FCI ACT
THE FOOD CORPORATIONS ACT,
1964
ACT NO. 37 OF 1964
[10th December, 1964.]
An Act to provide for the establishment of Food Corporations
for the
purpose
of trading in foodsgrains and other foodstuffs and
for matters
connected
therewith and incidental thereto.
BE it enacted by
Parliament in the Fifteenth Year of the Republic
of
CHAP
PRELIMINARY
CHAPTER I
PRELIMINARY
1.
Short title, extent and
commencement.
1. Short title, extent
and commencement. (1) This Act may
be
called the Food
Corporations Act, 1964.
(2) It extends to the
whole of
(3) It shall come
into force on such date 1*
as the Central
Government may, by
notification in the Official Gazette, appoint.
2.
Definitions.
2. Definitions.
In this Act,
unless the context
otherwise
requires,--
(a) "Corporation" means
the Food Corporation
of
established
under section 3;
(b)
"Food Corporation" means the Food Corporation of
established
under section 3 or a State Food Corporation
established
under section 17;
3*[(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 Reserve
Bank of
(e)
"State Food Corporation" means
a State Food Corporation
established
under section 17;
(f) "year" means the financial
year.
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1 17th December, 1964; vide Notification No.
G.S.R. 1808, dated the
16th December, 1964, Gazette
of
3(i),
p. 869.
2 Omitted by Act 67 of 1972, s. 2.
3 Ins. by s. 3, ibid.
78
CHAP
THE FOOD CORPORATION OF
CHAPTER II
THE
FOOD CORPORATION OF
3.
Establishment of Food
Corporation of
3. Establishment of Food
Corporation of
from such date 1*
as the Central Government may, by
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
(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.
4.
Offices and agencies.
4. Offices and agencies.
(1) The head office of the Corporation
shall be at
may, by notification in the
Official Gazette, specify.
2*[(2) The Corporation
may establish offices or agencies at other
places in or outside
Provided that no such
office or agency shall be
established at
any place outside
Government.]
5.
Capital of Corporation.
5. Capital of Corporation. (1)
The original capital
of the
Corporation shall be such
sum not exceeding one hundred crores of
rupees as the Central
Government may fix.
(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.
(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.
6.
Management.
6. Management. (1) 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.
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1 1st January
1965; vide Notification No. G.S.R. 1809, dated the
16th December, 1964 Gazette
of
3(i),
p. 869.
2 Subs. by Act 67 of 1972, s. 4. (w.e.f. 15-12-1972).
79
(2) The board of
directors, in discharging its functions, shall
act on business principles having regard
to the interests of the
producer and consumer and
shall be 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.
7.
Board of directors.
7. Board of
directors. (1) The
board of directors
of the
Corporation shall consist
of the following, namely:--
(a) a Chairman;
(b) three
directors to represent respectively the Ministries
of the
Central Government dealing with--
(i) food,
(ii)
finance, and
(iii)
co-operation;
(c) the
managing director of
the Central Warehousing
Corporation established under
section 3 of
the
Warehousing
Corporations Act, 1962 (58 of
1962), ex
officio;
(d) a managing director;
(e) six other
directors.
(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
(b) receive such salary
and allowances as the
board of
directors
may, with the
approval of the
Central
Government,
fix:
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
vacancies 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.
80
8.
Disqualification for office
of director.
8.
Disqualification for office of director.
A person shall be
disqualified for being appointed as, and for being, a director
of the
Corporation--
(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
(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
turpitude; 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 managing
director,
if he is
a salaried official of the
Food
Corporation
of
9.
Removal and resignation of
directors.
9. Removal
and resignation of
directors. (1) The
Central
Government may, at any time, after consultation 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; or
(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 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.
10.
Meetings.
10. Meetings. (1) 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.
81
(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 which 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.
11.
Advisory Committees.
