otherwise rendered incapable of carrying out his duties or is absenton leave or otherwise in circumstances not involving the vacation of hisappointment, the Central Government may, after consultation with the Board,appoint another person to act in his place during his absence.

11.Term of office of directors other thanmanaging director: (1) A nominated director, other than the managing director,shall hold office during the pleasure of the authority nominating him and theperiod of such office, unless terminated earlier, shall be two years.

Provided that a nominated director shall beeligible for renomination.

(2) An elected director shall hold officefor a period of two years from the date of his election;

Provided that an elected director shallcontinue in office until the election of his successor.

12.Disqualifications: No person shall bedirector, who, –

(a) except in the case of the managingdirector, is a salaried official of the Corporation, or

(b) is, or at any time has been, adjudgedinsolvent or has suspended payment of his debts or has compounded with hiscreditors, or

(c) is of unsound mind and stands sodeclared by a competent court or

(d) is or has been convicted of an offencewhich, in the opinion of the Central Government, involves moral turpitude.

13.Vacation of seats of directors: (1) If adirector, –

(a) becomes subject to any disqualificationspecified in section 12, or

(b) is absent without leave of the Boardfor more than three consecutive meeting thereof, his seat shall thereuponbecome vacant,

(2) The managing director or any other directormay resign his office by giving notice thereof in writing to the authority bywhich he was appointed or nominated, or if he is a director elected underclause (d) of section 9, to the Board, and on such resignation being accepted,shall be deemed to have vacated his office.

14.Executive Committee and other committeesof the corporation: (1) The Board may constitute an Executive Committeeconsisting of the Chairman of the Board, who shall be the Chairman thereof, themanaging director and two other directors, one of whom shall be a personnominated by the appropriate Government under clause (b) of section 9.

(2) The Executive Committee such othercommittees, whether consisting wholly of directors or wholly of other personsor partly of directors and partly of other persons, as it may think fit forsuch purposes as it may decide.

15.Meetings of Board and committees: (1)The Board or the Executive Committee or any other committee shall meet at suchtimes and places and shall observe such rules of procedure in regard to thetransaction of business at its meetings as may be prescribed.

(2) Three directors personally present atany meeting of the Board and two members personally present at a meeting of acommittee shall be the quorum for such meeting

(3) If, for any reason, the Chairman of theBoard or of any committee is unable to attend any meeting of the Board or theCommittee, as the case may be, the members present at the meeting shall electone of them to preside at the meeting.

(4) If for any reason a director nominatedunder clause (a), clause (b) or clause (c) of section 9 is unable to attend anymeeting of the Board or of any committee if he is a member thereof, theGovernment or the Reserve Bank by which such director was nominated may depute anyother person to attend such meeting and person so deputed shall, for thepurposes of the said meeting be deemed to be a director nominated under clause(a), clause (b) or clause (c), as the case may be, of the said section 9 or amember of the committee concerned.

(5) All questions which may come up beforeany meeting of the Board or a committee shall be decided by a majority of votesof the members present, and in the event of an equality of votes, the Chairmanof the Board of the Committee, as the case may be, or in his absence the personpresiding, shall have a second or casting vote.

16.Directors of Board or members in acommittee not to vote in certain cases: Every director or member of a committeewho has any direct or indirect pecuniary or other interest in any matter comingup for consideration at a meeting of the Board or a committee shall, as soon aspossible, after the relevant facts or circumstances have come to his knowledge,disclose the nature of his interest at such meeting and the disclosure so madeshall be recorded in the minutes of the meeting of the Board or of theCommittee, as the case may be, and no such director or member shall thereaftertake any part in any deliberation or decision of the Board or committee withrespect to that matter nor shall his presence at such meeting be taken intoaccount for the purpose of determining the quorum for the meeting at the timeof such deliberation or voting and if be does vote, his vote shall be void:

Provided that nothing contained in this sectionshall apply to such director or member of a committee by reason only of hisbeing a shareholder holding not more than two per cent of the paid- up capitalin any public company as defined in the Companies Act, 1956, or in any otherCorporation established by any law for the time being in force in India or inany co operative society, with which or to which the Corporation has enteredinto or made, or proposes to enter into or make, a contract, loan, arrangementor proposal.

