 the warehousing corporations bill, 1962(as introduced in lok sablia on 3rd sbptember, i962) fi akllamfnl uwtart i no  _ d~te •• ~lll!:1;;;- chapter i purjmin'ary1 short title extent and commencement 2 definitions  chapter n tim ciln'tbal w auro'osing corporatiok3 the central warehousing corporation 4 share capital and shareholders 5 shares to be guaranteed by central government and to be trust or approved securities 6 management of central warehousing corporation 7 directors 8 disqualiflcaticn for office of director of the central warehousing corporation 9 removal of directors from ofbce 10 appointment of officers, etc, and their conditions of service 11 functions of central warehousing corporation 12 executive committee 13 meetings of the corporation 14 grants illnd loans by the central government 15 corporation to maintain two funds 16 warehousing fund 17 general fund  chapter m state w arzho'osin'g corporation18 state warehousing corporations 19 share capital and shareholders 1649(b) ls-l ( i )  clauses30 ~~ •• ment of a s1ibte warehousing corporation 21 disqualification for membership of the board of the corporatum ' 22 removal of directors from office 23 appointment of officers, etc, and their conditions of service 24 functions of the state warehouaing corporation 25 executive commi1tee  chapter iv finance accounts and atjdit26 submission of programme of· ll'c'tivities and financial esttmatea 27 borrowing powers of warehousing corporation 28 deposit account 29 investment of funds 30 disposal of proftts 31 accowits ad audit of wanhousiftl c()z'}>oraugn  chapl'erv miscellaneous32 vacancies, etc, not to invalidate ada add proceedidgs of warehousin2 corporations 33 delegation 34 voting rights of shareholders 35 disputes between central warehousing corporation and state warehousing corporation 36 declaration of ftdeuty and secrecy  , 37 indemnity of directors 38 offences 39 provisions relating to income-tax and super-tax 40 winding up of warehousing corporations 41 power to make ruies 42 power of warehousing corporations to· make replatiot'll 43 repeal and savings  the schedule the warehousing corporations bill, 19n (as in'l'roduced in lok sabha) a bnlto provide jor the incorpotation and regulation of corporations fof' the purpobe of 'warehousing of agricuztural produce and certaift oem commodities tmd fot matters connected therewith beit enacted by parliament in the thirteenth year of the republic of india as follows:- chapter i puldlinally5 1 (1) this act may be called the warehousing corporations short titlet kt, 1962 extent aall commcdc:e-(2) it extends to the whole of india except the state of jammu mente and kaihmir (8) it shall come into force on such date as the central 'govern-10 lilent may by notification in the official gazette, appoll'lt z &1 this act unless the context otherwise requires,"";' dcllnltlodi (a) "agricultural produce" means any of the following classes of commodities, namely:-is (i) foodstu1fs, including edible oil-seeds; (ii) cattle fodder, including oil--cakes and other coneantrates; (iii) raw cotton, whether ginned or unginner, and cottod aeec:lj lm9(b) ls-2 (i,,) raw jute; and ~ t, (,,) vegetable oils; i (b) "appropriate government" means in relation to the ce:iitral w &rehousing corporation, ;the central government, and in relation to a state warehousing corporation, the state s government; (c) "central warehousing corporation" means the central warehousing corporation established under section 3; (d) "c(h)})erative society" means a society registered or deemed to be registered under the co-operative societies act,10 1912 or under any other law with respect to co-operative soc1 :& of 1912-ties for the time being in force in any state, which is engaged in the processing, marketing, storage e:x:port or import of aanc:ultural produce or any notified commodity or in insurance business and includes a co-operative land mortgage bank; is (e) "notified commodity" means any commodity (other than agricultural produce) which the central government may by notification in the ofticial gazette, declare to be a notified commodity for the purposes of this act, being a commodity with respect to which parliament has power to make laws by virtue of 20 entry 33 in list iii in the seventh schedule to the constitution; (f) "prescribed" means prescribed by rules made under this act; (g) "recognised association" means an association which is for the time being recognised by the central government under 2$ lection 6 of the forward contracts (regulation) act, 1952; 14 ol195a (h) "reserve bank" means the reserve bank of india constituted under the reserve bank of india act, 1934; :& of 1934 (i) "scheduled bank" means a bank for the time being included in the second schedule to the reserve bank of indla 30 act, 1934; ! :& of 1934 (;) "state bank" means the state bank of india constituted under the state bank of india act, 1955; 23 of i", (k) "state warehousing corporation" meana a warehousing corporation for a state established or deemed to be estab- 3' 1iabecl udder thij act; (i) ·'warehouslng corporation" means a warehousil:ja ec poration established or deemed to be establilhed under thia act; add (m) "year" means the financial year  chapter ii5  the central warehousing corporations (1) with eftect froom sueh date as the central government ~ = may, by notification in the oftlcial gazette, specify in this behalf, c:;,-  the central government shall establish a corporation by the name ~  10 of the central warehousing corporation which shall be a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property and to contract, and may, by the said name, sue and be sued (2) the head-office of the central warehousing corporation shall i~ be at new delhi '- (1) the authorised share capital of the central warehousing =ad corporation shall be twenty crores of rupees divided into two hund- ~ red thousand shares of the face value of one thousand rupees eaeli; aany shares remaining to be issued may be issued, with the sanction 20 of the central government from time to time, as and when the central warehousing corporation may deem fit (2) the central government shall subscribe for forty per cent of the sbare capital issued at any time and the remaining sixty per cent of the share capital may be subscribed for, within sucb period 2s and in neb proportion as may be specifted by the central govenament, by the following institutions, namely:-(4) the state bank; (b) other scheduled banks; (e) co-operative societies; 30 (d) insurance companies, investment trusts and other flnancial institutions; (e) recognised associations and companies dealing in agricultural produce or any notified commodity (3) if any portion of the sixty per cent of the share capital re-35 ferred to in