11. Advisory Committees. (1) The
Central Government may,
in
consultation with the Corporation, by notification in the
Official
Gazette, constitute one or
more Advisory Committees consisting of such
persons and on such terms
and conditions as may be prescribed.
(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.
(3) The expenses in relation to the Advisory
Committees shall be
met by the Corporation.
12.
Officers and other
employees of Corporation.
12. Officers and other employees of Corporation. (1) The
Central
Government shall, after consultation with the Corporation, appoint a
person to be the Secretary
of the Corporation.
(2) Subject to
such rules as
may be made
by the Central
Government in this behalf,
the Corporation may appoint such
other
officers and employees as
it considers necessary for the efficient
performance of its
functions.
(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 prescribed;
(b) as respects
the other officers and employees, be such as
may be
determined by regulations
made by the
Corporation
under this Act.
12A.
Special provisions
for transfer of
Government employees to
theCorporation
in certain cases.
1*[12A. Special provisions for transfer of Government employees
to the Corporation in certain cases. (1) Where the
Central Government
has ceased or ceases
to perform any functions which under section 13
are functions of the
Corporation, it shall be lawful for the Central
Government to transfer,
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1 Ins. by Act 57 of 1968, s. 2.
82
by order and with effect from such date or dates
(which may be either
retrospective to any date
not earlier than the 1st January, 1965, or
prospective) as may be specified in the order, to the
Corporation any
of the officers or employees serving in the
Department of the Central
Government dealing with food
or any of its subordinate or attached
offices and engaged in the
performance of those functions:
Provided that no order
under this sub-section shall be
made in
relation to any officer
or employee in such Department or office who
has, in respect of the proposal of the Central
Government to transfer
such officer or employee
to the Corporation,
intimated within such
time as may be
specified in this behalf by
that Government, his
intention of not becoming
an employee of the Corporation.
(2) In
making an order
under sub-section (1),
the Central
Government shall, as far
as may be, take
into consideration the
functions which the Central
Government has ceased or ceases to perform
and the areas in which such
functions have been or are performed.
(3) An officer or
other employee transferred
by an order made
under sub-section (1) shall,
on and from the date of transfer, cease
to be an employee of the Central Government and
become an employee of
the Corporation with such
designation as the Corporation may determine
and shall, 1*[subject to
the provisions of
sub-sections (4), (4A),
(4B), (4C), (5) and
(6)], be governed by the regulations made by the
Corporation under
this Act as
respects remuneration and
other
conditions of service
including pension, leave and provident fund, and
shall continue to be an officer or employee of the
Corporation unless
and until his employment is
terminated by the Corporation.
(4) Every officer or other employee transferred by an
order made
under sub-section (1) shall,
within six months from
the date of
transfer, exercise his
option in writing to be governed,--
(a) by the scale
of pay applicable to the post held by him
under the
Government immediately before
the date
of
transfer
or by the scale of pay applicable to the
post
under the
Corporation to which he is transferred.
