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REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY PART II—Section 2 PUBLISHED BY AUTHORITY

No. 48] NEW DELHI, TUESDAY, NOVEMBER 17, 1964 /KARTIKA 16, 1886

Separate paging is given to this Part in order that it may be filed as a separate compilation

LOK SABHA

The following Bills were introduced in Lok Sabha on the 17th November, 1964: —

BILL NO. 74 OF 1964

A Bill to provide for the establishment of Food Corporations for the purpose of trading in foodgrains and other foodstuffs and for matters connected therewith and incidental thereto.

BE it enacted by Parliament in the Fifteenth Year of the Republic of India as follows: —

CHAPTER I

PRELIMINARY

1. (7) This Act may be called the Food Corporations Act, 1964.

5

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(5) It shall come into force on such date as the Central Govern-

Short title, extent and com- mence- ment.

ment may, by notification in the Official Gazette, appoint.

2. In this Act, unless the context otherwise requires,—

to

Defini- tions.

(a) "Corporation" means the Food Corporation of India established under section 3;

(b) "Food Corporation" means the Food Corporation of India established under section 3 or a State Food Corporation established under section 17;

15

(c) "prescribed" means prescribed by rules made under this Act;

(763)

623 G of I Ex.- 1

2 of 1934.

(d) "scheduled bank" means a bank for the time being In- cluded in the Second Schedule to the Reserve Bank of India Act, 1934;

(e) "State Food Corporation" means a State Food Corpo-

5 ration established under section 17;

(f) "year" means the financial year.

CHAPTER II

THE FOOD CORPORATION OP INDIA

10 Establish- ment of Food Cor. poration of India.

3. (1) With effect from such date as the Central Government may, toy notification in the Official Gazette, specify in this behalf, the Central Government shall establish for the purposes of this Act a Corporation known as the Food Corporation of India.

15 (2) The Corporation shall be a body corporate with the name aforesaid, having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract, and may, by that name, sue and be sued.

Offices and agencies.

20 4- (/) The head office of the Corporation shall be at Madras or at such other place as the Central Government may, by notification in the Official Gazette, specify.

(2) The Corporation may, with the previous approval of the Central Government, establish offices or agencies at other place* in or outside India.

25 Capital of Cor- poration.

5. (7) The original capital of the Corporation shall be such sum not exceeding one hundred crores of rupees as the Central Govern- ment mav flx.

(2) The Central Government may from time to time increase the capital of the Corporation to such extent and in such manner as that Government may determine.

3o (3) Such capital may be provided by the Central Government from time to time after due appropriation made by Parliament by law for the purpose and subject to such terms and conditions as may be determined by that Government.

Manage, merit.

35 6. (7) The general superintendence, direction and management of the affairs and business of the Corporation shall vest in 'a board of directors which may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation under this Act.

"

(2) The board of directors, in discharging its functions, shall act on business principles having regard to public interest and shall be

40

guided by such instructions on. questions of policy as may be given to it by the Central Government.

(3) If any doubt arises as to whether a question is or is not a question of policy, the decision of the Central Government thereon shall be final.

5

7. (V) The board of directors of the Corporation shall consist of Board of directors.

the following, namely: —

(a) a Chairman;

(b) three directors to represent respectively the Ministries 10 of the Central Government dealing with—

(i) food,

(ii) finance, and

(Hi) co-operation;

15

58 of 1962.

(c) the managing director of the Central Warehousing Corporation established under section 3 of the Warehousing Corporations Act, 1962, ex officio;

(d) a managing director;

(e) six other directors.

2C

(2) All the directors of the Corporation other than the 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 and perform such duties as the board of directors may entrust or delegate to him; and

²5

(b) receive such salary and allowances as the board of directors may, with the approval of the Central Government, ftx:

Provided that the first managing director shall receive such salary and allowances as the Central Government may fix.

(4) The term of office of, and the manner of filling casual vacan- 30

cies among, the directors of the Corporation, other than the director referred to in clause (c) of sub-section (1), and the other terms and conditions of appointment of the directors of the Corporation shall, subject to the provisions of sub-section (3), be such as may be prescribed.

35

8. A person shall be disqualified for being appointed as, and (for being, a director of the Corporation—

£>isqua- ]ification for office oi direct tor.

(a) if he is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with his creditors; or

5

(b) if he is of unsound mind and stands so declared by a competent court; or

(c) if he is or has been convicted of any offence which in the opinion of the Central Government involves moral turpi- tude; or

10

(d) if he has been removed or dismissed from the service of the Government or a corporation owned or controlled by the Government; ox

15 (e) except in the case of the chairman or the managing director, if he is a salaried official of the Food Corporation of India or a State Food Corporation.

Removal and resig- nation of directors.

20 9. (/) The Central Government may, at any time, after consulta- tion with the Corporation, remove the managing director from office after giving him a reasonable opportunity of showing cause against the proposed removal.

