 the agricultural produce (de- velopment and warehousing) corporations bnl, 1956(as introducbd in loe sabha)  'l1ie agricultural produce (development and warehousing ) corporations bill, 1956 (as introduced in lok sabra) o a billto provide for the incorporation and regulation of' corporations for the purpose oj development and warehousing oj agricultural produce on co-operauve principles and for matters connected therewith be it enacted by parliament in the seventh year of the republic of india as follows:-chapter i  preliminarys 1 (1) this act may be called the agricultural produce (develop- short title ment and warehousing) corporations act, 1956 ' := ment (2) it extends to the whole of indja except th~ state of jammu and kashmir (3) it shall come into force on such date as the central govern-[0 ment may, by notification in the official gazette, appoint 2 in this act, unless the context otherwise requires,-de8nltionl (a) "agricultural produce" means any of the following classes of commodities, namely:-(i) foodstuffs, including edible oil-seeds; is (ii) cattle fodder, including oil-cakes and other concentrates; (iii) raw cotton, whether ginned or unginned and cotton seed; (iv) raw jute; and (v) vegetable oils; (b) "appropriate government" means in relatjon to the board and the central warehousing corporation, the central government, and in relation to a state warehousing corpora- 5 tion, the state government; (c) "board" means the national co-operative development and warehousing board established under section 3; (d) "central warehousing corporation" means the central warehousing corporation established under section 17;· 10 (e) "co-operative society" means a society registered or deemed to be registered under the co-operative societies act, - 1912 or under any other law for the time being in force in any 2 of 1912 state relating to co-operative societies which is engaged in any of the activities specified in sub-section (1) of section 9 and in- is eludes a· co-operative land mortgage bank; (f) "prescribed" means prescrfoed by rules made under this act; (g) "recognised association" means an association which is for the time being recognised by the central government under 20 section 6 of the forward contracts (regulation) act, 1952; 74 of 19,2 (h) "reserve bank" means the reserve bank of india constituted under the reserve bank of india act, 1934; 2 of 1934 (i) "scheduled bank" means a bank for the time be)ng includeli in the second schedule to the reserve bank of india act, 25 1934; 2 of 1934 (j) "state bank" means the state bank of india constituted under the state bank of india act, 1955; 23 of 19!5!5 (k) "state warehousing corporation" means a warehousing corporation for a state established under section ~8; 30 (l) "warehousing corporation" means a warehousing corporation established under this act; and (m) "year" means the financial year  chapter iithe national co-operativb devrlopmbnt and warehousing board 35 establish-3 (1) with eftect from such date as the central government may, n~t oflt~_ by notification an the official gazette, fix in this /behalf, there atlona """"' operative shan be established at new delhi a corporation by the name of the devct1&pd-national ico-operatlve development and warehousing board which ~ an  warehousshall be a body corporate having perpetual succession and a com- 40 ing board mon aeai with power to 'acquire, hold aad dispose of property and to contract, and may, in the said name, use and be sued (2) the board shall consist of the following members, namely:-(i) ten members representing the central goverbment, to be nominated by that government in such manner as may be prescribed; 74 of 1952 (ii) the chairman of the forward markets commission established under the forward contracts (regulation) act, 1952, ex-otjicio; (iii) one representative of the reserve bank, nominated by the central government; 10 (iv) one representative of the state bank, nominated by the central government; (v) seven non-officials, nominated by the central government of whom-(a) one shall b~ a person who has special knowledge of is rural economics; and (b) four shall be persons who have experience of cooperative societies, one being a persol) who has also special knowhdge of co-operative education (3) a member of the board- nominated by the central govern-20 ment may be nominated by virtue of office; (4) there shall be a cha;rman and a vice-chairman of the board who shall be chosen from among the members of the board in such manner as may be prescribed 4 a person shall be disqualified for being chosen as, or for being, disqualifica-2s a membet of the board wholion for being a member of (i) is, or at any time has been, adjudicated insolvent or has board suspended payment of his debts or has compounded with his creditors; or (ii) is or has been convicted of any offence involving moral 30 turpitude; or (iii) is a salaried official of the board or of a warehousing corporation s (1) the term of office of members of the board and the man- term ner of filling vacancies among members shall be such as may be ~f sit~:ber 3s prescribed - of board (2) any member of the board other than an ex-ot!icio member may resign his office by giving notice in writing to the central government, and on such resignation being accepted he shall be deemed to have vacated his office :me:o:fl~: 8 the central government may, ~t any time, remove from office ber, etc: any member other than an ex-offic,o member of the board after giving him a reasonable opportunity of showing cause against the proposed removal meetjnjl _ 7 (1) the board shall meet at such times and places and shall,s etc of board subject to the provisions of sub-sections (2) and (3), observe such procedure in regard to transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the board under this act (2) the chairman or, in his absence, the vice-chairman or, in 10 the absence of both the chairman and the vice-chairman, any member chosen by the members present from amongst themselves, shall preside at a meeting of the board (3) all questions at a meeting of the board shall be decided by a majority of the votes of the members present and voting, and in is the case of equality of votes, the chairman, or, in his absence, the viae-chairman, or, in the absence of both the chairman and the vice-chairman, the person presiding shall have a second or casting vote of&c:era and 8 (1) the central government shall, in consultation with the 20 = e::;p- board, appoint a person to be the secretary of the board board (2) subject to such rules as may be made by the central government in this behalf, the board may appoint such other officers and employees as it considers necessary for the efficient performance of its functions 25 (3) the methods of appointment, the conditions of service and the scales of pay of the officers and other employees of the board shall,-(a) as respects the secretary, be such as may be prescribed; and 30 (b) as respects the other officers and employees, be such as may debermined by regulations made by the board under this act puactiodi of 9 (1) subject to the provisions of this act, the functions of the board board shah be to plan and promote programmes for the production, 3s processing, marketing, stor~ge, warehousing, export and import of agriculture produce through a co-operative society or a warehousing corporation (2) in particular and without prejudice to the generality of the foregoing provision, the board may'-(a) advance loans or grant subsidies to state governments for 1lnancing co-operative societies; (b) provide funds to a state government or a warehousing corporation for financing co-operative societies for the purchase of agricultural produce on behalf of the central government; s (c) subscribe to the share capital of