(b) by the
leave, provident fund,
retirement or other
terminal benefits admissible
to employees of the
Central
Government in accordance with the
rules and
orders
of the Central Government as amended from time
to time or the leave, provident fund or other
terminal
benefits
admissible to the employees of the Corporation
under the
---------------------------------------------------------------------
1 Subs. by Act 12 of 1977, s. 2 (w.e.f. 31-12-1976).
82A
regulations
made by the Corporation under this Act, and
such option
once exercised shall be final:
Provided that the option
exercised under clause (a) shall
be
applicable only in respect
of the post to which
such officer or
employee is transferred to the Corporation and on
appointment to a
higher post under the
Corporation, he shall be eligible only for the
scale of pay applicable to
such higher post:
Provided further that if
immediately before the date
of his
transfer any such officer or employee is officiating in a
higher post
under the Government either
in a leave vacancy or in any other vacancy
of a specified duration, his pay, on transfer,
shall be protected for
the unexpired period of
such vacancy and thereafter
he shall be
entitled to the scale
of pay applicable
to the post
under the
Government to which he
would have reverted or to the
scale of pay
applicable to the
post under the
Corporation to which
he is
transferred, whichever he
may opt:
Provided also that when
an officer or other employee serving in
the Department of the Ministry of the Central Government
dealing with
food or in any
of its attached or subordinate offices is promoted to
officiate in a higher
post in the Department or office subsequent to
the transfer to the
Corporation of any other officer
or employee
senior to him in
that Department or office before such transfer, the
officer or other employee who is promoted to officiate
in such higher
post shall, on transfer
to the Corporation, be entitled
only to the
scale of pay applicable to the
post he would have held but for such
promotion or the scale
of pay applicable to
the post under
the
Corporation to which he is
transferred, whichever he may opt.
1*[(4A)
Notwithstanding anything contained in sub-section (4),--
(a) every officer or
other employee 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 appointed day)
shall, whether or not
he had exercised the option under
sub-
section (4) before the
appointed day, exercise such option within
six months from the
appointed day; and
(b) every officer or
other employee 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 or
such
order, exercise his
option under sub-section (4),
and in each such case such
option once exercised shall be final:
Provided that where an
officer or other employee having exercised
an option under sub-section
(4) before the appointed day--
(i) has died or retired before the appointed day, or dies or
retires after the appointed day, before exercising the
option as
required by this
sub-section, or
(ii) does not exercise
the option as required by this sub-
section,
the option already exercised by him
shall be deemed to have
been
validly exercised by him
under sub-section (4).
(4B) Where an officer
or other employee--
(a) has died or retired, or dies or retires, after an
order
of transfer under sub-section (1) in respect of such officer or
other employee is made
but before exercising the option under
sub-section (4) or, as
the case may be, as required
by sub-
section (4A); or
(b) has died or
retired, or dies or retires, before an order
of transfer under sub-section (1) in respect of such officer or
other employee is
made,
he shall, notwithstanding anything contained in
sub-section (4) or
sub-section (4A),--
(i) in a case falling under
clause (a), be deemed to have
exercised an option under
sub-section (4); and
(ii) in a case
falling under clause (b), be deemed to have
been transferred under sub-section (1) and exercised and option
under sub-section (4)
to be governed by
the leave, provident fund, retirement
or other
terminal benefits
admissible to the
employees of the
Central
Government in accordance with the rules
and orders of the 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
the appointed
day, been paid the terminal
benefits as admissible to the employees of
the Corporation under the
regulations made by the
Corporation under
this Act, unless such officer or other employee refunds
in a lump sum
within six months from
the appointed day the amount of contributions
made by the Corporation
towards such terminal benefits:
Provided further that nothing
in clause (b) of this sub-section
shall apply to an
officer or other employee who has intimated, under
the proviso to sub-section (1), his
intention of not becoming
an
employee of the
Corporation.
(4C) Where an officer
or other employee has exercised an option
under sub-section (4), or
exercises, or is deemed to have exercised,
an option under that
sub-section, read with sub-section (4A) or sub-
section (4B), to be governed by the leave, provident fund,
retirement
or other terminal benefits admissible to the employees
of the Central
Government, such benefits shall be calculated on the basis of
the pay
and allowances drawn by him
in the Corporation.]
(5) No officer or
other employee transferred
by an order made
under sub-section (1),--
(a)
shall be dismissed
or removed by
an authority
subordinate
to that competent to make
a similar or
equivalent
appointment under the Corporation as may
be
specified
in the regulations made by
the Corporation
under this
Act;
2*[(b) shall be dismissed
or removed or reduced in
rank
except
after an inquiry in which he has been informed
of the charges against him
and given a
reasonable
opportunity of being
heard in respect
of those
charges:]
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1 Ins. by Act 12 of 1977, s. 2 (w.e.f. 31-12-1976).
