 tile food corporations bill, 1964 arrangement of clauses "i chapter i preliminary clauses1 short title, extent and commencement 2 definitions  chapter ii the food corporation of lndia3 establishment of food corporation of indie 4 offices and agencies 5 capital of corporation 6 management 7 board of directors 8 disqualification for office of director 9 remowl and resignation of directors 10 meetings 11 advisory committees 12 officers and other employees of corporation 13 functions of corporation " !) 14 executive committee and other committees 15 member of board or committee thereof not to vote in certain cases  chapter iii boards of management16 boards of management, their constitutiqt\ and f\mettom , (i) 1394 (b)ls-i  chapter iv state food corporationsclauses 17 establishment of state food corporation is capital of the state food corporation 19 management of state food corporation 20 disquljlification for office of member of board of directors 21 removal and resignation of members ·of board of directors 22 meetings 23 appointment of officers, etc, and their conditions of service 24 executive committee and other committees 25 member of board or committee thereof not to vote in certain cases  chapter v finance, accounts and audit26 sub, nission of programme of activities and financial estimates 27 bon owing powers of food corporation 28 len ling by food corporation on security of foodgrains 29 pow ir to enter into agreement for purchase of foodgrains after barvest 30 gus rantee by food corporation 31 fun is of food corporation 32 inve itment of funds 33 allo ~tiol1 of surplus profits 34 accl un'ts and audit 35 annual report on the working of food corporations  chapter vimiscellaneous 36 vael ncies, etc, not to invalidate acts or proceedings of fqaq corporation, etc 37 dele gation 38 dec: aration of fidelity and ~recy 39 ind( mnity of directoz:s 40 pro1 ection of action taken under this act, clauses 41 offences 42 prm'ision relating to income-tax, super-tax, etc 43 win :ling up of food corporation 44 power to make rules 45 power of food corporation to make regulations  the schedule the food corporations bill, 1964 (to bel as introduced in lok sabha)1 page (11) , clause 18 -2 3 omit "the" -' page 4, line 21,-t'm1t it other" -page 5, line 36, -jafter "aforesaid," insert "the" 4 page l2, line 13, -ill "members" ~ "member" 5 page 12, line 21, -omi t, "the re of!' 6 page 18, line 15, -m "regulat on" read "regulation" 7 correct line numbers on pages -2, 12, 14, 16, 17 and 19 new dehii: november 14 196t kartlka 23, 1886 saka)  billt~ provide for th~ establif,hme:nt of food corporati~ for t~ pur-      pose oj tr~ine in foodgrains and other foodstufj~ and for 'n,14t-    tets' connected' therewith and incidental thereto                                                                 '   be it en~cted qy parliament in the fifteenth y~ of the republic oct ip¢a as fo~ows: -                                                               chapter is preliminaky 1 (1) this act may be called the food corporations act,19m short· title, (2) it extends to the whole of india except the state of, jammu extent and~ir and com mence-(3) it shall come into force on such date as the central govern· mento ment may, by notification in the official gazette, appoint 10 2 in t~ act, unless the context otherwise requires-defini-(a) "corporation" means the food corporation of india tions established under section 3; (b) "food corporation" means the food col1porat~on of i~~ia est~blished und~ section 3 or a state food corporation established under section 17; is (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; (e) "state food corporation" means a state food corporation established under section 17; s (f) "year" means the financial year  chapter ii the food corporation of indiaestablish mentof food cor poration of india offices and agencies 3 (1) with effect from such date as the central government may, 'by notification in the official gazette, specify in this behalf, iq 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 se'al with power, subject to the provisions 'of this act, to acquire, hold and is dispose of property and to contract, and may, by that name, sue and be sued 4 (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 20 (2) the corporation may, with the previous approval of the central government, establish offices or agencies at other places in or outside india capital of 5 (1) the original capital of the corporation shall be such sum cornot exceeding one hundred crores of rupees as the central govern- 2s poration ment 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 30 from time to time after due appl'iopriation made by parliament by law for the purpose and subject to such terms and conditions as may be determined by that government management 6 (1) the general superintendence, direction and management of the affairs and business of the corporation shall vest in a board 35 of directors which may exercise all such powers and do all such acts and things as may be exercised or done by the corporation under this act (2) the board of directors, in discharging its functions, shall act on business principles having regard to public interest and shall be 40 guided by such instructions on questions of policy as may be given to it by the cent:ral government (3) if any doubt arises as to wh~ther a qu~stion is or is not a question of policy, the decision of the central government thereon 5 shall 'be final 7 (1) the board of directors of the corporation shall consist of the following, namely:-(a) a chairman; 10 (b) three direlctors to represent respectively the mini,strie6 of the central government dealing with-(i) food, (ii) finance, and (iii) co-operation; is 68 of 1982 (e) the managing director of the centl'11 warehousing corporation established under section 3 of the warehousing corporations act, 1962, ex-officio; (d) a managing director; (e) six other directors (2) all the diredors of the corporation other than the director zo referred to in clause (c) of sub-section (1) shall be appointed by  the central government (3) the managing director s11a11-(a) exercise such powers and perfonn such duties 88 the board of qlrectors may entrust or delpgatel to him; and 25 (b) receive such salary and allowances ae; the board of directors may, with the approval of the central government, fix: provided that the first managing director shaj1 receive such salary and allowances as the central government may fix 30 (4) the tenn of office of, find the manner olf filling casual vacancies among, the directors of the corporation, other than the director referred to in clause (e) of sub-section (1), and the other terms and conditions of appolntment of the directors of the corporation shall, subject to the provisions of sub-section (3), ~ such as may 35 be prescribed 8 a person shall be disqualified for being appointed as, and !for being, a director of the corporation-disqualification for office of direc tor (a) if he is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with his creditors; or 5 (b) if he is of unsound mind and stands so declared by a c()mpetent court; or (e) if he is or has been convicted of any offence which in the opinion of the central government involves moral turpitude; or 10 (d) if he has been removed or dismissed from the service of the government or a corporation owned or controlled by the' government; or '  i ,: " (e) except 'in the case of the chairman or the managing director if he is a salaried official of the food corporation of is india or ,a state food corporation removal and resilnation of direct8l's t (i) the central government ml!ly, at a~;y tim~, aft'er consultation with the corporation, remove the managing director from office after g}ving him a reasonable opportunity of showing oouse against the proposed removal 20 (2) the board of directors may remove any other director from nffice 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 2s ' more than th:-ee consecutive meetings thereof without cause sufficient, in the opinion of the board, to exonerate his absence   (3) a director of the corporation mav resifm his office by giving; notice thereof in writing to the central government and' on such -resignation being accepted: he shall be deemed' to have vacatea; his 30 office "  meetings 10 (1) the board of directors of the corporation' shall meet' at such times and places and shall obse~e such rules' of' procedure in l'e~aro to the transaction of business at its meetin~~ (including the quorum at meetings) as may be provided'by re;~lation:s made by 3s the 'corp'oration under this act (2) the chaitnl'an 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 s second or casting vote 11 (1) the central government may, by notification in the advisory official gezette, constitute one or more advisory committees con- ~mmit­sisting of such persons and on such terms and conditions as may be eel prescribed~ 10 (2) it shall be the duty of any such advisory committee to advise the central government or the corporation in regard to any matter connected with the purposes of this act in respect of which its advice is sought by the central government, or, as the case may be, by the corporation) i is (3) the expenses in relation to the advisory committees shall  be met by the corporation) ! 12 (1) the central government shall, after consultation with oft\cerl the corporation, appoint a person to be the secretary of the corpo- ::81' emration; i plo1'ee8 or 20 (2) subject to such rules as may be made by the central gov- ~r  ernment in this behalf, th~ corporation may appoint such other officers and employees as it considers necessary for the emdent performance of its functions' ! l (3) the methods of appointment, the conditions of service and the 2s scales of pay of the omcers and other employees of the corponltion shall __ (a) as respects the secretary, be such·'" may be prescribed'! ~ (b) as respects the other omcers and employees, be such 1 30 may be determined by regulations made by the corporation under this act 13 (1) subject to the provisions of this act, it shall be the pri- l"wlctiona mary duty of the corporation to