sub-section (2) remains unallotted it may be nbscribed for by the central government and the state bank in such proportion as may be agreed upon between them and in default of sueb agreement, as may be determined by the central government (4) the shares of the central warehousing corporation shall 40 not be transferable except to the central government, the state / bank, any scheduled bank, any inlul'ance company any investment 1irust or other financial institution or any co-operatln socletiy or illy recognised association or company dealing in agricultural pl'clllace or any notified commodity, in accordance with the regulations made by the central warehousing corporation under this act s siwea ::0 5 (1) the shares of the central warehousin, corporation shall ~tral he juaranteed hy the central goverament as to the repayment of ~~eat the prineipai and the payment of the annual dividend at such mini-!rut or mum rate as may be fixed by the central government, by botlflea-=-tien published in the offieial gazette, at the time of the issue of, tile 10 shares ~ , ,-"" i ·'y!""! (2) notwithstanding anything contained in the aa:tb mentlgaed in this sub-section, the shares of the central warehoutinr ~ tto,n shall be deemed to be included am()n~ the seeuritifl1l enumen-:a of ilia 'hd in section 20 of the indian trusts act 1_ and' al80· to be is of approved securities for the purpose of the insuranoe alct 1t38- aad 4 1931 the banking companies act, 1949 10 of 194, ~ • (1) the reneral superintendence and mana~ment of wuehouaina affairs and business of the central warehousin~ corporation shalt ~orave&t in a board of directors who, with the assistance of an eeu~ 20 t!ve committee and a managing director, may erercise all the 'powers and discharge all the functions which may be e:llerelled: or discharged by the central warehousing corporation under this act (2') the board of directors shall act on busibess prfdeit)-h8vtng regard to public interest and shall be- rutded by s1i011 in 25 1:ructions on questions of policy as may be jtfven to tftl!ftl lty the central government (3) if any doubt arises as to whether a question fs or is not a question of policy the decision of the central govemmem shall bp ftnal i i , 30 dtnaton " (11 '1'tie board of directors referred to in section 6 shan eonsist of the following, namely:-(a) six directors to be nominated by the central government; (b) one dire~tor to be nominated by the national co-opem- 35 tive development corporation established under the nat1cmal ce-g~tive development corporation act, 1962: (c) fme director to be nomidbted by the state bark; (d) cme director to be elected by otner scheduled bp; (e) one director to be elected by co-operative sodeti  : 40 (1) one director to be elected by insurance companie$ bwestment trusts and other financial institutions, recognised associations and companies dealing in agicultural produce of npijjled commodities; (g) a managing director, appointed by the central goy-ernment in consultation with the directors referred to in clauses (a, to (f): provided that the three directors to be elected under clauses (d), '8'~ and (f) may, for the first constitution of the board of directors 10 be nominated by the central government in such manner as 110 give representation to each class of institutions (whether they have become shareholders of the corporation or not) referred to in those cbluses, but a director so nominated shall hold office only until he is replaced by a director elected as provided in that clause and the is c&eetor so elected shall hold office only for so long as the director replaced would have held office had he not been replaced (2) the directors referred to in clauses (d), (e) and (f) of subsection (1) shall be elected in the prescribed manner (3) if, within the period prescribed in this behalf, or within such ao further period as· the central government may allow, the institutions referred to in clause (d) or c1euse (e) or clause (i) of sub  sectian (1) fail to elect a director, the central government ulay nominate a director to ftll the vacancy (4) the board of directoxs shall have a chairman and a vice-2s chairman who shall be appointed by the central govemmem from among the directors (5) the managing director shall-(a) exercise such powers and perform such duties as the board of directors or the central warehousing corporation may entrust or delegate to him; and 30 (bl receive such salary and allowances as the centnl warelaousing corporation may, with the wpproval of the ceatral govel'dmel'lt, fix (6) the directors of the central warehousing corporation other than the managing director shall be entitled to receive by way of 3s reuumeration such sums as the central warehousing corporation may, with the approval of the central government, flx: provided that no oftlcial director shall be entitled to receive any remuneration other than the allowances, if any, admissible to him under the rules regulating his conditions ot service (7) the term of office of, and the manner of filling casual vaeancies among, the directors shall be such as may be prescribed 5 ~~ca-8 a person shan be disqualified for being chosen as, and for being, oilc:e of a director of the central warehousing corporatio~ director of ~=:!i (i) if he is found to be a lunatic or becomes of unsound mind; corporatiod or (ii) if he is, or at any time has been, adjudicated insolvent or 10 has suspended payment of his debts or has compounded with his creditors; or (iii) if he is or has been convicted of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months, unless a period of five years has is elapsed from the date of expiry of the sentence; or (iv) if he has been removed or dismissed from the service of government or a corporation owned and controlled by the government; or (v) except in the case of the managing director, if he is a 20 salaried official of the central warehousing corporation or any state warehousing corporation; or (vi) if he is personally interested in any subsisting contract made with, or in any work being done for the central warehousing corporation except as a shareholder (other than a 25 djrector) in any public company as defined in the companies act, 1956: i or its6 provided that where any such person is a shareholder, he shall cusclose to the central warehousing corporation the nature and extent ~f shares held by him in such company 30 aeaovalof dlncton froid otilce t (1) the central government may, at any time in consultation with the central warehousing corporation, remove the managing director from office after giving him a reasonable opportunity of showing cause against the proposed removal (2) the board of directors may remove from ofbce any director who-, i , "  -::'-:  :ro":'-r~ 3s (4) is or has