the central warehousing corporation or advance loans or g"rant subsidies to that corporation or any state warehousing corporation; and jo (d) plan and promote programmes through co-operative societies for the supply of seeds, manures, fertilisers, agricultural implements and other articles for the development of agricultural produce (3) the board shall so exercise its functions under this section as not to interfere with the activities of the all india khadi and village industries board set up by the central government 18 (1) there shall be an executive committee of the board which execulive is shall collsist of the following members, namely: -committee ofboird (a) the vice-chairman of the board; (b) two members nominated 'by the central government in such manner as may be prescribed, from among the mell\bers of the board referred to in clanse (i) of sub-section (2) of section 20 3; (c) the chairman of the forward markets commission; (d) the representative of the reserve bank nominated under clause (iii) of sub-section (2) of section 3; (e) one member nominated by the central government from 25 among the members of the board referred to in clause (v) of sub-section (2) of section 3 (2) (a) the vice-chairman of" the board shall be the chairman of the executive committee (b) the vice-chairman, of the executive committee shall be 30 nominated in such manner as may be prescribed, from among the members referred to in clause (b) ofsu'b-section (1) (3) subject to the general control, direction and superintendence of the board, the executive committee shall be competent to deal with any matter within the competence of the board; 3s (4) the executive committee shall meet at such times and at such places and shall observe such procedure in regard to transaction of business at its meetings (including the quorum at meetings) as lnay be provided by regulations made by the board under this act (5) the minutes of every meeting of the executive committee ~hall be laid before the board at its next following meeting grants b 11 the central government shall, after due appropriation made the ceniral by parliameqt by law in this behalf, pay to the board--government to board (a) a non-recurring grant of five crores of rupees and a 10 recurring grant in each year of a sum of five crores of rupees during the period of five years from the commencement of this s act: provided that the central government may increase or reduce the amount of such non-recurring grant or the annual recurring grant in any year having regard to the actual requirements of the board; (b) after the expiration of the salid period of five years, such sums as the central government may from time to time deem necessary to enable the board to perform its functions under this act 12 (1) the board shall maintain two separate funds, namely: -is board to maintain two fund •• (a) the national co-operative development fund (hereinafter referred to as "the development fund"); (b) the national warehousing development fund (herein-- after referred to as "the warehousing fund") (2) the board may with the approval of the central govern- ~ ment, make re-appropriations between the two funds 13 (1) to the development fund shall be credited-development pund (a) three-fifths of the annual recurring grant referred to in section 11; (b) such additional grants as the central government may 2s make to the board for the purposes of the fund; and (c) such sums of money as may, from time to time, be realised out of repayment of loans made from the fund or from interest on loans or dividends on investments made from the fund 30 (2) the development fund shall be applied for advancing loans and granting subsidies to state governments on such terms and conditions as the board may deem fit for the purpose of enabling state governments to subscribe to the share capital of co-operative societies or for otherwise financing co-operative societies 3s warehousing 14 (1) to the warehousing fund shall be credited-fund (a) the non-recurring grant of five crores of rupees and twofifths of the annual recurring' grant referred to in section 11; (b) such additional grants as the central government may make to the board for the purposes of the fund i 40 (c) such sums of money as may, from time to time, be realised out of loans made from the fund or from interest on loans or dividends on investments made from the fund (2) the warehousing fund shall 'be applied-s (a) for subscribing to the share capital of the central warehousing corporation; (b) for advancing loans to state governments on such terms and conditions as the board may deem fit for the purpose of enabling them to subscribe to the share capital of state ware-10 housing corporations; (c) for advancing loans and granting subsidies to a warehousing corporation or to a state government for the purpose of promoting the warehousing and storage of agricultural produce is 15 (1) 'fa,e board shall furnish to the central government at returns inj such times and in such form and manner as may be prescribed or (cpom as the central government may direct, such returns and statements and such particulars in regard to the discharge of i~ functions under this act as the central government may, from time to time, require 20 (2) without prejudice to the provisions of sub-seettion (1), the board shall, as soon as possible, after the end of each year, submit to the central government a report, in such form and manner and before such date as may be prescri'bed, giving a true and full account of its activities, policy and programme during the previous y   , 2s (3) a copy of the report received under sub-section (2) shall be laid before both houses of parliament 16 in the discharge of its functions, the board shall be guided directions by such directions as may be given to it by the central government bgoy central vernmeut chapter iii  the central w arbhousing corporation17 (1) with effect from such date as the central government the central may, by notification in the official gazette, fix in this behalf, there warehousing shall be es'tablished a corporation by the name of the central corporation warehousing corporation which shall be a body corporate having 3s 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 wareqousing corporation shall be at new delhi ' 18 (1) the authorised capital of the central warehousing cotporation shall be twenty crores of rupees divided into two hundred thousand shares of the f£ce value of one thousand rupees each, of which one hundred thousand shares of the total face value of ten crores of rupees shall be issued in the first instance, and the re- 5 maining shares may be issued, with the sanction of the central government from time to time, as and when the central warehousing corporation may deem fit (2) of the capital issued in the first instance-(a) the board shall subscribe for forty thousand shares; 10 (b) on application made before such date as may be notified by the central government in !the official gazette in this behalf;-(i) the state bank m£,y shares; subscribe for ten thousand is (ii) other scheduled banks may subscribe for twelve thousand and five hundred shares;  ('iii) co-operative societies may subscribe for two thousand and five hundred shares; (iv) insurance companies, investment trusts and other 20 classes ~f financial institutions may subscribe for thirty thou&:nd shares; and (v) recognised associations and joint stock companies dealing in agricultural produce may subscribe for five thousand shares 2s (3) if any shares referred to in clause (b) of sub-section (2) remain unallotted, they may be subscribed for by the board and the state boak in such proportion as may be agreed upon between them (4) if and when the remeining one hundred thousand shares or any part thereof are issued, the