undertake the purchase, storage, ~ movement, transport, distribution and sale of foodgrains and other u:::ra-3s foodstuffs (2) subject as aforesaid, corporation may also, with the previous approval of the central government,-(a) promote by such means as it thinka tit the production of foodgrains and other foodstuff; 181m (b) ls-2 (ll) set up, or assist in the setting up of, rice 'mml, iiour mills and other undertakings for the processing of foodgratn and other foodstuffs; and i (c) discharge such other functions os may be prescribed or as are supplemental, incidental or consequential to any of 'the j functions conferred on it under this act 14 (1) the board of directors of the corporation may constitute an executive committee which shall consist 01-(a) the chairman of the board; (b) the managing director; and 10 executive commit wand other commit- ' tea ·(c) three other directors, of whom one shall be a nonofficia1' , '(2) the chairman of the board of directors shall be the chairman of the executive committeej ! (3) subject to the j!eneral' control direction and superlntend- 1$ enee of the board of directors, the executive committee shall be competent to deal witll any matter within the competence of the corporation -~ (4) the board of directors may con~titute sucn other c'ofnmittees, whethp-r consfc:tinj! whonv of directors or wholly of other ner- 20 sons or partly of directors and 'dartly of other persons as it thinkl fit, for such purposes as it may decide (5) a committee constituted under this sec1:ion shall meet at such times and plrcps and shall observe such rules of nrocedure in resrard to the transaction of business at itsmeetinsrs(fncludlnll the 2, auonlm at meetinsrs) 8!; may be provided by regulations made by the corporatiowtunder this actj i on the'mpmbers of a committee (other than the dh·pctors of  the boj!il'd) !'inall he nq;d bv th~ corporation such fpfo's and qllowrnces as mav be fl-,red bv it bv rel!ulrtt,wns made undpt' thic: act for attfmd- 3-insr the mpeh"~s of the committee and for attending to any other work of the corporation member of ,15 a mpmber of the board of dirpctors of the corporation or a board or committee thereof who has any direct or indirect pecunfrrv interest commit tee in ,,"v matter comim! ltn for considpt'~tion at a meetinsr of th~ hmr~3s thereof of directors or committf"-e thpreof ~h!lll a~ !l:oon a!l: nm~blp ~fter r,,1f'-dot te vl'l"t cirmjm!l:b\n~ h~ve come tohic: lrnowlfl'di:!e df~clmp the ti"htrf'! vote in of his intptp!'it at ~l1~h m~ptfnj! :'inn thp dfcl('1mure t'fhftll be recl'lr~ed eertaid in fh", minut"'l111 of th", bol'lrd or the eommitt~e as the clllllle im'ly hf',  ""d th'" memhf't' ,;hall not hke anv nart fn l'inv dpliher"tirl1'l or df'cf- ~ eton of the board or committee with respect to that ~tttn'  chapter iii boards of manag:uo:ht11 (1) the central government may, on 8 request received in boardl ot this behalf from the state government or governments concerned mana,  , or otherwise, by notification in the official gazette, establi5h a :e~t, beard of management for a state or two or more contiguous states, co~t1tu­if no stete food corporation is functioning in such state or states tion anel (2) the head office of the board of management sooll be at funct10dl such place as the central government may, by notification in the 10 official gazette, specify i i (3) tl board of management shall consist of-(a) a chairman to be appointed by the board of directors at the food corporation of india; (b) the senior-most executive officer of the said corporation 15 employed at the head office of the board of management; and (c) not more than ten other members to be appointed by the board of directors of the said corporation (4) the members of a boord of management referred to in clausea (a) and (c) of sub-section' (3) shall hold office for a term of two 20 years and shall be eligible for re-appointment and the other terma and conditions of their appointment shall be such as may be prescribed~ i (5) the board of management shall advise the corporation on such matters as may be generally or specifically referred to it and 25 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 aa they apply in relation to the members of the board of directora of 30 a state food corporation:  provideci that the reference to the general manager in cla\lse (e) of section 20 shall be construed' as a reference to the officer of the corpomtion referred to in clause (b) of sub-section (3) (7) the food corporation of india may, after consultation with a board of management, appoint such staff as it considers n~essary 3s to enable that board to perform its functions under this act (8) the board of management may, by order in writing, authorise anyone or more of its members to exercise and perform, subject to such conditions and limitations, if any, as may be specified in -to the order, auch of its powers and functions 8i it may think 11t (9) the board of management shall follow such procedure as may be provided by regulations made by the food corporation of india under this act (10) where a