become subject to any of the dlsquallftcatlou mentioned in section 8; or (b) is absent without leave of the board of directota tal more than three consecutive meetings of the board without cause sufficient in the opinion of the board, to exonerate his absence 5 10 (1) the central warehousing corporation may appoint such appointotbcers and other employees as it considers necessary for the em- :ant of dent perf~rmance of its functiona (2) every person employed by the central warehousini cor- service poration under this ad shall be subject to such conditions of service 10 and shall be entitled to such remuneration as may be determined by regulations made by the corporation under this act 11 subject to the provisions of this act, the central warehousing puncdonl of corporation may-~=!um (a) acquire and build godowns and warehouses at such cozporadod is suitable places in india as it thinks fit; (b) run warehouses for the storage of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities offered by individuals, co-operative societies and other institutions; 20 (c) arrange facilities for the transport of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities to and from warehouses; (d) subscribe to the share capital of a state warehousin& corporation; 25 (e) act as agent of the government for the purposes of the p!1i"chase, sale, storage and distribution of agricultural produce, seeds, manures, fertilizers, airicu1tural implements and notiftecl commodities; and (1) carry out such other functions as may be prescribed 30 12 (1) there shall be an executive committee of the central bacudw warehousing corporation which shall consist of-~ (q) the chairman and the vice-chairman of the board of d1reetors; (b) the managing director; and 35 (c) two other directors chosen by the corporation in the prescr:tbed manner (2) the chairman and the vicechairman ,of the board of ciil'eetors shall be the chairman and the vice-chairmaa retqmlcti~ or the executive committee (3) subject to the general control, direction and superintendence 'of 'the boud of directors, the executive committee shall be com- 5 petent to deal with any matter within the competence of the -central warehousing corporation ~ poradaa u (1) the anmual genel:al meeting of 1m central w&reboallmj corpo:ration (hereinafter referred to as the ,al1llual geural meeting) shall be held every year either at its head-oifice or at ~ 10 other office of the corporation within six months of the close of the financial year, and any other general meeting may be convened by the board of directors at wly other time (2) the shareholders present at the annual general meeting shall be entitled to discuss the annual accounts, the report of the 15 board of directors on the working of the corporation during the year under report, as well as the auditors' report on the annual balancesheet and accounts   {3' the board of directors of the central warehoosing corporation slaall,on therequisition of one-third of the number ,of shareholde1'8 of 20 the corporation, call a special meeting of the corpoa'attoft (4) the requisition for a special meeting under sub-section (3) mall state the object of the meeting, and shall be signed by the requialtionistsand deposited at the head-oftice of the c&rporation, and may oonsistof several documents in like form each signed by as oiieor moire requisitionists (5) if the board of directql's of the central warehousing corporation do not proceed within twenty-one days from the date of the requisition being so deposited to cause the special meeting to be called, therequis'itionists, or a majority of them, may, themselves call the 30 meeting, but in either case, the meeting so called shall be held within three months from the date of the deposit of the requisition (6) the central warehousing corporation shall observe such rules of procedure in regard to the transaction of b\lsiness at its meetings (including the quorum at meetings) as may be provided 3' by regulations made by the central warehousing corporation ader thij act u <1> the central oefti'diftellt may, after chi •• ,piopilatiifl mad drimtw by parliament by law in this behau, pay to the central warehousinl =c= corporation for the purposes of either fund maltaia~ by the cor· venaeut potatlon-, <a> by way of grants, such sums of money as the central geyernment may coiuider lletellaiy; an (b) by way of loans, such sums of money on such terms and conditions as the central government may determine (2) when making a payment under sub-section (1), the central to government shall specify the fund for the p\irposes of ;;hieb the payment 11 imide 15 the central warehousing corporation shall maimain two c6~i __ ~  ~~- leparate funds, namely:-  i two ludell, (a) the central warehousing fwld (hereinafter referred to 15 as the warehousing fund) j and (b) the general fund: 18 (1) to the werehousing fund ihall be credited-wareboutial pwlcl (a) all moneys and other securities transferred to the central warehousing corporation under clause (c) of sub-section (2) of lection '-1; : i (b) such grants and loans as the central government mat make for the purposes of the warehousing fundj and (c) such swns of money as may, from time to time, be realised out of the loans made from the warehousing fund or from interest on loans or dividends on investments made from that fund: i (2) the warehousing fund shall be applied  30 (a) for advancing loans to state governments·on i1icl1 temu atrd e01lcutiolis as the centall warehousing cor,poratton ili8y deem fit for the purpose of enabling th~ to subscrtbe to the ahare capital of state warehousing corporations; (b) for advancing loans and granting subsidies to state warehousing corporations or to s1&te governments on such tetms and conditions as the central warehousing corporation may deem at for the purpose of promoting the warehousing and storage of agricultural produce and notified commoditie:t, otberw1le· tbaa through co-operative societies : 1649 (b) ls--3 l't (1) to ~he general fund shall be cired:ited-(4) all sums received by the central warehousing corporation other than those referred to in sub-section (1) of section 16; and i (b) such grants and l~ as the central government may s make for the purposes of the general fund (2) the general fund shall be applied-(4) for meeting the salary, allowances and other remuneration of the officers and other employees of the central warehousing corporation; 10  (b) for meeting the other administrative expenses of the corporation; and i (c) for carryini out the purposes of this act  chaprer m sta'l'i: w auhot1sihg corporation is18 (1) the state government may, by not1fication in the oftlcial gazette and with the approval of the central warehousing corporation, establish a warehousing corporation