2 Subs. by Act 53 of 1982, s.2.
82B
1*[Provided that where it
is proposed after such inquiry,
to
impose upon him any
such penalty, such penalty may be imposed on the
basis of the evidence adduced during such inquiry and
it shall not be
necessary to give such
person any opportunity of making representation
on the penalty proposed:]
1*[Provided further
that] this clause shall not apply,--
(i) where an officer
or employee is dismissed or removed or
reduced in rank on the ground of conduct which has led
to his
conviction on a criminal charge; or
(ii) where the authority
empowered to dismiss or remove an
officer
or employee or
to reduce him
in rank is
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 employee who, after transfer to the
Corporation,
is appointed to a higher
post under the
Corporation
in response to an open advertisement and in
competition
with outsiders.
(6) If, in respect of any such officer or employee as
aforesaid,
a question arises whether it is
reasonable practicable 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 to reduce 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 other
service or to
persons on deputation to
the Department referred to in
that sub-
section or to any
of its attached or subordinate offices from any
Ministry of the Central
Government or from any State Government or
from any organisation.]
13.
Functions of Corporation.
13. Functions of Corporation. (1) Subject
to the provisions of
this Act, it shall be the
primary duty of the Corporation to undertake
the purchase, storage, movement transport, distribution and sale of
foodgrains
and other foodstuffs.
(2) Subject as aforesaid,
the Corporation may also, with
the
previous approval of the
Central Government,--
(a) promote by
such means as it thinks fit 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
(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.
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1 Subs. and ins. by Act 53 of 1982, s.2.
82C
14.
Executive Committee and
other commodities.
14. Executive
Committee and other commodities.
(1) The board of
directors of the Corporation may constitute an Executive
Committee
which shall consist of--
(a) the Chairman
of the board;
(b) the managing
director; and
(c) three other directors, of whom
one shall be a non-
official.
(2) The Chairman of the board of directors shall be
the Chairman
of the Executive Committee.
(3) Subject to the
general control, direction and superintendence
of the board of directors, the Executive Committee
shall be competent
to deal with any matter
within the competence of the Corporation.
(4) The board of directors may constitute such other
committees,
whether consisting wholly of
directors or wholly of other persons 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 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.
(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 attending
the meetings of the
committee and for attending to any other work of
the Corporation.
15.
Member of board or
committee thereof not to vote in certain cases.
15. Member of board
or committee thereof not to vote in certain
cases. A member of
the board of directors of the
Corporation 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
83
of directors or committee
thereof, shall, as soon as
possible after
relevant circumstances have
come to his knowledge, disclose 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 committee with
respect to that matter.
CHAP
BOARDS OF MANAGEMENT
CHAPTER III
BOARDS OF MANAGEMENT
16.
Boards of Management, their
constitution and functions.
16. Board of Management, their constitution and functions. (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 Board of
Management
for a State or
two or more contiguous States,
if no State
Food
Corporation is functioning
in such State or States.
(2) The head office
of the Board of Management shall be at such
place as the Central
Government may, by notification in the Official
Gazette, specify.
(3) The Board of
Management shall consist of--
(a) a Chairman to be appointed by the board of
directors of
the Food
Corporation of
(b)
the senior-most executive
officer of the
said
Corporation
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
years and shall be eligible
for re-appointment and the other terms and
conditions of their
appointment shall be such as may be prescribed.
(5) The Board of Management shall advise the
Corporation on such
matters as may be
generally or specifically referred to it and shall
perform such other
functions as the Corporation may delegate 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
84
they apply in relation
to the members of the board of directors of 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
Board of Management, appoint such staff as it considers necessary to
enable that Board to
perform its functions under this Act.
(8) The Board of
Management may, by order in writing, authorise
any one or more
of its members to exercise and perform, subject to
such conditions and limitations, if any,
as may be specified in the
order, such 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
this Act.
