The Food Corporations Act, 1964
Administered Ministry: Ministry of Consumer Affairs, Food and Public Distribution / Department of Food and Public Distribution
Section
Section 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 India or 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 India or a State Food Corporation.
Section 21 Removal and resignation of members of board of directors.
(1) The Food Corporation of India may, at any time, after consultation with the State Food Corporation, remove the General Manager from office after giving him a reasonable opportunity of showing cause against the proposed removal.
(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 India and on such resignation being accepted, he shall be deemed to have vacated his office.
(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 India and on such resignation being accepted, he shall be deemed to have vacated his office.
Section 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.
(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.
Section 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 the Corporation under this Act.
(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 the Corporation under this Act.
Section 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
(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.
(a) the Chairman of the board of directors;
(b) the General Manager; and
(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.
Section 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.
Section 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.
(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.
Section 27 Borrowing powers of Food Corporation.
10[(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:
2[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.
3[(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.]
(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:
2[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.
3[(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.]
1. Subs. by Act 36 of 1988, s. 2, for sub-section (1) (w.e.f. 20-8-1988).
2. Subs. by Act 27 of 2001, s. 2, for the proviso (w.e.f. 22-5-2001).
3. Ins. by Act 67 of 1972, s. 5 (w.e.f. 15-12-1972).
2. Subs. by Act 27 of 2001, s. 2, for the proviso (w.e.f. 22-5-2001).
3. Ins. by Act 67 of 1972, s. 5 (w.e.f. 15-12-1972).
Section 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.
Section 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 food crops who has entered into such 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 food crops who has entered into such agreement.
Section 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.
Section 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.
(2) Such fund shall be applied for meeting all administrative expenses of the Food Corporation and for carrying out the purposes of this Act.
Section 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.
Section 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.
(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.
Section 34 Accounts and audit.
1[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.]
(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.]
1. Subs. by Act 12 of 2000, s. 2, for section 34 (w.e.f. 2-6-2000).
Section 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 1[together with any comments thereon or supplement thereto by the Comptroller and Auditor-General of India] to be laid before both Houses of Parliament.
(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 1[together with any comments thereon or supplement thereto by the Comptroller and Auditor-General of India] to be laid before both Houses of Parliament.
1. Ins. by Act 67 of 1972, s. 7 (w.e.f. 15-12-1972).
Section 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.
(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.
Section 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.
Section 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.
Section 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.
(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.