board, the state bank and the 30 other institutions referred to in sub-section (2) may subscribe for such shares in such· proportion as the board may determine at the time of the issue of the shares (5) notwithstanding anything contained in this section, no institution belonging to any of th«:; classes referred to in sub-clause 3s (it), (iii), (iv)or (v) of clause (b) of sub-section (2) shall be entitled to subscribe for more than twenty-five per cent of the share capital reserved for that class of institution under the said clause (6) tbe shares of the central warehousing corporation shall not be transferable except to the board, the state bank, any scheduled bank, any insurance company, any investment trust or other financial institution or any co-operative society or any recognised s association or joint stock company dealing in agricultural produce, in accordance with the regulations made by the central warehousing corporation under this act it (1) the shares of the central warehousing corporation shall shares to be guaranteed be guaranteed by the central govemment as to the repayment by central 10 of the principal add tile payment of the annual dividend at such government and to be minimum rate as may be fixed by the central government by noti- trust or ftcatlon published in the oftlcial gazette at the time of the issue of approy~ the shares securities (2) notwithstanding anything contained in the acts mentioned i~ in this sub-section, the shares of the central warehousing corporation shall be deemed to be included among the securities enumerated in section 20 of the indian trusts act, 1882, and also to be 2 0: 188; approved securities for the purpose of the insurance act, 1938 and 4 0 f 11939'  100 94 the banking companies act, 1949 20 20 (1) the general superintendenceand management of the ::~~:jnt affairs and business of the central warehousing corporation shall warehollsing vest in a board of directors who, with the assistance of an execu- corporation' tive committee and a managing director, may exercise all the powers and discharge all the functions which may be exercised or dis-25 charged by the central warehousing corporation under this act (2) the directors in discharging their functions under this act shall act on business principles having regard to public interest and shall be guided by such instructions on questions of policy as may be given to them by the board 30 (3) if any doubt arises as' to whether a question is or is not a question of policy, the decision of the board shall be final - 21 (1) the board of directors, referred to in section 20, shall dirtctora consist of the following, namely:-(a) all members of the executive committee of the board referred to in sub-section (l) of section 10; 35 (b) two directors, nominated by the board in 'the prescribed manner from among the members of the board other than those who are members of the executive committee of the board; (c) the representative of the state bank on the aoard; (d) one director to be elected in the prescribed manner by each of the following classes of shareholders of the central warehousing corporation, namely:-(i) scheduled banks, (ii) co-opera ti ve societies, (iii) insurance companies, investment trusts and other financial institutions, and (iv) recognised associations and joint stock companies dealing in agricultural produce; (0 (e) a managing director, appointed by the board in consultation with the directors referred to in clauses (a) to (d) (2) the four directors to be elected under clause (d) of sub-section (1) may, for the first constitution of the board of directors, be is nominated by the central government in consultation with the board in such manner as to give representation to each class of institutions (whether they have become shareholders of the corporation or not) referred _to in that clause, but a director so nominated shall hold office only until he is replaced by a director elect- 10 ed as povided in that clause, and the director so elected shall hold office only for so long as the director replaced would have held office had he not been replaced (3) if, within the period prescribed in this behalf, or within such further period as the central government may allow, any 15 class of institutions referred to in clause (d) of sub-section (1) fails to elect a director, the board may nominate a director- to fill the vacancy (4) the vice-chairman of the board shall be the chairmah of the board of directors 30 (5) the vice-chairman of the executive committee of the - board shall be the vice-chairman of the board of directors (6) the managing director shall-(a) be a whole-time officer of the central warehousing corporation; r ~ (b) perform such duties as the central warehousing corporation may by regulations made under this act entrust or delegate to him; and (e) receive such salary and allowances as the central warehousing corporation may, with the approval of the board, fix (7) the'directors of the central warehousing corporation other 5 than a managing director shall be entitled to receive by way of remuneration such sums as the central warehousing corporation may, with the approval of the board, fix: provided that no official director shall be entitled to receive any remuneration other than the allowances, if any, admissible to 10 him under the rules regulating his conditions of service (8) the term of office of, and the manner of filling casual vacancies among, the directors shall be such as may be prescribed 22 a person shall be disqualified for being chosen as, or for du' isqfiualifimcaon or 0 icc being a member of the board of directors of the central ware- of director 15 housing corporation whoof the ce~trl warehousmg (i) is found to be a lunatic or becomes of unsound mind; corponllion or (ii) is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with his 20 creditors: or (iii) is or has been convicted of any offence involving moral turpitude; or (iv) has been removed or dismissed from the service of government on a charge of corruption or bribery; or (v) except in the case of the managing director, is a salaried official of the board or of the central warehousing corporation or any state warehousing corporation; or (vi) has directly or indirectly any interest in any subsisting contract made with, or in any work being done for, the central warehousing corporation except as a shareholder (other than a director) in any' incorporated company: provided that where any such person is a shareholder he shah disclose to the cf'ntral warehousing corporation the nature and extent of shares held by him in such company 35 23 (1) the board may, at any time in consultation with the ~emovill of central warehousing corporation and with the previous approval t:o':t~ffice of the central government, 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 office any director who-(a) is or has become subject to any of the disqualifications mentioned in section 22; or (b) is absent without leave of the board of directors for more , than three consecutive meetings of the board without excuse, sufficient in the opinion of the board, to exonerate his absence a~pointment 24 (1) the central warehousing corporation may appoint such ~ndffi:e~,etc officers and other employees as it considers necessary for the efficient con~tions of performance of its functions 10 lemcc (2) every person employed by the central warehousing corporation under this act shall be subject to such conditions of service and shall be entitled to such remuneration as may be determined by regulations made by the corporation under this act functioill of 25 subject to the provisions of this act, the central warehousing i~ cen w tralh  are ou8u18 corporation may-corporation (a) acquire and build godowns and warehouses at such suitable places in