(10) Where a Board of
Management has been established--
(i) for a State, or
(ii) for two or
more States,
then such Board shall stand
dissolved--
(a) in
the case referred
to in clause
(i),
on the
establishment of a Food Corporation for that State, and
(b) in
the case referred
to in clause
(ii), on the
establishment of such Corporation for any one or more
of such
States.
(11) Where a Board
of Management stands dissolved
under clause
(b) of sub-section (10), the Central
Government may establish 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 Corporation of
CHAP
STATE FOOD CORPORATIONS
CHAPTER IV
STATE FOOD CORPORATIONS
17.
Establishment of State Food
Corporation.
17. Establishment of State
Food Corporation. (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.
85
(2) A State Food
Corporation established under
sub-section (1)
shall be a body corporate
by the name notified under that sub-section,
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 the said name, sue and be sued.
(3) The head office of a State Food Corporation shall
be at such
place within the State as
may be notified by the Central Government in
the Official Gazette.
(4) Subject
to the provisions
of this Act,
a State Food
Corporation may perform such of the functions of the Food
Corporation
of
18.
Capital of State Food
Corporation.
18. Capital of State Food Corporation (1) The capital of
a State
Food Corporation shall be such sum not exceeding ten crores of rupees
as the Central Government may,
after consultation with
the Food
Corporation of
(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 as that Government may determine.
(3) Such capital shall
be provided--
(a) by the Central
Government after due appropriation made
by
Parliament by law for the purpose, and
(b) by the Food
Corporation of
in such proportion and subject to such terms and
conditions as may be
determined by the Central
Government.
19.
Management of State Food
Corporation.
19. Management
of State Food
Corporation. (1) The
general
superintendence,
direction and management of the affairs
and business
of a State Food
Corporation shall vest in a board 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
Government.
(2) The General
Manager shall--
(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 by
such
terms and conditions of service
as the board of
directors may, in
consultation with the
Food
Corporation
of
86
(3) The board of
directors, in discharging its functions, shall
act on business principles having regard
to the interests of the
producer and consumer and
shall be guided by such instructions on
questions of policy as
may be given to it by the Food Corporation of
(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
Government whose decision
thereon shall be final.
(5) The members of the
board of directors, other than the General
Manager, shall be entitled
to receive by way of remuneration 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 the
rules regulating his
conditions of service.
(6) The term of
office of, and the manner of
filling casual
vacancies among, the members
of the board of directors shall be such
as may be prescribed.
20.
Disqualification for office
of member of board of directors.
20.
Disqualification for office of member of
board of directors.
A person shall be disqualified for being appointed as,
and for being,
a member of the board of
directors of a State Food Corporation--
(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
(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
turpitude;
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
Manager,
if he is
a salaried official of the Food
Corporation
of Indian or a State Food Corporation.
21.
Removal and resignation of
members of board of directors.
21. Removal and
resignation of members of board of directors. (1)
The Food Corporation of
with the State Food
Corporation, remove the General
Manager from
officer after giving him
a reasonable opportunity of showing cause
against the proposed
removal.
87
(2) The board of
directors of a State Food Corporation may remove
from office any member of
that board who--
(a) is or has
become subject to any of the disqualifications
mentioned in
section 20, or
(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
resignation being accepted, he
shall be deemed to have vacated his
office.
22.
Meetings.
22. Meetings. (1)
The board of
directors of a
State Food
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 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 in
his absence, the person presiding
shall have and
exercise a second or
casting vote.
23.
Appointment of officers,
etc., and their conditions of service.
23. Appointment of
officers, etc., and
their conditions of
service. (1) A State
Food Corporation may appoint such
officers and
other employees
as it considers
necessary for the
efficient
performance of its
functions.
(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.
Executive Committee and
other committees.
24. Executive Committee and
other committees. (1) The board
of
directors of a State
Food Corporation may
constitute an Executive
Committee which shall
consist of--
(a) the Chairman of
the board of directors;
(b) the General
Manager; and
88
(c) three other members
of the board of directors, of whom
one shall be
a non-official.