board of management has been established-(i) for a state, or 5 (u) for two or ~ore 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 establish- 10 ment of such corporation for anyone or more of such states (11) wher~ a board of management stands dissolved under clause (b) of sub-section (10), the central govermnent may establish a new board of management for the state or states for which no food corporation has been established, is (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 indiaj i ,  'chapter iv state food corporations20 17 (1) the central government mey, 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, 1"irta1t1ishmentof state food corpora tion (2) a state food corporation established under sub-section (1) 25 shall be a body corporate by the name notified under that sub-section, having perpetual succession and a cormnon 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 nwne, sue and be sue~' -30 (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 i i (4) subject to the provisicms of this act, a state food corporation may perform such of the functions of ~he food corporation 35 of india as that corporation mey delegate to it ls (1) the capital of a state food corporation shall be luch sum not exceeding ten crores of rupees as the central government may, after consultation with the food corporation of india, fix capital of state 'food corporation (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-5 (a) by the central government after due appropriation made by parliament by law for the purpose, and (b) by the food corporation of indie, in such proportion and subject to such terms and conditions as may be determined by the central government manage ment of -'te f~d corporation ) 10 19 (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 india after consultation is with the central government and the state 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 india, fix~ i (3) the board of directors, in discharging its functions, shall act on business principles having regard to public interest and shall be ~s guided by such instructions on questions of policy as may be given to it by the food corporation of india (4) if any doubt arises as to whether a question is or is not a question of policy, the matter shall be referred to the central government whose decision thereon shall be final (5) the members of the board of directors, other than the 30 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 35 the rules regulating his conditions of service (6) the term of ofiice of, and the manner of ftlling caaual vacancies among, the members of the board of directora shall b iuch u may be preacribed \ zoo 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 s his creditors; or disqualification for office of member of board ofdirec_ tor • (b) if he is of unsound mind and stands so declared by - competent court; or (c) if he is or has been convicted of any offence which in the epinion of the central covernment involves moral turpi- 10 tude; or , (d) if he has been removed or dismissed from the service of the government or a corporation owned or controlled by the government; or (e) except in the caseof the chairman or the qeneral i) manager, if he is a salaried official of the food corporation of india or a state food corporation 21 (1) the food corporation of india may, at any time after consultation with the state food corporation, remove the general manager from office after giving him a reasonable opportunity of 20 showing cause against the proposed removal removal andresilllation ofmem_ berlot board of directors (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 2s (b) is absent without leave of the board of directors from more than three consecutive meetings thereof without caur sufficient, in the opinion of the board, to exonerate his absence (3) a member of such board may resign his office by givina notice thereof in writing to the food gorporation of india and on 30 such resignation being accepted, he shall be deemed to have vacated his office meetinp 22 (1) the board of directors of a state food corporation shall meet at such times and places and shall observe such rules of proc dure' in regard to the transaction of business at its meeting (in- 3s ,eluding the quorum at meetings) as may be provided- by reiulation mad by that corporation under thil aot (2) the chairman of the board of directors or, if for any reason 'he is unable to attend any meeting, any other member of theboard 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 votin/!, and, in the event of an equality of votes,  the chairman or in hisabsenc(' the person presiding shall have and exercise a second or· casting vote 10 23 (1) a'state food corporation may appoint such officers and appoint-'other e~ploy~'as it consjders necessary for the efficient perform- :~!: ance of its functions etc, '&fld (2) every person employed by a state food corporation under ~~~_ this act shah be subject to such conditions of service and shall be tiona of i!! entitled to such remunerati~n as may be determined by regulations