 the state agricultulual credit corporat rom bill, 1968 (to be/aa introduced in lok sibha)1 - page 5, 11r·~ 7,-'l,0e, "on" read ii of" 2 page 6, line 7,-after "and" insert " " , 3 page 9, in the marginal heading to olause 18,-for "member" read "members" --4 page 9, line 32,-ilor" read "of" -5 page 11, in the marginal heading to olause 22,-for "borrowing" ~ "borrowings" 6 page 11, line 22,-m "every" ~ "the" 7 page 11, line 25,-1 after "fund" insert " )" 8, page 11, in the marginal heading to clause 24,-2iuu ;, of" 9 page 14, line 25,-in the marginal oi tation !2£ "1958" reaq "1956" 10 page 16, line 22,-"10 of 194 1 ~lt the marginal citation 11 page 30, line 3,-f,or "carring" read "carrying" 12 in the docket page, !2~ "territorie" ~_es "territories" 13 correot line numbers on pages 4, 8 and 19 ne\f deil:ii; lay' 1968 -  arrangement of clauses chapter i przllmlnaay1 short title and commencement 2 definitions  chapter ii incorporation of state agricultural crbdjt corporations ajn) thedl capital3 establishment of state agricultural credit corporatiolll 4 head office and other oftlces 5 share capital and shareholders 6 restrictions on transfer of shares  chapl'eriii managdrlent of the coitpoaatiojr7 management 8 corporation to be guided by directiodl of central govel'j)o ment 9 collltitution of board 10 managing direetor 11 term of oftlce of direetors other than managm, director 12 disqualification& 13 vacation of seats of directol'8  clauses14 executive committee and other committees of the corporation is:  'meetings of board and committees ,  16 director of board or members of a committee nat to vote in certain cases 17 defects in appointments not to invalidate acts etc 18 fees and allowanees of directors and members of committees  chapter iv business and funds or the corporation19 business which the corporation may transact 20 borrowing by the corporation 21 deposits with the corporation 22 limits on borrowings and deposita 23 corporation to maintain two funda 24 stabilisation fund 25 reserve fund 26 payment of dividend 27 investment of surplus funds 28 recovery of moneys due to the corporation 29 acquisition or transfer by the corporation of business, asset and liabilities from or to co-operative societies  chapter v30 general meetings  chapter vi31 accounts 32 audit as retuma  clauses chapter vii application of certa1n l  cts to the corporatiojr34 certain provisions of the banking regulation act, 1949,  apply to the corporation 35 certain provisions of the reserve bank of india'aet, 1934, to apply to the corporation 36 reserve bank of india act 1934 and banking rejlulatlon act, 1949, not to apply except as otherwise provided 37 the bankers' books evidence act, 1891, to apply 38 corporation to be deemed to be a co-operative society for the purposes of income-tax act 1961 39 court, tribunal, etc, not to require production of report on inspection made by the rese~e bank  chapl'er viii miscellaneous40 declaration of ftdelity and secrecy 41 indemnity of director 42 protection of action taken in good faith 43 liquidation of the corporation 44 reserve bank to submit report 45 staff of the corporation and delegation of powers 46 power of the central government to make rules 47 power of the board to make regulations 48 amendment of act 10 of 1963 the schedule  rations bill, 1968 billto provide for the establishment in the states and union ten-itorif, of agricultural credit corporations and for matter, connected therewith or incidental thereto be it enacted by parliament in the nineteenth year of the republic of india as follows:- chapter i puldonabys 1 (1) this act may be called the state agricultural credit co!-- short porations act 1968 title add coin· (2) it shall come into force on such date as the central governmenee ment may, by noti1ication in the official gazette, appoint, and menl different dates may be appointed for different states or for different union territories % in this act, unless the context otherwise requires,-deftnitiona (a) "agricultural marketing society" means a co-operative society the objects of which include the marketing of agricultu- 5 ral produce; (b) "agricultural operation" includes animal husbandry, dairy farming, pisciculture and poultry farming; ezplcnction-the expression "pisciculture" incluth!s the development of fisheries, both inland and marine, catching of 10 fish and all activities connected therewith or incidental thereto; (e) "agricultural processing society" means a co-operauve society the objects of which include the processing of agricultu-  ra! produce; (d) "agricultural produce" includes the produce of an agri- is cultural operation; (e) "appropriate government" means,-(i) in relation to any corporation established in a union territory, the central government, and (ii) in relation to any corporation established at any 20 other place, the state government; 1t <f) "banking company" has the meaning assigned to it in clause (e) of section 5 of the bariking regulation act, 1949; (g) "board", in relatiod to the corporation, means the board of directors of the corporation; 2s (h) "ea-operative farming society" means a co-operative society the objects of which include the cultivation of land on a co-operative basis; (0 "corporation", in relation to a state or union territory, means the agricultural credit corporation established under 30 section 3 in that state or union territory, as the case may' be; (j) "director" means a member of the board; (k) "food corporation" means the food corporation of india established under the food corporations act, 1964; (i) "prescribed" means prescribed by rules maqe under this 35 act; (m) "reserve bank" means the reserve bank of india constituted under the reserve bank of india act, 1934; , 2ol1934   (n) "subsidiary bank" has the meaning assigned to it in the state bank of india (subsidiary banks) act, 1959; 18 of 1959 (0) "central c()oo()perative bank", "co-operative bank", clcooperative society", "primary agricultural credit society", "scheduled bank", "state bank" and "state co-operative bank", have the meanings respectively assigned to them in section 2 of the reserve bank of india act, 1934  chapter ii 10 incoiu'oration of s~ati: agilicultural credit corporations and their capital3 (1) the appropriate government may, by notification in the establish-ofbcial gazette, establish in any state or union territory an agri- ment of is cultural credit corporation under such name as maybe specified in state the notification: agricultural provided that no such corporation shall be esiablished in any gredit state or union territory other than the states of assam, bihar, ti:~:or­orissa, rajasthan and west bengal and the union territories of 20 manipur and tripura, except whh the previous approval of the central government, and no such approval shall be given by the central government except after consultation with the reserve bank (2) the corporation established under this act shall be a body corporate by the name specified in the notification referred to in 2s sub-section (1), 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 or be sued 4 (1) the corporation shall establish its head office at such head 30 place in the state or union territory as the appropriate government office may, after consultation with the reserve bank, specify and other omell (2) the corporation may, after consultation with the appropriate government, establish offices or agencies at other places in the state or union territory, as the case may be 3s 5 (1) the authorised capital of each corporation bau be loeh share bum as the appropriate government may initially fix but