(2) The Chairman of the board of directors shall be the
Chairman
of the Executive Committee.
(3) Subject to the
general control, direction and superintendence
of the board of directors, the Executive Committee
shall be competent
to deal with any
matter within the competence of
the State Food
Corporation.
(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.
(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.
(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 for attending to any
other work of that
Corporation.
25.
Member of board or
committee thereof not to vote in certain cases.
25. Member of board
or committee thereof not to vote in certain
cases. A member of the board of directors of a State
Food Corporation
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 possible
after relevant circumstances have come to his knowledge,
disclose 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.
CHAP
FINANCE, ACCOUNTS AND AUDIT
CHAPTER V
FINANCE, ACCOUNTS AND AUDIT
26.
Submission of programme of activities and financial estimates.
26. Submission
of programme of
activities and financial
estimates. (1) A Food
Corporation shall, before the
commencement of
each year, prepare a
statement of programme of its activities
during
the forthcoming year as
well as a financial
estimate in respect
thereof.
89
(2) The statement prepared under sub-section (1)
Shall, not less
than three months before
the commencement of each year, be submitted
for approval--
(a) in the case
of the Food Corporation of
Central
Government;
(b) in the case
of a State Food Corporation, to the Food
Corporation
of
(3) The
statement and the
financial estimate of
a Food
corporation referred to in
sub-section (1) may, with the approval of
the Central Government, in the case of the Food
Corporation of
or with the approval of the
Food Corporation of
State Food Corporation, be
revised by the Food Corporation.
27.
Borrowing powers of Food
Corporation.
27. Borrowing
powers of Food
Corporation. 2*[(1) A Food
Corporation may, for the
purpose of carrying out its functions under
this Act,--
(a) take advances against stocks of
foodgrains
or other
foodstuffs held by it,
or borrow money--
(i) from any scheduled bank, or
(ii)
from any
other bank or
financial institution
approved by the
Central Government in this behalf, or
(iii) from
any other authority,
organisation
or
institution
or from the public on such terms and
conditions
as may be
approved by the Central Government; or
(b) issue and
sell bonds and debentures carrying interest at
such rates as may be fixed by the Central Government at
the time
the bonds or
debentures are issued:
Provided that the amount
borrowed by a Food Corporation under
this sub-section shall not
at any time exceed ten times the
paid-up
capital and the reserve fund
established under section 33.]
(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.
2*[(3) A Food Corporation may, for
the purpose of carrying out
its functions under this
Act, also borrow money from
the Central
Government, and that Government may, after due appropriation made by
Parliament by law in
this behalf, pay to the Food Corporation such
sums of money by
way of loan on such terms
and conditions as that
Government may determine].
28.
Lending by Food Corporation
on security of foodgrains.
28. Lending by Food
Corporation on security of foodgrains. A Food
Corporation may lend or
advance money to any person engaged in the
production of foodgrains upon the security of foodgrains
or such other
security as may be
prescribed, for any purpose connected with such
production.
29.
Power to enter
into agreement for
purchase of foodgrains afterharvest.
29. Power to enter
into agreement for purchase of foodgrains
after harvest. (1) A
Food Corporation may enter into
agreement with
any grower of foodcrops for the
purchase of foodgrains after
the
harvest of such crops and any such agreement may provide
that any sum
payable by the Corporation
to the grower under such agreement shall be
payable to any scheduled
bank or other financing agency nominated by
the grower in this
behalf to such extent as may be
specified in the
agreement.
(2) The scheduled bank or other financing agency referred to in
sub-section (1) 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.
---------------------------------------------------------------------
1 Ins. by Act 67 of 1972. s. 5.
2 Subs. by Act 36 of 1988, s. 2.
90
30.
Guarantee by Food
Corporation.