for the state under such name as may be specified in the notification (2) a state w8il"ehousing corporation established under tub- 20 aeetion (1) shall be a body corporate by the name notified under that sub-section, having perpetual succession and a common teal, with power to acquire, hold and dispose of property and to contract, and may, by the said name, sue and be sued (3) the head-oftice of a state warehousing corporation shall be 25 at such place within the state as may be notified in the oftlcial gazette (4) notwithstanding anything contained in sub-aections (1) (1) and (3) it shall not be necessary for the state government to establish a corporation under sub-section (1) where, under claulmt 30 (g) of sub-section (2) of section 43, a c01"porajtioll'l is deemed to be ablithed for that state under th1t act tt (1) the authorised capital of a state warehousing corpora- s, qpital tion shall be such swn not exceedini two crores of rupees as diq ctde~ be prescribed, divided into shares of the face value of one hundred rupees each, of which such number as may be determined by the 5 corporation in consultation with the state government shall be issued in the first instance and the remaining shares may be issued, from time to time, as and when the corporation may deem fit after consultation with the central warehousing corporation and with the sanction of the state government 10 (z) of the share capital issued in the first instance and of any subsequent issue of such capital, the central warehousing corporation shall in anv case where the state government has subscribed for fifty per cent of such capital, subscribe for the remaining my per cent of the capital i i 15 zoo (1) the general superintendence end managemenlt of the !:~=-t affairs of a state warehousing corporation shall vest in a board of wrehouaid directors which shall consist of the following, nameiy:-corporadoa (a) five di:rectors nominated by the central warehousing corporation, of whom one shall be' nominated in consultation 20 with the state bank and one at least shall be a non-oftlcial; (b) five directors nominated by the state government; and (e) a managing director, appointed by the state govemment in consultation with the directors refei'll'ed to in clause 25 (a) and ('b) and with the previous approval of the central warehousing corporation (z) the chainnan of the board of directors shall be appointed by the state government from among the directors of the state warehousing corporation with the previous approval of the cen-lo tral warehousing corporation (l> 'nle managing director mall-(a) exercise such powers and perform such duties u the board of directors or the state warehousing corporation ma, entruat or delegate to him; and 35 (b) receive such salary and allowance as the state warehousing corporation may, in consultation with the central warehousing corporation, and with the previous approval of the state government, fix (4) the board of directors shall act on business principles having 40 regard to public interest and' shall be guided by suchinstructiolw 0&  of polky  may de ilv,n to ~eft1 by the ~te gov  pwgt ar the oentral warehouain, corporation (5) if any dqu~~ arises as to whether a question is or 1s not - qu-sti® qf policy, or, if the state government and the central w arellq~ing cpj;'pofat1~ giv~ co~ctiq,,, instrqctlons, the matter' alw,1 ~ re~~ tq th~ c~trai gqvernmejl~ whose decision therecnt ~~~  (6) the directors of a state warehousing corporation, other thu the managing director, shall be entitlect to receive "1 wiq' of 1'h111l\e1'&tiea auch sums 88 may be pmetibeci: 10 ~~ ~~ llp o~a1lil direotor mall be entitled to receive any remuneration other than any allowances admillsible to him undef the rules regulating his conditions of service (7) the term of offtce of, and the manner of ftiling cuual vaoan-~ among, directors shall be such u may be prescribed ~ a pe1'sqil ~ be diatqualified for bein~ chosen 01 apd lor oem" a dif~tq:r qf a ~t~te wa~ehous~" corporation-(i) if he is foudd to be a lunatic or becomes of unsound raij1d; (ii) if he is, or at any time has been, adjudicated insol~~ or has suspencied pa~~nt of his debts or has compounded with 20 h1a ere~utors; or  (iii) if ~e i!s wi p~s b~ convicted of any offence involving moral turpitude and sentenced in respect thereof to irnprtsonment for not less than six months, uniess a periodi of five years has elapsed from the date of expiry of the sentence; or ~, (1') if ~e has been removed or dismissed from service of government or a corporation owned and controlled by the govem· ment; oil' (v) except in the case of the managing dit'ector, if he is a  1'"' offioial ot ~ ee~ral w~ehou&ing corpgfauon or a 30 state wareh0u$l co~tio; or (vi) if he is personally interered in a subaistinjit contract "l"l':\, 9f iq, any work bein·e done for, th~ st~te wafehousinr cql'poration ~cept as a shareholder (othe;f than a director) in , ~c ~~p~ 8& ~ed in tl\e c~pan~e, ~c~ 1958: 35 35 i of i,,, provided that where any such person is a shareholder, he shall d'",lam ta the w'~ cqrporauon ~, mt~ ~ atedt of  w·bit ~ pl _ ~, u (1) 'nle state government may, at any time, with the pre- - -• , vious approval of the central warehousing corporation remon =: the managing director from office after giving him a reasonable opportunity of showing cause against the proposed removal , (i) the board of directors may remove from offtce any director whe-- , (4) is or has become subject to any of the disqualifications mentioned in section 21; or i ! (b) is absent without leave of the boud of directors tor 10 more than three consecutive ~etinils of the board without cau'se ~umeientt in the opinion of the board, to exonerate hil absence 23 (1) a state warehousing col"poration may appoint such appolntomeers and other employees as it considers necessary far the efft- :~rtc i, clent performance of its functions and their oonclitiadi (z) every per,on employed by a state warehousing corporation ofeemc u1w8l' this act shall ~ subject to such conditions of senice and shall be entitled to such remuneration as may be determined by :re~lations made by the corporation under this act 20 !4 subject to the provmona of this act, a state warehousing pudctiadi corporation mayof the state " arehou'''w corpondod (4) acquire and build godowns and warehou8el at ijuch placm within the state as it may, with the previous approval of the central warehousing corporation, determine; (b) :run warehquses in the state for the storage of agricultural produce, seeds, manures, fertilizers agricultural fmpl~~ent and notift~ commoditiesi 30 (0) arrange facuities for the transport of _,"cultural produce, seeds, manures, fertilizers, agricultural implemeata and ilottfted commodities t~ and from warehouses; 