it shau, in capital do case, be leu than ode q'oi'8 of rupees or more thllll ave croi'el of :!r provided that where the authorised capital iditially fixed is lea than five crores of rupees, the appropriate government may, from time to ti:ne, increase the authorised capital to such sum not exceedin, five crores of rupees: provided further that where the appropriate government is not 5 the central government, the initial fixation of the authorised capital and any subsequent increase or reduction thereof, shall be made with the prior approval of the central government (2) the authorised capital of each corporation shall be divided into such number of shares as the appropriate government may 10 determine and shall be issued as fully paid-up shares to the parties nlentioned in sub-section (3) at such times and in luch madder and to luch extent as the appropriate government may determine ud each of such shares shall have the same face value (3) out of the capital issued under sub-section (2),-15 (a) in the case of a corporation established in a state, the central government shall subscribe for thirty per cent of the share capital, and in the case of a corporation established in a union territory, the central government shan subscribe for fifty per cent of the share capital; 20 (b) the reserve bank shall subscribe for twenty per cellt of the share capital; (c) in the case of a corporation established in a state, the state government shall subscribe for twenty per cent of the share capital; 25 (d) the food corporation, state bank, subsidiary banks and bankin, companies may subscribe for, in tbe a,grejate, thirty per cent of the share capital: provided that node of the said parties shall subscribe for more than fifteen per cent of the share capital 30 (4) the parties referred to in sub-section (3) shall sublcribe for the shares before such date as may be specified in this behalf by the central government by notification in the oftlcial gazette (5) subject to the provisions of sub-section (3), the central government shall determine the number of shares which an to be allotted to the parties referred to in clause (d) of that sub-section: :35 provided that if any of the parties referred to in clause (d) of sub-section (3) fails to subscribe for any share allotted to it, iueil share shall be subscribed for by the central govemment the "lerw bank and the appropriate government in such proportions as may be determined by the central government: provided further that the shares subscribed for by the cedtrai , govel'lulledt, the reserve bank and the appropriate governmeat, in pul'l1lallce of the provisions of the foregoing proviso, may be tra  - ferred to any party who is elipble under clause (d) on sub·section (3) to subscribe for sueh shares in the first instance, so, however, that the total number, of shares held by any of the parties referred 10 to in that clause does not exceed fifteen per cent of the share eapltlll of the corporation s save as otherwise provided in the second proviso to sub-sectlon ~ (5) of section 5, the shares of the corporation shall not be transfer- !:r: able  1 : of ihu'ii  chap1'er itr management of the corporation1 (1) the general superfjitendence, direction and management of !ianapthe affairs and business of the corporation shall vest in a board of ment directors who may exercise all the powers and discharge au the :ao functions which may be exercised or discharged by the corporatiod and are not by this act expressly directed or required to be done by the corporation in general meeting (2) the board in discharging its functions shall act on buslde  principles, regard being had to public interest  2s 8 in the discharge of its functions, the corporation shall be guld- ~orpor  , eel by such directions in matters of policy involving public interest to ~ ii as the central governmem may, in consultation with the reserve ,wded bj bank, give to it in writing and, if any question aribes whether a dlree- direetloal tion relates to a matter of policy involving public interest, the decj- of 30 sion of the central government thereon shall be final ~=_ mant-i the board of directors of the corporation shall cons'ist of the eanutu tiod f1l following, namely: - ,--- " "w" bout (a) one director to be nominated by the central government who shall be the chainnan of the board; 35 (b) two directors nominated by the appropriate government, one of whom shall be a person who has special knowledge of co-operation and who is not an employee of the central or state government or· of -the reserve bank, state bank, 1ubt1-diary bank, banking company, or food corporation; (c) one director to be dominated by the reserve bank: (d) two directors to be elected in such manner as jil'v be prescribed by the parties subscribing for shares in pursuance of the provisic'lls of clause (d) of lub-eectiod (3), and lub-aectlon (5) of section 5; , (e) a man~ging director  to be appointed by thecentraj govemmentand except in the case of first appointment, after consultation with the board 10 (1) the managing director shad-(a) be a whole-time oftlcer of the corporation; 10 (b) perform such duties as the board may, by regulations or otherwise, assign to him: (c) hold oftice for such term, not exceeding ftve years, as the central government may specify at the time of the appointment and be eligible tor re-appointment; is (en r~lve  such salary and  allowances and be governed ·bysuch terms and conditions 'of service as the central government ma),-(i) in the case of first appointment determine or (ii) in the cae of anv subsequent appointment, deter- 20 mine after consultation with the board (2) the central government may, after conl1i11tation with the f:4mrd·and· for sufbcient cawle, remavethe managing director from otftce:  prov~ded that no managing director shall be so removed unle 25 be has been given an opportunity of sbow1dg cause against' his removal   (3) if the ma~gi~,(iirector js byi1p~ity or,'?them~ ~nde­red incapable of carfytng out his duties or' is 'absent on leave oj' otl1e~se  in  circumlsta~ces ' not 'invo~$g the ~~tion of his ap- 30 pointmel1;t, tl)~ :central government ma" ~er consultation with ~he bo~,' appoint another perionto act in bj place during hil ao~nce ,il (l) a aommtec! c:urecnar ouler tau the ~m dtd!irtot tenn ul = hold dee during the pleasure of the -,tqqri:ty ljomi~ omce of ciirecton other than (2) all elected ~tor shall hold alice for a period of an> manatid; s ;years from the date'of'hhjeletrt1on: ' direc'tor provided that 8n et~t'ect ~tor shall continue 1a oftlce until ' the election of his auccesaor -' , ", ", ' q no pe1'i1od ~ be a d,irecto~ ,who,-disquau_ 10 (4) except in the cu4t oi tu managing 4irector, is - aala- ficatiolll ried ob;icial of the corporation, or "','  ' , ", :",: : ' (~ is, 01' at ally time ~ been, adjuqaeq insolvent or ~ ilupeddedpaymedt of his qebts or baa com'po~ed with ~ ere w~~~ , (c) is of unsound mind and stands 10 declared by a compe~~ cowt, ql' ', , (d) is or has been convicted at an oftence which, in the opinion of the central' govemment, idvoivel'moral t\ll'(>hude u (1) ifa dir8ctor,-vacation (4) becomea subject to any dlsquajif1cation apecifted in he- of beata tied 12, or' , of c!irec-20 , to  (b) is absent wlthout leave of the :board for more tban three 'eon&eeutlve meetinp 1bereof, his seat shall thereupon become vacant (2) 'l'be managina du-ector 01: any other director may resign his 2501lice dy glv1llg notlce meteot in wtitirig to dlemthority by whieh he w~' appolutec1 or nominated, or if he is a' director elected under clause (a) of section ii, to the board, and on such