india as it thinks fit; (b) run warehouses for the storage of agricultural produce, seeds, manures and fertilizers offered by individuals, co-opera- 20 tive societies and other institutions; (e) arrange facilities for the transport of agricultural produce to an~ from warehouses; (d) subscribe to the share capital of a state warehousing corporation; 2, (e) act as agent of the board or of the government for the purposes of the purchase, sale, storage and distribution of agricultural produce, seeds, manures and fertilizers; and (f) carry out such other functions as may be prescribed executive 26 (1) there shall be an executive committee of the central 30 committee warehousing corporation which shall consist of~ (a) the chairman and vice-chainnan of the board of directors, (b) the managing director and (e) two other directors chosen by the corporation in the 3$ prescribed manner  (2) the cairman and the vice-chairman of the board of directora shall be th~ chairman and vice-chairman respec~ively of the execu· tive cominittee (3) s~bje4,tg-,~ ge~~tl'~ di:~~~;~nclrtl~~~~ of the ~~dof dir~ctprj~~~tive cormnitt~~hallbe,c;o~ to deal with any matter withinctheco~tej)ce,o~,th~:~il~al/war~­housing corporation s· z~~ ' (1) the annllt~ g~neral, ~eting of the ,centf~ w ,arehousins~ectidi of corporation (hereinafter referred to as the annual general ~':' lion coiponing) shall be held every year either at its head office or at any other office -ofthe-co!'poration within ·three months from the date- on which the annual accounts of the corporation are closed;· and any other· 10 general· meeting may be ronvened by the directors at any other time , (2) the ~~holc!er8pi'esent at the annuatg~jlej;'al jileeuni~ be"elltitled to discuss the,lulllual accwnt~, re}lqf~ of ;·the , du'~~", on, theworkil\gpf the co~pw'etwn duriqg the yeatlund~~~t,~ w~  as, the audito~' repq,rt on the ann",at, ba)ance-~eet, bpa is accounts (8) the, dif~¢oqi ,of the,centralw4lrebo~~g j'::orp~4ltiql\ s~ll, on the requ~uonof one:twrq of the number of  ~r;:ehold~ ,pi the,, coi'p;qration, call a sre,;w~e~tin& of, the corporation (4),; the requisition for a special ,~eeting under· sub-seetion (3)· 20 shall state the object of the meeting, and must "be: signed by ,the re-, quisltionists and4epositedat the head otlic~ of the cc)rpqj;8tiw"and mayicollsist of several docwnelltsin like fonneach sibned:)y ode r or more requisitiqjli$ts (5) ·ifthe,dijz~ of;the  c~tratl"ww:elwuemg,~qw_on do 2silqtjmlc~withiil twty~onet4ijms· from, th~uiate, ()f ith~ jnttl~uon being 80 de~ed;toj::aq'mt th~ spaciet~~i;tq be_cajled, it~ requisitioni~t~"' or a ,maiqr·ity of them • m~ thelil~elves cwl ,tl¥! meeting, but in either case the meeting so called shall be held within thlj:'8emonths from the date· of th~ldeposit· of· the,requisition 30 (6) the central warehousing corporation shall observe such rules of procedure in regard to the transaction of ·business at its meeungs (including the quorum at meetings) as may be provided by regulatlolls made by t~ ,cel'\t~al w~}tq"sidg cqrpoj'ation, under, this ~aict  chapter iv state warehousing corpomticnt&31t 28 (1) the state governmentmay by notifica~nindh~t01licial state '\vue-gazette and with the approval of thecentral, warehqus,ipg ,corpora- =dciiii tion, establish a warehousing corporation for the state u~~r_s\lch name as may be specified in the notification 4r~ (2)' a state warehousing corporation established under, subsection (1) shall be a body corporate by the name,not~ed under that sub-section, 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 (3) the head oftlce of a state warehousing corporation shall be at such place within the state as may be notified in the ofticial s gazette share capital 19 (1) the authorised capital of a state warehousing corporation aad lbare- shall ,be such sum not exceeding two crore!i of rupees as may be laoldcn prescribed, divided into shares of the face value of one hundred rupees each, of which such number as may be determined by the 10 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 in consultation with the central warehousing corporation and with the sanction of the state government is (2) of the share capital issued in the first instance, and of any subsequent issue of such capital, the central warehousing corporation shall, in any case where the state government has subscribed for fifty per cent of such capi~l, subscribe for the remaining fifty per cent of the capital 20 mmapmcnt s' (l) tne general superintendence and management of  the ~:: affairs of a state warehousing corporation shall vest in a board of corporadoo directors which shan consist of the following, namely:- (a) five directors nominated by the central warehousing corporation, of whom one shall be nominated in consultation as with the state bank and one at least shall be a non-oftlcial; (b) five directors nominated by the state government; and (c) a managing director, appointed by the state government in consultation with the directors referred to in clauses (a) and (b) and with the previous approval of the central warehousing 30 corporation '"  (2) the chairman 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 central warehousing corporation sj (3) the managing director shall-(a) be a whole-time oftlcer of the state warehousing corporation; (b) perform such duties as the state warehousing corporation may, by regulations made under this act, entrust or del  4tt   late to him; and (c) receive such salary and allowances as the state warehousing corporation may, in consultation with the central warehousing corporation: and with the previous approval of the state government, fix s (4) the directors in discharging their functions under this act shall act on business principles having regard to public interest and shal~ be guided by such instructions on questions of policy as may be given to them by the state government or the central warehousing corporation 10 (5) if any doubt arises as to whether a question is or is not a question of policy, or, if the state government and the central warehousing corporation give conflicting directions, the matter shall be referred to the board whose decision thereon shall be final (6) the directors of a state warehousing corporation, other than rs the managing director, shall be entitled to receive by way of remuneration such sums as may 'be prescribed: provided that no official director shall be entitled to receive any remuneration other than any allowances admissible to him under the rules regulating his conditions of service 20 (7) the term of office of, and the manner of filling casual vacan· cies among, directors shall be such as may be prescribed  31 a person shall be disqualified for being chosen as, or for i?iequ8wlcabeing, a member of the board of directors of a state warehousing ~ corporation whoof the of the cor· 2s (i) is, or at any time has been, adjudicated insolvent or has potation suspended payment of his debts or has compounded with his creditors; ol'! (ii) is or has been convicted of any offence involving moral turpitude; or!  30 (iii) has been removed or dismissed from the service of government on a charge of corruption or bribery; or (iv) except in the case of the managing director, is a salaried official of the board or of the central warehousing corporation or a state warehousing corporation; or 35 (v) has directly or indirectly any interest in subsisting contract made with, or in any work being done for, the state warehousing corporation except as a shareholder (other than a director) in any incorporated company: provided that where any such person is a shareholder, he shall 40 disclose to the warehousing corporation the nature and extent of the shares held by him in such company -32 (1f'i'he state government may, at' any time, in ~6nsultation with