17.Defects in appointments not toinvalidate acts, etc.: (1) No act or proceeding of the Board or of any of itscommittees shall be questioned or be invalid on the ground merely of theexistence of any vacancy in, or any defect in the constitution of, the Board orthe committee, as the case may be.

(2) No act done by any person acting ingood faith as a director or member of any committee shall be deemed to beinvalid merely on the ground that he was disqualified to be a director ormember or that there was any other defect in his nomination or appointment.

18.Fees and allowances of directors andmembers of committees: Every director and every member of a committee shall bepaid such fees and allowances as the Board may, by regulations, determine, forattending the meetings of the Board or, as the case may be, any of itscommittees, or attending to any other work of the Corporation:

Provided that no fees shall be paid to theChairman, managing director or any other director, if he is an officer of theGovernment, Reserve Bank, State Bank, subsidiary bank, 1 [corresponding newbank], banking company or Food Corporation.

____________________

1. Inserted by the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) Section 20 (5)(b).

CHAPTER IV

BUSINESS AND FUNDS OF THE CORPORATION

19.Business which the Corporation maytransact: Subject to the provisions of this Act, the Corporation may transactthe following kinds of business, namely:-

(a) the granting of loans and advances,repayable within a period, not exceeding five years, to agriculturists,agricultural marketing societies, agricultural processing societies, CentralCo- operative Banks, co- operative farming societies or primary agriculturalcredit societies for agricultural operations or for such other operationsconnected therewith as the Board may by regulations determine;

(b) the drawing, making, accepting,discounting, buying, selling, collecting and dallying in bills of exchange,hundies, promissory notes, coupons, drafts, bills of lading, railway receipts,warrants, debentures, certificates, scripts and other instruments, andsecurities whether transferable or negotiable or not;

(c) the granting and issuing of letters ofcredit and acquiring, holding, issuing in commission, underwriting and dealingin stock, funds, shares, debentures, debenture stock, bonds obligations,securities and investments of all kinds;

(d) the purchasing and selling of bonds,scripts or other forms of securities on behalf of constituents or others, thenegotiating of loans and advances, the receiving of all kinds of bonds, scriptsor valuables on deposit vaults, and collecting and transmitting money andsecurities;

(e) the carrying on of agency business ofany description including the clearing and forwarding of goods, given ofreceipts and discharges;

(f) the entering into contracts ofindemnity, suretyship or guarantee with specific security or otherwise;

(g) receiving in consideration of theservices mentioned in clauses (b), (c), (d), (e) and (f) such commission as maybe agreed upon;

(h) managing or selling of any propertywhich may come into the possession of the Corporation in satisfaction or partsatisfaction of any of its claims;

(i) acquiring or holding of any property orany right, title or interest in any property which may form the security or apart of the security for any loan or advance or which may be connected with anybusiness of the Corporation;

(j) any other kind of business which theCentral Government may, on the recommendation of the Reserve Bank, authorise;

(k) generally the doing of such things andmatters as may be incidental to or consequential upon the discharge of itsfunctions under this Act.

20.Borrowing by the Corporation: Subject tothe provisions of this Act, the Corporation may, for the purposes of carryingout of its functions under this Act, –

(a) re-discount; with or sell to; theReserve Bank or borrow money from that Bank and for that purpose, theCorporation shall be deemed to be a State Co- operative Bank within the meaningof clause 2 (a), clause 2 (b), clause 2 (bb) and clause (4) of section 17, sub-section (2) of section 46A and sub- section (2) of section 46B of the ReserveBank of India Act, 1934 (2 of 1934);

(b) borrow money from the CentralGovernment or the State Government or such other authority or institution asapproved in this behalf by the Central Government, on such terms and conditionsas may be agreed upon.

21.Deposits with the Corporation: TheCorporation may, with the prior approval of the Reserve Bank, accept depositsfrom the appropriate Government, a local authority or any other person whetherincorporated or not.

22.Limits on borrowings and deposits: Theaggregate of the amounts borrowed and deposits accepted by the Corporation andoutstanding shall not at any time exceed ten times the amount of paid- up sharecapital and the reserve fund of the Corporation or, with the prior approval ofthe Central Government, fifteen times the amount of such paid up share capitaland reserve fund.

23.Corporation to maintain two funds: TheCorporation shall establish two separate funds, namely: –

(a) Agricultural Credit (Stabilisation)Fund (hereinafter referred to as Stabilisation Funds), and

(b) Reserve Fund.