(2) The board of directors may remove any director from office who—

(a) is or has become subject to any of the disqualifications mentioned in section 8; "r

25 (b) is absent without leave of the board of directors from more than three consecutive meetings thereof without cause sufficient, in the opinion of the board, to exonerate his absence.

30 (.9) A director of the Corporation may resign his office by giving notice thereof in writing to the Central Government and on such resignation being accepted, he shall be deemed to have vacated his • office.

35 Meetings. 10. (I) The board of directors of the Corporation shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the Corporation under this Act.

(2) The Chairman of the board or, If for any reason he is unable to attend any meeting, any other director elected by the directors present at the meeting, shall preside at the meeting.

(3) All questions whicn come up before any meeting of the board shall be decided by a majority of the votes of the 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 A

second or casting vote.5

Advisory Commit- tees.

11. (1) The Central Government may, by notification in the Official Gazette, constitute one or more Advisory Committees con- sisting of such persons and on such terms and conditions aa may be prescribed.

¹⁰ (2) It shall be the duty of any such Advisory Committee to advise the Central Government or the Corporation in regard to any matter connected with the purposes of this Act in respect of which its advice is sought by the Central Government, or, as the case may be, by the Corporation.

¹⁵ (3) The expenses in relation to the Advisory Committees shall be met by the Corporation.

12. (I) The Central Government shall, after consultation with the Corporation, appoint a person to be the Secretary of the Corpo- ration.

20

Officers •nd other em- ployees of Corpora- tion.

(2) Subject to such rules as may be made by the Central Gov- ernment in this behalf, the Corporation may appoint such other officers and employees as it considers necessary for the efficient performance of its functions.

25

(3) The methods of appointment, the conditions of service and the scales of pay of the officers and other employees of the Corporation shall—

(a) as respects the Secretary, be such as may be pres- cribed;

30

(b) as respects the other officers and employees, be such as may be determined by regulations made by the Corporation under this Act.

13. (I) Subject to the provisions of this Act, it shall be the pri- mary duty of the Corporation to undertake the purchase, storage, movement, transport, distribution and sale of foodgrains and other

Function* of Corpora, tion. foodstuffs.35

(2) Subject as aforesaid, the Corporation may also, with the pre- vious approval of the Central Government,—

(a) promote by such means as it think* flt the production of foodgrains and other foodstuffs;

(b) set up, or assist in the setting up of, rice mills, flour mills and other undertakings for the processing of foodgrains and other foodstuffs; and

5 (c) discharge such other functions as may be prescribed or as are supplemental, incidental or consequential to any of the functions conferred on it under this Act.

14- (I) The board of directors of the Corporation may constitute

an Executive Committee which shall consist of—

(a) the Chairman of the board;

Executive Commit- tee and other commit-

JO (b) the managing director; and

tees,

(c) three other directory, of whom one shall be a non-

offlcial. '

(2) The Chairman of the board of directors shall be the Chair-

man of the Executive Committee.

15 (3) Subject to the general control, direction and superintend- ence of the, board of directors, the Executive Committee shall be competent to deal with any matter within the competence of the Corporation.

2O (4) The board of directors may constitute such other commit- tees, whether consisting wholly of directors or wholly of other per- sons or partly of directors and partly of other persons as it thinks fit, for such purposes as It may decide.

• (5) A committee constituted under this section shall meet at

25 such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the Corporation under this Act. i

30 (6) The members of a committee (other than the directors of the board) shall be paid by the Corporation such fees and allowances as may be fixed by it by regulations made under this Act for attend- ing the meetings of the committee and for attending to any other work of the Corporation,

15. A "member of the board of directors of the Corporation or a

35 Member of board or commit- tee thereof not to vote in certain cases.

committee thereof who has any direct or indirect pecuniary. interest in any matter coming up for consideration at a meeting of the board of directors or committee thereof, shall, as soon as possible after rele- vant circumstances have come to his knowledge, disclose the nature of his interest at ?uch meeting and the disclosure shall be recorded in the minutes of the board or the committee, as the case may be, and the member shall not take any part in any deliberation or deci- sion of the board or committee with respect to that mett"r-

40

CHAPTER HI

BOARDS OF MANAGEMENT

16. (1) The Central Government may, on a request received in this behalf from the State Government or Governments concerned or otherwise, by notification in the Official Gazette, establish a 5 Board of Management for a State or two or more contiguous States, if no State Food Corporation is functioning in such State or States.

Boards of manage- ment, their constitu- tion and functions.

(2) The head office of the Board of Management shall be at such place as the Central Government may, by notification In the to Official Gazette, specify.

(3) Th Board of Management shall consist of—

(a) a Chairman to be appointed by the board of directors of the Food Corporation of India;

(b) the senior-most executive officer of the said Corporation 15 employed at the head office of the Board of Management; and

(c) not more than ten other members to be appointed by the board of directors of the said Corporation.