the central warehousing corp~tion,'removethema1ulging 'director from office after giving him a reasonable opportunity of showing cause against the proposed removal (2) the board of directors may remove from office any director 5 wb~ "(4) is or has become subject to any of the disqualifications mentioned in section 31; or -(b) is 'absent without leave of the board of, directors for -more 'than , three consecutive meettilgs of the board without 10 , caurrauftlcient, in the opinlon of the board, to exonerate 'his "ence ~f':;:::'cdt,!33(1) a 'state warehousing 'cotpotation may appoint such etc, and , <smcers ahd' btheretnpl()~es as it considers'nece9sllry'fot'the'effte1ent ~iodl performance of its functions is of eervicc (2) every person employed by a state warehousing corporation under this act shall be subject to such conditions of service and shall be entitled to such remuneration as may be determined by regulations' made by the corporation under this act   ~ of, 34 subject to the provisions of this act, a state warehousing 20 w:  corporation may-_jiila»ll (a) acquire and build god owns and warehouses' at such places within the state as it may, in consultation with the central wlu'ehousing corporation, determine; (b) run warehouses in the state for the storage of agricul- 25 tural produce, seeds, manures and fertilizers; (c) subscribet~ the share capital of co-opetative societies engaged in the storage or warehousing of agricultural produce; (d) arrange facilities for the transport of agricultural produce to and frol'l1 warehouses; 30 (e) act as an-agent of the central warehousing corporation or of the government for the purposes of the purcl\ase, sale, storage and distribution of agricultural pl"oduce, 'seeds, lhahures and fertilizers; and (1) carry out such other functions as'maybeprescrtbed 35 "35 (1) there shall be an e1t~cutivecl)mmittee of a state 'warehousing corporation which shall cortsist of-(a) the chairman of the ~  rd of directors;  (b) the managing director; and (c) three other directors chosen in the prescribed manner-· (2) the chairman of the board of directors shall be the chairman of th~ eft"c!uttve 'cbtnmiitee ' (3) ,:subject to any general or special directions as the board of directors may, from time to time, give, the executive committee 5 shall be competent to deal with any matter within the competence 'of the state :warehousing corporation   'chaptbr v  finance, accounts and audit36 (1) the board and every warehousing corporation shall pre- submillion 10 pare before the commencement of each year a statement of pro- ~ of ,gramme of, its activities during the forthcoming yearss well as a activitiea and financial estimate in respect thereof :r~ (2) a statement prepared under sub-section (1) shall, not later than three months before the commencement of each year, be sub-is mitted for approval-' (a) in the c«se of the 'soard, to the central government; (b) in' the case of the central warehousing corporation, to the board; (c) in the ease' of a' state warehousing corporation, to the lo  €entral , warehousing ,corporation and the state government oj3'7 (1) a'warehousing corporation may, in consultation with the borrowin, 'reserve bank and with the previous approval of the appropriate ~:=o~ainl government, issue and sell bonds and debentures carrying interest corporation for the purpose of raising funds:  2s provided, that the total amount of bonds and debentures issued and outstanding and of the '-other borrowings of the corporation hall'not at any time exceed ten times the amount of the paid up "8bre clt1iial and 'theresei've fund of the corpot1ltion (2) a wai"ehousing corporation may, for the purpose of carry-30 ing out its functions under this act, borrow money-(i) from the reserve bank,-(a) repayable on demand or on the expiry of ftxed periods not' i~ing ninety 'days from the ,date on which the money is so borrowed 'against securities' of the central !s gdvertl1'ftent /1r' of any state government; or (b)  'repayable on the expiry of fixed tperiods not exceed-, ~ng ~ighteenmonths from the, date on which the -money is  ·sobottrowed;· against securities' of the central g<;,we~~nt or of any state government, or any maturity, or 8gai~t  bonds and debentures issued under sub-section (1) by the borrowing warehousing corporation and guaranteed by the appropriate government and maturing within a perioc:l not exceeding eighteen months trom the date on which the money is so borrowed: s provided that the amount borrowed under this sub-clause shall not at any time exceed, in the aggregate, three clore of rupees in the case of the central warehousing corporation and fifty iakhs of rupees in the case of a state warehousing corpo-~oo; ~ (ii) from the state bank, for such periods for which, and upon any of the securities against which, it is authorised to advance and lend monies, under the provisions of the state bank of india act, 1955 ~3 of 1"5 (3) subject to the proviso to sub-section (1), the central ware- is housing corporation may borrow money from the central government and the board, and a state warehousing corporatioo may borrow money from the state government the central warehousing corporation and the board, on such securities and on such terms and conditions as may be agreed upon ·between the borrowin, cor- 20 poration and the lender in each case (4) the bonds and debentures of a warehousing corporation may be guaranteed by the appropriate government as to the repayment of principal and the payment of interest at such rate as may be fixed by the appropriate government on the recommendation of as the board of directors of the corporation at the time the bonds or - debentures are issued deposit account 38 (1) all moneys belonging to the board shall be deposited in the reserved bank or the state bank (2) all moneys belonging to a warehousing corporation shall be 30  deposited in the reserve bank or the state bank or, subject to any rules made under this act, in any scheduled bank or co-operative bank  investment of funds 39 a warehousing corporation may invest its funds in the securities of the central government or any state government 3s dilposal of profits 40 (1) every warehousing corporation shall establish a reserve fund out of its annual net profits - (2) after making provision for bad and 80ubtful debts, depreci-' ation on assets and all other matters which are usually provided for by companies registered and incorporated under the indian com- 40 panies act, 1913, a warehousing corporation may, out of its net an-7 of 1913 nual profits, declare a dividend: provided that for so 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, if anyt as that government may have paid under a guarantee given in pur-, suance ot sub-section (1) of section 19 or sub-section (4) of section 37, the rate of such dividend, in the case of the central warehousing corporation, shall not exceed the rate guaranteed by the central government under sub-section (1) of section 19_ u_ (1) the board shah maintain proper accounts and other rele- accounts of 10 vant records and prepare an annual statement of accounts in such = and form as may be prescribed in consultation with the comptroller and auditor-general of india -(2) the accounts of the board shall be audited annually by the comptroller and auditor-general of india or any person authorised is by him in this behalf and any expenditure incurred in connection with such audit shall be payable by the board (3) the comptroller and auditor-general of india and any person authorised by him in connection with the audit of the accounts of the board shall have the same rights, privileges and authority in :30 connection with such audit as the comptroller and auditor-general has in connection with the audit of government accounts and in particular shall