24.Stabilisation Fund: (1) To theStabilisation Fund shall be credited such sum, not being less than ten and notmore than fifteen percent, as the Corporation may deem fit from out of its netannual profits before declaring a dividend.

(2) Subject to such conditions as may bespecified by the Board by regulations, the amount lying to the credit of theStabilisation Fund shall be utilised solely for the purpose of making loans oradvances with a view to enabling any co- operative society or other person topay its or his dues in case where, in the opinion of the Corporation, suchsociety or other person is unable to pay such dues in time owing to drought,famine or other natural calamities.

25.Reserve Fund: (1) To the Reserve Fundshall be credited such sums not being more than fifteen percent as the Corporationmay deem fit out of its not annual profits before declaring a dividend.

(2) The amounts lying to the credit of theReserve Fund shall be utilized solely for such purposes as the Board may byregulations specify.

26.Payment of dividend: After makingprovision for bad and doubtful debts, depreciation of assets and all othermatters which are usually provided for by bankers, and after crediting to theStabilisation Fund under section 24 and to the Reserve Fund under section 25,the Corporation may, out of its annual net profits, declare a dividend.

27.Investment of surplus Funds: All moneysbelonging to the Corporation which may not, for the time being be required byit shall be-

(a) deposited with the Reserve Bank or inconsultation with the Reserve Bank with a scheduled Bank, State Co- operativeBank or Central Co-operative Bank; or

(b) invested in the securities of theCentral Government or any State Government or in securities in which a trusteemay invest money under clause (a), clause (b), clause (bb), clause (c) orclause (d) of section 20 of the Indian Trusts Act, 1882 (2 of 1882); or

(c) utilised in such other manner as may beapproved by the Reserve Bank.

28.Recovery of moneys due to theCorporation: Where any amount is due to the Corporation in respect of loans oradvances or other financial accommodation granted by it to any person, theCorporation or any person authorised by it in writing in this behalf, may,without prejudice to any other mode of recovery, make an application to the appropriateGovernment for the recovery of the amount due to it, and if the appropriateGovernment, or such authority, as that Government may specify in this behalf issatisfied after following such procedure as may be prescribed, that any amountid so due it may issue a certificate for that amount to the Collector, and theCollector shall proceed to recover that amount in the same manner and under thesame condition as if it were an arrears of land revenue.

29.Acquisition or transfer by theCorporation of business, assets and liabilities from or to co-operativesocieties: (1) Subject to the provisions of any law relating to co-operativesocieties for the time being in force, the corporation may –

(a) acquire the whole or any part of thebusiness, including the assets and liabilities of a co-operative society;

(b) transfer the whole or any part of itsbusiness, including its assets or liabilities to a co-operative society.

(2) The terms and conditions relating tosuch acquisition or transfer, if agreed upon by the Board and the co-operativesociety concerned shall be submitted to the Reserve Bank for its approval andthat Bank may by order in writing (hereafter in this section referred to as theorder of approval) accord its approval thereto;

Provided that where such acquisition ortransfer involves the acquisition of the assets of the co-operative society ora transfer of the liabilities of the Corporation to the co-operative society,no such approval shall be accorded by the Reserve Bank, unless it is satisfiedthat –

(i) the co-operative society has givennotice of the proposed acquisition or transfer, in such manner as may beprovided under the law relating to co-operative societies applicable to it, toall its members and creditors, giving them the opinion, of demanding payment oftheir share or dues, as the case may be, and

(ii) all the members and creditors haveassented to the proposal or demand to have assented thereto by virtue of anymember or creditor failing to execute his opinion within such period as may bespecified in accordance with such law relating to co-operative societies forthe time being in force.

(3) The terms and conditions as approved bythe Reserve Bank should come into effect from the date specified by the Bank inthis behalf in the order of approval and be binding upon the Corporation andits shareholders and creditors and if such law relating to co-operativesocieties be binding also upon the co-operative society and its shareholdersand creditors.

(4) If for any reason the terms andconditions cannot come into effect on the date specified in the order ofapproval, the Reserve Bank may fix another suitable date for that purpose.

(5) On the date on which the terms andconditions as aforesaid come into effect, the business, assets and liabilitiesof the Corporation, or as the case may be, the co-operative society concerned,shall by virtue of and in accordance with the provisions of aforesaid order ofapproval, and if such law relating to co-operative societies so provides, standtransferred to and become the business, assets and liabilities of theco-operative society or the Corporation, as the case may be.