service made by that corporation under this act %4 (1) the board of directors of a state food corporation may ~ecuconstitute an executive committee which shall consist oftmllve com-(a) the chairman of the board of directors; ttee and other commit_ tees (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 2" (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 boam of directors may constitute such other committees, 30 whether consisting wholly of members of the board or whally 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 35 regard to the transaction of business at its meetings (including the 'quorum at meetings) as may be pro\'ided ·by regulations made by the state fdod corporatiollunder this act member ot board oreommittee thereof not to vote in  certain cues , (~) the members of a committee (other than the directors of the board) shall be paid by the state food corporation such fees and allowanyes 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 's -- %5 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, shau, as soon as possible after relevant circumstances have come to his knowledge, dis- 10 1 close the nature of his interest at such meeting and the disclosure shall be recorded in the minutes of the poard or the committee, as the case may be, and the members shah not take any part in any deu~ation or decision of the board or the committee with respect is to that matter  chapter v finance, accounts and audit%6 (1) a-food corporation shall, before the commencement of each year, prepare a sibtement of programme of its activities during the forthcoming year as well as a financial estimate in respect thereof 20 thereof i (2) the statement prepared under sub-section (1) shall, not lesa than three months before the commencement of each year, be submitted for approval-i submitlion of pro gramme ot activities andftnancial uti mates (a) in the case of the food corporation of india, to the 2s central government; , (b) in the case of a state food corporation, to the food co1-p<)ration 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 3d 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 borrowin, powers of food corporation 21 (1) a food corporation may, for the purpose of carrying out its functions undet' this act, take advances against stocks of food- 35 grains or other foodstuffs held by it, or borrow money-(i) from any scheduled bank, or (u) from any other bank or financial institution approved by the central government in this behalf !  (2) th central government ma1 ruarantee the loans ad advancestaken:  by a food corporation under sub-section (j) as to the re-payment of prineipai and the payment of interest thereoa and otber incidental charles 5 28 a food corporation may lend or advance money to any per- lendinl son engaged in the production of foodgrains upon the security of by food foodgrains or such other security as may be prescribed, for any pur- c:0fporad  h h d t' tion on pose connecte wit suc pro uc ion security ot food_ grains 29 (1) a food corporation may enter into agreement with an~' enter into agreement fot' purchue of food power to 10 grower of food crops for the purchase of food grains after the harvest of such crops and any such agreement may provide toot 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  i s may be specified in the agreement grain8 aft~r (2) the scheduled bank or other financing agency referred to in harvest 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 20 30 a food corporation may, upon such terms and conditions as it may think fit, guarantee any loan referred to in sub-section (2) of section 29, and also any other loan raised by a grower of foodcrops, which is repayable within a period not exceeding five years guarantee by food corporation 31 (1) a food corporrtion shall have its own fund and all reo funds of 25 ceipts of the corporation shall be credited thereto and all payments food of the corporation shall be met therefrom corpora_ tion (2) such fund shah be applied for meeting all administrative expenses of the food corporation and for carrying out the purpose! of this act 30 32 a food corporation may invest its funds in the securities of the central govenunent or any state government or in such other inveat ment or fun<t ma~n~r as may be prescribed 33 (1) a food corporation shall establish a reserve  fund to·alloc&_  which shall be credited every year such portion of its annual net tion of 35 profits as that corpor~tion thinksftt   urplua ,~··(2·) ~attr ma:kina pr9~isi~n"f~r a~ch reserve fund and tot bad' pl'08t •• and doubttul debt, depreciation in assets and all  other matters 13"(b) ls-3 which are ullually provided for by companies -regtstere<i and incorporated under the compaules act, 185s; tho balaneeof tta annual 1 of 1151 net profits shan be paid-i (a) in the case of the food corporation of india, to the central government, and s (b) in the case of a state food corp:lration, to the central government and the food corporation of india in the same proportion as the capital provided by them ac:ounts and audit 34 (1) a food