(4) The members of a Board of Management referred to in clauses (a) and (c) of sub-section (3) shall hold office for a term of two 20 years and shall be eligible for re-appointment and the other terms and conditions of their appointment shall be such as may be pres- cribed. I

(5) The Board of Management shell advise the Corporation on such matters as may be generally or specifically referred to it and 2c shall perform such other functions as the Corporation may dele- gate to it.

(6) The provisions of sections 20, 21 and 25 shall, so far as may be, apply in relation to the members of a Board of Management as they apply in relation to the members of the board of directors of j0 a State Food Corporation:

Provided that the reference to the General Manager in clause (e) of section 20 shall be construed as a reference to the officer of the Corporation referred to in clause (b) of sub-section (3).

(7) The Food Corporation of India may, after consultation with a Board of Management, appoint such staff as it considers necessary 35 to enable that Board to perform its functions under this Act.

(8) The Board of Management may, by order in writing, autho- rise any one or more of its members to exercise and perform, sub- ject to such conditions and limitations, if any, as may be specified In 40 the order, auch of its powers and functions as it may think fit

(9) The Board of Management shall follow such procedure as may be provided by regulations made by the Food Corporation of India under this Act.

(70) Where a Board of Management has been established—

5 (i) for a State, or

(ii) for two or more States,

then such Boar'd shall stand dissolved—

(a) in the case referred to in clause (i), on the establish- ment of a Food Corporation for that State, and

10 (b) in the case referred to in clause (ii), on the establish- ment of such Corporation for any one or more of such States.

15 (11) Where a Board of Management stands dissolved under clause (b) of sub-section (70), the Central Government may estab- lish a new Board of Management for the State or States for which no Food Corporation has been established.

(12) The expenses of the Board of Management in the discharge of its functions under this Act shall be met by the Food Corpora- tion of India.¹ I

CHAPTER IV

STATE FOOD CORPORATIONS

2O

17. (1) The Central Government may, by notification in the Official Gazette and after consultation with the Government of a State, establish a Food Corporation for that State under such name as may be specified in the notification.'

'

Establish-

ment of

State

Food

Corpora-

tion.

25

3O 35 Capital of State Food Cor- poration

(2) The Central Government may, after such consultation, from time to time increase the capital of the State Food Corporation to such extent and in such manner QS that Government may determine.

(3) Such capital shall be provided—

-> (1) by the O itral Government after due appropriation made by Parliament by law for the purpose, and

(b) by the Food Corporation of Indie,

in such proportion and subject to such terms and conditions as may be determined by the Central Government.

Manage- ment of State Food Cor- poralion.

¹⁰ 19. (1) The general superintendence, direction and management of the affairs and business of a State Food Corporation shall vest in a boerd of directors which shall consist 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 after consultation J5 with the Central Government end the State Government.

(2) The General Manager shall— I

(a) exercise such powers and perform such duties as the board of directors may entrust or delegate to him; and

(b) receive such salary and allowances and be governed 20 by such terms nnd conditions of service as the board of direc- tors may, in consultation with the Food Corporation of India, fix.¹ I

(3) The board of directors, in discharging its functions, shall act on business principles having regard to public interest and shall he 25 guided by such instructions on questions of policy as may be given to it by the Food Corporation of India.

(4) If any doubt arises as to whether a question is or is not a question of policy, the matter shall be referred to the Central Gov- ernment whose decision thereon shall be final.

30 (5) The members of the board of directors, other than the General Manager, shall be entitled to receive by way of remunera- tion or fees such sums as may be prescribed:

Provided that no official member shall be entitled to receive any remuneration other than any allowances admissible to him under 35 the rules regulating his conditions of service.

• (6) The term of office of, and the manner of filling casual vacan- cies among, the members of the board of directors shall be such as may be prescribed.

20. A person shall be disqualified for being appointed as, and for being, a member of the board of directors of a State Food Cor poration—

(a) if he is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with 5 his creditors; or

Disquali- fication for office of member of board of direc- tors.

(b) if he is of unsound mind and stands so declared by a competent court; or

(c) if he is or has been convicted of any offence which in the opinion of the Central Government involves moral turpi- Io tude; or

(d) if he has been removed or dismissed from the service of the Government or a corporation owned or controlled by the Government; or

(e) except in the case of the Chairman or the General ij Manager, if he is a salaried official of the Food Corporation of India or a State Food Corporation.

21. (1) The Food Corporation of India may, at any time, after consultation with the State Food Corporation, remove the General Manager from office after giving him a reasonable opportunity of ²O showing cause against the proposed removal.

(2) The board of directors of a State Food Corporation may re- Removal and re- signation of mem- bers of board of directors,

move from office any member of that board who—

(a) is or has become subject to any of the disqualifications mentioned in section 20, or

25

(b) is absent without leave of the board of directors from more than three consecutive meetings thereof without cause sufficient, in the opinion of the board, to exonerate his absence.

