Food Corporations Act, 1964

For establishment of Food Corporations (including FCI – Food Corporation of India) for the purpose of trading in foodgrains and other foodstuffs.

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 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. 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 India [i][* * *].

(3) It shall come into force on such date 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 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;

[ii][(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 India Act, 1934 (2 of 1934);

(e) “State Food Corporation” means a State Food Corporation established under Section 17;

(f) “year” means the financial year.

Chapter II

THE FOOD CORPORATION OF INDIA

3. Establishment of Food Corporation of India.

3. Establishment of Food Corporation of India.—(1) With effect from such date 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 India.

(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 Madras or at such other place as the Central Government may, by notification in the Official Gazette, specify.

[iii][(2) The Corporation may establish offices or agencies at other places in or outside India:

Provided that no such office or agency shall be established at any place outside India without the previous approval of the Central 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.

(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 ad 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.

 

Other Contents of Food Corporations Act, 1964

Sections 1 to 15 Sections 16 to 25 Sections 26 to 46 and Schedule

 

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 India or a State Food Corporation.

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.

(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. Other officers and employees of Corporation.

12. Other officers and 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.

12-A. Special provisions for transfer of Government employees to the Corporation in certain cases.

[iv][12-A. 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, 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, [v][subject to the provisions of sub-sections (4), (4-A), (4-B), (4-C), (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 regulations made by the Corporation under his (sic 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 out for such promotion or the scale of pay applicable to the post under the Corporation to which he is transferred, whichever he may opt.

[vi][(4-A) 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 of 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).

(4-B) 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 (4-A); 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 (4-A),—

(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 an 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.

(4-C) 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 (4-A) or sub-section (4-B), 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;

[vii][(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:]

[viii][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:]

Provided [ix][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 reasonably 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 (7) 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 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.

14. Executive Committee and other committees.

14. Executive Committee and other committees.—(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 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, an the member shall not take any part in any deliberation or decision of the board or committee with respect to that matter.

References

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