3' (4) act as an agent of the central warehousing corporation or ~ the government ~or the purpose of the putchase, 1181e, i_age elnei distribution, of agricultural produce, ~eds manure, fertilizers, agricultural inlpl«nnents and llotifltd commodities   25 (1) there shall be an executive committee of a state w~ c~ housing corporation which shall consist of-(a) the chairman of the board of directors; (b) the managing director; and (c) three other directcxrs chosen in the prescribed mann j of ·whom one shall be a director referred to in clause «(i) of aub-section (1) of section 20 (2) the cbairman of the board of directors shall be the chairman of the executive committee (3) subject to any general or special directions as the board of 10 directors may, from time to time, give, the executive committee thall be competent to deal with any matter within the competence of the state warehousing corporation   ;,  chapter iv is  finance, accounts and auditsvhnunbt 28 (1) every warehousing corporation shall prepare before the =: of commencement of each year a statement of programme of its acti-:ra~ial vities during the forthcoming year as well as a financial esticliimmei mate in respect thereot' (2) a statement prepared under sub-section (1) shall, not later :ao than three months before the commencement of each year, be lubmitted for approval-(a) in the case of the central warehousing corporation, to the central government; (b) in the case of a state warehousing corporation, to 25 the central warehousing corporation and the state government (3) the statement and the financial estimate of a warehousing corporation referred to in sub-section (1) may, with the approval of the central government in the case of the central warehousing 3 corporation, or with the approval of the central warehousing corporation and the state government in the case of a state ware housing corporation, be revised by the warehousing corporation borro:,:! %7 (1) a warehousing corporation may, in consultation with ;: 0 - the reserve bank and with the previous approval of the approprl- 35 ~ ate government, issue and sell bonds and debentures carrying interest for the purpose of raising funds: provided that the total amount of bonds and debentures ls8ued and outstanding and of the other borrowings of the corporation j aball not at any time exceed ten times the amount of the paid-up share capital and the reserve fund of the corporation (2) a warehousing corporation may, fol' the purpose of carryina out ita functions under this act, borrow money-(1) from the reserve bank, or s (1i) from the state bank, for such periods for which, and upon any of the securities against which, it is authorised to advance and lend moneys, under the provisions of the state bank of india act, 1955 10 (3) subject to the proviso to sub-section (1), the central warehousing corporation may borrow money from the central government and a state warehousing corporation may borrow money :from the state government and the central warehousing corporation on such securities and on such terms and conditions as may be is agreed upon between the borrowing corporation and the lender, in each case (4) the bonds aad debentures of a w &rehousing corporatlojl may be paranteed by the appropriate government as to the repqment of principal and the payment of interest at such rate al may be 30 fixed by the appropriate government on the reeommendation of the board of directors of the corporation at the time the bonds or debentures are lssued 28 all moneys belonging to a warehousing corporation shall be npoik deposited in the reserve bank or the state bank or, subject to ic~" 25 any rules made under this act, in any scheduled bank or co-operative bank 29 a w &rehousing corporation may invest its funds in the inftltlmat aecurities of the central or any s1jate government or in such other of fiidcil manner as may be prescribed by the appropriate government io 30 (1) every warehousing corporation shall establish a reserve diipomj of fund out of its annual net profits proi& (2) after making provision for bad and doubtful debts, depreciation on assets and all other matters which a:re usually provided for by companies registered and incorporated under the companlee 3s act, 1956, a warehousing corporation may, out of its net annual profits, declare a dividend: provided that for 80 long as the reserve fund is less than the paid-up share capital of the central warehousing corporation and until there has been repaid to the central government such sum, 40 if any, as that government may have paid under a guarantee given in punuance of sub-seetion (1) of section 5 or lub-section (4) of i8guon 27, the rate of iucb divtd4tnd, in the case of 'he central warehousing cmporatiod, shall dot exceed the rate suaranteea by the central government under sub-section (1) of section 6 aoco\idtl 31 (1) every wlilrehousing corporation shall maintain proper :r w-::! accounts and other relevant records and prepare an annual statement s boalln of accounts inclwiing the profit and lou account and the balance corporation sheet in euch fonn as may be prescribed: provided that, in the case of the central warebouain corporation, the aa:owlts relating to the warehousing fund and the general fwld shall be maintained separately 10 (2) the accounts of a warehousing corporation sball be au4lted by an uditor duly quauf\wi ·to act as an auditor of companies udder aection 226 of ibe companies act, 1956 (3) the said auditor shan be appointed by the appropriate government on the advice of the comptroller and auditor-general of is india ~ i (4)'the audi-1iball be supplied 'with a oopy "t the annual '-lance ibeet and the profit and 10m ldcow1i of the warehousing corporation and it shall be his duty to examine them together with the koowlts and vouchers relating thereto, and he shall have 4 list delivered to 20 him of all books kept by the corporation and shall at all reasonable times have access to the books, accounts and other documents of the corporation and rmy require from any officer of the colporation such information and explanations as the auditor may think necessary fl8 the performance of his duties as auditor 2s (5) the auditor mall make a report to the mareholdera on the accounta exa:mjned by htmand on the annual balance sheet and the profit and lois account and in every such report, he shall state whether in hia opinion the eccounta give a true and fadr view-(4) in the case of the balance sheet, of the it ate of the cor- 30 poratlon'8 afta1rs at the end cd its flhaneial year, and (b) in the case of the proftt and losi acoount, cd the proat at loss for ita ftnancibl year, - and in case he has called for any explulatitm or irifonnatioo from the 3s dcers, whether it haa been given and whether