(3) A member of such board may resign his office by giving notice thereof in writing to the Food Corporation of India and on 30 such resignation being accepted, he shall be deemed to have vacated his office.

Meetings, 22. (1) The board of directors of a State Food Corporation shall meet at such times and places and shall observe such rules of proce- dure in regard to the transaction of business at its meetings (in- 35 eluding the quorum at meetings) as may be provided by regulations made by that Corporation under this Act.

(2) The Chairman of the board of directors or, if for any reason he is unable to attend any meeting, any other member of the board elected by the members of the board present at the meeting, shall preside at the meeting.

(3) All questions which come up before any meeting of the board of directors shall be decided by a majority of the votes of the members present and voting, and, in the event of an equality of votes, the Chairman or his absence, the person presiding shall have and exercise a second or casting vote.

10 23. (1) A State Food Corporation may appoint such officers and other employees as it considers necessary for the efficient perform- ance of its functions.

Appoint- ment of officers, etc., and their condi- tions of service.

15

(2) Every person employed by a State Food Corporation under this Act shall be subject to such conditions of service and shall be entitled to such remuneration as may be determined by regulations made by that Corporation under this Act.

24. (/) The board of directors of a State Foo 1 Corporation may

constitute an Executive Committee which shall consist of—

(a) the Chairman of the board of directors;

Execu- tive Com- mittee and other commit- tees.

(b) the General Manager; and

20

(c) three other members of the board of directors, of whom

one shall bo a non-official.

(2) The Chairman of the board of directors shall be the Chair-

man of the Executive Committee,

25

(3) Subject to the general control, direction and superintendence of the board of directors, the Executive Committee shall be com- petent to deal with any matter within the competence of the State Food Corporation.

30

(4) The board of directors may constitute such other committees, whether consisting wholly of members of the board or wholly of other persons or partly of such members and partly of other persons as it thinks fit, for such purposes as it may decide.

35

(5) A committee constituted under this section shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the State Food Corporation under this Act.

5 (6) The members of a committee (other than the directors of the board) shall be paid by the State Food Corporation such fees and allowances as may be fixed by it by regulations made under this Act, for attending the meetings of the committee and fur attending to any other work of that Corporation.

25. A member of the board of directors of a State Food Corpora-

io Member of board or com- mittee thereof not to vote in certain cases.

tion or a committee thereof who has any direct or indirect pecuniary interest in any matter coming up for consideration at a meeting of the board of directors or committee thereof, shall, as soon as possi- ble after relevant circumstances have come to his knowledge, dis- close the nature of his interest at such meeting and the disclosure shall be recorded in the minutes of the board or the committee, as the case may be, and the member shall not take any part in any deliberation or decision of the board or the committee with respect to that matter.

15

CHAPTER V

FINANCE, ACCOUNTS AND AUDIT

2(J. (1) A Food Corporation shall, before the commencement of each >ear, prepare a statement of programme of its activities during the forthcoming year as well as a financial estimate in respect thereof, 20 Submis- sion of gramme of activities and finan- cial esti- mates.

(2) The statement prepared under sub-section (7) shall, not less than three months before the commencement of each year, be sub- mitted for approval—

(a) in the case of the Food Corporation of India, to the

Central Government;

25

(b) in the case of a State Food Corporation, to the Food

Corporation of India.

30 (3) The statement and the financial estimate of a Food Corpora- tion referred to in sub-section (I) may, with the approval of the Central Government, in the case of the Food Corporation of India, or with the approval of the Food Corporation of India in the case of a State Food Corporation, be revised by the Food Corporation.

35 27. (1) A Food Corporation may, for the purpose of carrying out its functions under this Act, take advances against stocks of food- grains or other foodstuffs held by it, or borrow money—

(i) from any scheduled bank, or

Borrow- ir.g powers of Food Coipora- tion.

(ii) from any other bank or financial institution approved

by the Central Government in this behalf.

(2) The Central Government may guarantee the loans and advances taken by a Food Corporation under sub-section (1) as to the re-payment of principal and the payment of interest thereon and other incidental charges.

5 28. A Food Corporation may lend or advance money to any per- son engaged in the production of foodgrains upon the security of foodgrains or such other security as may be prescribed, for any pur- pose connected with such production.

Lending by Food Corpora- tion on security of food- grains.

10

29. (/) A Food Corporation may enter into agreement with any grower of foodcrops for the purchase of foodgrains after the har- vest of such crops and any such -agreement may provide that any sum payable by the Corporation to the grower under such agree- ment shall be payable to any scheduled bank or other financing agency nominated by the grower in this behalf to such extent aa may be specified in the agreement.

15

Power to enter into agree- ment for purchase of food- grains after harvest.