have the right to demand the production of books accounts, connected vouchers and other documents and papers and to inspect any office of the board 25 (4) the accounts of the board as certified by the comptroller and auditor-general of india or any other person authorised by him in this behalf together with an audit report thereon shall be forwarded annually to the central government and that government shall cause the same to ~ laid before both houses of parha-30 ment u (1) every warehousing corporation shall maintain proper accounta_ accounts and other relevant records and prepare an annual state- audit of  ment of accounts including the profit and loss account and the = balance-sheet in such form as may be prescribed 35 (2) the accounts of a warehousing corporation shall be audited by not less than two auditors duly qualified to act as auditors of companies under sub-section (1) of section 144 of the indian com-7 of 1913 panies act, 1913 (3) the said auditors shall be appointed by the appropriate 40 go\t'ernment and the appropriate government shan appoint one such auditor in consultation with the comptroller and auditor-genea! of india (4) the auditors shau ,be supplied witq a, copy of tile aj)j1ual baj,ance:sneet of;th~, w areb~su;ag ~orpqrati()n, and it shall be theil; duty to examine it tog~~r wi~ the- ac,couj1ts  and voucllers, , relatr ing, ther~to and they shau have a list delivered to them of au booka kept ,by the cofpqnl tiooan,d ·shall: at· au reasqnable times have s acc~s to the books, accqunts and,otber  do«:umenti of, t~ co~r~  tion and may in relation to ,suchaccounu examine any curectel' or, officer of the corporatio,ll (5) the auditors shall make a report to the shareholders on  the annual balance-sheet and accounts and in  every such report they 10 shall state whether in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary p~ticulars and, properly drawn up to exhibit a true and correct view of the state of affairs· of the  warehousing col'pol'a tionadd·, in case ,they had callecl,~or any explanation or informatioj) from' the  directors,  whethft·· it :ha8i 15 been· given and whether it is satisfactory  (6) the appropriate government, on the rec(!)fl'lmendation of the board, may, after consultation with the comptroller and auditor-general-of india at any time issue direction&, through the boud to; the auditors requiring themto report to the appropriate govemmeat 20 upon the adequacy of measures·taken by·a wueheuii1gc~ tion :for the protection of its shareholders·,and creditors or upon the sumcie~ of their proeeduj!e-m auditingtbeacoo\:ultsofthecoj'pork tion and mtiy enlarge or ,elctenci the scope of the 8udih)r dire<lt that a different procedure in audit may; be!adopteo, or;dir8a\  that iu\y' 25 other e:x:anunatio~ may be made by the ,auelitors if in the op~ion of the appropriate government public interest so requires (7) a warehousidg,corpc)lw,tion!shallsenci'a copy,ef, e~re~1i of the auditors· to the comp$rollerand auditor-genftr~·of india  a~ to tbe  boaniat leaat on~monthbefq,1!e ,u is placed betgrethe ,shal;e- 30 holders (8) notwithstanding anything h~reinbefore contained in this setion, the comptroller and auditor-general of indi(l m~y, either of his own motion or on a request received inahis b~half from the appropriate government undertake in respect of a warehousing oor- 35 poration such audit' and at such time as he may consider necessary: provided that where the central government is, ~equir~· to make ' any payment on account of the gua,rantee gi\f~n by ~tunder sub-sec-  tion (1) of section 19 such audit shall be u~ertaken by the comptroller and auditor-general of india 40 (9) every audit report under this section ;shau be forwarded to the appropriate government and that goveniment shau caqse the same to be laid before both houses of parliament or the lelijlature of the state, as the case may be  chapter vimiscellaneous 43 no act or proceeding of the board or of a warehousing cor- vacanciets,  etc not 0 inporation shall be invalid by reason only of the existence of any validate acts 5 vacancy among its members or directors or any defect in the consti- anlnd proceed f th - h f is 0 e tubon t ereo  board and warehousinl corporation • 44 in any meeting of the shareholders of a warehousing corpora- vf0tinh g rights - 0 s aretion every member shall have one vote in respect of each share held holders by him in the -corporation 10 45 if there is any difference of opinion between the central ~;::~s warehousing corporation and a state warehousing corporation re- ~~ waregarding their respective functions and powers under this act, such o,=~ation difference shall be referred to the board whose decision thereon shall bdwd shute b ft are ousidg e nal corporation is 46 every member, auditor and employee of the bod and every ~ec1~det~ director, auditor, officer or other employee of a warehousing cor- and secrecy poration shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the schedule 47 (1) every director of a warehousing corporation shall be i1~mnity 20 indemnified by the corporation concerned against all losses and ex- 0 recton penses incurred in the discharge of his duties except such as are caused by his own wilful act or default (2) a director of a warehousing corporation shall not be responsible for any other director or for any officer or other employee 25 of the corporation or for any loss or expense resulting to the corporation by the insufficiency or deficiency of value of, or title to, any property or security acquired or taken on behalf of the corporation in good faith, or by the wrongful act of any person under obligation to the corporation or by anything done in good faith in the execution 30 of the duties of his office or in relation thereto  48 (1) whoever without the consent in writing of a warehousing offences corporation, uses the name of that corporation in any prospectus or advertisement, shall be punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand 35 rupees, or with both (2) no court shall take cognizance of any offence under sub-section (1) otherwise than on a complaint in writing by an officer authorised in this behalf by the warehousing corporation concerned 49 for the purposes of the indian income-tax act 1922, a ware- pr~v~8ion 40 housing corporation shall be deemed to be a company within the f~co~~: meaning of that act and shall be liable to income-tax and super-tax and superaccordingly on its income, profits and gains: tax provided that in the case of the central warehousing corporation any sum paid by the central government under the guarantee given in pursuance of sub-section (1) of section 19 or in the case of a warehousing corporation any sum paid by the central or a state government under any guarantee given in pursuance of sub-section 5 (4) of section 37 shall not 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 treated as expenditure incurred by it: provided further that in the case of any sharehol9er or deb en- 10 ture-holder 'such portion of a dividend or interest as has been paid out of any such sum advanced by the central government shall be deemed to be his income from interest on securities declared to be income-tax free within the meaning of section 8 of that act dissolution of board 50 (1) the central government, if it is of opinion that the board 15 has failed to £arry out its functions under this act or that for any other reason iris not necessary to continue the board may, by notification in the official gazette dissolve the board from such date as may be specified in the notification (2) when the board is dissolved under sub-section (1) ,-20 (a) all members of the board shall, from the date of dissolution, vacate their offices as such members; , (b) all powers and duties of the board shall, as from the