it islatisfactory (6) the appropria~ government may, itfter consultatiod with ~ comptrouer add auditor-general of iadia eli an, time iine ~ t to the auditor requiring him ito report to the appropriate government upon  the adequacy of measures taken by a warehousing corporation for the protection of its shareholders and creditors or upoil the ufii· ciency ~f his procedure in auditing the accounts of the corporation s and may enlarge or extend the scope of the audit or direct that - different procedure in audit may be adopted or direct that any other examination may be made by the auditor if in the opinion of the appropriate government public interest so requires (7) a warehousing corporation shall send a copy of every report 10 of the auditor to the comptroller and auditor-general of india and to the centn11 governmenlt at least one month before it is placed before the shareholders ; ! (8) notwithstanding anything hereinbefore contained in this section, the comptroller and auditor-general of india may, either of hi is own motion or on a request received in this behalf" from the appropriate government, undertake in respect of a warehousing corporation such audit and at such time as he may consider necessary: provided that where the central government is required to make any payment on account of the guarantee given by it under sub-20 section (1) of section 5, such auclit shall be undertaken by the comptroller and auditor-general of india or any person authorised by him in this behalf ' ! (9) the comptroller and auditor-general of india and any person authorised 'by him in connection with the audit of the accounts of a 25 warehousing corporation shall have the same rights, privileges and authority in connection with such audit as the comptroller and auditor-general has in connection with the audit of government accounts and in particular, shall have the right to demand the production of books, accounts connected vouchers and other documents 30 and papers and to inspec1; the office of the corponltion (10) the annual accounts of a warehousing corporation together with the audit report thereon shall be placed before the annual general meeting of the col"poration within six months of the close of the ftnancial year ' 35 (11) every audit report under this section shall be forwarded to the appropriate government within a month of its being placed before the annual general meeting and that govemmentt shall as soon thel'ieafter as may be cause the same to be laid before both houses of parliament or the legislature of the state, as the case may be 1649 (b) ls-4  chapter v misc'ellanj;ousu no act or proceeding of a warehousing corporation shall be invalid by reason only of the existence of any vacancy among ttl directors or any defect in the constitution thereof vpldciei, etc, not to invalidate act and proc:eedins of warebouiina corporalionl delepdon ia a w~housing corporation ~y, by genenu or ~ml order in wjitcing delegate to the ~tb;ty or other oftlcer of the corponltion, subject to such conditions and limitatiorw, if aay as ~y be lpecified in the order, such of its powers and functions under this act u it may d"rd necessary for the e&cient perfornumce of its functions ~o ~odd 34 in any meeting of the shareholders of a warehousing corpora-=-~c1cra tion, every member shall have one vote in res~t of each share held by him in the corporation dl'pu' 35 if there is any difference of opinion between the central ware-~~ holujing corporation and a state warehousing corporation regarding is 'fiuebouaina their respective functions and powers under this act, such difference ~~ shall be referred to the central government whose decision thereoaa arebou~iri shad·be final cor jiltion dtclaratioa 36 every director, auditor, officer or other employee of a wareefftdelltv housing corporation shall, before entering "pon his duties, make a 20 idd secrecy declaration of fidelity and secrecy in the form set out in the schedule indemnity fit director •• 37 (1) every direc'tcr of a warehousing corporation shell be lnderoniijed by the corpo~ation concerned against all losses qci expense$ i~ed in the 4ischarse of his duties except such as we cau,sed by bjs own wilful act or default 35 (2) a director of a warehousing corporation shall not be 1'81-ponsible for any other director or for any ofticer or other employee of' the corporation or for' any' loss or expense resulting to the cqrporation by the insufficiency or deficiency of value of, or title to, any property or security acquired or taken on behalf of the corpomtion in good faith, or by the wrongful act of any person under obligation 30 to the corporation qr qy anything done in good faith in the execution of the duties of h~ office or in relation thereto otr_ca, ii (1:) whoever, without the conscmt in writing of a wareho\lfpl' corporation, uses the name of that corporation in any prospectus or 3 advertisement, shall be punishable with imprisonment which ma,·5 atend to six month, or with be whtch may exterld to one thoumncl rupees, or with both (2) no court shall take cognizance of any o1!enee under sub-~ion (1) otherwise than on a complaint in writing by ad ofticer s authorised in this behalf by the warehousing corporation concerned 45 of 1961 39 for the purposes of the income-tax act, 1961, a ware- providanl housing corporation shall be deemed to be a company within the ::::: meaning of that act and shall be liable to income-tax and super-tax and iupei-iiccordtngly on its income, profits and gains: tu 10 provided that, in the case of the central warehousing corporation, any sum paid by the centml government under the guarantee given in pursuance of sub-section (1) of section 5 or, in the case of a warehousing corporation, any sum paid by the central or a state goverturient under any guarantee given in pursuance of sub-section is (4) of section 27 shall nat be treated as income, profits and gains of a warehousing corporation, and any interest on the debentures or bonds issued by that corporation out of such sums shall not be treat~ as e~penditure incurred by it: provided further that in the case of any shareholder or debenture-20 holder, such portion of a dividend or interest as has been paid out of any such swn advanced by the central government shall be deemeci to be his income from interest on securities declared to beidcome-taxfree within the meaning of section 86 of that act " no provision of law relating to t1he winding up of companies windma"~ 25 or crorporations shall apply to a watehousing corporation alld any = such corporation shall not be placed in liquidation save by order of col1loft  the appropriate government and in such mannt!'l" as it may diret't lienl '1 (1) the appropriate government may, by notification in the power cd