(2) The scheduled bank or other financing agency referred to in sub-section (2) may, on the basis of any agreement referred to in that sub-section, lend money to a grower of foodcrops who has entered into such agreement,

20 30. A Food Corporation may, upon such terms and conditions as it may think fit, guarantee any loan referred to in sub-section (2) of section 29, and also any other loan raised by a grower of foodcrops, which is re-payable within a period not exceeding five years.

Guaran- tee by Food Corpora- tion,

25

31. (i) A Food Corporation shall have its own fund and all re- ceipts of the Corporation shall be credited thereto and all payments of the Corporation shall be met therefrom.

Funds of Food Corpora- tion.

(2) Such fund shall be applied for meeting all administrative expenses of the Food Corporation and for carrying out the purposes of this Act.

l

Invest- ment of funds.

30 32. A Food Corporation may invest its funds in the securities of the Central Government or any State Government or in such other manner as may be prescribed.

33. (I) A Food Corporation shall establish a reserve fund to which shall be credited every year such portion of its annual net profits as that Corporation thinks fit.

35

Alloca- tion of surplus profits.

(2) After making provision for such reserve fund and for bad and doubtful debts, depreciation in assets and all other matters

1 of 195(i.

which are usually provided for toy companies registered and incor- porated under the Companies Act, 1956, the balance of its annual net profits shall be paid—

(a) in the case of the Food Corporation of India, to the Central Government, and

5

(t>) in the case of a State Food Corporation, to the Central Government and the Food Corporation of India in the same pro- portion as the capital provided by them.

io Accounts and audit.

34. (2) A Food Corporation shall maintain proper accounts and other relevant records and prepare an annual statement of accounts including the profit and loss account and the balance sheet in such form as may be prescribed.

(2) The accounts of a Food Corporation shall be audited by auditors duly qualified to act as auditors of companies under section 226 of the Companies Act, 1956.

15 1 of 195b.

(3) The auditors shall be appointed annually by the Food Cor- poration from among a list of auditors approved by the Central Government on the advice of the Comptroller and Auditor-General of India.

20

25 (4) The auditors shall be supplied with a copy of the annual balance sheet and the profit and loss account of the Food Corporation and it shall be their duty to examine them together with the accounts and vouchers relating thereto, and they shall have a list delivered to them of all books kept by the Corporation and shall at all reason- able times have access to the books, accounts and other documents of the Corporation and may require from any officer of the Corpora- tion such information and explanations as the auditors may think necessary for the performance of their duties as auditors.

30 (5) The auditors shall send a copy of their report together with an audited copy of the accounts to the Food Corporation concerned and to the Central Government and, where the accounts relate to a State Food Corporation, also to the Food Corporation of India.

Annual report on the work- ing of Food Corpora- tions

35" (1) A Food Corporation shall, as soon as possible after the end of each year, submit to the Central Government an annual report on the working and affairs of the Corporation. 35 (2) The Central Government shall, as soon as may be after the receipt of such report, cause such report and the audit report received under section 34 to be laid before both Houses of Parliament.

CHAPTER VI

MISCELLANEOUS

36. (I) No act or proceeding of a Food Corporation or a com- mittee thereof or a Board of Management shall be invalid by 5 reason only of the existence of any vacancy in, or any defect in the constitution of, the board of directors of the Food Corporation or such committee or Board of Management.

Vacancies, etc., not to invali- date acts or pro- ceedings of Food Corpora- tion, etc. (2) No act done by any person acting in good faith as a member of a board of directors of a Food Corporation or of a Board of ¹⁰ Management shall be deemed to be invalid by reason only of his disqualification for being appointed as, or for being, a member of such board of directors or Board of Management.

Delega- tion.

37. A Food Corporation may, by general or special order in writing, delegate to the Chairman or any other member of the board

X5 of directors or the Secretary or other officer of the Corporation, subject to such conditions and limitations, if any, as may be specified in the order, such of its powers and functions under this Act as it may deem necessary.

20

Declara- tion of fidelity and secrecy.

38. Every director, member of an Advisory Committee or other committee, auditor, officer or other employee of a Food Corporation and every member of a Board of Management and its staff shall, be- fore entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the Schedule.

25

Indem- nity of direc- tors.

39. (1) Every member of the board of directors of a Food Cor- poration and of a Board of Management shall be indemnified by the Corporation against all losses and expenses incurred by him in the discharge of his duties except such as are caused by his own wilful act or default.

30

35

(2) A member of the board of directors of a Food Corporation or a Board of Management shall not be responsible for any other member or for any officer or other employee of the Corporation or Board of Management or for any loss or expense resulting 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 Corporation in good faith, or by the insolvency or wrongful act of any person under obligation to the Corporation or by anything done in good faith, in the execution of the duties of his office or in relation thereto.

5 40. No suit or other legal proceeding shall lie against a Food Corporation or any member of the board of directors thereof or any officer or other employee thereof or any member of a Board of Management or its staff or any other person authorised by a Food Corporation or a Board of Management to discharge any functions under this Act for any loss or damage caused or likely to be caused by anything whichr Is in good faith done or intended to be done in pursuance of this Act.