reslgnatlon being acc~pt~d, shall be deemend to have vacated his ot!ice 14 (1) 'rhe jjuard lnay constitute an executive committ~e con- executiw 30 slstldg at tne l:11auman of the board, who snail be the chairman committee thel'eot the managing director and two other directors, ole 01 whom and o~  ' , comnutihaj,l be a person nommated by the appropriate government under tees of cjause (b) of section 9 the cor (2) the executlve committee shall discharge such functiollll as paratieb· 3s may be prescribed, or may be delegated to it, by the board (3) the board may constitute such other committe:s, whether jonslsung "wholly of directors or wholly of other persons or parqy of d1rectol8 and partly of other pei'8ods; as it may thidk fit tor·1i1c:h purpoeea u it may decide ii (1) the board or the executive committee or any other committee &hau meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at 5 ita meetings as may be prescribed (2) three directors personally present at any meeting of the boar~ and two members personally present at a meeting of a committee ahall'be the quorwn !dr suc\lmeeting (3) if, for any reason, the chairman of the board or of any com- 10 mluee is unable to attend any meeting of the board or the committee,  the case may be, the members present at the meeting iihall elect one of them to presidt! at the meeting (4) u for any reason a director nominated under clause (a), is clause (b) or clause (c) of section 9 is unable to atte~d an7 meeting of the board or of any committee if he is a member thereof, the government or the reserve bank by which such director was nominated may depute any other person to attend such meeting and the person so deputed shall, for the purposes of the said meeting, 20 be deemed to be a director noi:linated under clause (a), clause (b) or clause (c), as the case may be, of the said section 9 or a member of the committee concerned - (5) all questions which may come up before any meeting of the board or a committee shall ·be decided by a majority of votes of 25 the members present, and in the event of an equality of votes, the chairman of the board or of the committee, as the case' may be, or in hia abaence the person presiding, shall have a second or casting yo~ j)jreetofa of board or mem_ bers of a coiinmitt dot to •• til eerta!a  11 every director or member of a committee who has an, 30 direct or indirect pecuniary or other interest in any matter comins up for consideration at a meeting of the board or a eo~ttee iihall, as soon as possible, after the relevant facts or circumstances have come to his knowledge, disclose the nature of his interest at uch meeting and the disclosure so made shall be recorded in the 35 minutes of the meeting of the board or of the committee, u the ease may be, and no such director or member shall thereafter take any part in any deuberation or decision of the board or committee with respect to that matter nor shall his presence at such meetins be taken into 8cooudt for the purpose of determining the quorum tot the meeting at the time of such deliberation oi'votidg, anci it he does vote, his vote &hall be void: provided that nothing contained in this section shall apply to such director or member of a committee by reason only of his be-s ing a shareholder holding not more than two per cent of the paidup capital in any public company as defined in the companies act 1956, or in any other corporation established by any law for the time being in force in india or in any co-operative society, with which or to which the corporation has entered into or made, or pl'c)o 10 poses to enter into or make, a contract, loan arrangement or pl'c)o ~ !;:,,j! 17 (1) no act or proceeding of the board or of any of its com- detec:t mlttees shall be questioned or be invalid on the ground merely of!'il appointthe existence of any vacancy in, or any defect in the constitution of, menta is the board or the committee, as the case may be not to invalidate (z) no act done by any person acting in good faith as a director acts, etc or member of any committee shall be deemed to be invalid merely on the ground that he was disqualified to be a director or member or that there was any other defect in his nomination or appointment 20 18 every pirector and every member of a committee shall be fees an4 paid such fees and allowances as the board may, by regulations, allow&lldetennine, for attending the meetings of the board or~ as the cue ces of may be, any of its committees, or attending to any other work of :;ctora the corporation: member of com-25 provided :that no fees shall be paid to the chairman, managing mitt  director or any other director, if he is an oftlcer of the government, reserve bank, state bank, subsidiary bank, banking company or !i'ood corporation  chapter iv business and funds of me cqiuioratiok30 19 subject to the provisions of this act, the corporation may transact the following kinds or business, namely:-buein_ which the cor poratiod may tranact (a) the granting of loans and advances, repayable within a period, not exceeding five years, to agriculturists, agricultural 35 marketing societies, agricultural processing societies, central co-operative banks, co-operative farming societies or primary qricultunl credit societies for agricultural operationa or for ~ qtb,~~ qp8i'1uou codllected therewith ii the boud may by regulations determine; (b) ~e, dra~b1b, ~g, acce~ting, disco~tid& bu)'inc, selling collecting ili1d dealing in bills ot exchange, hundies, ~!9missory not~, co\lp~s, draits b~ of lading, r8ilway rec~i- s p~, warrants, debentures, certificates, scrips and other blstru·;; menta, and securities whether tra:iisf~rabie or negotiable or n~t; tc) tile gr8llt1ng and issuing of letters oil credit am aequi-mg, holding, itsuing on commtsjon, underwriting and dealin, in stock, funds, shares, debentures, debenture stock, bo~ 10 obligations, securities and investments of all kinds; (~) the purchasing and sewng of bonds, scrips or other forms of securities on behalf of constituents or others the negotiating of loans and advances, the receiving of auldnds of bonels scrips or valuables on deposit ot for safe custody or otherwise, is providing of safe deposit vaults, and eolltmg and transmittidg money and securities; (e) the carrying on of agency business of any description including the clearing and' forwarding of' goods, giving' of receiptj and discharg~; 20 (1) the entering into contracts of indemnity, suretybhtp or guarantee with specific security or otherwise; (g) receiving in consideration of the services mentioned in clauses (b), (c), (d), (e) and (f) such commissionu may be "-agreed upon; 2s (h) managing or selling of any propery which mar come into the possession of the corporation in satisfac~ion or part satisfaction of any of its claims;   (i) acquiring or holding of any property or any right, title or interest in any property which may form the security or a 30 part of the security for any loan or advance or which may be connected with any business of the corporation; (j) any other kind of business which the central government may, on the recommendation of the reserve bank, autho-; ~ (k) generally the doing of such th~ngs and ·fnatters as ma~' be incidental to or consequential upon the discharge of lts functions wider this act~' zoo subject to the provisions of this act, the corporation may for the 'purposes of carrying out its functions under this act-borrowin, by the corporatiod 5 (a) re-discount with or sell to the reserve bank or borrow money from that bank and for that purpose, the corporation shall be deemed to be a state co-operative bank within 