oftldal gazette, make rules to carry out the purposei ot this act mab nal ••• 30 (2) without prejudice to the generality of the foregoillg power, ilrc1l '1iilel may provide for-(4) the additional functions which a warehoulth'i cotporatioll may performj (b) the manner of nomination end eleetlon of the djrecton of the central warehousing corporation and th'e period withjd which such direcior shan be (lominated or eleicted; (e) the term of oe of, and the manner of 1ullng cauuil vacancies among, and the remuneration payable to the dlrectol'l of warehousing corporationj (d) the manner of choosing· djreetors ·on the exeeutive c~om­mittee of a warehousing corporationj (e) the authorised capital of a state warehousing corporation within the limit specified in sub-section (1) of section 19i (f) the form of the annual statement of accounts and the, baluce-sheet· to be prepared by a warehousing corporation; (g) the deposit of moneys of a warehousing corporation in a scheduled bank or a co-operative bank; (h) the manner of issuing shares of a warehousing corporation, the calls to be made in respect thereof, and all other 10 matters incidental to the issue of shares; (i) any other matter which has to be or may be prescribed (3) every rule made by the central government under this section shall be laid as soon as may be after it is made, before each house of parliament while it is in session for a total period of thirty day' 15 which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session in which it is so laid or the successive sessions aforesaid, both houses agree in making any modification in the rule or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modifted 20 form or be of no effect, as the case may be; so however that any such moc:liflcation or annulment shall be without prejudice to the validit7  at an,ytbijli previously done under that rule rowe, or 42 (1) a warehousing corporation may, with the previous sane-~~~ tion of the appropriate government, by notification in the official 2' ~o gazette, make regulations not inccmsistent with this act and the = rep rules made thereunder to provide for all matters for which provision is necessary or expedient fol" the purposes of giving effect to the provisions of this act (2) in particular, and without prejudice to the generality of the il foregoing power, such regulations may provide for-(<<) the conditions of service of, and the remuneration payable to, the officers and other employees of a ·warehouatni corporation; (b) the manner in which, and the conditions subject to" which, shares of the central wareho~sing corporation may be transferred; (c) the manner in which meetings of a warehousing carporation and the executive committee thereof shall be convened, the fees for attending such meetings and the procedure to be 40 followed thereat; (d) the duties and conduct of otlcers and employees of - warehousing corporation; (e) the powers and duties which may be entrusted or delegated to the managing director of a warehousing corporation; s (f) generally, the efftcient conduct of the affairs of a warehousing corporation (3) the appropriate government may, by notification in the ofticial gazette, rescind any regulation which it has sanctioned and thereupon the regulation shall cease to have effect 10 a (1) with effect from the date on which the central ware- re~ •• d housing corporation is established under section 3, the airricultural uymll 0{ j9'6 produce (development and warehousing) corporations act, 1956, in so far as it has not been repealed by the national co-operative development corporation act, 1962, shall stand repealed (2) notwithstanding such repeal,-is (a) the shares allotted and the share certificates issued by the central warehousing corporation established under the repealed act (hereinafter referred to as the said corporation) shall be deemed to hove been allotted and issued by the corporation established under section 3 of this act as if this act had been in force on the day on which the shares were allotted and the share certificates were issued; (b) every shareholder of the said corporation shall become the holder of as many shares in the corporation established under aection 3 of this act as are equivalent in number and value to the shares held by him in the said corporation; (e) all moneys and other securities belonging to the national warehousing development fund which, immediately before the said date, was maintained by the said corporation shall stancl transferred to and be maintained by the corporation established under aection 3 of this act; 3s (d) anything done or any action taken (including oy appointment, nomination, delegation, rule or regulation made) under the repealed act shall, in so far as it is not inconsistent with the provisions of this act, be deemed to have been done or taken under this act; (e) every share held by the said corporation in a state warehousing corporation under the repealed act shall be deemed to be a lihare held by the c01p)l'ation estabushed under ectfon 3 of th1a ad; in file· ~t~dirrg state wmho~1 corporati06 deemed to be established under this act; (1) all rights, liabuiti9 an·d obligations of the said cor,or-ti- whethel'lir'tsfil aut of any contr  et or otherwise, shall be the rights, liabilities end obligaticna respectively of the corp:>ra-s tion established under section 3 of this a~; (9) a state warehousing corporation establwred for - state under the repealed act shall be deemed to be the· s •• warehousing corporation establlsfted for that state lulder tidi act 10  ~'ij, 'qi\'jildilli,ty ad ~i, - declar,e utat i will faj,thf~ , ~y and to the ht!st of my judgment, skill and ability execute and perform the duties which are reqqired of me as a director, officer, employee or auditor (as the case may be) of the warehousing corpqration and wbich properly relate to the office or position in the said co~poration h~ldj by me 10 i fu~er declare that i will not communicate or allow to be communicated to any ~rson not legally entitled t1)ereto ~y iqlormatiod relating to the ~ff~4's of the said corporation, nor will i allow any such person to inspect or have access to any books or docqjl1enta belonptg to, or in th~ possessio!) of, t;he corporation 8i\d relating tp is the bustnes!! of the corporation sign,d ~elore me date  statement 0'" objects and reasonsunder the agricultural produce (development and warehousing) corporations act, 1956, two inter-dependent bodies namely the national c(h)perative development and warehousing board and the central warehousing corporation were established and they were under the administrative control of the ministry of food and agriculture subsequently, as a result of the re-allocation of business among the ministries, the two bodies came