Food Corporations Act, 1964- Sections 26 to 46 and Schedule

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.

(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 India, to the Central Government;

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

(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 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.

27. Borrowing powers of Food Corporation.

27. Borrowing powers of Food Corporation.—[i][(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:

[ii][Provided that the amount borrowed by a Food Corporation under clause (b) 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.

[iii][(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 after harvest.

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 the 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.

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 India, to the Central Government, and

(b) in the case of a State Food Corporation, to the Central Government and the Food Corporation of India in the same proportion as the capital provided by them.

34. Accounts and audit.

[iv][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 by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of a Food Corporation shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Food Corporation to the Comptroller and Auditor-General of India.

(3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of a Food Corporation shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General has in connection with the audit of Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any office of the Food Corporation.

(4) The accounts of a Food Corporation as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually by the Comptroller and Auditor-General of India to,—

(i) the Food Corporation concerned;

(ii) where the accounts relate to a State Food Corporation, also to the Food Corporation of India;

(iii) the Central Government,

and that Government shall, as soon thereafter as may be, cause the same to be laid before both Houses of Parliament.]

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 [v][together with any comments thereon or supplement thereto by the Comptroller and Auditor-General of India] to be laid before both Houses of Parliament.

Chapter VI

MISCELLANEOUS

36. Vacancies, etc., not to invalidate acts or proceedings of Food Corporation, 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 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.

 

Other Contents of Food Corporations Act, 1964

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

 

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, made 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 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.

(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.

(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 [vi][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 provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

[vii][(1-A) 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 India;

(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 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 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 thereupon such regulation shall cease to have effect.

(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.

[viii][(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 sessions 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.

[ix][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.]

Schedule

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 officer 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 Corporations 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.

References

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