'the meaning of clause 2(a), clause 2(b), clause 2(bb) and clause (4) of s~<;tion n, sub-section (2) of section 46a and sup-s,ection (2) of section 46b of the reserve bank of india act, 1934;  jot 193'-(b) borrow money from the cencral gov8i'dmeat or the 10 state  govenimeat or such other authority or institution a 'p proved in this behalf by the central govemment· on such term and conditions as may be agreed upon zi the corporation may, with the prior approval 01 the reserve depos1u ~ank, accept depos)ts froijl the !lppropt"iate, governmen~ a local ~:= ,is ,authority or any other person whether incorporated or not tion limitaon borrowingand deposits 2z the aggregate of the amounts borrowed and dep()sits accepted by the corporation and outstandinf,t shall not at any time exceed ten times the amount at 'the paid-up share capital and the reserve fund ,of the corporation or, with the prior approval of the central gov-ao"fllidment fifteen times the amount of such paid-up share capltel and reserve fund 13 every corporation shall establish two separate funds, name- corpor •• ly:-tion to ma:ntain (a) agricultural credit(st~bilfsation) fund (hereinafter re- two 2s lerred to as the ,stabilisation fund, and fundt! (b) reserve fund sfabili· sationot fund k (1) to the stabilisation fund shall be cre<jit~ such sum, ,not ;being less than ten and not more' than meen :per cent 8' t~e corporation may deem! fit from out of' its net annual profits before 30 declaring a dividend (a), subject to  such conditions as may be specffted by the' board by regulations, the amount lying to the credit of the stabilisation fund shall be utilised solely for the purpose of makillg loljps or advances with a view to enabling any c,o-operative society or other 35 person to pay its or his dues in cases where, in the opinion of the corporation, such soc1e~y or other person is unableto, pay such duel :tn:tbde';01mg'to drought, famine or other ,natural ~u rllerye 15 (1) to the reserve fund shad be credited such sums not beina 1'udd more than fifteen per cent as the corporation may deem fit ou·t of its net annual profits before declaring a dividend payment ofdivldend (2) the amounts lying to the credit of the reserve fund shall be utilised solely for such purposes as the board may by regulations , specify   after making provision for bad and doubtful debts, depreciation of assets and all other matters which are usually provided for by bankers, and after crediting to the stabilisation fund under section 24 and to the reserve fund under section 25, the corporation ic may, out of its annual net profits, declare a dividend 1:1 all moneys belonging to the corporation which may not, for the time being, be required by it shall be-' (4) deposited with the reserve bank or with any agency of the reserve bank or in consultation with the reserve bank with 15 a scheduled bank, state co-operative bank or central co-operative bank; or (b) invested in the securities of the central government or any state government or in securities in which a trustee may invest money under clause (a), clause (b), clause (bb), clause 20 (c) or clause (d) of section 20 of the indian trusts act, 1882; or (c) utilised in such other manner as may be approved by the reserve bank | reoo      ||-----------|| ofmode)'l || due       || to        || the cor-  || poratlod |28 where any amount is due to the corporation in,respect of loans or advances or other financial accommodation granted by it to any a5 penon, the corporation or any penon authorised by it in writing in this behalf, may, without prejudice to any other mode of recovery, make an application to the appropriate government for the recovery of the amount due to it, and if the appropriate government, or ftuch authority, as the state government may specify in this behalf, i, 30 satisfied, after following such procedure as may be prescribed, that any amount is so due, it may islue a certificate for that amount to the collector, and the collector shall proceed to recover that amount in the same manner and under the same condition as if it were an arrear of land revenue 35 21 (1) subject to the provisions of any law relating to co-operative societies for the time being in force, the corporation may-(4) acquire the whole or any part of the business, includfnl the assets and uabwties of a co-operative society; acqu1l1-tion or tranater by the corpora-uonof (b) transfer the whole or any part of its business, including busines, its assets or liabilities to a co-operative society oleta and llabi-(2) the terms and conditions relating to such acquisition or trans- !ti::m fer, if agreed upon by the board and the co-operati\lle society con- operative s eemedmall be submitted to the reserve bank for its approval and seoetiea that bank may by order in writing (hereafter in this section referred to as the order of approval) accord tts approval thereto: provided that where such acquisition or transfer involves the acquisition of the assets of the co-operatlve society or a transfer of the 10 uabilities of the corporation to the co-operatlve society, no such approval shall be accorded by the reserve bank, unless it is satisfied that--is (i) the co-operative society has given notice of the proposed acquisition or transfer, in such manner as may be provided under the law relating to co-operative societies applicable to it, to all its members and creditors, giving them the option, of demanding payment of their share or dues, as the case may be, and 20 (ii) all the members anel crecuton have assented to the proposal or deemed to have assented thereto by virtue of any member or creditor failing to exercise his optiod within such period as may be specified in accordance with such law relating to co"-operative societies for the time being in foree (3) the terms and conditions as approved by the reaerve bank shall come into effect from the date specified by the bank in this be-2s half in the order of approval and be bincung upon the corporation and its sha-eholders and creditors and if such law relating to c0-operative societies so,provides be binding also upon the co-operative society and its shareholders and creditors (4) if for any reason the tenns and conditiens cannot come into 30 effect on the date specified in the order of approval, the reserve bulk may fix another suitable date for that purpose (5) on the date on which the terms and conditions as aforesaid come into effect, the business, assets and liabilities of the corporation, or as the case may be, the co-operative lociety conc:enaed, shall, 35 by virtue of and in accorda~ -with the provisions of the aforesaid order of approval, and if such law relating to co-operauve aoci6tles so provides, stand transferred to, and become the business, assets and liabilities of the co-operatfve society or the corporation as the cue li1ay be  chapter v general meetings(;eneral 30 (1) a general meeting (in this act referred to as an annual meetinp general meeting) of the corporation shall be held at the head oftlce of the corporation within three months from the date on which the s annual accounts of the corporation are closed, and any other general meeting may be convened -by the board at any other time:' provided that the central government may extend the time within which any annual general meeting shall be held, by a period not exceeding one month 10 (2) the shareholders present at an annual general meeting shall be entitled to discuss the balance-sheet and profit and loss account of the corporation, the report of the board on :the working of the corporation for the period covered by the accounts and the