corporation shall maintain proper accounts and other relevant records and prepare an annual statement of aceounts 10 including the profit and loss account and the balance sheet in such form a~ 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 is 1 of 1956 (3) the auditors shall be appljinted annually by the food' corporation from among a list of auditors approved by tne central government on the advice of the comptroller and auditor-general' of india (4) the auditors shall be supplied with a copy of the mnual 20 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 corpor~tion and shall at all reasonable times have access to the books, accounts and other documents 25 of the corpon:tlon 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 lis auditors (5) the auditors shall send a copy of their report together with an audited copy of the accounts to the food corporation concerned 30 and to the central government and, where the accounts relate to a state food corporation, also to the food corporation of india 35 (1) a food corporation shall, 81 soon c9 posstble after the end of each year, submit to the central government an annual reportod the working- add' amrtr, of, tm- corpanltioit  35 annual report on the worklnlof food corpor&o: tlqiii  (2)  the central government abau, sa loon· ai, ml1 '- :aftel: the' receipt o! such report, c8uh iuch report and the audit report received under iecrti0d m:  to be· lalcl· 'befoi'e~:;1:iottr· houiel:":of p~liament  chap'l'd vi38 (1), ~o act or proceedina ot a,food corporation or a corn- v,eueie, m1ttee thereof or aboard of manjlement hall be invalid by etc, not 5 reason only of the existence of any vacancy in, or any defect in the to invaliconstitution of, t~ board of directors of the food corporation or date acts _ or pro~ such committee or board of management ceedings of ·food - corporation, etc (2) no act done by any person acting in·good fa:th as a member of a board of directors of a food corporation or of a board of 10 management shall be deemed to be invalid by reason only of his disqualification for being appointed as, or for be:ng, a member of such' board of directors or board of management delegation 37 a food corporation may, by gener:d or special order in writing delegate to the chairman or any other member of the board is of directors or the secretary or other officer of the corporation, subject to such condiiions 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 every director, member of an advisory committee or other declara-20 committee, auditor, officer or other employee of a food corporation tion of and every member of a bo:ud of management and its staff shall, be- fidelity and fore entering upon h:s duties, make a declaration of fidelity and iccrecy secrecy in the form set out in the schedule indemnityof directori 39 (1) every member of the board of directors of a food cor-2s porat'on and of a board v: management shall be indemnn,ed by the corpol'ation against all losses and expenses incut'red 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 30 or a board of management shall not be re:>ponsible for any other member or for any officer or other employee of the corporation or board of management or for any 10s3 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 35 corpontioll ill lood faith, or by the insolvency or wrongful act of my'pel'lcllludder abuptioll1 to the corporation or by nytbing done jngood falia, om the flx8c\jtioo of- the duties of his ofllce or in relation ~~  protee non of etion taken under ibis act 40 no suit or other legal proceedihg shan lie aainat a food corporation or a~y member of the board of directortl thereof or any oftlcer 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 'f)f management to discharge any, function!! 5 under this act for any loss or damage caused or 'lik~ly to be caused by anything which, is in good faith done or intended to be done in pur~ilnce of this act, 41 (1) whoever, without the consent in writing of a food corj'o~ ration, uses its name in any prospectus or advertisement, shall be ro punishable with imprisonment for a term which may extend to six months, or with fine whi('h may extend to one thousand rupees, or with both (2) no court shall take cogni7ance of any of{ence under subsection (1) except on a complaint in writing by an officer authorised r 5 in this behalf by the food corporation concerned provision 42 for the purposes of the income-tax act, 1961 or any other relating enllctment for the time being in force relating to income-tax, superto income- tax or any other tax on income, profits or gains, a food corporation ~,super_ shall be deemed to be a company within the meaning of the income- 20 tax, t't:', tax act, 1961, and shall be liable to tax accordingly on its income, profits and gains, 43 no provision of law relating to the winding up of companies or corporations shall apply to a food corporation and it shall not be placed in liquidation save by order of the central government 25 winding up ot food corporation, ~d in such manner as that government may direct « (1) the central