10 Offences. 41. (1) Whoever, without the consent in writing of a Food Corpo- ration, uses its name in any prospectus or advertisement, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

15 (2) No court shall take cognizance of any offence under sub- section (1) except on a complaint in writing by an officer authorised in this behalf by the Food Corporation concerned.

43 of 1961

20 Provision relating to income- tax, super- tax, etc.

42. For the purposes of th? Income-tax Act, 1961, or any other enactment for the time being in force relating to income-tax, super- tax or any other tax on income, profits or gains, a Food Corporation shall be deemed to be a company within the meaning of the Income- tax Act, 1961, and shall be liable to tax accordingly on its income, profits and gains.

25 43. No provision of law relating to the winding up of companies or corporations shall apply to a Food Corporation and it shall not be placed in liquidation save by order of the Central Government ajid in such manner as that Government may direct.

Winding up of Food Corpora- tion.

44. (1) The Central Government may, by notification in the

Official Gazette, make rules to carry out the purposes of this Act. Power to make rules.

(2) Without prejudice to the generality of the foregoing power,

30 such rules may provide for—

(a) the term of office of, and the manner of filling casual vacancies among, and the other terms and conditions of appoint- ment of, the directors of the Corporation;

(b) the composition of Advisory Committees and the terms

and conditions of service of members thereof;

35

(c) the additional functions which the Corporation may

perform;

40 (d) the remuneration or fees payable to the members of the board of directors of a State Food Corporation and the term of office of, and the manner of filling casual vacancies among, such members;

(e) the securities (other than foodgrains) upon which a

Food Corporation may lend or advance money;

(f) the manner in which a Food Corporation may invest

its funds;

(g) the form of the annual statement of accounts and the

balance sheet to be prepared by a Food Corporation;

5

(h) any other matter which has to be or may be prescribed.

10

15

(3) Every rule made by the Central Government under this section shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session In which It is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect 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 to the validity of anything previously done under that rule.

20

46. (1) A Food Corporation may, with the previous sanction 01 the Central Government, by notification in the Official Gazette, make regulations not inconsistent with this Act and the rules made thereunder, to provide for all matters for which provision is neces- sary or expedient for the purpose of giving effect to the provisions

Power of Food Corpora- tion to make regula- tions.

• of this Act.25

(2) Without prejudice to the generality of the foregoing power,

such regulations may provide for—

30

(a) the methods of appointment, the conditions of service and the scales of pay of the officers and employees of a Food Cor- poration, other than the Secretary of the Food Corporation of India;

(b) the duties and conduct of officers and employees of a

Food Corporation, other than the Secretary aforesaid;

35

(c) the functions and duties which may be entrusted or delegated to the managing director or, as the case may be, the General Manager, of a Food Corporation;

(d) the times and places at which meetings of a Food Cor- poration or any committee thereof shall be held and the proce- dure to be followed thereat;

(e) the fees and allowances payable to the members of a committee under sub-section (6) of section 14 or sub-section (6) of section 24;

(f) generally, the efficient conduct of the affairs of a Food

5 Corporation.

(3) The Central Government may, by notification in the Official Gazette, rescind any regulation which it has sanctioned and there- upon such regulation shall cease to have effect.

io

15 (4) Any regulation which may be made by the Food Corporation of India under this Act may be made by the Central Government within three months from the establishment of that Corporation and any regulation which may be made by a State Food Corpora- tion under this Act may be made by the Food Corporation of India within three months from the establishment of such State Food Corporation; and any regulation so made may be altered or rescind- ed by the Food Corporation concerned in the exercise of its powers under this Act.

THE SCHEDULE

(Sec section 38)

DECLARATION OF FIDELITY AND SECBECY

I,

5

, declare that I will faith- fully, truly and to the best of my judgment, skill and ability execute and perform the duties which are required of me as director, member of committee, officer, employee or auditor (as the case may be) of the Food Corporation of India , J lL _ , . .. .

: - ..... or as member of the Board of Management

Food Corporation

10

, at ^ -under the Food Corporation of India and which properly relate to the office or position in or in relation to that Corporation held by me.

15

20

I further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any infor- mation relating to the affairs of the said Corporation or to the affairs of any person having any dealing with the said Corporation nor will I allow any person not legally entitled aa aforesaid to inspect or have access to any books or documents belonging to, or in the possession of, the said Corporation and relating to the business of the said Corporation or the business of any person having any dealing with the said Corporation.

(Signature) • • —

Signed before me.

STATEMENT OF OBJECTS AND REASONS

It is considered desirable, in the interests of increased agricul- tural production as well as in the interests of the common consumer, to set up a State Agency for the purpose of undertaking trading in foodgrains in a commercial manner but within the framework of an over-all Government policy. Only by such a measure it will be possible to effectively implement any policy of ensuring that the primary producer obtains the minimum price that may be announced from tame to time and to protect! the consumer from the vagaries of speculative trade.