CHAPTER V

GENERAL MEETING

30.General meetings: (1) A general meeting(in this Act to as an annual general meeting) of the Corporation shall be heldat the Head Office of the Corporation within three months from the date onwhich the annual accounts of the Corporation are closed, and any other generalmeeting may be convened by the Board at any other time;

Provided that the Central Government mayextend the time within which any annual general meeting shall be held, by aperiod not exceeding one month.

(2) The shareholders present at an annualgeneral meeting shall be entitled to discuss the balance-sheet and profit andloss account of the Corporation, the report of the Board on the working of theCorporation for the period covered by the accounts and the auditor’s report onthe balance-sheet and account.

CHAPTER VI

ACCOUNTS AUDIT AND RETURNS

31.Accounts: (1) The balance-sheet andaccounts including the profit and loss account of the Corporation shall beprepared and maintained in such form and manner as maybe prescribed.

(2) The Board shall cause the books andaccounts of the Corporation to be balanced and closed on the thirtieth day ofJune each year.

32.Audit: (1) The accounts of theCorporation shall be audited by an auditor duly qualified to act as auditorunder sub-section (1) of section 226 of the Companies Act, 1956 who shall beappointed by the Board with the previous approval of the Reserve Bank and shallreceive such remuneration from the Corporation as the Board may, with theapproval of the Reserve Bank, fix;

Provided that the first auditor shall beappointed by the Central Government within one month from the establishment ofthe Corporation on such terms and conditions as the Central Government maydetermine;

(2) The auditor so appointed shall heldoffice from the conclusion of the annual general meeting of the Corporationuntil the conclusion of the next annual general meeting;

Provided that the first auditor shall holdoffice until the conclusion of the first annual general meeting.

(3) The Corporation shall supply itsauditor with a copy of its annual balance-sheet and it shall be the duty of theauditor to examine such balance-sheet together with the accounts and vouchersrelating thereto and he shall have a list delivered to him of all books kept bythe Corporation and shall at all reasonable times have access to the books,accounts, vouchers and other documents of the Corporation.

(4) The auditor may, in relation to theaccounts of the Corporation of which he is the auditor, examine any director orany officer or employee of the Corporation and shall be entitled to requirefrom the officers of the Corporation such information and explanation as he maythink necessary for the performance of his duties.

(5) The auditor shall make a report to theCorporation upon the annual balance-sheet and accounts examined by him and inevery such report he shall state whether in his opinion the accounts exhibit atrue and fair view, –

(a) in the case of the balance-sheet, ofthe state of affairs of the Corporation at the end of the year, and

(b) in the case of the profit and lossaccount, of the profit or loss for the year, and, in case he had called for anyexplanation or information from the Board, whether it has been given andwhether it is satisfactory.

(6) Without prejudice to anything containedin the preceding sub-sections, the Comptroller and Auditor-General of Indiamay, if so requested by the Central Government, examine and report upon theaccounts of the Corporation and any expenditure incurred by him in connectionwith such examination and report shall be payable by such Corporation to theComptroller and Auditor-General of India.

33.Returns: (1) The Corporation shallfurnish, from time to time, to the appropriate Government and to the ReserveBank such returns as the appropriate Government or the Reserve Bank mayrequire.

(2) The Corporation shall furnish to allits shareholders, within three months from the date on which the annualaccounts of the Corporation are closed, or within such further time notexceeding one month as the Central Government may specify, a copy of thebalance-sheet as at the close of that year and a profit and loss account forthe year, the auditor’s report and a report of the Board on the working of theCorporation during the year, and copies of the said balance-sheet, profit andloss account and reports shall be published in the Official Gazette.

(3) The Corporation shall furnish astatement in such form as may be prescribed of its assets and liabilities as atthe close of business on the last Friday of each month or if that day is apublic holiday under the Negotiable Instruments Act, 1881, as at the close ofbusiness at the preceding working day, to the Reserve Bank within ten days fromthe date to which the statement relates.

CHAPTER VII

APPLICATION OF CERTAIN ACTS TO THECORPORATION

34.Certain provisions of the Banking RegulationsAct, 1949 to apply to the Corporation: The provisions of sections 8, 9, 20,20A, 21, 23, 24, 26, 34A, 35, [excluding sub-section (4)], 35A, clause (a) ofsub-section (1) of section 36, and sections 46,47,50 and 54 of the BankingRegulation Act, 1949 (10 of 1949), shall apply to or in relation to theCorporation as they apply to or in relation to co-operative banks.