government may by notification in the ofticial gadtte, make rules to carry out the purposes of this act, power to make rule!!, (2) without prejudice to the generality of the foregoing power, such rules may provide for-- 30 (a) the term of office of and the manner of filling casual vacancies among and the other terms and (onditions of appointment of, the directors of the corporation; (b) the composition of advisory committees and the terms and conditions of service of members thereof; 35 (c) the additional functions which the corporation may perform; (d) the remuneration or fees payhi)le 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 vcancies amon, 40 ~uch members; (e) the securities (other than foodgri~) upon which - food corporation may lend or advanee mo~ey; (i> the manner in which a food corporation may' inveat its funds; (g) the form of the mmual 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 thii section shall be laid as soon as may be after it is made, before each 10 house of parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the' expiry of the session in which it is so laid or the session immediately following, bcth houses agree in making any modification in the rule or both houses agree that the r 5 rule should not be made, the rule shall thererfter 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 previousjy done under that rule  power of food corporation to make regula tiod&20 45 (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 neces· sary or expedient for the purpose of giving effect to the provisions ls of this act (z) without prejudice to the generality of the foregoing power, such regulations may provide for-30 (a) the methods of appointment, the conditions of service and the scales of pay of the officers and employees of a food cor-,poration, other than the secretary of the food corporation of india; (b) the duties and conduct of officers and employees of a food corporation, other than the secretary aforesaid; 35 (c) the functions and duties which may be entrusted or delegated to the managing director or, as the case may be, the general manager, of a food corporation; (d) the times and places at which meetings of a food col'· poration or any committee thereof shall be held and the procfdun to ~ follow,g thereat; :(e) thf", and aliowanees-payab)e to ih~ members of a committee ~der sub-section (6) of section 14 of- sub-section  "") of-ct1od 24; (1) generally, the emdent eonduet of the affairs of a food cf)rporation 5 (3) the central government may, by notification in the offtcial goette,  rescind ~ny regulation which it has sanctioned and thereu~ such regulation shall c~ase 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 10 within three months from the establishment o~ 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 regulat·on so made may be a~te:ed or re3cind- is ed by the food corporation concerned in the exercise of its pow~rs under this act  the schedule (se, section 38) dbclara'llon of fmelity and sicocyi, , declare that i will faith-s :ully, truly and to the best of my judgment, skill and ability - execut~ and perform the duties which are required of mea director, member of committee, officer, employee 01' auditor (as the case may be) of the 1<'000 corpual:on of lndi~ ---- - ----or as memb3r' of the board of management 10 food colporatlon at under the food corporat~on of india and which properly relate to the office or pjsition in or in relation to that corporation held by me· - i further declare that i will not communicate or allow to be is communicated to any person not legally entitled thereto any information r_iaing 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 acces~ to any books or documents belonging to, or' 20 in the po,;;sess;on of, the said corporation and relating to the business of the said corporation or the business of any person having any dealing with the said corporation (signature)--------signed before me  statement of objects and reasonsit is considered desirable in the interests of increased agricultural production as well as in the interests of the common consumer to set up a state agency for the purpose of undertaking trading in foodgrains in a commercial manner but within the framework of an over-all government policy only by such a measure it will be possible to effectively implement any policy of ensuring that the primary producer obtains the minimum price that may be 'announced from time to time and to protect ~he consumer from the vagaries of speculative trade 2 the setting up of the food corporation of india as provided for in this bill, will therefore, be one of the essential and important iiteps in the implementa~on of government's food policy the corporation will be the first organised attempt to take up state trading in foodstuffs on an appreciable scale the agency will also be used to build up gradually buffer stocks 3 the corporation will engage itself primarily in the purchase storage movement, distribution and sale of foodgrains provision has also been made in the bill enabling the corporation to deal in