2. The setting up of the Food Corporation of India, as provided for in this Bill, will, therefore, be one of the essential and important steps in the implementation of Government's food policy. The Corporation will be the first organised attempt to take up State trading in foodstuffs on an appreciable scale. The Agency will also be used to build up gradually buffer stocks.

3. The Corporation will engage itself primarily in the purchase, storage, movement, distribution and sale of foodgrains. Provision has also been made in the Bill enabling the Corporation to deal in other foodstuffs if considered necessary by the Government. The Corporation may also discharge certain incidental functions as provided for in the Bill in consultation with the Central Government.

4- The Corporation will be encouraged to function generally as an autonomous organisation working on commercial lines. It is expected to secure for itself a strategic and commanding position in the foodgrains trade of the country. Bearing in mind the several large spheres in which the Corporation will ultimately have to operate, this Bill is being introduced to enable it to function as a statutory Corporation wholly owned by the Government.

5. It is necessary that the Corporation should work with the active and continued co-operation of State Governments and their machinery. The Bill, therefore, provides for the setting up of Boards of Management or State Food Corporations, as the case may be, to secure such co-operation and participation In a practical and effective way.

NEW DELHI; C. SUBRAMANIAM.

The 5th November, 1964,

PRESIDENT'S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE CONSTITUTION OF INDIA

[Copy of letter No. 179(6) |64-Py. I, dated the 11th November, 1964 from Shri C. Subramanlam, Minister of Food and Agriculture to the Secretary, Lok Sabha.]

The President, having been informed of the subject-matter of the Food Corporations Bill, 1964, has recommended under articles 117(1) and 274(1) of the Constitution the introduction of the Bill in the Lok Sabha, and under article 117(3) of the Constitution, its consideration by the Lok Sabha.

FINANCIAL MEMORANDUM

1. The original capital of the Food Corporation of India shall not exceed one hundred crores of rupees. The capital will be fixed by t he Central Government and provided by it from time to time after due appropriation m a de by Parliament by law for the purpose and subject to such terms and conditions as may be determined by the Central Government. Provision has been m a de for increasing t he capital of the Corporation by the Central Government from time to time. (Clause 5 of the Bill).

2. The capital of a State Food Corporation shall not exceed ten crores of rupees. It will be fixed by the Central Government after consultation with the Food Corporation of India. The capital will be provided by the Central Government after due appropriation made by Parliament by law for the purpose and by t he Food Corpo- ration of India, in such proportion and subject to such terms and conditions as may be determined by the Central Government. Provision has also been made for increasing t he capital of a State Food Corporation by t he Central Government in consultation with the Food Corporation of India. (Clause 18 of t he Bill).

3. Clause 27 of the Bill provides for the guarantee by t he Central Government of the re-payment of principal and the payment of interest, etc., in respect of loans and advances taken by a Food Corporation from any scheduled bank or any other bank or financial institution approved by the Central Government against stocks of foodgrains or other foodstuffs held by it. The ultimate liability arising out of such guarantees cannot be estimated at this stage.

4. Clause 30 of the Bill empowers a Food Corporation to guarantee any money lent by a scheduled bank or other financing agency to a grower of foodcrops on the basis of agreement entered into by that Corporation with t he grower of foodcrops for t he purchase of foodgrains after the harvest of such crops, and also a ny other loan raised by a grower of foodcrops, which ia re-payable within a period not exceeding five years.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 44 of the Bill empowers the Central Government to make rules to carry out the purposes of the Act. The matters in respect of which rules may be made are specified in sub-clause (2) of that clause. They relate inter alia to the term of office of and the manner of filling casual vacancies among the members of the board of directors of a Food Corporation, the composition of Advisory Committees and the terms and conditions of service of members thereof, the additional functions which the Food Corporation of India may perform, the securities (other than foodgrains) upon which a Food Corporation may lend or advance money and the form of the annual statement of accounts to be maintained by a Food Corporation. The matters in respect of which rules may be made are of a routine or administrative nature. Moreover, the rules shall be subject to the scrutiny of Parliament.

2. Clause 45 of the Bill empowers a Food Corporation to make regulations not inconsistent with the Act and the rules made there- under for the purpose of giving effect to the provisions of the Act. The matters which may be provided for by regulations relate to procedural or administrative details.

3- The delegation of legislative power is thus of a normal character.

BILL NO. 77 OP 1964

A Bill further to amend the Mineral Oils (Additional Duties of

Excise and Customs) Act, 1958,

BE it enacted by Parliament in the Fifteenth Year of the Republic

of India as follows: —

1. This Act may be called the Mineral Oils (Additional Duties of Short title.

Excise and Customs) Amendment Act, 1964.