date of dissolution, be exercised and performed by the central government or such person or persons as the central govern- 25 ment may appoint in this behalf; (c) all funds and other property vested in the board shall vest in the central government winding up 51 no provision of law relating to the winding up of companies i!gwc~~o:: or corporations shall ,apply to a warehousing corporation and any 30 tions such corporation shall not be placed in liquidation save by order of the appropriate government and jn such manner as it may direct power to 52 (1) the appropriate government may, by notification in the makc'rulcli official gazette, make rules to carry out the purposes of this act , (2) without prejudice to the generality of the foregoing power, 3s such rules may provide for-(a) the manner in which representatives of the central government shall be nominated under clause (i) of sub-section (2) of section 3; (b) the manner in wl)ich the chairman and vice-chairman 40 of the board shall be chosen; (c) the term of office of members of the board and the manner of filling vacancies among them; 5 10 15 (d) the methods of appointment, the conditions of service and the scale of pay of the secretary to the board; (e) the manner in which the members shall be appointed under clause (b) of sub-section (1) of section 10 and the manner in which the vice-chairman of the executive committee shall be nominated under clause (b) of sub-section (2) of section 10; (f) the returns, statements and other particulars in regard to the discharge of its functions to be furnished by the board to the central government; (g) the form and the manner in which and the time within which, the board shall furnish to the central government returns, statements and other particulars with regard to the discharge of its functions; (h) the form and the manner in which, and the time within which, the board shall furnish to the central government a report of its activities policy and programme; (i) the additional functions which a warehousing corporation may perform;  20 (j) the manner of nomination and election of the directors of the central warehousing corporation and the period within which such directors shall be nominated or elected; 25 (k) the term of office of, and the manner of filling casual vacancies among and the remuneration payable to, the directors of a warehousing corporation; (l) the manner of choosing directors on the executive committee of a warehousing corporation; (m) the maximum limit of the authorised capital of a state warehousing corporation; 35 (n) the form of the annual statement of accounts and the balance-sheet to be prepared by a warehousing corporation; (0) the deposit of moneys of a warehousing corporation in a scheduled bank or a co-operative bank; (p) the manner of issuing shares of a warehousing corporation, the calls to be made in respect thereof, and all other matters incidental to the issue of shares (3) all rules made by the appropriate government under this section shall as soon as may be after they are made, be laid before 40 both houses of parliament or the legislature of the state as the case may be 53 (1) the board may with the previous sanction of the central power of government, by notification in the official gazette, make regulations =r:t re~­not inconsistent with this act and the rules made thereunder, to tiona provide for all matters for which provision is necessary or expedient for the purposes of giving effect to the provisions of this act (2) in particular and without prejudice to the generality of the foregoing power, such regulations may provide for-(a) the manner in which meetings of the board and the 5 executive committee thereof shall be convened, the fees for attending such meetings and the procedure to be followed thereat; (b) the methods of appointment, the conditions of service and the scales of pay of the officers (other than the secretary) 10 and other employees of the bo~rd; (c) the duties and conduct of officers and other employees of the board; (d) the time when the accounts of a warehousing corporation may be closed; and 15 (e) generally the efficient conduct of the affairs of the board (3) the central government may, by notification in the official gazette, rescind any regulation which it has sanctioned and thereupon the regulation shall cease to have effect 20 power of 54 (1) a warehousing corporation may, with the previous wrehou~ing sanction of the appropriate government by notification in the offi-~~r:bons cial gazette, make regulations ndt inconsistent with this act and reaujations the rules made thereunder to provide for all matters for which provision is necesary or expedient for the purposes of giving effect 25 to the provisions of this act (2) in par;ticular and without prejudice to the generality of the foregoing power, such regulations may provide for-(a) the conditions of service of, and the remun~ration payable to, the officers and other employees of a warehousing 30 corporation; (b) the manner in which and the conditions subject to which, sha'i'es of the central warehousing corporation may be transferred; (c) the manner in which meetings of a warehousing 35 corporation and the executive committee thereof shall be convened, the fees for attending such meetings, the procedure to be followed thereat; (d) the duties and conduct of officers and employees of a warehousine corporation; (e) the duties which may be edtrusted or delegated to the \ managing director of a warehousing corporation; (f> generally, the efficient conduct of the affairs of a warehousing corporation s (3) the appropriate government may, by notificdion in the official gazette, rescind any regulation which it has sanctioned and thereupon the regulation shall cease to have effect of 1934 10 55 in the reserve bank of india act, 1934, in section 17, after amendment clause (4b), the following clause shall be inserted, namely: -of the reserve bank u(4c) the making to a warehousing corporation established of india under the agricultural produce (development and warehous- act, 1934· ing) corporations act, 1955 of loans and advances,-is (a) repayable on demand or on the expiry of fixed periods not exceeding ninety days, from the date of such loan or advance, against securities of the central government or of any state government, or 20 2s (b) repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the central government or of any state government, of any maturity, or against bonds and debentures issued by the corporation to which the loan or advance is made, and guaranteed by the centr~l or a state governmedt, and maturing within a period not exceeding eighteen months from the date of such loan or advance: provided that the amount of loans and adv~nces granted under clause (b) shall not at any time exceed, in the aggregate, three crores of rupees in the case of the central watehousing corporation and fifty lakhs of rupees in the case of a state warehousing corporation" 30  the schedule(see section 46) declaration of fmelity and secrecy i  ,  declare that i will faithfully, truly and to the best of my judgmentt, skill and ability ex~cute and perform the 3s duties required of me as a director, officer, employee or auditor (as the case may be) of the  warehousing corporation and which properly relate to any office or position in the said corporation held by me i further declare that i will not communicate or allow to be 40 communicated to any person not legaiiy entitled thereto any information relating to the affairs of the said corporation nor will i allow any such person to inspect or have access to any books or documents belonging to, or in the possession of, the corporation and relating to the business of the corporation | signature    |  ,     ||---------------|-----------|| '"            |           || signature    |          ||             |           || 5             |           || signature     |           |signed before me date  statement of objects and reasonsthe bill gives effect to the recommendations of the rural credit survey committee relating to the development and warehousing of agricultural produce on co-operative principles which have been accepted by the government the b:n provides for the constituti~n of a central national co-operative development and warehousing board which will be a policy-making and financing body the functions of the board will generally be to plan and prorrt'ote programmes ~or the production, processing, marketing, storage, warehousing and import and export of agricultural produce through co-operatlve societies the board will be financed by the central government 2 the bill further provides for the setting up of a central warehousing corporation in order to implement the warehousing programme laid down by the board the corporation will have a share capital, a part of which will be subscribed for by the central govemment and the rest by the state bank, scheduled banks, cooperative societies, etc the shares of the corporation will be guaranteed by the central government as to the repayment of the principal and the payment of a minimum annual dividend the management of the corporation shall vest in a board of directors which will include all members of the executive committee of the national co-operauve development and warehousing board and a managing director the main functions of the central warehousing corporation woul'd be to acquire and build godowns and warehouses for the storage of agricultural produce at places of all-india :mportance, to run warehouses for the storage of agricultural produce and to arrange facilities for the transport of agricultural produce 3 the bill also empowers every state government to establish within the state a state warehousing corporation on the lines of the central wa,rehousing corporation half of the share capital of the state warehousing corporation shall be subscribed for by the central warehousing corpol"8tion, if the state government provides the remaining half the board of directors of a state warehousing corporation will consist of an equal number of directors nominated by the central warehousing corporation and the state government and also a managing director appointed by the state government with the previous approval of the central warehousing corporation if any dispute arises between the central warehousing corporation and a state warehousing corporation regarding their respective functions, the dispute will be referred to the central board whose decision shall be final, 4 the bill provides for financial control and auditing of accounts of the various statutory bodies set up under it the board and every warehousing corporation will submit an annual statement of its programme and activi ties as well as financial estimates in respect thereof to the appropriate authority the funds of a warehousing corporation "re to be invested only in the securities of the central gqvernment or a state government the accounts of the board are to be audited by the comptroller and auditor-general of india the accounts of a warehousing corporation are to be audited by qualified auditors appointed by the appropriate gov,ernment and one of the auditors will be appointed in consultation with the comptroller and auditor-general of india such auditors when asked by the appropriate government would also submit a report to it upon the adequacy of the measures taken by a warehousing corporation for the protection of its shareholders and creditors a copy of every audit report will be laid before both houses of parliament or the legislature ot the state, as the case may be a p jain new delhi; the 20th february, 1956  financial memorandumunder clause 11 of the bill, the central government will pay ~o  the "national co-opejratji've d~elopmen:t and warehousing board" a non-recurring grant of five crores of rupees and a total recurring grant of not less than twenty-five crores of rupees spread over a period of five years under clause 12 the national cooperative development and warehousing board is to ma:ntain two funds, namely, the "national co-operative development fund" and the j'national warehousing development fund" the non-recurr:ng grant of five crores of rupees will be credited to the warehousing fund while the recurring grant will be d:vided between the two funds the board will be entitled to make re-appropriations between the two funds clause 41 provides that the board shall maintain proper accounts and other relevart records and prepare an annual statement of accounts in su~h i::·m as may be prescribed in consultation with the comptroller and auditor-gt'neral of india it also provides for annual audit by the comptroller and auditor-general of india or any person authorised by him and for the accounts of theboard together with an audit report thereon being furnished annually, to the central government who will cause the same to be laid before both houses of parlia' ment  - • memorandum regarding delegated legislationclause 52 of the bill empowers the appropriate government to make rules to carry out the purposes of the act the matters in respect of which such rules may be made are specified therein these matters are generally of a routine ch£facter they relate to the manner of choosing members of the board or directors of a warehousing corporation, the term of office of such members or directors, the appointment of officers and other employees of the board, etc rules may also be made in regard to certain returns, reports and other statements to be furnished by the board, rules may further be made in regard to certain minor financial matters· such as the maximum limit of the authorised capital of a state warehousing corporation,the form of the annual balance-sheet, the investment of the moneys of a warehousing corporation, etc the appropriate government may also make rules with respect to the manner of issuing shares of a warehousing corporation and the calls and other incidental matters relating to the issue of shares all the above matters are comparatively of a minor importance and are normally the subject-matter of delegated lzgislation provision has been made that rules made by the appropriate government shall be laid before parliament or the legislature of the state, as the case may be clauses 53 and 54 of the bill empower the board and a ware-):lousing corporation to make regulations not inconsistent with the provisions of the act and the rules made thereunder the power of making regulations is mainly restricted to procedural matters, such as, the calling of meetings, the fees for attending meetings, etc regulations may also be made with respect to the delegation of powers to the managing director of a warehousing corporation, the duties and conduct of officers and other employee:s of the board or a warehousing corporation the cea! warehousing corporation is further empowered to make regulations regarding the manner in which, and the conditions subject ~ which, its shares may be transferred the power of making regulations is thus confined to matters of detail only and all such regulations are to be made with the previous sanetion of the appropriate government  a  billto provide for the incorporation and regulation of corporations for the purpose of development and warehousing of agricultural produce on co-operative principles and for matters connected therewith the president has, in pursuance of clauses (i) and (3) of article 117 of the constitution of india, recommen'ded to lok sabha the introduction and consideration of the bill m n kaul, secretary - - (shri a p jain minister of food and agriculture) 