other foodstuffs if considered necessary by the government the corporation may also discharge certain incidental functions as provided for in the bill in consultation with· the central government 4 the corporation will be encouraged to function generally as an autonomous organisation working on commercial lines it is expected to secure fm' itself a strategic and commanding position in the foodgrains trade of the country bearing in mind the several large spheres in which the corporation will ultimately have to operate, this bill is being introduced to enable it to function as a statutory corporation wholly owned by the government 5 it is necessary that the corporation should work with the active and continued co-operation of state governments and their machinery the bill, therefore, provides for the setting up of boards of management or state food corporations as the case may be, to secure such co-operation and participation in a practical and effective way new delhi; c subramaniam 'i'm 5th novembfl'l", 1984  president's recommendation under articles 117 and 274 of the constitution of india[copy of letter no 179(6) 164-py i, dated the 11th november, 1964 from shri c subramaruam, minister of food and agriculture to the secretary, lok sabha] the president, having been informed of the subject-matter of the food corporations bill, 1964, has reeommended under articles 117 (1) and 274(1) of the constitution the introduction of the bill in the lot sabha, and under article 117(3) of the constitution, its consideration by the lok sabha 1394 (b) ls-4  financial memorandum1 the original capital of the food corporation of india shall not exceed one hundred crores of rupees the capital will be fixed by the central government and provided by it from time to time after due appropriation made by parliament by law for the purpose and ~ubject to such terms and conditions as may be determined by the central government provision has been made for increasing the capital of the corporation by the central government from time to time (clause 5 of the bill) 2 the capital of a state food corporation shall not exceed ten crores of rupees it will be fixed by the central government after consultation with the food corporation of india the capital will be provided by the central· government after due appropriation made by parliament by law for the purpose and by the food corporation of india, in such jxl'oportion and subject to such terms and conditions as may be determined by the central government provision has also been made for increasing the capital of a state food corporation by the central government in consultation with the food corporation of india (clause 18 of the bill) 3 clause 27 of the bill provides for the guarantee by the central government of the re-payment of principal and the payment of interest, etc, in respect of loans and advances taken by a food corporation from any scheduled bank or any other bank or financial institution approved by the central government against stocks of foodgrains or other foodstuffs held by it the ultimate liafbility arising out of such guarantees cannot be estimated at this stage 4 clause 30 of the bill empowers a food corporation to guarantee any money lent by a scheduled bank or other financing agency to a grower of foodcrops on the basis of agreement entered into by that corporation with the grower of food crops for the purchase of foodgrains after the harvest of such crops, and also any other loan raised by a grower of foodcrops, which is re-payable within a period not exceeding five years  memorandum regarding delegated legislationclause 44 of the bill empowers the central government to make rules to carry out the purposes of the act the matters in respect of which rules may be made are specified in sub-clause (2) of that clause they relate inter alia to the toerm of office of and the manner of filling casual vacancies among the members of the board of directors of a r~ocd corporation, the composition of advisory committees and the terms and conditions of service of members thereof, the additional functions which the food corporation of india may pernorm, the securities (other than fuodgrains) upon which a food corporation may lend or advance money and the form of the annual statement of accounts to be maintained by a food corporation the matters in respect of which rules may be made are of a routine or administrative nature moreover, the rules shall be subject to the scrutiny of ,parliament 2 clause 45 of the bill empowers a food corporation to make regulations not inconsistent with the act and the rules made there-- under for the purpose of giving e'·ffect to the provisions of the act the matt~rs which may be provided for by regulations relate to procedural or administrative detailis 3 the delegation 00 legislative power is thus of a normal character a bill to provide for the establishment of food corporations for the  purpose of trading in foodgrains and other foodstuff and for matters connected therewith and incidental thereto (s hri c subramaniam minister of f odd and agriculture ) 