30. Guarantee by Food
Corporation. 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.
31.
Funds of Food Corporation.
31. Funds of Food Corporation. (1) A Food Corporation
shall have
its own fund and
all receipts of the Corporation shall be credited
thereto and all payments of
the Corporation shall be met therefrom.
(2) Such fund shall
be applied for meeting all administrative
expenses of the Food,
Corporation and for carrying out the purposes of
this Act.
32.
Investment of funds.
32. Investment of funds. 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.
Allocation of surplus
profits.
33. Allocation of surplus
profits. (1) 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.
(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 by
companies registered and
incorporated under
the Companies Act, 1956
(1 of 1956), the balance of its annual net
profits shall be paid--
(a) in the case
of the Food Corporation of
Central
Government, and
(b) in the case of a State Food Corporation, to the
Central
Government
and the Food Corporation of
same
proportion as the capital provided by them.
34.
Accounts and audit.
34. Accounts and audit.
(1) 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 (1 of 1956).
(3) The
auditors shall be
appointed annually by
the Food
Corporation from among a
list of auditors approved by the Central
91
Government on the advice
of the Comptroller and Auditor-General of
(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 reasonable
times have access to
the books, accounts and other
documents of the
Corporation and may require
from any officer of the Corporation such
information and explanations as the auditors may think necessary for
the performance of their
duties as auditors.
1*[(5) The Comptroller and Auditor-General of
power--
(a) to direct the
manner in which the accounts of a Food
Corporation shall be
audited by the auditors appointed under sub-
section (3) and to
give such auditors instructions in regard to
any matter relating to
the performance of their functions
as
such;
(b) to conduct a
supplementary or test audit of the accounts
of a Food Corporation by such
person or persons
as he may
authorise
in this behalf; and for the purpose of such audit, to
require
information or additional information to
be furnished to
any person or persons
so authorised,
on such matters, by such
person or persons, and
in such form, as the
Comptroller and
Auditor-General may,
by general or special order, direct.
(6) The auditors shall send a copy of their report
together with
an audited copy of the
accounts--
(a) to the Food
Corporation concerned;
(b) where the accounts relate to
a State Food Corporation
also to the food
Corporation of India;
(c) to the
Central Government; and
(d) to the Comptroller and Auditor-General of
shall have the right
to comment upon, or supplement the audit
report in such manner
as he may think fit.
(7) Any comments upon
or supplement to, the audit report, made by
the Comptroller and Auditor-General of
section (6) shall be
placed by the Food Corporation concerned before
the Central Government, and where the accounts relate to
a State Food
Corporation, also before
the Food Corporation of
35.
Annual report on the
working of Food Corporations.
35. Annual report on
the working of Food Corporations. (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.
(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
2*[together with any
comments thereon or
supplement thereto by the
Comptroller and Auditor-General of
be laid before both Houses
of Parliament.
CHAP
MISCELLANEOUS
CHAPTER VI
MISCELLANEOUS
36.
Vacancies, etc., not
to invalidate acts
or proceedings of
FoodCorporation,
etc.
36. Vacancies, etc., not
to invalidate acts or proceedings of
Food Corporation, etc. (1) No act or proceeding of a Food
Corporation
or a committee thereof or a
Board of Management 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 Food Corporation or
such committee or Board of
Management.
(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 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.
37.
Delegation.
37. Delegation. A Food
Corporation may, by general or special
order in writing, delegate to the Chairman or any
other member of the
board
---------------------------------------------------------------------
1 Subs. by Act 67 of 1972, s. 6.
2 Ins. by s. 7, ibid.
92
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.
38.
Declaration of fidelity and
secrecy.
38. Declaration of fidelity
and secrecy. 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, before entering upon his
duties, make
a declaration of fidelity
and secrecy in the form set
out in the
Schedule.
39.
Indemnity of directors.
39. Indemnity of directors.
(1) Every member of the board
of
directors of a Food Corporation 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.