auditor's report on the balancesheet and accounts is  chapter vi accounts, audit and utt1rns| accounts    | 31    | (1)                           | the    ||--------------|--------|-------------------------------|--------|| profit       |        |                               |        || and          |        |                               |        || 1068         |        |                               |        || account of   | the    | corporation shall be prepared |        || and          |        |                               |        || maintained   |        |                               |        || in           |        |                               |        || such         | form   | and                           | manner || as           |        |                               |        || may          |        |                               |        || ,be          |        |                               |        || prescribed  |        |                               |        || 20           |        |                               |        |(2) the board shall cause the books and accounts of the corporation to be balanced and closed on the ~eth day of june each year audit 32 (1) the accounts of the corporation shall be audited by an auditor duly qualified to act as audiltor under sub-section (1) of fiec-tion 226 of the companies act, 1956 who shall be appointed by the 2s 1 f 1908 board with the previous approval of the reserve bank and shall re-0 - ceive such remuneration from the corporation as the board may,' with the approval of the reserve bank, fix: provided that the first auditor shall be appointed by the central government within one month from the establishment of the cor- 30 poration on such tenns and conditions as the central government may determine c (2) the auditor so appointed shall hold office b-om the concluaion of the annual general meeting of the corporation until the conclusign of the dext annual ieneral meetm,: ~ provided that the flm auditor shall hold offtce until the conclusion of the first annual general meeting (3) the corporation shall supply its auditor with a copy of its annual balance-sheet and it shall be the duty of the auditor to exa-5 mine such balance-sheet together with the accounts and vouchers relating thereto and he shall have a list delivered to him of all books kept by the corporation and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the corporation 10 (4) the auditor may in relation to the accounts of the corporation of which he is the auditor, examine any director or any officer or employee of the corporation and shall be entitled to require from the oftlcers of the corporation such infonnation and explanation as he may think necessary for the performance of his duties 15 (5) the auditor shall make a report to tho corporation upon the annual balance-sheet and aceount!; examined' by him and in every such report he shall state whether in his opinion the a~ounts exhibit a true and fair view,-(11) in the case of the balance-sheet, of the state of affairs of 20 the corpol'8tion atf: the end of the year, and (b) in the case of the profit and loss account of the profi{ or loss for the year, and in case he had called for anv explanation or information from thl'! board whether i1: has been given and whether it is satisfactory 25 (if) witthout prejudice to anythins! contained in the oreceding subsections, the comptroller and auditor-general of india may, if so requested by the central government examine and report upon the accounts c:jf the corporation and any expenditure incurred' by him in connection with such examination and reoort shall be payable by 30 such corpol'8tion to the comptroller and auditor-generlll of india 33 (1) the corporation shall furnish, from time to time, to the retuna& appropriate government and to the reserve bank such returns as the appropriate government or -the reserve bank may reauire (2) the corporation shall futnish to all its shareholders within 3s three months from the date on which the annual accounts of the corporation are closed, or within such further time not exceeding one month as the cf'ntral government may specify, a copy ot the balance-sheet as at the close of that year and a proftt and loss aoaount for the year, the auc:utor's report and a report of the board 1)1\ the working of the corporation during the year, and copies of the said balance-sheet, profit and loss account and reports shall be publiahed in the official gazette (3) the corporation shall furnish a statement in such form as may be prescribed of its assets and liabilities as at the close of bust s ness on the last friday of each month or if that day is a public holiday under the negotiable instruments act, 1881, as at the clc;>se of 26 of 1681 business at the preceding working day, to the reserve bank within ten days from the date to which the statement relates  chapter vn application of cek'raln acts to 'l'idl cobporatiol(34 the provisions of sections 8, 9, 20, 20a, 21, 23, 24, 26, ma, 35 [exclud:idg sub-section (4)], ma, clause (a) of su,bsection (1) of section 36, and sections 41, 47, 50, 53 and 54 of the banking begulati0li act, 1949, shall apply to or in relatwn to the corporation as they is 10 of 1949 apply to or in relation to co-operative banks certain provisioll8 githa banking regula_ tion act, 1949, to apply to the corporation 2 of 19m 3l the provisions-· of sections 18 and 42 of the reserve bank of india act, 1934, shall apply to or in relation to the corporation as they apply to or in relation to a state co-operative bank certain provisioll8 githa reserve bank of india act, 1934, to apply to the corporation 2 of 1934 36 save as otherwise provided in this act, nothing contained ill 20 the reserve bank of india act, 1934 and the banking regulation act, 1949, shall apply to or in relation to the corporation reserve bank of india act, 1934 and banking regulation act, 1949, not to apply except a otherwise provided , 18 of 1881 "" 37 the bankers' books evidence act 1891, shall apply to or ib the 'reiaij,qd to the corporation as it applies to or in relation to - babt :::era' as defined in section 2 of that act evl~ act,latl to , 43 of 1961 1 of 1872 38 for the purposes of the income-tax act, 1961, or any ~ ~ 5 enactment for the time being in force relating to any to on iaeome tion proftts or aains the corporation shall be deemed to be a co-opaathoe tdo be 'ty ~~ soae  to be a co-opera tlve , for the pu~ otlmc~ tax mt, 1081 39 notwithstanding anything contained in the indian evidence court, act, 1m, or any other law for the time being in force, no court, tribunai, 10 tribunal or other authority shall have power ,to require the corpora- :c, not tiod, the reserve :bank or any offtcer of the corporation or the reaerve pr::!