35.Certain provisions of the Reserve Bankof India Act, 1934 to apply to the Corporation: The provisions of sections 18and 42 of the Reserve Bank of India Act, 1934 (2 of 1934), shall apply to or inrelation to the Corporation as they apply to or in relation to a StateCo-operative Bank.

36.Reserve Bank of India Act, 1934 andBanking Regulation Act, 1949, not to apply except as otherwise provided: Saveas otherwise provided in this Act, nothing contained in the Reserve Bank ofIndia Act, 1934 (2 of 1934) and the Banking Regulations Act, 1949 (10 of 1949),shall apply to or in relation to the Corporation.

37.The Bankers Books Evidence Act, 1891 toapply: The Bankers’ Books Evidence Act, 1891(18 of 1891), shall apply to or inrelation to the Corporation as it applies to or in relation to a bank asdefined in section 2 of that Act.

38.Corporation to be deemed to be aco-operative society for the purposes of Income-tax Act, 1961: For the purposeof the Income-tax Act, 1961(43 of 1961), or any other enactment for the timebeing in force relating to any tax on income, profits or gains the Corporationshall be deemed to be a co-operative society.

39.Court, Tribunal, etc., not to requireproduction of report on inspection made by the Reserve Bank: Notwithstandinganything contained in the Indian Evidence Act, 1872 (1 of 1872), or any otherlaw for the time being in force, no Court, Tribunal or other authority shallhave power to require the Corporation, the Reserve Bank or any other officer ofthe Corporation or the Reserve Bank to produce before such Court, Tribunal orother authority the report of any inspection, or any copy thereof, made by theReserve Bank in pursuance of section 35 of the Banking Regulation Act, 1949(10of 1949), as applied to the Corporation under section 34.

CHAPTER VIII

MISCELLANEOUS

40.Declaration of fidelity and secrecy:Every director, member of a committee, auditor, officer or other employee ofthe Corporation shall before entering upon duties, make a declaration offidelity and secrecy in the form set out in the Schedule.

41.Indemnity of director: (1) Everydirector shall be identified by the Corporation against all losses and expensesincurred by him in the discharge of his duties except such as are caused by hisown wilful act or default.

(2) A director shall not be responsible foranything done or committed to be done by any other director or officer or otheremployee of the Corporation or for any loss or expenses resulting to theCorporation by the insufficiency or deficiency of value of, or title to, anyproperty or security acquired or taken on behalf of the Corporation in goodfaith, or by the wrongful act of any auditor or any person under obligation tothe Corporation, or by anything done in good faith in the execution of theduties of his office or in relation thereto.

42.Protection of action taken in goodfaith: No suit or other legal proceeding shall lie against the Corporation orthe Central or State Government or the Reserve Bank or any director or officerof the Corporation or of the Central or State Government or of the Reserve Bankor any other person authorised by the Corporation to discharge any functionsunder this Act, for any loss or damage caused or likely to be caused byanything which is in good faith done or intended to be done in pursuance ofthis Act.

43.Liquidation of the Corporation: (1) Noprovision of law relating to the winding up of companies or corporations shallapply to the Corporation and the Corporation shall not be placed in liquidationsave by order of the Central Government made in consultation with the StateGovernment and in such manner as it may direct.

(2) Without prejudice to the provisions ofsub-section (1), any order made by the Central Government for the liquidationof a Corporation may provide for all matters for effectively winding up theaffairs of the Corporation, including the repayment of capital disposal of anyfund established under this Act, the transfer of the business, property, assetsand liabilities, rights, interests, privileges and obligations of whatevernature of the Corporation to such institution or institutions as the CentralGovernment may direct and payment, receipt or disposal of compensation arisingout of such transfer.

44.Reserve Bank to submit report: TheReserve Bank shall, on the expiry of a period of three years, from the date ofestablished of the Agricultural Credit Corporation in a State or Unionterritory and thereafter at an interval of three years and within such time asthe Central Government may specify, submit a report to that Government as tothe working of the Corporation and forward a copy thereof to the StateGovernment concerned.