(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.
40.
Protection of action taken
under this Act.
40. Protection of action
taken under this Act. 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 which is in
good faith done
or intended to be done in
pursuance of this Act.
41.
Offences.
41. Offences. (1) Whoever,
without the consent in writing of
a
Food Corporation, 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.
93
(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.
42.
Provision relating to
income-tax, super-tax, etc.
42. Provision relating 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 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.
43.
Winding up of Food
Corporation.
43. Winding up of Food Corporation. 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 and in such
manner as that Government
may
direct.
44.
Power to make rules.
44. Power to make
rules. (1) The Central Government
may, by
notification in the Official
Gazette, make rules to carry out
the
purposes of this Act.
(2) Without prejudice to
the generality of the foregoing power,
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
appointment
of, the directors of the Corporation;
(b) the
composition of Advisory Committees and the terms and
conditions
of service of members thereof;
(c) the additional
functions which the
Corporation may
perform;
(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;
(h) any other
matter which has to be or may be prescribed.
94
(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
1*[which may be comprised in one session or in two or more
successive
sessions, and if,
before the expiry
of the session
immediately
following the session or
the successive sessions aforesaid,]
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.
45.
Power of Food Corporation
to make regulations.
45. Power of Food
Corporation to make
regulations. (1) A Food
Corporation may, with the
previous sanction of 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
provisions is necessary or expedient for the
purpose of giving effect to
the provisions of this Act.
2*[(1A) The power to
make regulations under this
section shall
include the power to give
retrospective effect from a date not earlier
than the date of
commencement of this Act, to the regulations or any
of them but no
retrospective effect shall be given to any regulation
so as to prejudicially
affect the interests of any person to whom such
regulation may be
applicable.]
(2) Without prejudice to
the generality of the foregoing power,
such regulations may
provide for--
(a) the methods of
appointment, the conditions of
service
and the scales of pay of the officers and employees
of
a Food Corporation, other than the
Secretary of the
Food
Corporation of
(b) the duties and
conduct of officers and employees
of a
Food Corporation, other than the Secretary
aforesaid;
(c) the functions and
duties which may be
entrusted or
delegated to
the mananging 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
Corporation
or any committee thereof shall be held
and
the
procedure 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 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.
---------------------------------------------------------------------
1 Subs. by Act 53 of 1982, s. 3.
2 Ins. by s. 4, ibid.
95
(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 Corporation
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 rescinded by the Food Corporation
concerned in the exercise
of its powers under this Act.
1*[(5) Every regulation made under this
Act 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 or more successive sessions and if,
before the expiry of the
session immediately following the
session or
the successive session
aforesaid, both Houses agree in
making any
modification in
the regulation or
both Houses agree
that the
regulation should not be
made, the regulation 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 regulation.]
46.
Validation.
2*[46.
Validation. No regulation made or
purporting to have been
made with
retrospective effect, under
section 45 before
the
commencement of the Food
Corporations (Amendment) Act, 1982 shall be
deemed to be invalid or
ever to have been invalid merely on the ground
that such
regulation was made
with retrospective effect
and
accordingly every such regulation and any action taken or thing done
thereunder
shall be as valid and
effective as if the provisions of
section 45, as amended by
the Food Corporations (Amendment) Act, 1982,
were in force at
all material times when such regulation was made or
action or thing was taken
or done.]
---------------------------------------------------------------------
1 Added by Act 53 of 1982, s.4.
2 Ins. by s. 5, ibid.
96
SCHE
DECLARATION OF FIDELITY AND
SECRECY
THE SCHEDULE
(See section 38)
DECLARATION OF FIDELITY AND SECRECY
I,---------------------,
declare that I will faithfully, 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/Food
Corporation or as member of the Board
of Management 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.
I further
declare that I will not communicate or allow
to be
communicated to
any person not
legally entitled thereto
any
information 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 as 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.
{ }