~ire bank to produce before such court, tribunal or other authority the tion of i report of any inspection, or any copy thereof, made by the rle8erve rt!pol1, on blink in pursuance of section 35 of the banking regulation act, inspectio:', 10 of 1949 is 1949, as applied to the corporation under section 34 ::de by reeerve bank "  chapter viii misci:liam:ous• every director, member of a committee, auditor, ofticer or decl  , other employee of the corporation shall, before entering upon his uon of 20 duties, make a declaration of fidelity and secrecy in the form set out ft~lity ~~~ed~ m lecrecy 41 (1) every direc'l;or shall be indemnified by the corporation incfemai6i against all losse's and expenses incurred by him in the discharge of of -c_ his duties except such as are caused by his own wilful act or' defaul~ ter 25 (2) a director shall not be responsible for anything done  oinitted to be done by any other director or officer or other employee - of the corporart;ion or for any 1099 or expenses resulting to the corperation by the insufficiency or deficiency of value of, or title to, , property or security acquired or taken on behalf of the corporatioa in good faith, or by the wrongful act of any auditor or any person under obligation to the corporation, or by anything dane in good faith in the execution of the duties of his office or in relation thereto protec-42 no suit or other legal proceeding shall lie against the corporation of tian or the central or state government or the reserve bank or s :=: in any director or officer of the corporation or of the central or state ,ood faith government or of the reserve bank or any other person authorised by the corporation to discharge any functions under thi's act, for any loss or damage caused' or likely to be caused by anything which is in good faith done or idtended to be done in pursuance of this 10 act liquidation of the corporation g (1) no provision of law relating to the winding up of companies or corporations shall apply to the corporation and the corporation shall not be placed in liquidation save by order of the central government made in consultation with the state government and 15 in such manner as it may direct (2) without prejudice to the provisions of sub-section (1), any order made by the central government for the liquidation of a corporation may provide for all matters for effectively winding up the affairs of the corporation, including the repayment of capital, 20 disposal of any fund established under this act, the transfer of the business, property, assets and liabilities, rights, interests, privileges and obligations of whatever nature of the corporation to such institution or institutions as the central government may direcl and payment, receipt or disposal of compensation arising out of such 25 transfer reserve bank to submit report 44 the reserve bank shall, on the expiry of a period of five years, from the date of establishment of the agricultural credit corporation in a state or union territory and thereafter at an interval of five years and within such time as the central government 30 may specify, submit a report to that government as to the working of the corporation and forward a copy thereof to the state government concerned 45 (1) the corporation may appoint such officers, advisers and employees as it considers necessary for the efticient performance of 35 its function and determine, by regulations or otherwise, their condi· tions of appointment and service and the remuneration payable to them  stall of the corporation and deleptlon of powers (2) the board may, by general or special order, delegate to the managing director or to any other officer of the corporation, subject 40 to such conditions and limitations, if any, as may be specified, such of its powers and duties under this act as it may deem necessary m (1) the central government may, by notification in the power ofbciaj gazette, make rules for carrying out the purposes of this of the s act central govern-(2) in particular, and without prejudice to the generality of the :: to foregoing power, such rules may provide for all or any of the follow- rulej, ing matters, namely:-(a) functions which shaube discharged by the executive 10 committee; (b) rules of procedure with regard to the transaclion 01 business at a meeting of the board; (c) rules of procedure with regard to the transaction 01 business at a meeting of any comuiittee constitulted by the board; (d) the procedure to be followed by the state government or the authority specified by the state governmed't for issuina the certific8jte under section 28; (e) the manner in which the general meeting shall be convened, the quorum therefor, the procedure to be followed thereat and the manner in which voting rights may be exercised; 20 (1) form and manner in which accounts shall be maintained the balance-sheet and profit and loss account shall be prepared; (g) form in which statement of assets and liabilities shall be furnished; (h) any other matter which is required to be, or may be prescribe~ (3) every rule made under this section shall be laid as soon as may be after it is made, before each house of parliament while it is 30 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, both houses agree in making any modification in the rule or both houses agree that the rule should not ,be made, the rule ihau thereafter have eftect only in such modified form or be of no effect 35 as the case may lbe; so, however, that any such modification or annulment shall be without prejudice to the validity of anythine previously done under that rule &t (j) the board may, after consultation with the reserve bank, make regulations not inconsistent with the provisions of this act and the rules made thereunder, to provide for all matters for which provision is necessary or expedient for the purposes of gividc etrect to the provisions of this act (2) in particular and without prejudice to the generality of the foregoing provisions, such regulations may provide for all or any of the 1odo$g matters, namely:-(4) duties which the managing director shall perform; (b) fees and allowances which may be paid to every dircc- 10 tor for auending any meeting of the board or any committee thereof or for attending to any other work of the corporation; (c) duties, conduct, salaries and allowances and conditions of aervice of oftlcers and oiher employees of the corporatit>n; {d) es'tabtishment and maintenance of provident and other is benefit funds for the employees of the corporation; (e) the delegation of powers and functions to the officers and employees of the corporation; (1) the purposes connected with agricultural purposes for which the corporation may grant loans and advances; 20 (g) the conditions subject to which the amount in the stabilisation fund may be utilised; (h) the manner in which the amount in the reserve fund may be utwsed; (i) conditions which the corporation may impose on any 2s 108&1 or advance made by it; (3) any other matter which is, or may be, necessary for the emciamt conduct of the affairs of the corporation (!) notwithstanding anything contained in sub-section (1), the a-ve bank may at any time within three months from the com- 30 medteid8ilt of this act make regulations with regard to any of the matten wpecifted in suib-section (2) but the regulation so made may be ~ed or modifted by the board in exercise of the p~ conferred on it by sub-section (1) 48 in clause (1) of section 2 of the agricultural refinance cor- amendporation act, 1963, after sub-clause (ii), the following sub-clause mentl~ shall be inserted, namely:-!fet1983 "(iii) an agricultural credit corporation established unaer s section 3 of the state agricultural credit corporations act, 1968"  the schedule (see section 40)i,  , do hereby declare that i will faithfully, truly 10 and to the best of my judgment, skill and ability execute and perform the duties required of me as a director, oftlcer, employee or auditor (as the case may be) of the agricultural credit corpora-_ tion and which properly relate to any oftlce or position in the said corporation held by me is 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 aft'airs of the corporation nor will 1 allow such person to inspect or have access to, any books or documents belonging to, or in the possession of, the corporation and 20 relating to the business of the corporation signed before me date   ~  !  -- statement of objects and reasonsthe question of supply of adequate agricultural credit ha~ assumed vital importance in the context of our aim to achieve self-sufficiency in food production as early as possible while the co-operative mlovement has made considerable progress over the years in the matter of provision of agricultural credit, the progress has not been uniform throughout the country and there are certain areas particularly, the states of assam, bihar, west bengal, orissa 'lqnd rajasthan and the union territories of manipur and tripura where the existing co-operative credit agencies are unable to take care of the full credit needs of the fanners it has, therefore, be~ felt that supplementary arrangements should be devised for the supply of institutional agricultural credit in those parts of the states and union territories where the co-operative credit agencies are not suftlciently developed 2 the object of the bill is to enable the states and central government to set up agricultural credit corporations in the above-mentioned states and union territories it will also he open to any other state or union territory to set up a corporation on similar lines with the prior approval of the central government the proposed corporation will provide short and medium tenn credit for periods not exceeding 5 years each corporation will have an authorised capit&l between rs 1 crore and rs 5 crores, depending on the requirements of each state or union territory, the share capital heinl! contributed: by the ~enrtral government, the state government, the reserve bank, the state bank and its subsidiaries, other commercial banks and the food corporation the bill also contains provisions for the transfer of the business and assets and liabilities of the corporation to co-operative societies and from the co-operative societies to the corporation with the prior approval of the reserve bank and subject to the requirements of the respective state laws relating to the co-operattv societies 3 opportunity is also being taken to amend the agricultural refinance corporation act, 1963, to enable that corporation to provide necessary funds to the proposed agricultural credit corporation for its lending operations notes on clauses explain in detail the various provisions of the bill morarji desai new dbllii; the 17th april, 1968 -- president's recommendation under article 117 of the constitution of india[copy of le'tter no f11/75/66-sb, dated the 26th april, 1968 from shri morarji desai, deputy prime minister and minister of finance to the secretary, lok sabha] the president having been informed of the subject matter of bill to provide for the establishment in the states and union territories of agricultural credit corporations and for matters connected therewith or incidental thereto, recommends the introduction of the bill in the lok sabha under clause (1) of article 117 and its consideration under clause (3) of article 117 of the constitution c'lause 2 provides for the definition of certain words and expressions used in the bill agricultural operation, in accordance with the proposed definition, will include animal husbandry, dairy farmllng, pisciculture and poultry farming ciat&b8 3 seeks to empower the appropriate government to establish an agricultural credit corporation in each of the five states of assam, bihar, orissa, rajasthan and west bengal and the two union territories of manipur and tripura it will also be open to any other state or union territory to set up a similar corporation after obtaining the prior approval of the central gov· ernment czaube 4: provides for the location of its head office and other oftiee and agencies of the corporation c14t&be 5 and 6 provide for the capital structure, ownership of the corporation, allotment of shares and related matters the authorised capital of each corporation will be between rs i and as 5 crores, depending on the requirement of each state or union territory and would be contributed mainly by the central government (30 per cent), the state government (20 per cent) , the reserve bank (20 per cent) the remaining shares (30 per cent) would be contributed by the state bank of india and its subsidiaries, other commercial banks and the food corporation in such proportion as may be specified by the central government c'laues 7 and 8 seek to vest the power of general superintendence, direction and management of the affairs of the corporation in its board of directors, subject to such directions in matters of policy involving public interest as may be given by the central government in consultation with the reserve bank claule 9 provides that the corporation will be managed by a board of directors consisting of 7 persons: the chainnan and  the idliulbging director to be nominated by the central government, two, one of whom shall ·be non-ofticial, to be nominated by the central or state government, as the case may be, one director to be nominated by the reserve bank and two directors to be elected by the other ahareholders in accordance with the prescribed rules from the residuary shareholders holding 30 per cent of the shares olause 10 provides for matters connected with the appointment, tenure and removal of the managing director clauses 11 to 13 provide for the term of oftice of a director other than the managing director, disqualifications of a director and vacatiod of his oface clause 14: deals with the composition and functions of the executive and: other committees of the board, subject to such rules as may be prescribed ciauia 15 to 18 provide for the meetings of board of directors and its committees, fees and allowances of directors anel members of committees and matters connected therewith subject to any rules and regulations that may be made for such purpose it has been provided that interes'ted directors shall not participate at these meetings clause 19 specifies the classes of business which the corporation will be authorised to perform; the principal business of the corporation will be to grant loans and advances for periods not exceeding five years for agricultural and allied operations, 10 agriculturists, agricultural marketing and processing societies, central co-operative banks, co-operative farming societies or primary agricultural credit societies it will also be authorised to perform other types of business which a c()operative bank is generally authorised to transact clause 20 seeks to authorise the corporation to obtain funds from the reserve bank on the same tenns and conditions as a state c0-operative bank and also from 'the central government, state government or such other authorities and institutions as may be approved by the central government clauses 21 and 22 seek to authorise the corporation to accept deposits and lay down a limit for the total amounts of its borrowings and deposits in relation to its paid up capital and reserve fund claue 23 to 25 provide for the establishment by the corporation of two separate funds, namely, agricultural credit stabilisation fund and reserve fund and the order of contribution that the corporation may make to these funds out of iots annual profltl clause 26' provides for the payment of divldend by the corp()l'ation after allowing for the necessary provisions usually made' by the bankers and after affording credit to the two funds cla'u8e 27 provides for the investment of surplus funds of the corporation in trustee securities or with the reserve bank or with any agency of the reserve bank or with any scheduled bank, state co-operative bank or central co-operative bank ~n consultation with the reserve bank cl4use 28 seeks to authorise the