5 Amendment of long title.

27 of 1958, 2. In the Mineral Oils (Additional Duties of Excise and Customs) Act, 1958 (hereinafter referred to as the principal Act), in the long title, for the words "certain mineral oils", the words "certain mineral products" shall be substituted.

10 Amendment of section i.

3. In section 1 of the principal Act, in sub-section {1), for the words "Mineral Oils", the words "Mineral Products" shall be substituted.

4. In section 3 of the principal Act, in sub-section (I), for the Amendment of section 3. Table, the following Table shall be substituted, namely: —

"TABLE

15 Description of

Rate of additional duty

goods

1

2

I. Motor spirit . •

One hundred and sixty-five rupees per kilolitre at fifteen degrees of Centigrade thermometer.^

2. Kerosene

Eighty rupees per kilolitre at fifteen degrees

10

of Centigrade thermometer.

oils and One hundred rupees per kilolitre at fifteen 3. Refined diesel vaporizing oil.

degrees of Centigrade thermometer,

otherwise Sixty rupees per metric tonne.

4- Diesel oil, not specified.

"5 Furnace oil .

Sixty rupees per metric tonne.

•

5-

Description of goods

1

Rate of additional duty 2

6. Asphalt and Bitumen as Fifty rupees per metric tonne.

1 cf 1944-

described in item No. 11(1) of the First Schedule to the Central Excises and Salt Act, 1944.

Three hundred rupees per metric tonne.".

10

7. All products as described in item No. 11A of the First Schedule to the Central Excises and Salt Act, 1944.

1 of ISH4-

5. In section 5 of the principal Act, in clause (b), the words and Amendment of lection 5, figure "under section 4 or" shall be omitted.

Declaration under the Provisional Collection of Taxes Act, 1931

*5

16 of 1531,

It is hereby declared that it is expedient in the public interest that the provisions of clause 4 of this Bill shall have immediate effect under the Provisional Collection of Taxes Act, 1931.

STATEMENT OF OBJECTS AND REASONS

The Mineral Oils (Additional Duties of Excise and Customs) Act, 1958 wns enacted for the purpose of levying and collecting additional duties of excise and customs on certain mineral oils. The purpose underlying that enactment was to readjust, with effect from the 20th May, 1958, the excise and customs duties in the light of the reduction in prices agreed to by the principal companies distributing mineral oil products in India. The aforesaid Act provides for ceiling rates within which effective rates are fixed by notification. Since the introduction of the revised pricing structure from the 1st October, 1961 and up to the 30th September, 1964, a sum of nearly rupees five crores has accrued in favour of Government due to reduction of f.o.b. cost of petroleum products and freight thereon. It is expected that further accumulations of like nature will also accrue to Government. The existing ceiling rates will not enable a quick recovery of these amount3 from the distributing companies.

The Bill seeks to enhance the existing ceiling rates adequately in respect of the mineral oil products already covered by the Act; at the sanie time, provision is also being made for levy of additional duties on certain other petroleum products such as asphalt and bitu- men. This is being done with a view to enable appropriation from the companies of over-recoveries on these products, if found necessary in the future.

NEW DELHI; T. T. KRISHNAMACHARI.

The 12th November, 1964.

PRESIDENT'S RECOMMENDATION UNDER ARTICLE 117 OF THE CONSTITUTION OF INDIA

[Copy of letter dated the 14th November, 1964 from Shri T. T. Krishnamachari, Minister of Finance to the Secretary, Lok Sabha.]

The President having been informed of the subject matter of the Bill further to amend the Mineral Oils (Additional Duties of Excise and Customs) Act, 1958 has recommended under article 117(1) of the Constitution the introduction of the Bill in the Lok Sabha.

S. L. SHAKDHER,

Secretary.

CORRIGENDA

In the Gazotte of India Extraordinary, Part II—Section 2—

1. No. 32, dated the 11th September, 1964: —

(i) Page 491, read 'Appearance before wealth-tax authorities by authorised representatives.' as marginal heading against line 1; and

(ii) Page 499, line 18 from bottom, after 'assets' insert 'or'.

2. No. 33A, dated the 11th September, 1964: —

(i) Page 529/54, delete side rule to line number 21—24; and

(ii) Page 529/64, marginal reference to clause 43, for '10 of 1891¹ read '10 of 1897'.

3 No. 34, dated the 14th September, 1964: —

(i) Page 535, line 5 from bottom, after 'is' insert 'in'; and

(ii) Page 547, line 9 from bottom for 'PRESIDENT'S RECOM- MENDATION' read 'PRESIDENT'S RECOMMENDA- TION'.

4. No. 35, dated the 17th September, 1964: —

PRINTED IN INDIA BY THF. GENERAL MANAGER, GOVERNMENT OF INDIA PRESS,

MINTO ROAD NEW DELHI AND PUBLISHED BY THE MANAGER OP PUBLICATIONS,

DELHI, 1964