under the administrative control of two different ministries namely, the ministry of community development and co-operation and the ministry of food and agriculture in the interest of the better functioning of the two bodies and for administrative convenience, it has been decided that the two bodies should function independently under separate enactments a bill has already been introduced for establishing a separate national co-operative development corporation in place of the existing board the present bill seeks to provide for the establishment of a central warehousing corporation and for each state, a state warehousing corporation under this bill, the central warehousing corporation will continue to perform the same functions as the existing corporation the central government will be a shareholder to the extent of forty ~r cent of the shares of the corporation in the place of the national co-operative development board while the other shareholders of the existing corporation will become the other shareholders of the new corporation the new corporation will also maintain the warehous'ng fund the existing state warehousing corporationa shall be deemed to be the warehousing corporations established for the respective state under the new law new delhi; s k patil the 24th august, 1962 the authurised share-capital of the c~ntral warehousmg c6rpo~ ration is rs 2q (twenty) crores un:d'er clause 4' of me bill: fu~ central government has to subscribe 40% of the share;ca~iial"issu~d at any tim~ by the central watehousing c6tporatj'on the corporation has issued one lakh shares of the value of rupees ten crores for subscripti'on, out of which 40,000 shates have been subscn"'bed for by tile national cooperative developnlent and warenousing board" anc!' these shares will be" ttartsferted to central govemrtierif a sum of rupees two crores has already been paid on these'sliates by the board and the central government will have to pay the balance" of rupees two ctores as and ,hen calls are" maae 5y the corpotiffion futare i88l1':~11 of share-capital 'by the central wafehousin, corporation will be made only with' the approval of the ceatral-government forty per cent of such shares wililotave to be gubaettiobed for by the central government and the non-recurring expenditure on this account will not exceed rupees four cl'ores if my portion of the rest of the" sixty per ~eht of the" sl1at~  capitlll ntiw issued: or that may be issued hi future reri:\ai~s unatloftm, it may be subscribed for by the central government and the state s'ank ot india in such proportion as rh~y be agteed upon between tll~rn: 2 under clause· 5· of the' bill; the shares- of the ~iltral w~ housin, corporation have beell' guaranteeti by tbt! cedtnl government as to the re-payment of principal aftci the plf,ymef!rt of the annual dividend the centrai government have gual"lmeed the' payment of a minimum dividend of 31% on the shares of the central warehousing corporation 3 under clause 14, the central government can give grants and loans to the central warehousing corporation from time to time as it may deem fit during the last four years, the annual average of loans advanced to the corporation comes to about rs 2·5 lakhs 4 clause 15 of the bill provides that the central warehousing corporation shall maintain two funds called the central warehous-~ng fund and the general fund the resources of the warehousing 1649 (b) ls-5 fund will be utilised for advancing loans to the state governments to enable them to subscribe to the share-capital of the state warehousing corporations and for advancing loans and granting subsidies to the state warehousing corporations or to the state governments for the purpose of promoting the warehousing and storage of agricultural produce otherwise than through co-operative societies during the last six years about rs 78 lakhs have befm advanced to the state goyernments as loan for enabling them to subscribe to the share-capital of the state warehousing corporations the resources of the general fund will be utilised to meet the day-to-day expenses of the central warehousing corporation to carry on its business activities and to carry out the purposes laid down in the bill 5 clause 26 of the bill provides for the control by the central government over the financial estimates of the central warehousing corporation similarly the financial estimates of the state warehousing corporations are subject to the control of the state governments as well as the central warehousing corporation which subaeribes fifty' per cent of the share-capital of state corporations 6 clause 27 of the bill provides for the guarantee by the appropriate government of the repayment of principal and payment of interest on moneys borrowed by the warehousing corpoi:ations 7 clause 31 of the bill provides for the audit of the accounts of the corporations by a qualified auditor, to be appointed in consultation with th~ comptroller and auditor-general of india further, the clause also 'empowers the comptroller and auditor-general to carry out the audit of the accounts of the corporations as and when considered necessary by him or upon a request by the appropriat~ governmejit  clause 41 of the bill empowers the central government in relation to the central warehousing corporation and the state government in relation to a state warehousing corporation to make rules to carry out the purposes of the act the matters in respect of which rules may be maae are specified in sub-clause (z) and they relate to the manner of nomination and election of the directors of the corporation concerned and of its executive committee, the term of office of and the manner of filing casual vacancies among the directors, the amount of the authorised capital of a state warehousing corporation within the limit specified in clause 19 (1) , the form of the annual statement of accounts to be furnished by a corporation and other matters of a routine or administrative character clause 42 of the bill empowers a warehousing corporation to make regulations not inconsistellit with the act or the ntes made thereunder for the purpose of giving effect to the provisions of the act the matters which may be provided for by regulations relate to procedural or administrative details the delegation of legislative power is thus of a normal cha~er bfll to provide t6't- the irtcotpora'tiori and regulation of corporations for the purpose of warehousing of agricultural produce and ~in other commodities and for ma~ters connected t1ierewith the president has, in pursuance of clauses (i) and (3) of article 117 of the constitution of india, recommended to lok sabha the introduction and consderation of the bill m n kaul, secretary (shri s k pati!, minister of food and agriculture) 