45.Staff of the Corporation and delegationof powers: (1) The Corporation may appoint such officers, advisers andemployees as it considers necessary for the efficient performances of itsfunction and determine, by regulations or otherwise, their conditions ofappointment and service and the remuneration payable to them.

(2) The Board may, by general or specialorder, delegate to the Managing Director or to any other officer of theCorporation, subject to such conditions and limitations, if any, as may bespecified, such of its powers and duties under this Act, as it may deemnecessary

46.Power of the Central Government to makerules: (1) The Central Government may, by notification in the Official Gazette,make rules for carrying out the purposes of this Act

(2) In particular and without prejudice tothe generality of the foregoing power, such rules may provide for all or any ofthe following matters, namely: –

(a) functions which shall be discharged bythe Executive Committee

(b) rules of procedure with regard to thetransaction of business at a meeting of the Board.

(c) rules of procedure with regard to thetransaction of business at a meeting of any committee constituted by the Board.

(d) the procedure to be followed by theappropriate Government or the authority specified by the appropriate Governmentfor issuing the certificate under section 28.

(e) the manner in which the general meetingshall be convened, the quorum therefore, the procedure to be followed thereatand the manner in which voting rights may be exercised.

(f) form and manner in which accounts shallbe maintained the balance-sheet and profit and loss account shall be prepared.

(g) form in which statement of assets andliabilities shall be furnished;

(h) any other matter which is required tobe, or may be prescribed;

(3) Every rule made under this sectionshall be laid as soon as may be after it is made, before each House ofParliament while it is in session for a total period of thirty days, which maybe comprised in one session or in two successive sessions, and if before theexpiry of the session in which it is so laid or the session immediatelyfollowing, both Houses agree in making any modification in the rule or bothHouses agree that the rule should not be made, the rule shall thereafter haveeffect only in such modified form or be of no effect as the case may be; so,however, that any such modification or annulment shall be without prejudice tothe validity of anything previously done under that rule.

47.Power of the Board to make regulations:(1) The Board may, after consultation with the Reserve Bank make regulationsnot inconsistent with the provisions of this Act, and the rules madethereafter, to provide for all matters for which provision is necessary orexpedient for the purpose of giving effect to the provisions of this Act.

(2) In particular and without prejudice tothe generality of the foregoing provisions, such regulations may provide forall or any of the following matters, namely; –

(a) duties which the managing directorshall perform;

(b) fees and allowances which may be paidto every director for attending any meeting of the Board or any committeethereof or for attending to any other work of the Corporation;

(c) duties, conduct, salaries and allowancesand conditions of service of officers and other employees of the Corporation;

(d) establishment and maintenance ofprovident and other benefit funds for the employees of the Corporation;

(e) the delegation of powers and functionsto the officers and employees of the Corporation;

(f) the purposes connected withagricultural purposes for which the Corporation may grant loans and advances;

(g) the conditions subject to which theamount in the Stabilisation Fund may be utilised;

(h) the manner in which the amount in theReserve Fund may be utilised;

(i) conditions which the Corporation mayimpose on any loan or advance made by it;

(j) any other matter which is, or may be,necessary for the efficient conduct of the affairs of the Corporation.

(3) Notwithstanding any thing contained insub-section (1), the Reserve Bank may at any time within three months from thecommencement of this Act make regulations with regard to any of the mattersspecified in sub-section (2) but the regulations so made may be rescinded ormodified by the Board in exercise of the powers conferred on it by sub-section(1).

48.Amendment of Act 10 of 1963: In clause(f) of section (2) of the Agricultural Refinance Corporation Act, 1963, aftersub-clause (ii) the following sub-clause shall be inserted, namely;

"(iii) an Agricultural CreditCorporation established under section 3 of the State Agricultural CreditCorporation Act, 1968".

THE SCHEDULE

(See section 40)

I,do hereby declare that I willfaithfully, truly and to the best of my of my judgement, skill and abilityexecute and perform the duties required of me as a director, officer, employeeor auditor (as the case may be) of the Agricultural Credit Corporation andwithin and which properly relate to any office or position in the saidCorporation held by me.

I further declare that I will notcommunicate or allow to be communicated to any person not legally entitledthereto any information relating to the affairs of the Corporation not will Iallow such person to inspect or have access to, any books or documentsbelonging to, or in the possession of, the Corporation and relating to thebusiness of the Corporation.

Signature

Signed before me,

Date…………..