corporation to make anapplication to the appropriate government fof the l"e!cc)very of its dues as arrears of land revenue  clause 29 provides for the transfer of the business and the assets and liabilities of the corporation to the co-operative societies or from the co-operative soc:ieties to the corporation with the approval of the reserve bank, subject to the requirements of the respective state laws relating to co-operative societies clause 30 deals with the general meeting of the corporation clauses 31 to 33 provide for the preparation of balance-sheet, profit and loss account, audit and submission of returns to the appropriate authorities clauses 34 to 37 seek to apply to the corporation certain provisions of the banking regulation act, the reserve bank of india act, and the bankers' books evidence act, in so far as they are applicable to a co-operative bank these powers will enable the reserve bank to issue instructions to the corporation in: regard to its lending policy and other matters as are already available in respect of a co-operative bank clause 38 provides that the corporation shall be deemed to be a co-operative society for the purposes of income-tax act, 1961 clause 39 exempts the reserve bank and the corporation or any oftlcer of the reserve bank or corporation from producing before a court of law the report of any inspection that may be carried out by the reserve bank in pursuance o"! the statute clauses 40 to 42 deal with the declaration of fidelity and secrecy, indemnity of director and protection to officers for acts done in good faith \ clause 43 provides that the corporation cannot be taken to liquidation except by an order of the central government cla1ue 44 requires the reserve bank to submit a report to the central government on the working of a corporation after five years clause 45 seeks to empower the corporation to appoint officers, advisers and employees for the purpose of the working of the corporation and also provides for delegation of powers to its employees ~use 46 provides for the rules to be made by the central government in order to carry out the purposes of the act clause 47 deals with the matters which have to be covered by regulation to be made by the ·corporation in consultation with the reserve bank clause 48 provides for an amendment to the agricultural re- finance corporation act, 1963, to enable the agricultural refinance corporation to provide necessary fwlds to the corporations for their operation clause 5 of the state agricultural credit corporations bill, 1_ provides that the authorised capital of each corporation shan be between rs 1 crore and rs 5 crores and that 30 per cent of issued share capital in the case of a corporation established in a state and 50 per cent in the case of a corporation established in a' union territory, shall be contrlbuted by the central government the first proviso of the said clause also provides that the central government, along with the reserve bank and the state governments, may take up the unallcytted shares up to 30 per cent in case these shares are not contributed ful1y by other shareholders, namely, the state bank and its subsidiaries other commercial banks and the food corporation the size of the share capital fixed, from time to time, will depend on the requirements of each state or union territory and on present indications the total contribution by the central government to the share capital of the corporations may not exceed rs 7 crore!; in all spread over in three or four financial years even if the bill is enacted and brought into operation well before the end of the current financial year, it is not likely that the corporations could be set up in more than one or two states and union territories during the flnancial year hence the non-recurring expenditure bv the central government during the current financfal year is not likely to exceed at the most, rs 1 crore the balance of the estimated non-recurrinl!' expe!nditure of rs 6 crores is likely to be incurred in the subsequent two or three flnancial years no recurring expenditure is envisaged clause 20 (b) of the bill provides that the corporations may borrow money from, among others the central government this is a permissive provision which authorises the corporations to borrow monev from the central government on such tenns and conditions as' may be determined the corporations will depend for their wor1dn~ funds primarily on the reserve bank and public deposits and it is not possible to envisaj!'e at this stage whether it will ~ neeessarv for the corporations to borrow funds from the central govemm'ent if and when the corporations find it necessary to reauest the central governmeont to lend funds to them and if the central government decides to advance fund!'; on terms and conditions as may be determined, there would be some expenditure from the consolidated fund, but it is not possible to indicate, before the corporations have started functioning, what would be the order of such expenditure in any case, amounts to be lent by the central goftrnment would be required to be repaid to it by the corporations and over the years no net outgo from tilt" consolidated fund on this recount is envisaged clause 46 of the bill empowers the central government to make rules for earring out the purposes of the act the rules made under the act may provide for the functions to be discharged by the executive committee; procedure with regard to the transaction of business at a meeting of the board or of any committee constituted by it; procedure to be followed by the state government for issuing a certificate for the recovery of any money due to the corporation; the manner in which the general meeting of the corporation shall be convened and held; the form and manner in which accounts of the corporation shall be maintained and its profit and loss account shall be prepared and the form in which the statement of its assets and liabilities shall be furnished these are matters which relate to detail and as such the delegation of the legislative power is of a normal ~haracter 2 clause 47 of the bill empowers the board to make, after consultation with the reserve bank, regulations with regatd to the duties which the managing director shall perform; the fees and allowances which may be paid to directors for attending the meeting of the board or any committee thereof; duties, conduct, salaries and allowances and conditions of service of officers and other employees of the corporation; establishment and maintenance of provident and other benefit funds for the employees of the corporation; the conditions subject to which the amlount in the stabilisation fund shall be utilised; the manner in which the amount in the reserve fund may be utilised; the restrictions which may be imposed by the corporation on any loan or advance made by it with a view to facilitating the wotk of the corporation sub-clause (3) of clause 47 empowers the reserve bank to make the first regulations at any time within three months from the commencement of the act; but the regulations so made may be rescinded or modified by the board \vhen it i~ constituted 3 the delegation of the legislative power with regard to the matters for which regulations may be made by the board or the reserve bank are matters of detail the delegation of the legislative power is thus of a normal character  a billto provide for the establishment in the states and t: nion territorie of agricultural crwit corporations and for matters colulccted therewith or incidental th('teto (shri morarji desai, deputy prime minister and minister of fi1uljfce) 